Biofuel producing countries alliance under consideration

In a bid to counter OPEC, India is looking at creating an alliance of biofuel producing countries, with biofuel expected to be part of the agenda of G20 summit scheduled to be held in India on 9-10 September next year.

The alliance would initially focus on knowledge sharing and transfer of technology on production of biofuel from feedstock and 2G and 3G biofuels, rather than trade

India is set to take up the G20 Presidency in December 2022. Several major biofuel producers including the US, Brazil, Argentina, Indonesia and China are part of G20.

First generation biofuels are produced from sugar, starch, corn, wheat, broken rice among others. 2G or second-generation biofuels are produced from various types of non-food biomass, such as plant materials and animal waste. On the other hand, 3G biofuel is the fuel produced from microorganisms such as bacteria and algae.

The plan comes at a time when India is eyeing for energy security as the world stares at an energy crisis amid the Russia-Ukraine conflict. With around 85% of the country’s energy requirement being met through imports, the crisis may have a severe impact for India.

The move for an alliance of biofuel producers is planned to achieve energy security for oil importing countries, keeping in view the hold the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, together known as ‘OPEC+’, have over the global crude oil market.

Amid concerns of a global energy crisis, OPEC+ recently decided to lower its daily production level by 100,000 barrels per day for October, which resulted in a spike in prices for a short span. India has time and again asked OPEC and its member countries to raise production keeping in view the requirement of oil consuming nations.

India also has an ambitious biofuel roadmap under its national biofuel policy. Government has set a target to achieve 20% ethanol blending in petrol by 2025-26. The initial deadline to achieve 20% blending was 2030. The target of petrol supplies with 10% ethanol blending was achieved in June this year, ahead of the original schedule of November 2022.

Launched in 2018 with a thrust on advanced biofuels, the policy indicates a viability gap funding scheme for 2G ethanol bio refineries of ₹5,000 crore in six years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels. The policy encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil and short gestation crops.