India ethanol blending crosses 18% as plans beyond E20 take off: energy secretary

India is making significant progress in ethanol blending as part of its broader energy transition strategy, with blending rates surging to 18% by the end of 2024, up from 12%-13% in early 2024, Pankaj Jain, secretary of the ministry of petroleum and natural gas, said Jan. 13.

The government official also expressed certainty about achieving the 20% ethanol blending by the policy deadline of 2025.

"Because we will achieve E20 very quickly so we need to get the entire ecosystem in place to be looking at beyond E20," Jain said.

India's ambitious E20 program, which aims for 20% ethanol blending in gasoline by 2025, is progressing faster than anticipated. As highlighted by the official, a dedicated committee is already exploring pathways to push blending rates beyond 20%.

"We are on track to achieve E20 ahead of schedule, and now the focus is on creating the ecosystem to go beyond," Jain added, signaling the government's intent to deepen ethanol's role in the energy transition.

While emphasizing about the importance of ethanol in India's energy mix during an announcement about the upcoming India Energy Week from Feb. 11-14, he added, "Ethanol continues to be a very progressive story in terms of a non-disruptive transition that we are seeing."

At an industry event in October, Hardeep Singh Puri, minister of petroleum and natural gas, said that the Indian government had begun discussions to develop a post-2025 roadmap to further raise the ethanol blend in gasoline from 20%.

Earlier this year, the ministry said in a statement that oil marketing companies have begun dispensing E20 blends at more than 17,400 retail outlets nationwide.

Under the Ethanol Blended Petrol program, ethanol supplies increased to 7.074 billion liters in the 2023-24 supply year, from 380 million liters in the 2013-14 supply year.

The rise in ethanol blending is also complemented by increasing adoption of electric and hybrid vehicles and the development of alternative biofuels such as compressed biogas.

Moreover, India plans to introduce a formal biodiesel blending mandate within one to two years.

India's biodiesel blending target of 5% by 2030 remains in focus, with current blending at nearly 0.5% by the end of 2023, according to Jain. Speaking at the FT Energy Transition Summit in October, Jain noted that while mandates of 1%-2% are expected within a year or two, production must scale up to meet demand.

From April to November 2024, oil marketing companies procured 366.8 million liters of biodiesel for the biodiesel blending program, against 292.5 million liters from April to November 2023.

India aims to have 500 GW of renewable energy -- 200 GW currently -- and an output of 5 million mt of renewable hydrogen by 2030, in addition to multiple other targets to spur greater production and consumption of new fuels.

"...When we saw volatility in prices of oil and gas, we continued to see steadiness in our market because we continue to move on a well-thought through path of transition," Jain said on Jan. 13.

Also, "more EVs and hybrid vehicles are on the road, and there is a greater uptake of CNG, and progress on compressed biogas," he added.

The Ministry of Petroleum is exploring the production of renewable methanol as part of India's energy transition, with a focus on carbon capture, utilization, and storage, or CCUS, by using captured CO2. An official noted that green methanol is being evaluated by the policy think tank of the Indian government, NITI Aayog, due to the challenges its toxicity presents.

Methanol is seen as a viable decarbonization option, particularly for blending and transportation.

An official in the Ministry of Petroleum said the government is working on a plan to explore production of renewable methanol as another fuel type, one that would be a part of CCUS as it would use captured CO2.

"We are looking at green methanol quite seriously with the Niti Aayog. One of the challenges for us with methanol is its toxicity, and that is what we are working on," the official said.

"It is definitely one of the options for decarbonization. In some areas, methanol makes more sense for example it could be considered for specific use such as blending and transportation."

Despite these efforts, India's reliance on fossil fuels will remain substantial until the 2040s due to rising energy demand, with renewable sources like wind, solar, hydro, and biomass seen making up about 24% of the energy mix, according to data from S&P Global Commodity Insights.

Platts, part of Commodity Insights, assessed Asian fuel ethanol at $635.67/cu m CIF Philippines on Jan. 13, up $13.67 day over day.