Prime Minister announced an ambitious plan to triple the production of biofuels in the next four years and reduce the excessive dependence on imports to meet our energy needs.
What is the objective?
- The new biofuel strategy is aimed at raising ethanol blending of petrol to 10 percent by 2022 and 20 percent by 2030 from the present national average of around two percent only.
- Biofuel blending of diesel which is almost negligible now is proposed to be stepped up to give percent by 2030.
- All this is estimated to save around 120 billion rupees of import bill for India. The intended objective is to create a 1 trillion rupees biofuel economy.
Plan to meet the objectives –
- Oil marketing companies are already in the process of setting up 12 biofuel refineries with an investment of 100 billion rupees.
- These units would deploy second-generation technology, which can make biofuels from even solid municipal and industrial trash and problematic agricultural wastes such as paddy straw and crop stubbles that are generally torched in the fields itself, causing pollution.
- The government is offering subsidised credit, viability gap funding and relatively higher purchase prices for the ethanol produced by these plants.
- The goods and services tax has been trimmed from 18 per cent to 5 per cent on ethanol and from 18 per cent to 12 per cent on biodiesel.
- The proposal to use various kinds of farm produce and not just agricultural waste can potentially distort the pattern of agricultural output in favour of energy crops which is a trend that even land-rich countries are finding hard to sustain.
- Another contentious part of the new game plan is the liberties granted to ethanol manufacturers to choose their feedstock from a generously expanded basket of crops and other farm materials, many of which are part of the human or animal food chains. These include sugarcane juice; sugar containing crops such as beetroot and sweet sorghum; starchy crops such as maize and cassava; and damaged food grains such as wheat, broken rice and potato.
- For biodiesel, the new plan envisages utilisation of non-edible oilseeds and short-gestation oil-bearing crops, disregarding the fact that most of their oils find gainful use in the pharmaceutical, cosmetic and other industries.
- The sugar industry has already been permitted to produce ethanol directly from cane juice, completely bypassing sugar production. Government has fixed a higher procurement price for the ethanol drawn directly from cane juice than for that manufactured from the byproducts like molasses.
- This is an open invitation to the sugar mills to mop up more sugarcane and, worse still, to the farmers to produce more of this water-guzzling crop even at the cost of the other crops that can be grown on these prime irrigated lands.
Government should make judicious alterations in an otherwise well-intentioned biofuel plan so as to ensure a sustainable development of biofuels market in India with least economic and environmental costs.
Source – Business Standard
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