Biofuels in India

Any hydrocarbon fuel that is produced from an organic matter within a short period of time is considered a biofuel. It may be solid, liquid or gaseous in nature.

Solid: Wood, dried plant material, and manure

Liquid: Bioethanol and Biodiesel

Gaseous: Biogas

Generations of biofuel

First generation

  • Sourced from food-based plants containing energy molecules
  • Limited biofuel yield
  • May have negative impact on food security
  • Ex.: bioethanol and biodiesel

Second generation

  • Use feedstock of lignocellulosic plant material
  • Includes non-food-based items or by-products of food crops that are considered waste such as straw, bagasse, forest residues
  • Reduced greenhouse gas emission compared to 1G
  • Limited commercial scale production
  • Ex.: biodiesel and cellulose ethanol

Third generation

  • Primarily based on microorganisms like algae for production
  • Provides high-yield and does not rely on arable land use
  • Fertilizers used for its production may cause environmental pollution
  • Still in the research and development stage

Fourth generation

  • Also known as photobiological solar fuels
  • Crops are genetically modified to absorb large amounts of carbon and then converted into fuel using second-generation techniques.
  • Inexhaustible, cheap and widely available
  • Some of these fuels are considered carbon-negative
  • Still in early stages of research

The two most widely used biofuel types are

  1. Sugar-based bioethanol production
  2. Fatty acid methyl ester-based biodiesel

Benefits for Biofuel use

  • Biofuels offer both advantages and disadvantages in terms of environmental, economic and social sustainability.
  • Reduction in greenhouse gas (GHG) emissions
  • Increases energy security through lower import of crude oil
  • Increase participation of local entrepreneurs and sugarcane farmers in the energy economy
  • Supports overall rural development
  • Decrease vehicular emissions

Initiatives taken

Initiatives by the Department of Biotechnology, Ministry of Science and Technology

  • It developed technology for 2G Ethanol, Indigenous Cellulolytic Enzyme for biofuel production and micro algae-based sewage treatment.
  • Expanded global cooperation through initiatives like Mission Innovation and Bio Future Platform to reach target goals faster

Pradhan Mantri JI-VAN Yojana

  • Launched in 2019
  • Aims to foster an environment for the development of business ventures
  • Aids to advance research and development in the 2G ethanol market

Ethanol blending

  • Biofuel Policy, 2018 has set target of reaching 20% ethanol-blending and 5% biodiesel-blending by the year 2030.
  • The Government has reduced GST on ethanol blending from 18% to 5%.

GOBAR (Galvanizing Organic Bio-Agro Resources) DHAN scheme

  • Launched in 2018 under the Swachh Bharat Mission (Gramin)
  • Focused on utilizing solid farm waste into compost, biogas, and bio-CNG, which in turn keeps villages clean and boosts rural economy

Repurpose Used Cooking Oil (RUCO)

  • Launched by the Food Safety and Standards Authority of India (FSSAI)
  • Creates an ecosystem where used cooking oil is collected and converted to biodiesel

National Policy on Biofuels

  • Launched in 2018 by Ministry of Petroleum and Natural Gas
  • Categorization of biofuels to better target extension of financial and fiscal incentives. The two main categories are:
    • Basic Biofuels- First Generation (1G) bioethanol & biodiesel
    • Advanced Biofuels – Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, third Generation (3G) biofuels, bio-CNG etc.
  • Expanded scope of raw material for ethanol production by allowing use of Sugarcane Juice, sugar containing materials, starch containing materials, and damaged food grains unfit for human consumption
  • Allowed use of surplus food grains for production of ethanol to ensure appropriate price to farmers with the approval of the National Biofuel Coordination Committee.
  • Viability gap funding scheme for 2G ethanol Bio refineries in addition to tax incentives and higher purchase price
  • Encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil, short gestation crops.


  • Potential food security and water challenges posed as sugarcane is a water intensive crop grown on land meant for food production
  • India is currently a net importer of ethanol as per reports released by Niti Aayog which means that it is yet to contribute to increase in energy security.
  • The gains in tailpipe emissions from ethanol blending too small and may become redundant with the push for electrifying surface transport.
  • Benefit to farmers and rural economies from biofuel production in Indian scenario may bring few benefits at very high cost.

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