E20 Petrol in India: Green Transition or Greenwashed Cronyism?

Posted on 25th September, 2025 (GMT 01:37 hrs)

ABSTRACT

This article critically examines India’s nationwide rollout of E20 petrol—a fuel blend of 80% petrol and 20% ethanol—framed as a green transition but marked by structural contradictions and political capture. While the policy promises reduced fossil fuel dependence and enhanced energy security, its hasty and opaque implementation has exposed ecological, economic, and democratic fault lines. Large-scale ethanol production, dependent on sugarcane and food grains, risks intensifying food-versus-fuel conflicts, groundwater depletion, monoculture expansion, and contested lifecycle emissions, undermining its environmental rationale. At the same time, the accelerated timeline has disproportionately benefited politically connected firms, notably those linked to Union Minister Nitin Gadkari’s family, fuelling charges of dynastic capitalism and greenwashed cronyism. Consumers face reduced mileage, vehicle compatibility issues, and higher costs, while farmers encounter persistent inequities despite promised gains. Unlike Brazil’s gradual, infrastructure-supported ethanol transition, India’s compressed shift neglects readiness, transparency, and public consultation. By prioritizing centralized agro-industrial biofuels over decentralized renewables such as solar microgrids and electric mobility, E20 risks locking India into short-term, carbon-intensive fixes while delaying structural decarbonization. The study argues that the E20 rollout exemplifies the mirage of green developmentalism—where sustainability discourse legitimizes elite enrichment and policy capture, displacing burdens onto citizens, farmers, and ecosystems.

Introduction

The Indian government has recently rolled out E20 petrol nationwide, a fuel blend consisting of 80% petrol and 20% ethanol. Unlike earlier optional blends, E20 is now mandatory for all petrol vehicles. Touted as a step toward cleaner energy and energy security, the rollout has sparked controversy. While ethanol blending is supposed to carry environmental promise, the rushed, opaque, and politically entangled implementation has raised serious questions about consumer welfare, agricultural sustainability, and governance. E20 also illustrates a deeper climate paradox: a measure framed as a green solution may, in fact, displace rather than resolve the crisis. On the one hand, it reduces dependence on fossil fuels and signals a shift to renewables. On the other hand, large-scale ethanol production demands vast amounts of water, land, and crops such as sugarcane—resources already under severe ecological and social stress. The outcome risks intensifying food-versus-fuel conflicts, increasing groundwater depletion, and locking farmers into vulnerable monocultures, all while only marginally cutting carbon emissions. Thus, a policy celebrated as climate action simultaneously reproduces the very extractive logics that drive the climate emergency.

Adding fuel to the controversy is Union Minister Nitin Gadkari’s dual role as ethanol policy advocate and beneficiary, with his sons’ companies—Manas Group and CIAN Agro—emerging as major ethanol producers. The overlap of policy and profit has fueled allegations of conflict of interest, “greenwashed cronyism,” and dynastic nepo-capitalism, where clean energy rhetoric risks concealing entrenched political-business gains.

What Is E20 Fuel and Why Mix Ethanol with Petrol?

Ethanol is an alcohol used both as a beverage component and as a biofuel. It is produced from sugar- and starch-rich crops such as sugarcane, corn, and rice. Sugarcane is particularly effective due to its high yield per acre, though leftover crop residues and waste can also be converted into ethanol.

In fuel applications, ethanol acts as an oxygenate, improving combustion efficiency. According to NITI Aayog, ethanol from sugarcane can reduce greenhouse gas emissions by up to 65% compared to petrol. Ethanol blending also reduces India’s dependence on crude oil imports, thereby improving energy security.

The History and Political Economy of Ethanol Blending in India

Ethanol blending in India has a two-decade history, marked by ambitious targets, uneven implementation, and now, intense political and corporate entanglements. The program was first launched in 2003 with a 5% blending target (E5), but progress was slow. Limited ethanol supply, logistical bottlenecks, and pricing disputes between oil companies and sugar mills kept actual blending at just 1.5% by 2013–14, far below the official goal.

After the BJP came to power in 2014, the ethanol program received a major political push. The government expanded the Ethanol Blended Petrol (EBP) programme, aiming to scale E10 adoption across states. The pace of policy acceleration during this period was markedly faster than in the preceding decade, signaling a shift from cautious experimentation to aggressive state-led intervention.

A major shift occurred in 2018, under the National Biofuel Policy, when the government targeted 20% ethanol blending (E20) by 2030. This aligned with stated goals of reducing crude oil imports, supporting the sugar industry, and contributing to climate commitments. In 2021, Prime Minister Narendra Modi announced that the 2030 target would be brought forward to 2025, compressing what had been planned as a gradual transition into a short three-year timeframe. Policy instruments to accelerate blending included fixed ethanol procurement prices, diversification of feedstocks (maize, surplus rice, damaged grains), and soft loans for distillery expansion. By 2020–21, blending levels had reached around 8%, rising to roughly 10% in 2021–22.

However, this rapid expansion has been deeply entangled with the growing involvement of politically connected private actors, raising pressing questions about conflict of interest and dynastic, nepo-capitalism in India’s green transition. A central figure is Union Minister Nitin Gadkari, widely recognized as the political face of ethanol advocacy, whose family directly owns and operates major ethanol-producing companies. His son Sarang Gadkari heads Manas Agro Industries, while Nikhil Gadkari runs CIAN Agro Industries—firms that have witnessed meteoric growth, diversification, and rising valuations precisely in step with the government’s accelerated blending mandates. Industry reports suggest that Manas Agro expanded its distillery capacity multiple times in the past decade, while CIAN Agro moved aggressively into the ethanol supply chain, both benefitting from cheap loans, subsidies, and assured procurement policies tied to ethanol targets. The compressed timeline of the E20 rollout, combined with relaxed environmental clearances and fast-tracked approvals, has effectively funneled state-backed incentives and market advantages to a small cluster of politically well-connected firms. What is framed as a clean energy transition, therefore, risks becoming a textbook case of policy capture, where public mandates are restructured to serve private dynastic networks—blurring the line between governance, business, and political patronage.

Crony-Dynastic Capitalism and Greenwash

The E20 rollout exemplifies how India’s pursuit of “green growth” can act as a veneer for state-corporate enrichment rather than genuine sustainability, embodying a broader climate paradox—where policies promoted as climate solutions reproduce the very ecological and social harms they claim to solve.

• Familial Profit Capture: Union Minister Nitin Gadkari has been the most vocal champion of ethanol policy, while his sons’ companies—Manas Agro and CIAN Agro—have rapidly expanded ethanol production. Backed by government procurement guarantees, soft loans, and favorable feedstock policies, this overlap of policymaking and private profit exemplifies dynastic capitalism under a greenwashed banner.
• Policy Acceleration for Private Gain: The jump from E10 to E20 within just three years mirrored the expansion of politically connected firms, with little space for democratic debate. What is framed as a clean transition instead reflects policy capture by entrenched business-political networks.
• Centralized Industrial Model: The ethanol drive prioritizes large, centralized distilleries over decentralized renewables such as solar microgrids, wind-solar hybrids, or electric mobility. Rather than diversifying India’s energy system, it deepens dependence on resource-hungry monocultures and extractive infrastructure.

Agrarian and Environmental Stress

• Monocultures and Food vs. Fuel: Large-scale ethanol production encourages sugarcane and grain monocultures, diverting fertile land and water from food crops. This risks food inflation, weakens the Public Distribution System (PDS), and fuels food-versus-fuel conflicts.
• Water Footprint: Sugarcane ethanol is highly water-intensive, exacerbating depletion of rivers and aquifers in drought-prone regions such as Maharashtra.
• Biodiversity and Soil Degradation: Expansion of single-crop systems erodes soils, reduces groundwater recharge, and threatens ecological diversity.
• Farmer Inequity: While politically linked mills benefit from assured markets, small farmers still suffer from delayed payments and weak bargaining power, worsening rural vulnerability.

Consumer Concerns and Vehicle Compatibility

For ordinary citizens, the E20 mandate has created new costs and risks:

• Mileage Loss: Ethanol contains 30% less energy than petrol. Independent surveys (e.g., Local Circles, 36,000 respondents) show 10–15% mileage drops, compared to the government’s claim of only 1–2%.
• Vehicle Damage: Ethanol absorbs water, causing corrosion, rust, and clogged filters. Most Indian vehicles were built for E5 or E10; only since 2023 have manufacturers begun producing E20-compliant models.
• Maintenance Burden: Small garages lack the training and equipment to handle ethanol-related damage, leaving consumers with higher repair costs and uncertainty.

Health and Environmental Trade-offs

• Air Quality: Ethanol blending reduces CO₂ but increases acetaldehyde and ozone precursors, worsening smog and exposing traffic workers and commuters to carcinogenic risks.
• Energy Efficiency Paradox: Because ethanol delivers less energy per litre, more fuel is required for the same distance, undermining its net climate benefit.
• Lifecycle Emissions: Fertilizer use, land-use change, and processing energy offset much of ethanol’s supposed carbon savings; in some cases, lifecycle emissions rival petrol.

Temporal and Environmental Injustice

The E20 policy reveals who bears the costs and who reaps the rewards. Corporations and politically connected actors capture subsidies and profits, while farmers face land and water stress, consumers endure higher costs and vehicle risks, and ecosystems absorb the long-term damage. What is presented as a sustainability milestone thus exposes the paradox of India’s energy transition: the burdens of “green” policy are displaced onto the vulnerable, while the benefits are captured by the powerful.

Economic and Social Equity

• Regional Imbalance: Benefits accrue mainly to sugar-producing states (UP, Maharashtra, Karnataka), while non-sugar states face higher consumer costs without proportional gains.
• Labour Exploitation: Agricultural labourers remain in precarious conditions; ethanol policy has not addressed structural inequities.
• Consumer Burden: Despite domestic ethanol reducing import bills, petrol prices remain unchanged. The savings have not been passed on to consumers.

Infrastructural Readiness Gaps

• Fuel Distribution: Ethanol is corrosive and hygroscopic. Most petrol pumps, storage tanks, and distribution systems were not upgraded before rollout, raising risks of leaks and contamination.
• Repair Ecosystem: Mechanics and garages lack training to handle E20-related issues, compounding consumer costs.

Governance, Transparency, and Conflict of Interest

The rollout is entangled with political and corporate interests:

• Crony Conflict of Interest: Union Minister Nitin Gadkari’s family has direct business interests in ethanol production. His sons manage ethanol-producing companies such as Manas Agro Industries and Infrastructure Ltd. (part of the Manas Group) and CIAN Agro Industries & Infrastructure Ltd. These companies have experienced meteoric growth in recent years, closely coinciding with the government’s aggressive promotion of ethanol blending targets and expanded biofuel incentives. For instance, CIAN Agro’s revenue reportedly surged from around ₹17 crore in mid-2024 to approximately ₹510 crore by mid-2025, a nearly 30-fold increase, while its stock price jumped from ₹37.45 in January 2025 to ₹638 in August 2025. Manas Agro operates a 190 KLPD grain-based distillery in Maharashtra and has also expanded production significantly during this period. Critics argue that this rapid growth raises serious concerns about conflict of interest and policy capture, as government ethanol procurement policies effectively guaranteed a market for these companies, potentially benefiting Gadkari’s family enterprises. While Nitin Gadkari has denied any role in his sons’ businesses, the coincidence of policy incentives and corporate expansion has drawn sustained scrutiny.

• Policy Capture: Ethanol policy has been disproportionately shaped by sugar industry lobbies and “sugar barons,” sidelining independent scientific review.
• Transparency Deficit: There is little disclosure at petrol pumps about ethanol content or potential mileage impacts. No compensation mechanism exists for vehicle damage.

Democratic and Legal Questions

• Right to Choice: Making E20 mandatory eliminates consumer alternatives, raising concerns under Article 19(1)(g) (freedom of trade) and Article 21 (right to life).
• Equality Before Law: (Article 14) Consumers bear uniform burdens, while politically connected corporations reap disproportionate benefits.
• Public Consultation: No meaningful citizen or civil-society input preceded the rollout, undermining democratic legitimacy.

The Brazilian Comparison

The Indian government frequently cites Brazil as a model for ethanol blending, highlighting the success of its E27 fuel program. However, Brazil’s transition was anything but abrupt. It was a gradual process spanning several decades, beginning in the 1970s under the Proálcool (National Alcohol Program) initiative. The government rolled out progressive blending mandates, invested heavily in infrastructure, and nurtured technological readiness through the introduction of flex-fuel vehicles—cars designed to run on any mix of ethanol and petrol. Crucially, Brazil also provided strong consumer incentives such as tax breaks, fuel price parity mechanisms, and subsidies to ensure affordability and public acceptance.

In contrast, India’s ethanol push has been extremely compressed in time and scope. The leap from E10 (10% ethanol blend) to E20 (20% ethanol blend) was announced and pursued within just three years, without comparable groundwork. There has been little investment in consumer-facing preparation, such as the development of flex-fuel compatible vehicles, nationwide awareness campaigns, or meaningful economic incentives. Most cars and two-wheelers currently on Indian roads are not fully compatible with higher ethanol blends, raising risks of engine damage, reduced efficiency, and increased maintenance costs.

Moreover, India’s ethanol supply chain—dependent largely on sugarcane and food grains—faces ecological and economic stresses that Brazil partly avoided by leveraging sugarcane’s high ethanol yield in more favorable climatic conditions. This sudden policy shift, therefore, risks transferring costs and vulnerabilities onto consumers and farmers, while disproportionately benefiting corporate producers with political connections.

Global Lessons Ignored

• United States: Gradual rollout (E10–E15) with subsidies and flex-fuel infrastructure.
• European Union: Crop-based biofuels capped at 7% due to sustainability concerns.
• Brazil: Transition anchored in long-term planning and consumer readiness.
• India: Compressed shift, inadequate infrastructure, and minimal safeguards.

Alternatives Ignored

• Second-generation (2G) biofuels from crop residues and waste are far more sustainable, but policy has overwhelmingly favoured first-generation sugarcane ethanol due to entrenched industry interests.
• A phased roadmap (E10 → E20 → E30 with 2G integration) could have balanced environmental goals with consumer protection.
• Without this balance, India risks locking itself into an unsustainable sugarcane-based energy economy.

Socio-Political Implications

• Rural-Urban Divide: Rural sugar elites consolidate wealth, while urban commuters bear higher costs.
• Nepo-Capitalism: The rollout feeds into wider critiques of crony capitalism, where green policies are hijacked by politically connected families, e.g., the Gadkari Family.
• Decentralized Renewable Energy Futures:
  By hastily implementing E20 ethanol blending, India risks entrenching short-term, carbon-intensive fixes at the expense of genuinely sustainable energy transitions. Ethanol—particularly when sourced from sugarcane and food grains—remains biomass-dependent, centralized, and only partially carbon-neutral, rather than a truly clean alternative. This policy diverts attention, investment, and infrastructure away from decentralized renewable systems such as solar microgrids, wind–solar hybrids, and electric mobility, which hold far greater promise for carbon-neutral, community-driven resilience. The rush to E20 risks a temporal injustice: short-term targets may be met, but at the expense of structural shifts vital for a genuinely sustainable, and not merely a “decarbonized” future—entrenching dependence on centralized agro-industrial biofuels.

Conclusion: E20 and the Mirage of Green Developmentalism

Ethanol is not inherently “bad.” When managed with foresight, ethanol blending can lower emissions, bolster energy security, and provide genuine support to farmers. Yet India’s E20 rollout has been characterized by haste, opacity, and political capture. Consumers bear the brunt through mileage loss, engine wear, and higher costs—without choice or compensation. Farmers, meanwhile, see little benefit beyond the enrichment of entrenched sugar barons, while environmental gains are undermined by water depletion, air quality concerns, and contested lifecycle emissions.

What emerges is less a transition than a cautionary tale: how green developmentalism can collapse into eco-cronyism. A policy framed as sustainable ends up consolidating elite power, shifting burdens onto ordinary citizens, and foreclosing more equitable and durable alternatives.

For ethanol to serve as a legitimate bridge in India’s energy future, policy must rest on three principles:

• Transparency and Choice – Consumers deserve full information and meaningful alternatives.
• Equity and Participation – Farmers, workers, and citizens must share fairly in the gains.
• Sustainability Beyond Sugarcane – Investment must pivot toward second-generation biofuels and decentralized renewables.

Absent these safeguards, India risks rehearsing a familiar tragedy: where the language of sustainability cloaks the practice of nepo-crony capitalism—a transition proclaimed in name, but hollow in substance.

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