The India Cabinet, chaired by Prime Minister Narendra Modi, has approved national policy on biofuels – 2018.
Biofuels include basic biofuels such as first generation (1G) bioethanol, biodiesel and advanced biofuels or second generation (2G) ethanol, municipal solid waste (MSW) to drop-in fuels and third generation (3G) biofuels, bio-CNG etc. to enable extension of appropriate financial and fiscal incentives under each category.
The policy expands the scope of raw material for ethanol production by allowing use of sugarcane juice, sugar containing materials like sugar beet, sweet sorghum, starch containing materials like corn, cassava, damaged food grains like wheat, broken rice, rotten potatoes, unfit for human consumption for ethanol production.
The policy allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
The policy indicates a viability gap funding scheme for 2G ethanol bio refineries of Rs 5,000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels.
The policy encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil and short gestation crops.
Reduce import dependency
One crore lit of E10 saves Rs 28 crore of forex at current rates. The ethanol supply year 2017-18 is likely to see a supply of around 150 crore litres of ethanol which will result in savings of over Rs 4,000 crore of forex.
Cleaner Environment
One crore lit of E-10 saves around 20,000 ton of CO2 emissions. For the ethanol supply year 2017-18, there will be lesser emissions of CO2 to the tune of 30 lakh ton. By reducing crop burning & conversion of agricultural residues/wastes to biofuels there will be reduction in green house gas emissions.
Health benefits
Used cooking oil is a feedstock for biodiesel and its use for making biodiesel will prevent diversion of used cooking oil in the food industry.
MSW Management
India generates 62 MMT of municipal solid waste per year. Technologies can convert waste / plastic to drop in fuels. One ton of such waste has the potential to provide around 20 percent of drop in fuels.
Infrastructural Investment in Rural Areas
One 100klpd bio refinery will require around Rs 800 crore capital investment. Oil marketing companies are in the process of setting up twelve 2G bio refineries with an investment of around Rs 10,000 crore. Further addition of 2G bio refineries across the country will spur infrastructural investment in the rural areas.
Employment Generation
One 100klpd 2G bio refinery can contribute 1,200 jobs in plant operations, village level entrepreneurs and supply chain management.