BT EXPLAINER | What is Ethanol, how it's made and why is India betting big on it?

As India works towards reducing its dependence on imported crude oil and lowering carbon emissions, ethanol fuel has emerged as a key component of the country’s energy strategy. The government has been aggressively promoting ethanol blending in petrol to increase the share of cleaner, domestically produced fuel in the transportation sector. 

What Is Ethanol Fuel?

Ethanol is a renewable biofuel made from plant-based materials such as sugarcane, molasses, maize, rice, and other agricultural feedstocks. It is a type of alcohol that can be blended with petrol and used in conventional internal combustion engines. An ethanol blend contains highly purified ethyl alcohol mixed with petrol in specific proportions. 

In India, petrol sold at fuel stations increasingly contains ethanol. The most common blends are E10 (10% ethanol and 90% petrol) and E20 (20% ethanol and 80% petrol). The government aims to achieve nationwide 20% ethanol blending under its Ethanol Blended Petrol (EBP) Programme.

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How Is Ethanol Produced?

1. Feedstock Collection: In India, ethanol is mainly produced from sugarcane juice, molasses, and sugar syrup, along with maize and surplus or damaged food grains such as rice and wheat. Expanding approved feedstocks has increased ethanol production, supported farmers’ incomes, and strengthened the ethanol blending programme, reducing the country’s dependence on imported fossil fuels.

2. Fermentation Process: The sugar or starch extracted from these crops is mixed with yeast. During fermentation, yeast converts sugars into alcohol and carbon dioxide.

3. Distillation and Purification: The fermented liquid is then heated in distillation units to separate alcohol from water and impurities. The resulting ethanol is further purified to achieve fuel-grade quality.

4. Blending with Petrol: Oil marketing companies procure ethanol from distilleries and blend it with petrol before supplying it to fuel stations across the country. 

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India’s Ethanol Blending Journey

The Ethanol Blended Petrol Programme was launched to gradually increase the percentage of ethanol in petrol. Over the last decade, blending levels have risen significantly due to policy support, financial incentives, and the expansion of ethanol production capacity. India has already achieved blending levels close to 20% and is expected to meet its E20 target for the 2025-26 supply year.

Challenges Ahead

Despite rapid progress, challenges remain. Ethanol production requires large quantities of water and agricultural feedstocks. Experts have also raised concerns about balancing fuel production with food security and ensuring a sufficient supply of crops for both purposes. Continued investment in alternative feedstocks and second-generation biofuels will be important for long-term sustainability.