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8.3 India
8.3.1 Overview of India's National Policies on Biofuels
Indian national biofuel policy, in 2009, was cautiously optimistic in nature. It aimed
to achieve a 20% blending of biofuels with gasoline by 2017, mainly from ethanol.
However, the 10% ethanol blending target set in October, 2008, was not achieved in
the country, and the 20% target seemed quite challenging. In the national policy,
ethanol was envisaged as the major source of biofuels in the country, while the other
plant-based biofuels (mainly biodiesels) were considered as secondary sources.
The major obstacle to maintaining a stable supply of ethanol for biofuel production was the instability of sugarcane production. The pricing of ethanol-based biofuels was also very controversial, and disagreements between the sugar industry, the
major producer of ethanol (from its by-product molasses), and the oil marketing
companies, the main distributors of the biofuels, were not resolved. National policy
briefly mentioned pricing, but the government gave no clear indication regarding
how it will handle the issue except to pass the responsibility to the Biofuel Steering
Committee. Uncertainty about the pricing policy was a serious obstacle to the promotion of the bioethanol industry in India.
Regarding biodiesel production, the national policy stated that no foodproducing land should be used, and biodiesel should be produced only from nonedible oilseed plantations on lands which were considered wastelands, degraded, or
marginal. However, it was not clear just how much wasteland was available. Land
availability is a serious problem in India where food shortages are increasing.
Definitions of degraded and wasteland vary according to productivity and length of
fallowness. Agricultural experts in the country claimed that technology is available
to convert a majority of the so-called wasteland to at least mono-cropping land provided required inputs are given. Moreover, most of the degraded lands are either
forest lands, which are difficult for farmers to access, or village common lands
belong to the panchayats and communities which are used by the landless and tribal
communities for cattle grazing and other purposes. The Ministry of New and
Renewable Energy, the implementing agency of the national biofuel policy, has little ability to procure wasteland to produce biodiesel because land is under the jurisdiction of other ministries and departments. The land may seem to be “wasted” and
“barren” to outsiders, but in reality much of it provides sustenance for millions of
poor and marginalized rural people. Most of these wastelands are classified as common property resources (CPRs) and are used as grazing ground for the village cattle. So on one hand, ethanol supply fluctuates, and on the other hand, availability of
wasteland for nonedible oil seed production is also uncertain under India’s new
national policy. Therefore, two of the pillars of biofuel policies (ethanol and wasteland) have been uncertain for India. Nevertheless, the policy also ensured the use of
the National Employment Guarantee Act (NREGA) to provide financial support for
the labor costs of biofuel production. Unfortunately, NREGA was the only source
8 Socioeconomic Impacts of Biofuels in East Asia
8.3 India
8.3.1 Overview of India's National Policies on Biofuels
Indian national biofuel policy, in 2009, was cautiously optimistic in nature. It aimed
to achieve a 20% blending of biofuels with gasoline by 2017, mainly from ethanol.
However, the 10% ethanol blending target set in October, 2008, was not achieved in
the country, and the 20% target seemed quite challenging. In the national policy,
ethanol was envisaged as the major source of biofuels in the country, while the other
plant-based biofuels (mainly biodiesels) were considered as secondary sources.
The major obstacle to maintaining a stable supply of ethanol for biofuel production was the instability of sugarcane production. The pricing of ethanol-based biofuels was also very controversial, and disagreements between the sugar industry, the
major producer of ethanol (from its by-product molasses), and the oil marketing
companies, the main distributors of the biofuels, were not resolved. National policy
briefly mentioned pricing, but the government gave no clear indication regarding
how it will handle the issue except to pass the responsibility to the Biofuel Steering
Committee. Uncertainty about the pricing policy was a serious obstacle to the promotion of the bioethanol industry in India.
Regarding biodiesel production, the national policy stated that no foodproducing land should be used, and biodiesel should be produced only from nonedible oilseed plantations on lands which were considered wastelands, degraded, or
marginal. However, it was not clear just how much wasteland was available. Land
availability is a serious problem in India where food shortages are increasing.
Definitions of degraded and wasteland vary according to productivity and length of
fallowness. Agricultural experts in the country claimed that technology is available
to convert a majority of the so-called wasteland to at least mono-cropping land provided required inputs are given. Moreover, most of the degraded lands are either
forest lands, which are difficult for farmers to access, or village common lands
belong to the panchayats and communities which are used by the landless and tribal
communities for cattle grazing and other purposes. The Ministry of New and
Renewable Energy, the implementing agency of the national biofuel policy, has little ability to procure wasteland to produce biodiesel because land is under the jurisdiction of other ministries and departments. The land may seem to be “wasted” and
“barren” to outsiders, but in reality much of it provides sustenance for millions of
poor and marginalized rural people. Most of these wastelands are classified as common property resources (CPRs) and are used as grazing ground for the village cattle. So on one hand, ethanol supply fluctuates, and on the other hand, availability of
wasteland for nonedible oil seed production is also uncertain under India’s new
national policy. Therefore, two of the pillars of biofuel policies (ethanol and wasteland) have been uncertain for India. Nevertheless, the policy also ensured the use of
the National Employment Guarantee Act (NREGA) to provide financial support for
the labor costs of biofuel production. Unfortunately, NREGA was the only source
8 Socioeconomic Impacts of Biofuels in East Asia