India ethanol blending policy sparks food security and vehicle performance concerns

India’s ethanol blending programme is facing scrutiny due to its impact on food security, commodity prices, and vehicle performance. The policy, designed to reduce oil imports and save foreign exchange—reportedly by Rs 1.97 lakh crore—has led to the diversion of sugarcane, rice, and maize toward fuel production.

This shift has contributed to rising sugar prices, which were 13% higher in August compared to the previous year, and has turned India from a sugar exporter into an importer. Critics argue that using arable land and water for fuel creates a “food versus fuel” tension that threatens nutritional affordability and domestic food stocks. While the Ministry of Petroleum and Natural Gas maintains that the programme does not jeopardize food supplies, citing minimal rice contribution to ethanol in the 2023-24 fiscal year, concerns persist regarding the ethical use of taxpayer-funded food grains.

Additionally, the rollout of E20 fuel (20% ethanol) has raised concerns among vehicle owners. Despite government assurances regarding E20-compliant vehicles, some consumers report a decrease in mileage when switching from regular petrol to the ethanol blend.