India moves to ratify 100% ethanol as vehicle fuel under motor vehicle rules

NEW DELHI: The Centre on Wednesday proposed allowing vehicles to run on 100% ethanol (E100) by amending the Central Motor Vehicle Rules, 1989, marking a step towards positioning ethanol as a primary transport fuel.

The draft notification dated 29 April proposes replacing references to ‘E85’ with ‘E85 or E100’ in multiple provisions, formally enabling higher ethanol blends and potentially easing pressure on surplus domestic capacity.

This comes amid a push to reduce dependence on imported crude and expand the use of locally produced biofuels.

The draft also proposes replacing B10 biodiesel (10% biodiesel and 90% petro-diesel) in the law with B100 (fully biodiesel), signalling readiness for wider use of fully bio-based fuels.

India produced about 20 billion litres of ethanol as of March 2026, against demand of about 11 billion litres under the current 20% blending mandate, leaving manufacturers grappling with under-utilization of capacity.

Vehicles which can run on any ethanol blend are called flex-fuel vehicles. These vehicles can run on any ethanol blend in petrol.

Mint reported first on 20 April that the ministry of petroleum and natural gas, its state-run oil marketing companies, and automobile manufacturers were firming up a plan to roll out flex fuel vehicles in the country.

The All India Distillers’ Association (AIDA), which represents about 80% of India’s distillation capacity, wrote to the Centre only days after the war in West Asia broke out, seeking incentives for flex fuel vehicles and promotion of ethanol-based cookstoves, since ethanol manufacturers were struggling with under-utilization of installed capacity.

“For years, India has steadily progressed from E10 to E20 blending. With this amendment, the Government is clearly demonstrating its intent to move from ethanol from being a blended component to becoming a primary, advanced transport fuel,” AIDA deputy director general Bharati Balaji told Mint.

According to Balaji, this proposal aims to formally enable higher ethanol blends such as E85 and E100.

Globally, flex-fuel vehicles are used extensively in Brazil, where they were introduced in 2003. Today, they dominate new vehicle sales, with over 90% of cars and two-wheelers capable of running fully on ethanol, petrol, or a blend of both (in various proportions).

India’s Ethanol Blended Petrol (EBP) programme was launched in 2003 with the aim of cutting oil imports and providing support to farmers. While progress was initially slow, it gained momentum after 2014, reaching 10% blending in 2022 and setting a target of 20% (E20) by fiscal year 2025-26 (FY26). This acceleration has been supported by policy measures, ethanol pricing incentives, and the use of a wider range of feedstocks such as sugarcane and grains.

In 2025, India’s policy decision to mandate the sale of E20 petrol in the country received tremendous consumer backlash, with consumers complaining of mileage loss.

In January 2026, petroleum minister Hardeep Singh Puri said that as India approached nearly 20% ethanol blending in the 2025 ethanol supply year, the country had achieved foreign exchange savings of about $19.3 billion and made direct payments of over $15 billion to farmers over the past decade. The ethanol supply year runs from November to October.