Biofuel policy eyes imports, growing feedstock on wastelands to meet domestic demand 

With domestic production of ethanol at around 867 crore litres, against an estimated requirement of 1,700 crore litres under the Ethanol Blending Programme (EBP), the national biofuel policy aims to meet the shortfall through imports as well as utilising wastelands for feedstock generation.

Last month, the Ministry of Petroleum & Natural Gas (MoPNG) approved amendments to the National Policy on Biofuels, 2018, which were notified on June 15, and enhances the scope of procuring raw materials for producing ethanol under EBP.

Under this, oil marketing companies (OMCs) will sell 20 per cent ethanol-blended petrol from April 1, 2023. Besides, petrol blending will be gradually raised in coming years. A target of 20 per cent blending of ethanol in petrol is proposed by November 2026. A target of 5 per cent blending of biodiesel in diesel or direct sale of biodiesel is also proposed by 2030.

Domestic demand, availability

India needs to increase its domestic ethanol production on a massive scale to meet the policy goals as the present biofuel capacity is low. There are challenges due to lack of good quality feedstock and uniform availability of ethanol across the country.

As on June 5, OMCs cumulatively issued Letter of Intent (LoIs) for 443.24 crore litres. Of this, around 439.80 crore litres has been contracted and 224.93 crore litres has been delivered. India has achieved a blending of 10.04 per cent as of June 5, 2022.

The amendments to the national policy on biofuels increases the scope of raw material procurement. The government has identified algal feedstock and cultivation of sea weeds as a potential feedstock for ethanol production.

For producing biodiesel, non-edible oilseeds, used cooking oil (UCO), animal tallow, acid oil, short gestation non-edible oil rich crops and algal feedstock have been identified.

“The policy encourages augmenting indigenous feedstock supplies for biofuel production utilising wastelands. However, depending upon availability of domestic feedstock and blending requirement, import of feedstock for bio diesel production would be permitted to the extent necessary. Feedstock import requirements will be decided by the National Biofuel Coordination Committee (NBCC) proposed under this Policy,” MopNG said in the notification.

Further, to promote the production of biofuels by units located in Special Economic Zones (SEZ) and Export Oriented Units (EoUs), the import of feedstock for production of biofuels meant for export by them will be allowed without any restriction, it added.

Restrictions to biofuel exports

Considering that domestic biofuels availability is much lower than the country‘s requirement, the export of biofuels will generally not be permitted. However, export may be allowed under certain circumstances, subject to approval of the NBCC.

The circumstances include surplus biofuels after meeting domestic demand. Besides, in the case where the price of biofuels made from domestic feedstocks for the domestic market becomes high due to increase in feedstock prices, thereby resulting in poor domestic sales.

In such a scenario, the export of biofuels would be permitted to support and keep the domestic biofuel industry viable. This in addition to the ‘Make in India‘ programme’ would also lead to an increase in the country’s foreign exchange income, MoPNG said.

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