Published Date: Dec 2023


India aims to reduce its dependence on fossil fuels and lower carbon emissions. Biofuels produced from sustainably grown feedstocks present a viable alternative. The Government of India has introduced various policies and schemes to boost biofuel production and use in the country.


Current status of biofuel production in India


India produced around 6.37 billion litres of biofuels in 2020-21, with ethanol contributing a major share. The country extracted around 5.13 billion litres of ethanol, primarily from sugarcane juice. Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited are the major players involved in ethanol procurement in India.


Ethanol Blended Petrol (EBP) Programme was launched in 2003 with the aim to introduce a mandatory blending of 5% ethanol in petrol. This has been raised to 10% recently. Several oil marketing companies have started supplying petrol blended with 10% ethanol (E10) in select areas. Along with reducing pollution, the programme aims to cut oil imports and support sugarcane farmers.


India also produced 1.24 billion litres of biodiesel in 2020-21, primarily from non-edible oilseeds like mustard. The National Biofuel Policy, 2018 has set a target of 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel by 2030.


Policies promoting biofuel development


To boost the production and consumption of biofuels, the Government of India has put in place enabling policies and schemes. Some key policy measures are:


- National Biofuel Policy, 2018: Lays out production targets, pathways for biofuel development and encourages setting up of necessary supply chain infrastructure.


- Ethanol Blended Petrol Programme: Mandates fuel sellers to sell 10% ethanol blended petrol. Provides subsidies to oil companies for undertaking ethanol blending.


- Interest Subvention Scheme: Provides financial assistance to loan projects engaged in biofuel production. Interest subvention for 5 years reduces risk for investors.


- Excise Duty Exemption: Exemption from excise duty for bioethanol produced from non-food sources like sugarcane juice or damaged foodgrains. This promotes second generation biofuels.


- Biofuel Co-Processing Policy: Allows co-processing of 5%-10% advanced biofuels along with fossil fuels in refineries. This boosts demand and production of advanced biofuels like bio-ATF.


These progressive policies are successfully driving the sustainable growth of India's biofuel sector.


Feedstock availability and production capacity expansion


Feedstock availability is crucial for expanding biofuel production capacity. India has sufficient agricultural residues and biomass that can potentially be utilized for biofuel production. Significant research is also happening in developing high yielding non-food feedstocks suitable for Indian conditions.


To meet its ambitious 2030 targets, India's current ethanol production capacity is being ramped up significantly from existing 750 crore litres to 1500 crore litres. Numerous grain-based and molasses-based distilleries are coming up across states. Advanced technologies are also enabling use of lignocellulosic biomass in biofuel production. Projects based on agricultural residues, energy plantations are in various stages of implementation.


Oil marketing companies are setting up infrastructure for transportation and marketing of higher ethanol-gasoline blends. This includes retrofitting dispensing units, adding ethanol storage tanks at depots, pipelines etc. The expansion is enabling consumption of ethanol at a scale required to meet blending targets on time.


Role of startups and private sector participation


India is emerging as a hotspot for biofuel startups. Several agri-tech startups are involved in developing high yielding non-food feedstock varieties suitable for the country. Others are working on advanced technologies such as biochemical, thermochemical routes for converting lignocellulosic biomass to liquid fuels.


Large corporates are also entering the biofuels business, attracted by the policy push and business potential. Indian Oil Corporation, DuPont, POET-DSM etc have set up 2G ethanol and biodiesel plants. Leading automakers like Maruti Suzuki and Hero Motocorp support eco-friendly fuels. Several ports are being modernized to handle increased biofuel trade.


Increasing participation from private sector will be crucial for achieving stated biofuel production targets, especially for advanced biofuels. Their R&D efforts, technology solutions, project management experience and access to capital will help in overcoming existing technological and infrastructural bottlenecks. Through public-private partnerships, Indian biofuels industry is progressing towards excellence and sustainability.




With sufficient cultivable land and biomass resources, biofuels have huge untapped potential in India's energy security. If produced and utilized sustainably following international standards, they can reduce GHG emissions significantly. The progressive policy regime has laid a strong foundation. Timely investments, capacity additions and supportive ecosystem development will enable transitioning to a low carbon future through biofuels. Continuous technology innovations will further strengthen their cost competitiveness. With dedicated efforts, India can certainly achieve its aspiration of becoming a leading biofuels producer and consumer globally.