Enroute reducing import dependence

The Indian economy has been growing at a rate of around 7% since 2000. A result of this high economic growth rate is a parallel surge in energy demand.

Studies project that under the current policy scenarios, in the next two decades, India’s primary energy demand will double, from 750 million tonnes of oil equivalent (Mtoe) in 2011 to 1,469 Mtoe in 2030. After coal, oil is the country’s largest energy source, accounting for about 30.5% of primary energy consumption. 

The transport sector’s share of the country’s total primary energy consumption will increase from 8.1% in 2010 to 11.3% in 2030. In 2013, India was the world’s fourth-largest consumer and net importer of crude oil and petroleum products after the United States, China, and Japan. India’s petroleum product demand reached nearly 3.7 million barrels per day, far above the country’s roughly one million barrels per day of total liquid production. Unless alternative fuels based on indigenously-produced renewable feedstock are developed to substitute or supplement petro-based fuels, India’s energy security will remain vulnerable.

New purchase policy

The government of India under the Ministry of Petroleum and Natural Gas had announced a Bio-diesel Purchase Policy in October 2005, which became effective from January 1, 2006. In December 2009, in order to strengthen and formalise the country’s commitment to promoting a sustainable biofuels industry, India adopted the National Policy on Biofuels (NPB). The policy encourages the use of renewable fuels and proposes a 20% biofuel (ethanol and biodiesel) mandate by the end of 2017. 

India has taken several initiatives in the field of biofuels in the last two years. The Ministry of Petroleum and Natural Gas has adopted a four-pronged approach and is running four programmes — Ethanol Blended Petrol Programme (EBP) – Ethanol blending in Petrol, Second Generation Ethanol (2G Ethanol) – Ethanol production from celluloses and lignocelluloses material including chemical route, Bio-diesel Blending Programme – Bio-diesel blending in Diesel, and Waste/Plastic to Fuel. 

Blending programme

The bio diesel blending programme, which was started a year ago on August 10, 2015 as a pilot in five cities, has now been extended to six states and biodiesel blended diesel is sold through nearly 2,200 retail outlets in the country. The government has also allowed production of ethanol from alternate routes. The government has allowed the sale of biodiesel (B100) by private manufacturers to bulk consumers like railways, state transport corporations and other bulk consumers. As on July 1, 2016, 1.32 crore litre B100 has been procured by public sector oil marketing companies (OMCs). During the current fiscal year also, OMCs have finalised a quantity of 4.01 crore litres of biodiesel for the period of April – September, 2016. 
Humungous potential

There is a large potential of biofuel business in India to grow from present Rs 6,500 crore to Rs 1 lakh crore in the next 10 years. The government has set a target of 10% import reduction in crude by 2022, and biofuels can play an important role in achieving the target.

Shifting the fuel consumption profile to biofuels derived from domestic feed stocks would lead to decrease in this dependence on crude oil imports. Although India, through its multi-pronged policy approach, has taken positive steps towards developing and promoting biofuels, the possibility of achieving the 20% blend target seems remote. Due to constraints such as the state of existing infrastructure and institutional set-up, production is currently limited to first-generation biofuels, namely molasses-derived ethanol and tree-borne oilseed biodiesel. Feedstock and first-generation biofuel production depends on well-established technologies, and the final product has been widely commercialised. 

Concerns galore

However, concerns about food security and land use have raised questions about the viability of first-generation biofuels. The direct benefits of biofuels are linked to indirect impacts that may adversely, ecosystems, and food and water security. While both first and second-generation biofuel producers may compete with other industries for feedstock, currently competition is more pronounced with first-generation biofuels.

There is a great concern about feedstock competition between the biofuel and food industries, and how using of food crops for fuel production would impact food security, the food industry and society in general. The increasing questions about the sustainability of many first-generation biofuels have called attention to the potential of second-generation (advanced) biofuels.

Lack of technology

At present, India lacks mature technologies for second-generation biofuel production from lignocellulosic biomass, which is an abundant potential source of renewable energy. Agricultural residues are produced and can be exploited in most parts of the country. 

Although biomass itself is cheap, its processing costs are relatively high. Technologies for biomass-to-biofuel conversion are still at various stages of development, and a large-scale proof of implementation is lacking. India has skilled labour and substantial financial resources, which can be channelled into ramping up the collection of feedstock from crop residues, establishing collection infrastructure and transporting and handling of large amounts of biomass. These are indispensable steps towards boosting biofuel use in India and will help the country enter into second-generation biofuel production.

Impact on quality of life

The biofuels are closely linked to increasing the quality of life of the common man as they would provide a sustainable way to convert human generated wastes to energy and reduce pollution as well. A major challenge that faces the sector is the sustainable availability of feedstock for the bio-fuel generation plants. 

Private investors should be encouraged to invest in biofuel programmes and government policies should be conducive to their participation. Active involvement of the private sector and private-public partnerships could help accelerate the commercialisation of second-generation biofuel technologies. A biofuels policy framework that supports second-generation biofuels would facilitate a stronger public-private partnership for the early deployment of advanced biofuels in India. 

Speed, skill and scale are important for the success of any programme and they should be included in the biofuel programme too. The biofuel programme has the capacity to provide better remuneration for farmers, address environmental concerns, reduce dependence on imports and help in foreign exchange savings.