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Odisha’s Bio-Refinery and India’s Path of Bio-Fuels


On October 10, 2018, Odisha witnessed a development leap as the foundation stone was laid for a second generation (2G) Ethanol Bio-Refinery in Bargarh district. The refinery with an estimated cost of Rs 1000 crore will be operational by the year 2020. It will be the first in the country to produce ethanol from rice straw. This is just an example to mirror how the present government has been pursuing Bio-fuel path in a revolutionary way. Number of 2G Ethanol Bio-refineries planned across 11 States stands at 12 under this government. Let’s see how India’s bio-fuel efforts have been progressing and what significance it holds.

National Policy on Bio-Fuels

Considering the Policy purview, the first question that comes to mind is – Does India have a specific roadmap for Bio-fuels? And the answer is Yes, as in May 2018, Modi government had come up with the ‘National Policy on Bio-Fuel- 2018’ where the scope of this effort has been detailed. Some important points which can be delineated are summed up here:

  • The policy allows the 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 and other plant products which are unfit for human consumption for ethanol production.
  • To ensure farmers appropriate price for their produce, policy allows the use of surplus food grains for production of ethanol for blending with petrol with the approval of National Bio-fuel Coordination Committee.
  • Policy indicates a viability gap funding scheme for 2G ethanol bio- refineries of Rs 5000 crore in 6 years, in addition to some additional tax incentives, and a higher purchase price as compared to 1G bio-fuels.
  • The government aims to achieve 10 percent ethanol blending in petrol by 2022 and 20 percent by 2030.
Increasing Farmers Income, Reducing Import Bill

Push to the bio-fuel has significant advantages in the Indian context. India in recent years has been producing surplus food grains. Using the by-products of agriculture produce to bio-fuel, farmers can be assured of increase in income.

It is estimated that one 100klpd bio-refinery will require around Rs.800 crore capital investment. As the number of bio-refineries increases across the country in future, it will generate a large-scale employment in addition to rural infrastructural investment.

Oil import is a major reason for India’s import bill to become dearer and dearer. Bio-fuel and ethanol blending with petrol together will reduce this burden significantly. In 2017-18 around 150 crore litres of ethanol supply resulted in estimated savings of over Rs 4000 crore of forex.

Environment Benefit by Bio-fuel

As technology improves, India aims to convert the critical issue of food wastage into the production of bio-fuel. It also has the potential to address the serious environmental concern like stubble burning resulting in significant air pollution, by diverting those leftover stacks into bio-fuel. As one crore litre of Ethanol saves around 20,000 ton of CO2 emissions, it is estimated that around 150 crore litres of ethanol supply in the year 2017-18, there will be lesser emissions of CO2 to the tune of 30 lakh ton.

Thrust on bio-fuels will also help to promote India’s efforts in sanitation, as waste also can be diverted to produce bio-mass. Annually around 62 MMT of Municipal Solid Waste (MSW) gets generated in India. There are technologies available which can convert waste, plastic, and MSW to bio-fuels, which will further result in the drop in the usage of non-renewable fuels. One ton of such waste has the potential to provide around 20% of drop in the usage of non-renewable fuels.

Taking the Trend Forward

It was Vajpayee government which took an affirmative measure in the bio-fuel effort when it started Ethanol Blended Petrol (EBP) Programme in 2003.The successive UPA government seems to failed in taking this momentum forward. However, the Modi government once again pursued this with other bio-fuel programmes and a broader policy framework, as we have explained above. The ethanol procured by the public sector oil manufacturing companies has increased from 38 crore litre in the year 2013-14 to estimated 140 crore litre in 2017-18.

With Odisha seeing the foundation stone laying ceremony for 2G Ethanol Bio-refinery, India’s enduring commitment to clean and green energy has been proclaimed once again.