How India plans to boost Biofuel Industry

India can no longer continue to import crude oil from Oil Producing Countries at skyrocketing prices. Without governmental initiative, a logical shift towards relying on biofuels will never become a reality on a large scale. With foresight and timely intervention, the centre is on its way to achieving a previously unimagined target for producing ethanol in the country. Let’s explore some of the schemes that will be instrumental in an India of the future, less dependent (or completely independent?) on crude imports.

Biofuels have caught up in the last decade and it has become imperative to keep up with the pace of developments in the field of biofuels. Biofuels programme in India has been largely impacted due to the sustained and quantum non-availability of domestic feedstock for biofuel production which needs to be addressed. In order to promote biofuels in the country, a National Policy on Biofuels was made by the Ministry of New and Renewable Energy during the year 2009. This National Policy on Biofuels was approved by the Union Cabinet in May 2018.

National Policy on Biofuels-2018

The National Policy on Biofuels is aimed at taking forward the indicative target of achieving 20 per cent blending of biofuels with fossilbased

fuels by 2030. The policy builds on the achievements of the earlier National Policy on Biofuels and sets the new agenda consistent with the redefined role of emerging developments in the renewable sector.

This policy aims to bring in renewed focus taking into context the international perspectives and national scenario. The government has emphasised achieving energy security of the country with a target of reducing import dependence i.e., usage of fossil fuels by 10 per cent from 2014-15 levels by the year 2022.

The policy expands the scope of raw material for ethanol production by allowing the use of Sugarcane Juice, Sugar containing materials like Sugar Beet, Sweet Sorghum, Starch containing materials like Corn, Cassava, Damaged food grains like wheat, broken rice, Rotten Potatoes,

unfit for human consumption for ethanol production.

The policy allows the use of surplus food grains for the production of ethanol for blending with petrol with the approval of the National Biofuel Coordination Committee.

The policy encourages the setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, Used Cooking Oil, short gestation crops.

Pradhan Mantri JI-VAN Yojana

Continuing its support to the biofuel industry, the Government of India launched ‘Pradhan Mantri JI-VAN (Jaiv lndhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana’ on February 28, 2019, as a tool to create 2G ethanol capacity in the country and attract investments in this new sector. The said scheme was notified on March 8, 2019 in the Extraordinary Gazette of India.

The scheme’s objective is to support 12 Commercial Scale and 10 demonstration-scale Second Generation (2G) ethanol Projects with a Viability Gap Funding with a total financial outlay of Rs 1969.50 crore for the period 201819 to 2023-24. Out of Rs 1969.50 crore, Rs 1800 crore has been allocated for supporting 12 above mentioned Commercial projects, Rs 150 crore has been allocated for supporting 10 demonstration Projects and the remaining Rs 19.50 crore will be provided to the Centre for High Technology (CHT) as administrative charges.

Financial assistance

Government has notified scheme for extending financial assistance to project proponents for enhancement of ethanol distillation capacity or to set up distilleries for producing first Generation (1G) ethanol from feed stocks such as cereals (rice, wheat, barley, corn & sorghum), sugarcane, sugar beet etc. vide notification dated January 1, 2021. Under the scheme, government would bear interest subvention for five years, including one year moratorium, against the loan availed by project proponents from banks @ 6 per cent per annum or 50 per cent of the rate of interest charged by banks, whichever is lower, for setting up of new distilleries; expansion of existing distilleries; converting existing distilleries to dual feedstock; setting up of new dual feed distilleries; expansion of existing dual feed distilleries; and installation of Molecular Sieve Dehydration (MSDH) column etc.

Sharing the above information the then Union Minister of State for Consumer Affairs, Food and Public Distribution, Danve Raosaheb Dadarao in Lok Sabha on February 9, 2021, said “State gvernments/ UTS have been advised to promote the scheme to the entrepreneurs and encourage them to participate in the scheme so that the target set by the government could be achieved well within the timeline. State governments have also been requested to facilitate entrepreneurs in arranging land for the project, getting early environment clearance etc. in setting up of distilleries. In this regard, webinars/meetings have been organised with state governments/ UTS, industry, concerned departments of central government and other stakeholders.”

During previous Ethanol Supply Year (ESY) 2019-20 (December- November), the minister said “About 173 crore litre of ethanol was supplied by sugar mills and distilleries to Oil Marketing Companies (OMCS). In the current ESY 2020-21, against Letter of Intent (LOI) quantity of 324.69 crore litre and contracted quantity of 269.88 crore litre, about 48.73 crore litre of ethanol has been supplied to OMCS, as on February 1, 2021.

Ethanol Blended Petrol (EBP)

Recently on the occasion of World Environment Day, 2021, Prime Minister Narendra Modi, has launched the ambitious E100 pilot project in Pune for the production and distribution of ethanol across the country, to promote biofuels for a better environment. While releasing the ‘Report of the Expert Committee on

Road Map for ethanol blending in India 20202025’, Modi mentioned that the government has resolved to meet the target of 20 per cent ethanol blending in petrol by 2025. Earlier the target was set for 2030. Currently, the ethanol blending level in petrol is around 8.5 per cent.

Under the Ethanol Blended Petrol (EBP) programme, the government has already reintroduced the administered price mechanism for ethanol procurement, allowing ethanol production from multiple feedstocks like heavy molasses, sugarcane juice, sugar, sugar syrup, damaged food grains, maize and surplus rice stocks with Food Corporation of India (FCI).

The Prime Minister remarked that the 21st century India can get energy only from the

modern thinking and modern policies of the 21st century. With this thinking, the government is continuously taking policy decisions in every field. He said that today, a lot of emphasis is being laid on building the necessary infrastructure for the production and purchase of ethanol in the country. Most of the ethanol manufacturing units are mostly concentrated in 4-5 states where sugar production is high but now Food Grain Based Distilleries are being established to expand this to the whole country. Modern technology based plants are also being set up in the country to make ethanol from agricultural waste.