Ethanol and EVs both needed for India's clean mobility, says IFGE

Date: July 7, 2025

India’s transition to cleaner transportation cannot rely on a single technology, according to the Indian Federation of Green Energy (IFGE). The industry body stressed that ethanol, electric vehicles, hybrids, CNG, and hydrogen must all play a role, given the country still has nearly 300 million internal combustion engine (ICE) vehicles on the road.

“The debate should not be framed as ethanol versus EVs. India needs both,” said Dilip Patil, Regional Director of IFGE-West, Pune. “E20 provides an immediate pathway to reduce crude oil dependence and strengthen energy security, while EVs, hybrids and other technologies continue to scale.”

The federation’s stance comes amid growing concerns about the impact of E20 petrol—a blend of 20% ethanol with gasoline—on vehicle mileage and engine compatibility. Citing studies by the Automotive Research Association of India (ARAI), Indian Oil, and the Society of Indian Automobile Manufacturers (SIAM), IFGE noted that E20 reduces fuel efficiency by 2–6% compared to E10. However, tests have not shown widespread engine damage, and newer vehicles are increasingly built with ethanol-compatible materials. The main transition risk lies with older vehicles, the group added.

India completed nationwide E20 deployment by April 2025 and is now expanding higher ethanol blends, flex-fuel vehicles, and second-generation ethanol production. The Ministry of Petroleum and Natural Gas reports that the ethanol blending program has saved more than ₹1.97 lakh crore (about $24 billion) in foreign exchange since 2014–15, displacing nearly 316 lakh metric tonnes of crude oil.

Global parallel: US ethanol experience

The dual-fuel approach resonates with strategies adopted in the United States, where ethanol blends like E15 and E85 have coexisted with electric vehicle incentives for over a decade. According to the U.S. Energy Information Administration, ethanol accounted for about 10% of U.S. gasoline consumption in 2024, displacing roughly 500 million barrels of imported crude annually. “India’s path mirrors what we’ve seen in the Midwest—ethanol is a bridge fuel that cuts emissions now, while battery technology matures,” said Dr. James Kohler, clean transportation analyst at the Washington-based Energy Futures Group.

Challenges ahead

Despite the progress, the IFGE acknowledged that the pace of EV adoption remains uneven in India, hampered by high upfront costs, limited charging infrastructure, and grid reliability issues. “Ethanol is not a perfect solution, but it’s available today, using existing fuel stations and engines,” Patil said. “For a country that imports 85% of its crude oil, every percentage point of ethanol blending reduces vulnerability.”

The government has set a target of 20% ethanol blending by 2030, but the early rollout suggests the target could be met sooner. Meanwhile, EV sales in India reached 1.5 million units in fiscal 2024–25, up 40% year-on-year, according to the Society of Manufacturers of Electric Vehicles. Hybrids, particularly strong hybrids from Toyota and Maruti Suzuki, are also gaining traction in urban markets.

Need for policy coherence

Auto industry experts caution that conflicting mandates—such as penalizing ethanol blends or favoring EVs with subsidies—could confuse consumers and slow the overall transition. “The best policy is one that is technology-neutral and lets the market decide,” said Rajiv Bajaj, a Pune-based automotive analyst. “IFGE’s call for coexistence is pragmatic, but execution will require coordinated fuel standards, tax incentives, and public awareness.”

As India pushes toward net-zero emissions by 2070, the federation’s message is clear: slowing down the phase-out of ICE vehicles does not mean abandoning climate goals. It means using every clean fuel option available until the EV ecosystem is truly ready for mass adoption.