Ethanol Policy: Balancing Blending Targets with Water Sustainability
Context
India’s E20 ethanol blending programme is among the world’s most ambitious biofuel initiatives. However, experts argue that future policy should be driven by scientific evidence, life-cycle sustainability and economic efficiency, rather than focusing solely on blending targets. The environmental benefits of ethanol vary depending on the feedstock and production process.
Key Highlights
- India increased ethanol blending in petrol from around 1.5% (2013-14) to nearly 20% in 2025, helping reduce crude oil imports and support farmers’ incomes.
- Sugarcane-based ethanol can reduce greenhouse gas emissions by 50-70% compared to petrol, while grain-based ethanol offers a relatively lower reduction of 20-50%.
- Producing one litre of sugarcane ethanol may require nearly 2,000-3,500 litres of water, making it water-intensive, particularly in groundwater stressed regions.
- Subsidised electricity and urea encourage excessive groundwater extraction and fertiliser use, increasing the environmental cost of ethanol production.
Key Concepts
- E20 Fuel: Petrol blended with 20% ethanol. Vehicles manufactured after April 2023 are designed to be E20-compatible.
- EROEI (Energy Return on Energy Invested): Measures the amount of usable energy produced relative to the energy consumed during production.
- Life-Cycle Assessment (LCA): Evaluates the total environmental impact, including water use, carbon emissions and energy consumption, from cultivation to ethanol production.
- Second-Generation (2G) Ethanol: Produced from agricultural residues and other non-food biomass, reducing pressure on land and water resources.
Way Forward
- Adopt life-cycle-based carbon and water accounting while designing ethanol policies.
- Replace input subsidies with direct income support to farmers and rationalise the pricing of electricity, water and fertilisers.
- Accelerate the production of 2G ethanol and encourage ethanol manufacturing in regions with lower water stress and higher resource efficiency.