The Directorate-General of Foreign Trade has banned the import of bio-fuels being used to run vehicles. It, however, allowed imports of bio-fuels for ‘non-fuel’ purposes.

The notification will result in the import policy on bio-fuels being revised from ‘free’ to ‘restricted’ and for non-fuel purpose on actual user basis as per the National Bio-fuel Policy 2018. Effectively, the import of ethyl alcohol and other spirits, and biodiesel and its mixtures, will be allowed only for non-fuel purposes after the notification.

The President of Biodiesel Association of India, Sandeep Chaturvedi, told BusinessLine , “The notification will prevent the import of blended fuels, which were 70 per cent diesel and only 30 per cent biodiesel in to the country. The total duty on petrol and diesel imports is close to 50 per cent while the duty on bio fuel is 10 per cent. The arbitrage was an incentive to import products that were not as per BIS standards and to circumvent paying a higher duty by virtue of their classification as a bio-fuel.”

According to industry estimates, 30,000 to 40,000 tonne of non-BIS grade biofuel was imported in the country every month. Domestic ethanol manufacturers, the other dominant bio-fuel group said that the notification does not impact them in any way.

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