Chief economic adviser (CEA) V Anantha Nageswaran has called for the reintroduction of a lower ethanol-blended petrol such as E10 alongside E20, particularly to protect India's large fleet of older two-wheelers, while cautioning the government against increasing ethanol blending beyond 20% without a detailed assessment of the food-versus-fuel trade-off.
Mr Nageswaran made the recommendation
in a column published in The Indian Express, co-authored with Akash Poojari, a consultant with the department of economic affairs (DEA). The authors said their views are personal. The column comes amid a growing public debate over E20 petrol, which contains 20% ethanol and has become the standard petrol blend available at fuel stations across the country.
The recommendation is significant because in July, the Union government had said that there was no proposal to bring back E0 or E10 petrol. The government has defended E20 as a scientifically tested fuel and argued that maintaining multiple nationwide fuel supply chains would increase logistics, inventory and handling costs.
E20 Does Not Damage Engines, Says CEA
Mr Nageswaran and Mr Poojari rejected the widespread social-media claims that E20 petrol inherently damages vehicle engines. They said available testing in India and abroad did not support the allegation of increased engine wear.
The column cited testing by Oak Ridge National Laboratory in the US involving 86 vehicles that travelled nearly 10mn (million) km (kilometres) on fuel blends of up to E20. According to the authors, the testing found no increased wear in vehicles that were not rated for E20.
They also referred to testing conducted in India by the Automotive Research Association of India (ARAI), the petroleum institute and Indian Oil, which they said reached a similar conclusion.
The authors, however, acknowledged that ethanol has lower energy content than petrol. Ethanol contains about two-thirds the energy of petrol, meaning E20 can result in a reduction in fuel economy. Since ethanol constitutes one-fifth of the blend, they put the energy penalty at around 6%-7%, rather than the much higher figures circulating online.
They also noted that carbon monoxide and unburnt hydrocarbon emissions decline with ethanol blending.
Older Two-wheelers Are the Real Concern
The CEA's argument for bringing back E10 is centred on older vehicles rather than a claim that E20 is generally damaging engines.
India has around 75mn-80mn older two-wheelers built before BS4 standards, according to the column. Many of these vehicles use carburettors, which cannot automatically compensate for the additional oxygen associated with higher ethanol blends.
The result, the authors said, can be a leaner air-fuel mixture and higher engine temperatures.
There is another compatibility issue involving older rubber seals and other components that were not designed to withstand higher ethanol concentrations. Such components can degrade when exposed to ethanol-containing fuel.
Although replacing the seals with ethanol-compatible components is relatively inexpensive, the scale of the problem makes a rapid retrofit difficult.
"Covering 75mn to 80mn two-wheelers that way will take years," the authors said.
They argued that the original ethanol-blending roadmap had anticipated the issue and called for a lower-blend fuel to remain available for older vehicles. According to the column, E10 subsequently disappeared from petrol pumps.
Mr Nageswaran and Mr Poojari have, therefore, proposed restoring E10 at fuel stations while continuing to offer E20.
They argued that such a move would provide older vehicle owners with a compatible option, reduce public anxiety and, importantly, lower overall ethanol consumption rather than increase it.
CEA Questions Move beyond E20
The column goes beyond the immediate controversy over vehicle compatibility and raises a larger question: how far should India take ethanol blending?
The authors caution that moving from E20 to E27 or E30 would represent a substantially different policy decision because higher blending could intensify competition between fuel production and food production.
India's annual crude oil import bill is around ₹11 lakh crore to ₹12 lakh crore, while its edible oil import bill is around ₹1.6 lakh crore-₹1.75 lakh crore, according to the column.
The authors argue that while ethanol blending can reduce the crude oil import burden, the reduction at E20 is only around 3%-4%. In contrast, India has greater scope to reduce its dependence on imported edible oil.
Domestic production currently accounts for about 40% of India's cooking oil requirement, while the government has set a target of raising this to 72% by 2030-31, they noted.
Maize Creates a Food-versus-Fuel Dilemma
The authors said the ethanol feedstock mix has changed significantly, making the food-versus-fuel question more immediate.
Maize now accounts for about half of India's ethanol production, while grains collectively account for nearly 67%, according to the column.
Maize competes with soybean, groundnut and mustard for agricultural land. The authors argued that ethanol procurement prices can make maize more attractive to farmers, while by-products from ethanol production can put downward pressure on the price of soybean meal used as animal feed.
This could create a chain of effects in which oilseed farmers are adversely affected by the expansion of grain-based ethanol.
"The oilseed farmer loses twice," the authors wrote.
Water Use Also Needs Closer Scrutiny
The column also questioned how water consumption associated with ethanol production is measured.
Mr Nageswaran and Mr Poojari distinguished between 'green water' — rainwater that crops would have received anyway — and 'blue water', which is drawn from rivers, canals, groundwater and wells.
They argued that policy should focus on blue-water consumption because it represents the scarce water resource.
This is particularly relevant in states such as Maharashtra and Karnataka, where sugarcane cultivation places significant pressure on already-stressed water resources.
Climate Benefits beyond E20 Remain Uncertain
The authors also questioned whether higher ethanol blending would necessarily produce greater climate benefits.
According to the column, blending beyond E20 would largely depend on grain-based ethanol. However, Indian life-cycle assessments do not provide a uniform conclusion on whether grain ethanol remains cleaner than alternative fuels once cultivation, processing and other stages of production are taken into account.
The authors therefore argued that the environmental case for moving beyond E20 requires further examination rather than being assumed.
Ethanol Programme Has Delivered Benefits
The column did not dismiss the gains from India's ethanol programme.
Mr Nageswaran and Mr Poojari acknowledged that ethanol blending has helped clear sugarcane arrears, increased rural incomes and created an assured market for agricultural produce.
However, they also pointed to the costs of maintaining the programme at E20, including distillery capacity created in anticipation of higher demand, loans taken against expected ethanol demand and the role of ethanol in absorbing surplus sugar.
These factors, they said, need to be included in any assessment of the policy.
'Hold at E20' Until Food-versus-Fuel Costs Are Assessed
The central argument of the column is that the government should distinguish between policy measures that can easily be reversed and those that could lock India into long-term changes in land use, water consumption and industrial capacity.
The authors said procurement prices, water-use rules, fuel-protection measures and edible oil import duties can be changed relatively quickly if evidence shows that policy settings are producing undesirable outcomes.
The Ethanol Blending Level Is Different
Once agricultural land and water resources are committed to producing fuel and distilleries and cropping patterns are built around higher ethanol demand, reversing the policy becomes much more difficult.
The authors, therefore, recommend bringing back a lower blend such as E10 for older vehicles, correcting price and water-use distortions that may favour maize over oilseeds, reviewing edible oil import duties and holding ethanol blending at E20 until a comprehensive cost-benefit assessment of the food-versus-fuel trade-off is completed.
The column's argument comes against the backdrop of the Union government's continued defence of E20. In July, the government said there was no proposal to revert to E0 or E10 and maintained that E20 had undergone extensive testing covering engine durability, fuel systems, material compatibility, drivability, emissions and performance.
The immediate issue, therefore, is no longer simply whether E20 damages engines. The CEA's intervention shifts the focus towards a broader policy question: whether India should continue increasing ethanol blending when doing so could have consequences for food crops, farmers, water resources and the country's long-term agricultural choices.
The recommendation is a call by a senior government adviser for wider fuel options amid growing consumer dissatisfaction with E20.
For now, the Union government's stated position remains that E20 will continue as the standard petrol blend and that there is no plan to restore E10. The CEA's column puts forward a different approach: keep E20 for the newer fleet, restore E10 for older vehicles and undertake a fuller economic assessment before taking the next step towards higher ethanol blending.
