India’s transportation activity has increased substantially over the last two decades. However, its heavy reliance on gasoline has led to negative environmental impacts (“Extraordinary,” 2022). To disengage this sector from high carbon emissions, policymakers are stepping up the efforts to introduce cleaner energy. The National Policy on Biofuels was introduced by the Ministry of Petroleum and Natural Gas on 16 May, 2018, to allow the production of ethanol from surplus and damaged food grains. Biofuels are produced directly or indirectly from organic material (biomass), including plant material and animal waste, and are further used for the production of bioenergy. Biofuels not only decrease the dependence on petroleum and other exhaustive sources of energy, but also help in the utilisation of plastic waste, municipal solid waste, and gas waste in a positive fashion (Kumar et al., 2019). In 2022, amendments were made to the existing policy so as to optimise the use of biofuels by increasing the percentage of ethanol up to 20% in Ethanol Blended Petroleum (“Extraordinary,” 2022). Along with the amendment, clauses for Bioethanol, Advanced Biofuels, and a list of potential domestic raw materials which can be used for the production of ethanol was also introduced.
Scope and Implementation
Developmental goals such as technical advancement, capacity building, and economic growth require heavy dependence on energy. Since biofuels can help in achieving energy security and reducing fossil fuel import dependence, they play a strategic role in the Indian Energy basket. Over the last decade, the government has undertaken multiple interventions to promote biofuels through structured programs like the Ethanol Blended Petrol Programme, National Biodiesel Mission, and Biodiesel Blending Programme. Simultaneously, the existing biodiversity of India can be put to optimum use by utilising drylands to generate wealth for the local populace, hence contributing to sustainable development.
This policy demonstrates the Centre’s efforts to advance the agenda of sustainability while bolstering the nation’s energy infrastructure, reducing global warming, and sustainably generating new job opportunities. It encourages the establishment of supply chain mechanisms for the manufacture of biodiesel from non-edible oilseeds, spent cooking oil, and short-gestation crops. It also helps with the management of municipal solid waste (MSW). Technologies are available that can turn MSW trash and plastic into biofuels using processes such as pyrolysis. Such garbage has the potential to reduce fuel use by about 20% per tonne (Mookherjee, 2022). Production of biofuels using municipal waste will help reduce dependence on edible feedstock and will make biofuels more affordable as raw materials will become cheaper. Without a doubt, if the sector is to take off, consistent assistance for feedstock producers and the value chain of biofuel production for a period of three to five years would be necessary.
Plan of Action
Adopting appropriate financial and fiscal measures regularly will be part of the strategy to promote biofuel development and increase its use across a wider range of industries. To achieve this, the government has considered increasing financial incentives for biofuels such as grant money, subsidies, and viability gap funding. Biofuels are categorized under the policy as follows; Ethanol from molasses and biodiesel from non-edible oilseeds are examples of first-generation (1G) “basic Biofuels”, Ethanol and Municipal Solid Waste (MSW) are examples of Second Generation (2G) “Advanced Biofuels”, and Bio-CNG falls under the Third Generation (3G) category. The government will designate 2G Ethanol, drop-in fuels, bio-CNG, 3G Biofuels derived from algae, bio-methanol, DME, and bio-hydrogen, among other things, as “Advanced Biofuels” (Das, 2020). A national biofuel fund could provide financial incentives for the same.
Due to the wide scope of work involved, synergy is essential between many departments and agencies. This necessitates the creation of an empowered committee to provide early policy direction and assessment of various elements of biofuel production, promotion, and use. A National Biofuel Coordination Committee (NBCC), to be chaired by the Minister of Petroleum and Natural Gas, composed of representatives from the relevant ministries is thus planned (Jai, 2022). To rebalance the demand and supply for biofuels, the government intends to make the necessary adjustments to domestic production, storage, and distribution of biofuels as and when necessary, using a consultative approach with the participation of all stakeholders.
Feasibility of Biofuels
Although biofuels seem to be a good solution for reducing carbon emissions and decreasing the dependence on fossil fuels for energy, they have some economic drawbacks. The ethanol-blended petroleum helps reduce the emission of greenhouse gases but at the same time, it also produces lesser energy content, leading to the use of higher amounts of fuel for the same amount of energy. The cost of ethanol production isn’t desirable either as the costs of ethanol production are higher than that of gasoline. This is due to the production process which includes a fermentation process that involves pretreatment costs. Moreover, in India, ethanol production depends on the availability of molasses whose prices fluctuate every year. Lastly, there is a restriction on the use of 100% ethanol in unmodified gasoline engines as it may corrode the components present in the fuel ejection system. It is necessary to invest in the research and development of better systems to make the conversion of raw materials to biofuels more reasonable. There is the availability of raw materials, however, total dependency on sugarcane molasses is not feasible as it increases the costs of bioethanol. The reduction or removal of these obstacles will help make biofuels more attractive and favoured.
The policy and its vision are very progressive and unique. However, the focus on an increase in blended petroleum is causing a detour from the policy’s emphasis on its other goals like sustainable land use and focus on 2G feedstocks. This may lead to a slight delay in blending targets, but a focus and sustainable practices will yield better long-term results. The simple solution to this challenge is returning to the original vision by redirecting available resources toward 2G production methods, which will guarantee fewer emissions and imports. The National Policy on Biofuels is of strategic importance in India and it is essential that it receives the required focus and funds, as it will go a long way in reducing carbon emissions and dependence on crude oil for domestic use.
Manya Jha and Aahana Negi are second-year students of Economics at Indraprastha College for Women.
References
- Bharat Petroleum. (2018). National Policy on Biofuels. Retrieved from https://www.bharatpetroleum.in/our-businesses/fuels-and-services/biofuels/national-policy-on-biofuels.aspx
- Das, S. (2020). The National Policy of biofuels of India – A perspective. Energy Policy, 143, 111595. doi:10.1016/j.enpol.2020.111595
- Government of India. (2018). The Gazette of India: Extraordinary. https://mopng.gov.in/files/article/articlefiles/Notification-15-06-2022-Amendments-in-NPB-2018.pdf
- Home | Ministry of Petroleum and Natural Gas | Government of India. https://mopng.gov.in/en
- Jai, S. (2022). Cabinet approves National Biofuel Policy after slew of amendments. https://www.business-standard.com/article/economy-policy/cabinet-approves-national-biofuel-policy-after-slew-of-amendments-122051801171_1.html
- Kumar, N., Sonthalia, A., Pali, H. S., & Sidharth. (2019). Next-Generation Biofuels—Opportunities and Challenges. Innovations in Sustainable Energy and Cleaner Environment, 171–191. https://doi.org/10.1007/978-981-13-9012-8_8
- Ministry of Petroleum and Natural Gas. (2018). Biofuels. http://petroleum.nic.in/sites/default/files/biofuels.pdf
- Mookherjee, P. (2022). The implications of India’s revised roadmap for Biofuels: A lifecycle perspective. orfonline.org. Retrieved from https://www.orfonline.org/research/the-implications-of-indias-revised-roadmap-for-biofuels/
- Pohit, S. (2022). How India can give a boost to biofuels. National Council of Applied Economic Research. https://www.ncaer.org/news_details.php?nID=1471
- ProductLine, T. (2019, November 5). National Policy on Biofuels 2018: Here are key things you should know. The Economic Times. Retrieved from https://economictimes.indiatimes.com/small-biz/productline/power-generation/national-policy-on-biofuels-2018-here-are-key-things-you-should-know/articleshow/71922729.cms?from=mdr
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