India’s fossil fuel subsidies have declined by 59% since 2014—an accomplishment that many other large economies have struggled to achieve. However, the 2022 energy crisis, combined with India’s growing energy demand, has led the country to bolster all forms of energy supplies and adopt a mixed approach to fossil fuels and clean energy. This shift highlights the significant impact of biofuel subsidies on the Indian market.
Initiatives by the Department of Biotechnology, Ministry of Science and Technology
The Department of Biotechnology has made substantial progress in advancing biofuel technologies and initiatives:
1. 2G Ethanol Development: The department successfully developed second-generation (2G) Ethanol technology and transferred it to Oil Marketing Companies (OMCs).
2. Indigenous Cellulolytic Enzyme: Developed for the production of biofuels, enhancing the efficiency of biofuel production.
3. Micro Algae-Based Sewage Treatment: Demonstrated innovative technology for treating sewage using micro algae.
4. International Collaboration: Strengthened international partnerships to accelerate innovation in sustainable biofuels through programs like Mission Innovation, Biofuture Platform, and implementing International Biofuel Alliance (IBA) in G20.
5. Training and Encouragement: Providing fellowships and awards to young researchers in the field of bioenergy to foster innovation and research.
Key Government Schemes and Policies
Several government schemes and policies have been implemented to promote biofuels, demonstrating the impact of subsidies and support in the biofuel sector:
1) Pradhan Mantri JI-VAN Yojana (2019)
The scheme aims to create an ecosystem for setting up commercial projects and to boost research and development in the 2G Ethanol sector. It supports the establishment of biofuel plants and encourages innovation in biofuel technologies.
The scheme aims to create an ecosystem for setting up commercial projects and to boost research and development in the 2G Ethanol sector. It supports the establishment of biofuel plants and encourages innovation in biofuel technologies.
2) Ethanol Blending Policy
The 2018 Biofuel Policy set the objective of reaching 20% ethanol-blending and 5% biodiesel-blending by 2030. However, the Centre has accelerated its ethanol blending target, planning to achieve 20% ethanol blending in petrol by 2025-26. This initiative promotes the production of biofuels under the Make in India program by units located in Special Economic Zones (SEZ) and Export Oriented Units (EoUs).
The 2018 Biofuel Policy set the objective of reaching 20% ethanol-blending and 5% biodiesel-blending by 2030. However, the Centre has accelerated its ethanol blending target, planning to achieve 20% ethanol blending in petrol by 2025-26. This initiative promotes the production of biofuels under the Make in India program by units located in Special Economic Zones (SEZ) and Export Oriented Units (EoUs).
3) GOBAR (Galvanizing Organic Bio-Agro Resources) DHAN Scheme (2018)
This scheme focuses on managing and converting cattle dung and solid waste in farms into useful compost, biogas, and bio-CNG. It aims to keep villages clean and increase the income of rural households, supporting sustainable agriculture and energy production.
This scheme focuses on managing and converting cattle dung and solid waste in farms into useful compost, biogas, and bio-CNG. It aims to keep villages clean and increase the income of rural households, supporting sustainable agriculture and energy production.
4) Repurpose Used Cooking Oil (RUCO)
Launched by the Food Safety and Standards Authority of India (FSSAI), this initiative aims to create an ecosystem for collecting and converting used cooking oil into biodiesel. It addresses waste management and promotes the production of biofuels from alternative feedstocks.
Launched by the Food Safety and Standards Authority of India (FSSAI), this initiative aims to create an ecosystem for collecting and converting used cooking oil into biodiesel. It addresses waste management and promotes the production of biofuels from alternative feedstocks.
5) Central Financial Assistance (CFA)
The CFA program supports the setup of biomass briquette/pellet manufacturing plants and biomass (non-bagasse) based cogeneration projects. It provides financial assistance to project developers and implementing/inspection agencies. Key CFA patterns include:
The CFA program supports the setup of biomass briquette/pellet manufacturing plants and biomass (non-bagasse) based cogeneration projects. It provides financial assistance to project developers and implementing/inspection agencies. Key CFA patterns include:
- Biogas: Up to Rs. 5.0 Cr/project.
- BioCNG/Enriched Biogas/Compressed Bio Gas: Up to Rs. 10.0 Cr/project.
- Power Generation from Biogas: Up to Rs. 5.0 Cr/project.
- Power from Bio & Agro-Industrial Waste: Up to Rs. 5.0 Cr/project.
- Biomass Gasifier for Electricity/Thermal Applications: Variable financial assistance based on application.
- Briquette/Pellet Manufacturing Plants: Up to Rs. 45 Lakhs per plant.
- Biomass (Non-bagasse) Cogeneration Projects: Up to Rs. 5 Crores per project.
Benefits and Future Directions
The promotion of biofuels in transportation and other sectors helps reduce India’s crude oil import bill and supports environmental sustainability. Alternative feedstocks like agricultural waste and recycled cooking oil contribute to more environmentally friendly biofuels. To enhance the ethanol mix, there is a need to increase the non-cane contribution by incentivizing both public and private players to set up second-generation ethanol facilities.
Biofuel subsidies and government initiatives have significantly impacted the Indian market, promoting sustainable energy practices and reducing dependence on fossil fuels. By continuing to support biofuel production and innovation, India can further its goals of energy security and environmental sustainability.
