New Delhi: India’s ethanol blending programme has reached a major milestone with the nationwide rollout of E20 petrol, but sustaining growth beyond the 20 per cent ethanol blending level will require diversified feedstock sources, demand-side flexibility and stronger policy alignment, according to a new report.
The report by KPMG India examines the evolving ethanol ecosystem as the country moves beyond E20, outlining both opportunities and challenges related to feedstock availability, supply-chain efficiency, infrastructure preparedness and regulatory support.
According to the report, the next phase of India’s ethanol journey will require a shift from merely expanding production capacity to optimising the entire system for greater efficiency and resilience.
“Having achieved the E20 milestone ahead of schedule, the imperative now is to move from scale creation to system intelligence — where ethanol transitions from a blending mandate to a foundational pillar of a resilient, flexible and future-ready transport fuel ecosystem,” said Anish De.
The study stresses the need to accelerate the development of second-generation (2G) ethanol and increase the use of alternative feedstocks such as maize and agricultural residues. These measures can help reduce dependence on traditional first-generation ethanol sources and improve long-term supply security.
It also highlights several challenges that need to be addressed, including feedstock availability, maintaining a balance between food and fuel requirements, pricing mechanisms and supply-chain logistics. Tackling these issues will be essential to ensuring a stable and reliable ethanol supply.
The report further calls for coordinated ecosystem development, including wider adoption of flex-fuel vehicles, strengthening blending and distribution infrastructure, expanding storage capacity and maintaining policy consistency across the sector.
Enhanced coordination, transparency and real-time visibility across the ethanol supply chain are also expected to improve operational efficiency and accountability throughout the value chain.
“India’s ethanol journey has evolved from a targeted blending directive to a structurally significant component of the nation’s transport energy architecture. As the sector advances beyond E20, the strategic priority must shift toward feedstock diversification, demand-side flexibility and infrastructure alignment at scale,” said Vivek Rahi.
According to the findings, second-generation ethanol and non-food feedstocks will play a crucial role in boosting future supplies while reducing reliance on conventional raw materials. At the same time, upgrading storage, transportation and distribution systems to support multiple fuel blends will be critical for ensuring reliable supply and enabling the adoption of higher ethanol-blended fuels in the future.
The report concludes that while India has successfully achieved the E20 target, the next stage of growth will depend on building a more flexible, efficient and integrated ethanol ecosystem capable of supporting the country’s long-term energy and sustainability goals.
With inputs from IANS
