Can we meet biofuel blending of 20% by 2017?

Can India get to a 20% biofuel blend by 2017?


The World Economic Outlook (WEO) 2009 underscored that the transport
sector would have an incremental share in the future flows of GHG
emission, especially carbon dioxide. The WEO further emphasised that
the growth pattern of this sector, balanced or otherwise, will have a
serious implication for future energy consumption and hence the energy
security of developing nations like India. The lion's share of
transport's energy comes from petroleum—a scarce, exhaustible resource
concentrated in the hands of a few producer countries, essentially
making the sector more vulnerable to oil shocks. Recognising the dire
importance of alternate sources of energy for reducing transport's
dependence on petroleum in India, the government finally gave its nod
to the National Biofuels Policy (NBP) in December 2009 after a lot of
dillydallying.
Ethanol and biodiesel are the two biofuels primarily used in
transport, either in pure or blended form, along with petrol and
diesel. The NBP has set a target level of biofuel blending of 20%, to
be achieved by 2017. The blending level will be reviewed periodically,
depending on the availability of feedstock crops. At present, the
government mandates only 5% blending of ethanol with petrol. The NBP
has tried to allay the concerns about the food-fuel trade-off by
emphasising that in the Indian context bioethanol is produced from
molasses—a by-product of the sugar industry—and biodiesel is produced
from non-edible oilseeds grown in degraded lands. It also envisages a
minimum support price for oilseeds for biodiesel production, besides
allowing production of ethanol directly from sugarcane juice. The
policy also envisages a focus on innovation, research and development.
It provides encouragement for international cooperation for sharing
technologies and funding biofuel production, conversion and
utilisation. Moreover, activities related to biofuels will be declared
a priority sector for financial agencies and banks. States will be
asked to set up or designate agencies for development and promotion of
biofuels. These agencies will decide matters of land use for
plantation of non-edible oilseed plants and allot government wasteland
for such plantations.
The multi-pronged policy prescriptions for the development and
promotion of biofuels are in the right direction. However, given the
existing infrastructure and the institutional set-up, the achievement
of 20% blending in the next decade seems a remote possibility. First,
the ethanol industry is facing acute shortage of sugarcane molasses,
besides countering restrictive government policies and unsustainable
prices. Second, the involvement of multiple government agencies poses
a serious challenge in terms of coordination. The food and consumer
affairs ministry controls sugar and molasses production. The supply of
ethanol for industrial use is the concern of the ministry of industry
and chemicals. The petroleum and natural gas ministry is responsible
for the procurement, pricing and marketing of biofuels. The
agriculture ministry manages the R&D for production of sugar,
ethanol and biofuel feedstock crops. State governments control the
allotment of cane, the licensing of new sugar factories and
distilleries as well as their expansion. They also control the
movement of molasses that affects prices and supply for the ethanol
industry. Finally, the Centre is in charge of the ethanol blending
policy.
For the biodiesel industry, the foremost problem is the availability
of land for planting jatropha. The Planning Commission estimated in
2003 that in order to reach a blending target of 20%, the requirement
of land would be around 14 million hectares for jatropha cultivation.
While the land may exist on the ground, a part of it may be occupied
by landless and marginal farmers who need to be persuaded to grow only
jatropha. In the case of wasteland, local farmers may participate only
if they are assured adequate returns. Development of high-yielding
varieties of jatropha oilseeds may take a couple of years to be
available.
As envisaged in NBP, the timely announcement of remunerative prices
for oilseeds and instituting rebates and subsidies for bridging the
gap in the prices of biofuels and petroleum fuels needs to be taken up
on a priority basis. In order to facilitate faster development of
improved oil expellers and economical transesterification plants for
biofuel production, private sector participation is essential and
ought to be strongly encouraged. The author is former advisor at the
shipping, road transport and highways ministry of the Government of
India
.........by.......KL Thukral .....from the pages of FINANCIAL
EXPRESS...Fri, Apr 16 01:41 AM