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Ethanol - A Potent Weapon to Reduce Carbon Emissions

BANKING FINANCE

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April 2025

The World Energy Forum has forecasted that fossil fuels are under high pressure of shortage and can deplete in the coming decades. Also, use of fossil fuels has led to adverse effects on the global climate. Such an alarming situation has led policymakers to think about alternate ways of energy generation.

Ethanol - A Potent Weapon to Reduce Carbon Emissions

Recently, the Govt of India announced that it intends to blend 20% ethanol in petrol by the year 2025. Simultaneously, there were announcements by a couple of auto majors about launching models of vehicles capable of running on flex fuels (fossil fuels blended with biofuels like ethanol). Ethanol blending with fossil fuels once again became the talk of the town. We all know that energy demand across the world is increasing day by day due to development of the global economy. Fossil fuels are the primary energy sources which account for bulk of the world's energy consumption.

The World Energy Forum has forecasted that fossil fuels are under high pressure of shortage and can deplete in the coming decades. Also, use of fossil fuels has led to adverse effects on the global climate. Such an alarming situation has led policymakers to think about alternate ways of energy generation. The Government of India is also pushing for greater adoption of renewable power in the country. The Central Govt has set a target of achieving Net Zero carbon emission by the year 2070.

One of the methods which the Govt of India is adopting to achieve its target of Net Zero emission by 2070, is by blending ethanol with petrol. It is noteworthy to mention that as of March 2024, about 98% of the fuel requirement of the road transport sector wais being fulfilled by fossil fuels while only 2% was being fulfilled by biofuels like ethanol. The above data from Govt of India highlights the huge potential available to reduce our carbon emissions by replacing/blending fossil fuels like petrol with biofuels like ethanol.

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