India to start supplying petrol with 20% ethanol from April 2023: Puri

India will start supplying petrol with 20 per cent ethanol at select petrol pumps from April next year and will ramp up supplies thereafter as it looks to cut oil import dependence and address environmental issues.

Oil Minister Hardeep Puri said a fifth of petrol will be made up of ethanol by 2025.

"E20 petrol (petrol blended with 20 per cent ethanol) in some quantity will be available from April 2023 and the rest to be covered by 2025," he said.

India, which achieved the target of supplying petrol mixed with 10 per cent ethanol (10 per cent ethanol, 90 per cent petrol) ahead of schedule in June this year, has advanced the target of making petrol with 20 per cent ethanol by five years to 2025.

The original target for doping 10 per cent ethanol, extracted from sugarcane and other agri commodities, in petrol originally was November 2022.

On the occasion of World Biofuel Day on Wednesday, Prime Minister Narendra Modi dedicated the 2nd generation (2G) ethanol plant here.

The plant is part of a long series of steps taken by the government over the years to boost the production and use of biofuels in the country.

Built at a cost of over Rs 900 crore by Indian Oil Corporation (IOC), the plant near the firm's Panipat refinery will turn about 2 lakh tonnes of rice straw (parali) annually into around 3 crore litres of ethanol.

Creating an end-use for the agri-crop residue would empower farmers and provide an additional income generation opportunity for them, Modi said.

The project will have zero liquid discharge. Through the reduction in the burning of rice straw, the project will contribute to a reduction of greenhouse gases equivalent to about 3 lakh tonnes of carbon dioxide equivalent emissions per annum, which can be understood as equivalent to replacing nearly 63,000 cars annually on the country's roads.

Puri said 10 per cent ethanol blend translated into a forex impact of over Rs 41,500 crore, reduced greenhouse gas emissions of 27 lakh tonnes and also led to farmers being paid over Rs 40,600 crore expeditiously.

India is the world's fifth largest producer of ethanol after the US, Brazil, EU and China. Ethanol worldwide is largely used for consumption but nations like Brazil and India also dope it in petrol.

Supply of petrol with 20 per cent ethanol will result in a saving of an estimated USD 4 billion annually.

This increased blending will expand the use of renewable energy in the world's third-biggest oil importer and consumer, and help turn the nation's surplus rice and damaged food grains into ethanol.

Officials said 20 per cent ethanol blended petrol will be available at select petrol pumps in the country by April 2023 and it will be progressively spread to other parts of the country.

As much as 10.17 per cent of ethanol is being doped in petrol now, up from 8.10 per cent in 2020-21 and 5 per cent in 2019-20. Ethanol blending in petrol was 1.53 per cent in 2013-14.

The blending of ethanol not just curbs vehicular pollution but also reduces import dependency and increases farmer income. It saves precious foreign exchange that is spent on importing crude oil, Modi said.

According to the oil ministry, 2 million tonnes of crude oil was substituted due to the blending of ethanol in petrol during the first three and half months of the current fiscal year that began in April. In 2020-21, 2.14 million tonnes of crude oil was substituted and 1.34 million tonnes in the year prior to that. The volume was 0.27 million tonnes in 2013-14.

The highest ever quantity of 306.43 crore litres of ethanol has been procured by oil marketing companies in the current ethanol supply year (December 2021 to November 2022). This is up from 302.3 crore litre last year and 173 crore litre in 2019-20. Ethanol supply for mixing with petrol was 38 crore litre in 2013-14.

For a 20 per cent blend, 1,000 crore litres of ethanol will be required.

As the availability of ethanol increases, the equivalent amount of crude (used for petrol production) import is reduced.

The Centre had announced an additional duty of Rs 2 per litre on unblended fuels starting October 2022 to incentivise blending. That duty will no longer be effective as the target of 10 per cent blend has been achieved.