• BIO-FUELS ‘Biofuels’– BIO-FUELS These are  liquid or gaseous fuels produced from biomass resources and used in place of,  or in addition to,  diesel, petrol or other fossil fuels for transport, stationary, portable and other applications.
  • ‘Biomass’ resources are  the biodegradable fraction of products, wastes and residues from agriculture, forestry and related industries  as well as the biodegradable fraction of industrial and municipal wastes.
  • ‘Bio-ethanol’:- Ethanol produced from biomass such as sugar containing materials, like sugar cane, sugar beet, sweet sorghum, etc.; starch containing materials such as corn, cassava, algae etc.; and cellulosic materials such as bagasse, wood waste, agricultural and forestry residues etc.
  • ‘Biodiesel’:- a methyl or ethyl ester of fatty acids produced from vegetable oils, both edible and non-edible, or animal fat of diesel quality; and other biofuels. Biomethanol, biosynthetic fuels etc.

Biofuels have been around as long as cars have. At the start of the 20th century, Henry Ford planned to fuel his Model Ts with ethanol, and early diesel engines were shown to run on peanut oil. But discoveries of huge petroleum deposits kept gasoline and diesel cheap for decades, and biofuels were largely forgotten. However, with the recent rise in oil prices, along with growing concern about global warming caused by carbon dioxide emissions, biofuels have been regaining popularity. Gasoline and diesel are actually ancient biofuels. But they are known as fossil fuels because they are made from decomposed plants and animals that have been buried in the ground for millions of years. Biofuels are similar, except that they’re made from plants grown today.

There are various ways of making biofuels, but they generally use chemical reactions, fermentation, and heat to break down the starches, sugars, and other molecules in plants. The leftover products are then refined to produce a fuel that cars can use.

Production of Bio-ethanol (C2H2OH-same stuff as in alcoholic drinks) involves the conversion of a feedstock crop into fermentable sugars through enzyme amylases. Yeast is then added to ferment the sugars into alcohol and carbon dioxide. The main crop used in bioethanol production varies throughout the world – in Brazil, sugar cane is preferred (some cars there can run on pure ethanol rather than as additive to fossil fuels), in the USA its corn and across Europe it’s predominantly wheat and barley. The Philippines have mandated a 10% ethanol mix in gasoline since 2007. And biodiesel—a diesel-like fuel commonly made from palm oil—is generally available in Europe.

On the face of it, biofuels look like a great solution. Unfortunately, it’s not so simple. The process of growing the crops, making fertilizers and pesticides, and processing the plants into fuel consumes a lot of energy. It’s so much energy that there is debate about whether ethanol from corn actually provides more energy than is required to grow and process it. Also, because much of the energy used in production comes from coal and natural gas, biofuels don’t replace as much oil as they use.

For the future, many think a better way of making biofuels will be from grasses and saplings, which contain more cellulose (it could be more efficient than current biofuels, and emit less carbon dioxide). Cellulose is the tough material that makes up plants’ cell walls, and most of the weight of a plant is cellulose.

National policy on Bio-fuels-

Renewable energy resources are indigenous, non-polluting and virtually inexhaustible. India is endowed with abundant renewable energy resources. Therefore, their use should be encouraged in every possible way. India’s energy security would remain vulnerable until alternative fuels to substitute/supplement petro-based fuels are developed based on indigenously produced renewable feed stocks. In biofuels, the country has a ray of hope in providing energy security.

Biofuels are derived from renewable bio-mass resources and, therefore, provide a strategic advantage to promote sustainable development and to supplement conventional energy sources in meeting the rapidly increasing requirements for transportation fuels associated with high economic growth, as well as in meeting the energy needs of India’s vast rural population & creating new employment opportunities.

The National Policy on Bio-fuels and its implementation has been approved by the Union Cabinet (2008). The Indian approach to bio-fuels is based solely on non-food feed stocks to be raised on degraded or wastelands that are not suited to agriculture, thus avoiding a possible conflict of fuel vs. food security.

The salient features of the National Policy on Bio-fuels are:-

  1. Bio-diesel production will be taken up from non-edible oil seeds (400 species of trees in the Country) in waste/degraded/marginal lands. Bio-diesel plantations on community/Government/ forest waste lands would be encouraged while plantation in fertile irrigated lands would not be encouraged. The focus would be on indigenous production of bio-diesel feedstock and import of Free Fatty Acid (FFA) based such as oil, palm etc. would not be permitted.
  2. An indicative target of 20% blending of bio-fuels, both for bio-diesel and bio-ethanol, by 2017 has been proposed.
  3. Minimum Support Price (MSP) for non-edible oil seeds would be announced with periodic revision to provide fair price to the growers. Minimum Purchase Price (MPP) for purchase of bio-ethanol and bio-diesel would be announced with periodic revision.
  4. Employment provided in plantations of trees and shrub bearing non-edible oilseeds will be made eligible for coverage under the National Rural Employment Guarantee Programme.
  1. Major thrust will be given to research, development and demonstration with focus on plantations, processing and production of bio-fuels, including Second Generation Bio-fuels.
  2. In view of the current direct and indirect subsidies to fossil fuels and distortions in energy pricing, a level playing field is necessary for accelerated development and utilization of biofuels to sub serve the Policy objectives. Financial incentives, including subsidies and grants, may be considered for second generation bio-fuels. If it becomes necessary, a National Bio-fuel Fund could be considered.
  3. The National Biofuel Policy envisages that bio-fuels, namely, bio-diesel and bio-ethanol may be brought under the ambit of “Declared Goods” by the Government to ensure unrestricted movement of bio-fuels within and outside the States.  It is also stated in the Policy that no taxes and duties should be levied on bio-diesel & bio-ethanol.
  4. A National Biofuel Coordination Committee, headed by the Prime Minister, will be set up to provide policy guidance and coordination.
  5. A Biofuel Steering Committee, chaired by Cabinet Secretary, will be set up to oversee implementation of the Policy.
  6. The responsibility of storage, distribution and marketing of biofuels would rest with OMCs. This shall be carried out through their existing storage and distribution infrastructure and marketing networks, which may be suitably modified or upgraded to meet the requirements for biofuels.
  7. Plantation of non-edible oil bearing plants, the setting up of oil expelling/extraction and processing units for production of bio-diesel and creation of any new infrastructure for storage and distribution would be declared as a priority sector for the purposes of lending by financial institutions and banks. National Bank of Agriculture and Rural Development would provide re-financing towards loans to farmers for plantations. Indian Renewable Energy Development Agency, small industries Development Bank of India, commercial banks would be actively involved in providing finance for various activities under the entire biofuel value chain, at different levels.
  8. Investments and joint ventures in the BIO-FUELS sector are proposed to be encouraged. Biofuel technologies and projects would be allowed 100% foreign equity through automatic approval route to attract Foreign Direct Investment would not be open for FDI participation.
  9. Import of biofuels would only be permitted to the extent necessary, and will be decided by  the National Biofuel Coordination Committee   proposed under this Policy.  Duties and taxes would be levied on the imports so as to ensure that indigenously produced biofuels are not costlier than the imported biofuels. Import of Free Fatty Acid will not be permitted for production of biofuels. Export of biofuels would only be permitted after meeting the domestic requirements and would be decided by the National Biofuel Coordination Committee.

The Ministry of New & Renewable Energy has been designated as the co-ordinating Ministry for biofuel development and utilization while specific roles have been assigned to other concerned Ministries. In order to enable the Ministry of New & Renewable Energy to effectively carry out its role as the coordinating Ministry for the National Biofuel Progamme, it will be necessary for it to be suitably strengthened through augmentation of its manpower with the flexibility of hiring external professional manpower and services.

An Indo-US MoU has been signed on biofuels with focus on joint R&D, particularly on second generation biofuels such as, cellulosic ethanol and algal biodiesel. Another initiative with research institutes and industry is on for development of high efficiency engines for use of SVO (straight vegetable oil) for stationary applications.

In Jan 2013, the government having cleared the import of the commodity, the public sector oil marketing companies were reported to be moving jointly to float a Rs. 3,500-crore global tender to source ethanol. The annual requirement is estimated to be about 1,000 million litres for a pan-India roll-out of 5 per cent blended petrol, which is already available in some States. 5% blending of ethanol with gasoline has already been taken up by the Oil Marketing Companies 20 States and 4 Union Territories.  10% mandatory blending of ethanol with gasoline is to become effective from October, 2008 in these States. Countries like the United States now have established ‘doping’ programmes that involve up to 20 per cent ethanol.

India stands to save a huge amount of foreign exchange through the blending programme, provided it gets ethanol at a viable price. There is also an environment & economical dividend as India’s ethanol source is sugarcane unlike U.S.’s (food crops so no increase in food prices). It ought to follow the example of Brazil, 51 per cent of whose fuel market is made up by sugar-based ethanol, making it the leading biofuel exporter and the second biggest producer after the U.S.

Domestic ethanol consumption rose by 4.5 per cent to 2.08 billion litres (production- 2.1 billion litres in 2012). However, only an estimated 400 million litres were available to be blended with petrol. The liquor industry’s insatiable appetite for ethanol is responsible, and powerful interests that push for better price yields are having a field day. So if imports are allowed then pricing formula should be mutually beneficial to all in long term otherwise the government ought to consider an intervention to mandatorily channel a certain percentage of indigenously produced ethanol for a requirement that is clearly in the national interest. States should also cooperate by easing regulations. Meanwhile, sufficient lead time should be given to the auto industry to carry out engine and other modifications to make vehicles compatible with still higher levels of blended fuel.

            We (Virgin Atlantic) were the first airline to take a bio-fuel flight when everyone was saying it couldn’t be done. We need to make sure that there are global protocols on how the industry develops bio-fuels such as by ensuring that we don’t cut down forests, don’t displace food crops and don’t use scarce water resources.

New Zealand bio-fuel company, Lanzatech, take waste gases from industrial processes which are bad for the environment, reprocess them to initially make ethanol and then jet fuel. There is an interesting statistic. If you just fitted these Lanzatech scrubbers on 65 per cent of the world’s steel mills, you will produce 15 billion gallons of jet fuel a year and that’s over 20 per cent of current global jet fuel consumption. Its early days yet and the trial plants are working but we are looking to fix some industrial scale units. You could well see our Delhi and Shanghai flights flying on bio-fuel in the next three years

In Oct 2012, The European Union (EU) has announced on October 17 that the amount of biofuels that will be required to make up the transportation energy mix by 2020 has been halved from 10 per cent to 5 per cent therefore effectively revises the Renewable Energy Directive (RED), 2009.

A study conducted in 2009-2012 by the EU found that greenhouse gas emissions were on the rise because of conversion of agricultural land for planting first-generation biofuel crops(such as corn, sugarcane, and potato). It also became known that large quantities of carbon stock had been released into the atmosphere because of forest clearance and peat land-draining.

The EU is now incentivising second-generation biofuels — manufactured from crop residues such as organic waste, algae, and woody materials — that do not interfere with food-production. The RED also required that biofuels which replace fossil fuels be at least 35 per cent more efficient. The EU has now made more stringent; biofuels should be at least 50 per cent more efficient by 2017, and 60 per cent more efficient after 2020. Research on high-performance biofuels is still nascent. Focus is more on extracting fuel rather than efficiency from available stock. The announcement also affirms that till 2020, no major changes will be effected in the biofuels sector, and post-2020, only second-generation biofuels will be supported, paving the way for sustained and focused development of high-efficiency, low-emission alternatives to fossil fuels.

Like the EU, the U.S. too has a BIO-FUELS-consumption target set for 2022. However, a U.S. National Research Council report released on October 24 found that if algal biofuels, second-generation fluids whose energy capacity lies between petrol’s and diesel’s, have to constitute as much as 5 per cent of the country’s alternate energy mix, “unsustainable demands” would be placed on “energy, water and nutrients.”

In Sep 2013, oil import is the heaviest burden on India’s foreign exchange, at $144 billion last year.

Brazil has already done it successfully, reducing petrol consumption by 30 per cent. Brazil is the global leader with 16 million of the world’s total 27 million flexi-fuel vehicles in December 2011. The Brazilians are now moving into cellulosic ethanol technology, which uses waste material and bagasse from sugar mills. The use of fuel ethanol has created a synergy between the agriculture and energy sectors and a win-win for farmers, industry and government. It has also improved the quality of air in Brazil’s cities as ethanol is less polluting than petrol.

Oil crisis

How did Brazil do it?

In 1974, hurt by the oil crisis, the government brought together all stakeholders — sugar cane farmers, sugar mills, car manufacturers and oil companies besides the ministries of agriculture, industry and energy — and formulated a policy that would ensure energy independence. Today, fuel ethanol is the centrepiece of Brazil’s energy, agricultural and industrial strategy and Brazil is a role model for the world.

Brazil is working quietly to create a global ethanol market with standardization of specifications and market mechanisms in collaboration with the U.S. & encouraging and collaborating with others. India has the potential to replicate the success of Brazil; we are the second largest producer of sugar cane in the world. And the risk and investment involved in ethanol production is far lower than in oil exploration and production.

Hostage to policy        

Ethanol has been considered before. In 2006, the government of India launched a programme of five per cent mandatory ethanol blending. But oil companies offer unattractive prices to local ethanol suppliers even as they pay top dollar for foreign oil supplies. The ethanol producers naturally prefer the better prices offered by chemical and alcohol companies as well as foreign importers.

The mandatory blending should be increased to 10 per cent immediately, with the target of 20 per cent in the next three years. New Delhi can compel the oil companies to invest in ethanol production, so they have a stake in its development. The car manufacturers too must be brought on board to modify the engines. Some foreign car makers in India such as Ford, GM, Volkswagen, Honda, Toyota, Renault and Fiat are already producing flexi-fuel cars in Brazil, and can easily do so in and for India.


Ethanol will help farmers sustain their income during the cyclical bumper harvests and their lower sugar prices, as is the prevailing situation this year. India will reduce its trade deficit and foreign exchange outflow. And there will be less pollution. Most importantly, fuel ethanol will be a sustainable, long term, India-centric solution.

READ MORE:Topics under Current Affairs and for UPSC IAS Prelims Exam year 2022


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