Govt starts talks with automobile companies on shift from E20 to E25

Government explores E25 fuel shift beyond E20, but automakers flag emission risks, liability concerns, and lack of testing amid rising crude oil pressures

The Centre has begun discussions with automakers on whether India should move beyond the mandatory E20 petrol to a higher ethanol blend of E25, Business Standard has learnt. This comes even as concerns emerge within the auto industry over regulatory, technical and consumer implications of such a shift. 

Almost all retail outlets in India dispense E20 petrol — a blend of 20 per cent ethanol and 80 per cent petrol — and it is set to become mandatory across the country from next month. 

Ethanol is entirely produced within India, while more than 85 per cent of crude oil is imported. 

The ongoing war in West Asia has disrupted crude oil supply and pushed up global prices. Government officials, therefore, are looking for ways to minimise its impact on consumers, people aware of the matter said. 

They added that Ministry of Heavy Industries (MHI) officials on Friday held a meeting with executives of the Society of Indian Automobile Manufacturers (Siam) on the feasibility of changing fuel composition from E20 to E25 at petrol pumps across India.

Ahead of this meeting, Siam member companies also held an internal discussion on this matter. 

These discussions at the MHI are separate from the meeting that the Ministry of Petroleum and Natural Gas (MoPNG) will hold on Saturday to push automakers to launch “flex-fuel vehicles” in India, and to encourage oil industry stakeholders to ensure ample availability of flex fuel at petrol pumps. 

E85 and E100 blends are referred to as flex fuels in India. Currently, no automaker has launched a flex-fuel vehicle in India, as these models are more expensive compared to petrol-run vehicles. 

However, the proposal to move from mandatory E20 to E25 fuel has triggered caution within the auto industry, with executives flagging multiple unresolved issues. 

One major concern is related to the in-service conformity (ISC) norms under Bharat Stage-VI emission standards. 

ISC is a regulatory mechanism under which vehicles already on the road are periodically tested to ensure they continue to meet emission limits over time. 

In simple terms, regulators pick vehicles in use and check whether they remain as clean as when they were first approved. 

These tests are linked to the type of fuel for which a vehicle was originally designed and certified. 

At present, most vehicles in India are calibrated and tested for E20 fuel. A shift to E25 would change combustion behaviour, potentially affecting emission outcomes during real-world testing. 

“As things stand, a vehicle that was compliant at the time of certification could fail ISC checks later, not because of any defect, but because the fuel itself has changed,” said an industry executive, pointing to a potential regulatory grey area. 

Automakers are also concerned about liability in case of customer complaints. If mandatory E25 leads to changes in performance, fuel efficiency, or maintenance requirements, consumers are likely to approach manufacturers. 

Companies, however, may argue that their vehicles were compliant with prevailing norms at the time of sale. And, subsequent changes in fuel composition are beyond their control. 

This divergence could lead to disputes unless accountability is clearly defined, executives said. They added the government must take a more proactive role in communicating any such transition to consumers. 

“The onus of informing customers should not fall entirely on automakers. If there is a policy-driven change in fuel, it has to be communicated clearly by the government as well,” stated an executive. 

Industry executives also highlighted the limited testing done so far beyond E20. While extensive validation has been carried out for E20 — with studies by agencies such as the Automotive Research Association of India and Indian Oil Corporation cited by the government — similar large-scale validation for E25 is yet to be undertaken. 

Executives cautioned against a repeat of the situation seen in August-September 2025, when automakers had to respond to a surge in consumer queries amid concerns over mileage, engine wear and fuel compatibility during the E20 rollout. 

During that phase of transition, lower ethanol blends such as E10 gradually became scarce at many fuel stations, limiting consumer choice. 

The central government maintained that E20's impact on performance and efficiency is marginal even as several users alleged a drop in mileage under real-world conditions. 

The Centre defended the programme through late 2025, dismissing concerns as misinformation. 

It emphasised the long-term benefits of ethanol blending in reducing crude imports, lowering emissions and supporting the agricultural economy. 

A public interest litigation challenging the rollout was also dismissed by the Supreme Court in 2025, allowing the programme to proceed. The MHI and Siam did not respond to requests for comment by Business Standard on the matter. 

Industry concerns

• Vehicles may fail emission checks after sale due to fuel change
• Liability risks if customers report performance or maintenance issues
• E25 lacks sufficient testing on engines and components
• Earlier E20 rollout saw consumer concerns over mileage and maintenance