Draft rules on 100% Ethanol: Not all vehicle makers are gung-ho about it

The Ministry of Road Transport and Highways issued a draft notification to amend the Central Motor Vehicles Rules, 1989, formally proposing the introduction ...

What Happened

The Ministry of Road Transport and Highways issued a draft notification to amend the Central Motor Vehicles Rules, 1989, formally proposing the introduction of E85 (85% ethanol blend) and E100 (pure ethanol) as recognised motor fuels alongside existing standards.
The draft also proposes upgrading biodiesel references from B10 to B100, expanding the alternative fuel regulatory framework significantly.
Sugar and distillery industry bodies welcomed the notification, while automakers — particularly in the luxury segment — expressed skepticism about the business case for retrofitting or developing flex-fuel powertrains beyond the current E20 mandate.
The draft is open for public comment for 30 days; E85 dispensers at select fuel stations are expected in a trial phase by late 2026 if the rules are finalised.
This announcement follows the nationwide mandatory rollout of E20 (20% ethanol blend) petrol from April 1, 2026.

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Ethanol Blended Petrol (EBP) Programme

India's EBP Programme has progressively increased ethanol blending targets over two decades. It began with a 5% blending target and escalated through successive policy announcements. The National Biofuel Policy 2018 set a 20% blending target for petrol by 2030, a timeline later advanced to 2025–26. The government achieved the E20 mandate nationwide from April 1, 2026, requiring petrol to carry a minimum Research Octane Number (RON) of 95. The EBP programme has saved over ₹1.40 lakh crore in foreign exchange since 2014–15 by substituting ethanol for imported crude oil.

E20 mandate: nationwide from April 1, 2026, with minimum RON 95
Ethanol is sourced from sugarcane (molasses and juice), maize, damaged food grains, and other agri-residues
Approximately 1,800 crore litres of ethanol were produced in the 2025–26 supply year
EBP programme saves approximately 4.5 crore barrels of crude oil annually

Connection to this news: The draft E100/E85 rules are the next policy step after E20 mandatory implementation, aiming to expand the ethanol blending ladder progressively and accelerate India's departure from fossil fuel dependency.

National Biofuel Policy 2018

The National Biofuel Policy 2018 replaced the 2009 policy and established a comprehensive framework for biofuel promotion. It categorised biofuels (first, second, third generation), permitted ethanol production from more feedstocks (including damaged grains and surplus food crops), and set blending mandates across fuel types. The policy directed ministries to coordinate on production, pricing, procurement, and infrastructure.

First-generation biofuels: from food crops (sugarcane, maize, rice)
Second-generation (2G) biofuels: from agricultural residue, lignocellulosic biomass
Third-generation: from algae
Policy envisages indicative target of 20% blending of biofuels in petrol and diesel by 2030

Connection to this news: The E100 and E85 draft rules operationalise the longer-term trajectory embedded in the National Biofuel Policy, extending the regulatory infrastructure to accommodate higher blend levels.

Flex-Fuel Vehicles (FFVs)

Flex-fuel vehicles can run on any mixture of petrol and ethanol up to E85 or E100, as their engines and fuel systems are engineered to handle varying ethanol concentrations. Standard petrol vehicles are compatible with up to E20 but cannot use higher blends without risk of corrosion to rubber seals, hoses, and fuel injectors. FFV adoption in Brazil is a global benchmark — Brazil achieved near-universal FFV penetration over two decades. India's Supreme Court in 2022 directed original equipment manufacturers (OEMs) to introduce FFVs.

E100 use leads to approximately 27–30% reduction in mileage compared to pure petrol, partially offset by lower pump prices for ethanol
E85 and E100 require separate dispensers at fuel stations; they cannot be dispensed from E20 dispensers
Luxury automakers note low volumes for FFV variants make capital investment in new powertrains challenging
Toyota, Maruti Suzuki, and Honda have showcased FFV prototypes; Tata Motors and Mahindra have flex-fuel variants of Safari and Bolero respectively

Connection to this news: The draft rules create the regulatory demand signal for automakers to develop FFV infrastructure, though industry is seeking clearer timelines and demand certainty before committing capital.

Key Facts & Data

E85 contains 85% ethanol and 15% petrol; E100 is pure ethanol fuel
India's current nationwide fuel standard (since April 1, 2026): E20 petrol with minimum RON 95
National Biofuel Policy 2018 set a 20% blending target for petrol by 2030
EBP programme saves ~4.5 crore barrels of crude oil annually
Foreign exchange savings from EBP since 2014–15: over ₹1.40 lakh crore
Mileage loss on E100 vs pure petrol: approximately 27–30%
Ethanol production in 2025–26 supply year: ~1,800 crore litres
Central Motor Vehicles Rules, 1989 is the parent regulation being amended
Brazil is the global benchmark for FFV adoption (near-universal penetration)
India is the world's third-largest consumer of crude oil and net importer of over 85% of its crude requirements