The ongoing energy crisis and the deterioration of the energy sector’s supply chain can be attributed to global uncertainty in the context of the looming Russia-Ukraine war. Climate change brought on by rising temperature also represents a serious threat to the ecosystem. All of these setbacks force nations to reconsider and explore alternatives on the energy market. And, biofuels started to gain momentum as a result.
India’s biofuel industry is thriving. Thanks to its high energy needs for consumption, the country is now a significant participant in the sector.
Yet, challenges, especially in supply chain, are inevitable considering the biofuel field’s newness. Despite this, the Indian government sets a goal to use biofuel as part of their envisioned strategy to reduce the nation’s carbon footprint by 30–35% by 2030. It may look ambitious, but not impossible!
Let’s Understand India’s Existing Biofuel Industry and its Supply Chain Challenges
India is currently one of the world’s top producers of biofuel. The nation ranks fifth in the world for biodiesel production and third for ethanol production. In India, the manufacturing of biofuel began with sugarcane but has now expanded to include other crops like wheat, corn, and rice.
India’s agrarian economy generates about 500 and 680 MT gross and 180 and 240 MT of surplus crop residue every year. Unfortunately, its potential to be used as feedstock for biofuel production got deprived due to stubble burning and ignorance among farmers. Hence, there is a lack in supply chain mechanism to collect and process such residues which in turn hinders the possibility of biofuel energy becoming a reality.
Although the government-backed economic and environmental regulations are supportive, procuring biomass still is a difficult task. The majority of the local, disorganized, and unqualified players who operate inefficiently and supply inexpertly processed biomass have a great impact on the quality and energy efficiency. Several important plants have experienced viability concerns as a result, leading to shut downs.
A worrying problem in the manufacture of biofuel is the shortage of feedstock. How so? The cost of planting, cultivating, harvesting, and transporting biomass, as well as the feedstock’s market price, are often what define a feedstock’s availability. The unpredictability of feedstock supply is also influenced by the seasonality, weather and disease conditions. Thus, the supply crunch exists substantially.
The pricing of varying sorts of biomass feedstock as well as technological improvements have an impact on the demand for biofuel. Assuringly, long-term predictions indicate that the need for transportation fuel due to shrinking petroleum oil sources will surge the demand in the future.
Transportation and logistics aspect is hardly an unavoidable component in a supply chain model. In this case, the locations of feedstocks are scattered due to factors such as climate, soil type, land use regulation, etc., which increases the cost of transportation for bulk biomass volume transfer.
Internal problems at every level of the biofuel sector are another example given the myriad difficulties it faces overall since its supply chain is less well-organized than that of fossil fuels.
How Buyofuel Aids in Supply Chain?
Given the numerous obstacles, the biofuel sector requires a solid foundation, solid distribution channels, and solid verification procedures to remove supply chain inefficiencies. Efficiency in the supply chain can have an impact on our country’s import and energy expenses, as well as the environment, rural jobs, farmer incomes, and rural jobs.