India is one of the fastest growing economies and the third largest consumer of primary energy in the world after the US and China. India’s share in global energy consumption is estimated to double by 2050. Rising energy demand and high reliance on import, poses significant energy security challenges. It also leads to massive foreign currency outflow. Further, excessive use of fossil fuels leads to higher carbon emissions and associated health concerns. India’s fuel energy security will remain vulnerable until alternative fuels are developed, based on renewable feedstocks. The government of India targets reducing the country’s carbon footprint by 30- 35 percent by 2030. These targets will be achieved by adopting biofuels and renewables.

The government aims to provide 24x7 access to different forms of energy to end consumers, and bioenergy can play an instrumental role in this endeavour. The government has planned to electrify all the willing households in the country at 450 GW of renewable energy capacity by 2030.

India is endowed with abundant indigenous, non-polluting, and virtually inexhaustible renewable energy resources. According to the National Biofuel Policy 2018, the government of India has proposed a target of 20 percent blending of ethanol in petrol and 5 percent blending of biodiesel in diesel by 2025.

  • The above targets will be met through,
  • Growth in domestic biofuel production
  • Use of multiple feedstocks
  • Encouraging biofuel blending to supplement gasoline and diesel

There was shift in the government policy from the 2018 National Biofuel Policy, where the focus was on second- generation sources, to the 2021 NITI Aayog Roadmap for Ethanol Blending where the focus was back to the first- generation crops for biofuels. In the 2021 roadmap, the ethanol blending targets were also fast-tracked from 2030 to 2025. The new programme aims for 20 percent ethanol blending by 2025, and 5 percent biodiesel blending by 2025. While ethanol production is mainly derived from sugar crops and agricultural waste, biodiesel is driven from oil-based seeds and plants.

The Indian government recently announced that 11 states/union territories have achieved the target of 10 percent blending. According to the data these states are - Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Punjab, Telangana, Uttar Pradesh and Daman and Diu and Nagar Haveli. With an overall average of 9.45 percent ethanol blending with petrol, India is likely to reach a target of 10 percent ethanol blending by November 2022.

Existing and Proposed Advanced Biofuels Plants
Company Year Status Scale/Technology Annual Production Capacity (Million Liters)
Indian Glycols Kashipur 2016 Operational Demo/Cellulosic ethanol 0.75
Praj Biofuels 2017 Operational Demo/Cellulosic ethanol 1
Shell Bengaluru 2018 Operational Demo/Drop-in Fuels 0.6
Numaligarh Refinery Limited 2018 Planned Commercial/Cellu-losic ethanol 60
IOCL Panipat 2019 Planned Commercial/Cellu-losic ethanol 30
BPCL Bargarh 2018 Planned Commercial/Cellu-losic ethanol 30
HPCL Bhatindia 2017 Planned Commercial/Cellu-losic ethanol 30
IOPCL Panipat 2019 Planned Demo/Cellulosic ethanol 0.75
HOP Dehradun 2018 Operational Pilot/HEFA Biojet 0.01
IOCL Panipat 2019 Planned Commercial/3G ethanol 3.3
  • ETHANOL

Ethanol is derived either from feedstock such as sugarcane juice or molasses, considered first-generation sources, or through paddy straws, bagasse, forest residues, and others. The Ethanol Blending Programme (EBP) in India started in 2003, with the target of 5 percent blending of ethanol in petrol in selected districts which was later expanded to more states in 2006. Ethanol is used for blending with petrol due to its characteristics, which lead to benefits such as an increase in engine efficiency, better fuel quality due to its higher octane number, and other environmental benefits. Due to its complete combustion quality, ethanol leads to lesser emissions of carbon monoxide, and other Particulate Matter (PM).

India: Ethanol Scenario (Million Litres)
Calendar Year 2017 2018 2019 2020 2021(E)
Production 1,671 2,692 2,552 2,981 3,178
Imports 722 607 704 722 750
Exports 141 129 50 133 140
Consumption 2,230 3,020 3,360 3,300 4,120
No of Refineries 161 166 170 220 231+
Nameplate Capacity 2,215 2,300 3,000 3,500 4,200
Capacity Use (%) 75 117 85 85 76
Molasses 2019 Planned Demo/Cellulosic ethanol 0.75
(Feedstock use for fuel) 2,813 6,250 7,000 6,407 9,643
Fuel Ethanol 675 1,500 1,890 1,730 2,700
Gasoline 35,701 38,896 42,266 34,930 36,000
Blend Rate (%) 1.9 3.9 4.5 5.0 7.5
  • Trade

Despite increased domestic production, India remains a net ethanol importer. In 2020, Indian ethanol imports increased 3 percent to 722 Mn litres, valued at $300 Mn. For the eighth consecutive year, the United States remained the largest ethanol supplier to India at 96 percent of India’s total ethanol imports. Strong local demand for industrial and medical-grade ethanol continues to drive U.S. exports. Other suppliers to India in the period included Singapore, Sri Lanka, Pakistan, China and Brazil.

  • BIODIESEL

Since 2000, the share of biodiesel in total biofuel production has increased nearly ten-fold, from 3.3 percent in 2000 to nearly 32 percent in 2020, but bioethanol still accounts for two thirds of total production. The biodiesel market remains informal, dispersed with minimal domestic production. As many countries operate at a minimum of B5, and several including Brazil, Thailand, Argentina, Malaysia, Indonesia running at B10 or higher, India’s biodiesel market has tremendous growth potential. However, India must retain a viable strategy that builds a financially sustainable domestic industry that contains sufficient feedstock availability coupled with market access for imports.

  • Jatropha and Biodiesel

In the West, biodiesel is produced mostly from field crops like rapeseed and sunflower in Europe and soyabean in the US. Malaysia utilises palm oil while Nicaragua uses Jatropha. In India, there is a vast potential to produce biodiesel from Jatropha.

In December 2009, the Union government launched the National Biodiesel Mission (NBM) identifying Jatropha as the most suitable tree- borne oilseed for biodiesel production to help achieve a proposed biodiesel blend of 20 percent with conventional diesel by 2017. Biodiesel procurement started in 2014 and a pilot programme was started in August 2015 and was extended to six states. However, due to an acute shortage of Jatropha seeds, the government’s.

  • Current Scenario

In 2021, India produced 180 Mn litres of biodiesel, 10 percent below 2020 levels. India has more than six plants with an installed annual biodiesel production capacity (maximum possible) of one Bn litres. However, the operating capacity remains at 500-550 Mn litres, as majority of the plants remain closed due to the lockdown and high feedstock prices (imported palm oil, palm stearin and domestically available animal tallows) that have reduced their operating margins. The production capacity ranges from 11 Mn to 225 Mn litres for existing plants. India’s annual biodiesel consumption grew by 6 percent till 2019, however due to the pandemic demand dropped by almost 24 percent and remained flat at 140 Mn liters in 2021. Muted demand for Biodiesel is because its applications are limited to certain OMC retail outlets, Indian railways, certain state road transport corporations, road transport fleet companies and port authorities. India’s 2021 biodiesel exports were 50 Mn litres down by 26 percent, nearly all biodiesel is exported to Europe (primarily the Netherlands, Spain and Belgium).

  • MARINE BIOFUEL

Marine biofuel has the potential to become an environmentally friendly alternative fuel. It will be able to reduce CO2 by about 80-90 percent in the well-to-wake (from fuel generation to consumption) process without changing current engine specifications. Marine biofuel uses renewable organic resources such as biomass which are not utilized as foodstuff and feed crop. Biofuels are made from renewable organic resources like biomass.

Furthermore, for its production, waste and residues that need to be disposed of, can be reused. Some examples are used cooking oil collected from restaurants and residential households and animal fats. This will avoid the use of raw materials that compete with food or feed market.

In 2021, Kawasaki Kisen Kaisha Ltd. (K LINE) signed a deal for marine biofuel supply with global integrated energy company BP and have conducted a trial use of marine biofuel on car carrier ‘POLARIS HIGHWAY’. In the K LINE Environmental Vision 2050 - Blue Seas for the Future, they have set the 2030 interim target of improving CO2 emission efficiency by 50 percent over 2008, surpassing the IMO target of 40 percent improvement.

India: Biodiesel Scenario (Million Litres)
Calendar Year 2017 2018 2019 2020 2021
Production 170 185 230 200 180
Imports 7.1 25.2 7.0 1 1
Exports 7.6 23.1 54.0 68 50
Consumption 1665 180 185 140 140
No of Biorefineries 6 6 6 6 6
Nameplate Capacity 600 650 670 580 520
Capacity Use (%) 28.3 28.5 34.3 34.5 34.6
(Feedstock use for fuel) (1,000 MT)
Non- Edible Industrial 100 110 140 145 90
Used Cooking Oil 55 60 55 50 55
Animal Fats/Tallows 6 8 10 9 9
Total 161 178 215 204 154
Market Penetration (Million liters)
Biodiesel, on – road use 73 83 100 50 50
Diesel, on -road use 56.715 59,220 60,145 44,400 52,927
Blend Rate (%) 0.13 0.14 0.17 0.11 0.09
Diesel, total use 94,524 98,700 100,241 74,000 75,000
Source: Trade Data Monitor (TDM) and Industry Sources
Proposed Biodiesel Plants
Applicants Offered Capacity (TPD) Plant Location State Status of Application
Adnoc Chem Pvt.Ltd. 30 Indore Madhya Pradesh LOI Issued
Pyarelal Enterprises 10 Kanpur nagar Uttar Pradesh LOI Issued
Pyarelal Enterprises 10 Allahabad Uttar Pradesh LOI Issued
Pyarelal Enterprises 10 Varanasi Uttar Pradesh LOI Issued
Endri Poly Plast 9 Farehpur Uttar Pradesh LOI Issued
BioD Energy India Pvt.Ltd. 11 Barwad Haryana Evaluation Completed
Greenhance Soplutions Pvt.Ltd. 13.2 Bhubaneshwar Odisha TCQ Pending
Bengal Bioiesel 50 24 South Parganas West Bengal TCQ Pending
Excel Technologies 12.22 Ghaziabad Uttar Pradesh Evaluation Completed
Excel Technologies 4.52 Meerur Uttar Pradesh Evaluation Completed
Sunshine Industries 11 Ahmedabad Gujarat Evaluation Completed
R N Fuels Pvt.Ltd. 10 Faridabad Haryana Evaluation Completed
RNS Automation 3.57 North Delhi Delhi TCQ Pending
RNS Automation 2.18 Muzaffarnagar Uttar Pradesh TCQ Pending
RNS Automation 1.82 Saharanpur Uttar Pradesh TCQ Pending
RNS Automation 2.23 Dehradun Utrakhand TCQ Pending
Vajrakaya Real Estate Pvt.Ltd. 20 Azamgarh Uttar Pradesh TCQ Pending
Vajrakaya Real Estate Pvt.Ltd. 20 Ghazipur Uttar Pradesh TCQ Pending
Vajrakaya Real Estate Pvt.Ltd. 20 Jaunpur Uttar Pradesh TCQ Pending
TOTAL 682.03
  • Challenges

While the government is confident of achieving 20 percent blending, there are some challenges along the way. For instance,

  • The transition from 10 percent ethanol blending to 20 percent would lead to other investments, and additional burdens on several sectors, ranging from its effect on farms to automobile users.
  • Existing vehicles are compatible with 5 percent-10 percent ethanol-blended petrol, so an increase in blending beyond that would mean replacing the existing stock or investing in retrofitting and calibrations.
  • In 2021, out of total ethanol produced in the country, 91 percent came from sugarcane alone. The sugar industry, claims that sugarcane and paddy (the feedstock source of ethanol) use 70 percent of India’s irrigation water, leading to a lack of water availability for other crops.