Biofuel sector gears up
Understanding the need
for an alternative fuel, the Government of India and the state
governments have promoted the production and consumption of biodiesel
since the year 2000.
Proponents of biodiesel emphasize that the oilseeds are an effective
alternative to nonrenewable fuels and it possesses an ability to reduce
the energy dependency and greenhouse gas emission. They also highlight
the opportunities it hold for greening the countryside along with
providing rural employment.
Growing demand for
According to an estimate in 2008, the current global biofuel usage is
around 1.66 percent of total petroleum production. It is expected to
increase multi-fold in the next decade. In the first generation
technologies, sugar and grain crops are used as feed stocks to make
bioethanol, while seed oils, fats and greases are used to make
biodiesel. The second generation technology attempts to bring in
different alternate processes with wider range of feed stocks including
feed stock development.
Biotechnology is expected to play a crucial role in developing second
generation technology. It would be complemented by conventional
chemical processes in making a better biofuel. Developing renewable
biomaterials like jatropha brings wide-ranging benefits in social
context: improve land use pattern, reduce green house gas emissions and
more importantly uplift the marginal farmers with better livelihood.
Policy initiatives by the Government of India to encourage the biofuel
industry came out in the form of National Biofuels Policy in September
2008. The policy sets an indicative target of blending 20
percent of biofuels—bioethanol and biodiesel by 2017. The
policy also lay emphasis on facilitating the cultivation of non-edible
oil seeds in waste and marginal lands for biodiesel production;
restricting the import of free fatty acid (FFA); allowing unrestricted
movement of biofuels within and outside the states; encouraging
biodiesel plantations on community, government and forest waste lands;
and the policy also has provisions of periodic revision for biodiesel
oil seeds to provide fair price to the growers.
Finance Minister of India, Pranab Mukherjee, has raised his concern
over the unprecedented hike in the global prices of oil and petroleum
products in 2008-09. He also asserted that the government will set up
an expert committee to advice on a viable and sustainable system of
pricing petroleum products. He proposed to reduce the basic customs
duty on biodiesel from 7.5 percent to 2.5 percent at par with
petro-diesel. “With these proposals I hope to see a smile on
the faces of the green brigade!” he said.
The Union budget 2009-10 proposes to fully exempt petro-diesel blended
with biodiesel from excise duty. This initiative is a continuation of
the National Biofuels Policy.
Biofuel sector in India
India is the sixth largest and one of the fastest growing energy
consumers in the world. Due to limited domestic crude oil reserves,
India meets about 72 percent of its crude oil and petroleum products
(diesel and aviation fuel) requirement through imports, which are
expected to expand further in coming years. In the last three years,
India’s oil import expenditure has nearly doubled due to the
escalation in global oil prices.
Understanding the real potential of the biofuel sector, several
companies have shifted their focus towards biofuel
manufacturing—Reliance Industries, Tata Chemicals, ONGC,
BPCL, HPCL, Godrej Agrovet, and Emami group are a few to name. The
state governments are also not far behind. Leading by example is the
state of Chattisgarh, where the Chief Minister’s car itself
has been running on biodiesel. Additionally, a large number of
centrally-sponsored schemes are used to promote biodiesel plantations.
The budget incentives for biofuel industries put forth by the Finance
Minister of India is a positive step towards substituting
biofuels partially for imported oil, boosting biofuel industries,
contributing to equitable economic development, getting energy
self-reliance and reducing carbon emissions. By streamlining the
National Biofuels Policy in sync with the needs of the industry and
farmers, India can reach the ambitious target of blending 20 percent of
biofuels well before the set deadline of 2017.