Total ethanol supply for ethanol blending program during current fiscal year (2011/12) is anticipated to be just sufficient to meet the 2-percent blending target.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number: IN2081
Total ethanol supply for ethanol blending program during current fiscal year (2011/12) is anticipated to
be just sufficient to meet the 2-percent blending target while production of biodiesel from jatropha in
India is commercially insignificant at present. This stands in contrast to the National Biofuel Policy,
which aims to replace 20 percent of petroleum fuel consumption with biofuels by end of 12th Five-Year
Total ethanol supply for ethanol blending program during current fiscal year (2011/12) is anticipated to
be just sufficient to meet the 2-percent blending target while production of biodiesel from jatropha in
India is commercially insignificant at present. This stands in contrast to the National Biofuel Policy
approved by the Government of India on December 24, 2009. The policy encourages use of renewable
energy resources as alternate fuel to supplement fossil motor fuels and had proposed a target of
replacing 20 percent of fossil motor fuel consumption with biofuels (bioethanol and biodiesel) by the
end of the 12th Five-Year Plan (2017).
With an outlook for strong sugarcane and sugar production for the third consecutive  year , the Indian
government may renew its focus and strongly implement the mandatory 5-percent ethanol content in
petrol, provided there is a consensus among stakeholders on the purchase price of ethanol for the
Ethanol Blending Program (EBP). The government‟s current target of a 5-percent blend of ethanol in
gasoline has been partially successful in years of surplus sugar production and below target when sugar
production declined. Presently, the contracted ethanol supply for current fiscal would be just sufficient
to meet 2 percent blending.
Production of biodiesel in India is commercially insignificant and will not soon be commercially
deployed as a economically viable biofuel. The government‟s plan to blend diesel fuel with 20 percent
content of biodiesel by fiscal year (April-March) 2011/12 is improbable mostly due to unavailability of
high-yielding, drought-tolerant jatropha seeds to produce biodiesel.
However, generation of grid-quality power from biomass continues to play an important role as fuel for
sugar and textile mills, and has significant potential in breweries, fertilizer plants, the pulp and paper
industry, solvent extraction units, rice mills, and petrochemical plants. The total biomass power
potential in India is estimated at 31,000 MW; of which surplus power generation through bagasse is
 Marketing Year Oct-Sep 2012/13
India is the world‟s fifth largest primary energy consumer and fourth largest petroleum consumer after
United States, China and Japan. Despite the recent global economic slowdown, India‟s economy is
expected to continue to grow at 6 to 8 percent per year in the near term. With an outlook for moderate
to strong economic growth : and a rising population, growing infrastructural and socio-economic
development will stimulate an increase in energy consumption across all major sectors of the Indian
In the recent past, starting in Indian fiscal year (IFY) 2009/10, imports of gasoline and petroleum
products has outgrown total domestic consumption by more than 14 percent. While India‟s domestic
energy base is substantial, the country continues to rely on imports for a considerable amount of its
energy use  , consequently escalating India‟s oil import expenditure to over $135 billion in IFY
2011/12, up 22 percent over the previous year (figure 1). Concurrently, petroleum consumption (Figure
2) in India has also grown in tandem to 148 million tons.
Figure 1. India: Import of Crude Oil and Value of Petroleum
Source: Petroleum Planning and Analysis Cell, Government of India (GOI)
It is estimated that the proportionate consumption of petroleum products in India is as follows
Transport (Petrol, Diesel, CNG, Aviation Fuel) : 51 percent
Industry (Petrol, Diesel, Fuel Oil, Naphtha, Natural Gas): 14 percent
Commercial and Others: 13 percent
Domestic (LPG and Kerosene): 18 percent
Agriculture (Diesel): 4 percent
Thus, in terms of end usage, energy demand across the transport sector is greatest. Roads, being one of
the dominant infrastructures for transport, carry an estimated 85 to 90 percent of the country‟s passenger
traffic and 65 percent of its freight. Traffic on roads is growing at a rate of 7 to 10 percent per year;
while the vehicle growth is of the order of 8 to 10 percent per year.
Easy availability, adaptability to individual needs and cost saving are some of the factors which favor
road transport. Total registered motor vehicles in India in fiscal year 2005/06 numbered approximately
90 million  and are forecast to exceed 140 million by the end of fiscal 2011/12. Economic growth,
increasing urbanization, a rise in consumer spending levels and improved road infrastructure have
stimulated new vehicle registrations (particularly four-wheel as opposed to two-wheel vehicles). As
vehicle ownership expands, petroleum demand in the transport sector is expected to grow in tandem.
Diesel and gasoline account for more than 95 percent of the requirement for transportation fuel, and
demand is expected to grow at 6 to 8 percent over the coming years.
Figure 2. India: Consumption of Petroleum Products
Source: Petroleum Planning and Analysis Cell, Government of India (GOI)
Given that India is the fourth largest global contributor to carbon emissions, the GOI transport policy
has targeted EURO-III and IV vehicle emission norms  for vehicles, which in turn would require
adoption of clean and green fuel. The government is seriously concerned about economic,
environmental, energy security while looking to alternate fuels to meet energy demand through safe,
clean, and convenient forms of energy at least cost in a technically efficient, economically viable and
environmentally sustainable manner. To meet these objectives, the Union Cabinet approved the
National Policy on Biofuels on December 24, 2009 (PIB press release). Endowed with significant
potential for generating energy through renewable resources, the Government of India (GOI) is
promoting production and use of i) ethanol derived from sugar molasses/juice for blending with
gasoline and ii) biodiesel derived from inedible oils and oil waste for blending with diesel.
POLICY AND PROGRAM: ‘INDIA’S BIOFUEL POLICY’
SALIENT FEATURES OF INDIA’S BIOFUEL POLICY
National Biofuel Steering Committee (NBSC) under the Prime Minister to set policy.
Strengthen India‟s energy security by encouraging use of renewable energy resources to
supplement transport fuels. An indicative 20-percent target for blending of biofuel for both
biodiesel and bioethanol.
Meet the energy needs of India‟s vast rural population, stimulating rural development and
creating employment opportunities.
Address global concerns about net reduction of carbon emissions through use of environmentally
Derive biofuel from inedible feedstock grown on degraded soils or wastelands unsuited to food
or feed production, thus avoiding a possible conflict of fuel- versus food security.
Facilitate optimal development and utilization of indigenous biomass feedstock for production of
biofuels. The policy also envisages development of next-generation, more efficient biofuel
conversion technologies based on new feedstock‟s.
Minimum Support Price (MSP) mechanism to ensure a fair price for biodiesel oilseed growers.
Implementation of the proposal would be considered carefully after consultation with
stakeholders, central and state governments, Biofuel Steering Committee, and a final decision by
the National Biofuel Coordination Committee.
The state-owned Indian oil marketing companies propose to purchase bioethanol at a Minimum
Purchase Price (MPP) based on the actual cost of production and import price of bioethanol. In
the case of biodiesel, the MPP should be linked to the prevailing retail diesel price.
If necessary, the GOI proposes to create a National Biofuel Fund for providing financial
incentives, including subsidies and grants, for new and second-generation feedstock‟s, advanced
technologies and conversion processes, and production units based on new and second-
Bring biofuels under the ambit of “Declared Goods” by the Government so as to ensure their
unrestricted movement betwe en states.
Except for a concessional excise tax of 16 percent on bioethanol, no other central taxes and
duties are proposed to be levied on biodiesel and bioethanol.
Biofuel technologies and projects would be allowed 100-percent foreign equity through an
automatic approval route to attract foreign direct investment (FDI), provided the biofuel is for
domestic use only, and not for export. Planting of inedible oil bearing plants would not be open
to FDI participation.
For more information, please follow the link to biofuel policy.
The National Biofuel Policy proposes to set up a National Biofuel Coordination Committee (NBCC)
headed by the Prime Minister. Given the roles of different agencies and ministries in the biofuel
program, NBCC‟s role of providing high-level coordination, policy guidance and review of biofuel
development, promotion and utilization becomes more imperative. The committee would meet
periodically to review progress of and to monitor the biofuel program. The policy also mandates a
Biofuel Steering Committee headed by a Cabinet Secretary to oversee implementation of its policies on
a regular basis.
Various state governments will work closely with their respective research institutions, forestry
department, and universities for development and promotion of biofuel programs. Few states
(http://www.pcra-biofuels.org/whois.htm) have drafted policies and set up institutions for promoting
biofuel in their states. In order to deal with different aspects of biofuel development and promotion in
the country, several ministries have been allocated specific roles and responsibilities:
Ministry of… Role
New and Renewable Policymaking and overall coordination concerning biofuels. Undertake
Energy Sources Research and Development (R&D) of various applications of biofuels
Petroleum and Marketing biofuels as well as development and implementation of pricing
Natural Gas and procurement policy
Agriculture R&D of biofuel feedstock through ICAR and IARI (sweet sorghum,
jatropha, pongamia oil tree (Millettia pinnata), and inedible oilseeds).
Undertake jatropha plantation on non-forest land.
Rural Development Plantation of jatropha on wastelands. Integrate biodiesel program with rural
development schemes (such as Mahatma Gandhi National Rural
Employment Guarantee Scheme). Coordinate R&D with other agencies.
Science and Support research on biofuel crops through biotechnology
Road Transport and Plantation along highways and use of biofuel blended fuel. Work with
Highway automobile manufacturers‟ association in India for engine modification,
emission norms, etc.
Railways Undertake plantation of jatropha on wastelands, along rail rights of way, and
conduct trials of biodiesel blended fuel in locomotives.
Environment and Ensure implementation of jatropha and tree borne oilseed plantations in
Forests forest wastelands; Central Pollution Control Board to monitor health and
Ethanol is produced in India from sugarcane molasses for blending with gasoline. Beginning January
2003, the GOI mandated a 5-percent ethanol blend in gasoline through its ambitious Ethanol Blending
Program (EBP). Ethanol and alcohol production in India depends largely on availability of sugar
molasses (a byproduct of sugar production). Since sugarcane production in India is cyclical, ethanol
production also varies with sugar and sugarcane production and therefore does not assure optimum
supply levels needed to meet the demand at any given time. Lower sugar molasses availability and
consequent higher molasses prices affect the cost of production of ethanol, thereby disrupting the supply
of ethanol for the blending program at pre-negotiated fixed ethanol prices.
Developments in EBP
Period Action Comments
January, 2003 Ministry of Petroleum and Natural Partially implemented due to
Gas (MoPNG) made 5-percent unavailability of ethanol (due to low
ethanol blending (Gazette on EBP ) in sugarcane production in 2003/04 and
gasoline (gasoline) mandatory across 2004/05)
9 States and 5 Union Territories
September, Resurgence in sugarcane production OMC contracted for 1.4 billion liters of
2006 in 2005/06 and 2006/07 led GOI to ethanol for EBP at Rs 21.50/liter from
mandate 5-percent blending of Nov 2006 to Nov 2009. Only 540 million
ethanol in gasoline across 20 states liters of ethanol supplied till April 2009
and 4 Union Territories (excludes due to short supply of sugar molasses.
Northeast, Jammu & Kashmir and GOI deferred implementation due to short
Andaman & Nicobar) subject to supply of sugarcane in 2007/08
September, Union Cabinet approved the National GOI deferred the plan again due to short
2008 Biofuel Policy. Five-percent blending supplies of sugarcane and sugar molasses
mandatory nationwide. in 2008/09.
October, Third phase of implementing EBP; Since there was no official notification
2008 blend to be increased to 10 percent. released, oil marketing companies have
not started 10 percent ethanol blending.
November Government meets to decide blending Status quo ante remains, targets 5 percent
2009 target for EBP EBP
August 2010 Government fixed an ad-hoc Expert Committee in March 2011 had
provisional procurement price of Rs recommended that ethanol be priced 20
27 per liter of ethanol by OMC for percent lower than gasoline. No
EBP program. Decision was taken to consensus yet on pricing policy of
constitute expert committee under ethanol. When ethanol supply runs short,
Chairmanship of Dr. Choudhary, government proposes to reduce import
Member of Planning Commission, to duty on alcohol and molasses. OMC
recommend a formula for pricing caveats the proposal that alcohol or
ethanol. molasses could not be imported for EBP;
it has to be exclusively sourced from
domestic produced molasses.
Indian Fiscal OMC unable to procure contracted Most domestic ethanol producers or
Ye ar ethanol supplies from sugar mills and suppliers were disqualified from
(April-March) ethanol manufacturers. The Ministry supplying ethanol.
2010/11 of Petroleum and Natural Gas, GOI
has not been able to implement Failure to set ethanol pricing formula and
compulsory blending of 5 percent procedural delays by various state
ethanol in gasoline. governments delayed procurement for
Industry sources estimate that 365 million
liters of ethanol was supplied against the
contracted 570 million liters.
During same period, a major share of
molasses production was diverted as cattle
feed to Europe.
Fiscal Year OMC targets procurement of 1 billion After deducting the ethanol requirement
2011/12 liters of ethanol for fiscal 2011/12. for EBP in non-implementing states (such
as Tamil- Nadu, West Bengal, Odisha,
Jharkhand, Chhattisgarh and Madhya
Pradesh), the present requirement worked
out to 720 million liters, of which
suppliers had offered to supply 610
million liters. With lower supplies in a
few states, the contracted supply was
further drawn down to 430 million liters.
Molasses continues to be exported as
cattle feed to Europe.
Current By 2017, the GOI mandates replacing Given the surplus sugar situation in the
Status 20 percent of petroleum-based motor current and forecast years (2012/13), net
fuel with biofuels. ethanol availability after accounting for
domestic consumption seems sufficient to
meet blending targets (5 & 10 percent) for
EBP. The contracted supply for current
fiscal year is just sufficient to meet 2
percent blending target. However, given
the constraints, achieving a higher target
(20 percent) looks unattainable.
Expanding the ethanol supply:
Currently, the government does not allow use of imported ethanol for the EBP program, as the focus is
on developing domestic capacity.
Presently, ethanol is manufactured directly from sugar molasses, but given the projection for
higher sugarcane production in India for 2011/12 and 2012/13  (upswing in production cycle),
use of sugarcane juice (on an experimental basis) for ethanol production seems to be a viable
option especially under conditions of a sugarcane glut.
The GOI is offering subsidized loans (through sugarcane development funds) to sugar mills for
setting up of an ethanol production unit. The loans would cover up to a maximum of 40 percent
of the project cost.
Given the limited scope for bringing additional area under water-intensive sugarcane cultivation,
fluctuations in supply and pricing of ethanol could be stabilized through use of alternate crops.
Public and private institutions could promote use of alternate crops such as sweet sorghum,
sugar beets, and sweet potatoes to supplement domestic ethanol production, though the efforts to
produce ethanol from these feed stocks are at an experimental stage.
Development of low-cost technology to utilize lignocellulosic material such as agricultural and
forest residues to produce bioethanol.
Procedural hurdles such as non-issuance of export permits for interstate transport of ethanol, delays in
issuing no-objection-certificates (NOC), higher taxes and levies across different states have impacted
the EBP. Rules and regulations, including a high excise tax of Rs 750 per ton on molasses, which
works out to 25- to 30 percent ad valorem, whereas on industrial alcohol the central excise duty is 12.36
percent ad valorem, and interstate (octroi) taxes applicable to potable alcohol for industrial use are
equally applicable to ethanol for blending with gasoline, thereby severely constraining its availability
and utilization for EBP.
The GOI had launched the National Bio-diesel Mission (NBM) after identifying jatropha (Jatropha
curcas) as the most suitable tree-borne oilseed for biodiesel production. The Planning Commission of
India set an ambitious target of planting 11.2 to 13.4 million hectares of land to jatropha by the end of
the 11th Five Year Plan (2011/12). The central government and several state governments provide fiscal
incentives in support of planting jatropha and other inedible oilseeds. Several public institutions,
government departments, state biofuel boards, state agricultural universities and cooperative sectors are
also supporting the biofuel mission in various capacities.
Developments in NBM
Period Action Comments
April, Demonstration phase 2003 to 2007: Ministry Public and private sectors, state
2003 of Rural Development appointed as nodal governments, research institutions
ministry to plant 400,000 hectares to jatropha. (Indian and foreign) involved in the
This phase also proposed nursery program achieved varying degrees of
development, establishment of seed success.
procurement and establishment centers,
installation of trans-esterification plant,
blending and marketing of biodiesel
October, Ministry of Petroleum and Natural Gas Cost of biodiesel production higher
2005 (MoPNG) announced biodiesel purchase (20 to 50 percent) than purchase
policy under which oil marketing companies price. No sale of biodiesel.
(OMC) would purchase biodiesel from 20
procurement centers across the country to
blend with high speed diesel as of January
2006. Purchase price set at Rs 26.5 per liter
2008 Self Sustaining Execution phase 2008 to Lack of large-scale plantation, use of
2012: Targeted to produce sufficient biodiesel conventional low-yielding jatropha
for 20 percent blending by end of 11th (2008- cultivars, seed collection and
12) five-year plan extraction infrastructure, buy-back
arrangement, inadequate capacity- and
confidence-building measures among
farmers impeded the progress of this
2010 An estimated half-million hectares has been Assuming 80 percent of the biodiesel
planted to jatropha, of which two thirds is requirement is met though jatropha
believed to be new plantations needing two to oilseeds, the biodiesel thus obtained
three years to mature will meet just 0.01 percent of total
biodiesel required for 5-percent
blending by 2010/11.
Fiscal No additional „wastelands‟ have been brought The government may have to offer
Ye ar under jatropha cultivation fiscal incentives to growers to
2011/12 adopt better agronomic practices
during first 2-3 years of plantation
development in addition to marketing
and price support mechanisms to
encourage biodiesel program.
Status quo remains as the production
of biodiesel from jatropha seeds is
commercially insignificant at present.
The GOI‟s ambitious plan of producing sufficient biodiesel by fiscal 2011/12 to meet its mandate of 20-
percent blending with diesel is looking unattainable given the unavailability of sufficient feedstock
(jatropha seeds) and lack of sufficient research and development to evolve high-yielding, drought-
tolerant jatropha seeds.
According to one estimate, 3.21 million tons of biodiesel would be required from 3.42 million hectares
to meet 5-percent blending by Fiscal 2011/12  . Considering jatropha to be a major feedstock for
biodiesel with an average seed yield of 2.5 tons/hectare and 30 percent biodiesel recovery rate, 18.6
million hectares would need be brought under jatropha cultivation to meet the 20-percent blending
target by 2017. The above assessment assumes a steady rise in demand (circa 6.4 percent/annum) for
diesel in India. Diesel demand during the 12th Five-year plan (fiscal year 2012/13 through 2016/17) is
likely to grow by 35 percent to 87.4 million tons  . Meeting a 5-percent blending target will require
an additional 4.1 million hectares under jatropha.
Smaller land holdings, ownership issues with government- or community-owned wastelands, very little
progress made by state governments to stimulate large scale jatropha plantations, and negligible
commercial production of biodiesel have impeded efforts and investments by both private- and public-
In the face of reports that most biodiesel companies in India are working at very low capacity and some
are idle, the GOI has reportedly contemplated fixing a higher price of Rs 34 per liter (compared to Rs
26.5 /liter) for purchase of biodiesel (please refer our previous GAIN report IN1058 for more
information) through oil marketing companies (OMC), though industry and stakeholders had
recommended an even higher price (Rs 36 per liter) to bring idle companies back to operation. The
proposed price is believed to have been mutually agreed by the GOI and industry representatives.
However, this proposal has yet to materialize.
ETHANOL AND BIODIESEL
India has 330 distilleries which can produce over 4 billion liters of rectified spirit (alcohol) per year in
addition to 1.5 billion liters of fuel ethanol. Of this total, about 140 have the capacity to distill around 2
bil ]lion li [12ters of conventional ethanol per year and could meet the demand for 5-percent blending
with gasoline. Currently, India produces conventional bioethanol from sugar molasses; production of
advanced bioethanol is in a nascent phase (research and development).
Table 1. India: Conventional Bioethanol Production and Distribution (million liters)
Calendar Year 2006 2007 2008 2009 2010 2011 2012 2013
Beginning Stocks 483 747 1,396 1,672 1,241 1,065 756 911
Production 1,898 2,398 2,150 1,073 1,522 1,681 2,170 2,239
Imports 29 15 70 280 92 20 80 50
Total Supply 2,410 3,160 3,616 3,025 2,855 2,766 2,901 2,995
Exports 24 14 3 4 10 15 10 15
Industrial Use 650 700 700 720 700 720 740
Potable Liquor 800 850 880 900 850 880 910
Blended Gasoline 200 280 100 50 365 400 450
Other Use 75 100 110 100 110 80 85 85
Total Consumption 1639 1750 1940 1780 1780 1995 2085 2135
Ending Stocks 747 1,396 1,673 1,241 1,065 756 1,000
Total Distribution 2,410 3,160 3,616 3,025 2,855 2,766 3,006 3,200
Production Capacity (Conventional Fuel)
No. of Biorefineries 115 115 115 115 115 115 140 140
Capacity 1.5 1.5 1.5 1.5 1.5 1.5 2 2
Feedstock Use (1,000 MT)
Feedstock A (000‟ 7,910 9,992 8,958 4,469 6,342 7,004 9,041 9,330
Source: FAS/New Delhi Estimates based on information from trade sources
Note: Feedstock A is molasses
With an outlook for strong sugar production for a third consecutive year (viz., 2012/13, Marketing Year
(MY) October-September), domestic ethanol production is likely to grow in tandem, almost reaching
the high it last achieved in calendar year 2007. The Indian government may renew its focus and
strongly implement the mandatory 5-percent ethanol blending in petrol, provided there is consensus
among stakeholders on the purchase price of ethanol for EBP. Presently, only three-fifths of total
facilities are actually supplying ethanol, severely constraining the supply of ethanol for EBP.
Consequently, molasses stocks are being diverted to Europe for cattle feed. Short supplies of sugar
molasses in preceding years (before MY 2010/11) had constrained ethanol production and consequent
higher prices made it unviable to supply ethanol to petroleum companies at the negotiated prices.
Presently, strong demand for bagasse (from paper mills, independent sugar units) and molasses (for
cattle feed and potable alcohol production) continues to support profitability of sugar mills at times
when profit margins run thin.
Improved supplies of molasses and a steady rise in demand from the chemical and potable liquor
industries in the face of an expected rise in blending for EBP could raise total ethanol consumption in
2013 to 2.1 billion liters.
Exports of ethanol  have grown significantly in the last three years. Taking advantage of the upswing
in the sugarcane production cycle, India has exported 25.2 million liters of denatured ethanol and
spirits worth $21 million  to Ghana, South Korea, Saudi Arabia, Sierra Leone, Cameroon, Tanzania,
Liberia and host of other African and neighboring countrie  s . Besides being a net exporter of
ethanol, India had also imported approximately 16 million liters of ethanol and spirits mostly from
United States, UAE, Pakistan, UK, South Africa, Germany and China. Traditionally, India imports
ethanol only to meet shortfalls during years of low sugar production. Demand is mostly for
consumption across the potable liquor and chemical industries, not for fuel. There are no quantitative
restrictions on import of biofuels; however, high duties (Table 2) sometimes make imports
economically unviable. The GOI does not provide any financial assistance for exports of biofuels
(biodiesel or ethanol). However, current trade regulations allow duty-free imports of feedstocks for re-
export by certified export oriented units.
Table 2. India: Import duty on biofuels (percent ad valorem on CIF value)
ITC HS Tariff Number Import duty (percent)
2207.20 Denatured Ethyl Alcohol and Spirits (including ethanol) 28.64
3824.90 Chemical Products NES (including biodiesel) 28.64
The ending stocks for the forecast year (2013) are likely to recover to 1 billion liters, up 90 million liters
over the current year‟s estimate.
Jatropha plantation is a subject for state governments. Public-sector petroleum companies and private-
sector firms have entered into memoranda of understanding with state governments to establish and
promote jatropha plantation on government wastelands or to contract with small and medium farmers.
However, only a few states have been able to promote actively jatropha plantation despite the
government‟s incentives and encouraging policies.
Slow progress in jatropha planting has resulted in lower availability of jatropha seeds to be used as
feedstock for biodiesel production and hence most of the biodiesel units are not operational most of the
year. There are about 20 large-capacity biodiesel plants (10,000 to 200,000 metric tons per year) in
India that produce biodiesel from alternative feed stocks such as edible oil waste (unusable oil
fractions), animal fat and inedible oils.
Presently, commercial production and marketing of jatropha-based biodiesel in India is small, with
estimates varying from 140 to 300 million liters per year. The biodiesel produced is sold to the
unorganized sector (irrigation pumps, mobile towers, kilns, agricultural usage, owners of diesel
generators, etc.) and to experimental projects carried out by automobile manufacturers and transport
companies. However, as per industry sources, there has been no commercial sale of biodiesel to state-
owned transport 18]companies except for [ trials .
Additionally, there has been no commercial sale of biodiesel across the biodiesel purchase centers (set
up by the GOI) as the government biodiesel purchase price of Rs 26.5 (48 cents) per liter is still below
the estimated biodiesel finished production cost (Rs 35 to Rs 40 per liter / 63-72 cents pe r liter ).
Unavailability of feedstock supply (jatropha seeds), rising wage rates and inefficient marketing channels
are a few of the major factors that have contributed to higher produc tion costs .
In order to revive and accelerate the biodiesel industry, a recent study taken up by the industry
recommends that the present procurement prices of biodiesel be raised as well as to ensure an average
procurement price of jatropha seeds at level such that farmers will not shift land from food crops to fuel
Research and development activities (experimental or pilot trials by select industry groups and
government research institutes) are being carried out to develop suitable technologies for production of
advanced biofuels from wood biomass, agricultural and forest waste, municipal solid waste conversion,
microalgae and photosynthetic organisms. Given the technological challenges, commercial production
of advanced biofuel is still far in the future.
BIOMASS FOR HEAT AND POWER
The Ministry of New and Renewable Energy is implementing a biomass power program with the
objective of generating grid-quality power from biomass resources through various conversion
technologies along with optimizing power generation from bagasse produced in sugar mills. The
benefits include its renewable nature, wide adaptability, carbon neutrality and the potential to provide
largescale productive employment in rural areas. Biomass has been playing important role as fuel for
sugar mills, pulp and paper mills, small and medium enterprises (SME). In particular; there is
significant potential in breweries, textile mills, fertilizer plants, solvent extraction units, rice mills, and
Biomass materials used for power generation include bagasse, rice husk, straw, cotton stalks, coconut
shells, soy husk, oilseed cakes, coffee waste, jute wastes, peanut shells, and 21] sawdust [ . However,
competition for biomass from the growing cattle and water buffalo sector may limit supplies unless
biomass is grown specifically for power generation. The availability of crop residue from non-fodder
crops may prove to be good alternatives for biomass power production  .
The availability of biomass in India is estimated at about 500 million tons per year including residues
from agriculture, agricultural industries, and forest products. A survey by the Ministry of New and
Renewable Energy indicated that 15-20 percent of total crop residues could be used for power
generation, without altering their present uses. This implies availability of 120 to 150 million tons of
surplus agro-industrial and agricultural residues per year that could be made available for power
generation. Around 1525 MW of power is proposed to be harnessed from agricultural residues and
plantations by end of 12th Five-Year Plan (Table 3).
Bagasse power cogeneration
With modernization of new and existing sugar mills the surplus power generation through bagasse
cogeneration in India‟s 550 sugar mills is estimated at 10,000 MW (the target for 12th Five-year plan is
to achieve 32 percent of total potential) if these mills were to adopt technically and economically
optimal levels of cogeneration for extracting power from bagasse. Total estimated biomass power
potential from bagasse (biomass power) is about 31,000 MW. The GOI has initiated several programs
and schemes for promoting renewable energy sources, the details of which may be accessed from
Table 3. India: Biomass based Commercial Energy Achievement in Mega Watts (MW)
S.No. Sources/ Estimated Achieved in Achieved Achieved Total Target by
Systems Potential fiscal 2010- through through end of 12th Five-
11 March December year plan
2011 2011 (2016/17)
1 Biomass Power 18,000 143.50 1,025 1,118 1,525
2 Biomass Power NA 61.19 282.07 NA NA
3 Biomass Power 10,000 # 257 1616 2,012 * 3,216
4 Waste to Energy 2,700 7.50 72.46 NA 324
5 Biomass Gasifier - 6.72 eq 150 eq NA NA
6 Family Type 12 Million 73,281 units 4.5 million NA 5.6 million units
Biogas Plants units
Source: Ministry of New and Renewable Energy, GOI
NA: Not Available
MW eq: Megawatt equivalent
*: Includes 1932 MW from private-sector sugar mills while additional capacity from cooperative sector
likely to be commissioned by August 2012
#: updated from Indian Sugar Mills Association (ISMA)
 Economic Survey of India pegs growth at 7.6 percent for fiscal 2012/13 and 8.6 percent for fiscal 2013/14, while other private
institutions and rating agencies expect Indian economic growth to moderate down to 6.5/7 percent and 7.5 percent in Indian fiscal 2012/13
and 2013/14 respectively.
 According to the International Energy Agency (IEA), hydrocarbons account for the majority of India's energy use. Together, coal and
oil represent about two-thirds of total energy use. Natural gas now accounts for a seven-percent share, which is expected to grow with the
discovery of new gas deposits. Combustible renewable resources and waste constitute about one fourth of Indian energy use. This share
includes traditional biomass sources such as firewood and cow-dung, which are used by more than 800 million Indian households for
cooking. Other renewable such as wind, geothermal, solar, and hydroelectricity represent a 2-percent share of the Indian fuel mix.
Nuclear holds a one percent share.
 Ministry of Road Transport and Highways, GOI
 Preliminary estimate for 2010 indicates that India outpaced EU-27 and stands third after China and U.S. on CO2 emission estimates
(India‟s carbon emissions are growing 3.2 percent annually)
In contrast to the United States, India does not enjoy free interstate movement of goods and services.
 Hereinafter referred to as „f'iscal year‟ unless otherwise stated
 Marketing Year (MY) (October-September)
 Coupled with carbon credits
 A policy brief paper from the National Centre for Agricultural Economics and Policy Research (NCAP)
 Diesel demand in 2011-12 was estimated at 65.2 million tons (77.7 billion liters).
Includes an additional annual ethanol production capacity of 400 million liters that was built up in the last four years after the Indian
government provided funds to sugar mills
 An estimated three-fifths of total refineries are actually supplying ethanol for EBP.
 Export of biofuel is only permitted after supply meets the domestic requirement and the final decision is taken by the National Biofuel
 Global Trade Atlas
 First 10 months of calendar year 2011
 During the same period, India also exported 132,068 metric tons of chemical products including biodiesel worth $108 million to Sri
Lanka, United States, Italy, Bangladesh and other Asian and European countries.
 A few state road transport corporations claim to run their buses on blended fuels
 Cost of production may be still higher, as above estimates are based on inputs from industry sources
 Feedstock constitutes more than 75 percent of cost of production of biodiesel
 Annual report 2011/12, MNRE, GOI
 Department of Science and Technology, GOI