India Unveils New Biofuel Policy

Combustible fuels created from biomass are called Biofuels. In simple terms, these are fuels created from recently living plant matter as opposed to dead remains of ancient organisms in the form of hydrocarbons. Biofuels are generally used to reference ethanol and biodiesel, which act as replacements for transportation fuels such as petroleum, diesel, jet fuel etc. Biofuels also include solid fuels like wood pellets and biogas or syngas. Two main types of biofuels as mentioned before are ethanol and biodiesel. Ethanol is formed by fermentation and can be used as a replacement or, additive to, gasoline. Biodiesel is produced by extracting naturally occurring oils from plants and seeds, in a process called transesterification and is combusted in diesel engines.

Brief of 2009 National Biofuel Policy

The Policy aimed at main-streaming of biofuels and, therefore, envisioned a central role for it in the energy and transportation sectors of the country. The Goal of the Policy was to ensure that a minimum level of biofuels become readily available in the market to meet the demand at any given time. An indicative target of 20% blending of biofuels, both for bio-diesel and bio-ethanol, by 2017 was proposed. The Policy was put forth to bring accelerated development and promotion of the cultivation, production, and use of biofuels to substitute for petrol and diesel for transport. Additionally, biofuels would be used in stationary and other applications, whilst contributing to energy security, and climate change mitigation. This was in addition to creating new employment opportunities and eventually leading to environmentally sustainable development.

The responsibility of storage, distribution, and marketing of biofuels rested with OMCs. The entire value chain comprising production of oilseeds, extraction of bio-oil, it is processing, blending, distribution, and marketing was decided to be taken into account, in the determination of bio-diesel purchase price. Financial incentives, including subsidies and grants, were considered upon merit for new and second generation feedstocks; advanced technologies and conversion processes; and, production units based on new and second-generation feedstocks. The co-ordinating ministry was Ministry of New and Renewable Energy.

(text from Government of India – Ministry of New & Renewable Energy; National Policy on Biofuels document)

National Biofuel Policy 2018

Like Make in India, Skill Development, and Swachh Bharat Abhiyan programs of the current government, biofuels blend well with ongoing novel drives, leading to the approval of 2018 National Policy on Biofuels by PM Narendra Modi.

The National Policy on Biofuels-2018 notified on 8.6.2018, inter-alia, allows production of ethanol from damaged food grains like wheat, broken rice etc. which are unfit for human consumption. The policy also allows conversion of surplus quantities of food grains to ethanol, based on the approval of National Biofuel Coordination Committee.

Use of damaged foodgrains and surplus foodgrains for production of ethanol will increase its availability for Ethanol Blended Petrol (EBP) Programme.  During the ethanol supply year 2017-18, 150.5 crore litres of ethanol was blended in Petrol which resulted in foreign exchange impact of about Rs. 5070 crore and carbon emission reduced to the extent of 29.94 lakh tonnes.

The National Policy on Biofuels-2018 approved by the Government envisages an indicative target of 20% blending of ethanol in petrol and 5% blending of bio-diesel in diesel by 2030. Under EBP programme, ethanol blending in petrol is being undertaken by the Oil Marketing Companies (OMCs) in whole country except island Union Territory (UT) of Andaman Nicobar and Lakshadweep wherein, OMCs blend up to 10 % ethanol in petrol under the EBP Programme.

Further, Government has approved Pradhan Mantri JI-VAN Yojana to provide Viability Gap Funding (VGF) to Second Generation bio-ethanol manufacturing projects to increase availability of ethanol for EBP programme. Ministry has also issued Gazette Notification dated 1.5.2019 on “Guidelines for sale of Biodiesel for blending with high speed diesel for transportation purposes-2019” dated 30.4.2019.

Government has decided to leapfrog directly to  BS-VI quality w.e.f. 1st April, 2020 in the entire country. Considering the rise in environmental pollution in National Capital Region, Government has started supply of BS-VI auto fuel in National Capital Territory of Delhi from 1st April, 2018.  Further, in line with the directions issued by Ministry of Petroleum and Natural Gas, supply of BS-VI auto fuel has started in ten districts of National Capital Region and three other districts/cities outside of National Capital Region (Karauli, Dhaulpur and city of Agra) w.e.f. 1st April, 2019.

Types of Biofuels under National Policy 2018

Biofuels have been classified, as per the National Biofuel Policy 2018, as:

1. Basic Biofuels – First Generation like bioethanol and biodiesel.
2. Advanced Biofuels – Second Generation like, Municipal Solid Waste (MSW) to drop-in fuels, and ethanol.
3. Third Generationbiofuels, like bio-CNG. 

Raw Materials Used

1. Organic matter unfit for human consumption can be utilized as raw materials for ethanol production. Examples are sugar containing materials such as sugar beet, sweet sorghum, cassava, sugar cane juice and damaged food grains like wheat, rotten potatoes.
2. With the approval of National Biofuel Coordination Committee, surplus food grains can be utilized to produce ethanol for blending with petrol.

Estimation of Improvements in the Environment

The government estimates 1 crore litre of E-10 saves ₹280 million of forex at current rates. The supply year 2017-18 for ethanol is expected to see a supply of 150 crore litres. This, in turn, is estimated to result in savings of more than ₹40 billion of forex.

1. 1 crore litre of E-10 saves around 20,000 ton of CO2
2. For the ethanol supply year 2017-18, CO2 emissions will be reduced to about 30 lakh ton.
3. By reducing crop burning and conversion of agricultural residues and wastes to biofuels, greenhouse gas emissions will be further reduced.
4. The Ministry of Power has issued a policy to help tackle air pollution issues using 5-10 % of biomass pellets alongside coal for power generation in thermal power plants across the nation.

How is this policy of use to India?

1. Biofuels offer a great opportunity to incorporate the ambitious goal of doubling farmers’ income, waste-to-wealth creation, employment generation, and import reduction.
2. Due to continuous non-availability of domestic feedstock, the biofuels program in India has witnessed a setback, which needs proper attention. The new policy on Biofuels will help change this trend.
3. The policy indicates a viability gap funding program for 2G ethanol biorefineries of ₹50 billion in 6 years, with an obvious thrust on Advanced Biofuels. This comes in addition to extra tax incentives and higher purchase price as compared to 1G biofuels.
4. Biodiesel production from non-edible oilseeds used cooking oil, and short gestation crops will be encouraged for setting up of supply chain mechanisms.(https://mercomindia.com/cabinet-approves-national-policy-biofuels/) 

Advantages of Using Biofuels

1. Biofuels are not as energy dense as conventional transportation fuels. The following statement provides the necessary justification; i.e. 1 gallon of biodiesel has 93% of the energy of 1 gallon of diesel and 1 gallon of ethanol (E85) has 73% of the energy of 1 gallon of gasoline.
2. Minimal changes to infrastructure are needed as biofuels can be used in existent combustion engines.
3. Biofuels provide an alternative to foreign fuel imports in regions that don’t have hydrocarbon resources but have suitable agricultural conditions.
4. They come from an extensive variety of sources. Hence, can be produced in many regions.
5. It is generally accepted that the crops used to produce biofuels can be replenished much faster than fossil fuels, although there is some dispute over just how renewable they are.
6. Biofuels are currently the only feasible replacement to hydrocarbon transportation fuels. (https://www.studentenergy.org/topics/biofuels)

The Government through Oil Marketing Companies (OMCs) is implementing the Ethanol Blended Petrol (EBP) programme under which, OMCs sell ethanol blended petrol with percentage of ethanol upto 10% subject to its availability. OMCs procure ethanol for blending in petrol. In the current Ethanol Supply Year 2018-19, 180.80 crore litre of ethanol has been procured by OMCs upto 11.11.2019.

To encourage procurement of biodiesel produced from Used Cooking Oil (UCO), OMCs have floated Expression of Interest (EoI) for setting up of biodiesel plants from UCO processing plants on 10.08.2019 across India for 100 locations.  It was further extended to 200 locations on 10.10.2019.

Author’s Bio:

Adeela Hameed is pursuing Masters in Environmental Sciences from Amity University, Noida.

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