130
6 India’s Bioeconomy and the Ambition over “Wastelands”
been divided into forest land (protected areas) and revenue land (usable for agricultural or other commercial activity). However, the biofuel policy creates an exception
to label degraded forest lands managed by the Ministry of Environment & Forests
as “wastelands” available for jatropha cultivation. Some have feared this creates a
precedent for converting India’s forest lands for commercial agricultural use. Also,
state-level policies that regulate the leasing of public revenue lands have been altered
in some cases to facilitate jatropha cultivation. For example, in 2007, Rajasthan
passed a law allowing for the leasing of public “wastelands” for biofuel feedstock
cultivation at very accessible, below-market prices (Government of Rajasthan 2007).
As of 2020, biodiesel blending remained negligible after reaching a meager 0.14%
in 2018, and all of it produced from imported sources such as palm stearin (a byproduct of palm oil imported for food) (Aradhey 2019a). However, a new National
Biofuels Policy launched in 2018 has built new momentum, as it reiterates India’s
ambition to cultivate perennial feedstock crops on a large scale (GOI 2018). Although
the policy itself does not spell out the area sought for that purpose, the Indian government currently identifies as much as 26 Mha of “wastelands” to be targeted for
landscape restoration of different forms (GOI 2019). It emphasizes the importance
of R&D to improve non-food oil crop yields and thus domestic feedstock availability, and it sets the indicative targets of having 5% biodiesel (B5) and 20% ethanol
(E20) blends by 2030 (GOI 2018). For the first time, the government also explicitly links these goals to climate change concerns and India’s nationally determined
contributions under the 2015 Paris Agreement (GOI 2018; Aradhey 2019a).
Tables 6.1 and 6.2 present in detail the timeline of key biofuel policies in India
and the country’s prevailing policy rationales, respectively.
6.1.4 Assessing Institutional Causality
It is self-evident that public policies have driven biofuel production and consumption in India. First, the state controls the middle of both ethanol and biodiesel
chains through its OMCs, namely the link between fuel demand and production.
This arrangement has allowed it to set the ethanol blending mandate and ensure
biodiesel procurement more easily. It has thereby created a demand for biofuels.
Second, the government has provided economic incentives for biofuel production to
private industries, including tax concessions, lending priority at state-owned banks,
grants to biofuel R&D and pilot project implementation, and the leasing of public
lands at below-market prices. Third, the government has changed regulations to
enable and facilitate biofuel expansion, inter alia, by allowing feedstock cultivation on forest lands and eligibility under the National Rural Employment Guarantee
Scheme. Fourth, the state has engaged directly in biodiesel production by establishing
plantations and pilot projects during the National Biodiesel Mission’s dissemination
phase. More recently, it has engaged in the “Jatropha 2.0” initiatives, such as through
Bharat Renewable Energy.
6 India’s Bioeconomy and the Ambition over “Wastelands”
been divided into forest land (protected areas) and revenue land (usable for agricultural or other commercial activity). However, the biofuel policy creates an exception
to label degraded forest lands managed by the Ministry of Environment & Forests
as “wastelands” available for jatropha cultivation. Some have feared this creates a
precedent for converting India’s forest lands for commercial agricultural use. Also,
state-level policies that regulate the leasing of public revenue lands have been altered
in some cases to facilitate jatropha cultivation. For example, in 2007, Rajasthan
passed a law allowing for the leasing of public “wastelands” for biofuel feedstock
cultivation at very accessible, below-market prices (Government of Rajasthan 2007).
As of 2020, biodiesel blending remained negligible after reaching a meager 0.14%
in 2018, and all of it produced from imported sources such as palm stearin (a byproduct of palm oil imported for food) (Aradhey 2019a). However, a new National
Biofuels Policy launched in 2018 has built new momentum, as it reiterates India’s
ambition to cultivate perennial feedstock crops on a large scale (GOI 2018). Although
the policy itself does not spell out the area sought for that purpose, the Indian government currently identifies as much as 26 Mha of “wastelands” to be targeted for
landscape restoration of different forms (GOI 2019). It emphasizes the importance
of R&D to improve non-food oil crop yields and thus domestic feedstock availability, and it sets the indicative targets of having 5% biodiesel (B5) and 20% ethanol
(E20) blends by 2030 (GOI 2018). For the first time, the government also explicitly links these goals to climate change concerns and India’s nationally determined
contributions under the 2015 Paris Agreement (GOI 2018; Aradhey 2019a).
Tables 6.1 and 6.2 present in detail the timeline of key biofuel policies in India
and the country’s prevailing policy rationales, respectively.
6.1.4 Assessing Institutional Causality
It is self-evident that public policies have driven biofuel production and consumption in India. First, the state controls the middle of both ethanol and biodiesel
chains through its OMCs, namely the link between fuel demand and production.
This arrangement has allowed it to set the ethanol blending mandate and ensure
biodiesel procurement more easily. It has thereby created a demand for biofuels.
Second, the government has provided economic incentives for biofuel production to
private industries, including tax concessions, lending priority at state-owned banks,
grants to biofuel R&D and pilot project implementation, and the leasing of public
lands at below-market prices. Third, the government has changed regulations to
enable and facilitate biofuel expansion, inter alia, by allowing feedstock cultivation on forest lands and eligibility under the National Rural Employment Guarantee
Scheme. Fourth, the state has engaged directly in biodiesel production by establishing
plantations and pilot projects during the National Biodiesel Mission’s dissemination
phase. More recently, it has engaged in the “Jatropha 2.0” initiatives, such as through
Bharat Renewable Energy.