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Viability of biofuels in India

Student name: Ms Preeta Singh
Guide: Dr Kaushik Ranjan Bandyopadhyay and Dr Ritu Mathur
Year of completion: 2016
Host Organisation: TERI University

Abstract: In the current scenario where volatile fuel prices, energy security and climate change have become a major concern for countries across the globe, especially oil-importing and developing countries, the demand for alternative renewable energy fuels is increasing. One such alternative is Biofuels. This study aims to draw crucial insights into the feasibility of biofuels (bioethanol and biodiesel) in the Indian scenario. The government has actively sought out a biofuel policy. In 2009, the National Biofuel Policy was introduced by the Ministry of New and Renewable Energy (MNRE). The policy specifies that biofuels can only be generated using non-food feedstock and these plantations will be grown only on wastelands to avoid a possible food versus fuel security issue. Furthermore, the aim of this policy is to meet the energy demands of the vast rural population by stimulating rural development and employment opportunities by production of biofuels.

As promising as it sounds, there are still some questions and caveats that need addressing: (i) Cost competitiveness is a major issue since, as long as the price of biofuels is greater than conventional fuel, consumers will not buy it, (ii) cultivation of feedstock requires land and water among many other inputs, use of which has its own set of problems (wasteland classification, food-fuel debate, water-energy nexus, etc.), (iii) no specific guidelines to use of alternative feedstocks in production, (iv) dis-harmony between centre-state in terms of tax policy on biofuels and inputs, (v) alternative uses of ethanol in other industries with much better returns, (vi) rather than aiding rural development, it seems to be causing rural distress and finally (vii) biofuel policy has not fuelled any technological innovations in India. Thus, the policy in isolation will not be able to achieve the desired results and it needs a multi-disciplinary approach for sound regulations and implementation. In this scenario biofuels in isolation cannot be judged properly. Other alternatives such as CNG which has become a prominent fuel should also be taken under consideration.