What has been the impact of ethanol blending? , Pg8

Key Highlights:

• India achieved 20% ethanol blending in petrol (E20) by 2025, ahead of schedule.
• ₹1.40 lakh crore in foreign exchange saved since 2014-15 due to ethanol blending.
• Two in three petrol vehicle owners oppose the E20 mandate, citing mileage drop and maintenance costs.
• Sugarcane-based ethanol supply increased from 40 crore litres in FY14 to nearly 670 crore litres in FY24.
• 7.6% of vehicle sales in 2024 were electric, far short of the 30% target by 2030.

Detailed Insights:

• The government incentivized the sugarcane industry, leading to an increase in ethanol blending from 1.5% in 2014 to 20% in 2025.
• While the government promotes E20 for reducing emissions and increasing farmer income, concerns exist regarding its environmental impact and consumer acceptance.
• Despite IOC and BPCL seeing a 255% rise in dividend payouts since 2022-23, they only passed on a 2% decrease in petrol prices to the public [i].
• Sugarcane cultivation requires substantial water, leading to groundwater extraction in water-stressed regions like Maharashtra, contributing to land degradation.
• Diversion of rice and corn for ethanol production has led to increased imports of corn, impacting agricultural trade dynamics.
• India's dependence on REEs for EV production, mainly sourced from China, poses supply chain vulnerabilities and production challenges.
• The future of ethanol blending beyond 20% remains uncertain, with the government yet to make a definitive decision.

Key Concepts Involved:

• Ethanol Blending: Mixing ethanol with gasoline to reduce reliance on fossil fuels and lower emissions.
• Fair and Remunerative Pricing (FRP): The minimum price that sugarcane farmers are guaranteed for their produce.
• Rare Earth Elements (REEs): A set of seventeen metallic elements crucial for various technologies, including electric vehicles.