India is on track to achieve its ambitious target of blending 20% ethanol with petrol by 2025-26, as indicated by recent progress in blending percentages and increasing ethanol production capacities. However, the journey toward this goal is fraught with challenges, particularly concerning the “food versus fuel” debate. Recent developments, such as the surge in maize imports and restrictions on sugarcane-based ethanol, highlight the complexities of balancing energy needs with food security.

The Blending Target: Current Status and Projections

• India’s ethanol blending program aims to integrate 20% ethanol with petrol by 2025-26, translating to a production target of approximately 1,000 crore litres of ethanol.
• As of now, blending levels have risen from around 8% in 2021 to 13-15% in 2023. 
• This progress highlights the significant strides made in scaling up ethanol production and integration into the fuel supply chain.

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Government Policies and Industry Dynamics

• The NITI Aayog roadmap outlines a significant increase in both sugarcane-based and grain-based distilleries to meet the ethanol blending targets. 
• Specifically, sugarcane-based distilleries need to expand from 426 crore litres in 2021 to 760 crore litres by 2026, while grain-based distilleries must grow from 258 to 740 crore litres. 
• The government’s interest subvention programs have been crucial in facilitating this expansion, but there is a call for their extension to sustain momentum and ensure long-term stability.

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The Sugarcane Dilemma

Sugarcane produces three main products: sugarcane juice and syrup, B-heavy molasses, and C-heavy molasses, in decreasing order of sugar content. Typically, the first two are used to make sugar, while the third is used for ethanol production.

• To boost fuel ethanol production, the government began permitting the diversion of the first two away from sugar production towards fuel ethanol. However, this diversion has led to concerns about the impact on sugar availability.
• The government’s recent restrictions on the diversion of B-heavy molasses and sugarcane juice highlight the delicate balance needed between ethanol production and sugar supply. 
• Expanding sugarcane cultivation to meet ethanol demands further exacerbates water use concerns, with potential impacts on agricultural sustainability.
• To make up for the shortfall caused by restrictions on B-heavy molasses, grain-based distilleries, primarily using maize, have likely been operating at full capacity to maintain blending percentages.This has led to a shortfall in the availability of maize as well aevident by increased Maize imports  this year. 

Increased Maize Imports: A Red Flag?

• Recent data reveals a notable increase in maize imports from April to June of this year compared to the previous year. 
• This rise in imports is largely attributed to the increased use of maize for ethanol production, compensating for restrictions on using sugarcane products.
• While the industry maintains that India has ample grain and sugar surpluses, the spike in imports raises concerns about potential imbalances in the food supply chain.

Fuel Efficiency in Automobiles

• Ethanol blending not only reduces greenhouse gas emissions but also has the potential to save foreign exchange and support rural economies. 
• However, there are concerns about the impact of higher ethanol content on vehicle performance.
• Existing vehicles may experience a decrease in fuel efficiency by an average of 6% when using ethanol blends, raising questions about the feasibility of achieving the E20 compliance target without affecting vehicle performance.

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Conclusion

India’s ethanol blending program represents a significant step towards sustainable energy use and reduced greenhouse gas emissions. However, achieving the 20% blending target requires careful management of the food versus fuel dilemma, the adoption of advanced biofuels, and continued policy support for ethanol production infrastructure. A balanced approach that considers food security, environmental impact, and vehicle performance will be crucial in realising the full potential of this ambitious program.

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