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From APRIL 1, oil marketing companies across India will be required to sell petrol blended with up to 20 per cent ethanol, a mixture commonly known as E20. The government’s stated aim is to curb crude oil imports and cut emis sions. Yet the strategy is increasingly being viewed as a double-edged sword: it not only has a mixed impact on emissions but, as a transitional fuel, may also detract attention from the transport sector’s vital transition to zero-emission alternatives such as full electrification. This raises a critical question: rather than mandating progressively higher blends for internal-combustion engines, should ethanol be prioritised as an industrial feed- stock and fuel? Here is a hard look at the implications of E20 mandate.
Concerns among consumers is about the effects of E20 on vehicles and fuel economy. It is said ethanol possesses 30 to 35 per cent less ene-rgy by volume than petrol. Engines must therefore burn more of it to deliver the same power, resulting in higher fuel consumption. For older vehicles not tuned for E20—vehicles manufactured from April 2023 are required by the government to be E20 “material-compliant”—this is likely to mean a measurable drop in fuel economy, estimated at 2-7 per cent. Evidence from global technical literature suggests that ethanol is also highly hygroscopic—it actively absorbs water from its environment—and acts as a powerful solvent. It may thus cause moisture-induced corrosion in metal fuel lines, fuel tanks and carburettors. In older vehicles, prolonged exposure to E20 can harden and eventually crack the vital rubber hoses and plastic seals. Despite consumer concerns, there is no plan to retrofit the older fleet. Industry body such as the Automotive Research Association of India and the Society for Indian Automobile Manufacturers maintain that E20 is safe for legacy vehicles, dismissing claims of wear-and-tear as “misinformation”.
The shift to E20 also fundamentally alters engine combustion chemi-stry, leading to mixed emission results. As an oxygen-rich fuel, ethanol improves initial combustion, reducing carbon monoxide, non-methane hydrocarbons and particulate soot. But it brings new challenges. Technical evidence indicate that ethanol combustion can increase nitrogen oxides (NOx) emissions and spike acetaldehyde (carbonyl) emissions, which are highly unregulated and toxic compounds. Unlike Brazil, a heavy user of ethanol, India has not yet adopted standards to monitor such emissions.
Additionally, E20 increases petrol’s Reid Vapor Pressure, making it more volatile. This can strain evaporative emission control (EVAP) systems, especially in older vehicles with smaller charcoal canisters that absorb fuel vapours; in other words, fuel vapours may escape into the atmosphere.
India’s climate compo unds the problem. Labor atory tests rely on conse rvative temperature models for evaporative emissions testing that do not adequately capture the extremes of peak sum-mer. High heat may cause rapid boiling of the fuel, even when a vehicle is parked on dark asphalt, producing vapour vol-umes that EVAP system may struggle to contain. Ageing fuel tanks and rubber lines may further allow vapours to seep through. Such evaporative emissions, rich in toxic volatile organic compounds, contribute to ground-level ozone formation that is harmful to public health. For these reasons, countries like Brazil, US and China have tightened evaporative emission standards and adopted stringent “on-board refuelling standards”. India’s regime remains comparatively weak.
India’s push for “energy self-reliance” has also had paradoxical effe-cts by turning the country into an importer of both industrial ethanol and corn. As the transport sector absorbs most domestic supply, indu-stries such as chemicals, pharmaceuticals and beverages that rely on ethanol as a feedstock face shortages. To keep these industries running, India has to import industrial ethanol. At the same time, India, traditionally a major corn exporter, is increasingly importing the grain to supply ethanol distilleries.
The policy is reportedly creating a tension between food and fuel. In 2023-24, media reports suggested that rising ethanol demand contributed to a corn shortage, impacting the poultry sector and fuelling food inflation. The Economic Survey 2025-26 notes that administered ethanol prices vary by feedstock, with corn-based ethanol commanding a premium. This has encouraged farmers to expand acreage under corn. There are also concerns that a shift towards water-intensive ethanol feedstock like sugarcane could further strain groundwater.
As the current policy framework prioritises increasing ethanol blending in petrol, critics worry that this focus on a transitional fuel could slow the transition to zero-emissions technologies in vehicles such as electrification which can eliminate tailpipe emissions and thereby deliver meaningful gains for public health and the climate. So it is pertinent to explore if the policy can support industrial sectors that use ethanol as feedstock and fuel, while limiting its usage in transport. To avoid a “food versus fuel” crisis, India could scale up Second-Generation (2G) ethanol production utilising crop residues and municipal waste. Schemes such as the PM-JI-VAN Yojana for bioethanol from non-food crops should be used to make 2G ethanol commercially viable.
This can be seen in large economies like the US, where ethanol blending in petrol is limited to 10-15 per cent, and sur-plus ethanol is used in industrial applications. In the US, both the government and private biotech firms are funding chemical pathways to upgrade ethanol into renewable plastics and high-value bioproducts like green solvents and chemi-cals. Also in Europe, ethanol is being used to manufacture green plastics, disinfectants, cosmetics and solvents. In Germany, the use of bioethanol in the pharmaceutical and chemical industries has reportedly surged by 40 per cent in 2024. The EU’s 90 per cent car CO2 emission reduction by 2035 target for ambitious electrification, allows only a 10 per cent combined credit margin for waste-based biofuels, synthetic fuel and green steel. Both in the EU and UK, aviation fuel produced from “food and feed crops” is excluded from being used as sustainable aviation fuel; only 2G fuels from waste are permitted.
Ethanol can also serve as a clean industrial fuel, for instance in boilers or for small-scale power generation. It may come with technical constraints; its low energy density, tendency to absorb water and corrosive properties require special storage and delivery systems. Despite this, it is possible to prioritse domestic ethanol as a high-value industrial feed-stock in targeted manufacturing sectors and upgrade com- bustion technology to be compatible with ethanol.
This article was originally published in the April 1-15, 2026 print edition of Down To Earth