How India can give a boost to biofuels

The transport sector in India contributes about 10 percent of total greenhouse gas (GHG) emissions. Among them, road transport contributes about 87 percent of the total emissions. Clearly, achieving net zero emissions by 2070 means road transport needs a major overhaul. While transportation based on hydrogen fuel cells or EV may be dominant in the long term, biofuels are expected to play an important role in the near future. With this in mind, Transport Minister Nitin Gadkari announced on November 11, 2021, that flex-fuel engines will become mandatory in the coming days.

The advantage of flex-fuel engines is that they can be run on 100 percent biofuel, as opposed to a standard engine which causes a problem if the blending ratio exceeds 20 percent. Flex fuel, or flex fuel, is essentially a biofuel made from a blend of gasoline, methanol, or ethanol where the blend ratio may turn from zero to 100 percent.

The goal is to gradually shift to fuels that are import alternatives, cost-effective, domestic and pollution-free. The entire automotive sector in Brazil runs on flex-fuel engines. Blending varies depending on the availability of biofuel feedstock and the global crude oil price. As a result, the global price of crude oil is no longer putting pressure on them.

While the idea of ​​pushing for a flex-fuel automatic engine is new, the stark fact is that we don’t have the raw materials even for the 20 percent bending ratio. Currently, the supply is sufficient to meet about 8.5 percent of the blend ratio. The government has decided to intensify the domestic manufacture of biofuels by 10 percent each year and has introduced a target of blending 20 percent ethanol into gasoline until 2025 from 2030. But there is no way to achieve the target by 2025.

Moreover, India is increasingly using its large stocks of low quality food grains (due to improper storage) for biofuel production. Earlier, they were used as animal feed. But the trend now is to use it to produce ethanol. Certainly, this is not a sound proposition as these food grains were purchased at higher prices.

Biodiesel production includes four distinct phases – (1) the cultivation of the oilseed-bearing plants from which the seeds will be harvested; (ii) Seed trade which involves buying seeds from individual farmers and selling them to processing plants; (3) Extracting the oil from the seeds and converting the extracted oil into biofuels through the process of trans-esterification; and (iv) blend this biofuel with gasoline/diesel and dispose of it to individual consumers through retail outlets.

Originally, the Indian Biofuel Program identified a few oilseeds whose cultivation was encouraged to meet the feedstock supply. However, this policy is now being ignored in the new biofuel policy. Increasingly, the focus is now on the adoption of the second generation biofuel process, ie the production of biofuels from used vegetable oils, and crop residues.

Most modern plants being built now are able to use crop residues, used vegetable oils or oilseeds to produce biofuels.

While the policy appears sound on paper, very little has been achieved. Only two bio-refineries with a capacity of 500,000 liters/day of ethanol from spoiled and surplus food grains have been established by Indian Oil Corporation among 12 new bio-refineries to be built in 11 states of the country.

The best choice

For a long-term solution to burning thatch in northern India, particularly Punjab, Haryana and Western UP, the idea is to build a bio-refinery so that crop residues can be used to produce ethanol. However, no factory has yet been set up as it may not be economically viable given the current tax/incentive plans.

Collecting crop residues during harvest time is a costly proposition unless farmers are given sufficient incentive to bring crop residues to the proposed plant after harvest. Also, collecting a constant supply of other raw materials during non-harvest times is also an issue of concern to entrepreneurs. In a way, the incentive scheme does not tilt in favor of biofuel production.

Most of the countries that have successfully promoted biofuels have relied on some crops as feedstock. Most of them have also genetically engineered the crops so that the yield is maximized. Take the case of Brazil. Most ethanol is produced directly from sugar cane for efficient extraction.

On the other hand, India uses by-products (molasses) from sugar production to produce ethanol. This is not an efficient, low-return process. Of course, sugar producers get better prices for their by-products.

It is better for India to identify the feedstock, and do genetic engineering on plants if it is planning to use biofuels in a big way in the transportation sector. Using used oil and crop residues for biofuels can at best supplement biofuel production, but the goal India needs can never be achieved if it wants to replicate the Brazilian experience with biofuels.

There is no doubt that supporting the feedstock producers as well as the biofuel production value chain for 3-5 years is essential if the sector is to take off. Will the government pay the bullet in the next budget?

The writer is an NCAER professor. Opinions are personal

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