India Plans for 20% Ethanol-blending with Gasoline by 2025

India has set up a target to achieve 20% ethanol-blending with gasoline by the year 2025. This will be now 5 years ahead of the previous target country for reducing its dependence on costly oil imports.

Key Points

• Before this, in 2020 the government had set a target of reaching 10% ethanol-blending by the year 2022. This 10% ethanol-blending means 10% of ethanol mixed with 90% of gasoline.
• The government set the target of 20% ethanol-blending by the year 2030.
• Now, India plans to achieve the target of 20% ethanol-blending by 2025 only; 5 years ahead of the previous target.
• India is the third-biggest oil importer in the world. The country relies on imports and foreign suppliers for meeting over 80% of its demand.
• In the present ethanol supply year, which started in October, the country targets to have 8.5% ethanol-blending with gasoline.
• This would be later raised to 10% by mixing in 4 billion litres of ethanol by the year 2022.
• If India has to achieve a 20% blending target by the year 2025 and to meet the requirement of the chemical and other sectors, the country will require around 12 billion litres of alcohol/ethanol.
• 7 billion litres of the ethanol needed will be produced by the sugar industry by diverting 6 million tonnes of surplus sugar. The remaining 5 billion litres of ethanol will be produced from excess grain.

Increasing ethanol content also has the aim of providing an alternate revenue source for sugar mills as, under the World Trade Organization Agreement on Agriculture, India will not be entitled to extend sugar export subsidies beyond 2023.