What is the story about?
New Delhi: The Centre's E20 fuel policy is back in the spotlight as Aam Aadmi Party (AAP) convener Arvind Kejriwal prepares to lead a protest march to Prime
Minister Narendra Modi's residence against the nationwide rollout. India is gradually shifting to E20 fuel - petrol blended with 20% ethanol - to reduce crude oil imports, cut emissions and boost farmers' incomes. However, the policy has sparked debate over its impact on older vehicles, mileage and fuel costs. Here's what E20 fuel is, why it's controversial and what the government and automobile industry have to say.
What is E20 fuel?
E20 fuel is a blend of 80% petrol and 20% ethanol, a biofuel mainly produced from sugarcane and other agricultural feedstock.
The Centre says increasing ethanol blending will help India:
- Reduce its dependence on imported crude oil.
- Lower carbon emissions.
- Support sugarcane farmers by creating a larger market for ethanol.
The rollout began in 2023 after earlier blends such as E5 and E10. Today, E20 has become the standard petrol available at most of India's nearly 90,000 fuel stations.
Why is E20 fuel controversial?
The biggest concern is whether older vehicles can safely use E20 fuel.
Many experts and vehicle owners argue that cars and two-wheelers manufactured before April 2023 were not originally designed for E20. They say prolonged use could lead to engine knocking, corrosion, wear of rubber and plastic components and reduced fuel efficiency.
Another concern is mileage.
Many users have reported a 6-8% drop in fuel efficiency, meaning vehicles travel fewer kilometres on the same amount of fuel. Even if ethanol is cheaper than petrol, lower mileage could increase the cost of driving.
Automobile manufacturers have also raised concerns in the past about warranty issues and the long-term impact on older vehicles.
Does E20 reduce mileage?
Industry body Society of Indian Automobile Manufacturers (SIAM) says E20 fuel can reduce mileage but rejects claims that it damages vehicles or poses a safety risk.
"Millions of vehicles are plying on E20 for quite some time now. Not a single vehicle breakdown has been reported or vehicle failure has been reported," SIAM Executive Director PK Banerjee said at an event in New Delhi on August 30, 2025.
Banerjee also dismissed reports claiming mileage falls by as much as 50%.
According to him, scientific studies conducted under controlled conditions found a 2-4% reduction in fuel efficiency.
However, he acknowledged that real-world driving conditions can produce different results.
"On road, it could be very different because of the way in which the vehicles are maintained and driven, so that difference will be there," CV Raman, executive committee member at Maruti Suzuki India Ltd., told Reuters.
Can India produce enough ethanol?
The government estimates India will require more than 1,000 crore litres of ethanol every year to fully implement E20 fuel across the country.
Production capacity has expanded rapidly over the past decade.
According to an Economic Times report, India's annual ethanol production capacity reached 1,810 crore litres by mid-2025, up from 421 crore litres in 2013.
During the Ethanol Supply Year 2023-24, around 707 crore litres of ethanol were blended into petrol, resulting in a 14.6% blending rate.
By May 2025, the blending rate had increased to 18.74%, with 548 crore litres of ethanol blended.
What is the environmental impact?
Supporters say E20 fuel helps lower carbon dioxide emissions and reduces India's dependence on fossil fuels.
However, critics point out that ethanol production also has environmental costs.
Experts say large-scale sugarcane cultivation requires significant amounts of water, raising concerns in a country already facing water stress. Some studies have also found that while ethanol reduces carbon dioxide emissions, it may increase emissions of pollutants such as aldehydes.
Oil companies have also had to invest in separate storage and distribution infrastructure for E20 fuel.
Government Rejects Seven Common Claims
Amid the growing debate, the Ministry of Petroleum & Natural Gas recently issued a detailed clarification rejecting what it described as "misleading claims" about E20 fuel.
Road Transport and Highways Minister Nitin Gadkari also told the Lok Sabha that E20 may reduce fuel efficiency by 2-6%, depending on the vehicle's age and type.
He said engine durability tests conducted both in laboratories and under real-world driving conditions had found no engine failures linked to E20 fuel.
According to Gadkari, compared with E10 petrol, E20 also offers better acceleration, improved ride quality and nearly 30% lower carbon emissions.
He said the findings were based on a joint study by the Automotive Research Association of India (ARAI), Society of Indian Automobile Manufacturers (SIAM) and Indian Oil Corporation Ltd. (IOCL).
Claim 1: Older vehicles cannot run on E20
The government says this is false.
It says vehicles manufactured before 2023 have already been using high-ethanol blends for several years without evidence of widespread engine failures.
According to the ministry, service records from 2.84 crore vehicles during FY2025-26 - including 1.5 crore vehicles that were not originally E20-compatible - showed no E20-related corrosion, abnormal wear or reduction in component life.
Claim 2: E20 will make 30 crore vehicles unusable
The government has also rejected this claim.
It says more than 20 crore two-wheelers and over three crore petrol cars have already been running on E15+ and E19-E20 fuel without verified reports of widespread breakdowns.
"If E20 really rendered vehicles unusable, India would have witnessed millions of breakdowns, warranty claims and service campaigns. Nothing of that sort has occurred," the ministry said.
Claim 3: Automakers oppose E20
The government says automobile manufacturers support the programme.
It pointed to a joint press conference held on July 4, 2026, where representatives from Toyota Kirloskar, Maruti Suzuki, Hero MotoCorp, Hyundai Motor India, TVS Motor Company and Bajaj Auto defended the rollout.
Toyota said E20 was introduced only after extensive testing under international standards.
Maruti Suzuki said its service data from 2.84 crore vehicles, including 1.5 crore older vehicles, found no evidence of E20-related corrosion or abnormal wear. It also estimated the mileage impact at 3-3.5%.
Hero MotoCorp said its field data also showed no increase in vehicle damage linked to E20.
Claim 4: Older vehicles face engine damage
The ministry said service records from leading car and two-wheeler manufacturers found no abnormal corrosion, excessive wear or reduced component life linked to E20 use.
Another automobile manufacturer, according to the government, monitored 1.4 crore vehicles running on E20 and found no evidence of ethanol-related corrosion.
Claim 5: Mileage drops drastically
The government says claims of major mileage loss are exaggerated.
It says fuel efficiency depends on several factors, including:
- Driving style
- Traffic conditions
- Vehicle maintenance
- Tyre pressure
- Air-conditioner usage
According to the ministry, any reduction in mileage for older vehicles is generally limited to 3-5%.
It also says E20 provides benefits such as:
- Higher octane rating
- Better anti-knock performance
- Cleaner combustion
- Smoother engine operation
- Better acceleration
Claim 6: Automakers are being forced to support E20
The government says manufacturers would not certify vehicles as E20-compatible or continue providing warranty coverage unless they were satisfied with the fuel's performance.
According to the ministry, warranty decisions are based on engineering validation and extensive testing.
Claim 7: Companies are hiding the truth under government pressure
The ministry rejected this allegation as well.
It said automobile manufacturers are independent, publicly listed companies that would face legal action, warranty claims and reputational damage if they knowingly concealed widespread defects.
According to the government, manufacturers continue to honour warranties for E20-compatible vehicles because they are confident in the testing and real-world data supporting the programme.
The E20 fuel policy remains one of India's biggest energy transition initiatives. While the government and automobile industry maintain that the fuel is safe and environmentally beneficial, concerns over mileage, compatibility with older vehicles and the overall cost to consumers continue to fuel public debate.
