E20: From Mileage Fears to Brazil’s E27 Model — Govt Explains Its Case for the Fuel
On August 4, the Ministry of Petroleum and Natural Gas issued a detailed response to concerns about the impact of 20% ethanol blended petrol (E20) on fuel efficiency, vehicle performance and costs. The government’s statement lays out the data behind its blending programme, addresses specific queries, and sets the roadmap for the near term.
How much foreign exchange and emissions has E20 blending saved?
Between Ethanol Supply Year (ESY) 2014-15 and ESY 2024-25 up to July 2025, blending ethanol in petrol has saved over ₹1,44,087 crore in foreign exchange and substituted about 245 lakh metric tonnes of crude oil.
The ministry says this has reduced carbon dioxide emissions by approximately 736 lakh metric tonnes — equivalent to planting 30 crore trees.
In 2025, at 20% blending, the government expects payments to farmers to be about ₹40,000 crore and forex savings to be around ₹43,000 crore.
What environmental benefits are cited?
A NITI Aayog study found that greenhouse gas emissions from ethanol made from sugarcane are 65% lower, and from maize 50% lower, than those from petrol.
Apart from emissions, the ministry points to rural economic benefits — elimination of sugarcane arrears, improved maize cultivation viability, and higher farm incomes. The statement notes that money earlier spent on crude imports is “now going to our farmers who have become ‘Urjadaatas’ apart from being ‘Annadatas’”.
What about concerns over mileage and performance?
The government said concerns about E20’s effect on mileage were anticipated in 2020 and studied by an Inter Ministerial Committee (IMC) of NITI Aayog, backed by research from Indian Oil Corporation Ltd (IOCL), Automotive Research Association of India (ARAI) and the Society of Indian Automobile Manufacturers (SIAM).
According to the ministry, E20 offers around 30% lower carbon emissions compared to E10 fuel, better acceleration in vehicles tuned for it, and a higher octane number (~108.5 versus petrol’s 84.4), which suits high-compression engines.
It also reduces intake manifold temperatures, improving volumetric efficiency.
The statement rejects claims of a “drastic” drop in fuel efficiency, noting that mileage is influenced by factors such as driving habits, maintenance, tyre pressure and air-conditioning load. For some manufacturers, vehicles have been E20-compatible since 2009, it said, and any efficiency drop in E10 vehicles has been marginal.
How does India’s E20 compare with global examples?
Brazil has been running on E27 fuel for years without reported issues, including for vehicles from manufacturers operating in India such as Toyota, Honda and Hyundai. The ministry said E20 meets Bureau of Indian Standards (BIS) and Automotive Industry Standards (AIS) on safety, drivability, and material compatibility.
For certain older vehicles, some rubber parts and gaskets may require earlier replacement when using E20, but the ministry described this as inexpensive and a one-time procedure during regular servicing.
Why is E20 not cheaper for consumers?
When NITI Aayog’s report was prepared in 2020-21, ethanol was cheaper than petrol. However, procurement prices have since risen. The average procurement price of ethanol in ESY 2024-25 (as of July 31, 2025) is ₹71.32 per litre, higher than refined petrol.
Despite this, the oil marketing companies have continued with blending because of its benefits to energy security, rural incomes, and emissions reduction.
What about insurance coverage fears?
The ministry called as “totally baseless” the claim that vehicle insurance would be invalidated by E20 use. It said an insurance company’s tweet had been misinterpreted to create confusion and that E20 use has no impact on vehicle insurance validity in India.
Will India move beyond E20 soon?
The current roadmap commits to E20 blending until October 31, 2026. Any move beyond this will require recommendations from the Inter Ministerial Committee, stakeholder consultations, and a formal government decision. The ministry said consultations are ongoing with automakers, ethanol producers, oil companies and research agencies, but no decision has yet been taken.
