The official gazette of the National Policy on Biofuels, 2018, of the Ministry of New and Renewable Energy (MNRE), discusses a five-point strategy to control the country’s dependence on imports in oil and gas sector. Besides domestic production, putting energy efficiency norms in place and improvement in refinery processes, the policy enforces the adoption of biofuels and renewables.
The policy Biofuels-2018 approved by the Government envisages an indicative target of 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel by 2030.
Biodiesel alone has a huge potential given 70% of transportation runs on diesel currently. To be noted, air pollution due to diesel combustion exhaust is a major cause of critical illnesses like cancer, heart and lung damage, and mental disorder. So mass adoption of biodiesel can save the country from these implications and can reduce the economic burden due to health covers and insurance plans.
Shiva Vig, Group CEO, BioD Energy (India) Pvt Ltd. says, “Biodiesel can be used in standard diesel engines and is compatible with almost all regular engines. Compared to fossil-fuel alternatives, it helps to reduce greenhouse gas (GHG) pollution and support economic development and job creation, particularly in rural areas. Also, it comes at a lesser cost.”
Are we ready to produce enough biodiesel?
The awareness about biodiesel is rising, but its adoption at a larger level will take time.
The current scenario is witnessing demand but meeting supply is a challenge due to the unavailability of feedstock for conversion into biofuel and, bigger and efficient biofuel plants in the country.
Expectations: Union Budget 2020-21
While sharing his expectations and recommendations for the upcoming Union Budget 2020-21, on behalf of the oil and energy sector, Vig says, “Looking at the grim situation of smog and hazardous air pollution around Diwali festival in northern India and other parts of the country, identifying and implementing new and sustainable fuels is need of the hour. Usage of biodiesel not only in automobiles, residential generators, but also in industrial use, typically brings a reduction in greenhouse gases from 75-90 per cent everywhere relative to fossil diesel. Thus, dedicated funds must be allocated for developing the infrastructure for such biodiesel producing units.
Reflecting his optimism, Vig says, “The industry is optimistic that the 2020-21 Union Budget will put ample focus on the biodiesel industry aligned with the government’s mission to provide cleaner and greener fuel. We are hopeful that there will be enough fund allocation for establishing an effective framework to meet the demand of biodiesel in the country.”
Vig on behalf of the oil and energy sector requests the government to consider the following demands:
- To reach the aspired target of reducing foreign exchange by 12,000 crores over the next three to four years, there are a few changes and innovations that the government must include in the upcoming budget 2020-21.
- There should be a strong push on the investments in the biodiesel industry which have witnessed escalation and show immense potential. Thus, dedicated funds must be allocated for developing the infrastructure for such units.
- There should be zero duty on the import of the machinery for putting up a biodiesel manufacturing plant.
- Animal fat should be brought in the export bank for domestic as well as international biodiesel production so that India could take advantage of it for energy security
- To encourage domestic manufacturing, easy access to loans and priority sector lending must also be given. In the long run, it will also promote ‘Make in India’.
- A five-year tax holiday window should also be given for the proven innovators in the biofuel sector.
- All products and services related to biodiesel should come under the 5% GST category.