Overview of India's biofuel policies and production potential. Internal report written for the biofuels and the poor project (IFPRI)

Abstract

In this report we address the key economic, policy and environmental challenges that will influence the future growth potential of the biofuels sector in India. In the recent past, lot of emphasis has been given world over, on bioenergy as a possible long-term and sustainable alternative for fossil fuel-based energy. As with the case of many other developing countries, India too has started a biofuel programme on its own, primarily with a view to explore its potential as a cleaner source of energy and to partially offset the growing burden of crude oil imports. There is a larger consensus among the policy makers that the country should focus only on non-edible feedstocks for biofuel production so as not to compromise on food security. As a part of the strategy, Government of India launched Ethanol Blended Petrol Programme (EBPP) and Biodiesel Blending Programme (BDBP) in the year 2003. The feed stocks identified were molasses, a by-product in the manufacture of sugar from sugarcane, for production of ethanol and tree-borne non-edible oilseed crops like jatropha and pongamia for production of biodiesel. Specified, time-bound targets of 5 per cent and 10 per cent blending with petrol and diesel were also laid out catalyze the transition. For the sector to pick up momentum, the government has also announced various supportive measures like minimum purchase price for fuel ethanol and biodiesel, minimum support price for jatropha seeds etc.