What Is E20 Fuel & Why India Aims 20% Ethanol Blending By 2025? – The Catalysts Group

What Is E20 Fuel & Why India Aims 20% Ethanol Blending By 2025?

Introduction – 

What is E20 Fuel ?

Fuel which is made from a composition of petrol and Ethanol is referred to as E20 fuel. The number 20 here refers to the percentage in which Ethanol is mixed with petrol. India plans to reach the current ethanol ratio in the composition of 8.5 to 20 percent in 2025 (10 percent in 2022). The government preponed the target from 2030 to 2025 in the wake of rising pollution and drain on the depleting and expensive gasoline. Ethanol is generated from sugarcane and corn, hence called green fuel. It’s production does not need crude oil and there is an abundant plantation of sugarcane and corn in India already. However to reach 20 percent in E20 fuels, the production capacities could need enhancement in sugarcane and corn plantation.

There are certain advantages which come naturally with increasing the ethanol percentage. Let us glance at the advantages in a nutshell.

  • Reduces carbon emissions and reduces the pollution levels in the air caused by pure petrol combustion by improving combustion performance
  • Reduces the country’s import bill and hence the savings in the foreign exchange. This eventually reduces the impact of crude oil prices on inflation.
  • Improves the engine efficiency by increasing the compression ratios of petrol vehicles. E20 is a knock resistant fuel that lends itself to increasing the Octane Numbers, hence better efficacy.
  • Reduces burden on depleting non-renewable sources of energy which is a global concern and hence a concern for India too which doesn’t have enough crude oil reserves of its own.
  • A given amount of Ethanol produces approximately 66.67% of energy as generated by the same amount of petrol.
  • Promotes the government overall agenda of enhancing Green/Bio Fuel usage across the country including Ethanol, which in turn gives a boost to India’s Agriculture Sector.

Why Ethanol?

Ethanol, a naturally produced biofuel, has gained prominence in the recent past for its beneficial usages in energy, medical, and industrial applications. It has come to be known as an effective tool to aid the world in its global struggle against environmental degradation and climate change and energy security. Ethanol is produced from sugars and molasses by the process of fermentation with yeasts or through petrochemical processes like ethylene hydration. India is the fourth-largest producer of Ethanol in the world and the second-largest producer in Asia after China. The country produces 460 million gallons of Ethanol annually which is approximately 4% of the world total production. The other countries in the world are using Ethanol for blending petrol from 5% to 27%. Research has shown promising results in the use of Ethanol for transportation.

Why India Aims At 20% Blending by 2025?

The government is making these efforts to reduce the stress on its balance of trade, as increasing ethanol ratio in petrol for country-wide consumption would substantially bring down the crude oil imports which is the biggest factor affecting economy and inflation. India’s net import of petroleum during 2020-21 was 185 Mt at the cost of USD 55 billion. Petroleum products are mainly used for transportation purposes. A successful Ethanol Blending Program of 20% (E20%) can save the country USD 4 billion per annum, i.e. Rs. 30,000 crores. Crude oil prices globally affect the inflation rates and forex reserves. The increasing pollution is another huge challenge the government is grappling with and would need to fast track its efforts and E20 is one step further in that direction.

In Indian context, some of the advantages, i.e., availability of large cultivable land, ever increasing production of food grains and sugarcane leading to surpluses, availability of technology to produce Ethanol from plant based sources, and feasibility of making vehicles compliant to Ethanol blended petrol make E20 not only a national imperative, but also an important strategic requirement. Due diligence by concerned agencies of the government has made it possible to put in place a favourable regulatory and retail ecosystem for safe and effective use of Ethanol blended petrol. With the recently approved interest subvention incentives for grain based distilleries, the target of 20% blending of petrol in the country by 2025 thus appears feasible and within reach with some challenges along the way, which any plan of such magnanimity is likely to face.

In India, our energy demands are surging due to urban growth, changing lifestyles, expanding economy, growing population and rising spending power of this population. The fuel requirements of the road transport sector is met mostly by natural fuels, which have already started depleting and are also largely responsible for environmental degradation. Though the Government of India started its ethanol blending program known as Ethanol Blending Program (EBP) in 2003, yet we are using biofuels in the transport industry only to the tune of 2%, which is exceptionally low.

As mentioned earlier, the Government of India has already decided to advance the adoption of 20% blending in petrol in the country by 2025 and worked out a plan to achieve this target. It includes measures for augmentation of ethanol production capacity, ethanol blending roadmap, augmentation of infrastructure of oil marketing companies, expediting regulatory clearances for Ethanol producing units, production of higher ethanol compatible vehicles, incentives for Ethanol blended petrol vehicles, pricing of Ethanol blended gasoline, and encouraging use of water saving crops to produce Ethanol. However, there are challenges in the way of achieving the targeted 20% ethanol blend, as the auto industry already saw a rough phase during the implementation of BS-VI emission norms and then the covid struck the world which jostled the best of plans globally. Also there is a rush towards Electric Vehicles as an alternative and rightly so and already existing CNG powered vehicles. Hence to invest into technology and manufacturing of flex-fuel vehicles, which come with an engine modified to accommodate any percentage of ethanol and petrol concoction, might be an uphill task.

However, the incentives and advantages of EPB (Ethanol Blending Program) outweigh the challenges and the government is all set to make sure it reaches its planned target of 20% by 2025.