After soliciting inputs from relevant ministries and associations and analyzing progressive demand-supply projections, challenges in the manufacture of E20 vehicles, and infrastructure of Oil Marketing Companies (OMCs), the committee suggests a gradual rollout of E20 ethanol in the country to achieve the target by 2025. In the meantime, the rollout plan suggests pan-India availability of E10 from April 2022 for use as a protection fuel to meet the demands of existing vehicles until April 2025.

In this report, the committee has estimated an ethanol demand of 1016 crore litres based on the expected growth in vehicle population. The modeling exercise on the expected penetration of electric vehicles estimates the ethanol demand for petrol blending in the range of 722-921 crore litres in 2025. The committee has, however, framed its recommendations on an optimistic demand for ethanol (1016 crore litres) to ensure that the objectives of E20 are met by 2025.

The current ethanol production capacity in India of 426 crore litres derived from molasses-based distilleries and 258 crore litres from grain-based distilleries is proposed to be expanded to 760 crore litres and 740 crore litres respectively. This would be sufficient to produce 1016 crore litres of ethanol required for EBP (Ethanol Blended Petrol) and 334 crore litres for other uses. This will require 60 lakh MT (Metric Tons) of sugar and 165 lakh MT of grains per annum in ESY 2025 to be used for producing ethanol, which the country can support. The committee’s generous demand estimates and consequent supply projections give us confidence that our suggested plan for E20 roll-out is robust.

To get the ball rolling, MoP&NG should proclaim and lay out the target for 10% ethanol blending of gasoline fuel all over the country by April 2022. MoP&NG should further initiate phased roll-out of 20% ethanol blending from April 2023 onwards to enable action by all stakeholders, namely Oil Marketing Companies, vehicle manufacturers, service stations, distilleries, and entrepreneurs, as per a detailed roll-out plan suggested (Figure 9.1). This should be supported by a simpler and quicker regulatory regime, preferably single-window clearance by the States, MoEF&CC, PESO, DFPD, and MoP&NG, and the launch of educational campaigns for consumers.

When using E20, there is an estimated loss of 6-7% fuel efficiency for 4-wheelers which are originally designed for E0 and calibrated for E10, 3-4% for 2-wheelers designed for E0 and calibrated for E10, and 1-2% for 4-wheelers designed for E10 and calibrated for E20. SIAM has informed that with modifications in engines (hardware and tuning), the loss in efficiency due to blended fuel can be reduced. To compensate consumers for a drop in efficiency from ethanol-blended fuels, tax incentives on E10 and E20 fuel may be considered.

SIAM has assured the committee that once the roadmap for the availability of ethanol-blended fuel in the country is issued by MoP&NG, they would gear up to supply compatible vehicles in line with the roadmap. E20 material compliant and E10 engine-tuned vehicles may be rolled out all across the country from April 2023. These vehicles can tolerate 10% to 20% of ethanol-blended gasoline and also give optimal performance with E10 fuel. Vehicles with E20 tuned engines can be rolled out all across the country from April 2025. These vehicles would run on E20 only and will provide high performance.

In recommendations (Chapter-9), the report lays out specific responsibilities of union ministries, state governments, and vehicle manufacturers, which are summarized in Figure 9.1 as the suggested E20 rollout plan for 2025. To accelerate the adoption and transition to ethanol-blended fuels, price incentives through tax relief at the retail level on ethanol-blended fuel and tax incentives for vehicles compatible with E20 are suggested. The government may also encourage the use of lower water-consuming food grain crops like maize and 2G feedstock for the production of ethanol.