India’s push towards greener fuels is encountering challenges, particularly from the insurance sector. Some insurers have warned they may deny claims if a vehicle’s engine fails after using E20 petrol in models not designed for it. While ethanol blending is promoted for its environmental and economic benefits—such as reducing oil imports and supporting farmers—its implementation has raised concerns.
Recent reports indicate that insurers like ACKO may not cover damages for E10-compliant vehicles using E20, citing incorrect fuel usage as negligence. E20, which contains 20% ethanol, can cause issues in older vehicles not built to handle it. Problems include reduced mileage, engine overheating, corrosion, and damage to rubber components. A LocalCircles survey found mileage drops exceeding 10% in E20-use cases.
Though newer vehicles like the 2024 Honda City are E20-compliant, most vehicles sold before 2023 are not. Insurance add-ons like “Engine Protection Plus” may also exclude damage caused by improper fuel use. While the government aims for nationwide E20 availability by 2025-26, insurers and automakers remain cautious. Despite official reassurances, the real-world impact of E20 on vehicle performance and insurance claims continues to raise concern among stakeholders.
