Monday, December 26, 2016

India can save $6 bn through ethanol-blended fuel: Report

Today biofuels, and specifically ethanol are drawing renewed attention as an alternate to petroleumderived gasoline in order to address energy security, energy costs, and global warming concerns associated with liquid fossil fuels. It is noteworthy to take into consideration the emerging era of rapid transformation in the way in which economic and social development is being undertaken. Specifically, the significant growth in the transportation sector has seen a corresponding increase in demand for energy and fuel. Globally, transportation systems are generally dependent on fossil fuels, which have a significantly more harmful effect on the environment. It is not surprising that most periods of accelerated industrial development have been correlative to the international price of crude oil. However, the increased attention to environment and climate change has propelled innumerable new approaches that can incentivise the application of long-time dormant technologies. One such example is the development of the biomass and biofuel industry, which is increasingly being seen as one of the solutions to energy insecurity. Moreover, many countries, developed and developing, have attempted to shift from a fossil fuel dependent economy to a biofuel based economy as a sustainable alternative. Biofuel is a renewable fuel that is produced through biological processes, such as agriculture and anaerobic digestion, rather than geological processes, such as those involved in the production of fossil fuels.

Biofuels can be derived directly from plants, or indirectly from agricultural, commercial, domestic and industrial wastes. Renewable biofuels generally involve contemporary carbon fixation, such as those that occur in plants or microalgae through the process of photosynthesis. The most commonly used biofuel is ethanol, which is produced from various feedstocks, such as sugarcane, maize and cassava. The United States and Brazil, as the largest producers of ethanol have adopted robust policy measures for the promotion of ethanol in the transportation sector with a view to reduce dependence on fossil fuels. Similar policy approaches need to be tailored to India’s needs in order for it to move India’s rapidly expanding transportation towards greener alternatives. The key to leveraging the economic, social and environmental benefits of ethanol would require India to develop flexible strategies aimed at incentivising industry and consumers to shift towards broader adoption of ethanol, bother as an oxygenate and as an alternate. As this paper discusses, the social benefits of a broader biofuel programme include an expansion in livelihood opportunities. Similarly, economic benefits include significant opportunities across the value chain for farmers, and expansion of industrial development. 

The environmental benefits are significant as well, wider ethanol usage has shown to substantially reduce harmful emissions and consequently improve air quality. In the above said background, this paper has covered in its first chapter the background and history of the adoption of ethanol blending in India. The second chapter of this paper highlights some of the challenges to EBP program and different issues ranging from imposition of varied taxes upon the interstate movement of ethanol, procedural difficulties and legislative and administrative issues in India. The third chapter has explored some of the potential economic and environmental advantages of adoption of ethanol as a biofuel in India. The fourth chapter documents global best practices and analyses the experience of three countries in specific: the United States, the Philippines and Brazil. The final chapter sets out policy recommendations based on the roadblocks and hurdles identified in Chapter II, and further provides a comprehensive roadmap for the broader adoption of biofuels in the country. It is necessary to note that, in view of India’s rapid economic growth, energy demand will continue to rise rapidly in the coming decades. There is no going back on the path and pace of economic progress that India has chosen for itself, especially after globalization. 

The increasing consumer demand of a developing nation add stress on limited sources of energy of any nation. In order to meet these increasing demands, it is important that a gradual shift from fossil fuels to renewable fuels is made. However, this process is slow and expensive, and therefore it would be necessary to make appropriate investments that are aimed at increasing efficiency of existing sources of energy while, in parallel, enabling a shift towards sustainable resources. India’s National Policy on Biofuels, 2009 does reflect these concerns and charts out ambitious goals in this regard. However, there is a need to ensure that implementation of these programs accounts for broader administrative and policy priorities, especially in the agricultural and transportation sectors. In this context, this expert paper aims to present pragmatic measures and interventions that are specifically aimed at operationalizing the objectives of this expert paper.

The report was released on 8th December, 2016 by YB Ramakrishna, Chairman working group on Biofuels , Ministry of Petroleum & Natural Gas Govt. of India. 

The said report is the outcome of the joint project done by PLR Chambers, University of Petroleum and Energy Studies, Dehradun and CSTEP ( Center of Study of Science Technology & Policy) Bangaluru. 

The report is much appreciated and published by almost all the renowned national dailies like, The Hindu Business Line ,  Times of India ,   Economic Times  to name a few.  However if you are interested to read the full report please click here

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