Biofuel policy of India: Mission and Vision

biofuel

The biofuel policy of India aims at mainstreaming of biofuels and hence plays a prime role in the future energy and transportation sectors of India.

The policy is expected to enable development and promotion of the cultivation, production and use of biofuels to substitute petrol and diesel, while contributing to energy security and climate change mitigation.  It should create new employment opportunities leading to environmentally sustainable development, according to Ministry of New and Renewable Energy (MNRE).

biofuel_logoThe goal of India biofuel policy will be to ensure that biofuel is readily available in market at any time. An indicative target of 20 percent blending of biofuels, both bio-diesel and bio-ethanol, by 2017 is proposed. Blending levels prescribed in regard to bio-diesel are intended to be recommendatory in the near term. The blending level of bio-ethanol has already been made mandatory.

The government has adopted a number of measures to develop biofuel technology in India. The development focus for biofuels will be to utilize waste and forest lands for cultivation of plants bearing non-edible seeds for producing bio-diesel. In future it has to be ensured that non-food feedstocks are used for biofuel production.

Farmers and landless people will be encouraged for cultivating feedstock that provides bio-fuels. Corporates can also get involved in the process by undertaking farming through contract in consultation with Panchayats. These plantations will be backed up by a minimum support price.

Government has proposed a practical approach towards the evolution of biofuel generation. A level playing field is unavoidable for development and utilization of biofuels and hence financial and fiscal measures will be announced to support their promotion from time to time. Research works and demonstration will get adequate support to cover feedstock production and biofuel processing applications. Second generation biofuels will also be encouraged.

The financial infrastructure chalked out by government to crop up the biofuel policy in India is a welcome step in this regard. Plantation, setting up of processing units, storage and distribution will be declared as a priority sector for providing loans and sanctions from the bank. National Bank of Agriculture and Rural Development will provide re-financing loans.

Multi-lateral and bi-lateral funding will be sourced for development works. Carbon financing opportunities will be explored. Investments and joint ventures in biofuel sector will be encouraged. The government also plans to announce 100 percent foreign equity to attract Foreign Direct Investment in the renewable energy sector.

Financial incentives including grants and subsidies will be proposed for new and second generation feedstocks, technologies, and production units related to biofuel sector, MNRE officials said.

[email protected]