The Supreme Court on Thursday questioned how the Centre intends to ensure adequate ethanol supplies following its decision to permit vehicles capable of operating on nearly 100 per cent ethanol. The query arose during proceedings concerning ethanol allocation for the Ethanol Supply Year (ESY) 2025-26.
A Bench of Justice M.M. Sundresh and Justice Prasanna B. Varale raised the issue after referring to reports about the government’s recent decision to allow vehicles compatible with E100 fuel.
The judges sought clarification on how such vehicles would be supplied with ethanol. Attorney General R. Venkataramani responded that meeting the requirement would involve large-scale restructuring of manufacturing arrangements.
Supreme Court Highlights Farmers’ Interests
The Bench also identified farmers’ welfare as an important consideration in the country’s ethanol policy. Justice Sundresh observed that discussions on ethanol supply must account for the interests of the wider population, particularly those dependent on agriculture.
The Court emphasised that empowering farmers deserved greater attention alongside broader public interest and environmental considerations.
Justice Sundresh observed that the question of how to empower farmers was an important aspect that had not received sufficient attention.
The Attorney General informed the Court that he would address farmers’ interests during his submissions.
During the proceedings, one advocate submitted that promoting ethanol would benefit farmers in some manner. Another counsel maintained that the Central Government’s existing policy already considered their interests.
The Bench stressed the importance of empowering people living in villages and scheduled the matter for further hearing next month.
New Rules Permit E100-Compatible Vehicles
The Court’s observations came days after the Ministry of Road Transport and Highways amended the Central Motor Vehicles Rules, 1989.
The amendments, notified on October 26, expressly included E100 alongside E85 in the emission certification provisions for flex-fuel vehicles.
Unlike conventional petrol vehicles approved for lower ethanol concentrations, flex-fuel vehicles can operate on higher ethanol blends, including E85, comprising 85 per cent ethanol and 15 per cent petrol, and E100, which consists of nearly pure ethanol.
However, Petroleum and Natural Gas Minister Hardeep Singh Puri stated on October 27 that the government had no immediate proposal to raise ethanol blending in petrol beyond the existing 20 per cent.
Dispute Over Ethanol Allocation
The proceedings arise from a dispute over ethanol allocation for ESY 2025-26, in which an oil marketing company challenged a Karnataka High Court direction.
The company argued that the High Court’s order could disrupt the national policy providing for 20 per cent ethanol blending in petrol.
On June 30, the Supreme Court directed that the status quo be maintained concerning the High Court’s direction to enhance ethanol allocation.
The Karnataka High Court had directed Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and Indian Oil Corporation Limited to consider and decide a representation made by a dedicated ethanol manufacturer seeking increased allocation for ESY 2025-26.
The High Court had held that ethanol manufacturing units established under government policy and contractually required to supply their entire production exclusively to oil marketing companies could not be deprived of preferential allocation benefits envisaged under the long-term offtake agreement.
The Supreme Court will continue hearing the matter next month.
