Explained: What is ethanol blending in petrol and why it can be beneficial for India

At a time when fuel prices are rising virtually every day and concern for the environment has become widespread, mixing ethanol in auto fuel can result in savings and also protect against climate change: a win-win situation.

Which is why the Centre is keen to have a fifth of all petrol sold in the country to be ethanol by 2025, five years earlier than the initial target. Here's what it means:

What is ethanol blending?

Ethanol is a biofuel, that is, a fuel produced by processing organic matter. The auto fuels we commonly use are mainly derived from the slow geological process of fossilisation, which is why they are also known as fossil fuels. Ethanol in India is obtained primarily from sugarcane via a fermentation process. Ethanol is high in oxygen content, which therefore allows an engine to more thoroughly combust fuel.

It can be mixed with fuel in different quantities and can help reduce vehicular emissions. Also, since it is plant-based, it is considered to be a renewable fuel.

While Prime Minister Narendra Modi has brought forward the launch of 20 percent ethanol blend for petrol, the idea itself is not new. According to the paper, Roadmap for Ethanol Blending In India 2020-25 by the NITI Aayog and Ministry of Petroleum and Natural Gas, the Centre had "launched pilot projects in 2001 wherein 5 percent ethanol blended petrol was supplied to retail outlets".

Success of field trials eventually paved the way for the launching of the Ethanol Blended Petrol (EBP) Programme in January, 2003 for sale of 5 percent ethanol blended petrol in nine States and four UTs.

How will it help?

Announcing his government's decision to advance the 20 percent ethanol blending target by five years to 2025, Modi said that ethanol has become one of the major priorities of 21st Century India.

Mixing 20 percent ethanol in petrol holds multiple attractions for India. First, it can potentially reduce the auto fuel import bill by a yearly $4 billion, or Rs 30,000 crore. Second, it also provides for farmers to earn extra income if they grow produce that helps in ethanol production.

Third, and no less important, is the fact that ethanol is less polluting than other fuels and, per the NITI Aayog paper, "offers equivalent efficiency at lower cost than petrol".

Spelling out the opportunity for India for embracing ethanol, the paper stresses that "availability of large arable land, rising production of foodgrains and sugarcane leading to surpluses, availability of technology to produce ethanol from plant-based sources, and feasibility of making vehicles compliant to ethanol blended petrol make E20 not only a national imperative, but also an important strategic requirement".

What is needed to meet the blending target?

In his World Environment Day speech in which he made the announcement on ethanol mixing, Modi said that whereas till 2014 an average of only 1.5 percent ethanol could be blended in India, that proportion has now reached about 8.5 percent. So, while in 2013-14, about 38 crore litres of ethanol were purchased in the country, that figure now stands at more than 320 crore litres.

The prime minister noted that a majority of the ethanol units are "concentrated in 4 to 5 states where sugar production is high", but said that food grain-based distilleries are now being set up across India along with modern tech-based plants to make ethanol from agricultural waste.

Will vehicles need to be modified?

The NITI Aayog paper said that two-wheelers and passenger vehicles that are now being made in the country "are designed optimally for E5 (5 percent ethanol blend with petrol) while rubber and plastic components are "compatible with E10 fuel".

However, as the EBP rolls out, "vehicles need to be produced with rubberised parts, plastic components and elastomers compatible with E20 and engines optimally designed for use of E20 fuel". The paper said that the industry body the Society of Indian Automobile Manufacturers (SIAM) has guaranteed that "once a road-map for making E10 and E20 available in the country is notified... they would gear up to supply compatible vehicles in line with the roadmap".

The paper notes elsewhere that "all the components required can be made available in the country" and that "no significant change in the assembly line is expected".

Which countries are doing it?

Given the constraints of finite sources of fuel, frequent fluctuations in prices and their overall impact on the environment, alternatives like ethanol in fuel are being explored by countries. The NITI Aayog paper said that "alternative fuels specific to geographies can address these issues", adding that ethanol is considered to be highly suitable for blending.

The paper said that the global production of fuel ethanol stood at 110 billion litres in 2019 after clocking an average yearly growth of 4 percent in the last decade. The US and Brazil account for 84 percent of the global production followed by the European Union (EU), China, India, Canada and Thailand.

Brazil has mandated that ethanol content in gasoline sold in the country should be in the range of 18 percent to 27.5 percent while the EU has a target for 10 percent of transportation fuel for each member country to come from renewable sources, such as biofuels, by 2020.