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Cabinet okays bio-fuel policy to ensure cleaner environment

By TIOL News Service

NEW DELHI, MAY 16, 2018: THE Union Cabinet today gave the thumbs up to the National Policy on Biofuels – 2018. Such policy has several salient features. The policy categorises biofuels as Basic Biofuels, such as First Generation (1G) bioethanol & biodiesel and Advanced Biofuels - Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, Third Generation (3G) biofuels, bio-CNG. This would enable extension of appropriate financial and fiscal incentives under each category. It also 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.

Besides, the policy also allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee. This is to check the risk of farmers not getting appropriate price for their produce during the surplus production phase. Also, with a thrust on Advanced Biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol Bio refineries of Rs 5000 crores 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 & short gestation crops. Lastly, the policy also lists the roles and responsibilites of various ministries & departments w.r.t. biofuels.

Moreover, such policy is slated to have several benefits. The first benefit is reduced dependency on imports. 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 would result in savings of over Rs 4000 crores of forex. Another benefit is a cleaner environment. One crore lit of E-10 saves around 20,000 ton of CO 2 emissions. For the ethanol supply year 2017-18, there would be lesser emissions of CO 2 to the tune of 30 lakh ton. By reducing crop burning & conversion of agricultural residues/wastes to biofuels there would be further reduction in Green House Gas emissions. The use of bio-fuels also has several health benefits. Prolonged reuse of Cooking Oil for preparing food, particularly in deep-frying is a potential health hazard and can lead to many diseases. Used Cooking Oil is a potential feedstock for biodiesel and its use for making biodiesel would prevent diversion of used cooking oil in the food industry.

Other benefits include MSW Management. It is estimated that, annually 62 MMT of Municipal Solid Waste gets generated in India. There are technologies available which can convert waste, plastic, MSW to drop in fuels. One ton of such waste has the potential to provide around 20% of drop in fuels. Such policy would also result in investment in infrastructure of rural areas. It is estimated that, one 100klpd bio refinery would require around Rs 800 crores capital investment. At present 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 would spur infrastructural investment in the rural areas.

Further, the policy on bio-fuels would lead to employment generation. One 100klpd 2G bio refinery can contribute 1200 jobs in Plant Operations, Village Level Entrepreneurs and Supply Chain Management. This would also help boost the income of farmers. By adopting 2G technologies, agricultural residues & waste which otherwise are burnt by the farmers can be converted to ethanol and can fetch a price for these waste if a market is developed for the same. Also, farmers are at a risk of not getting appropriate price for their produce during the surplus production phase. Thus conversion of surplus grains and agricultural biomass can help in price stabilization.

In order to promote biofuels in the country, a National Policy on Biofuels was made by Ministry of New and Renewable Energy during the year 2009. Globally, biofuels have caught the attention in last decade and it is imperative to keep up with the pace of developments in the field of biofuels. Biofuels in India are of strategic importance as they 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, Waste to Wealth Creation. Biofuels programme in India has been largely impacted due to the sustained and quantum non-availability of domestic feedstock for biofuel production which needs to be addressed.