Ethanol Producers To Govt: Increase Ethanol Blending To 22-23%, Won't Affect Vehicles
Grain-based ethanol manufacturers have made a fresh pitch to the government to increase the ethanol blending limit in petrol. The industry body wants the current 20 percent blending mandate pushed up to 22 or 23 percent. The core argument presented to policymakers is that a minor two to three percent increase will not require any mechanical changes or cause damage to the current fleet of passenger vehicles and two-wheelers.
While the pitch to the government highlights emission benefits, the actual driver behind this demand is idle factory capacity. The country currently has an installed ethanol production capacity of around 17,000 million litres.
However, to meet the existing 20 percent blending target, oil marketing companies only need to procure between 11,000 and 12,000 million litres annually.
This massive gap means production plants are sitting idle. According to the Grain Ethanol Manufacturers Association, production facilities across various states are operating at anywhere between 40 percent and 90 percent of their actual capacity.
Operating below capacity is starting to hurt the balance sheets of biofuel producers. There are nearly 400 ethanol manufacturing units actively operating, with about 250 of these being grain-based plants that rely heavily on rice and maize. The association has warned that if underutilisation continues, the heavy investments made to set up these plants, along with the associated bank funding, could be at serious risk.
For the 2025 to 2026 supply year, oil marketing companies have agreed to procure roughly 10,500 million litres of ethanol. Out of this total, 7,500 million litres are expected to come from grain-based producers, while the rest will be sourced from sugar-based units. Pushing the blending mandate up by just a few percentage points would force oil companies to buy an additional 2,000 million litres. This immediate bulk purchase would solve the capacity utilization problem for factory owners.
The claim that a 22 or 23 percent blend will not affect existing vehicles is bound to be scrutinized. Modern passenger vehicles and two-wheelers manufactured recently are built with E20 compliance in mind. Their fuel pumps, injectors, and hoses are specifically designed to handle fuel that contains 20 percent ethanol. However, pushing the blend higher without official automotive manufacturer warranties could potentially void engine coverage for consumers.
Furthermore, millions of older vehicles currently on the road were only built to handle E10 fuel. Ethanol is highly hygroscopic, meaning it absorbs moisture from the air. Pumping an E23 mix into older engines increases the risk of water accumulation in the fuel tank, fuel line corrosion, and degraded rubber seals over time. Any official move by the government to increase the blending limit will require rigorous technical validation from automotive testing agencies to ensure consumers do not end up footing the bill for engine repairs.
Realizing that the automotive sector might push back against a sudden fuel specification change, the ethanol industry is also trying to create new demand channels. Biofuel producers have proposed the introduction of ethanol-based cooking stoves as a supplementary energy source alongside traditional LPG cylinders for households and commercial kitchens.
They have requested the initiation of pilot projects in collaboration with oil companies to test the safety and cost effectiveness of this alternative. Meanwhile, the petroleum ministry is reportedly working with the food ministry to find a middle ground, which may include easing export restrictions on ethanol rather than forcing a higher blend into domestic fuel tanks immediately.
Via FinancialExpress