The government has amended the Central Motor Vehicles Rules, 1989, introducing changes to vehicle emission and fuel-related standards, including provisions for vehicles using 100 per cent ethanol (E100) fuel in flex-fuel vehicles, effective from Monday.

The government has expanded references to ethanol fuel by replacing several mentions of E85 fuel with E85 or E100 across emission standards and testing requirements, according to a notification issued by the Ministry of Road Transport and Highways.

However, the government has also clarified that E85 or E100 fuel should be used only in flex-fuel vehicles designed by original equipment manufacturers.

The rules revise certain fuel and vehicle classifications, including raising the gross vehicle weight threshold in one emission table to 3,500 kg from 3,000 kg.

Other amendments include updates to references for hydrogen-compressed natural gas (HCNG), gasoline blends containing up to 20 per cent ethanol (E20), biodiesel standards, and technical corrections in emission-testing tables and notes.

Earlier this year, Union Road Transport and Highways Minister Nitin Gadkari noted that switching to a car running entirely on ethanol could bring fuel costs down to the equivalent of around Rs 25 per litre.

Separately, a report has said that India’s ethanol industry demand under an E25 blending scenario could reach 17.9 billion litres by FY31 in the base case.

As per analysis of Brickwork Ratings, the current installed distillation capacity of 18.25 billion litres is already sufficient to meet demand under the Base and Bear scenarios.

"The base case translates into utilisation of approximately 98 per cent of the existing 18.25 billion litre capacity. If blending remains at E20, demand is estimated at 14.3 billion litres under the bear case, implying utilisation of around 78 per cent," according to the report.

"Ethanol is being used in 19 countries in the world and today no complaint is coming from any vehicle in India," Gadkari said.