Chief Economic Adviser (CEA) V. Anantha Nageswaran has flagged serious concerns over India’s aggressive ethanol blending program, urging the government to reintroduce E10 petrol (10% ethanol blend) to protect older vehicles. In an article co-authored with Akash Pujari in ‘The Indian Express’, Nageswaran warned that before pushing ethanol blending beyond the current 20% (E20) target, India must critically evaluate the delicate balance of “food versus fuel” and the country’s massive water consumption patterns. Threat to 8 Crore Older Two-Wheelers: Why E10 is Needed? The CEA highlighted a major mechanical risk currently facing Indian commuters. There are currently an estimated 7.5 to 8 crore older, pre-BS-IV two-wheelers on Indian roads that rely on older carburettor technology. The Technical Glitch: Unlike modern fuel-injected engines, carburettor-based engines cannot automatically adjust the air-fuel mixture to compensate for the higher oxygen content in E20 fuel. The Risk: Running these older vehicles on E20 petrol leads to engine overheating and rapid degradation of rubber components. The Solution: The CEA suggested that until these older vehicles are phased out or modified, fuel stations should offer E10 petrol as an alternative alongside E20. The ‘Food vs Fuel’ Crisis: Rising Food Inflation Risks While India’s rapid achievement of its ethanol blending targets has successfully reduced crude oil import bills, it has come at a cost. Grains and crops like sugarcane, maize, and broken rice are increasingly being diverted to distilleries to meet ethanol demand. The CEA cautioned that if India aggressively pushes past E20 toward E27 or E30 blending, “fuel will begin to cannibalize food.” Maize is a primary component of poultry and livestock feed. If ethanol manufacturers begin purchasing maize at premium rates, it will drive up feed costs, directly impacting the poultry industry and triggering food inflation. — V. Anantha Nageswaran Akash Pujari Sugar Shortages and the Water Footprint The warning comes amid reports that the government is considering restricting the use of sugarcane for ethanol production in the upcoming season to prevent domestic sugar prices from spiking. In the current season, approximately 30 lakh tonnes of sugar—nearly 10% of India’s annual production—was diverted to ethanol manufacturing. Furthermore, the environmental cost of water-intensive crops like sugarcane is a growing concern. The CEA emphasized that policymakers must calculate the total ecological cost: It is not just about the water consumed inside ethanol distillation plants. The massive amount of groundwater used to cultivate these crops, and their alternative agricultural uses, must be factored into the economic equation. Government’s Counter-Stance: E20 is Safe, Dual-Fuel Logistics Impractical The Central Government, however, continues to strongly defend its Ethanol Blended Petrol (EBP) programme, citing its massive benefits: Economic Farmer Benefits: The program has saved billions in foreign exchange and ensured remunerative prices for farmers. Engine Safety: Government-backed testing has maintained that there is no widespread evidence of E20 causing significant engine damage. Logistical Hurdles: The government has previously dismissed demands to supply both E10 and E20 simultaneously at petrol pumps, stating that maintaining dual supply chains would exponentially increase logistics and distribution costs. The Way Forward: Proceed with Caution The CEA’s intervention is not a call to dismantle the ethanol program, but rather a plea for caution before scaling up further. The core message is clear: the benefits of energy security must be weighed against the hidden costs imposed on India’s agricultural sector, water tables, and food security. The debate is no longer just about vehicle mileage or engine longevity—it is about how much land and water India can afford to divert from plates to fuel tanks Post navigation Sensex sinks over 300 points to trade at 77,700:Nifty slips to 24,300; IT, banking stocks drag; 2 IPOs open today
