ICRIER urges flexible ethanol blending policy to balance fuel goals and food supply
A new ICRIER paper recommends that India keep its long-term E20 target but allow temporary reductions when domestic ethanol supplies are tight.
ICRIER researchers propose a more adaptable ethanol-blended petrol framework for India, maintaining the 20 percent target as a long-term objective but permitting a temporary step-down when domestic ethanol is insufficient. The paper highlights that the choice between sustaining the target, importing ethanol, or lowering the blend should be guided by relative economic costs. It calls for a flexible feedstock mix, increasing maize’s role as its productivity improves, while moderating sugar diversion during tight stocks and limiting rice use to genuine surpluses with higher pricing.
The authors note that ethanol demand has outpaced feedstock growth, creating a food-versus-fuel trade-off evident in rising sugar prices. They recommend using sugar imports as a buffer and adjusting FCI rice pricing to reflect acquisition costs. Overall, the study seeks to align fuel security with agricultural market stability.
