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Environmental sustainability encompasses various problems, including clean air, renewable energy, climate change, safe environments, and the capacity to live in a healthy community. One possible strategy for addressing these global problems is the circular bio-economy. Cleaner and lower-carbon environments may be fostered via the production of bioenergy and biomaterials, which can also help to maintain the energy-environment connection. To improve sustainability and the state of the planet, scientists are looking at renewable energy sources like ethanol. Compared to gasoline, ethanol has a reduced carbon footprint and a greater energy density, making it a viable alternative fuel. This study gives an overview of ethanol as a possible alternative fuel for flex-powered power generators in India to meet the goals of the circular bio-economy. This paper details the results of flex-fuel testing conducted on a light-duty power generator using an ethanol-gasoline mix. The findings reveal improved thermal efficiency and lower fuel consumption rates than basic fuel. The emissions of both carbon monoxide and unburned hydrocarbons were shown to be reduced.