FROM E20 to E27 : India’s Green Fuel Push boosts performance and the sugar economy

SYNOPSIS

India is moving from E20 to E27, blending more ethanol with petrol to cut oil imports. This is also helping farmers earn more and sugar industry grow.

India's shift from E20 to E27 green fuel enhances economic performance, benefiting the sugar industry with innovative growth.

India is accelerating the transition to energy by placing ethanol at the centre of its fuel policy. The action not only guarantees lower oil imports but also increased rural incomes and a life jacket for the sugar industry.

India is focusing on new rules for green fuel now. With ethanol amounting to a larger share of petrol, farmers, mills are going to be major benefiter. Ethanol blending program is changing how the country uses fuel. The E20 goal, which means mixing 20% ethanol with petrol, was achieved five years before the target. Now the focus is shifted to E27, where 27% ethanol will be blended in petrol. This will be an important step that will bring benefits along with fuel savings.

The sugar industry has been benefited from ethanol. This year heavy rains affected production, so farmers had planted more sugarcane and maize. This resulted in increase in ethanol production, boosted sugar output, and allowed mills to pay farmers on time. Sugar mills now earn from selling sugar and transforming extra cane into ethanol. In regions like Vidarbha, this has raised earnings and eased financial burden due to late payments. 5 crore sugarcane farmers depend on these system & ethanol sales helps in making quick payment.

 The government’s Fair and Remunerative Price (FRP) for sugarcane, set at ₹355 per quintal for 2025 is double the cost of growing it giving farmers profit. Tax relief of over ₹43,000 crore for mills and farmers has also helps the industry. The sugar industry has been one of the main winners. Sugar mills now earn not just from selling sugar but also from transforming extra cane into fuel. This helps them pay farmers faster. In places like Vidarbha, it has raised incomes and reduced farmer suicides, which were often due-to delayed payments and volatile cane prices.

For farmers, the benefits are a lot, around 5 crore cane growers depend on this system, and ethanol sales give mills the money they need to clear payments on time. The government’s Fair and Remunerative Price (FRP) for sugarcane, fixed at ₹355 per quintal for 2025–26 is more than double the cost of growing it, so farmers get a good profit. Tax changes have also given relaxation over ₹43,000 crore for mills and farmers together, making the industry stronger. This Industry is growing, with more than 5 lakh cooperative and private mills, helping directly the rural areas. These mills are giving jobs to farmers and workers in fields like processing, transport, and  many more. Ethanol blending is giving them a consistent income, which helps them to invest in better technology, infrastructure, and higher yield cane varieties. This is making the industry stronger and more productive.

Looking ahead, the shift to E27 will not depend only on sugarcane. Share of cane in ethanol production has fallen from 70% to 30% with maize being most important. This comes with some challenges like higher maize imports which will affect the feed and poultry industries. E27 will not just help reducing oil imports, it will also help in transforming the agricultural economy, with timely payments for farmers, and giving India more control over its energy future.

Parth Ajmera