For a country that currently imports roughly 90% of its crude oil, the push for biofuels is a cornerstone of national security and the goal of achieving energy independence.
29 Jan 2026 | 358 Views | By Shahkar Abidi and Kiran Murali
While the global automotive spotlight remains fixed on the "electric revolution," senior Indian energy officials are signaling that the real winner on India's roads may be grown in a field rather than manufactured in a Gigafactory.
Dr. DK Ojha, Deputy Director General with the Ministry of Petroleum and Natural Gas (MOPNG), ...
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While the global automotive spotlight remains fixed on the "electric revolution," senior Indian energy officials are signaling that the real winner on India's roads may be grown in a field rather than manufactured in a Gigafactory.
Dr. DK Ojha, Deputy Director General with the Ministry of Petroleum and Natural Gas (MOPNG), suggests 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.
The Physics of the Infrastructure Gap
The primary hurdle for EVs is what Dr. Ojha describes as a change in basic physics. Transitioning to electric power requires a completely different logistical channel and massive investments in vehicle architecture and charging infrastructure. In contrast, biofuels offer a plug-and-play solution that utilizes existing gas stations and internal combustion engines.
"Infrastructure, no cost. No additional physics to the car. No engine change," Dr. Ojha noted during an interaction with Autocar Professional on the sidelines of India Energy Week 2026 in Goa.
For a country that currently imports roughly 90% of its crude oil, the push for biofuels is a cornerstone of national security and the goal of achieving energy independence. While EVs are often touted as the solution to import dependence, they bring a new set of risks. Battery production relies heavily on rare metals not found domestically, which could simply trade one form of import reliance for another. Conversely, India’s status as an agrarian society provides a built-in supply chain.
From Sugar to Bamboo: The Second Generation Shift
The industry is now moving beyond simple sugar-based ethanol (1G) into second-generation (2G) biofuels. One landmark project is a Rs 5,000-crore rupee 2G plant that uses bamboo as a feedstock to produce ethanol. Other plants are being developed to convert paddy straw. which is traditionally burned by farmers, causing severe pollution, into fuel.
The momentum is already visible in the numbers. The 20% blending target, often referred to as E20, serves as the current benchmark for India’s Ethanol Blending Programme (EBP) which is now planned to be taken upward to E27 and E30 in the coming years. The country has rapidly accelerated its blending capabilities, moving from a mere 0.6% in 2013 to 5% in 2018, 10% in 2022, and reaching the 20% milestone in 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.
The Consumer Friction: Mileage and Maintenance Concerns
However, the milestones have not been without its fare share of controversy. The rollout of E20 petrol in India has sparked significant controversy, primarily due to concerns from owners of older vehicles manufactured before April 2023. Motorists frequently report drops in mileage with some surveys indicating an efficiency loss of 15% to 20%—and describe issues like engine knocking, rough idling, and corrosion in fuel lines and tanks.
In contrast, the Society of Indian Automobile Manufacturers (SIAM) and major Original Equipment Manufacturers (OEMs) maintain that E20 is safe and that the actual mileage dip is marginal, typically ranging from 1% to 6% depending on the vehicle's age. OEMs argue that legacy vehicles only require minor, inexpensive maintenance, such as replacing rubber gaskets and hoses that may degrade faster due to ethanol's corrosive properties, during routine servicing. Retrofitting options are available, but at a cost: for a Maruti car, the tentative cost is around Rs 6,000, and it may be higher for more expensive brands and models.
While the government and NITI Aayog defend the shift as a vital step toward energy security and reduced emissions, the lack of an ethanol-free (E0) fuel option remains a central point of frustration for many drivers. Furthermore, in countries such as Brazil and others, the ethanol blending programme have been largely successful also due to the benefit of lower pricing which a motorist enjoys on such fuel, which is not the case in India. The retail petrol prices have constantly remained high despite a significant drop in crude prices.
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.
The 2,000-Plant Vision: Biogas and Green Hydrogen
Furthermore, talking about Compressed Biogas (CBG), the senior government official, highlighted it as an important vertical in India’s renewable energy matrix. A central theme of it is the symbiotic relationship between CBG and the expanding City Gas Distribution (CGD) network, which serves as a ready-made infrastructure for utilizing biogas produced from agricultural and municipal solid waste across the country. To ensure these plants attain a level of profitability comparable to the successful ethanol sector, the government has established lucrative purchase prices for biogas.
To accelerate this transition, the government has introduced significant policy reforms and financial support mechanisms. These include the bio-irrigated machinery plant scheme for setting up facilities and subsidies to bridge the gap between remote CBG plants and local pipeline networks.
Dr. Ojha detailed that the Ministry has brought major reforms such as support for biomass aggregation and funding for pipeline infrastructure, noting that the current pace of project commissioning is steady, with 170 plants commissioned and over 250 under construction.
The industry outlook for CBG is highly ambitious, with experts predicting the establishment of at least 2,000 plants across the country by 2030.
Additionally talking about the green hydrogen, Dr. Ojha noted: "So, green hydrogen, I feel, till now, is very costly for new technology, new emerging areas. So, it was not so much viable. But now, with the interest shown by our PSUs, the prices are coming down"
Way Forward
Dr. Ojha concluded that while the ministry provides the necessary framework, it is the responsibility of the industry to take the "fruits from that, you know, policy level trees" and translate these financial enablers into tangible energy solutions for the public.