The Centre has amended the Central Motor Vehicles Rules, 1989, introducing updated emission and fuel-related standards that formally recognise 100 per cent ethanol (E100) as a permissible fuel for flex-fuel vehicles, effective from Monday, 26 October 2026. The notification, issued by the Ministry of Road Transport and Highways, marks a significant regulatory step in India's push to mainstream alternative, domestically produced fuels.

Key Changes in the Amended Rules

The amendment expands references to ethanol fuel by replacing several instances of E85 with E85 or E100 across emission standards and vehicle testing requirements. The government has, however, clarified that E85 or E100 fuel must be used exclusively in flex-fuel vehicles designed and certified by original equipment manufacturers (OEMs) — a guardrail intended to prevent misuse in conventional engines.

The rules also revise certain vehicle classifications, notably raising the gross vehicle weight threshold in one emission table to 3,500 kg from 3,000 kg. Additional technical updates cover references to hydrogen-compressed natural gas (HCNG), gasoline blends containing up to 20 per cent ethanol (E20), biodiesel standards, and corrections in emission-testing tables and notes.

What Nitin Gadkari Has Said

Earlier this year, Union Road Transport and Highways Minister Nitin Gadkari had highlighted the cost advantage of ethanol-run vehicles, noting that switching to a car running entirely on ethanol could bring fuel costs down to the equivalent of around ₹25 per litre. Gadkari has been a consistent champion of ethanol blending, arguing that it reduces import dependence on crude oil and boosts farm incomes. He also noted that ethanol is already being used in 19 countries and that no complaints have emerged from vehicles using it in India.

India's Ethanol Industry: Demand and Capacity Outlook

The regulatory change arrives against a backdrop of rapidly expanding ethanol ambitions. According to an analysis by Brickwork Ratings, India's ethanol industry demand under an E25 blending scenario could reach 17.9 billion litres by FY31 in the base case. Notably, India's current installed distillation capacity of 18.25 billion litres is already sufficient to meet demand under both the base and bear scenarios.

The base case translates into utilisation of approximately 98 per cent of existing capacity, according to the Brickwork Ratings report. If blending remains at E20, demand is estimated at 14.3 billion litres under the bear case, implying utilisation of around 78 per cent.

Why This Matters

India is the world's third-largest oil importer, and every percentage point of ethanol blending substitutes for crude imports while channelling demand toward domestic sugarcane and grain farmers. The E100 notification builds on a policy trajectory that began with E10 mandates and has progressively moved toward higher blends. This is the first time E100 has been formally embedded in the Central Motor Vehicles Rules, giving OEMs regulatory clarity to invest in flex-fuel powertrain development for the Indian market. The move also aligns India more closely with Brazil, the global leader in flex-fuel adoption, where E100 vehicles have operated at scale for decades.