The ongoing Iran war has triggered a severe energy shock across Asia, prompting governments to accelerate the adoption of biofuels as a strategic move to reduce dependence on imported fossil fuels. The conflict's disruption of shipping routes through the Strait of Hormuz has hit Asian nations particularly hard, leading to soaring fuel prices and supply shortages.
India's Push for Higher Ethanol Blends
In India, taxi driver Ravi Ranjan, living in New Delhi with his wife and child, has felt the pinch acutely. Shipping disruptions caused by the war have forced him to pay three times more for cooking fuel. "I used to get a cylinder of LPG for 1,000 rupees ($11), now I pay 3,000 rupees ($31) in the black market," he said. Meanwhile, in Chennai, advertising executive Sushmita Sankar reports that her gasoline and cooking fuel expenses have skyrocketed. She noted that ethanol-blended petrol, now the default at fuel stations, has reduced her car's mileage. "Fuel expenses are increasing and with only ethanol mixed petrol available, I feel my car’s mileage has reduced in the last year or so," she said.
Against this backdrop, the Indian government has proposed allowing vehicles to run on 85% or even 100% ethanol. India has also banned all sugar exports at least through September to ensure sufficient local supply for both sugar and ethanol production. The government claims that higher ethanol blends will reduce vehicle pollution, but drivers have expressed concerns about mileage. Environmental experts warn that producing corn, rice, and other grains for ethanol could compete with food and livestock needs.
India currently blends 20% ethanol into gasoline, a target achieved in 2025—five years ahead of schedule. Policymakers are now considering increasing the blend to 27% by 2030. The recent transport ministry announcement proposing vehicles that run on 85% or 100% ethanol sends a strong signal to automakers to produce compatible vehicles, though a timeline for these higher blends remains unclear. "Moving toward higher ethanol blends reflects the government’s long-term vision for energy security, lower emissions, and reduced dependence on imported crude oil," said Chandra Kumar Jain, president of the Grain Ethanol Manufacturers Association. According to the Institute for Energy Economics and Financial Analysis (IEEFA), India's 20% ethanol blend led to a 2.5% reduction in crude oil imports in 2025.
Southeast Asia's Biofuel Ambitions
Southeast Asia is also turning to bioenergy as a shield against the current crisis. Indonesia aims to increase fuel blending to 50% biodiesel, up from 40%, under a program launched in March by President Prabowo Subianto, who declared, "We are going in a big way to biofuel." This initiative is part of Indonesia's push for "energy sovereignty" in response to fuel disruptions, according to Putra Adhiguna of the Jakarta-based Energy Shift Institute. However, he cautioned that land clearing and deforestation must be monitored. In April, Malaysia approved a proposal to gradually increase its fuel mixing to 15% biodiesel, with a future 20% blend under consideration. Skyrocketing fuel costs have "revived the idea," said Ahmad Rafdi Endut, a Kuala Lumpur-based energy analyst, though he noted that higher concentrations require more testing and consumers are wary about reduced mileage.
Debated Biofuel Benefits
While ethanol blending is often presented as a substitute for gasoline, experts warn of complexities. Shyamasis Das of the Centre for Social and Economic Progress in New Delhi said it's unclear how higher blends would affect current engines, and scaling up manufacturing for compatible engines will take time. Ethanol is less energy-dense than gasoline, meaning vehicles consume more fuel to cover the same distance, Das explained. Concerns also persist that crops for ethanol could compete with food supply, raising prices and increasing water stress. In India, about 70% of ethanol comes from sugarcane, corn, and rice. Producing a single liter of ethanol can require 3,000 to 10,000 liters of water, a resource already under pressure in a country facing groundwater depletion.
While biofuels can reduce tailpipe emissions, their overall climate impact depends on production methods. Charith Konda of IEEFA said electric vehicles are likely a more efficient long-term solution, along with moving industries to renewable energy. Das emphasized that producing ethanol from agricultural residues, municipal waste, and used oils—materials that do not require additional land or water—is key. "If the biofuel is not sourced from residues or waste, they are not usually treated as renewable," he said.
