Tangential target: India’s biofuel policy

[India] Energy plays an important role in the development of a country and this linkage is well established. The debate on energy sustainability, therefore, has created much-needed traction and rightfully so. On this note, alternative resources to generate energy remain the crux of the problem. India stands third in global energy consumption, after China and the US. Of this, crude accounts for 29.45%, 95% of which is used for transportation. Crude imports amount to 3.8 million barrels per day, serving a demand of 4.1 million barrels per day. The domestic supply of crude meets only 22% of the demand and the rest had to be met through imports in 2015.

However, fluctuating crude prices, shrinking supplies, climate change and growing demand over the past decade have forced India to consider alternative energy sources as a significant option. In COP21 (Conference of Parties held in Paris last year), India expressed its desire to harness 40% of its energy from non-fossil fuels by 2030, striving to become one of the largest green energy producers in the world.

What are biofuels?

Biofuels are derived from organic raw materials and serve as suitable transportation fuel surrogates. They include bioethanol, biodiesel, biogas, and more. Ethanol serves as a fuel and oxygenates gasoline, while biodiesel is used to supplement diesel derived from vegetable oils and animal fats.

Biofuels are categorised under three heads: first-generation fuels derived from edible crops such as sugarcane and corn; second-generation fuels developed from wastes or residues and non-food feedstocks and third-generation fuels from algae.

Blending of bioethanol with gasoline prevents incomplete combustions and therefore, reduces emissions. The Bureau of Indian Standards (BIS) currently allows 20% ethanol in petrol without any engine modifications. As of now, 5% of biodiesel is blended with diesel in a few cities.

India’s biofuel policy

The country’s biofuel policy has undergone changes/challenges ever since the Power Alcohol Act, 1948, was enforced. The objective of the policy was to blend ethanol from molasses with petrol to decrease sugar prices and reduce dependence on petrol imports. However, this act was withdrawn in 2000 as it was said to have outlived its utility and rendered obsolete.

Ethanol, a byproduct of the sugar industry, was a freely available commodity as India was the third-largest sugarcane producer across the globe. In January 2003, the Indian government launched the ethanol blended petrol programme (EBPP) with a mandate to blend 5% ethanol with gasoline in nine states and four Union territories. However, due to acute shortage of ethanol, the second phase of EBPP was discontinued after October 2004. Subsequently, the mandatory regulation was made optional.

Despite the hurdles, EBPP-phase II was implemented in 2006 and mandated 5% ethanol blending with petrol on an all-India basis (in 20 states and 8 Union territories except a few north-eastern states, and Jammu and Kashmir). But due to market imbalance, oil companies could source only 440 million litres of ethanol compared with the targeted 1.05 billion litre for the stipulated 5% mix.

In December 2009, the ministry of new and renewable energy formulated the national policy on biofuel with an objective to consume greener fuel via blending at least 20% biofuels by 2017. To encourage this, the government in 2014 fixed the price of ethanol in the range of Rs.48.50-49.50 per litre, irrespective of the locations of the oil marketing companies across India. Despite these efforts, the target set by the national biofuel policy has not been achieved so far.

A need for revamping

India’s biofuel policy requires 20% ethanol blending. However, the table below shows that even 10% blending demands are greater than the ethanol available for use.

The sugarcane-centric policy was necessitated to reduce sugar prices and was overlooked during the years of low sugarcane production. Strong emphasis has been put on bioethanol production from sugarcane juice (70% yield), but the policy does not specify how to deal with sugarcane scarcity.

There is a thrust on the development of second-generation biofuels by recommending plantation of trees bearing non-edible oilseeds on government/community wasteland, fallow land in forest and non-forest areas, but without mandated targets.

Second-generation biofuel production from energy crops, agricultural residues and residential wastes can benefit all the stakeholders in the biofuels supply chain, and may reduce the impact of the food-versus-fuel debate. Generating energy from waste is necessarily the first step towards ‘greenergising’ our economy.

Algae, a third-generation biofuel source, can be cultured in wastewater or sea water. Algae biofuel has a calorific value of 41 megajoules per kg, which is comparable to gasoil and can provide an annual yield of 5,000-15,000 gallon per hectare. These are economical and probable blending stocks as they feed on carbon dioxide (CO2) and nutrients present in wastewater. In addition, CO2 emissions and the recirculating cooling water from coal-based power plants can harvest algae biofuel. Strong incentives can be earned as these plants integrate processes to minimise emissions and bolster biofuel production.

Several companies and government agencies have adopted algae production as a source of commercially viable, CO2-friendly fuel. For instance, Prime Group, an Indian industrial and transport company, has planned to build a biodiesel production facility fuelled by algae. Reliance Industries Ltd has also come up with Algenol in 2015, an algae production system from COrecycled from industrial processes.

To foster economic growth and attain energy security, huge investments in research and development are needed. An effort can be made by reducing registration fees and introducing road tax exemptions for vehicles running on biofuels. A subsidy from the Indian government in the initial years will go a long way in supplementing ethanol production for blending requirements. Also, a greater emphasis on second- and third-generation biofuels will provide energy security, economic growth and prosperity, thus ensuring a better quality of life for all.


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