Govt Denies Calling E20 An ‘Experiment’ Before Supreme Court

While the case regarding ethanol allocation is ongoing, it is unlikely to have any impact on the existing E20 standard

Several media reports claimed that the Government of India had described the country’s E20 (20% ethanol blended petrol) programme as an “experiment” during proceedings before the Supreme Court. However, the Office of the Attorney General for India has since issued an official clarification, stating that these reports are “completely false” and do not reflect the submissions made before the Court.

The clarification came in connection with an ongoing Supreme Court case involving ethanol allocation to oil marketing companies (OMCs). The government has reiterated that the Ethanol Blended Petrol (EBP) Programme is a national policy initiative and that the litigation relates to ethanol allocation, not the validity of the E20 programme itself.

Ethanol allocation case details

A number of distilleries have filed cases against oil marketing companies (OMCs) in respective High Courts. This is primarily due to oversupply of ethanol, which OMCs are unable to absorb even with the E20 mandate in place. When the E20 blending target was set around 2021-2022, producing such large quantities of ethanol was considered a challenge.

However, with special incentive schemes, private players were onboarded on a massive scale. The government offered incentives such as easy loans, environment clearances and interest subsidies. As more and more entrepreneurs entered the ethanol production business, the E20 blending target was achieved easily. However, the incentives have prompted distillers to build increased capacity, resulting in oversupply of ethanol.

As OMCs can only buy what is needed for E20 and since the distillers are not allowed to sell surplus to other entities, it has led to litigation. The current case in the Supreme Court relates to a Karnataka High Court order. The court had ordered OMCs to consider a higher allocation, as requested by a distillery.

This High Court order was challenged in the Supreme Court, saying that making changes in ethanol allocations can create problems with the current E20 setup. If one distiller’s request is granted, other distillers will also demand higher ethanol allocations. Moreover, ethanol supply contracts were fully finalized last year for 2025-26. Another request made by the central government is to pull all such cases from various High Courts and combine them in a single case.

Probable solutions

This case needs an urgent final ruling since the next round of annual ethanol contracts will start from October 2026. If these cases are not resolved, it could adversely impact the procurement of ethanol, as needed for fulfilling the E20 mandate. Since the crux of the problem is oversupply of ethanol, solutions can be built to effectively resolve this issue.

Recent moves such as testing of higher blends of ethanol such as E22, E30, E85 and E100 could be a step in that direction. It is also important for stakeholders to have more transparent systems, which will help avoid the issue of overcapacity. For now, the Supreme Court has ordered all parties to maintain a status quo in the case.

Is E20 an experiment?

While a statement may have been made in this context, it may not be the whole truth. As mentioned earlier, the Office of the Attorney General for India has already clarified that E20 ethanol blending is not an experiment. E20 is a binding national policy initiative and not a trial. The government has already tested E20 and published the results. Trials are actually ongoing for higher blends such as E22, E25, E27 and E30. Based on results, these could be introduced in the coming years.