Govt starts negotiations with auto OEMs over new ethanol blending target for India
- The Indian government has started negotiations with automobile OEMs to set a new ethanol blending target beyond 20 percent in petrol as of May 2025.
- This move follows the upcoming achievement of the 20 percent ethanol blending target by October 2025 and rising concerns over required investments and fuel supply.
- OEMs and component makers have invested about $11 billion to expand capacity, while automakers report muted urban vehicle sales and emphasize the need for widespread ethanol fuel availability.
- Experts note that increasing ethanol blends beyond 20 percent could raise vehicle costs by up to four percent and require engine modifications costing nearly Rs 15,000 crore, impacting pricing and maintenance.
- The ongoing discussions and draft government report indicate potential acceleration of investments but also highlight challenges in fuel infrastructure and consumer demand for higher ethanol blends.
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Govt starts negotiations with auto OEMs over new ethanol blending target for India
Industry experts told Moneycontrol that automakers would have to make some changes in the engine for the vehicle to be compliant with a fuel having an ethanol blend of over 20 percent, increasing the overall cost by 2.5 percent to 4 percent.
·India
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