Archive · 29 Oct 2025
Ethanol Producers Seek Higher Blending Amidst Automaker Opposition
Imagine mixing juice with water.
Some people who make ethanol, a type of alcohol from plants, want to mix more of it into gasoline for cars.
They say they have a lot of ethanol that isn't being used and a small increase would help their business.
However, car companies say that if you mix too much ethanol into gasoline, cars don't run as well and use more fuel.
They also say that most cars are only built to handle a certain amount of ethanol.
Right now, the gasoline has up to 20% ethanol.
The car companies don't want to mix more than that.
People buying gas haven't seen any cheaper prices because of the ethanol, and their cars already go a little less far on a tank of gas with the current mix.
The ethanol industry is proposing a 1-2% increase in the mandated ethanol-petrol blend beyond the current E20.
Automakers are opposing this, citing reduced fuel efficiency (4-6% drop with E20) and potential engine durability issues with higher blends.
Nearly half of India's grain-based ethanol production capacity remains idle, leading producers to seek higher blending levels for viability.
Consumers have not benefited from price reductions, as E20 fuel production costs are higher, while elevated petrol prices persist.
The industry awaits a roadmap from Niti Aayog for the future of India's ethanol blending strategy, which is expected to address infrastructure and financial viability.
- Who
- The Grain Ethanol Manufacturers’ Association (GEMA) and automobile manufacturers
- What
- A dispute over increasing the percentage of ethanol blended with petrol.
- When
- Current discussions, with a roadmap expected from Niti Aayog addressing future strategy.
- Where
- India
- Why
- Ethanol producers want to utilize idle capacity and achieve breakeven, while automakers argue higher blends reduce fuel efficiency and could harm engines.
Ethanol Producers
Automakers
Capacity Utilization
Ethanol Producers
Nearly 50% of grain-based ethanol capacity is idle, and a modest increase in blending would help utilize this capacity and achieve breakeven.
Automakers
While not explicitly stated, automakers' opposition implies that maintaining the current blend is sufficient or that higher blends are not technically feasible or desirable.
Fuel Efficiency and Engine Performance
Ethanol Producers
Producers suggest a small, phased increase within the tolerance level of existing vehicles to support industry viability without significant negative impacts.
Automakers
Automakers argue that E20 already causes a 4-6% drop in mileage and higher blends could negatively affect engine performance and durability.
Consumer Benefit
Ethanol Producers
The program has boosted the farm economy by paying farmers ₹40,000 crore over a decade for ethanol-linked crops.
Automakers
Consumers see no price advantage at the pump because E20 fuel production costs are higher, and they already experience reduced mileage with the current blend.
- Current Ethanol Blending Mandate
- 20% (E20)
- Ethanol Industry Proposal
- 1-2% increase in blending beyond E20
- Automaker Stance
- Opposed to higher blends due to reduced fuel efficiency and potential engine issues
- Consumer Impact
- No price advantage at fuel pumps; E20 already causes 4-6% drop in mileage
- Grain-based Ethanol Capacity Utilization
- Approximately 50% idle
- Farmer Payments for Ethanol-Linked Crops
- Approx. ₹40,000 crore over the past decade