The Indian government has assigned the Automotive Research Association of India (ARAI) to conduct a detailed study on the impact of E25 fuel, which is petrol blended with 25% ethanol, on various performance aspects of existing vehicles, particularly mileage and engine condition. This initiative is part of the government's accelerated plan to increase ethanol blending in petrol to reduce crude oil imports.
Background of the Decision
According to sources, during a meeting of an inter-ministerial group last week, the Bureau of Indian Standards (BIS) indicated that adding 1% more ethanol to petrol beyond the current 20% blending level would not pose a problem. However, considering that increasing the blending to 25% represents a significant jump, the ARAI will now conduct a comprehensive study using vehicles that are compliant with E10 and E20 fuel standards.
Assessment Parameters
Officials familiar with the developments stated that while there is a surplus supply of ethanol, there is a need to evaluate the lifespan and performance (mileage) of vehicles not specifically designed for higher ethanol blending. The study will also assess emissions, upfront costs, and recurring expenses. According to best practices, vehicle samples should be run for 60,000 to 70,000 kilometers for a proper assessment.
Evolution of Vehicle Compliance
In response to the push for increased ethanol blending, automobile manufacturers began producing E10 compliant vehicles starting in 2010. Production of vehicles compliant with E20 materials commenced in 2023, and from April 2025, all new vehicles are required to be both E20 material and fuel compliant.
Tax Incentives for Higher Ethanol Blends
Meanwhile, the petroleum ministry informed the inter-ministerial group that it has recommended to the finance ministry a reduction in the Goods and Services Tax (GST) on E85 or higher ethanol blends from the current 15% to 5%. This move is intended to encourage vehicle manufacturers to produce flex-fuel vehicles capable of running on higher ethanol blends.
The inter-ministerial group, established two years ago to propose a roadmap for higher ethanol blending, is expected to submit its report next week.
Upcoming Flex-Fuel Vehicles
Several automobile companies have lined up the launch of flex-fuel cars and motorcycles next month. These vehicles can operate on higher ethanol-blended petrol, including up to 100% ethanol.
