Ethanol extracted from sugarcane as well as damaged food grains such as wheat and broken rice and agriculture waste is less polluting and its use also provides farmers with an alternate source of income.
Speaking at the release of ethanol blending road map 2020-25 on the occasion of World Environment Day, Modi said "the target for mixing 20 per cent ethanol in petrol has been brought forward from 2030 to 2025".
Last year, the government had set a target of reaching 10 per cent ethanol blending in petrol (10 per cent of ethanol mixed with 90 per cent of petrol) by 2022 and 20 per cent doping by 2030.
Currently, about 8.5 per cent ethanol is mixed with petrol as against 1-1.5 per cent in 2014, he said adding higher blending has led to ethanol procurement jumping from 38 crore litres to 320 crore litres.
"It will go up further when 20 per cent blending is achieved," he said.
Last year, oil companies spent Rs 21,000 crore on ethanol procurement.
Earlier this week, the Oil Ministry had issued a gazette notification mandating start of up to 20 per cent blending of ethanol in petrol from April 1, 2023. All petrol sold in the country is targeted to have 20 per cent ethanol by 2025.
India is the world's third-biggest oil importer, relying on foreign suppliers to meet over 85 per cent of its demand.
Modi said the focus on ethanol is having a better impact on the environment as well as on the lives of farmers as it gives them another source of income.
He said that a large part of this eight-fold increase in ethanol procurement has benefitted the sugarcane farmers of the country.
Prior to his speech, the Prime Minister interacted with a few farmers from Maharashtra, Uttar Pradesh and Gujarat to learn about their experience from ethanol plants aiding their income, using animal waste to generate biogas that could be used for cooking medium and running vehicles and use of organic fertilizers.
"Ethanol manufacturing units were previously limited to only 4-5 sugarcane producing states but now food grain-based distilleries are being established to expand this to the whole country," Modi said.
The Prime Minister said that India is a strong proponent of climate justice and is moving ahead with ideas like the founding of the International Solar Alliance for realising the vision of One Sun, One World, One Grid and the Coalition for Disaster Resilient Infrastructure initiative.
He went on to list India's efforts to protect climate change - raising renewable energy capacity 250 per cent and India now being among the top five nations with the largest installed capacity, solar energy capacity rising by about 15 times in the last 6 years, giving 37 crore LED bulbs and more than 23 lakh energy efficient fans, providing free electricity and cooking gas connections to cut household pollution.
"Apart from reducing pollution, it has also helped a lot in improving the health and strengthening environmental protection," he said. "India is setting an example to the world that it is not necessary to stop development for protecting the environment."
He said along with strengthening the economy, forests cover has also increased by 15,000 square kilometers in the last few years, the tiger population doubled and the number of leopards increased by about 60 per cent.
"It is a myth that air pollution is caused only by industries. Transport vehicles, unclean fuels, diesel generators also contribute to air pollution," he said adding the use of LPG as cooking fuel and electricity for lighting purposes has checked pollution from using firewood and kerosene.
Use of waterways, expansion of metro and suburban railways, electrification of railway lines and airports being powered by solar energy are other initiatives, he said.
India, he said, is now a proponent of climate change resolution and is among the top 10 nations on Climate Change Performance Index.
"We are aware of the challenges that are being faced due to climate change and are working proactively to overcome," he said. "India is setting an example to the world that it is not necessary to block developmental works in order to protect the environment."
"Economy and Ecology can go together. This is the path that India has chosen," he said.
The Prime Minister spoke about a project to develop Gujarat's Kevadiya, which houses the Statue of Unity, as an electric vehicle city.
Necessary infrastructure is being made available so that only battery-based buses, two-wheeler, four-wheeler will run in Kevadiya in future.
Modi said the government has identified 11 sectors that can make good use of resources by recycling them through modern technology.
He also launched a pilot project of E-100 (100 per cent ethanol) dispensing stations at 3 locations in Pune.
This will provide the consumers with another choice of fuel along with a price advantage as the government has kept ethanol under the lower GST slab.
In the current ethanol supply year, which started in October, India plans to have 10 per cent ethanol-blending with gasoline. As much as 4 billion litres of ethanol will be needed for achieving a 10 per cent mixing ratio.
For 20 per cent by 2023, 10 billion (1,000 crore) litres will be needed.
The sugar industry will divert 6 million tonnes of surplus sugar to produce 7 billion litres of the ethanol needed while the remaining ethanol will be produced from excess grain.