Petrol-fuelled vehicles running on Indian roads will be less polluting in near future as petrol sold in the country will have about 20% ethanol mix within two years, as India is trying to increase ethanol production.

India has revised the target to achieve 20% blending of petrol with ethanol by 2025, instead of the earlier target of 2030, Hanif Qureshi, Joint Secretary, Ministry of Heavy Industries, said at a recent seminar on sustainable mobility organised by the Society of Indian Automobile Manufacturers (SIAM).

“Originally set for 2030, we have revised our target to 2025, given the progress we have made thus far. The development of automobiles which will be suitable for E20 are already underway,” he says.

India has currently achieved over 12% ethanol blending and the country consumes about 50-60 million metric tonnes of petrol a year, Kishan Karunakaran, CEO of Buyofuel, India’s leading online aggregator platform for biofuel trade, tells Fortune India.

The country increased the ethanol blending in petrol from 1.53% in 2013-14 to 10.17% in July 2022, says the government. It achieved the 'P10 ' ethanol blending target by 2018-19, ahead of the target by 2020.

In 2022, the production of ethanol was about 530 crore litres and is forecast to reach 630 crore litres in 2023, says a statista analysis. India’s target is to raise pan-India ethanol production capacity from current 700 to 1,500 crore litres a year.

India is the second largest producer of sugarcane in the world and molasses made from sugarcane had been the primary source of feedstock for ethanol production. However, since FY 19, different kinds of raw materials such as B-Heavy molasses, sugarcane juice, and damaged food grains have been used to produce ethanol.

India’s oil marketing companies like BPCL, Indian Oil and HPCL are setting up twelve second-generation (2G) bio-refineries, with an investment of ₹14,000 crore to make ethanol using lignocellulosic biomass (any agro waste) and other renewable feedstock. Under a scheme -- Pradhan Mantri JI-VAN (JaivIndhan- Vatavaran Anukool Fasalawashesh Nivaran) Yojana – financial support is given to set up integrated bio-ethanol projects. The Government is providing 12 Integrated 2G Bio ethanol Projects with total financial outlay of ₹1,969.50 crore from 2018-19 to 2023-24, along with support to ten demo projects for 2G technology.

India’s nascent biofuel market worth around ₹500-₹600 crore a year is set to grow exponentially by 10 times a year in the coming years, considering the emphasis on sustainable mobility fuel push, regulatory framework and incentives from the Government, say experts.

However, India has not made much progress in biodiesel blending, notes Kishan Karunakaran, CEO of Buyofuel. “India’s main mobility fuel is diesel and its consumption is about 170-200 MMT a year. Now biodiesel blending is only about 1%”, he says. Biodiesel is produced from byproducts and waste from vegetable oil refineries. The main issue was lack of viable technology and availability of feedstock raw material. Now technologies are evolving to lower the cost of production and use less grade byproducts and related vegetable oil waste as raw material, he says.

Private sector corporates are also entering into biofuel production on a large scale. Indian Oil Corporation and Praj Industries recently formed a joint venture to produce Sustainable Aviation Fuel (SAF), Ethanol, Compressed Bio-Gas (CBG), Biodiesel and Bio-bitumen among others. Triveni Engineering and Industries, the country’s second biggest sugar producer has increased its etanol manufacturing capacity to 540-kilo litre per day (KLPD) and is further increasing it to 660 KLPD.

Currently, Buyofuel, started commercial operations in 2021, has a revenue of over ₹6.5 crore a month and has been growing at over 80% year on year with over 1000 clients, says Kishan Karunakaran.

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