SECTION 2 OF 3 · THE FUEL

About ethanol

The Ethanol Blended Petrol programme is older than most people assume and moved faster than almost anyone predicted. Understanding how it got to E20 explains why the feedstock question, not the blending target, is now the contested one.

01 — THE CLIMB

A decade of going nowhere

For its first decade the programme barely moved. Blending was under 1.5% in 2013-14 and 1.14% the year after: supply was unreliable and administered prices too low to justify building a distillery.

The money arrives

The inflection came after 2018. Interest-subvention schemes financed a wave of new capacity — 368 projects approved — and differential pricing made the and routes worth taking. The National Policy on Biofuels set an E20 target for 2030; by December 2020 the Cabinet had pulled it forward to 2025.

Five months early, then five years early

E10 arrived in June 2022, five months ahead of schedule. E20 followed in 2025-26, five years early, and from 1 April 2026 E20 became the sole standard petrol grade.

Average blending rate by supply yearFIG. 2.1

Ethanol supply years run 1 November to 31 October. Years with no published blending figure are omitted, so the horizontal axis is a sequence of reported years rather than an even time scale.

Average ethanol blending rate and volumes by ethanol supply year
ESY	Blending %	Ethanol procured (crore L)	Installed capacity (crore L)
2013-14	1.5%	38	421
2014-15	1.14%	—	—
2018-19	5%	189	684
2020-21	8.1%	—	—
2021-22	10%	433	—
2022-23	12.06%	—	—
2023-24	14.6%	707	1589
2024-25	19.05%	904	1623
2025-26	20%	1200	2019

Source: MoPNG / PPAC via PIB

Feedstock share: cane against grainFIG. 2.2

Cane-based
Grain-based (maize, FCI rice, damaged grain)

Percentage of ethanol supplied to oil marketing companies, computed from the published component volumes. The 2025-26 column covers the first half of the year only, to June 2026.

Ethanol feedstock shares and volumes by ethanol supply year (crore litres)
ESY	Cane %	Grain %	Maize	FCI rice	Damaged grain	Total
2020-21	86.3%	13.7%	0	2.2	39.3	302.4
2021-22	83.3%	16.7%	0	45.75	22.59	408.09
2022-23	72.9%	27.1%	31.5	73.7	31.9	506.4
2023-24	40.2%	59.8%	286.47	0.13	115.62	672.49
2024-25	30.9%	69.1%	498.49	—	—	1039
2025-26	33.1%	66.9%	258	177	45	717

Source: INFOMERICS compilation of DFPD/MoPNG data; AIDA

02 — THE QUIET SWITCH

The programme stopped being about cane

In 2019-20, nine litres in ten came from sugarcane. By 2024-25 grain supplied 69% of the ethanol reaching oil marketing companies — 718 crore litres against 321 from cane. This is the single most consequential fact about E20 and the least discussed.

It relieved pressure on sugar — and transferred it onto maize, damaged foodgrain and surplus FCI rice. India became a net maize importer in 2024 for the first time in decades, and 52 LMT of FCI rice was allocated to ethanol in each of the last two supply years.

69%

grain-based at the ESY 2024-25 peak

1,016 cr L

needed for E20 blending

Capacity now runs at about 2,019 crore litres across 478 units — roughly double what E20 blending needs.

03 — IN CONTEXT

India against the world's blenders

World fuel ethanol production, 2024FIG. 2.3

India
Other producers

Billion US gallons. India is highlighted. Blend mandates differ from production share — the United States produces the most but blends the least of the leaders.

World fuel ethanol production, blend mandates and 2026-27 sugar balance
Country	Fuel ethanol (bn gal)	Share of world	Blend mandate	Sugar note
United States	16.219	52%	E10 standard (E15/E85 limited, under RFS/RFS2)	Set a record 16.49 bn gal in 2025, almost entirely from maize.
Brazil	8.78	28%	E30 from 1 Aug 2025 (up from 27.5%, Law 14.993/2024); E35 under evaluation; E100 for the flex-fuel fleet	2026-27 output 42.5 MMT (USDA, −3%) or 43.952 MMT (Conab, −0.5%); ~48.6–52% of cane to sugar.
India	1.63	5%	E20	Gross production 306 LMT in 2025-26 on the Ministry basis.
European Union	1.44	5%	E5–E10 under the Renewable Energy Directive	First-generation and ILUC biofuels capped under RED.
China	1.2	4%	No confirmed national mandate in our sources
Canada	0.464	1%	—
Thailand	0.36	1%	—	2026-27 output ~9.5 MMT (USDA, −15.6%) or ~10.2 MMT (StoneX, −15%).
Argentina	0.31	1%	—
World	—	—	—	2026-27 production ~193.7 MMT (−1%) against demand ~194.3 MMT (+0.5%). Balance flips from a +2.29 MMT surplus in 2025-26 to a −0.55 MMT deficit, later revised to −1.7 MMT. Other houses: Green Pool −3.3, Datagro −3.17, Czarnikow −0.1, Covrig −0.3 MMT.

Source: RFA / Statista / AFDC compilation

Only Brazil blends deeper than India. Brazil's programme is fifty years old, built on a flex-fuel vehicle fleet and a cane sector with roughly twice India's yield per hectare, and it moved to E30 in August 2025.

The United States blends less but produces far more — 52% of world output, almost entirely from maize. That is why American food-versus-fuel arguments read so similarly to India's newest ones.

India cannot copy Brazil directly: Brazilian mills flex between sugar and ethanol on a market parity price, while India's ethanol prices are administered. India's flexibility is policy — switching cane-juice and B-heavy allowances on and off — not price.

Next: how they connect →