Watch: What does food security have to do with flex fuel vehicles? | Business Matters

Indian government considers adopting Brazil-like flex fuel policy to promote green energy, but food supply concerns arise.

A recent report showed that the Indian government is now looking to adopt a policy with multiple facets to help promote flexible fuel vehicles— on the lines of Brazil. Is it worth going down that road or will it put into imbalance parts of our food supply chain?

The idea of a new flex fuel policy is to ICE vehicles on par with electric vehicles in a bid to accelerate the journey to decarbonise the economy. In the process, the government is also aiming to make India a global hub for green energy services and products, The Hindu businessline reported.

One of the big reasons for this push, other than going green, is that the ecosystem of flex fuel vehicles is less dependent on China that that for electric vehicle supplies. Sweet sorghum, considered an alternative to sugarcane in production of ethanol, is likely to get a push after PMO stepped in to help scientists popularise the varieties developed by Hyderabad-based Indian Institute of Millets Research (IIMR) for their commercial cultivation.

The EIA says that with reduced production of sugarcane and rice recently, India has relied more on imports of U.S. fuel ethanol to meet industrial sector demand and free up domestic ethanol production for EBP targets.India is the third-most popular destination for U.S. fuel ethanol exports. After decreasing in 2022 and 2023 due to increasing supply chain costs and elevated U.S. fuel ethanol prices, U.S. fuel ethanol exports to India have rebounded to record volumes in 2024, slightly exceeding the highs from 2017 to 2020.

Though the Indian government does not permit the use of imported ethanol to meet blend targets, imported ethanol finds its way to industries such as pharmaceuticals. This helps free up the domestic produce for our transportation blend targets.

In wanting to reduce oil import bills that we pay using dollars, is India merely switching to ethanol import bills and not really becoming self sufficient?