Industry Chiefs Dismiss E20 Petrol Damage Claims Ahead of Supreme Court Hearing

Senior executives from India's automotive and petroleum sectors have dismissed allegations that E20 petrol damages older vehicles, ahead of a Supreme Court hearing scheduled for September 1 that will examine a legal challenge to the government's ethanol blending mandate.

Speaking at a joint press conference on Saturday, representatives from automobile manufacturers, oil marketing companies, and the Automotive Research Association of India maintained that no documented cases of vehicle damage have emerged from the ethanol programme. They acknowledged only minor fuel efficiency reductions of 2% to 6% in older vehicles.

The petroleum industry highlighted the programme's economic benefits, including foreign exchange savings of $4 billion and payments totalling ₹40,000 crore to farmers in 2025. The initiative has also contributed to reducing carbon emissions whilst supporting agricultural incomes across the country.

Feedstock Revolution

The programme's expansion required significant diversification beyond traditional sugar industry sources. Initially dependent solely on C heavy molasses, the ethanol supply chain now draws from multiple feedstocks including sugar cane juice and various grades of molasses.

Infrastructure Development

Oil marketing companies have constructed storage facilities capable of holding over 80 crore litres of ethanol, equivalent to 21-28 days of national requirements. The industry has streamlined payment processes, ensuring distilleries receive payments within 21 days to maintain adequate working capital.

Government support included simplified environmental clearances, moving from P1 category requiring public hearings to P2 category with reduced compliance requirements. Interest subvention schemes have made new distillation capacities financially viable for entrepreneurs nationwide.

Industry Position Shift

The Society of Indian Automobile Manufacturers, which previously expressed concerns about E20 impacts on older vehicles, has modified its stance. Executive Director Prashant K Banerjee stated that testing evidence from ARAI, original equipment manufacturers, and oil companies has demonstrated their earlier concerns were unfounded.

Major manufacturers including Renault and Toyota now confirm no adverse effects from using higher ethanol blends in E10-compliant vehicles. The industry association has pledged to honour warranty claims should any E20-related damage occur.

India achieved 20% ethanol blending five years ahead of its original 2030 target, reaching the milestone by March 2025. The programme combines BS6 emission standards with E20 blending, a combination not achieved elsewhere globally according to industry officials.

The ethanol programme has achieved remarkable growth since its inception in 2001. From modest beginnings processing just 38 crore litres in 2014, the initiative now handles approximately 1,200 crore litres annually. This represents a procurement value jump from under ₹500 crore to roughly ₹85,000 crore per year.

However, the most significant development has been the shift towards grain-based ethanol production. Maize now accounts for approximately 40% of total ethanol output, reducing dependence on sugar-producing states like Uttar Pradesh, Maharashtra, and Karnataka.

Supreme Court Challenge Looms

Chief Justice BR Gavai, alongside Justices K Vinod Chandran and NV Anjaria, will hear a Public Interest Litigation questioning the mandatory ethanol blending policy. The legal challenge comes as consumer concerns mount over fuel efficiency impacts on non-E20 certified vehicles.