In India, the minimum support price (MSP) mechanism, is a vital safety net for farmers, guaranteeing a minimum price for their crops, irrespective of market fluctuations. Established by the government, and recommended by the Commission for Agricultural Costs, and Prices (CACP), the MSP, guarantees a minimum price, for an array of crucial crops, spanning from staples, such as paddy, and wheat, to oilseeds, and commercial crops, such as cotton, and jute. The policy, is a cornerstone of India’s agricultural framework, covering 22 essential crops, and providing vital economic assurance, to the nation’s farmers.

Agricultural surpluses, and their impact on market

India’s agricultural sector, is often characterised, by its ability to produce surpluses, with output frequently surpassing domestic consumption needs. While a testament to the sector’s productivity, this abundance introduces its own challenges. Surplus production, especially of staple crops, like rice, and wheat, can drive market prices below the MSP, prompting the government to step in, and purchase the excess at the guaranteed price.

During the Kharif Marketing Season (KMS) 2022-23, when India’s rice production reached an impressive 130.8 million tonnes, the government procured 52 million tonnes, benefiting over 11 million farmers with MSP payments, amounting to ₹1,59,659.59 crore. While this procurement safeguarded farmer incomes, it also highlighted the financial burden of maintaining such a safety net.

The accumulation of surplus crops, also leads to practical issues, such as storage, and wastage. Large stockpiles can deteriorate, if not managed properly, resulting in significant losses. Moreover, the consistent focus on a few major crops, driven by the assurance of MSP, can discourage diversification, and sustainable farming practices. This trend exacerbates ecological problems, such as water scarcity, soil degradation, and pollution, from agricultural practices like stubble burning. One innovative approach to managing excess production, is redirecting these surpluses towards biofuel production.

India’s biofuel policy, and ethanol production goals

India, the second-largest producer of sugarcane, leverages its abundant biomass resources, to scale up ethanol production. The National Biofuel Policy, aims to increase the ethanol blend in petrol, to 20 per cent, by 2025-26. The policy’s focus, is not limited to ethanol derived from sugarcane. To ensure a diversified, and resilient biofuel supply chain, it encompasses a broad spectrum of feedstocks, including agricultural residues, and surplus foodgrains.

Flex-fuel vehicles (FFVs), capable of running on a blend of ethanol, and traditional fuel, represent a transformative advancement, for India’s transportation sector. These vehicles are designed to operate on any mixture of ethanol, and petrol, from pure petrol, up to 85 per cent ethanol (E85). This flexibility, provides both environmental benefits, and economic advantages, by enabling the use of domestically produced ethanol, thus reducing reliance on imported oil.

Aviation’s green shift: Biofuels taking flight

A significant, yet, often overlooked aspect of biofuel integration, is its application in the aviation sector. Modern aircraft engines, and refinery technologies, now support biofuel blends up to 20 per cent, marking a significant leap forward. The International Energy Agency (IEA), projects that global bio-jet fuel demand, could reach 15 billion litres by 2028, with India, well-placed to be a key player in this growth (Source). The government’s focus on biofuel technologies, extends beyond production, to include the necessary infrastructure, for efficient distribution, and utilisation.

Smart tech: Empowering the biofuel movement

As India advances its biofuel agenda, the role of advanced monitoring technologies, becomes increasingly critical, in ensuring efficient, and effective adoption. Companies like Intangles, are leveraging cutting-edge artificial intelligence (AI), and Digital Twin Technology, to provide real-time, precise insights, into how biofuels impact vehicle performance.

These systems, continuously monitor, and analyse, a comprehensive range of vehicle performance metrics. This includes tracking fuel and AdBlue consumption, the frequency, and quality of Diesel Particulate Filter (DPF) regeneration, and potential issues, such as multiple cylinder misfires, common rail depressurisation incidents, and concentration of impurities in the fuel, providing fleet managers, with a holistic view of vehicle health.

The future of biofuels in India’s energy landscape

India stands on the brink of a transformative shift in its energy landscape, propelled by the strategic adoption of biofuels. By capitalising on its agricultural strengths, and adopting renewable energy sources, India is addressing its current energy challenges, and setting a global benchmark for sustainable development. The nation’s ongoing advancement in its biofuel agenda, heralds profound, and far-reaching benefits for the economy, environment, and society.

The author is Co-founder and Analytics Head at Intangles