The Union government is at sixes and sevens trying to justify its E20 mandate, the policy of blending automobile fuel with 20% of ethanol. The decision took effect last year, and now, in the context of high fuel prices due to the Strait of Hormuz blockade, there is a massive backlash from the public over anecdotal but widespread reports of damage to vehicles and reduced mileage due to the use of blended fuel.
What has stoked popular ire is a submission by Attorney General R. Venkataramani to the Supreme Court that E20 was an "experiment" whose results would be clear only next year. The obvious question this begs is why, if it is only an experiment, is it already policy? And if final data won’t be due until next year, what is the basis for the assurances that engines will not corrode or that fuel efficiency will not drop due to the blended fuel?
The government has been trying to walk back the attorney-general’s Freudian slip, maintaining that the E20 mandate was not an experiment but a robustly researched decision that will lead to multiplier benefits. Petroleum Minister Hardeep Singh Puri said ethanol blending is meant to reduce carbon emissions, save on crude oil imports, and support farmers’ incomes by increasing demand for feedstocks used in ethanol production. A figure of Rs 1.4 lakh crore of foreign exchange saved is being bandied about, even though the E20 mandate is a year old.
While the broader objectives are desired by all, motorists are, for the moment, more worried about the wear and tear to their vehicles, the reduced mileage and the higher maintenance costs they have to cope with. To set these fears at rest, the government last week rustled up statements by oil companies and automobile industry executives attesting to the technical soundness and cost-effectiveness of E20.
However, cherry-picked reassurances are not likely to satisfy vehicle owners. For instance, automobile industry executives have said, based on workshop feedback, that no issues of corrosion or other damage were reported last year, even though most of the vehicles were of pre-E20 vintage. However, this is likely a sleight of hand, because most workshop referrals are for routine checks, and cases of ethanol-induced corrosion of fuel tanks would be statistically few in relation to the overall number.
Similarly, the widely quoted factoid that ethanol is used in Formula One racing is unlikely to convince vehicle owners because their cars are not bespoke-designed with specialised systems and advanced materials.The government’s response to the consumer outcry misses the point. No one contends that ethanol blends have been introduced in any other country.
More than 60 countries have them. If India were to import best practices from them, it would need to fine-tune aspects of the current mandate, including what feedstock is sourced, what options are offered to the consumer at the pump, and how transportation systems are tweaked for the transition.
While Brazil and the US have spent 30 to 50 years developing their ecosystems, India is rushing through a mandatory system with a pay-as-you-go attitude to second-order effects.In the immediate term, the government needs to introduce different blends at different prices, leaving the final choice to motorists. Further, it needs to smooth the current creases in the policy, such as implications for insurance claims. Beyond that, there are humongous environmental and agricultural issues that need to be considered.