DRIVING CHANGE E20

E20 fuel is going to be a game changer. The success of India's ethanol blending program can be attributed to proactive government policies and active participation of the private sector

The Union Budget for fiscal year 2023-24 had a couple of announcements for the ethanol industry. Also, within a few days of presenting the Budget, Prime Minister Narendra Modi, at an industry event, launched Ethanol-20 (E-20) fuel. E20 is a blend of 20% ethanol with petrol. The blended fuel will be initially available at fuel pumps in 15 cities, and across India within two years.

The rollout of the E20 fuel is a watershed moment for the country. Government policy initiatives and private sector participation are aiding India’s bio-energy market.

Bio-fuels like ethanol have multiple benefits: blending ethanol with fossil-based fuel reduces vehicular emissions, strengthens the country’s energy security, helps reduce oil imports and conserves forex reserves, and most importantly helps control excess sugar supply in the country.

The launch of E20 and the Union Budget announcements are to be read contextually. About 85% of India’s fuel needs are met by imports. India is pursuing a fourfold strategy to cut import bill and also stay environmentally prudent.

These include, first, increasing domestic exploration and production; second, diversifying the supply source of fuels; third, de-carbonisation by using electric vehicles and hydrogen as fuel. And fourth, expanding biofuels like ethanol and compressed biogas.

India is aiming to have 50% non-fossil fuel power capacity by the end of this decade and becoming energy sufficient by 2047. For this transition, the government is adopting several initiatives to build renewable power capacity and is providing incentives to the private sector.

Accordingly, the government has announced an allocation of around 35,000 crore in the Union Budget to the sector.

BUDGETARY PROVISIONS