India's E20 rollout driven by self-reliance, not Mideast conflict: GEMA

India's E20 program aims for energy self-reliance, not a reaction to geopolitics, says GEMA. With surplus capacity and feedstock, blending can exceed 20%, having already saved India ₹40,000 crore in crude oil imports.

India's rollout of 20% ethanol blending in petrol (E20) is driven by long-term energy self-reliance goals rather than geopolitical disruptions like ongoing Middle East conflict, with scope to raise blending levels further given surplus capacity and feedstock supply, said CK Jain, President, Grains Ethanol Manufacturers Association (GEMA).

"E20 is not based on the war; it has only one concept, self-reliance in energy, and that is most important. Why should we depend on others when we have our own produce?" Jain told ANI.

E20 a Checkpoint, Not the End Goal

India began full-fledged rollout of E20 from April 1, which Jain described as a checkpoint rather than the end goal, noting that both feedstock availability and investor participation have now been established.

"E-20 was a checkpoint whether the investor will come or not, whether the feedstock is available or not. Now we are in a situation where feedstock like surplus grain is available, and capacity has been created," he said.

20% should not be the last point, it should be a checkpoint to start further, he said, adding that "There is a 100% possibility that it can be increased and we can do 25-27%."

Production Capacity and Financial Concerns

India's ethanol production capacity has reached around 2,000 crore litres and is expected to rise by about 10% more from projects in the pipeline, while the current requirement at 20% blending stands at about 1,300-1,400 crore litres, including roughly 1,200-1,250 crore litres from oil marketing companies (OMCs).

Jain said plants set up over the past three years are currently operating at only 40-50% capacity, raising concerns over financial stress.

"Production, as I told you, we can do 2,000-plus crore litres, but right now the plants are running at 40-50% capacity, and there is a threat of NPA of around 50,000 crore rupees," he said.

Economic Benefits and Rural Impact

He said ethanol blending has already delivered significant economic benefits, helping India save about ₹40,000 crore in crude oil imports.

"In 2024-25, our country saved 40,000 crore rupees towards crude oil imports. This has directly gone to the farmers and the rural economy," Jain said, adding that nearly 75% of the value flows back into rural areas.

Feedstock Availability and Vehicle Impact

On feedstock, Jain said India has ample surplus even after meeting domestic food requirements.

"FCI has surplus rice of more than 200 lakh tonnes, which is equivalent to about 500 crore litres of ethanol. Apart from this, maize and other grains are also surplus after meeting PDS and other domestic needs," he said.

Currently, grain-based ethanol accounts for about 70% of the supply, while sugarcane-based ethanol contributes around 30%, he added.

Minimal Impact on Vehicles

Jain also dismissed concerns about the impact of higher ethanol blending on vehicles.

"Yes, there is a mileage loss, but it is minimal. Vehicles which were running at lower blending levels are now running at 20%, and there has been no major issue," he said.

Future Outlook and Other Considerations

He added that ethanol demand will rise meaningfully only if blending ratios increase, as petrol consumption itself grows at around 5-6% annually.

Looking ahead, Jain suggested expanding ethanol use beyond transport fuels, including ethanol-based cook stoves as a potential alternative to liquefied petroleum gas (LPG), especially in commercial segments.

"We are suggesting that the government study ethanol cook stoves. Over time, ethanol prices are coming down while LPG prices are rising, so somewhere the curves will meet," he said.

Jain also flagged risks from global supply disruptions, noting that reduced LNG availability could impact fertiliser production.

"Official indications are that there could be a 10-15% short supply. Fertiliser has priority, but supply will still be lower than earlier levels," he said, adding that there is no need to panic as farmers in the country are capable of managing the situation.

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)