Government introduces The National Biofuels Policy 2018
The new policy proposes a viability gap funding scheme of INR 5,000 crore for 2G biorefineries.
The Union Cabinet on Wednesday unveiled a comprehensive biofuels policy which, among other things, allows farmers to divert excess crop production for biofuels production and sets aside INR 5,000 crore to help establish second-generation (2G) ethanol refineries.
The National Biofuels Policy 2018 seeks to expand the range of feedstock available for ethanol production beyond sugar molasses, an official statement said.
Sugarcane juice, sugar-containing crops like beet, sorghum, corn and cassava, and damaged grains unfit for human consumption, such as rotten potato, wheat, and broken rice, can be considered for ethanol production.
Besides, farmers who are "at risk of not getting the appropriate price for their produce during the surplus production phase" can use the surplus grains to generate ethanol which cannot be blended with petrol, provided they have the approval of the National Biofuels Coordination Committee, the statement said.
The policy will offer a mechanism to address the mounting municipal solid waste problem in the country by converting it into drop-in fuels.
The new policy also proposes a viability gap funding scheme of INR 5,000 crore for 2G biorefineries, to be deployed over six years.
The scheme will be in addition to other incentives and higher purchase prices available to 2G biofuels as compared to 1G biofuels (bioethanol and biodiesel).
Oil marketing companies are in the process of setting up 12 2G biorefineries at an investment of around INR 10,000 crore.
To source non-edible oilseeds, used cooking oil and short-generation crops to produce biodiesel, the policy suggests the setting up of supply chain mechanisms.
To synergize efforts to improve biofuels production, the policy delineates the roles and responsibilities of various ministries and departments.