As escalating conflict in the Middle East keeps global energy markets on edge, India will have to  attempt a radical shift toward bio-energy sovereignty. Faced with an 85% reliance on imported energy and a volatile geopolitical landscape, the world’s most populous nation would have to  work to establish a "new normal" that prioritizes domestic self-reliance over fragile global supply chains, remarked industry captains.

"Most of the countries that actually suffered from this (energy sourcing), they will work out a new normal for energy," said Atul Mulay, President of Corporate Strategy at Praj Industries, a leading bio-energy technology provider.

Industry experts pointed out that the anticipated shift should be seen in the context of logistical bottlenecks, including the near blockage of the Strait of Hormuz, which have made energy security synonymous with national sovereignty.  New Delhi has walked a diplomatic tightrope, navigating U.S. pressure on Russian crude sourcing while monitoring shifting alliances in the Middle East.

The impact has been tremendous. Geopolitical tensions since the beginning of the Iran-US-Israel war on February 28 have not only raised crude prices but also created severe shortages of gas and commodities including those used in the automotive ecosystem. India will also have to consider a future where its neighbourhood is likely to change in the coming years with some countries forming their own 'NATO-like' regional forces, which may further complicate matters.

Automotive Friction

India's new normal will depend heavily on reducing the country's fuel sourcing needs. According to experts, this could be largely achieved through greater adoption of biofuels, which are abundant considering India remains largely an agrarian economy. For instance, the nation's ethanol blending program has been one of its success stories in the green transition with the government advancing its E20 (20% ethanol blending in petrol) targets by five years, moving the deadline from 2030 to 2025. 

This trajectory has established India as the third-largest ethanol producer in the world. India’s adaptability has resulted in the production of 1700 crore liters of ethanol, significantly exceeding the 1000 crore liters required for the 2025 target, leading the government to permit exports.

As per the government data, ethanol blending has already saved an estimated 1.55 lakh crore rupees  and substituted roughly 2.66 lakh metric tons of crude oil. The program has led to a reduction of 800 lakh metric tons of CO2 emissions and approximately Rs 1.36 lakh crore  has been paid back to farmers for ethanol feedstocks.. There were even plans to take the blending levels to E27, E30, and even further up.

However, the ethanol blending program faced its share of challenges. Last year, there was social media outrage over the issue from certain sections of the general public and media, who worried about its corrosive nature harming the health of their vehicles. Motorists, especially those with older vehicles not explicitly designed for E20, voiced fears of a drastic reduction in mileage and long-term corrosion of mechanical components.

Anecdotal reports suggest efficiency losses of 15-20%, although official Automotive Research Association of India tests indicate a smaller dip of 1-6% , varying by vehicle and usage. Although the government denied the allegations, with Minister Nitin Gadkari even terming them "politically motivated", critics' apprehensions have not been successfully addressed. 

Consequently, the ethanol blending program appears to have plateaued since then, as the government has not officially announced any policy regarding increasing the blending levels.

Bharati Balaji, Dy. Director General,  All India Distillers’ Association (AIDA) stated that the ethanol blending programme assumes critical importance in this context (Iran-US-Israel war). Accelerating the adoption of higher blending levels will not only reduce import dependence but also enhance energy security and provide greater stability against external shocks. India’s ethanol industry has already made substantial investments and is well-positioned to support this transition.India’s 1800 crore litre ethanol capacity is a strategic energy reserve to explore. "A calibrated and forward-looking roadmap to increase blending targets will be essential to fully leverage the country’s existing production capacity and ensure long-term sustainability of the biofuel ecosystem" Balaji noted.

The Stalled Promise of CBG

While ethanol has flourished, India’s SATAT (Sustainable Alternative Towards Affordable Transportation) program has languished. Originally targeting 5,000 Compressed Biogas (CBG) plants, the program has barely 130 plants on the ground.

In 2018, the Indian government unveiled an energy roadmap that was as audacious as it was green: a plan to deploy 5,000 large-scale compressed biogas (CBG) plants to convert the nation’s agricultural waste into 15 million metric tons of homegrown fuel. Seven years into the initiative, known as SATAT (Sustainable Alternative Towards Affordable Transportation), the arithmetic of India’s energy transition is failing to add up.

As of January 2026, only 133 plants are functional, producing a mere 926 tonnes per day. This supply crunch comes at a precarious time for the domestic automotive industry. Sales of CNG-powered passenger vehicles have surged, with market share jumping from 6% in 2020 to nearly 20% in 2025. While major manufacturers like Maruti Suzuki and Tata Motors have moved aggressively toward gas-based models, the fueling infrastructure remains stuck in a cycle of lack of local focusl and systemic bottlenecks.

Compressed Biogas (CBG) is a renewable, eco-friendly fuel chemically identical to the natural gas (CNG) used to power cars and trucks. While standard natural gas is a fossil fuel extracted from the earth, CBG is green because it is produced from organic waste that would otherwise be discarded or burned.

Dr. DK Ojha, Deputy Director General with the Ministry of Petroleum and Natural Gas (MOPNG), during a recent interaction with Autocar Professional  suggested that biofuels, the fuels derived from organic matter like sugar, bamboo and others, are poised for significantly faster adoption by the automotive sector than electric vehicles (EVs). This shift is not merely a matter of preference but a pragmatic response to India’s unique economic and logistical landscape.

A Circular Future

Despite the current hurdles, the strategic imperative is clear. The move toward a bio-energy-led economy is not just about fuel; it is a circular economy model that keeps capital within the country. By shifting from imported crude to domestic ethanol and CBG, India can stop billions of dollars from flowing out to foreign regimes.

“If we build our own energy, produced within our borders, from our own resources, we don’t just insulate ourselves, we future-proof the nation." A circular bioeconomy can transform India’s vast agro-produce and agro-residue into sustainable fuels, reduce import dependence, and power true energy self-reliance. This is not just resilience, it is sovereignty in action.” Mulay concludes. As the global energy map is redrawn by conflict and new alliances, India’s best defense may well be its own fields.