India’s ethanol programme is one of its clearest energy security successes, reaching 20% blending (E20) five years ahead of the 2030 target and cutting the crude import bill. The government has now notified rules allowing flex-fuel vehicles to be certified to run on E85 and E100. The notification enables these fuels rather than mandating them.

Any meaningful uptake would raise demand substantially, as an E100 vehicle runs almost entirely on ethanol and, because ethanol carries less energy, needs more fuel per kilometre than an E20 vehicle. Meeting this demand would depend heavily on sugarcane, rice and maize, which will compete for the land, water, and grain India needs for food and animal feed.

The question is how much the country can afford to divert. Events over the past month suggest the margin is already thin.

Earlier this month, the government directed oil marketing companies to bring sugar diversion for ethanol down to zero for the 2026-27 supply year, amid concerns over sugar output after weak rains.

The same tender, seeking around 11 billion litres, cut the price for maize-based ethanol by ₹3 a litre. Maize was already the largest feedstock in 2024-25, supplying nearly half of India’s ethanol, and with cane juice and B-heavy molasses excluded this year,........

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