Green Revolution: India’s Strides in Biofuels Transforming the Global Energy Landscape

India is poised to revolutionize its transportation sector through ambitious targets for biofuel blending. The country aims to blend 20% ethanol in petrol and 5% biodiesel in diesel by 2030 to reduce oil import dependence and curb greenhouse gas emissions from the transport sector. Let’s take a closer look at India biofuels market.

Government Policy Push

The impetus for India’s biofuel push stems from government policy initiatives over the past decade. In 2006, the country launched its National Biofuel Policy with an initial target of blending 5% ethanol in petrol by 2012-13. This target was subsequently raised to 10% and achieved ahead of schedule in 2018-19.

In 2018, India notified the Roadmap for Ethanol Blending in India 2020-25 under which it aims to achieve 20% ethanol blending by 2025-26 and thereby replacing 10% of petrol consumption. To meet these goals, the government has taken several steps like fixing priority sector lending status for biofuel projects, allowing interest subvention, and mandating oil marketing companies to sell ethanol-blended petrol.

Further, in 2019, India’s Ministry of Petroleum and Natural Gas mandated an indicative target of 5% blending of biodiesel (B100) with high-speed diesel by 2030. The goal is to reduce reliance on fossil fuels and cut import costs of crude oil, which currently stands at over $110 billion annually.

Feedstock For Ethanol Production

The key feedstocks for ethanol production in India are sugarcane juice/syrup and damaged food grains like wheat and broken rice. As of 2020-21, around 42 crore litres of ethanol were produced using B-heavy molasses derived from sugarcane.

To scale up ethanol capacity, the government now allows use of sugarcane juice, sugar syrup and sugar for ethanol production. It has also permitted use of surplus rice available with FCI and maize for conversion into ethanol. Trials are underway to use feedstocks like sweet sorghum, cassava and corn.

This helps optimize agricultural raw materials and boost farmer incomes. It also supports the government’s aim of making India Aatmanirbhar or self-reliant in fuel and agricultural commodities.

Biodiesel Production

For biodiesel production, the key feedstock is non-edible oilseeds like palm, mahua, neem, karanja etc. Several states like Madhya Pradesh, Chhattisgarh and Rajasthan have potential to grow these oilseed crops on wastelands and degraded forests.

Select state governments offer incentives to establish biodiesel units and promote cultivation of non-edible oilseeds through contract farming. For example, the MP government launched a `940 crore initiative to develop 151 lakh hectares of wastelands for growing mahua, karanja and jatropha by 2024.

Another promising feedstock is used cooking oil collected from bulk consumers like hotels, restaurants and canteens. The EU has approved its use for biodiesel after refining and processing. Collecting and recycling used cooking oil can generate supplementary income for waste collectors.

Biofuel Sector: Investments and Future Outlook

Encouraged by the domestic push and investment opportunities, several public and private players are setting up bio-refineries across India. Major companies like Indian Oil, BPCL and HPCL are expanding their ethanol capacities and bunking facilities.

For more details on investment trends and growth potential of India’s biofuels sector, refer to the market research report published on CoherentMI. The report provides a detailed analysis of the key drivers, restraints and upcoming projects propelling the biofuels industry in India.

The domestic demand is projected to accelerate as oil marketing firms aggressively push for higher ethanol-petrol blends. Global ethanol trade is also opening new export markets. With its agro-climatic advantages and policy support, India is well-positioned to emerge as a leading producer and exporter of biofuels in the future. However, uncertainties around regulated crop prices and availability of low-cost feedstocks continue to pose challenges.

To conclude, there is tremendous opportunity for India to carve a niche as a biofuel powerhouse, driven by its renewable energy commitments and self-reliance goals. With the right policy approach and investor interest, the country’s biofuels sector has the potential for exponential growth over the next decade. It promises to transform the energy landscape while boosting farm incomes and rural economy. Timely infrastructure expansion and technological innovations will be key enablers of this renewable revolution.