Page 55 - Policy & Economic Report - July 2025

POLICY AND ECONOMIC
ROEILPO&RGTAS MARKET

The rollout of higher ethanol blends was undertaken only after extensive consultation with
automobile manufacturers, SIAM, ARAI, component manufacturers, testing agencies and Oil
Marketing Companies (OMCs).

Extensive laboratory studies and field trials conducted by ARAI, SIAM, IOCL, IIP and automobile
manufacturers covering parameters such as engine durability, drivability, startability, corrosion
resistance, material compatibility, emissions and fuel efficiency have confirmed that E20 is safe for
use under prescribed standards.

These studies also established that legacy vehicles do not exhibit any significant variation in
performance or abnormal wear and tear due to E20. These extensive laboratory studies, field
validation and real-world operating experience have not established any widespread adverse impact
on vehicle performance due to E20 fuel. The Government's assessment is based not only on laboratory
research but also on large-scale experience after nationwide implementation. India witnesses
approximately 8 crore vehicles visiting retail outlets every day (around 80% petrol vehicles).

This is evident from the fact that E15+ blended petrol has been in widespread use for over three-and-
a-half years and E19-E20 fuel for over two-and-a-half years. More than 20 crore two-wheelers and
over 3 crore petrol cars have been operating on these blends without any verified evidence of
widespread engine failure or vehicle breakdown attributable to ethanol blending. Manufacturer
service data confirm that there is no abnormal corrosion, wear or reduction in vehicle life due to E20
fuel. Manufacturers continue to honour warranty obligations for vehicles using E20 fuel, providing
further confidence in its safety and reliability.

A leading OEM serviced 2.84 crore vehicles during FY 2025-26, including approximately 1.5 crore
vehicles that were not originally certified as E20-compatible, and reported no E20-linked corrosion,
abnormal wear or reduction in component life. A leading 2-wheeler company has reported similar
field experience. One OEM recently stated that data from 1.4 crore E20-operated vehicles tracked
over an extended period showed no evidence of ethanol-induced corrosion. ARAI reaffirmed that
vehicles undergo rigorous international-standard validation before reaching consumers.

Automobile manufacturers, component suppliers, SIAM, ARAI, testing agencies and Oil Marketing
Companies were associated with every stage of the scientific evaluation and phased rollout of E20.
E20 was introduced only after successful validation of fuel systems, engine durability, drivability,
material compatibility and emissions performance. These studies did not reveal any significant
adverse impact on performance, durability or material compatibility in legacy vehicles under the
prescribed operating conditions. Had automobile manufacturers not been fully satisfied with the
results, they would neither have validated E20 fuel for older vehicles nor honoured warranty
obligations.

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