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Indian cabinet approves 2018 National Policy on Biofuels

In India, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved National Policy on Biofuels – 2018 to succeed the existing policy from 2009. The new approved Policy categorizes biofuels into three to enable the extension of appropriate financial and fiscal incentives under each category and expands the feedstock scope for ethanol production

In order to promote biofuels in the country, a National Policy on Biofuels was made by the Ministry of New and Renewable Energy during 2009. According to the Ministry of Petroleum & Natural Gas (MoP&NG), it is “imperative” to keep up with the pace of developments in the field as biofuels in India are of “strategic importance”.

Biofuels “augers well” with the ongoing initiatives of the government such as Make in India, Swachh Bharat Abhiyan, Skill Development and offers great opportunity to integrate with the ambitious targets of doubling of farmers income, import reduction, employment generation, and “Waste to Wealth” creation.

However, MoP&NG points out that the biofuels programme in India has been largely impacted due to the “sustained and quantum non-availability of domestic feedstock” for biofuel production which needed to be addressed.

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved National Policy on Biofuels – 2018 which includes:

  • The Policy categorises biofuels as “Basic Biofuels” viz. First Generation (1G) bioethanol and biodiesel and “Advanced Biofuels” – Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, Third Generation (3G) biofuels, bio-CNG amongst others to enable the extension of appropriate financial and fiscal incentives under each category.
  • The Policy expands the scope of raw material for ethanol production by allowing the use of sugarcane juice, other sugar-containing feedstock like sugar beet, sweet sorghum, starch-containing feedstock such corn and cassava, as well as damaged food unfit for human consumption such as wheat, broken rice and rotten potatoes.
  • Farmers are at a risk of not getting appropriate price for their produce during the surplus production phase. Taking this into account, the Policy allows the use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
  • With a thrust on advanced biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol biorefineries of Rs.5000 crore (Rs. 50 billion) 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 (UCO), short gestation crops.
  • Roles and responsibilities of all the concerned Ministries/Departments with respect to biofuels have been captured in the Policy document to synergise efforts.

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