Biofuels, where does India stand?

Yes, there are conflicting positions when it comes to alternative energy, clean energy and in particular, the biofuels. India needs to become more pro-active and must gel with the rest of the world. India’s policy options must be concretized and made to work there area ranges of issue and a range of options.

Biofuels have been talked for long. And it seems at last some action is on. But what is not clear is what the government’s own thinking is. What is the achievement so far? Where does India need to do more?

They chairman of the Praj industries, a big player in biofuels, says that biofuels at any time is competitive. When the crude prices was at as high as 147 dollars per barrel or even now when it is as low as 60-65 dollar a barrel. He cites the US situation today, when retail ethanol is still available at a good 25-30 per cent discount to retail gasoline in the United States and Brazil. So, he says what is good for USA and Brazil should be much better for Asian countries, in India as well. He also cites Thailand where the blending of ethanol and diesel has become a hedge against high oil prices, especially when the country is using precious and scarce foreign exchange to import oil.
On the face of it such arguments seem quite convincing.

In India there are certain peculiarties. The way we were going on in heavily subsidising our petroleum products, there are special price subsidies for kerosine, for LPG and for petrol and diesel.

This had determined our prices and the subsidies regime and we had continued to issue oil bonds to compensate our loss-making oil companies.
And yet, it looks the production of ethanol in India seems to be a viable option on many grounds, not just prices alone. Environment, energy security and also on the prices front, also on the point of rural development and many other fronts! It is pointed out that even if one takes the current diesel retail prices, biodiesel will still be available at a discount, says the Praj man. Even in the case of ethanol, it is still quite competitive at the current price of crude.

To develop the biofuels is a high priority when we see the advantages, including the environment; security, self-reliance and these objectives need to be factored into when we calculate the economic advantages and disadvantages when we discuss the crude import vs. the indigenous sources through alternative biofuels energy sources.

So, India must come out with an biofuels policy so that our current economics, (or economic bleeding?) when we simply stuck to our mindset and run around the world seeking crude oil sources and supplies and the international market and also the international players are all tied up with their own strategies and India seems to be at the mercy of these unreliable sources for long. For how long? No one seems to have any clue.
So, there is a strong case we go for biofuels.

But there is a recent reversal of policy at the Cabinet level. The Cabinet approved the national policy on biofuels as vetted by the group of ministers (GoM) and after okayed by the Cabinet Committee on Economic Affairs in September, the very same policy was reversed! Why?

The rural development ministry said the policy to raise energy plantations for cultivating jatropha species has come stuck! In Chattisgarh and Haryana the plants collapsed owing to summer heat becoming unbearable! The plan envisaged producing 20 per cent of equivalent plantation capacity to reduce petrol and diesel consumption of that capacity too by the year 2017.Bioenergy cover of the plantations was to reach a hectare acreage of 30 to 40 million hectares of land.

The acreage was to exceed the very acreage under wheat in India. Such projections only showed the projections of the ignorance of our politicians!
So, the over-all scarcity of land made the Cabinet see red and the policy was aborted!

The most serious charge was that large scale food crops-fit arable land can’t be diverted to non-food energy plantations.

So, the government’s bioenergy plan seems utopian!
Further, what the government also didn’t foresee is the likelihood of scarcity of food and also escalation of food prices.

FAO also cautioned the government on the food front. UK’s national science academy and the Royal Society also cautioned the governments. The need to study the techno-economic aspects of undertaking large scale biofuel plantations is also highlighted.

Anyway, the experience of countries like USA, Brazil and Thailand seem to give us reconsideration.

Of course, the state governments too are drawing up renewable and alternative energy plans.

India is a vast country where deprivation takes many dimensions to energy needs.

So, we need to study and research and come out with so many viable plans at many levels.

One important aspect, pointed by the TERI, an NGO for instance, is that the relatively affluent 25 per cent of the urban consumers, urban households, somehow garner 80 per cent of the subsidy on LPG! 50 per cent of the households in the country are yet to be electrified! This section dep3ends upon subsidised kerosene.80 per cent of the rural households directly burn biomass.

So, we need to come out with an energy policy that ensures equity, economics and efficiency and also environment and security!
So, how does jatropha cultivation for biofuels makes sense? In this environment of many contradictions and many layers of inequity?
24 million hectares of fallow land is said to be uncultivated. Then, this type of lands is with the marginal and small farmers.

The story of Indian small farmers is told many times. Debt, poverty and further debt and more poverty!

There are strategies and also new ideas. One is the use of jatropha oil, if it is at all possible to produce on the scale envisaged or imagined, and use the straight vegetable oils(SVO) for meeting directly the energy needs of the rural communities. Cited are the uses in Africa and South East Asia.

So many heart-touching individual success stories are cited to show such a small, decentralised energy security development models can be envisaged and implemented. Andhra Pradesh stories abound. TERI has cited the experience with the Project Green. Anyway, there is no harm to try such development models. We have to explore further into such experiments.
There is no wisdom in the government’s existing heavy subsidy consuming oil companies regime in meeting the energy needs.

The new US President elect Barack Obama has announced in his election manifesto a big “clean energy” plan. Thomas Friedman, his compatriot, has come out with his “Hot, Flat and Crowded” Green energy programme.

So, the world is waking up to the search for an alternative to the current highly polluting environment and climate change threats posed by petroleum dependent energy. India’s National Action Plan on Climate Change is in place and needs to be further closer to the “Moon” in the right orbit!

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