Geopolitical uncertainties, energy market volatility, and the imperative to strengthen energy security have renewed discussions on the role of sustainable, domestically produced renewable fuels alongside electrification.
As Europe evaluates the next phase of ethanol blending, including the possible adoption of E20 as a way to reduce emissions from the existing and future car fleet, experiences from other regions can provide valuable perspectives on the broader economic, environmental, and societal impacts of well-designed biofuel programmes.
India's Ethanol Blending Programme is one such example. What began as an initiative to reduce dependence on imported fossil fuels has evolved into a comprehensive bioeconomy that has transformed the national agenda from energy transition to energy security. Enabled by coordinated efforts between government, farmers, researchers, technology providers, oil marketing companies, and the automotive industry, the programme has strengthened energy independence, supported millions of smallholder farmers, promoted circular resource utilisation, and stimulated industrial innovation. But India’s E20 success story didn’t just happen overnight; it took key policy interventions, ecosystem enablers, and outcomes that offer insights into how renewable ethanol can contribute to a more resilient and sustainable energy future.
Policy-driven growth
India’s Ethanol Blending Program (EBP), which showed limited progress until 2014 with blending levels of just 0.1–1.5%, has since evolved into a landmark success. With the nation importing more than 85% of its crude oil requirement, energy security became a national priority. The ethanol programme was therefore conceived not merely as a climate initiative, but as a strategic measure to reduce dependence on imported petroleum and strengthen economic resilience.
To achieve this, the government introduced a Vision Policy after extensive stakeholder consultations and rolled out bold reforms that accelerated growth. As a result, the E20 target was advanced from 2030 to ESY 2025‑26, and by May 2025 nationwide blending reached 20%, achieving the milestone ahead of schedule.
Vision policy – Four pillars of success
Doubling farmers’ income through assured crop demand and expanded feedstock opportunities.
Reducing CO₂ emissions and saving foreign exchange by lowering crude oil imports.
Self‑reliance through strengthened domestic ethanol production and reduced dependence on imports.
Job generation across rural and industrial sectors, driven by new distilleries, logistics, and supply chains.
Government interventions
Differential pricing for ethanol based on feedstock.
Local Tax reduction on ethanol sales from 12% to 5%.
Expanded feedstock base: sugarcane juice, B‑molasses, maize, surplus grains from government distribution channels, unutilised grains, in addition to conventional C‑molasses.
Oil companies were instructed to execute long‑term assured off‑take agreements for ethanol with producers, for a period of ten (10) years.
Single‑window clearance system for fast‑track licensing of new ethanol plants.
50% interest subvention on project debt to ease financing.
Strict restrictions on ethanol imports to encourage domestic production.
Delivered benefits beyond expectations in last 8 years
By reducing crude oil imports, approximately $17.6 billion was saved in foreign exchange. Of this, around $15.4 billion was transferred to farmers, which in turn contributed to a doubling of their income.
Reduced CO₂ emissions by approximately 79 million metric tonnes—equivalent to the environmental benefit of 300 million fully grown trees.
Created thousands of jobs across agriculture, logistics, engineering, and manufacturing.
Stimulated rural economies by creating local markets for agricultural produce and biomass, reducing migration pressures and supporting balanced regional development.
From clean fuel to circular bioeconomy
India’s ethanol programme has evolved from a clean fuel initiative into a driver of energy security, rural development, agricultural transformation, and circular economy. Surplus grains, damaged food stocks, and residues are now valuable feedstocks. Second‑generation ethanol technologies convert crop residues into renewable fuel, reducing waste and open‑field burning. Farmers are now contributors not only to food security but also to national energy security.
Agricultural innovation and feedstock diversification
Unlike Brazil or the United States, where farms are typically large, Indian agriculture is dominated by millions of small and marginal farmers cultivating one to four acres. Building a successful ethanol programme therefore required raising productivity rather than expanding land use.
India adopted a diversified feedstock strategy, opening up multiple agricultural streams to support ethanol production while ensuring sustainability. This approach has been reinforced by continuous agricultural innovation.
Institutions such as the Vasantdada Sugar Institute (VSI) and the Indian Institute of Maize Research (IIMR) are pioneering intercropping systems that enable multiple crops to be cultivated on the same land and water resources, maximizing productivity. Advances in AI‑enabled precision farming, efficient irrigation practices, and improved agronomy are further optimising resource utilization, enhancing yields, and reducing environmental impact.
This integrated strategy demonstrates that expanding renewable fuel production can go hand in hand with agricultural sustainability, resource efficiency, and responsible land management — ensuring that India’s ethanol journey strengthens both energy security and rural prosperity.
Balancing food, feed, and fuel
A cornerstone of India’s ethanol journey has been its ability to balance food, feed, and fuel needs.
Importantly, all grain‑based ethanol plants produce a valuable co‑product: Distillers Dried Grains with Solubles (DDGS), which is rich in protein and widely used as animal feed. This innovation has created a win‑win scenario — ethanol production supports clean energy goals while simultaneously strengthening the livestock sector through enhanced feed availability.
This careful balance has allowed the programme to expand sustainably, supporting farmers with new income streams while safeguarding national priorities in nutrition, agriculture, and energy security.
Building bioeconomy beyond E20 & creating an entire biofuel ecosystem
India’s success has not been driven by blending mandates alone. It has been enabled by an ecosystem where policy, technology, agriculture, and industry progressed together.
Government policies created long‑term certainty for investment. Through the Pradhan Mantri JI-VAN Yojana scheme, the Government of India has provided viability gap funding of up to approximately €15 million per commercial 2G ethanol project, accelerating investments in advanced biorefineries that convert agricultural residues into low-carbon fuels and strengthen India's circular bioeconomy.
Fair and Remunerative Price (FRP) for sugarcane: Annual government-declared FRP ensures assured returns to sugarcane farmers, while the ethanol programme provides an additional revenue stream for mills, improving their liquidity and enabling timely cane payments.
Technology providers developed efficient biorefineries capable of processing diverse feedstocks.
Oil marketing companies invested in nationwide distribution infrastructure.
Automobile manufacturers introduced E20‑compatible and flex‑fuel vehicles, with higher blends such as E85 beginning to enter the market.
The result is an integrated value chain connecting farmers, researchers, technology developers, fuel retailers, vehicle manufacturers, and consumers. This coordinated approach shows that successful ethanol programmes depend on ecosystem development rather than isolated interventions.
The achievement of E20 blending—and the progress toward building a bioeconomy beyond E20—reflects the combined efforts of government, industry, and technology providers. Organisations such as Praj Industries contributed by enhancing ethanol production capacity, sharing technical expertise, and collaborating with stakeholders to align infrastructure and practices with national blending targets.
Sustainable Aviation Fuel (SAF) initiatives
India has taken a decisive step into advanced biofuels by building four 2nd‑generation ethanol plants that utilise agricultural waste from paddy fields, particularly rice straw. Out of these four facilities, three have already been commissioned and are ramping up capacity.
This 2nd‑generation feedstock‑based ethanol is classified as ultra‑low carbon ethanol, making it especially well‑suited for conversion into sustainable aviation fuel (SAF) through the Alcohol‑to‑Jet (ATJ) pathway. By leveraging crop residues that would otherwise be burned in fields, India is simultaneously reducing air pollution, cutting greenhouse gas emissions, and creating a high‑value renewable fuel for aviation.
The integration of SAF into India’s biofuel ecosystem demonstrates how the ethanol programme is not only transforming road transport but also laying the foundation for decarbonising aviation, one of the hardest‑to‑abate sectors. This positions India as a global leader in the transition to next‑generation biofuels.
Ethanol and electrification can coexist
India’s experience shows that renewable ethanol and electric mobility are complementary, not competing, pathways.
While EVs will play a vital role in decarbonisation, ethanol provides an immediate, scalable solution for reducing emissions from the existing fleet of internal combustion vehicles. Higher ethanol blends enable cleaner operation of conventional engines, accelerating emissions reductions without waiting for full fleet electrification.
This technology‑neutral approach allows multiple pathways to contribute towards shared climate and energy security goals.
Relevance to Europe
Europe has long been a leader in renewable fuels, but its transition towards climate neutrality is unfolding against an increasingly complex geopolitical backdrop. Energy security, once viewed mainly through the lens of supply diversification, has now become a strategic imperative. Recent geopolitical conflicts, volatile oil markets, and supply chain disruptions have underscored the urgency of building domestically available, renewable energy solutions that can strengthen resilience while advancing decarbonisation.
Against this backdrop, Europe is now exploring higher ethanol blends such as E20, alongside electrification. India’s journey demonstrates that ethanol programmes can deliver benefits far beyond emissions reduction:
Strengthening energy security in volatile oil markets.
Enhancing farmer incomes and rural liquidity.
Promoting a circular bioeconomy by converting surplus grains and residues into fuel.
Stimulating innovation across agriculture, industry, and mobility.
Balancing food, feed, and fuel priorities to ensure sustainability.
India's experience demonstrates that ethanol is far more than a substitute for fossil fuels. Through coordinated action by government, farmers, researchers, technology providers, oil marketing companies, and the automotive industry, the country has shown that ethanol can complement electrification, reduce emissions from the existing vehicle fleet, maintain the right balance between food, feed, and fuel, and strengthen resilience in an increasingly uncertain geopolitical landscape.
Backed by long-term policy commitment and a collaborative ecosystem, ethanol has evolved into a strategic pillar of India's energy transition—one that simultaneously advances energy security, supports rural prosperity, drives the circular bioeconomy, and accelerates sustainable economic growth.
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