Listen to this article in summarized format
Loading...
××
Subscribe to
Unlock AI Briefing and Premium Content
New Year Offer 24 Hours Left
Subscribe NowAlready a member? Sign In
What's Included
- Exclusive Stories
- Daily ePaper Access
- Smart Market Tools
- Curated Investment Ideas
- Ad-lite Experience
Subscription
India has proposed sweeping changes to its vehicle fuel framework, moving to formally introduce higher ethanol blends such as E85 and E100 as part of its strategy to cut dependence on imported petroleum.
In a draft notification issued late Tuesday, the Ministry of Road Transport and Highways outlined amendments to the Central Motor Vehicles Rules that would enable the use of advanced ethanol-based fuels in the country.
Also read: There is no future for petrol and diesel vehicles, Nitin Gadkari says
The proposal, reported first by Reuters, seeks to expand beyond the current E20 benchmark by creating regulatory space for vehicles compatible with significantly higher ethanol content.
These categories are expected to support the next phase of India’s biofuel push, particularly in segments designed or modified for flexible fuel use. The government has invited public feedback on the draft, after which a final decision will be taken.
India met its target of 20% ethanol blending (E20) in petrol in 2025, marking a key milestone in its biofuel programme. The latest move signals a shift toward even higher blending levels to curb costly crude imports, especially amid supply disruptions linked to tensions in West Asia.
“There is no future for diesel and petrol vehicles…If you (OEM) are not going to change, then be cautious. There is no good future for petrol and diesel,” Union Road & Transport Minister Nitin Gadkari had said at the Busworld India 2026 summit on Tuesday, urging manufacturers and fleet operators to accelerate the shift towards the cleaner fuels such as hydrogen, ethanol, CNG, LNG and electric-powered fleet.
"We import fossil fuels worth ₹22 lakh crore. This is not only an economic challenge, but also a major pollution problem. Our policy is: import substitute, cost-effective, pollution-free, and indigenous," Gadkari added.
The government’s Ethanol Blended Petrol (EBP) programme has already helped save nearly 4.5 crore barrels of crude oil annually and reduced foreign exchange outflow by around Rs 1.65 lakh crore, officials say.
At the same time, policy assessments have flagged potential drawbacks. A NITI Aayog roadmap cited by ToI noted that vehicles originally designed for E10 fuel but adjusted for E20 could see a 1–2% drop in mileage. This is particularly relevant for vehicles manufactured between 2012 and March 2023, many of which were built with E10 compatibility.
From April 2023, manufacturers began producing vehicles that are E20 material compliant, while those sold from April 2025 are expected to be fully E20 compatible—indicating a gradual transition in the auto sector.
Industry stakeholders have urged caution as India moves beyond E20. Experts involved in policy discussions warn that higher blends would require technological upgrades and supportive policy measures to avoid long-term efficiency and maintenance issues.
Also read: E100? Govt wants to go beyond E20 amid concerns over impact of ethanol on older vehicles
Meanwhile, policymakers have indicated that the ethanol push will continue. Officials have urged automakers to prepare for higher blending levels, with ongoing consultations on future fuel efficiency norms. Petroleum ministry joint secretary Sujata Sharma has described increased ethanol blending as “an idea whose time has arrived.”
Global examples such as Brazil are being studied for smoother adoption, including the use of separate fuel dispensers for different blends. Another long-term solution under consideration is the promotion of flex fuel vehicles (FFVs), which can run on ethanol blends up to 100%.
The government is also preparing to notify updated testing norms to enable commercial production of such vehicles, though large-scale rollout is yet to begin.
In a draft notification issued late Tuesday, the Ministry of Road Transport and Highways outlined amendments to the Central Motor Vehicles Rules that would enable the use of advanced ethanol-based fuels in the country.
Also read: There is no future for petrol and diesel vehicles, Nitin Gadkari says
The proposal, reported first by Reuters, seeks to expand beyond the current E20 benchmark by creating regulatory space for vehicles compatible with significantly higher ethanol content.
Draft opens door for E85 and near-pure ethanol fuels
The proposed changes include provisions for E85 fuel — a blend of 85% ethanol and petrol — as well as E100, which would allow vehicles to run on nearly pure ethanol.These categories are expected to support the next phase of India’s biofuel push, particularly in segments designed or modified for flexible fuel use. The government has invited public feedback on the draft, after which a final decision will be taken.
India met its target of 20% ethanol blending (E20) in petrol in 2025, marking a key milestone in its biofuel programme. The latest move signals a shift toward even higher blending levels to curb costly crude imports, especially amid supply disruptions linked to tensions in West Asia.
“There is no future for diesel and petrol vehicles…If you (OEM) are not going to change, then be cautious. There is no good future for petrol and diesel,” Union Road & Transport Minister Nitin Gadkari had said at the Busworld India 2026 summit on Tuesday, urging manufacturers and fleet operators to accelerate the shift towards the cleaner fuels such as hydrogen, ethanol, CNG, LNG and electric-powered fleet.
"We import fossil fuels worth ₹22 lakh crore. This is not only an economic challenge, but also a major pollution problem. Our policy is: import substitute, cost-effective, pollution-free, and indigenous," Gadkari added.
Push intensifies, but concerns emerge
However, the transition is raising concerns for vehicle owners, according to a report by The Times of India.The government’s Ethanol Blended Petrol (EBP) programme has already helped save nearly 4.5 crore barrels of crude oil annually and reduced foreign exchange outflow by around Rs 1.65 lakh crore, officials say.
At the same time, policy assessments have flagged potential drawbacks. A NITI Aayog roadmap cited by ToI noted that vehicles originally designed for E10 fuel but adjusted for E20 could see a 1–2% drop in mileage. This is particularly relevant for vehicles manufactured between 2012 and March 2023, many of which were built with E10 compatibility.
From April 2023, manufacturers began producing vehicles that are E20 material compliant, while those sold from April 2025 are expected to be fully E20 compatible—indicating a gradual transition in the auto sector.
Industry stakeholders have urged caution as India moves beyond E20. Experts involved in policy discussions warn that higher blends would require technological upgrades and supportive policy measures to avoid long-term efficiency and maintenance issues.
Also read: E100? Govt wants to go beyond E20 amid concerns over impact of ethanol on older vehicles
Auto cos sought relief
The automobile industry has also sought relief measures. Industry body SIAM has recommended tax incentives on E10 and E20 fuels to offset the marginal drop in fuel efficiency, though no such measures have been introduced so far.Meanwhile, policymakers have indicated that the ethanol push will continue. Officials have urged automakers to prepare for higher blending levels, with ongoing consultations on future fuel efficiency norms. Petroleum ministry joint secretary Sujata Sharma has described increased ethanol blending as “an idea whose time has arrived.”
Global examples such as Brazil are being studied for smoother adoption, including the use of separate fuel dispensers for different blends. Another long-term solution under consideration is the promotion of flex fuel vehicles (FFVs), which can run on ethanol blends up to 100%.
The government is also preparing to notify updated testing norms to enable commercial production of such vehicles, though large-scale rollout is yet to begin.
