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India used more than 11 billion litres of ethanol in 2025. E20 petrol drove that rise, bringing savings on oil imports but fresh costs elsewhere.
Key Highlights
Ethanol demand in India crossed 11 billion litres in 2025, after years of higher purchases by oil companies for E20 petrol. The figure comes from the International Energy Agency’s India Bioenergy Market Report, published on January 29, 2026. Oil companies bought most of it for E20 petrol sold across India.
The increase gives India another way to reduce imported crude. Farmers and distilleries also gain a large buyer. There is a less comfortable side. Some cars may travel fewer kilometres per litre, while ethanol demand can pull maize away from poultry farms, starch makers and food processors.
The 11 billion-litre figure is consumption. Estimated production reached 2.60 billion US gallons, close to 9.84 billion litres.
India is still some distance from the 2 leaders. The US produced over 6 times India’s volume in 2025. Even so, Indian output has climbed from 830 million gallons in 2021 to 2.60 billion gallons in 2025.
E20 petrol carries 20% ethanol. For an office-goer filling a 35-litre tank, 7 litres of that fuel now comes from ethanol rather than conventional petrol. The national benefit is lower crude use. At the household level, fuel economy remains the immediate concern.
The Society of Indian Automobile Manufacturers told Reuters on August 31, 2025that E20 could reduce mileage by 2% to 4%, depending on vehicle design. A newer E20-ready car may handle the fuel without much trouble. An older hatchback used for a long daily commute could show the difference sooner.
India’s official numbers show how rapidly fuel policy changed.
8.65 billion gallons
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2020-21
The government earlier calculated that E20 would need 1,016 crore litres each year. Total demand, including industrial use, could reach 1,350 crore litres.
The IEA expects India’s biofuel demand to be about 80% higher in 2030 than it was in 2024. Its January 2026 report says the next round of growth will depend on steady rules, better systems for collecting farm waste, and more fuel made from crop residue.
That is where paddy straw and bamboo come in. Straw left behind in the fields of Punjab and Haryana, and bamboo processed at Numaligarh in Assam, can both be used for ethanol. This reduces the need to divert maize from poultry feed and food factories. Such plants cost more and may take longer to operate reliably, but they place less strain on food supplies.
LoansJagat, in a report published on May 21, 2025, also flagged 3 risks for ethanol companies: an uneven supply of raw material, sudden policy changes, and rising feedstock prices. That is also the practical policy problem. A weak maize crop can leave distilleries, poultry farmers, and food factories bidding for the same grain.
India has become the world’s 3rd-largest ethanol producer, yet the US and Brazil remain far ahead. The harder job begins now, raising supply without pushing up grain costs or leaving older vehicle owners with a larger fuel bill.
What Is E20 Petrol?
E20 petrol contains 20% ethanol and 80% petrol.
Did India Produce 11 Billion Litres In 2025?
No. India consumed more than 11 billion litres of ethanol in 2025, while estimated production was about 9.84 billion litres.
Does E20 Affect Range?
Yes. SIAM placed the likely reduction at 2% to 4%, depending on the vehicle.
Why Is Ethanol-Blended Petrol Becoming Common In India, And Can It Harm Engines?
India uses E20 to cut oil imports. Newer compatible vehicles handle it well, but older engines may face mileage loss or fuel-system wear.
Will E20 Petrol Be Successful In India?
E20 can succeed, provided fuel supply stays steady and older vehicle owners receive proper compatibility guidance.
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