Examine the role of the Ethanol Blended Petrol (EBP) Programme in achieving India's energy security and agricultural income stabilisation objectives. What structural challenges remain at the 20% blending threshold?

Q. Examine the role of the Ethanol Blended Petrol (EBP) Programme in achieving India's energy security and agricultural income stabilisation objectives. What structural challenges remain at the 20% blending threshold? (15 marks, 250-350 words)

The EBP Programme blends domestically produced ethanol with petrol to cut crude import dependence while creating an assured market for surplus farm produce. The NITI Aayog Expert Committee's Roadmap for Ethanol Blending 2020-25 set the 20% (E20) target [2], which India has substantially achieved — making the programme a rare instance of energy and farm policy converging.

Contribution to energy security - Import substitution: ethanol displaces a growing share of petrol demand, conserving foreign exchange and insulating the fuel basket from crude price volatility [1]. - Domestic capacity creation: installed ethanol capacity stands at 1,380 crore litres — 875 crore litres molasses-based and 505 crore litres grain-based [3] — a supply base built within the country. - Investment and regional balance: Long-Term Offtake Agreements (LTOAs) with Dedicated Ethanol Plants target about 431 crore litres additional capacity and ₹25,000–30,000 crore of investment, mainly in ethanol-deficit states [1].

Contribution to agricultural income stabilisation - Countercyclical revenue: ethanol sales to OMCs give mills liquidity during sugar gluts, helping clear cane arrears linked to the Fair and Remunerative Price. - Diversification of feedstock: the March 2025 scheme lets cooperative sugar mills convert to multi-feedstock plants using maize and damaged food grains, with 6% interest subvention for five years [4] — extending benefits to maize growers and to mills idle outside the 4–5 month crushing season.

Structural challenges at the E20 threshold - Water stress: sugarcane and paddy-based ethanol intensify groundwater depletion in Maharashtra, UP and Karnataka. - Food–fuel trade-off: diverting grain to distilleries competes with buffer-stock and feed requirements. - Demand-side ceiling: absorption beyond E20 needs flex-fuel vehicles and engine compatibility; the Centre has taken no decision on blending beyond 20%, pending scientific validation [5]. - Allocation disputes: competition between integrated mills and standalone plants for procurement volumes creates policy uncertainty [1].

The EBP Programme has credibly linked energy self-reliance with farm income support. Sustaining it now requires shifting decisively toward water-efficient and second-generation feedstocks, matching supply expansion with flex-fuel demand, and keeping procurement rules transparent — aligning the programme with SDG-7 and India's net-zero commitment.

(~320 words)

Sources: 1. Government Speeds Up Ethanol Blending with Expanded Production and Infrastructure — PIB — blending progress, LTOA/DEP capacity of 431 crore litres and ₹25,000–30,000 crore investment, procurement framework 2. Report of the Expert Committee: Roadmap for Ethanol Blending in India 2020-25 — NITI Aayog — E20 target by 2025 3. Ethanol Production Capacity in the country is 1380 crore litres — PIB — total capacity and molasses/grain split 4. Centre notifies scheme for Cooperative Sugar Mills for conversion to multi-feedstock ethanol plants — PIB — 6% interest subvention, five years, maize and damaged food grains 5. Government measures to increase Ethanol Blending beyond 20% — PIB — no decision taken on blending beyond E20