India Plans Ethanol Blending Beyond E20 With Flex-Fuel Vehicles

The Centre is mulling to allow ethanol blending at levels higher than the current E20 limit, with flex-fuel vehicles likely to provide the technological basis for using higher ethanol concentrations, Tarun Kapoor, advisor to the Prime Minister, has said, news agency PTI reported.

Speaking virtually at the fourth edition of The India Sugar & Bio-Energy Conference 2026, Kapoor said the E20 programme had been "very successful" so far, while several automobile manufacturers had announced plans to introduce flex-fuel vehicles.

"Now our focus is on going into flexi-fuel vehicles and allowing blending at a percentage which will be higher than E20," he said, adding that the rollout would also require wider availability of pure ethanol at fuel outlets.

The proposed move would take India’s ethanol programme into its next phase, as the government looks beyond the current blending level and seeks to make greater use of the country’s expanding biofuel production capacity.

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Kapoor said the case for greater use of domestic biofuels has become more pressing following the West Asia crisis, which has disrupted supplies and pushed crude oil prices close to $100 a barrel, with the possibility of further increases. "It is important that we try to have whatever is available in the country," he said.

India’s ethanol production capacity has now moved beyond what is required for the existing blending programme, Kapoor said. The surplus means the industry will have to look at other applications for ethanol if the available capacity is to be fully utilised.

The E20 programme has also faced criticism over its impact on vehicle fuel economy. Kapoor attributed a significant portion of the criticism to misinformation or "motivated reasons", while pointing to studies that have found E20 to perform well. According to him, any marginal reduction in fuel efficiency is offset by ethanol’s higher octane content.

The government is also examining biofuel options for the diesel segment. Kapoor said work was under way on biofuel-based additives and pointed to experiments involving isobutanol. If successful, he said, the approach could create a "large" new avenue for biofuels, particularly given diesel’s substantial contribution to refinery output.

Beyond transport fuels, the government is seeking to broaden the bioenergy ecosystem through initiatives such as the new GOBARdhan scheme. The programme brings together incentives offered by different Ministries to encourage compressed biogas (CBG) production, although progress in the segment has so far been limited.

Kapoor urged ethanol manufacturers to consider CBG as another avenue for diversification, along with value-added products such as potash. Such diversification could help the industry make better use of existing feedstock and production infrastructure as ethanol supply increases.

The government's next challenge will be to match higher ethanol availability with suitable vehicle technology, fuel infrastructure and additional end-use markets. For automakers, the potential move beyond E20 could also accelerate preparations for flex-fuel vehicles as India seeks to reduce its exposure to imported crude and make greater use of domestically produced fuels.