Centre approves national policy on biofuels
17 May 2018
The union cabinet on Wednesday approved the National Policy on Biofuels which allows blending of ethanol from a vast range of waste agricultural products.
Till now ethanol produced from only sugarcane was allowed to be mixed in petrol.
Under the new policy, agricultural wastes such as damaged foodgrains, rotten potatoes, corn and sugar beet can now be blended with petrol to aimed at reducing import costs by Rs4,000 crore this year.
The new policy categorises biofuels as 'first generation', or 1G, that is bio-ethanol production from molasses and bio-diesel from non-edible oilseeds.
'Second generation' (2G) ethanol can be produced from municipal solid waste, while 'third generation (3G) fuels include bio-CNG.
A government statement said, "The Policy expands the scope of raw material for ethanol production by allowing use of sugarcane juice, sugar containing materials like sugar beet, sweet sorghum, starch containing materials like corn, cassava, damaged food grains like wheat and broken rice, and rotten potatoes."
The new policy also allows use of surplus foodgrains for production of ethanol for blending with petrol with the approval of the National Biofuel Coordination Committee.
The statement added, "a viability gap funding scheme for 2G ethanol bio refineries of Rs5,000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels will be provided."
The policy also encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil and short gestation crops.
According to government estimates, blending one crore litre of bio-ethanol with petrol would save Rs28 crore worth oil imports. "The ethanol supply year 2017-18 is likely to see a supply of around 150 crore litres of ethanol which will result in savings of over Rs4,000 crore of forex," the statement said.
Besides, it will lead to 30 lakh tons of lesser carbon emissions. "By reducing crop burning and conversion of agricultural residues / wastes to biofuels there will be further reduction in Green House Gas emissions," it said.
Annually 62 million tonnes of municipal solid waste are estimated to be generated in India and one ton of such waste has the potential to provide around 20 per cent of fuel, PTI reported.
Rs800 crore of investment is required to set up a 100-kilolitre per day bio refinery. State-run oil marketing companies are in the process of setting up 12 second generation bio refineries at an investment of approximately Rs10,000 crore.
According to the statement, 2G bio refineries would will spur infrastructure investment in the rural areas where jobs could be created.
"By adopting 2G technologies, agricultural residues / waste which otherwise are burnt by the farmers can be converted to ethanol and can fetch a price for these waste if a market is developed for the same. Also, farmers are at a risk of not getting appropriate price for their produce during the surplus production phase. Thus conversion of surplus grains and agricultural biomass can help in price stabilization," the statement added.