How can India grow its biofuel usage as an alternative fuel?

Being one of the fastest-growing economies, India is also the third-largest consumer of primary energy in the world, behind the US and China. India’s fuel energy security is at risk until the nation makes use of biofuel as an alternative fuel.

The government of India is targeting to reduce the country’s carbon footprint by 30-35%, by the year 2030. In order to achieve this herculean target, it is important to implement a strategy that includes adopting biofuels and renewables and increasing domestic production.

The government policy seems to be in the right direction and is set to improve the usage of biofuel from the existing levels. Earlier this year, the Government of India released a policy mandating the use of biomass pellets for around 7% of the requirement in thermal power plants.

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In addition to helping avoid stubble burning, this will also provide additional income to farmers and provide job opportunities to the locals. Further, in an amendment to the National Policy on Biofuels 2018 released in May this year, the government has made a provision to allow more feedstock for the production of biofuels and advance the ethanol blending target of 20% blending of ethanol in petrol to ESY 2025-26 from 2030.

The amendment also reflects the government’s will to promote the production of biofuels in the country, under the Make in India program, by units located in Special Economic Zones (SEZ)/ Export Oriented Units (EoUs).

Additionally, India’s carbon exchange and NDC goals will encourage the switching of fuels. As per the updated NDC, India now stands committed to reducing the Emissions Intensity of its GDP by 45% by 2030, from the 2005 level, and achieving about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

It also reaffirms the nation’s commitment to work towards a low carbon emission pathway, while simultaneously endeavouring to achieve sustainable development goals, and representing the framework for India’s transition to cleaner energy till 2030.

Also, organic waste diversion from agri and agro-processing industries into the biofuel value chain through better incentivisation will only improve this case.

For instance, the new policy on biofuels released by the Uttar Pradesh state cabinet aims to increase the production of biofuel while ensuring the safe disposal of agricultural and municipal waste. It also aims to increase farmers’ incomes and bring investments into rural areas.

Digitisation of the biofuel supply chain will ensure improvement in the production and consumption of biofuels and help keep up with the demand. Integrating digital technology into production will ensure a raise in productivity while maximising efficiency. Digitisation of the supply chain will also result in improvement in communication with suppliers, innovation, storage facilities and prediction maintenance.

Another important aspect is the capital subsidies for waste-to-fuel technologies that are critical to ensuring higher production and higher consumption. The Centre provides financial assistance in the form of a back-ended subsidy for the installation of Waste to Energy projects, such as:

- Biogas generation: Rs 1.0 crore per 12000cum/day

- BioCNG generation (including the setting of Biogas plant): Rs 4.0 Crore per 4800Kg/day

- Power generation based on Biogas (including setting of Biogas plant): Rs 3.0 Crore per MW.

- Power generation-based MSW: Rs 5.0 Crore per MW (Source Govt. Website)

Any discussion on biofuels is incomplete without the mention of electric mobility. Equivalent policies and market linkages will help in the growth of sustainable Electric Vehicles (EVs). According to statistics provided by the Government of India’s Bureau of Energy Efficiency (BEE), the transport sector accounts for 18% of total energy consumption in India. Thus, electric mobility presents a viable alternative to addressing climate change challenges, while contributing to balancing energy demand, energy storage and environmental sustainability. If accompanied by the decarbonisation of the power sector, EVs would also significantly contribute to keeping the world on track in meeting its shared climate goals.

With millionaires assuming the responsibility of being major decision-makers, it is important that they become self-aware of the environmental consequences of pollution and take action regarding their operations.

The current times have placed sustainability at the front and centre for companies. Global leaders should look at sustainability as a key aspect of their mission and weave it into their corporate strategy to ensure business resilience.

According to a report by Accenture, when global markets have faced tremendous pressures and volatility, companies with high ESG scores have continued to outperform, experiencing a cumulative relative return of 6.3% higher than bottom performers and facing lower volatility.

Lastly, to ensure decentralised production and distribution of biofuels, the opening up of trading and retailing within proper territorial coverage of all types of biofuels is key.

Biodiesel must be procured and sold by the oil manufacturing companies only, pure or blended. Industry stakeholders believe the sale of spurious biodiesel (made of byproducts of petroleum refineries such as cheap furnaces or fuel oils) should be kept in check.

This parallel business is hampering the very trust in biodiesel. Widespread awareness campaigns should be undertaken to make consumers aware of the ill effects of fake oils. Secondly, if the direct sale of biofuel is permitted in the future, it should be done with strict quality control in place.

Finally, biodiesel imports should happen under strict vigil to ensure the route is not being misused to import cheap oil in the name of biodiesel. Considering that organic waste is generated everywhere and is considered zero-cost material, developing cost-effective commercial means of biofuel production is key. The creation of proper strong regional markets will help in the sourcing, production and distribution of biofuels. This is beneficial considering the cost economics and environmental perspective (localised transition-less emission), and will pave the way for biofuel to be widely accepted as a viable fuel.