1 hr ago

India’s E20 Challenge Shifts From Capacity to Economics

India is mixing ethanol, a type of fuel made from crops, into petrol.

It has reached a target of about 20% ethanol blending.

However, having many factories does not always mean enough ethanol will be available.

Factories need feedstock, money, transport and enough operating days to produce efficiently.

India now uses grains such as maize and rice as well as sugarcane products.

This gives the country more choices, but grains and sugar-based materials must still be available at reasonable prices.

A factory that operates only part of the time can become expensive because its fixed costs remain.

The main question for 2026–27 is whether India can produce and deliver enough ethanol economically, not merely whether factories exist.

Predictable policies and flexible plants could help keep E20 supplies steady.

Key facts

Ethanol blending milestone: Average blending reached 19.2% in ESY 2024–25 and about 20% from November 2025 to June 2026.
Capacity growth: Production capacity increased from about 421 crore litres in 2014 to around 2,000 crore litres in 2026.
Estimated E20 requirement: About 1,212 crore litres, based on projected FY 2026–27 petrol consumption of approximately 60.6 billion litres.
Recent allocation mix: Of approximately 1,048.3 crore litres allocated, about 759.8 crore litres were grain-based and 288.5 crore litres were sugarcane-based.
Illustrative plant economics: For a 60 KLPD plant, annual interest cost was estimated at ₹5.56 per litre at full utilisation, ₹11.11 at 50% utilisation and ₹18.52 at 30% utilisation.
Key supply measure: Effective OMC supply—the ethanol actually available for blending—is more important than installed capacity alone.

thehindubusinessline.com · 2 hrs ago