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Cabinet gives nod to National Policy on Biofuels 2018

17 May 2018 Evaluate

In a major move on sustainable development, the Union Cabinet, headed by Prime Minister Narendra Modi, has approved National Policy on Biofuels 2018, which is expected to not only reduce pollution but also help farmers in case of surplus production. The Biofuels policy allows doping of ethanol produced from damaged foodgrains, rotten potatoes, corn and sugar beet with petrol to cut oil imports by Rs 4,000 crore this year alone. Till now only ethanol produced from sugarcane was allowed to be mixed in petrol.

The policy categorises biofuels into different groups such as first generation (1G), second generation (2G) and third generation (3G) fuels. The first generation category of biofuels includes bioethanol and biodiesel. The second generation comprises ethanol and municipal solid waste. The third generation includes bio-compressed natural gas (CNG). 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 and broken rice, and rotten potatoes.

Considering that farmers are at a risk of not getting appropriate price for their produce, the policy allows use of surplus food grains for production of ethanol for blending with petrol, with the approval of National Biofuel Coordination Committee. Under the policy, 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 will be provided. Moreover, it also encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil and short gestation crops.


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