Recently, India has advanced the target of 20 percent ethanol blending in petrol by Ethanol Supply Year 2025-26 (December to November). The Ethanol Blended Petrol program aims to;
- Protect the economic interests of farmers
- Reduce import bill and increase self-reliance
- Lowered CO2 emissions, cleaner environment
- Encouraging Ease of Doing Business through Technology
Bio-fuels might seem like a viable solution towards reducing India's reliance on imports to meet its crude requirements and to reduce Greenhouse Gas ('GHG') emissions. Is it? – there may not be an easy answer. It would be relevant to examine the present legal and policy landscape concerning bio-fuels in India. This article aims to decode India's Biofuels Policy and examine the regulatory roadmap, and identify the issues in the context of the larger picture.
What are biofuels
As defined by the Food and Agriculture Organization of the United Nations, "fuel produced directly or indirectly from biomass is named biofuel".1
The Organisation for Economic Co-operation and Development defines 'biofuel' as "liquid, solid, or gaseous fuel produced by conversion of biomass such as bioethanol from sugar cane or corn, charcoal or woodchips, and biogas from anaerobic decomposition of wastes."2 In parallel, generally, the term biofuels is used to exclusively refer to liquid or gaseous biofuels for the transport sector.3
'Biomass' is a renewable resource as it source of energy can be traced to the sun. However, it is also limited as it requires finite resources such as land, water, and nutrients for production. There is also a growing concern about the competitive uses of biomass and its limited availability, which requires an accurate analysis of the biomass demand concerning the existing potential for the development of a sustainable bioeconomy4.
A brief introduction to 'biofuels' is given below to place the biofuel policy of India in context.
The National Policy on Biofuels5 defines 'biofuels' as "fuels produced from renewable resources and used in place of or in blend with, diesel, petrol or other fossil fuels for transport, stationary, portable and other applications;" ";
'Biomass resources' are defined as "the biodegradable fraction of products, wastes and residues from agriculture, including vegetal and animal substances, from forestry and related industries, as well as the biodegradable fraction of waste, including industrial and municipal waste of biological origin."6
We may subdivide biofuels into four categories based on the feedstock used in production
- First-generation biofuels: Biofuels said to be first-generation are produced from edible oils such as rapeseed, soybeans, sunflower, safflower, palm oil, coconut, and peanut. If we utilize these feedstocks on a large scale, it would have a significant impact on the global food supply. Thus, these biofuels are not considered to be sustainable or green. First-generation biofuels represent most of the biofuels currently in use.
- Second-generation biofuels: Biofuels produced from a variety of feedstock, ranging from lignocellulosic feedstocks to municipal solid wastes, are known as second-generation biofuels. In this sense, because biofuels these biofuels are "greener" as they are made from sustainable feedstocks and can be reproduced. The term sustainable is defined mainly in the context of the availability of the source of the feedstock, the impact of its use on GHG emissions, and its ultimate effect on biodiversity.
- Third-generation biofuels: Third-generation biofuel refers to biofuel mainly made from algae. Previously, algae were clubbed with second-generation biofuels. Now, they have been moved into their own category due to their relatively high yields and low resource inputs compared to other feedstocks.
- Fourth-generation biofuels: Production of these biofuels requires implementing process systems that can utilize genetically engineered microorganisms and biomass. These genetically engineered microbial and biomass components are said to help enhance the overall yield of biofuels.
Based on the chemical nature of biofuels, they can be classified into various categories, including biodiesel, bioethanol, biomethane, biohydrogen, and so forth.
Indigenous production of biofuels will undoubtedly aid in reducing India's dependence on imports of crude and also reduce GHG emissions. Of course, biomass cannot realistically fulfill India's future energy demands. However, the versatility of biomass with the diverse portfolio of conversion options makes it possible to meet the demand for secondary energy carriers.
To avoid CO2 emissions, replacing natural gas is, at present, a highly selective way of using biomass. Replacing natural gas with biomass for power generation results in levels of CO2 mitigation similar to second-generation biofuels. Using biomass for transport fuels has the potential to become more attractive from a CO2 mitigation perspective because of their lower GHG emissions.
Policy and legal framework
In India, the law-making power can be understood broadly as below: in relation to matters falling under List I of the 7th Schedule of the Constitution of India, the Centre has the power to make laws List I.
The State has the power to make laws with respect to matters falling in List II of the 7th Schedule of the Constitution of India, and both the Centre and State have the power to make laws with respect to matters falling in List III of the 7th Schedule of the Constitution of India.
Subject matters that may be relevant for the production and utilization of 'bio-fuels' are identified below:
Entry 41. Trade and commerce with foreign countries; import and export across customs frontiers; definition of customs frontiers.
Entry 50. Establishment of standards of weight and measure
Entry 53. Regulation and development of oilfields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable.
Entry 83. Duties of customs including export duties.
Entry 8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.
Entry 14. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases.
Entry 25. Gas and gas-works.
Entry 33. Trade and commerce in, and the production, supply and distribution of,—
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(b) foodstuffs, including edible oilseeds and oils;
(c) cattle fodder, including oilcakes and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute.
Entry 33A. Weights and measures except establishment of standards.
Entry 34. Price control.
Entry 36. Factories.
Entry 38. Electricity.
For obvious reasons, India does not have a single legislation which addresses issues in respect of biofuels. There are several legislations (at the central and state levels), schemes and programs which affect the production and utilization of biofuels.
- Foreign Trade [Foreign Trade (Development & Regulation) Act, 1992, Rules and Orders made thereunder]
The import and export of biofuels has been restricted by the Government. The import of biofuels is 'Restricted' under three Harmonized System (HS) codes of 22072000, 27102000 and 3826000. However,
(i) Export of biofuel is permitted under license only for non-fuel purposes.
(ii) export of Biofuels from Special Economic Zones (SEZ)/Export Oriented Units (EoUs) is allowed for fuel as well as non-fuel purposes without any restriction when produced using only imported feedstock.
- Weights and measures and standards thereof [Legal Metrology Act, 2009 and Rules thereunder read with state amendments]
- There is a need for a robust metrology infrastructure with
respect to biofuels in order to accomplish the following:
- Develop measurable criteria for the assessment of the quality of biofuels
- Set up systems to trace the origin of the differentiation of biofuels
- Provide a reference for the physical and chemical characteristics of biofuels
- Environment [Water (Prevention and Control of Pollution) Act,
19746; Air (Prevention and Control of Pollution) Act, 1981,
Environment (Protection) Act, 1986]The Ministry of Environment,
Forest and Climate Change ('MoEF&CC') /State
Environment Impact Assessment Authority ('SEIAA') issues
Environmental Clearance under the Environment Impact Assessment
notification issued under the Environment (Protection) Act, 1986.
- Thereafter, an application for Environmental Clearance is submitted to MoEF&CC/SEIAA, which is deliberated in the Expert Appraisal Committee. The MoEF&CC/SEIAA grants an Environment Clearance after recommendations of the Expert Appraisal Committee.
- The categorization of biofuel into 'Category A' or 'Category B' for the purposes of Environment Clearance is decided after accounting for spatial extent of potential impacts on human health and natural and man-made resources.7 Thermal Power Plants up to 25 MW based on biomass or non-hazardous Municipal Solid Waste using auxiliary fuel such as coal, lignite or petroleum products up to 15% are exempt from the requirement of Environmental Clearance.8 The Central Pollution Control Board has categorized Compressed Biogas ('CBG')/Bio- Compressed Natural Gas ('CNG') plants based on their pollution index9 under the following heads:
- a. CBG plants based on MSW – Orange
- b. CBG plants based on process waste (industrial/process liquid effluent and solid waste like press mud, organic sludge, molasses, etc.) – Orange
- c. CBG plants based on crop residue (paddy straw/wheat straw/corn sweet sorghum/napier grass, etc.) – Green
- d. CBG plants based on animal waste (dairy farms, poultry farms, and other animal waste) – Green
- e. CBG plants (irrespective of the type of feed) producing Fermented Organic Manure and Liquid Fermented Organic Manure as by products – White
- Household bio-digesters/gobar gas plants based on biodegradable wastes have been categorized as 'white'.
- Renewable energy [Electricity Act, 2003 and Regulations thereunder Central Electricity Regulatory Commission (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) Regulations, 2022, Energy Conservation Act, 2001]
Under the said 2022 Regulations, in order to be elegible for being issued a renewable energy certificate (issued by the designated agency i.e., National Load Dispatch Centre), a renewable energy generating station and captive generating station based on renewable energy sources, shall meet the specified conditions. The issuance of these certificates takes place in multiples of the assigned certificate multiplier for 1 MegaWatt hour of electricity generated and injected or deemed to be injected into the grid.
The certificate multiplier for Municipal Solid Waste ('MSW') and non-fossil fuel based cogeneration technology is 2, and for Biomass and Biofuel technology is 2.5.
- Foreign Direct Investment
Terms of sub-section 2A of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (FEMA) read with Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules) regulate Foreign Investment in India.
Since foreign direct investment in the Plantation Sector is permitted only for tea, coffee, rubber, cardamom, palm oil tree and olive oil tree, it can be stated that foreign investment for the plantation of feedstock (for ethanol) is not permitted.
In the absence of any stated restriction or prohibition, it can be stated that foreign direct investment in the biofuel sector is permitted up to 100% on the automatic route, subject to applicable laws/regulations, security and other conditionalities.
In order to complement the green initiatives being undertaken by the Government, the Bureau of Indian Standards, to aid stakeholders (such as manufacturers and traders) dealing with biofuel and related matters, has developed the following nine Indian standards in respect of biofuels:
- IS 15464 : 2022 Anhydrous Ethanol for Use as Blending Component in Motor Gasoline – Specification
- IS 15607 : 2022 Biodiesel B-100 – Fatty Acid Methyl Esters FAME – Specification
- IS 16087 : 2016 Biogas (Biomethane) – Specification (First Revision)
- IS 16531 : 2022 Biodiesel Diesel Fuel Blend B8 to B20 Specification
- IS 16629 : 2017 Hydrous ethanol for use in ED95 automotive fuel – Specification
- IS 16634 : 2017 E85 fuel (Blend Of Anhydrous Ethanol And Gasoline) – Specification
- IS 17021 : 2018 E 20 fuel – Admixture of anhydrous ethanol and gasoline – As fuel for spark ignited engine powered vehicles – Specification
- IS 17081 : 2019 Aviation turbine fuel (Kerosene Type, Jet A – 1) containing synthesized hydrocarbons – Specification
- IS 17821 : 2022 Ethanol as a Fuel for Use in Positive Ignition Engine Powered Vehicles – Specification
- Government Policy Statements include;
- National Biodiesel Mission 2003:
- This Mission initiated the journey of National Biodiesel Mission (NBM) in the country and was implemented in two phases: from 2003 to 2007 and from 2007 to 2012. Taking a cue from this new biodiesel scheme, many state governments began to devise their own biodiesel policies.
- The first phase aimed to convert 4 lakh hectares of wasteland stated to be conducive to Jatropa farming. In this phase, the Government wanted to demonstrate the benefits of a comprehensive biodiesel industry; hence, the focus was on proper management of biodiesel missions from Jatropa plantations to Jatropa oil blending with diesel and marketing of Jatropa-blended diesel across the country.
- The second phase was aimed at making a self-sufficient biodiesel industry backed by capital from private sectors and international donors. It is understood that this Mission was not a success.
- Bio-Diesel Purchase Policy 2005: At the beginning of the 21st century, most oil from tree-borne non-edible oilseeds such as Jatropha and Pongamia was being used to light lamps and power pump sets. With the potential of these tree-borne non-edible oil seeds being used as a feedstock for producing bio-diesel, the Government oriented the policy towards providing additional and supplementary income to the rural economy. Under this policy, the oil marketing companies were mandated to purchase bio-diesel (B100) through purchase centres.
- National Policy on Biofuels 2018:
- The Ministry of Petroleum and Natural Gas notified the National Policy on Biofuels – 2018 on June 4, 2018. This Policy superseded the National Policy on Biofuels, promulgated by the Ministry of New & Renewable Energy, in 2009. The said Policy was amended in 2022 to advance the introduction of twenty percent Ethanol Blended Petrol throughout the country from 01.04.2023 by:
"(a) reinforcing ongoing ethanol/biodiesel supplies through increasing domestic production
(b) setting up Second Generation (2G) bio refineries
(c) development of new feedstock for biofuels
(d) development of new technologies for conversion to biofuels
(e) creating suitable environment for biofuels
and its integration with the main fuels."10
- Sustainable Alternative Towards Affordable Transportation (SATAT):
- The SATAT was launched on 1st October 2018. SATAT aims to establish an ecosystem for producing Compressed Bio Gas (CBG) from various waste/ biomass sources in the country.
- Integrated BioRefinery Model
The Government has envisioned the concept of an integrated Bio-Refinery model or Bio-park to encompass the integration of 2G Ethanol plant, Grain-based 1G Ethanol Plant, CBG Plant, Production of Chemicals, and Cogeneration Plant.
- Global Biofuel Alliance 2023:
- The Global Biofuel Alliance ('GBA') was launched on September 9, 2023 on the sidelines of the G20 Summit in New Delhi with India as the G20 chair. Nineteen countries and twelve international organizations have already agreed to join the alliance. GBA, through the participation of a broad spectrum of stakeholders, intends to expedite the global uptake of biofuels by intensifying the use of sustainable biofuels, facilitating technology advancements, shaping robust standard setting and certification. The GBA will also act as an expert hub and as a central repository of knowledge. GBA is aimed at serving as a catalytic platform, which would foster global collaboration for the widespread adoption and advancement of biofuels.
GBA will facilitate the transfer of technologies and the mobilization of international climate funds. It presents an opportunity for India to increase its share in biofuel production, leading to greater energy independence for India. Furthermore, it will expedite the progress of India's ongoing biofuels initiatives like PM-JIVAN Yojna, SATAT, and the GOBARdhan scheme, which, in turn, is expected to increase income for farmers, the generation of employment opportunities, and the overall development of India's ecosystem.
- It would be useful to appreciate the biofuel policy with a multi-dimensional approach, and the parameters borne out of such a multi-dimensional approach may be crystallized in a transparent manner. This will serve as a reference point to address the issues of energy security, sustainability and climate change. There are multiple alternatives to mitigate GHG emissions and reduce dependence on crude imports, and biofuels only form one small component of such alternatives. Reliance on biofuels alone might lead to unintended consequences, such as unsustainable land use change and competition with food production.
- Depending on the desired policy goals and objectives, there might be more cost-efficient options that may be explored. Such options include increased energy efficiency and conservation, other renewable energy sources and reduced emissions due to land degradation and deforestation.
- Even though the effects of higher biofuel production on factors such as GHG emissions, water resources, land use and biodiversity may differ significantly from one region to another based on climate, land availability and agricultural practices, there is an urgent and compelling need to have in place standardized methods and practices to assess the life-cycle impacts, sustainability criteria and GHG emissions involved in biofuels, feedstocks and production practices. Such a study can form the basis of course correction, if required, by all stakeholders to align policies and regulations for producing biofuels with environmental, energy security, and sustainability goals.
- While the Government has advanced the target of 20% blending of
ethanol in petrol by the year 2025-26, it is noteworthy that the
report on 'Roadmap for Ethanol Blending in India 2020-25'
published by Niti Aayog in June 2021 has identified certain
challenges that are to be addressed for effective implementation of
the ethanol blending program. Challenges include;
- need to expand feedstock options even further to ensure feedstock availability on a sustainable basis.
- Transportation of ethanol increases logistical costs and contributes to GHG emissions as well.
- Dispensing units and storage infrastructural facilities must be more suitable for E20 fuel.
- In the automobile sector, there is a need to optimize engines to be compliant with higher ethanol blends as well.
A singular approach may not address India's goal to achieve 'atmanirbharta'. A multi-dimensional analysis of the impact of the biofuel policy and implementation status would help us evolve parameters for measuring India's steps to fulfil the Sustainable Development Goals.
1. FAO, 2004, Unified Bioenergy Terminology (UBET), Available at: ftp://ftp.fao.org/docrep/fao/007/j4504e/j4504e00.pdf.
2. OECD, 2002
3. OECD, 2002. OECD Agricultural Outlook: 20022007—Annex II: Glossary of Terms. OECD Publications, Paris. Available at: http://www.oecd.org/about/publishing/ 35205971.pdf.
4. Scarlat et al., 2015
5. 3.1(i), National Biofuels Policy, 2018.
6. Article 2(e), DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, April 23, 2009.
7. Paragraph 4(i) of the Notification, S.O.1533(E) dated 14.09.2016 of the Ministry of Environment and Forests, (Published in the Gazette of India, Extraordinary, Part-II, and Section 3, Sub-section (ii)).
8. Ministry of Environment, Forest and Climate Change Notification, New Delhi, dated 14th July, 2022 bearing no. S.O. 3194(E).
9. Based on the pollution index, SPCBs/PCCs may issue consent to industries for:
Red- 5 years, with restriction on establishment in eco-sensitive and protected areas.
Orange – 10 years
Green – 15 years
White – No necessity of consent.
10. Clause 2.2, National Policy on Biofuels – 2018. (as amended on June 15, 2022).
Originally published by InfEneTy
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