Economics of biofuels – Food and feed must be given priority

Source: The post is based on the article “Economics of biofuels – Food and feed must be given priority” published in the Business Standard on 31st May 2023

Syllabus: GS – 3: Energy.

Relevance: About E20 target.

News: The government said to achieve the level of ethanol blending in petrol to 20% (E20) by 2025, instead of 2030. But a recent report rules out the availability of enough raw material to reach E20.

About the recent Amendments to the National Policy on Biofuels

Why does India need to revisit its E20 target?

Non-availability of land and low production capability: Brazil, the world’s leading sugar and ethanol producer, are able to grow crops exclusively for biofuel production because they have abundant land. Further, the productivity of these crops in India is lower than the global averages and their use for food and feed has to be given priority.

Not easy to divert food grains: Last year, the Food Corporation of India gave about one million tonnes of subsidised rice to distilleries for ethanol production. But diverting food grains like rice and corn for ethanol production often is not feasible as malnutrition is rampant, and India’s ranking on the global hunger index is low.

Vehicles need modifications: Most of the existing vehicles are, typically, not made to run on high ethanol doped fuels. They would require modifications, even if minor ones.

The level of emission reduction is low: The level of emission reduction achieved by replacing a small part of petrol with ethanol is too meagre to justify additional investment in engine modifications and creating fresh capacities to manufacture E20-compliant autos. According to a NITI Aayog report, the extra cost would be Rs 3,000-5,000 for every four-wheeler and Rs 1,000-2,000 for a two-wheeler.

What should be done to achieve the E20 target?

At present, the bulk of the ethanol is produced by the sugar industry, which has been permitted to utilise all products of sugarcane, including cane juice and finished sugar, for this purpose. To achieve E20 target, India should explore ways to produce ethanol by deploying second-generation (2G) technology. At least four such 2G ethanol plants are already coming up. India needs to set up more such plants.