&imwidth=800&imheight=600&format=webp&quality=medium "WION Decodes: What's behind India's ethanol push? Centre exempts E22, E25, E27 and E30 fuels from excise duty")
The Centre has extended central excise duty exemptions to petrol blended with 22 per cent, 25 per cent, 27 per cent and 30 per cent ethanol, marking another major step in India's ethanol blending programme.
In notifications issued by the Department of Revenue, the government provided a nil excise duty rate for E22, E25, E27 and E30 fuel blends that meet Bureau of Indian Standards norms. The decision clears the way for the wider use of petrol containing up to 30 per cent ethanol after India achieved its E20 blending target ahead of schedule.
Under the new framework, E22 fuel will contain 78 per cent petrol and 22 per cent ethanol, while E25, E27 and E30 blends will contain 25 per cent, 27 per cent and 30 per cent ethanol respectively.
So why is India pushing for higher ethanol blending?
Reducing dependence on imported crude oil
India imports over 85 per cent of its crude oil requirements, making it vulnerable to global supply disruptions and price fluctuations. Replacing a portion of petrol consumption with domestically produced ethanol helps reduce dependence on imported energy.
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Since 2014, ethanol blending has helped substitute 302 lakh metric tonnes of crude oil imports and generated foreign exchange savings of more than Rs 1.84 trillion.
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Agrarian and Rural Economy
Ethanol is produced from sugarcane molasses, maize and damaged food grains. The programme has created a large domestic market for agricultural produce while providing an additional source of income for farmers.
According to government data, more than Rs 1.58 trillion has flowed to farmers through the ethanol supply chain. The programme has also improved cash flow for sugar mills, helping them clear payments to farmers more efficiently.
Supporting India's climate goals
The government views ethanol as an important transition fuel in its broader strategy to achieve net-zero emissions by 2070.
Ethanol-blended petrol produces lower emissions of carbon monoxide and particulate matter compared with conventional fuel. The programme has helped mitigate more than 909 lakh metric tonnes of carbon dioxide emissions so far, while lifecycle greenhouse gas emissions can be up to 61 per cent lower than those from standard petrol.
Preparing for higher blend fuels
With the E20 target already achieved, policymakers are now preparing for the next phase of ethanol adoption through higher blend fuels such as E22, E25, E27 and E30.
The government has also introduced E85 fuel, which is priced Rs 20 per litre lower than standard petrol, to encourage the adoption of Flex Fuel Vehicles. Automobile manufacturers, including Maruti Suzuki and Hero MotoCorp, have already begun rolling out vehicles designed to run on such fuels.
