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Why Is India Struggling So Much to Get Its Biofuel Plan Right?

Why Is India Struggling So Much to Get Its Biofuel Plan Right?

One of the most important ingredients in the recipe of 21st century growth is energy. And to surmount the challenge of availing such energy without compromising the government’s progress towards other targets – including climate change – India launched the National Biofuel Policy (NBP) in 2008. One motivation was that 10 million litres of E10 biofuel could save Rs 28 crore in forex and around 20,000 tonnes of carbon dioxide emissions.

Biofuel is the product of blending a fossil fuel with a certain percentage of ethanol. This ethanol is generally extracted from crops, oilseeds and waste, and mixed in a ratio that doesn’t affect the properties of the fossil fuel while reducing the amount of greenhouse gases it emits when combusted. In 2008, the NBP targeted an ethanol fraction of 20% in both petrol and diesel by 2017.

However, by 2017, the government had achieved only a 2% blend with petrol and about 0.1% with diesel. So it revised the policy the next year and set new targets: 20% ethanol in petrol and 5% ethanol in diesel by 2030.

The NBP obviously has a wide scope, and can contribute to energy security, climate change mitigation and the creation of new employment opportunities in rural India. However, it has been continuously unsuccessful because of the limited availability of biofuel sources, constant failure to adopt a right pricing formula for ethanol and other crops, procedural delays by state agencies and delayed procurement.

So for now, the state’s principal goal has been to increase the supply of biofuels.

The food v. fuel challenge

Bioethanol and biodiesel in India can be produced from various sources. Depending on the raw material, a biofuel is called 1G, 2G and 3G, where ‘G’ stands for ‘generation’.

The source of 1G – the first generation of biofuels – include edible sources like molasses, sugar-containing materials like sugarcane, sugar beet and sorghum, starch-containing materials like corn, cassava and rotten potatoes, and edible oil seeds. 2G biofuels use non-edible sources like non-edible oilseeds (e.g. Jatropha curcas), used cooking oil, agriculture residue such as rice straw, cotton stalk, corn cobs, saw dust, bagasse, etc. 3G biofuels are drawn from industrial waste, municipal solid waste, etc. 2G and 3G biofuels are recognised as being more advanced.

Now, India’s high population and high population density impose a limit on the use of land as well as challenges vis-à-vis food security. The NBP addresses these issues in two ways. To not compromise food security, the policy discourages the use of sugarcane and maize as sources, and instead champions 2G and 3G biofuels. Second, to address the issue of limited land, the policy discourages agricultural land from being converted to cultivate non-edible crops, and instead pitches the use of wasteland.

But while the technology to enhance the yield from 1G biofuel crops already exists, it remains difficult to extract sugar, and hence ethanol, from 2G and 3G sources. India’s focus on advanced biofuels as such requires high investment, more research, market interest and public sector encouragement in technology. Without boosts on these fronts, the insufficient biomass available to produce ethanol will continue to stand in the way of India meeting its biofuel target.

To achieve a 10% blend of ethanol with petrol would require about 1,100 million litres of ethanol. India currently produces about 0.7 million kg/ha of sugarcane but this is not enough. The production capacity and productivity of 2G crops like J. curcas remains unknown, and we don’t have the technology to efficiently convert waste to fuel. To match India’s proposed level of biofuel production, it needs to produce 22% more biofuel by 2030, but the annual production growth in 2019-2025 falls short by as much as 86%.

According to the National Wastelands Development Board, wasteland is any land that is under-utilised or can be made productive by the proper use of technology and soil and water treatment. The Indian Space Research Organisation produces a comprehensive wasteland atlas for India, but it also includes pastoral lands, grazing areas and grasslands, all of which are important sources of fodder for communities and provide important ecosystem services. So as such, it’s difficult to locate wasteland in India – and far easier to convert agricultural fields for biofuel use.

To succeed, the NBP needs three types of support: economic, environmental and policy. Even if the production of biomass is met with time, the industry needs to grow in parallel. The government has already promised Rs 10,000 crore to set up 12 biofuel refineries but given how ambitious the NBF is, given the current situation and the disappointing productivity forecast, this isn’t enough.

Specific issues with sources

India’s claims of bumper sugarcane production in the past could be misleading because Indian sugarcane has its own problems. For one, India produces ‘C grade’ canes, which yield 1 litre of biofuel from about 0.004 tonnes of molasses, considered low. The crop also requires copious amounts of groundwater, a resource already stressed in India. Sugarcane is also used in the alcohol and pharmaceutical industries, which already offer steadier demand and better prices.

Second, the production of J. curcas – for 2G biofuels – remains economically unviable and has almost completely failed to interest farmers. To increase production, the NBP promised a minimum purchase price. But since this price is compensated to the oil companies that regulate storage, distribution and marketing, the producers have been pessimistic about getting their due.

Third, though India produces enough agricultural residue, not all of it is seen as ‘waste’. A lot of it is in fact repurposed as manure. So if a farmer has to sell the residue for 3G biofuels, she has to be compensated not just for the biomass but for cost-savings on the pesticides as well as benefits to the soil. Axiomatically, we can estimate how much residue is really available for the biofuel industry only after subtracting the residue used as manure.


Given all of these issues, it might just be worth asking if biofuels aren’t a good plan for India – or if they can become better by improving local business and regulatory conditions.

Green industries like biofuels are often small, risky, pricy, vulnerable and susceptible to failure – all attributes exacerbated by the fact that fossil fuels receive over seven-times as much subsidies as alternative energy sources. So improving biofuels’ prospects also requires the state to raise the value of the renewable energy sector.

In addition, biofuels can’t become profitable without good green industrial policies backed by the government support, incentives and even inflated profits for a time to encourage investment and innovation, together with a watchdog to regulate and promote the sector.

Monika Mandal is studying sustainability, agriculture, green economy and creative practices for enabling change, at the University of Sussex, UK.

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