That is history. now things are different. If you go through the recent KPMG report which describes the entire history of ethanol blending policy in India, perhaps it would explain the reason of disappointment on bio fuel policy.
To be brief and to the point :
(1) Ethanol blending policy for 5% was mandated in 2001. But it never took off for 15 years due to lack of clarity and incentive for farmers and Sugarcane pricing policy. However , Modi Govt perhaps realised the import burden of crude and price fluctuation. The needle started moving from 2014 onwards and by 2018 we achieved 5% and by 2022, we achieved 10% and we are on our way to 20% blending by 2024-25, given this Govt is serious for (a) reducing import dependence (b) Decarbonisation.
The Govt seems to have created the right climate for implementation of various policies.
(2) Given the scale of production , the cost of ethanol has come down and would further come down. And the most important is the volatility in crude prices and our begging to different countries for crude.
(3) Your point on Carbon emissions from ethanol is not true . Ethanol do contain 2 carbon atoms per molecule - but it is much less than petrol ( Average 8 C atoms per molecule ) & Diesel (16 C atoms average per molecule).
So 1 molecule of Ethanol do emit 2 molecules of CO2 when compared with 8 molecules of CO2 of petrol and 16 molecules of CO2 from diesel.
However , we need to grow Plants such as Sugarcane for ethanol. Any plant would absorb CO2 from atmosphere for photosynthesis during day time and so Carbon dioxide emitted by Ethanol burning gets nullified as it gets recycled back to sugarcane plant. so net carbon impact is zero.
so it is considered as a kind of renewable energy.
(4) Solar / wind energy are good. But these can not be directly used in Automobiles. However, Solar / wind energy can be used to produce Green hydrogen by electrolysis of water and hydrogen in turn can be used as automobile fuel as IC engine or fuel cell…
Solar / wind energy can also be stored through battery storage solution ( please go thr Green hydrogen thread to get more inputs) and fed to grid and Green hydrogen can also be converted to electricity by fuel cell …are still the early days.
(5) With regards to Ethanol as automobile fuel… research / technolgy is proven in many other countries such as Brazil , USA and many other countries since last 3 decades. so technology is proven.
,(6) Every available options are being exploited by the world today to combat carbon emission and climate change- EV, Ethanol, Bio Gas - CBG, CNG , Bio diesel, Green hydrogen , solar , wind …
All will co-exist together …
You can also read this thread where issues raised by you have been discussed at length.