Sir,
The recent decision regarding the National Bio Fuel Policy by the Union Cabinet is a welcome step towards reducing our over-dependence on crude oil imports. Domestic supply of crude oil meets only 23 percent of demand with the remaining been imported thus putting a huge burden on the exchequers. Amid the global uncertainty with the US pulling out of the Iran Nuclear deal and uncertainty prevailing in the Middle East, rates of crude oil aren’t going to calm down anytime sooner.
Currently, India is using E10 petrol i.e. 10 percent ethanol blended with fuel. According to the official estimates one crore liters of E10 petrol saves 28 crore of Forex at current rates and reduces the carbon dioxide emission by about 20,000 tons per year.
Problem though lies in the huge gap between the demand and supply of ethanol. The major source of the ethanol supply currently available to the oil companies is from the sugar factories. Present rules allow the Sugar factories to divert it to other users like alcohol producers who pay more. The oil companies have been floating tenders for ethanol supply, but availability lags behind their needs, because the price is often not attractive enough for the sugar industry. The new policy is expected to benefit the farmers, who will be able to sell various types of agricultural waste to industry at remunerative prices.
As the current rules allow only ethanol produced from sugarcane to be used for blending with petrol, scope of the products that can be blended has now been expanded. Under the new policy, feed-stock for bio-fuels includes sugar beet, corn, damaged food-grain, potatoes, and even municipal solid waste. This will likely reduce the cost of producing bio-fuels and improve affordability for consumers, particularly during times when oil prices reach discomforting levels. The National Bio Fuel Policy was long overdue. The success of the policy will now depend upon its effective implementation which would go a long way in reducing India’s dependence on crude oil imports.
Yours etc…
Rohit Hangloo
Barnai