E20 fuel explained: What is it, how does it impact your vehicle’s mileage, is E20 fuel better than regular petrol/ diesel, and more questions answered

India, the third largest consumer of crude oil and petroleum products in the world, committed to its renewable energy mission of 2030, has now gotten a new eco-friendly innovation in the name of E20 fuel. Announced at the India Energy Week 2023 event in Bengaluru, E20 fuel is a 20-80 Ethanol-Petrol blend fuel that aims to provide respite to an increase in oil imports for the Government of India. But what does it do for the consumers? How does it impact your vehicle? Here is everything you need to know about the newly launched E20 fuel.

What is E20 fuel?

First widely used in Brazil in the 1970s, E20 fuel is a common blend of ethanol and gasoline (petrol/ diesel) and contains 20% ethanol and 80% gasoline. It is used for internal combustion engines in vehicles such as cars, trucks, and bikes. In fact, this newly adopted blend is a good way to move towards eco-friendly and cost-effective fuels, which we will learn about below. Further, ethanol is extracted from the residue of sugarcanes and damaged plant grains, thus bolstering the sugar industry by creating an alternate source of income.

To give some background on its usage in India, the government of India started focusing on blends seriously after the National Policy on Biofuels was drafted in 2018, which aimed to reach the target of 20% ethanol blending in petrol by the year 2030. In June 2022, the target of 10 percent blending was reached. It is expected that the final target of 20 percent will be completed much earlier in 2025-26, as Prime Minister Modi encouraged the push to the final few percentage points in his speech this week.

According to the government of India, the Ethanol blending programme has resulted in foreign exchange savings of over Rs 41,500 crores, reduced GHG emissions of 27 lakh MT, and has also led to an income increase of over Rs 40,600 crores to farmers.

How is E20 fuel better than regular E10 petrol or diesel?

Given its usage in various countries over the last few decades, it is noted that the E20 fuel blend has certain advantages over normal petrol or diesel. 

1. Reduces carbon emissions: Ethanol is a renewable energy source that has lower carbon emissions compared to petroleum, making E20 a relatively cleaner-burning fuel.
2. Pushes towards renewable energy: By using ethanol as part of the fuel mix, E20 increases the use of renewable energy sources. It reduces full dependence on fossil fuels like petroleum.
3. Improved engine performance: Ethanol acts as an octane booster, which can lead to improved engine performance and reduced engine knock.

Do note that the improved engine performance is a debatable topic, as it depends on the make and model. However, it has been observed that E20 fuel usually benefits newer vehicles while it has a detrimental effect on older vehicles. Also, Ethanol is usually known to corrode metals over a longer period of time, thus expectedly increasing car maintenance costs.

Will Ethanol-blend petrol be cheaper?

There is currently no confirmation on whether this Ethanol-blend petrol, E20 fuel, will be any cheaper than normal petrol or diesel. In fact, the current version of petrol, E10, is already been sold across petrol stations for the last 6 months. And, although prices have not really gone down in the last few months, they haven’t gone up either. And, this is despite soaring oil prices across the world. 

So, in a tricky global situation with Ukraine war and high inflation, it is uncertain whether E20 fuel will bring real fuel savings to consumers or just be a way for the government to reduce their import bill. However, this is certain that as carmakers get ready to sell E20 fuel-compliant cars, the increase in cost will be passed onto the consumer, you. Maruti Suzuki has already confirmed that all its cars will be E20 fuel-compliant from April 1, 2023. And, they will definitely be expensive compared to the previous generations. Will the long-term savings in fuel be worth the extra cost? Past experience says yes, but we will have to wait and see.

How will E20 fuel impact your vehicle?

Several reports suggest that mileage will take a certain hit when you use E20 fuel in your vehicle. And, a substantial hit at that. Higher levels of ethanol blending (E20) in petrol impacts the mileage of the engines, reducing the fuel efficiency by 6-7%,” Hetal Gandhi, director, CRISIL Research, told the Times of India.

So, the fuel your car took to run 100km will now make it go just about 93-94km, which seems sizeable at a time when petroleum prices are high. However, with a lower GST on Ethanol and now-falling oil prices, consumers might see some respite in final prices as the months go by. Now, it’s up to the Oil Marketing Companies (OMCs) to do just that.

Is E20 fuel good for the environment?

As mentioned previously, the 20 percent Ethanol in E20 fuel is a biofuel extracted from sugarcane and damaged plant grains. Thus, it is much more renewable than fossil fuels, petrol and diesel. There is no doubt this is a more sustainable fuel. Plus, it burns cleaner. And, with millions of litres of fuel burning on a daily basis, the 20 percent blend that burns cleaner is always appreciated. 

With Electric Vehicles also around the corner, India is positively moving towards a cleaner, more sustainable model. The mission to move a majority of energy consumption to renewable sources by 2030 is coming to reality with steps like E20 fuel blending and promotion of EVs. Here’s hoping we leave behind a clean, green environment for future generations.