Carmakers Step Up Flex Fuel Efforts with CAFE III on The Horizon

August 07, 2025

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Tushaar Singh Gill (Acko Drive) India’s top carmakers are ramping up flex fuel vehicle plans as new CAFE III rules will soon give ethanol-blended cars the same regulatory benefits as EVs. Automakers are showcasing new models, but concerns remain over efficiency and engine compatibility.

India’s leading car manufacturers like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, and Toyota are ramping up their focus on flex fuel vehicles.

This shift comes in response to recent comments from the Minister of Road Transport and Highways, Nitin Gadkari, who indicated that the upcoming Corporate Average Fuel Efficiency (CAFE) III regulations would treat flex fuel and electric vehicles on par in terms of regulatory benefits.

The new framework, set to take effect in April 2027, is expected to boost the adoption of vehicles that can run on petrol-ethanol blends.

Flex Fuel Gains Momentum in India

India is pushing ahead with its ethanol blending programme, aiming to increase the proportion of ethanol in petrol to E20 (20 per cent ethanol) nationwide by 2025 and exploring E27 (27 per cent ethanol) for the future.

The government’s push for flex fuel adoption follows a meeting last year between Gadkari and the Society of Indian Automobile Manufacturers (SIAM), where he encouraged automakers to make these vehicles more appealing to Indian consumers. He pointed to Brazil’s successful use of flex fuels and biofuels as a model for India.

However, many vehicle owners worry about reduced fuel efficiency, potential engine compatibility issues, and higher maintenance costs, especially for older vehicles not designed for higher ethanol blends.

This has led to growing discontent, as consumers fear increased expenses and possible engine damage.

Flex fuel vehicles are designed to operate on petrol mixed with ethanol in concentrations ranging from 20 per cent to 100 per cent.

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While ethanol is more affordable than petrol, it typically results in about 30 per cent lower fuel efficiency.

To address this, Toyota is planning to introduce strong hybrid technology in its flex fuel vehicles. The company believes that hybrid systems, which combine petrol engines with electric motors, can offset the efficiency loss and reduce carbon emissions. READ MORE

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As car owners flag concerns on ethanol-blended petrol’s impact on older engines, Govt says fears ‘largely unfounded’ (Indian Express)
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Is E20 Fuel Safe for Older Cars? Complete Guide for Indian Car Owners (Acko Drive)

Excerpt from Acko Drive: The Issues: Fuel Efficiency, Engine Damage, and Rusting

Some of the main concerns raised are:

A supposed reduction in fuel efficiency because ethanol contains less energy than petrol.
Degradation or corrosion of fuel system components like rubber gaskets, hoses, and metal components, especially in non-E20 compatible vehicles.
Engine performance is below normal, especially on cold starts.

Other car drivers, especially owners of older vehicles, have also reported anecdotal findings of decreased mileage or engine lag. These have not been systematically confirmed, but have helped create a perception that E20 could be detrimental to current cars.

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What Do the Studies Say?

Against the speculation, scientific data and field tests indicate that the alarms could be exaggerated.

A series of studies by Indian and international agencies, including the Automotive Research Association of India (ARAI), Indian Institute of Petroleum (IIP), and Indian Oil Corporation R&D, indicate that:

Cars tested with 20 per cent ethanol blends for 100,000 km of use showed no notable difference in performance, power rating, or fuel efficiency.
E20 met the tests in both hot and cold conditions.
Material compatibility was confirmed, with only minimal issues regarding some rubber components in older cars, which can be replaced easily during normal maintenance.

In addition, E20-compliant cars have been produced since April 2023, according to the Society of Indian Automobile Manufacturers (SIAM). Such vehicles include new materials for fuel systems, better engine calibrations, and E20-tuned emissions controls.

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Mileage Drops: Real but Marginal

Although ethanol has a lower calorific value than petrol, mileage loss is typically 1–2 car owners in newer four-wheelers designed for E10 and E20, and perhaps 3–6 car owners in older vehicles not designed for greater ethanol blends. Engine tuning and material enhancements are already being used to counter this effect.

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Corrosion and Engine Life: A Minor Threat, Easily Controlled

Corrosion has been identified as a significant risk by other critics. Nevertheless, professionals point out that E20-compatible components, now required by BIS fuel system regulations, contain corrosion inhibitors. The only items that will eventually have to be replaced in older cars if run for long durations are rubber gaskets or hoses, usually after 20,000–30,000 km, and these could be replaced during routine servicing.

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Environmental and Economic Upside

Here's what the Ministry of Petroleum and Natural Gas has to say:

Ethanol blending has lowered India's CO₂ emission by 700 lakh tonnes.
Sugarcane and maize-based ethanol puts out 50–65% less GHG than petrol, according to a Niti Aayog lifecycle study.
The scheme has saved India more than ₹1.4 lakh crore worth of fuel imports since 2014.
More than ₹1.2 lakh crore has been compensated to farmers under the ethanol supply scheme, benefitting rural income and jobs.

Also, ethanol contains a higher octane level (100-105) than petrol (91), enhancing combustion and aiding performance in high-compression advanced engines. This should help overall drivability, especially as automobile manufacturers move towards high-octane, lower-emission technologies. READ MORE; includes VIDEO