How India’s ethanol hedge is paying back
India is accelerating plans for E85 and E100 fuels for flex-fuel vehicles as the 2026 global oil crisis highlights the success of its ethanol blending programme. Expanded biofuel policies since 2018 diversified feedstocks beyond sugarcane, strengthening energy security and creating new opportunities for farmers.
India is preparing for E85 — petrol blended with 85 per cent ethanol — and even E100 fuels for flex-fuel vehicles that can run on any blend. This push looks prescient. As crude oil volatility and shortages returned with force in 2026, triggered by the Strait of Hormuz blockade and global supply disruptions, India found itself buffered by a policy conceived over two decades ago: the ethanol-blended petrol programme.
What began quietly in January 2003 as a modest initiative — with a 5 per cent blending target across nine states — barely registered in the public discourse. Even by 2014, the national blending average was just 1.53 per cent. But the groundwork had been laid steadily, through incremental policy support, distillery capacity creation, and a long-term view of energy transition.
The real shift came about in 2018. The National Policy on Biofuels redefined the programme’s scope, expanding ethanol feedstock beyond sugarcane molasses to include damaged food grains, surplus rice, maize, and agricultural residues. This diversification reduced reliance on water-intensive sugarcane and brought the grain-producing regions of north and central India into the ethanol economy, creating new income streams for farmers.
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Source : The Hindu Business Line
