We are all aware of the government’s push towards blending ethanol into petrol as a cleaner fuel. While many countries are opting for ethanol-blended fuel as a step towards greener initiatives, most of us are still wondering what ethanol blending is. Moreover, it raises further questions, such as the impact of ethanol fuel on vehicle mileage or vehicle insurance premiums.

Here’s your guide to understanding what ‘ethanol in petrol’ means and its potential impact.

What is Ethanol Blending?

As the term is self-explanatory, ethanol blending refers to the blending of ethanol, a type of alcohol and biofuel, with gasoline. Instead of regular petrol, ethanol-blended petrol helps to create a cleaner, sustainable fuel. Ethanol is a plant-based biofuel produced from the biomass of sugarcane, maize, or grains. It is then mixed with conventional petrol to make ethanol-blend fuel. Some of the most popular ethanol blend petrols are -

  • E10 (10% ethanol, 90% petrol)
  • E20 (20% ethanol with 80% petrol), and
  • E85 (85% ethanol mixed with 15% petrol)

Globally, ethanol in petrol is gaining momentum because it is eco-friendly and helps to reduce dependence on crude oil. Thereby, it saves billions of foreign exchange. In India, the government has rolled out E20 fuel nationwide as fuel pumps are replacing unblended petrol and E10 with the E20 blend.

Ethanol Fuel Impact on Vehicles

In addition to the environmental impact and savings on imports, you may wonder about the impact of ethanol-based fuel on vehicles. Here are a few things you must be aware of -

  1. Incompatibility of the Engines: Most of your older vehicles and their engines are designed for petrol, not the blends, and may exhibit corrosion in the fuel system or engine parts. New vehicles must be designed to be compatible with ethanol blends.
  2. Mileage: With ethanol blending, the mileage remains a question, especially for vehicles designed for petrol-only use. It may exhibit lower energy and lower mileage, which is not as prominent in the E10 type but quite noticeable in the E20 fuel type. Let’s see if new vehicles come with ethanol-blend-compatible engines that can address this E20 fuel mileage drop.
  3. Performance: As of now, your vehicle’s performance can’t be guaranteed because most of the vehicles in the market are not built for ethanol blends. It is said that ethanol fuel can prevent engine knocking and provide higher acceleration in E20-tuned engines.
  4. Vehicle Maintenance: Since ethanol can chemically attack vehicle parts, particularly plastics and rubbers, it is essential to perform regular checks. Your vehicle may require extra maintenance if it is getting degraded. As ethanol is hygroscopic (water-absorbing), water ingress can occur in the fuel tank, leading to fuel clogging, rust, or corrosion.
  5. Cold Starts: Perhaps the ethanol-blended fuel takes longer to start your engine under cold conditions. It is because combustion properties vary in petrol, E10 and E20 fuels.

How Does Ethanol Blended Fuel Impact Your Vehicle Insurance Premium?

As we discussed earlier, the impact of ethanol-blended fuel on vehicles is somewhat positive, but it also has its downsides. Perhaps, in the future, vehicles compatible with ethanol fuel may not affect the vehicles’ parts or performance, but as of now, it is doubtful. Therefore, it is obvious to question the impact of ethanol fuel on my vehicle insurance.

Here’s what you need to know -

  • The Ministry of Petroleum and Natural Gas in India confirms that the E20 fuel will not affect the validity of your insurance.
  • Most insurers have not made changes to their policies or adjusted premium amounts to accommodate ethanol-blend fuel.
  • Although there’s no direct impact of ethanol-blended petrol on insurance premiums, the use of ethanol in E20 non-compatible vehicles may lead to more wear and tear. This can lead to more claims, affecting your NCB (No Claim Bonus) and impacting your premium. Moreover, your claim history may make insurers consider you a high risk during insurance renewals, and they may increase the premium amount.

Tips To Ensure Optimum Insurance Benefits For Using E20 Fuel

As E20 petrol will now be used for filling your vehicles, and questions regarding its impact on vehicle performance and premiums linger, you can take a few steps to ensure optimal insurance benefits for your vehicle.

  • If you are buying a new vehicle, check its ethanol compatibility. You can ask the dealer or refer to the owner’s manual. The government claims that E-20 can reduce carbon emissions, provide quick acceleration, and have no impact on mileage. While this may or may not be true for older vehicles that are not compatible with ethanol-blend fuel, it may be functional for new ethanol-fuel-compatible vehicles.
  • You must inform your insurance company about the fuel changes if you are shifting from petrol or E10 fuel to E20. Transparency is crucial in insurance policies to ensure that your claims are not denied later on, even if you need to pay an additional amount. Although there is no conclusive evidence that insurers will increase your premium for ethanol fuel, even if they do so, you must let them know.
  • If there is any manufacturer-recommended maintenance, follow it to avoid insurance denials of your claims. Purchase an engine protection cover for the added safety of your vehicle’s engine. Keep all records of servicing and fuel type usage.

You can hope (and not be assured) that the government offers some subsidies on this greener fuel alternative or insurance incentives. The government may encourage insurers to offer premium discounts for vehicles that are compatible with ethanol fuel and provide rebates for those that undergo regular servicing.

Summing Up What’s In the Future?

E20 is here to stay, or rather, we can expect higher ethanol blends as a greener fuel alternative. Manufacturers will begin building ethanol fuel-compatible vehicles, and insurers will develop relevant policies. Currently, there is no impact on your premiums or insurance costs, but stay informed for future developments.

FAQs on Ethanol Blending

What is the difference between E10 and E20 petrol?

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E10 and E20 are two types of ethanol-blended petrol, where the numbers indicate the percentage of ethanol in petrol. E10 has 10% ethanol, whereas E20 has 20% ethanol in 80% petrol.

What is the biofuel engine impact of using E20?

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E20 biofuel may lead to water content in the engine, rust or corrosion due to the hygroscopic nature of ethanol. It may damage the plastic and rubber components in older vehicles.

What are the ethanol fuel-efficient vehicles?

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Ethanol fuel-efficient vehicles, also known as flex-fuel vehicles, are the ones that are compatible with E20 and even higher ethanol blends like E85 (85% ethanol). Innova HyCross is one such model, whereas companies like Tata Motors and Suzuki are in the process of rolling out flex-fuel vehicles.

Is ethanol-blended petrol bad for engines?

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For ethanol fuel non-compatible engines, ethanol-blend petrol may have an adverse impact. However, E10 and E20 may not significantly affect the engine, but higher blends may.

If I change my fuel type, can it affect my car insurance premium or claim amount?

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The car insurance premium or claim amount depends on IDV, claim history, NCB, and age of the vehicle. Currently, a fuel change does not have a direct impact on the vehicle, but may have an indirect effect. In any case, you must inform your insurer about the fuel change.