The government is intensifying efforts to encourage Flex Fuel Vehicles (FFVs) to increase ethanol utilization in the transport industry amidst global oil market disruptions caused by the Middle East conflict. A key stakeholder meeting, organized by the Ministry of Petroleum and Natural Gas (MoPNG) and chaired by the Additional Secretary, is set to outline a roadmap for the adoption of FFVs in India. Participants will include representatives from major Oil Marketing Companies (OMCs) like Indian Oil, Bharat Petroleum, Hindustan Petroleum, as well as automobile manufacturers and other stakeholders.
The discussions at the meeting are anticipated to revolve around the necessary policy actions to expand ethanol blending with fuels beyond the current mandate. Currently, India operates under an E20 program where petrol is blended with 20% ethanol. The government is now exploring the transition to FFVs capable of running on ethanol blends of up to 85% to reduce the country’s reliance on oil imports and bolster energy security amid global oil market uncertainties.
India’s current crude oil imports exceed 85%, exposing the economy to global oil market shocks. To address this vulnerability, the government is eager to diminish the dependency on oil imports. The country’s target of blending 20% ethanol with petrol has been moved up to the Ethanol Supply Year (ESY) 2025-26 from the initial 2030 target due to rapid expansion.
In support of achieving the 20% Ethanol blending target by ESY 2025-26, the government has implemented various measures, including expanding feedstock for ethanol production and developing maize clusters around ethanol plants to boost maize production in the catchment area of grain-based distilleries. Additionally, the government has allocated surplus Food Corporation of India (FCI) rice for ethanol production and diverted sugar for ethanol production to enhance ethanol supply in the country.
To further stimulate ethanol production and supply, the government has introduced an administered price mechanism for Ethanol procurement under the Ethanol Blended Petrol (EBP) Programme and reduced the GST rate to 5% for Ethanol for the EBP Programme.
