The National Policy of biofuels of India – A perspective

Sudip Das

Energy Policy, 2020, vol. 143, issue C

Abstract: The National Policy on Biofuels (NPB) 2018 was adopted on May 16, 2018 in India to augment the generation of biofuels and to build a sustainable biofuel ecosystem. The Biodiesel Blending programme (BBP) got affected due to lack of sufficient feedstock coupled with an 18% Goods and Services Tax (GST) effective from July 1, 2017. The high GST resulted in the price of biodiesel being higher than that of conventional diesel thereby hindering the blending mandates. Most states in India do not allow free interstate movement of molasses resulting in artificially depressed prices besides derailing the Ethanol Blending Petrol (EBP) programme. NPB 2018 prohibits the import and export of biofuels to other nations resulting in reduced economic efficiency. The use of foodgrains as feedstock for biofuel production hampers food availability to the needy people and adversely affects food prices. The higher funding and incentives proposed to 2G ethanol production in NPB 2018 needs to be extended to 1G ethanol also as majority of the ethanol production happens through 1G. The paper touches upon the key biofuel policies of various nations, features of NPB 2018 and its critical analysis, BBP and EBP programmes and their current challenges and suggests future reforms.

Keywords: Biofuel policy; Ethanol; Biodiesel; Blending; Petrol (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:143:y:2020:i:c:s0301421520303347

DOI: 10.1016/j.enpol.2020.111595

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