National Policy on Biofuels


1.1 India is one of the fastest growing economies in the world. The Development Objectives focus on economic growth, equity and human well being. Energy is a critical input for socio-economic development. The energy strategy of a country aims at efficiency and security and to provide access which being environment friendly and achievement of an optimum mix of primary resources for energy generation. Fossil fuels will continue to play a dominant role in the energy scenario in our country in the next few decades. However, conventional or fossil fuel resources are limited, non-renewable, polluting and, therefore, need to be used prudently. On the other hand, renewable energy resources are indigenous, non-polluting and virtually inexhaustible. India is endowed with abundant renewable energy resources. Therefore, their use should be encouraged in every possible way.

1.2 The crude oil price has been fluctuating in the world market and has increased significantly in the recent past, reaching a level of more than $ 140 per barrel. Such unforeseen escalation of crude oil prices is severely straining various economies the world over, particularly those of the developing countries. Petro-based oil meets about 95% of the requirement for transportation fuels, and the demand has been steadily rising. Provisional estimates have indicated crude oil consumption in 2007-08 at about 156 million tonnes. The domestic crude oil is able to meet only about 23% of the demand, while the rest is met from imported crude.

1.3 India''s energy security would remain vulnerable until alternative fuels to substitute/supplement petro-based fuels are developed based on indigenously produced renewable feedstocks. In biofuels, the country has a ray of hope in providing energy security. Biofuels are environment friendly fuels and their utilization would address global concerns about containment of carbon emissions. The transportation sector has been identified as a major polluting sector. Use of biofuels have, therefore, become compelling in view of the tightening automotive vehicle emission standards to curb air pollution.

1.4 Biofuels are derived from renewable bio-mass resources and, therefore, provide a strategic advantage to promote sustainable development and to supplement conventional energy sources in meeting the rapidly increasing requirements for transportation fuels associated with high economic growth, as well as in meeting the energy needs of India''s vast rural population. Biofuels can increasingly satisfy these energy needs in an environmentally benign and cost- effective manner while reducing dependence on import of fossil fuels and thereby providing a higher degree of National Energy Security.

1.5 The growth of biofuels around the globe is spurred largely by energy security and environmental concerns and a wide range of market mechanisms, incentives and subsidies have been put in place to facilitate their growth. Developing countries, apart from these considerations, also view biofuels as a potential means to stimulate rural development and create employment opportunities. The Indian approach to biofuels, in particular, is somewhat different to the current international approaches which could lead to conflict with food security. It is based solely on non-food feedstocks to be raised on degraded or wastelands that are not suited to agriculture, thus avoiding a possible conflict of fuel vs. food security.

1.6 In the context of the International perspectives and National imperatives, it is the endeavour of this Policy to facilitate and bring about optimal development and utilization of indigenous biomass feedstocks for production of biofuels. The Policy also envisages development of the next generation of more efficient biofuel conversion technologies based on new feedstocks. The Policy sets out the Vision, medium term Goals, strategy and approach to biofuel development, and proposes a framework of technological, financial and institutional interventions and enabling mechanisms.


2.1 The Policy aims at mainstreaming of biofuels and, therefore, envisions a central role for it in the energy and transportation sectors of the country in coming decades. The Policy will bring about accelerated development and promotion of the cultivation, production and use of biofuels to increasingly substitute petrol and diesel for transport and be used in stationary and other applications, while contributing to energy security, climate change mitigation, apart from creating new employment opportunities and leading to environmentally sustainable development.

2.2 The Goal of the Policy is to ensure that a minimum level of biofuels become readily available in the market to meet the demand at any given time. An indicative target of 20% blending of biofuels, both for bio-diesel and bio-ethanol, by 2017 is proposed. Blending levels prescribed in regard to bio-diesel are intended to be recommendatory in the near term. The blending level of bio-

ethanol has already been made mandatory, effective from October, 2008, and will continue to be mandatory leading upto the indicative target.


3.1 The following definitions of biofuels shall apply for the purpose of this Policy:

i. ''biofuels'' are liquid or gaseous fuels produced from biomass resources and used in place of, or in addition to, diesel, petrol or other fossil fuels for transport, stationary, portable and other applications;

ii. ''biomass'' resources are the biodegradable fraction of products, wastes and residues from agriculture, forestry and related industries as well as the biodegradable fraction of industrial and municipal wastes.

3.2 The scope of the Policy encompasses bio-ethanol, bio-diesel and other biofuels, as listed below:-

i. ''bio-ethanol'': ethanol produced from biomass such as sugar containing materials, like sugar cane, sugar beet, sweet sorghum, etc.; starch containing materials such as corn, cassava, algae etc.; and, cellulosic materials such as bagasse, wood waste, agricultural and forestry residues etc.;

ii. ''biodiesel'': a methyl or ethyl ester of fatty acids produced from vegetable

oils, both edible and non-edible, or animal fat of diesel quality; and, iii. other biofuels: biomethanol, biosynthetic fuels etc.


4.1 The focus for development of biofuels in India will be to utilize waste and degraded forest and non-forest lands only for cultivation...

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