Indian Government Making Policies for a Flourishing Biofuel Industry

India, till now, doesn't have a well-developed Biofuel industry. But the government has now realized the need of the hour and is framing policies to rev up the green fuel production from sugarcane.

According to a recent report on "Indian Biofuel Industry" published by RNCOS, environmental safety, together with security and diversity of energy supply, are the principal aims of the Indian Government for the Biofuel industry. These factors are working as the main impetus for the growth of the Biofuel industry.

The Indian government has recently instituted its policies to promote the production and usage of Biofuel, with the effort directed on encouraging the ethanol blending with gasoline, and blending of Biofuel extracted from non-edible oils with diesel.

As per recent news, India, the second largest sugar producer in the world, may give permit to sugar mills to make use of low-grade sugar to produce ethanol to compensate for the price fall in the midst of record yield. "We're seriously thinking of allowing the use of secondary sugar for ethanol manufacturing,'' said Sharad Pawar, Agriculture Minister, in New Delhi, as reported by THE FINANCIAL EXPRESS on May 1, 2007. The Foreign Agricultural Service at the US Embassy in New Delhi predicted in a report dated April 20, 2007 that sugar production in India might touch the mark of 27.43 Million Tons in 2007. Production may further increase to around 28.8 Million Tons by September 2008.

Presently, the government policies allow sugar mills to prepare Biofuel from molasses (and not sugar) to ensure sufficient sugar supplies. The Centre, in May 2006, passed a law stating the blending of 5% ethanol in gasoline from November 2006.

Sugar mills, interested in establishing ethanol production facilities (using sugarcane and molasses), are being given subsidized loans of upto 40% of the project cost from the government controlled Sugar Development Fund.

The need to cut India's reliance on crude oil imports, provide environment-friendly alternative sources of fuel, and to support the Indian farmers by developing methods to keep sugarcane production high is driving the Biofuel policies.

According to the RNCOS report "Indian Biofuel Industry", a large proportion of arable area in India is under sugarcane production. The annual production of sugarcane for the year 2006 was about 266.89 Million Tons. However, the praxis of producing ethanol directly from sugarcane hasn't picked up in the country till yet, indicating huge opportunity for the development of production of ethanol.

The market research report presents a detailed picture of the Indian Biofuel industry with the foci on Indian Biofuel policy, demand & supply statistics, driving forces, opportunities, challenges, jatropha cultivation scenario, government initiatives, and future of the industry.

About RNCOS E-Services Pvt Ltd.:

RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of industry experts who analyze data collected from credible sources. They provide industry insights and analysis that helps corporations to take timely and accurate business decision in today's globally competitive environment.

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