The ethanol bargain.
From 1 April 2026, almost every litre of petrol sold in India contains up to a fifth ethanol. The country reached the 20% blending mark in 2025, roughly five years ahead of the target set under the National Policy on Biofuels, and the government has already notified standards for E27 and E30 and floated higher blends beyond that. By the official account, this is one of the cleaner energy-policy successes of the decade. By the account of a large and growing number of car and two-wheeler owners, it is a quiet tax on people who were never consulted.
Both accounts are largely true at the same time. That is what makes ethanol a more interesting story than either its boosters or its critics usually allow.
The case for
The strategic logic is straightforward and hard to dismiss. India imports more than 85% of the crude oil it consumes, and that dependence is both a fiscal drain and a security exposure — as the events of this June in the Strait of Hormuz have again made vivid. Every litre of domestically produced ethanol displaces a litre of imported petrol. The government puts the cumulative saving on crude imports at over ₹1.44 lakh crore since the programme scaled up, and estimates that pushing to E30 could trim the import bill by a further USD 4–5 billion a year.
The second argument is rural. Ethanol procurement creates a guaranteed, price-supported demand channel for sugarcane, maize and surplus grain, and the government credits the programme with more than ₹1.58 lakh crore in direct payments to farmers and the distillery and milling chain that sits between farm and pump. In a country still looking for ways to raise agricultural incomes without simply raising procurement prices forever, a fuel market that absorbs farm output has obvious appeal.
The third is climate. The official figure is roughly 909 lakh metric tonnes of carbon dioxide avoided, and the petroleum ministry argues E20 cuts certain tailpipe emissions relative to E10. Ethanol is not zero-carbon — the tractor, the boiler and the fertiliser all burn something — but on a lifecycle basis a domestically grown blend can come out ahead of the petrol it replaces.
None of this is invented. A government that set an ambitious target and beat it deserves the credit that a government which missed one would have been denied.
The case against
The objections fall into three buckets, and the honest version of each is uncomfortable.
The first is the car in the driveway. Vehicles sold before about March 2023 were not designed for 20% ethanol, and India has well over a hundred million of them. Ethanol is more corrosive and attracts water; over time it can degrade rubber seals, gaskets and certain plastics in older fuel systems. The mileage hit is genuine but contested in size: the petroleum ministry concedes a drop of 1–2% in newer cars and up to 6% in older ones, while some independent road tests on decade-old vehicles have reported far steeper falls. The dispute over whether the real number is 2% or 20% matters enormously, because it determines whether E20 is a rounding error or a recurring cost borne mostly by people driving older, cheaper vehicles — which is to say, by the less affluent.
The second is food and water. India’s ethanol has quietly shifted from sugar to grain: feedstock that was effectively zero grain in 2017-18 is now more than 70% grain, with maize and rice doing most of the work. Close to 29% of the 2024-25 maize crop went to ethanol, maize acreage has expanded sharply, and the land linked to ethanol feedstock has risen from under a million hectares in 2020-21 to nearly six million. Rice is the awkward case: producing a litre of grain ethanol from rice can imply well over 10,000 litres of water once irrigation is counted, in a country where the water table is already the binding constraint across much of the north. A fuel policy can quietly become a water policy, and a water policy India has not openly debated.
The third is the consent problem. The blend was raised to 20% without giving consumers a choice of pump, and the planned march to E30 and beyond would deepen a mandate that owners of incompatible vehicles cannot opt out of. Even people sympathetic to the strategic case bristle at being enrolled in it without a non-ethanol option or compensation. The backlash that has built through 2025 and into 2026 — call it India’s “greenlash” — is less an argument against biofuel than against the way the policy has been administered.
How to hold both thoughts
The temptation is to resolve the tension by picking a side. The more useful exercise is to notice that the strongest arguments for ethanol are national and long-run — import bills, energy security, farm incomes, emissions — while the strongest arguments against it are individual and immediate — your mileage, your engine, your water table, your lack of a choice. Policies that concentrate visible costs on individuals while dispersing benefits across the nation are exactly the kind that are economically defensible and politically combustible.
That suggests the real questions are not “ethanol: yes or no?” but the narrower, more answerable ones the debate keeps skipping. Should there be a non-blended or E10 pump option for pre-2023 vehicles, even at a price premium? Should the move beyond E20 wait for the inter-ministerial committee’s review rather than run ahead of it? Should feedstock policy actively steer away from rice toward less thirsty crops and genuine agricultural surplus, with a water audit attached to the blending roadmap, as several agronomists have urged? Should the mileage question be settled by transparent, independent testing rather than duelling press releases?
India has already done the hard part: it built the distillery capacity, the procurement plumbing and the political will to hit a target most observers thought it would miss. The harder, less glamorous part is now governing the programme well enough that the people asked to absorb its costs feel like participants rather than subjects. The bargain is a reasonable one. Whether it stays reasonable depends on terms that are still being written.
“The Refiner” is a pen name. Pen names are used by editorial choice; for our reasoning, see Editorial standards. This essay aims to lay out the strongest case on each side rather than to advocate a position.