Mobility is at the centre of industrialization and development. The increase in mobility causing an increase in demand for fuels has always intrigued the automobile industry, research, and policy to seek alternative fuels that can decrease combustion rates and produce more energy, all while keeping environmental impacts in mind. One such alternative is ethanol (also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol). Ethanol is a renewable biofuel produced from various feedstocks such as rice, maize, sugarcane, and corn.
An important reason for ethanol’s appraisal is its claim as a transition fuel, because of its ability to blend with conventional fuels, reduce crude oil imports, and lower greenhouse gas emissions. From E10 to E100 (the percentage of ethanol blended with petrol), more than 70 countries globally use ethanol as an alternative transportation fuel. Brazil is a global pioneer in high-ethanol fuels, using flex-fuel vehicles from E18 to pure ethanol (E100). The United States is the world's largest producer, with consumer gasoline primarily using E10. European Union countries like France, Germany, and Finland are also highly active in the E10 standard petrol space.
India is aggressively scaling its ethanol ecosystem. E20 petrol became the main fuel in India from April 1, 2026. The Ministry of Road Transport & Highways has mandated E20 (a blend of 80% petrol and 20% ethanol) for both regular and premium fuel variants. The ethanol industry is seen as a key pillar in the country's energy transition strategy. With the government's focus on ethanol blending, production capacity has expanded significantly across sugar mills, distilleries, and grain-based ethanol plants.
Despite these benefits, ethanol production has been a topic of debate due to its impact on water resources and the overall environment. Critics constantly argue that cultivating feedstock for ethanol requires vast amounts of water. While these arguments are valid, they do not always consider the broader context of agriculture, water use, food production, and energy security (Leenes, 2011). This raises a critical question: Is the issue only about producing ethanol, or is it about the larger challenge of managing agricultural water usage overall?
Since the Ethanol Blending Programme (EBP, originally launched in 2003) is incentivized by the government, farmers have increasingly shifted their focus to cultivating feedstock crops, as rising ethanol demand drives up the need for these crops. The issue is far more complex than it appears from the outside.
NITI Aayog, India's apex public policy think tank, warns in its Composite Water Management Index that 600 million people face high-to-extreme water stress, with demand projected to double available supply by 2030 (NITI Aayog, 2023). The report adds that a continued water crisis could trigger a nearly 6% contraction in India's GDP by 2050. When water scarcity is already a major problem, producing ethanol puts significant additional pressure on available water resources.
The feedstocks for ethanol—such as rice, maize, sugarcane, and corn—are among the most water-intensive crops. For instance, producing one litre of ethanol from rice requires over 10,000 litres of water, and rice irrigation demands that fields remain flooded for days. Producing one litre of ethanol from maize requires over 4,500 litres of water, and maize irrigation is largely rainfed but increasingly taps into groundwater. Sugarcane requires over 3,500 litres of water per litre of ethanol, needing a constant water supply throughout its growing cycle. All of these are driving water scarcity and drought-like conditions in areas pushed for ethanol production.
Another major concern with increased ethanol production is the deterioration of soil quality. The ability of soil to conserve groundwater has been seen depleting in regions like Punjab and Haryana (Spatio-temporal assessment of groundwater depletion in Punjab, India, 2020). Increasing the cultivation of water-intensive crops can strain already stressed aquifers. Groundwater is the most vital resource for farming, so this concern cannot be dismissed. When considering the large-scale use of ethanol, these potential challenges—impacts on water availability, groundwater resources, and agricultural practices—must be taken seriously.
While the above concerns are valid, they may not capture the complete picture of the relationship between ethanol and water. The major criticism attached to ethanol production is the large volume of water used, particularly for rice and sugarcane in India. However, most of this water is consumed during crop cultivation, not during the actual conversion of biomass to ethanol. Studies indicate that growing one kilogram of rice may take about 3,000–5,000 litres of water, while sugarcane requires much more throughout its growing season. Though these numbers are used to argue that ethanol adversely affects water resources, the bigger picture is that these crops require similar amounts of water to grow regardless of their final use. Whether these crops are used for making ethanol, exported to international markets, stored in government warehouses, or consumed as food, the water required remains unchanged.
India is the world's largest producer and exporter of rice, and millions consume rice daily. Yet, the water used to cultivate these crops is rarely questioned when the crops are destined for consumption or export. This observation raises a very important question: How is water use evaluated? When a portion of these crops is diverted for ethanol production, the water footprint suddenly becomes the primary point of criticism. This does not mean that fuel and food should be viewed as equal, but it highlights the need for consistency when assessing agricultural water usage.
There is even more to this nuance. A significant portion of the feedstock used is already existing and cultivated in surplus. A record 5.2 million tons of surplus rice was allocated for ethanol production in the country. The 2018 National Policy on Biofuels allowed the use of surplus food grains for producing ethanol for blending with petrol. Additionally, the Food Corporation of India (FCI) is directed to delegate surplus-damaged food grains—unfit for human consumption—for ethanol production. Therefore, assigning the entire agricultural water footprint exclusively to ethanol may oversimplify a broader issue involving crop selection, irrigation practices, agricultural policy, and resource management.
Likewise, pinning agricultural water scarcity solely on biofuel production undermines the complex, systemic nature of resource management. A moral question that arises is: how is food in surplus with the FCI when half the country is devoid of a complete nutritious meal a day, which is ascribed as a fundamental right in the constitution?
Beyond irrigation, ethanol production factories require water for processing and, in return, generate wastewater. Most of this wastewater is disposed of without adequate treatment, affecting local water quality and aquatic ecosystems. Added to this is air pollution. For example, Byrnihat, an industrial town between Assam and Meghalaya, is currently the most polluted city in India, and its pollution is significantly attributed to ethanol-producing industries. Overall, this perspective does not eliminate the environmental and sustainability concerns associated with ethanol production. Instead, it points out that the debate is not limited to ethanol but extends beyond to the sustainability of agricultural water use. Evaluating ethanol solely through the lens of water overlooks the broader aspects of food production, agricultural exports, and the complex trade-offs with energy security. The environmental impact of producing commodities like ethanol is tied to a chain of interconnected variables.
The debate over ethanol production goes beyond water consumption and significantly affects the country's economic condition. India imports more than 85% of its crude oil requirements, making it dependent on other nations and vulnerable to global oil price volatility and international supply disruptions (Konda, 2026). Such dependence imposes pressure on the economy and raises geopolitical concerns. Under these circumstances, the government views ethanol as a solution to reducing crude oil imports, saving foreign exchange, and improving long-term energy security, besides boosting farmers' incomes and lowering emissions.
The Ethanol Blending Programme has resulted in expedited payments to farmers of more than Rs. 1,25,000 crore from Ethanol Supply Year (ESY) 2014–15 up to July 2025, alongside savings of more than Rs. 1,44,000 crore in foreign exchange, a net CO₂ reduction of about 736 lakh metric tonnes, and substitution of more than 244 lakh metric tonnes of crude oil. These outcomes demonstrate that the programme has both environmental and economic benefits, strengthening energy security, supporting rural livelihoods, and reducing dependence on imported fossil fuels.
Overall, this highlights the complexity of policy decisions involving natural resources. A strategy that minimizes water usage may not be maximizing energy security, and vice versa. This does not mean that economic trade-offs and energy security should be prioritized above water scarcity and environmental challenges. Consequently, evaluating ethanol only through its water footprint provides a partial understanding. The defence put forward by the Ministry of Road Transport & Highways in the PIL at the Supreme Court remains unconvincing regarding the full impacts of ethanol.
On one hand, the concerns surrounding ethanol production—including the cultivation of water-intensive crops, groundwater depletion, and industrial wastewater—are entirely valid and should not be overlooked in a water-stressed country like India. On the other hand, evaluating ethanol solely through its water footprint is incomplete without seeing the broader context and gaining a better understanding of agricultural water use, surplus grain utilization, food production, and ethanol's role in strengthening energy security.
A more optimized assessment for sustainable development requires a balance between both environmental and economic objectives. The challenge here is not purely to decide whether to produce biofuels or to conserve water. Rather, it is to develop policies that improve irrigation efficiency, encourage the use of less water-intensive feedstocks, strengthen wastewater treatment, and promote renewable energy production without compromising the long-term availability of resources. Instead of asking whether ethanol is entirely beneficial or harmful, the more meaningful question is: How can it be produced responsibly within a sustainable agricultural system that optimizes water consumption and minimizes wastewater production?
What demands transparent deliberation, however, is the Union Government's defence of E20 before the Supreme Court. The government has conceded that the E20 fuel currently sold at every petrol pump across the country is technically still "an experiment," with results expected only by next year. It has further maintained that the Ethanol Blending Programme is a policy decision unlikely to be reversed, though the percentage of ethanol may be adjusted upward or downward depending on demand and other factors. Crucially, this defence pertains solely to potential damage to vehicles, with no mention of environmental or public health impacts.
At a time when the Environment Impact Assessment framework has been rendered virtually ineffective, a deeper question arises: Why experiment with the entire country instead of piloting on a smaller scale? We already have the example of Byrnihat—an industrial town whose severe pollution is attributed to ethanol-producing industries—to assess the local environmental consequences. This brings us to the larger, more unsettling question: How far can a country chase development at the cost of its natural resources and human wellbeing?
References
- IRENA. (2015). Renewable Energy in the Water, Energy & Food Nexus. Retrieved from https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2015/IRENA_Water_Energy_Food_Nexus_2015.pdf
- Jadhav, R., Munroe, T., & Gopalakrishnan, R. (2025, June 25). From shortage to surplus: India pours record rice crop into ethanol. Reuters. Retrieved from https://www.reuters.com/sustainability/climate-energy/shortage-surplus-india-pours-record-rice-crop-into-ethanol-2025-06-26/
- Konda, C. (2026, April 17). India's oil and gas crisis is a wake-up call for transport electrification. IEEFA. Retrieved from https://ieefa.org/resources/indias-oil-and-gas-crisis-wake-call-transport-electrification
- Leenes, G. (2011). The water footprint of bio-energy and other primary energy carriers. UNESCO-IHE Institute for Water Education. Retrieved from https://www.waterfootprint.org/resources/Report29-WaterFootprintBioenergy.pdf
- NetSol Water. (n.d.). Water Challenges in Ethanol Manufacturing and Treatment Solutions. Retrieved from https://www.netsolwater.com/water-challenges-in-ethanol-manufacturing-and-treatment-solutions.php?blog=7306
- NITI Aayog. (2023). Composite Water Management Index. Retrieved from https://www.niti.gov.in/sites/default/files/2023-03/CompositeWaterManagementIndex.pdf
- PIB. (2018). 2018 National Policy on Biofuels. Retrieved from https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1707222
Spatio-temporal assessment of groundwater depletion in Punjab, India. (2020). ResearchGate. Retrieved from https://www.researchgate.net/publication/346356087_Spatio-temporal_assessment_of_groundwater_depletion_in_Punjab_India
- Tithi, P. (2025, August 21). Ethanol Blending Boosts Farmers' Income and Rural Economy: Petroleum Minister Hardeep S. Puri. Press Information Bureau. Retrieved from https://www.pib.gov.in/PressReleasePage.aspx?PRID=2159409
- Vision IAS. (2026, January 5). India becomes world's largest rice producer, surpasses China: Agriculture Minister. Current Affairs. Retrieved from https://visionias.in/current-affairs/news-today/2026-01-05/economy/india-becomes-worlds-largest-rice-producer-surpasses-china-agriculture-minister
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Manav Pandya is a Bachelors Student at Ahmedabad University and an intern at WforW Foundation. Dr. Mansee Bal Bhargava is an entrepreneur, researcher, educator, speaker, and mentor
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