Cabinet approves National Policy on Biofuels

New Delhi: In a major move on sustainable development, the Union Cabinet on Wednesday approved National Policy on Biofuels – 2018. The National Policy on Biofuels was made by Ministry of New and Renewable Energy during the year 2009.

“The Policy categorises biofuels as "Basic Biofuels" viz. First Generation (1G) bioethanol & biodiesel and "Advanced Biofuels" - Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, Third Generation (3G) biofuels, bio-CNG etc. to enable extension of appropriate financial and fiscal incentives under each category,” a government release said.

The Policy expands the scope of raw material for ethanol production by allowing use of Sugarcane Juice, Sugar containing materials like Sugar Beet, Sweet Sorghum, Starch containing materials like Corn, Cassava, Damaged food grains like wheat, broken rice, Rotten Potatoes, unfit for human consumption for ethanol production.

With a thrust on Advanced Biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol Bio refineries of Rs 5000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels.

The Policy encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, Used Cooking Oil, short gestation crops.

The policy is aimed at reducing import dependency along with cleaner environment.

The ethanol supply year 2017-18 is likely to see a supply of around 150 crore litres of ethanol which will result in savings of over Rs.4000 crore of forex. For the ethanol supply year 2017-18, there will be lesser emissions of CO2 to the tune of 30 lakh ton, government said.

It is estimated that, one 100klpd bio refinery will require around Rs.800 crore capital investment. At present Oil Marketing Companies are in the process of setting up twelve 2G bio refineries with an investment of around Rs 10,000 crore. Further addition of 2G bio refineries across the Country will spur infrastructural investment in the rural areas, the release said.