National Policy on Bio-fuels, 2018

Reading time: 8-10 minutes.

When the whole world is grappling with need of efficient measures to tackle novel coronavirus crisis, the pandemic has been effectively contained in India with a slew of prompt actions and nationwide lockdown. But, the Indian economic growth has been disproportionately affected and requires constructive policy solutions to put it back on progressive track.

Biofuels have attracted global attention in recent decades and it becomes imperative for India to keep in pace with developments in field of biofuels to revive the economy. India has been highly dependent upon the non-renewable sources and imported crude oil requirements to fulfill domestic consumption requirements. In 2018, the National Bio Fuels Policy was introduced by the Ministry of New and Renewable Energy to promote the use of biofuels in India. This paper intends to provide insights upon features of the policy, the rationale behind its implementation and relevant legal provisions. It also provides information on recent developments and way forward for efficient implementation of well-intentioned policy.

Salient features of the policy  

This policy specifically divides biofuels into three varied categories – “basic biofuels” or first generation biodiesels and “Advanced Biofuels” as Second generation bioethanol or Municipal waste and third generation biofuels as bio-CNG to enable appropriate incentives under different spheres. It also expands scope of raw material needed for ethanol production as it has allowed the use of sugarcane juice, Sugar Beet, corn, cassava, broken rice, wheat, rotten potatoes which can be efficiently used for ethanol production. The roles and responsibilities of all the concerned ministries and departments are laid down in the policy document to effectively synergize collective efforts.

Moreover, during surplus production phase, the farmers are not provided appropriate prices for their produce which also contribute to surging farmer suicides in India. Taking this into account, this policy allows surplus food grains to be used for blending of ethanol with petrol. This policy also entails viability gap funding scheme of Rs 5000 crore for 6 years to 2G Ethanol bio refineries to encourage use of advanced biofuels in India. It also encourages initiatives for developing supply chain mechanisms for biofuels production from oilseeds, used cooking oil.

Rationale behind the policy implementation

Initially introduced in 2009, the latest edition of the policy was approved by the Union cabinet in 2018. This policy is aimed at achieving the anticipated target of 20% blending of bio-fuels with fossil-fuels by 2030. It is envisioned at accomplishing the following objectives which would have remarkable impact upon India’s developing economy.

  • Reducing Imports dependency – India is highly reliant upon the imported crude oil for fulfilling the requirements for domestic consumption. Also, the fluctuating oil prices in the global market have considerable impact upon developing countries like India. This policy will help in eliminating costs of oil imports and will help in building self-reliance for India.
  • Food security Vs Fuel generation – It is often argued that biofuel production often creates conflicts related to food crops and fuel-generating crops. But the new policy has expanded the scope of raw materials and it will bear immense befits to the agriculture sector as waste crops could also be efficiently used.
  • Municipal Solid Waste (MSW) management – It is estimated that about 78 MMT of waste is generated all over the India every year. The policy contemplates that a considerable amount of waste can be converted into drop-in-fuels with the use of efficient technologies. The waste management also provides more economical and cleaner methods of energy generation for its optimal use.
  • Additional income to the farmers – Contemplating the new policy, farmers will be encouraged to grow different varieties of biomass and oil seeds using inter-cropping or second crop methods. Under the 2G technologies pursuant to the policy, the agricultural waste which is generally burnt by the farmers can be efficiently converted to ethanol and in the long run, it will develop as income generating market for farmers. The 2G ethanol as major biofuel option will help in creating demand and value for crops residue like cotton stalk, rice straw, castor stalk etc.
  • Employment generation and rural infrastructural development – The bio refineries visualized under the policy will surge employment opportunities in the backward areas of the country with the optimal use of unexplored resources. This will lead to increase in the rural infrastructural investment which would prove as a boon for India’s rural development.
  • Environmental protection with health benefits – The biofuels are considered as cleaner fuels than fossils-based fuels which eliminate the quantum of CO2 emissions in India. The cleaner fuels also provide extended health benefits to majority of people.

Developments around it

In the current scenario, about 95% pf transportation fuel requirements are met by the fossil fuels and larger quantity of crude oil imported from different countries, the pressing need for efficient bio-fuels can’t be put aside. Biofuels are considered as the most promising alternatives for escalating energy requirements in India with simultaneous decarburization of the environment. The strategic policy augurs well with other government initiatives like Swachh Bharat Abhiyan, Make in India, Skill development mission etc. and offers opportunities for implementing Waste-to-Wealth policies.

Recently in August 2019, various state run Oil marketing companies like Bharat Petroleum Indian Oil Corporation and Hindustan Petroleum had launched programme for procuring biodiesel made from cooking oil across the 100 cities of the country. Under this initiative, these three major OMCs would invite expression of interest from various private entities for setting up of plants for production of biodiesel. Dharmendra Pradhan, Petroleum and Natural Gas Minister also introduced Repurposive Used Cooking Oil (RUCL) sticker and mobile application for efficient collection of used cooking oil to ensure that it does not revert back to ecosystem. The government had also launched the National Biodiesel Mission (NBM) in 2009 which identified Jatropa as most suitable tree borne oilseed used for biodiesel production. But Jatropa occupies only 0.5 million hectares of wastelands across the country and despite incentives by the various state governments, the Jatropa plantations have not been actively expanded. It is need of the hour that farmers should be provided subsidized incentives to promote biomass generation and use of non-edible farm products for ethanol production.

Way forward

Good intentions do not bring good laws as the lack of effective implementation of policies defeats the real purpose behind the envisioned laws. Presently, the unavailability of sufficient feedstock and ineffective R&D in developing high-yielding Jatropa seeds have been proved as major stumbling blocks for the implementation of biodiesel program in India. Moreover, lack of collective land holdings, negligible commercial production of biodiesel, ownership conflicts with government or community wastelands have deeply hampered the investment prospects by various private and public sector companies. The government should introduce collectivization of landholdings and subsidized programs to encourage awareness regarding bio-fuel production in India.

To achieve the targeted 20% blending, the ethanol production can’t be increased much as the sugarcane yield in the country has been stagnantly low. The direct production of ethanol through sugarcane juice also affects the sugar production in the market. Keeping these constraints in mind, the government should initiate constructive steps to incentivize bio-fuel market in India.


The National Bio-fuels policy has been introduced to harness various environmental, economical and social benefits for development of bio-fuels in the country. But the success of policy largely depends upon the readiness of stakeholders and efficient government machinery to tackle challenges. It is the need of the hour that efficient technologies needs to be introduced with viable alternatives in the long run.+

Author: Prince Chandak from National Law School of India University, Nagarbhavi, Bangalore.

Editor: Silky Mittal, Junior Editor, Lexlife India.

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