Auto industry, ethanol makers agree on continuation of 20% blending for now
Ethanol producers, auto firms, and the government are maintaining 20% blending for stability, while pushing flex-fuel vehicles as the long-term solution. Distilleries face excess capacity as OMCs plan to buy only part of projected output. Industry groups suggest expanding ethanol use in diesel, aviation fuel, exports, and flex-fuel cars.
The automobile industry and ethanol producers have agreed to continue with the 20 per cent blending for now to allow the biofuel blending programme to stabilise. They, however, have sought permission for the commercial launch of flex-fuel vehicles with some push to encourage customers.
Addressing a team of visiting media at Triveni Engineering’s Sabitgarh sugar mill, Vikram Gulati, country head and Executive Vice President (corporate affairs), Toyota Kirloskar Motor, said that the automotive industry, the government, and other stakeholders (ethanol producers) in the ecosystem are in one voice that the way ahead is flex fuel vehicle.
“Globally, what is seen is after you reach the stage, let us say 20 per cent (ethanol blending with petrol) in case of India, you stabilise that and you use flexible vehicles,” Gulati said, adding that it is very difficult to go beyond E-20, because of the impact it may have on the vehicles, legacy vehicles, apart from other factors.
He also said that auto makers can’t keep developing, re-testing, re-homologating the new vehicles in a gap of two-three years, every time blending rate is hiked, nor can the vast legacy vehicles be ignored.
Push and pull
While the sugar and grain-based distilleries are seeking a hike in ethanol blending beyond 20 per cent, which is under evaluation by an inter-ministerial committee under an additional secretary of the petroleum ministry, the government’s statements in the recent past lack clarity, after social media users criticised the EBP hike plan terming “blending as adulteration”.
Addressing the same, Deepak Ballani, Director General of Indian Sugar and Bio-Energy Manufacturers Association (ISMA) said that the oil marketing companies (OMCs) have confirmed purchase of 1,048 crore litres of ethanol in 2025-26 season (November-October), against the total ethanol production of 1,900 crore litres.
“(Even) after meeting demand of alcohol and other industries of 330 crore litres, there will be unutilised capacity of over 450 crore litres,” Ballani said, and admitted that it would impact the financials of the distilleries. He also said that while the sugar mills have about 900 crore litres capacity, they have been allotted only 289 crore litres incycle 1 tender.
Depending on demand and supply, OMCs decide on the quantity of ethanol to purchase in a year, and revise it every quarter as per requirement.
In his presentation, the ISMA DG explained different ways to increase ethanol consumption, but did not specify any plan to increase the blending rate from the current E-20 level.
Ballani said, there could be a demand of 1,950-2,050 crore litre in addition to the current 1,300-1,350 crore litre, which will include 1,300-1,350 crore litre from ethanol blending with diesel. He added that Praj Industries has at an advanced stage of its trial of ethanol blended diesel.
Other sources from where more demand could be created are 250 crore litre from sugarcane-based ethanol export, 300-350 crore litres from flex fuel vehicles and 100 crore litres from 5 per cent blending with aviation fuel.
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Source : The Hindu Business line
