Gadkari Pushes Biofuels, Green Hydrogen to Trim Rs 22 Lakh Crore Fuel Import Bill

Union Road Transport and Highways Minister Nitin Gadkari wants India's farms to do more than feed the country. Speaking at KPMG's Enrich 2026 Forum, he argued that agriculture can become a major energy source through ethanol, compressed biogas (CBG), bio-bitumen and other biofuels, and he tied the pitch to a hard number: India spends about Rs 22 lakh crore a year importing fossil fuels.

The math is the core of his argument. Gadkari framed the import bill as a drain on the economy and a problem for the environment, and he said the policy goal is import substitution, meaning homegrown fuel that replaces what the country now buys abroad. He also said the shift could give farmers new ways to earn income.

Ethanol is already the most visible piece. Gadkari said roughly 20 crore two-wheelers and four crore four-wheelers run on E20 blends, which mix 20 per cent ethanol into petrol. Automakers including Tata Motors, Mahindra, Toyota, Suzuki and Hyundai are preparing flex-fuel vehicles that can handle higher blends. He said he plans to unveil a Toyota Innova flex-fuel model in November that can run on 100 per cent bio-ethanol.

For drivers, the pitch comes down to price. Gadkari put ethanol at about Rs 75 a litre, compared with roughly Rs 120 for petrol, and cited a running cost of around Rs 25 a litre for the ethanol-powered Innova. He listed corn, broken rice, sugarcane juice, molasses and bamboo as possible feedstocks, and said trials are also testing isobutanol as a diesel blend.

Crop waste is the other big lever. Gadkari pointed to Punjab and Haryana, where he cited about 280 lakh tonnes of available biomass, including rice straw. Stubble burning there is a major contributor to Delhi's winter smog, so turning that residue into fuel could cut pollution and create a revenue stream. He said about 3,000 CBG plants have been registered, with 280 already operating, and that roughly five tonnes of rice straw yield one tonne of bio-CBG. He urged more research into raising biomass output and methane generation.

Gadkari also linked the energy push to the auto sector's supply chain. He said the vehicle scrappage policy could cut automobile component costs by about 30 per cent by recovering aluminium, copper, plastic and rubber from end-of-life vehicles. He added that the industry has grown from about Rs 14 lakh crore in 2014 to roughly Rs 22-23 lakh crore, and that it employs around 4.5 crore people.

On hydrogen, he said he wants green hydrogen production costs to fall from USD 5 per kg to USD 1 per kg as the country builds out its alternative fuel ecosystem. Whether these targets arrive on schedule will depend on plant rollouts, vehicle launches and pricing, but the direction is clear: New Delhi wants fuel that is grown, recycled or made at home. For more on the remarks, read the original report at BW Businessworld.

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