With E20, India Could Lead Global GHG Reduction

If India realizes its goal of 20% ethanol by 2025, it would be one of the higher blend rates achieved globally, putting India at the forefront of reducing overall greenhouse gas (GHG) emissions.
By Brian Healy | May 12, 2021

In January, India announced its intent to move to a 20% ethanol blend by 2025. If realized, this would be one of the higher blend rates achieved globally, putting India at the forefront of reducing overall greenhouse gas (GHG) emissions as countries look to greater blends to meet their Paris Agreement commitments. In fact, Prime Minister Modi fast-tracked by five years what would have been a 2030 E20 policy, looking to seize the benefits for India in terms of rural development for their own feedstock producers, the environmental aspects of use and air quality improvements.

The announcement, while huge, will take considerable effort in getting the policy right, aligning stakeholders and implementing in the fast-tracked timeline. The U.S. Grains Council, with its global presence, stands ready to help the country achieve its ambitious blend goals. The Council and its partners have drawn on and aggregated ethanol best practices globally that support domestic industry expansion for countries in similar situations.

India is no stranger to announcing ambitious blending targets for biofuels. Achieving them has proven elusory. According to USDA estimates, in 2020, India had a national blend rate of about 5.2%. India’s most recent biofuels policy, the National Biofuels Policy, updated in 2018, has an aspirational goal of E10 blending by 2022. That policy update included an expansion of feedstock that could be used for ethanol production, but still overall nameplate capacity to date does not meet the requirements for a 10%, let alone 20%, blend rate.

To that end, policy enforcement will be key for India to meet its goals and lead in the ethanol space. The transition from aspirational policies to enforced policies is readily achievable in the market through a two-tier system.    

For India, the two-tier procurement model first defines its pathway to E10 and then successively expands that same process to move to E20. The first tier involves using the existing tender system to procure ethanol from domestic sources. Upon the draw-down of domestically produced product, the second tier allows sourcing the remaining ethanol needs from the global market. Enforcement of the policy would shorten the period of closure for ethanol facilities in India, support a more rapid build-out of infrastructure, bolster the country’s aim to diversify energy sources, all while casting India as a leader in global decarbonization of the transport sector.

Actual implementation of E20 in India would be a boon in a year when countries will submit their progress reports on their initial nationally determined contribution (NDC) goals under the Paris Agreement. Countries around the world, including the U.S., are demonstrating the critical role ethanol can play. The United Kingdom recently announced plans to double its ethanol use. Canada and Brazil have done the same as each works to finalize and implement its biofuels policy.

Higher blend rates would be a real achievement for India, and the ethanol industry congratulates the country on its fast-tracked policy, standing ready to help the country meet its ambitious E20 goal.

Author: Brian Healy
Director of Global Ethanol
Market Development
U.S. Grains Council
202.789.0789
bhealy@grains.org