As concerns around climate change and fossil fuel dependence continue to grow, countries around the world are looking towards more sustainable biofuel options. India, with its growing energy needs and pollution problems, is no exception. The government has made bolstering the domestic biofuels industry a key priority to lessen environmental impacts while meeting energy security goals. This article explores India’s biofuels landscape, initiatives to promote the sector, and potential for future growth.
Current Status of Biofuels in India
Currently, ethanol blending is the major Biofuel activity in India. The government has an ambitious target of reaching 20% ethanol blending in gasoline by 2030. In recent years, significant progress has been made towards this goal. The blending ratio, which was around 1-2% in 2013, reached around 8.5% in 2021. About 1.67 billion liters of bioethanol was produced in the country in 2020-21, up from 1.5 billion liters the previous year.
Most of the ethanol used for blending is produced from sugarcane molasses, a byproduct of the sugar industry. However, there is increasing research into using other feedstocks like damaged food grains and corn. Biodiesel production is also growing but remains far smaller than ethanol, with jatropha, palm oil and used cooking oil the major feedstocks. The annual biodiesel production capacity stands at around 7-8 million liters currently.
Key Government Initiatives
The government has introduced a number of policies and programs to achieve biofuel targets and scale up domestic production capacities. The National Policy on Biofuel launched in 2018 aims to reach 20% ethanol blending by 2030. To incentivize use of alternative raw materials for ethanol, the Goods and Services Tax rate on ethanol derived from non-agricultural feedstocks was reduced from 18% to 5%.
The government also provides interest subvention for setting up grain-based distilleries. Viability Gap Funding is offered to support second-generation biofuel projects using lignocellulosic biomass. A National Biofuel Coordination Committee coordinates policy formulation among various ministries. Targets have also been set for biodiesel blending to be raised to 15% by 2030.
Growing Industrial Activity
These initiatives are bearing fruit, with ethanol capacity more than doubling over the past five years to nearly 1100 million liters annually. Numerous greenfield projects are underway, with distilleries being set up by public and private players across major cane producing states. Major companies like IOC, BPCL, and HPCL are aggressively promoting ethanol supplies and blending at their depots.
The biodiesel sector too is expanding, with new players commissioning jatropha and used cooking oil processing units. Indian Railways is utilizing biodiesel in various zones for ground handling equipment. Panipat Refinery has set up a 30 million liter palm oil refinery and intends to manufacture biodiesel.
Challenges and opportunities
While significant progress is being made, India still faces several challenges in fully realizing its biofuels potential. Availability of cost competitive non-food feedstocks at a large enough scale requires further investments in R&D and infrastructure. Logistical bottlenecks in transporting ethanol over long distances adds to costs for oil companies. International sustainability standards and traceability will also become important as imports increase.
However, opportunities far outweigh challenges. As a large agri-economy, India has abundant crop residues and waste that can be leveraged as feedstock. Advanced technologies open up the promise of cellulosic ethanol at lower costs. Close cooperation among stakeholders on supply chain, financing and supporting the nascent biodiesel sector could fast track growth. Investments in bio-refineries producing multiple bio-products will maximize value. With favorable policies and a concerted effort, India is well poised to emerge as a leading global producer of affordable sustainable biofuels.
To conclude, India has made commendable progress in ramping up its biofuel capacities but tough targets set for the future will require scaling up across the entire value chain. Continued government support through financial assistance, a conducive regulatory regime and international collaboration can help India emerge as a pioneering bio-economy. Promoting biofuels production not only helps reduce emissions but also benefits farmers through additional incomes and triggers rural employment. With a well-crafted long term plan, India has an opportunity to transition to a cleaner, greener transportation sector powered significantly by domestically produced biofuels.
1. Source: CoherentMI Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it