Cabinet Approves National Policy on Biofuels

Biofuels program has been largely impacted due to non-availability of domestic feedstock for biofuel production

May 18, 2018


The central government’s cabinet, headed by prime minister Narendra Modi,  approved the National Policy on Biofuels – 2018. Biofuels in India are of strategic importance as they augur well with the government’s ongoing initiatives, such as Make in India, Swachh Bharat Abhiyan, and Skill Development.

Biofuels offer great opportunity to integrate with the ambitious goal of doubling farmers’ income, import reduction, employment generation, waste-to-wealth creation. The biofuels program in India has  largely been impacted due to the sustained non-availability of domestic feedstock for biofuel production, which needs to be addressed. The National Policy on Biofuels will help change the trend.


  • Biofuels have been categorized as “Basic Biofuels” – First Generation (1G) bioethanol and biodiesel,”Advanced Biofuels” – Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, and Third Generation (3G) biofuels, bio-CNG, to enable extension of appropriate financial and fiscal incentives under each category.
  • 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 can be utilized as raw materials.
  • Surplus food grains can be utilized to produce ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
  • With a thrust on advanced biofuels, the policy indicates a viability gap funding program for 2G ethanol bio refineries of ₹50 billion in six years in addition to additional tax incentives and higher purchase price as compared to 1G biofuels.
  • Setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil, and short gestation crops will be encouraged.

The government estimates one crore liter of E-10 saves ₹280 million of forex at current rates. The ethanol supply year 2017-18 is likely to see a supply of around 150 crore liters of ethanol, which will result in savings of over ₹40 billion of forex. One crore liter of E-10 saves around 20,000 ton of CO2 emissions. For the ethanol supply year 2017-18, CO2 emissions will be reduced to the tune of 30 lakh ton. By reducing crop burning and conversion of agricultural residues and wastes to biofuels, greenhouse gas emissions will be further reduced.

The addition of 2G bio refineries across the country will spur infrastructural investment in rural areas. One 100klpd 2G bio refinery can contribute 1,200 jobs in plant operations, village level entrepreneurship, and supply chain management.

To help tackle air pollution issues, the Ministry of Power has issued a policy that calls for using 5-10 percent of biomass pellets alongside coal for power generation in thermal power plants across the country in February.

A program to support promotion of biomass-based cogeneration in sugar mills and other industries was also announced this month by the Ministry of New and Renewable Energy’s biomass power division.

Image credit: By Steve Jurvetson (Flickr), via Wikimedia Commons