According to Toyota Kirloskar, the automotive industry, the government and other stakeholders are of the same view that the next step is flex-fuel vehicle that can run on up to 100% ethanol, rather than gradually increasing the ethanol blend in petrol.
04 Dec 2025 | 4287 Views | By Kiran Murali
After crossing the 20% ethanol-blending milestone, automakers and sugar manufacturers are urging the government to prioritise flex-fuel vehicles - which can run on higher blends and 100% ethanol - instead of incrementally moving to 25% or 30% blends. They want lower taxes on these vehicles and a clear pricing advantage ...
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After crossing the 20% ethanol-blending milestone, automakers and sugar manufacturers are urging the government to prioritise flex-fuel vehicles - which can run on higher blends and 100% ethanol - instead of incrementally moving to 25% or 30% blends. They want lower taxes on these vehicles and a clear pricing advantage for ethanol over petrol. With surplus ethanol capacity and flex-fuel hybrids delivering lower well-to-wheel emissions, industry players argue that this shift offers India a practical route to reducing both its oil import bill and carbon footprint.
“Ethanol, being a carbon-neutral fuel, has emerged as a key practical energy option offering a clean energy transition for our growing economy. There is a surplus of ethanol availability, which gives a strong opportunity to take the momentum forward. With the right policy support provided to FFVs and Electrified-FFVs, India can chart its own pathway towards sustainable mobility, powered by indigenous green ethanol,” said Vikram Gulati, country head and executive vice president of Toyota Kirloskar Motor.
According to Gulati, gradually raising the ethanol-blending level to E25, E27 or E30 is challenging because the impact on legacy vehicles must be assessed each time the blend changes, requiring retesting and re-homologation of vehicles. “Globally, what is seen is that after you reach a stage, let us say E20 in the case of India, you stabilise that and use it for the next few vehicles. The automotive industry, Toyota, the government and other stakeholders are in one voice that the way ahead now is clearly the flex-fuel vehicle.”
Deepak Ballani, director general of ISMA, noted that the industry currently has surplus ethanol capacity of over 450 crore litres. With E20 in place, he believes that flex-fuel or flex-fuel hybrids are the next logical step, as carmakers and two-wheeler companies have already shown prototypes of their flex-fuel vehicles. “What is needed now is the right policy framework to get these vehicles on the road,” he said.
The push toward E20 has triggered concerns from consumers, especially owners of older vehicles, who worry about mileage drops, engine wear and the possibility that damage from higher ethanol blends may not be covered under warranty. These worries have been amplified by user manuals in some older models that caution against using fuel with more than 10% ethanol.
A study by the Indian Institute of Science (IISC) says that flex fuel vehicles can significantly reduce well-to-wheel greenhouse gas (GHG) emissions, particularly when using high-level ethanol blends like E85 or higher, compared to traditional gasoline.
The government has attempted to calm these fears, stating that claims of a “drastic” mileage drop are misplaced and that any reduction for older vehicles has been marginal. Tests by ARAI, IIP and Indian Oil, it says, show no abnormal wear-and-tear, while routine servicing can address minor issues such as gasket or rubber part replacement. SIAM has also stepped in to assure that manufacturers will honour warranties for older vehicles using E20, regardless of manual specifications.
Gulati said SIAM has urged the government to provide tax relief on flex-fuel two-wheelers and incentives for flex-fuel cars to make them more appealing to consumers. He, along with Ballani, also stressed that ethanol must be priced lower than petrol at fuel stations to offset the drop in fuel efficiency and make the shift attractive for buyers.
Pointing to Brazil’s successful flex-fuel transition, Gulati Underscoring the need for differential pricing for higher ethanol blends and the success of flex-fuel transition in Brazil, Gulati said: “In Brazil, there is a law that says ethanol [E100] should be 33% cheaper compared to the gasoline with 30% ethanol blend [E30]. This naturally drives the cost-conscious consumers to choose E100.”