India continues to produce E20 petrol even when crude oil falls below $70 per barrel. The policy aims to "compensate farmers adequately" but raises questions about cost, resource use and overall benefit.
Key Developments
- Government keeps the ethanol blend at 20% despite higher production cost than pure petrol.
- Most feedstock comes from sugarcane, a crop that strains water and fertilizer supplies.
- Consumers, including poorer households, pay a higher pump price while farmers receive the premium later.
- Policy rewards ethanol volume, not the efficiency of the feedstock, favouring sugarcane over alternatives.
- Government encourages maize, millets, sweet sorghum and lignocellulosic biomass for second‑generation (2G ethanol) production.
Important Facts
The ethanol blending programme lowers crude imports but adds cost at the pump. Sugarcane cultivation is water‑intensive, especially in water‑stressed states like Maharashtra and Karnataka. Alternatives such as maize, millets and sweet sorghum need less water, but maize still requires considerable fertilizer and millets yield less fermentable starch per hectare. Using agricultural residues avoids using cropland for fuel, curbing stubble burning. However, 2G ethanol is more expensive and technologically demanding.
Exam Relevance
This issue touches on multiple GS papers. GS3 (Economy) examines fuel import dependence, price subsidies and farmer income. GS3 (Environment) looks at water use, fertilizer impact and air‑quality concerns from stubble burning. Understanding the role of the