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Biofuels and India by Jagpreet Walia

2 Comments December 23, 2008 – 10:33 am | Permalink |  Print This Post |

India is the sixth largest and one of the fastest growing energy consumers in the world due to the rising population and consumption power of India .India’s Annual rate of increase in energy demand is expected around 4.8% and it is expected that demand for diesel will increase at a rate of 5.8% annually. Vehicular pollution contributes to about 70% to the total air pollution and is estimated to have increased 8 times in the last 2 decades.
Due to limited domestic crude oil reserves, India meets about 72 percent of its crude oil and petroleum products (diesel, aviation fuel, etc.) requirement through imports, which are expected to expand further in coming years. In the last three years, India’s oil import expenditure has nearly doubled due to the escalation in global oil prices.
Bio fuels promise to be an appropriate option to be fixed as a solution to these problems. Bio fuels being a renewable source of energy also act as a viable solution to the rising global GHG levels by substituting the petroleum fuels conventionally used.
Bio fuels have been developing in stages and have come up a long way. Bio fuels were initially produced using waste oil as the raw material and then as the demands rose up, various generations of technologies using different raw materials mushroomed up as options for bio fuels production.
The first generation bio fuels involved bio fuels derived from vegetable oils and animal fats.
There is a need to be skeptical about these first generation bio fuels for three main reasons –
• It doesn’t scale in terms of gallons of fuels produced per acre (i.e. efficient land use)
• It does not have improving economics over time (it is not cost-competitive with oil without subsidies which are likely to go away at some point), and
• It has consistency problems i.e. for classic bio fuels, neither the trajectory of land efficiency is positive nor is the cost positive.
These reasons have started showing the results as increasing food shortages across the globe due to food crops usage in bio fuels production.
The second generation bio fuels include bio fuels derived from plantations of special non edible oil crops on wastelands specifically used for bio fuel production e.g. Jatropha, Pongamia, Palm etc.
The market for this generation is an emerging one in India and for promotion of these biofuels the Indian Government announced its ‘National Biofuel Policy’ on 12th September 2008. According to the NAP India aims to meet 20% of its diesel demand with fuel derived from non edible seeds grows in waste and marginal lands by 2017. This will mean usage of 14 million hectares of land for plantation purposes. Presently fuel yielding plants cover less than 500,000 hectares in India.
The Government of India has also identified 400,000 square kilometers of land which is appropriate for growing Jatropha. The land is distributed among various states mainly Chhattisgarh, Karnataka, Tamil Nadu, Rajasthan, Andhra Pradesh and Maharashtra. The Indian government has also announced its intention to reduce the existing central excise duty on ethanol which would encourage oil companies to increase ethanol off take and promote the ethanol blending program in India. Minimum support price and minimum purchase price has also been promised under the national action plan. A Policy for removing any taxes and duties to be levied on bio-diesel has also been proposed to promote the biodiesel production in India.
Many private players in the transportation sector have already adopted this renewable source and now various PSUs have also come up in adopting Biodiesel consumption initiatives to promote the steps taken by the government e.g. The Indian Railways has started to use the oil (blended with diesel fuel in various ratios) from the Jatropha plant to power its diesel engines with great success. Currently the diesel locomotives that run from Thanjavur to Nagore section and Tiruchirapalli to Lalgudi, Dindigul and Karur sections run on a blend of Jatropha and diesel oil.
But the rising land prices and low efficiency in oil production still remains a small hurdle.
The third generation biofuels are the next promising solution to the remaining problems. Biofuels derived from engineered microorganisms are considered as the third generation fuels.
On a comparative basis a hectare of land under cultivation will produce 5950 liters of oil with Palm (a second generation option) but with Algae species, specially engineered for the purpose of oil production, the oil yield will rise to about 100000 liters per hectare using an open raceway pond cultivation system. Using engineered Photo bio reactor systems may raise the production still further to many folds. The development of third generation biofuels is still in nascent stages but is one of the most promising solutions.
Various companies and research setups for Algal biofuels are coming up and are backed up by big investors like Shell, Chevron and Microsoft naming a few.   
Both the second and third generation biofuels are excellent solutions to the rising demand of biofuels. In a developing nation like India they also provide a solution to alarming GHG levels thus attracting carbon funds and CDM benefits which further promotes the interest of market players.
Thus Bio fuels are standing tall enough to provide a cheap and a sustainable option for a cheaper and greener fuel and future seems to be promising.

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