The government is working to allow ethanol blending beyond the existing E20 level through flex-fuel vehicles, as it looks to expand the use of biofuels in the transport sector.
Advisor to the Prime Minister Tarun Kapoor said several automobile manufacturers are preparing to introduce flex-fuel vehicles, while fuel infrastructure will also need to expand to supply pure ethanol and related additives at petrol stations.
Speaking at the India Sugar & Bio-Energy Conference 2026, Kapoor said the E20 programme has progressed successfully and the next phase would involve blends with ethanol content above 20 per cent.
E20 petrol contains 20 per cent ethanol and 80 per cent petrol.
Ethanol Capacity Exceeds Blending Requirement
India's ethanol production capacity has surpassed current blending requirements, creating a need to develop additional uses for the fuel. The government is looking to expand the market to utilise this surplus capacity and support investments already made by producers.
The push has gained importance amid the West Asia crisis and crude oil prices nearing USD 100 a barrel, increasing the focus on domestically available alternative fuels.
The government is also exploring biofuel-based additives for diesel. Experiments involving isobutanol could provide another avenue for biofuel use if successful.
Government Looks To Expand Compressed Biogas
The government is also seeking to accelerate compressed biogas production under the GOBARdhan scheme, which brings together incentives from different ministries.
Ethanol manufacturers are being encouraged to diversify into compressed biogas and make greater use of by-products, including potash.
The government plans to continue expanding the biofuel market to utilise existing production capacity and support investments made across the sector.