印度乙醇汽油：从E20到更高比例混合的可行性分析

India Autos: Beyond E20 - What ethanol can and cannot deliver India crossed the 20 percent ethanol blending milestone in late 2025, making E20 itsstandard petrol grade about five years ahead of plan. The obvious next question is howmuch further this programme can go. Can it move to E25 or E27, and then beyond to flex-fuel vehicles and E85? More importantly, is the incremental reduction in crude imports Venugopal Garre+65 6326 7643venugopal.garre@bernsteinsg.com Param Shah+91 226 842 1417param.shah@bernsteinsg.com We separate our arguments into two halves. First half - stretching the blend from E20toward E25 or E27 by 2030 is directionally sensible but hard. Over 80% of vehicles onIndian roads are built for E10. Current E20 is already triggering mileage losses and fuel-system complaints in legacy vehicles, and Govt. has only just assigned ARAI to study E25'simpact on existing fleet. The stretch is achievable for new vehicles, but for legacy fleet it is The second half - going beyond the blend wall (E25 / E30) by building a national flex-fuel and E85 supply chain is a long industrial project whose payoff, when you model it, issmall, increasingly duplicated by technologies arriving anyway, and justified mainly by ahedging logic that no longer fits India's moment. Battery costs are falling every year, EVTCO is converging on petrol, and charging infrastructure build out + range improvement are Feedstock is also a risk. India's ethanol comes primarily from sugarcane, molasses andmaize - all hostage to water availability and hence monsoons. When a poor 2023 harvestforced distilleries to switch from sugar to grain, India briefly became a net maize importer Having increased adoption of Flex fuel vehicles and E85 supply chain is attractive in theory- if crude prices spike, a country with flex-fuel cars can switch to cheaper ethanol and bluntthe shock. But during normalcy, ethanol procurement costs for OMCs (INR 60-62/litrein a good monsoon) exceed the petrol it replaces (INR 55-58/litre at $75/bbl crude). Wemodelled what a full flex-fuel push would deliver: even with aggressive adoption (new petrolPVs sales phased out by end of this decade, replaced by FFVs), stock petrol PVs would stillmake up 45-50% of the fleet by end-2030 (vs 65-70% today). The net crude-import saving The global track record reinforces our scepticism. US built E85 infra and saw it languishat <2% of stations; China scrapped its ethanol mandate the moment grain turned scarce;Thailand's E85 demand collapsed when subsidies were cut in early 2026, with EVsstepping in. Only Brazil sustains high blends - but Brazil started in the1970s long before Our verdict: India can stretch to E25-E27 by 2030. Going beyond would require FFVs andE85 value chain. We only see a ~5% crude imports savings by 2030 with both, > 2/3rd ofit from blending + EV, Hybrid, CNG adoption, <1/3rd from FFVs. Savings jump to 7-8% by2035, and 10% by 2040. But with EVs, Hybrids, CNG taking off, a parallel supply chain is anexpensive hedge whose moment has passed. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS Our assessment of the ethanol blending programme points to meaningful execution challenges on two fronts. First, scaling theability of passenger vehicles to handle higher blends, particularly within the existing fleet, remains uncertain. Second, sustaining We believe the impact on reducing fuel imports is likely to be limited over this decade. At the same time, there is a risk thatpolicy and capital allocation shift toward extending legacy fuel technologies that may become less relevant over time, given the From a stock market perspective, the direct implications for the OEM supply chain appear modest. However, there could beindirect benefits for select players such as Maruti (rated Outperform), which remains relatively underpenetrated in electricvehicles. A stronger ethanol pathway may help bridge this gap by supporting its positioning in internal combustion and hybrid DETAILS INDIA HAS FINISHED THE EASY PART - BLENDING TILL E20 The first thing to understand about India's ethanol programme is why it succeeded so fast because the reasons are preciselywhy the next leg is hard. Blending rose from under 2% a decade ago to 20% in 2025 (Exhibit 1), ahead of every official timeline,on three favourable conditions: the blend went into engines India already owned, the feedstock came from crops India already It was not entirely costless. The government puts the mileage loss at E20 at 1–6%, but a meaningful share of owners ofpre-2023 vehicles report closer to 10%, alongside complaints of corrosion and fuel-system wear. The political signal is real - But the issue starts even before the blend wall. More than 80% of petrol vehicles currently on Indian roads were manufacturedbefore April 2023 and are only E10-compliant; E20 alone is already triggering rubber seal degradation, fuel pump complaintsand mileage losses of 6–10% in legacy vehicles - issues that sharpen materially wit