Authors: Dr. R. Kalirajan, Dr. R. Alagesan, Dr. S. Vigneswaran
Abstract: India’s move towards E20 ethanol blending has become an important part of its efforts to improve energy security and address climate concerns. Ethanol blending increased from 3.54% in 2015–16 to 19.24% in 2024–25, while India subsequently reached the 20% blending level during 2025–26. At the same time, sugar and sugarcane have become increasingly important feedstocks for ethanol, creating a food–energy allocation problem. This paper develops an empirical framework to examine whether diversion of sugar towards ethanol has an independent effect on domestic sugar prices after controlling for sugar production, opening stocks, exports, climate conditions, crude-oil prices and food inflation. The study considers these developments in relation to the Sustainable Development Goals (SDGs), with particular attention to SDG 2 (Zero Hunger), SDG 6 (Clean Water), SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). The empirical analysis is designed around monthly data for 2015–16 to 2025–26, subject to data availability, and uses ARDL/ECM, structural-break tests and a set of robustness checks. The available evidence suggests that ethanol diversion matters, but it would be too strong to explain the recent rise in sugar prices by E20 alone. Production prospects, weather, opening stocks, seasonal demand and speculative activity also appear to have played a role. The study therefore argues for a “Sustainable E20” approach that preserves the energy-security gains of ethanol while giving greater weight to feedstock diversification, food security and water availability.
DOI: http://doi.org/10.5281/zenodo.22302875
