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National Policy on Biofuels 2018

National Policy on Biofuels 2018 that expands range of feedstock available for fuel production, allows farmers to divert excess crop produce for biofuels production and sets aside ₹5000 crore to help establish second generation ethanol refineries as well as doping of ethanol produced from damaged food-grains, rotten potatoes, corn and sugar beet with petrol to cut oil imports by ₹4000 crore this year alone, has been approved by the Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday May 16, 2018.

Biofuels have caught the attention of the world in the last decade and are of strategic importance in India as it augers well with the ongoing initiatives of the Government such as Make in India, Swachh Bharat Abhiyan, Skill Development and offers great opportunity to integrate with the ambitious targets of doubling of farmers income. Reduced crop burning & conversion of agricultural residues/wastes to biofuels can fetch a price for this waste and will reduce Green House Gas emissions leading to Cleaner Environment. Biofuels production will also reduce import dependency, lead to employment generation and waste to wealth creation.

  • Policy categorises biofuels as “Basic Biofuels” to enable extension of appropriate financial and fiscal incentives under each category etc.:
    • 1G – First Generation bioethanol & biodiesel,
    • 2G- Second Generation: “Advanced Biofuels” ethanol, Municipal Solid Waste to drop-in fuels,
    • 3G- Third Generation biofuels, bio-CNG
  • 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.
  • Policy allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee.
  • Policy with a thrust on Advanced Biofuels indicates a viability gap funding scheme for 2G ethanol Bio refineries of ₹5000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels.
  • Policy encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil, short gestation crops.
  • Policy will boost Infrastructural Investment in Rural Areas with addition of 2G bio refineries across the Country as oil marketing companies are already in the process of setting up twelve 2G bio refineries with an investment of around ₹10000 crore.

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