National Policy on Biofuels 2018

The Union Cabinet has approved National Policy on Biofuels 2018 that seeks to not only help farmers dispose of their surplus stock in an economic manner but also reduce India’s oil-import dependence.

Background:
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 it 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.

Classification of Biofuels:
First generation biofuels are also called conventional biofuels. They are made from things like sugar, starch, or vegetable oil. Note that these are all food products. Any biofuel made from a feedstock that can also be consumed as a human food is considered a first generation biofuel.
Second generation biofuels are produced from sustainable feedstock. The sustainability of a feedstock is defined by its availability, its impact on greenhouse gas emissions, its impact on land use, and by its potential to threaten the food supply. No second generation biofuel is also a food crop, though certain food products can become second generation fuels when they are no longer useful for consumption. Second generation biofuels are often called “advanced biofuels.”
Third generation biofuels are biofuel derived from algae. These biofuels are given their own separate class because of their unique production mechanism and their potential to mitigate most of the drawbacks of 1st and 2nd generation biofuels.
Fourth generation biofuels are derived from specially engineered plants or biomass that may have higher energy yields or lower barriers to cellulosic breakdown or are able to be grown on non-agricultural land or bodies of water.

Salient Features of Policy:
Categorization: The Policy categorises biofuels as “Basic Biofuels” viz. 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 etc. to enable extension of appropriate financial and fiscal incentives under each category.
Scope of raw materials: The Policy 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.
Protection to farmers: Farmers are at a risk of not getting appropriate price for their produce during the surplus production phase. Taking this into account, the Policy allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
Viability gap funding: With a thrust on Advanced Biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol Bio refineries of Rs.5000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels.
Boost to biodiesel production: The Policy encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, Used Cooking Oil, short gestation crops.

Expected benefits:
Reduced Import dependency: The policy aims at reducing import dependency.
Cleaner environment: By reducing crop burning & conversion of agricultural residues/wastes to biofuels there will be further reduction in Green House Gas emissions.
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 will prevent diversion of used cooking oil in the food industry.
Employment Generation: One 100klpd 2G bio refinery can contribute 1200 jobs in Plant Operations, Village Level Entrepreneurs and Supply Chain Management.
Additional Income to 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.
 

By: Dr. Vivek Rana