Govt has no separate policy to promote flex-fuel vehicles running on over 20% ethanol

The government has not formulated any separate phased national policy to incentivise flex-fuel vehicles capable of running on fuel blended with more than 20% ethanol, Parliament was informed on Tuesday.

The Ministry of Heavy Industries (MHI) also said it has not conducted any study on incentivisation of flex-fuel and electric vehicles.

In a written reply to the Rajya Sabha, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma said the Production Linked Incentive scheme for Automobile and Auto Components (PLI-Auto scheme) is being implemented on an all-India basis.

The minister said that as of March 31, 2026, the scheme had attracted cumulative investment of Rs 44,326 crore, recorded incremental sales of Rs 52,414 crore over the base year FY2019-20, generated 67,820 jobs, and disbursed Rs 2,386.36 crore as incentives.

"To boost domestic manufacturing and localisation of AAT products, PLI-Auto scheme mandates minimum Domestic Value Addition (DVA) of 50% for availing incentives," he said.

The minister said that as of July 28, 2026, 18 applicants had received domestic value addition certificates for 155 advanced automotive technology (AAT) products or variants under the scheme.

As on July 28, 2026, 18 applicants have received DVA certificates for 155 AAT products/variants, he added.

On the ethanol blending programme, Varma said the government has adopted "a balanced approach to the Ethanol Blended Petrol (EBP) Programme, ensuring that water sustainability, food security and farmers' interests remain paramount."

He said ethanol is being produced from multiple approved feedstocks under the National Policy on Biofuels, including sugarcane-based raw materials, maize, damaged foodgrains, broken rice, foodgrains unfit for human consumption, surplus foodgrains approved by the National Biofuel Coordination Committee and other approved agricultural feedstocks.

The government is also promoting crop diversification towards comparatively less water-intensive feedstocks such as maize, he said.

Varma said an Expert Committee constituted by the Ministry of Agriculture and Farmers Welfare in 2024 examined the water requirement of various ethanol feedstock crops, and "its recommendations are being considered while implementing the programme."

He added that measures such as micro-irrigation and drip irrigation are being promoted under the Pradhan Mantri Krishi Sinchayee Yojana to improve water-use efficiency, while molasses-based and grain-based distilleries are required to operate as zero liquid discharge units to recycle and reuse process water.