Supreme Court asks Centre how it will ensure supply if 100% ethanol-run vehicles are permitted

The Supreme Court on Thursday questioned the Centre on how it would ensure adequate ethanol availability if vehicles capable of running entirely on ethanol are permitted, highlighting the need for large-scale manufacturing changes and examining the implications of ethanol promotion for farmers, the environment and the wider public interest.

A bench of Justices MM Sundresh and Prasanna B Varale raised the issue while hearing petitions concerning ethanol allocation for the Ethanol Supply Year (ESY) 2025-26. Referring to recent media reports, the court sought clarification on the practical aspects of permitting vehicles to operate on nearly pure ethanol.

“Day before yesterday, we saw some newspaper reports wherein it is stated that 100 per cent ethanol driven vehicles are permitted,” the bench observed.

“Academically, we want to know if the permission is given to have 100 percent ethanol run vehicles, how will you make the supply,” the judges asked.

Responding to the query, Attorney General R Venkataramani told the court that such a move would require significant changes in manufacturing arrangements. “That will require large scale manufacturing re-arrangements,” he said.

The proceedings come amid recent changes to vehicle certification rules and the Centre's position on ethanol blending in petrol.

On October 26, the Ministry of Road Transport and Highways amended the Central Motor Vehicles Rules, 1989, allowing flex-fuel vehicles capable of operating on ethanol blends of up to E100, which is nearly pure ethanol. The amendments updated emission certification provisions to expressly include E100 alongside E85.

However, Petroleum and Natural Gas Minister Hardeep Singh Puri said on October 27 that the government had no immediate plans to raise ethanol blending in petrol beyond the existing 20 per cent level.

Flex-fuel vehicles are designed to run on higher ethanol concentrations, including E85, comprising 85 per cent ethanol and 15 per cent petrol, and E100, which contains nearly pure ethanol. Conventional petrol vehicles, meanwhile, are approved for lower ethanol concentrations.

During Thursday's hearing, the bench also emphasised the importance of evaluating ethanol-related policies from the perspective of farmers and the larger public interest, in addition to environmental considerations.

Justice Sundresh said the issue of farmers' welfare required particular attention, noting that it had not received adequate emphasis in the discussion.

“And, the third, I think I would put is much important from the point of view of the larger populace of the country which is the farmers. We have to address the third issue which is how to empower the farmers. This is one aspect which nobody is highlighting,” he observed.

The bench further stressed the need to improve the position of ordinary citizens living in rural areas. “We need to empower the common man which is still in the villages,” it said.

Venkataramani assured the court that he would address the concerns relating to farmers during his arguments. An advocate appearing in the matter submitted that promoting ethanol could benefit farmers in some form. Another counsel said the Centre's policy already accounted for farmers' interests.

“The central government policy takes into account the aspect of interest of farmers also,” the lawyer told the court.

The Supreme Court subsequently scheduled the next hearing for November.

The proceedings are linked to a dispute over ethanol allocation for ESY 2025-26, following a Karnataka High Court order concerning supplies to a dedicated ethanol manufacturer.

On June 30, the Supreme Court had directed parties to maintain status quo on the High Court's direction to increase ethanol allocation for the supply year. The apex court was hearing a petition filed by an oil marketing company, which argued that the High Court's order could destabilise the national policy of blending 20 per cent ethanol into petrol.

The Karnataka High Court had directed Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOCL) to consider and decide a representation from a dedicated ethanol manufacturer seeking higher allocation for ESY 2025-26.

The High Court had held that dedicated ethanol plants, established in response to government policy and contractually obligated to supply ethanol exclusively to oil marketing companies, could not be denied the benefit of preferential allocation envisaged under long-term offtake agreements.