Aggressively pushing bio-fuels towards improvement in energy security, lowering greenhouse gases and better welfare for farmers, the Indian government has been since 2014. Policies and initiatives will push up biofuels like ethanol, biodiesel, and compressed biogas and eventually increase production and blending with petroleum products. It would complement India’s initiative to sustainable energy and fuel in a bigger way.
Major Government Initiatives to Prop Biofuels
During the last decade, the government had initiated major measures to promote biofuels, in particular ethanol. Some of the initiatives are as under:
1. EBP Programme (Ethanol Blended Petrol Program)
Ethanol Blended Petrol (EBP) Programme, under which ethanol is blended with petrol with an objective to reduce dependence on crude oil import. For this target, the government has taken the following steps:
Expansion of Feedstocks: It expanded the feedstock base to produce ethanol so that resultant ethanol can be produced from raw materials like sugarcane, grains, or biomass.
Administered Price Mechanism: To support the ethanol industry, an administered price mechanism was also put in place for the purchase of sugarcane-based ethanol under the EBP program.
GST Rate Cuts: The government also cut the GST on ethanol to only 5%, thus making it cheaper to blend in the EBP program.
Ethanol Interest Subvention Scheme (EISS): This scheme was introduced in between 2018 to 2022, so it provided interest subvention for both molasses-based and grains-based ethanol which guaranteed a steady supply of ethanol for blending.
Long-Term Offtake Agreements (LTOAs): Further consolidation of the supply chain, OMCs signed Long-Term Offtake Agreements with DEPs for securing steady procurement.
2. Pradhan Mantri JI-VAN Yojana
The Pradhan Mantri JI-VAN Yojana is a scheme launched in 2019 and was amended in 2024, with the aim of providing funding for establishing high-performance projects for biofuels in India. This primarily concerns the production of bioethanol through the use of lignocellulosic biomass and other renewable feedstocks. The scheme encourages a use of agricultural waste besides other non-food biomass for which there is a dual role in the management of efficiently waste and contributing to great reduction in environmental pollution. Therefore, this innovative approach takes India to its sustainable developmental goals, advancing the nation’s biofuel industry forward.
3. Promotion of Biodiesel Blending
Another type of biofuel which is heavily being promoted in India is biodiesel. The steps taken in the direction of enhancing blending of biodiesel with diesel are as follows:
Reduction of GST: The GST on the buying of biodiesel has been cut down from 12 percent to 5 percent, which would reduce the expense of the blending of the biodiesel with diesel.
Policy Reforms: National Policy on Biofuels 2018 had amended the mandate of 5 percent biodiesel blending in diesel to be increased gradually in steps.
Biodiesel Sales Directives: The government, hence, has developed directive procedures for selling biodiesel so that the process becomes an effective one for the respective companies and individuals interested to undertake the biodiesel blending process.
4. Compressed Biogas (CBG) Production
Other positive factors are the production and consumption of the Compressed Biogas (CBG) as a friendly environment alternative to natural gas. Among others, these include the following initiatives
- Financial Support: Provision of financial support by the government for CBG producers in purchasing aggregation machinery on biomass aggregation towards setting infrastructure for CBG projects.
- Pipeline Infrastructure: Sufficient emphasis has been put by the government on pipeline infrastructure. It will develop in such a way that when the CBG is produced, it shall be utilized in transport and in domestic usage through linking city gas distribution networks.
Great Success of Ethanol Blended Petrol Programme
The Ethanol Blended Petrol Programme has also achieved significant success; rather, in more detail in Ethanol Supply Year 2023-24. Important developments that occurred are :
- Farmer Payments: This scheme helped release about ₹23,100 crore to the farmers to ensure them a regular inflow of income and increased livelihood in rural areas.
- Savings in Forex: Due to the reduced import of crude oil, more than ₹28,400 crore were saved in foreign exchange under the scheme.
- Crude Oil Replaced: Over 43 lakh metric tonnes of crude oil substituted, thereby significantly boosting the energy security.
- Reduction in CO2: The plan resulted in decreasing 29 lakh metric tons of CO2, and that in itself was an acceptance by India of the fight against climate change.
Conclusion
The biofuel promotion by the government of India is in the right direction through a holistic approach of focused policy along with financial incentives and infrastructural support. This sets pathways to a cleaner, greener future for energy with the EBP programme, promotion of compressed biogas, and establishing advanced biofuels projects through initiatives like the Pradhan Mantri JI-VAN Yojana. Since this is reducing dependence on fossil fuel in India at the same time, it is being promoted for the agricultural sector and thus furthering the country’s environmental objectives also.
The Indian government has focused on renewable sources of energy, taking a huge leap towards the vision of an energy system that is not only greener but also self-reliant to the economy and the environment.
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