What’s in the way of India’s ambitious Ethanol target?

Despite a lot of push from the government through policies and regulations, the country's biofuel sector is facing a lot of issues that are hampering the growth of this sector.

Renewable energy can be termed as the right fodder for any developing nation owing to its nature of not causing any harm to the environment. It also helps in cutting down the transport cost drastically as it is less expensive than fossil fuel. Realising the importance of production of renewable energy to slash down on crude oil imports, the government of India over the years floated many schemes and policies to foster companies and institutes who are constantly working in this domain. However, despite pushing various promotion campaigns and trade activities, India biofuel producers are unable to cater the domestic demand.

Elaborating further on these shortfalls, Mili Sejpal, Proprietor, Sunshine Industries said,

“We are the manufacturer of biodiesel in India. Our focus is on supplying biodiesel to Indian oil marketing companies so that they can blend it with diesel. Currently, the biodiesel industry in India is facing lots of challenges. After the last quarter of the financial year 2019-2020, almost 80 per cent of genuine biodiesel manufacturing plants are shut.”

Raw materials woes

Raw materials are considered as the backbone of any sector so their easy availability is of utmost importance. Similarly, the biofuel industry also thrives on the availability of raw materials as their output is directly proportional to quantity and the quality of raw materials used in obtaining the biofuel. Supply chain management is essential for the production of biofuel. Around 60-70 per cent cost of the biodiesel process depends on raw material (vegetable oil). Continuous supply of feedstock oil (non-edible and used cooking oil) is also a challenge to run existing biodiesel plants in India. Similarly, for first generation (1G) ethanol, the other main biofuel in India’s economy, high dependence on sugarcane juice or molasses remains a concern. Overall, ethanol availability – as well as farmers in states that do not grow sugarcane – would benefit from adoption of other ethanol-amenable crops like sweet sorghum and tapioca. Second-generation (2G) ethanol, where agricultural or forestry wastes are converted to ethanol without relying on edible crops like sugarcane as the main carbon source, faces the challenge of seasonality and variability in the feedstock. Technologies for 2G ethanol are yet to reach maturity in India, though several projects are currently being developed with significant financial support from the government.

Elaborating on the topic, Dr Anjan Ray, Director, Council of Scientific and Industrial Research–indian Institute of Petroleum (CSIR– IIP) said, “Yes, raw material supplies are a key challenge. Theoretically, if we calculate the amount of carbon we import for fuel, we have more than the required carbon within our reach, and most of it is accounted as waste. Surplus agri waste (250 Million Metric Tonnes (MMT)/ year) alone can supplement ~25 per cent of our projected ethanol demand by 2030. But connecting the gap, i.e. bringing feed to factory and factory to field, keeping seasonal variation and the high cost of transporting low-density feed over large distances, is the primary concern.”

“Firstly, the raw materials used for production of biodiesel are allowed to be exported, this export of biodiesel’s raw materials should be stopped so that it will be available in adequate quantity for

domestic manufacturers. If the government can’t give us fair pricing for the biodiesel then export of biodiesel should be allowed to run our plants,” added Mili Sejpal.

Ramping of production cycle

As the demand of ethanol is rising, production rate needs to be scaled up and for that producers have to roll up their sleeves to ramp up the production capacity. “We have to understand that India is a diesel driven country, and however, uses around 700 MMT gasoline per day. By 2030, the consumption may reach around 800 Mmt/day. Achieving a 20 per cent ethanol blend to gasoline will supplement around 160 MMT gasoline/day. So, we have to produce almost 160 MMT ethanol per day by 2030. As of 2019, India produces almost 60 Mmt/day fuel ethanol. So there is a whopping gap of around 100 Mmt/day of ethanol production,” said Dr Ray.

Indian oil companies are looking for ethanol production from 2G/hybrid feedstock, rather than depending upon distilleries to supply ethanol from 1G sources (mainly molasses). So, the math is straightforward. Production has to meet the supply target of almost 100 Mmt/day of fuel ethanol at least to meet the demand. This includes the requirement of supply of around 60 Mmt/day from distilleries.

The new biofuel policy is much more flexible in terms of carbon diversity and based on biofuel production data. The new policy is much improved. Therefore, the approach should be multi-pronged and may cover the government’s mandates on biofuels blends, Original Equipment Manufacturers (OEMS) readiness to bring the latest vehicle technologies available elsewhere and consumer awareness. Already the government is working towards making E20 blends available soon. The OEMS need to introduce more flex-fuel vehicles to run on ethanol-gasoline blends like E10, E20, E85 and ED95.

Milli Sejpal also pointed out that to enhance production of biodiesel, the government needs to put a universal pricing cap to encourage producers. She further said that it is time for the government to treat biodiesel as a commodity and concurrently also work on scaling up non edible oil tree plantations in wasted lands.

Roadblocks

The Ministry of New and Renewable

Energy with an aim to lower the environmental degradation and prevent greenhouse gas emissions rolled out the National Biogas and Manure Management Programme (NBMMP). This initiative was well backed up by the subsidies for family-type biogas plants to increase adoption. Initially, the initiative struck the right chord and was welcomed with lakhs of biogas plants being installed across the length and breadth of the country. Later, due to the lack of information and communication about the plant operation and application of the digested biogas slurry and inability to perceive the return in terms of value resulted in discontinuation of lakhs of biogas plants across the country. There was a severe marketing snag due to which NBMMP failed to showcase major advantages of installing a biogas plant.

Benefits such as hike in revenue from agriculture with the use of high quality and a low-cost homegrown digested biogas slurry as fertiliser and constant use of these fertilisers will enhance soil quality in the long run were given a miss.

On the compressed biogas front, the country is far behind in its aim to install 5,000 compressed biogas (CBG) production plants. As of now, only two are operational and foundation stones have been laid for five others. The delay in replacing transport fuels with cleaner biogas imperils the country's energy security and makes it more dependent on imported crude.

“Surplus agri waste (250

MMT/Y) alone can supplement ~25 per cent of our projected ethanol demand by 2030.

But connecting the gap is the primary concern.”

- Dr Anjan Ray, Director, Council of Scientific and Industrial Research–indian Institute of

Petroleum (CSIR–IIP)

“Currently, the biodiesel industry in India is facing lots of challenges. After the last quarter of the financial year 2019-2020, almost 80 per cent of genuine biodiesel manufacturing plants are shut.” - Mili Sejpal, Proprietor,

Sunshine Industries