Budget 2020 expectations: Give ample focus on the biodiesel industry

Last Updated 27 January 2020, 11:20 IST

By Shiva Vig

Biodiesel can be used in standard diesel engines and is compatible with almost all regular engines. Compared to fossil-fuel alternatives, it helps to reduce greenhouse gas (GHG) pollution and support economic development and job creation, particularly in rural areas. Also, it comes at a lesser cost.

Are we ready to produce enough biodiesel?

The awareness about biodiesel is rising, but its adoption at a larger level will take time. The current scenario is witnessing demand but meeting supply is a challenge due to the unavailability of feedstock for conversion into biofuel and, bigger and efficient biofuel plants in the country.

The industry is optimistic that the 2020-21 Union Budget will put ample focus on the biodiesel industry aligned with the government's mission to provide cleaner and greener fuel. We are hopeful that there will be enough fund allocation for establishing an effective framework to meet the demand of biodiesel in the country.

Oil and energy industry players request the government to consider the following demands:

  • To reach the aspired target of reducing foreign exchange by 12,000 crores over the next three to four years, there are a few changes and innovations that the government must include in the upcoming budget 2020-21.
  • There should be a strong push on the investments in the biodiesel industry which have witnessed escalation and show immense potential. Thus, dedicated funds must be allocated for developing the infrastructure for such units.
  • There should be zero duty on the import of the machinery for putting up a biodiesel manufacturing plant.
  • Animal fat should be brought in the export bank for domestic as well as international biodiesel production so that India could take advantage of it for energy security
  • To encourage domestic manufacturing, easy access to loans and priority sector lending must also be given. In the long run, it will also promote 'Make in India’.
  • A five-year tax holiday window should also be given for the proven innovators in the biofuel sector.
  • All products and services related to biodiesel should come under the 5% GST category.

(Author is Group CEO, BioD Energy)

(Published 27 January 2020, 11:20 IST)

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