Policy on Biofuels: Green Push?

Policy on Biofuels: Green Push?

News:

1.The Cabinet approved the National policy on Biofuels earlier this month.

Important Facts:

2.The policy aims to encourage the production and use of biofuels like ethanol.

3.This policy aims to rectify supply side issues in the production of biofuel

4.Important Provisions:

• In addition to sugarcane, the policy approves the use of sugar beet, sugar beet, corn, damaged food grain, potatoes, even municipal solid waste.
• Around Rs 5,000 crore investment for building bio-refineries and other infrastructure.

5.Benefits:

(i) It would reduce the cost of production thus improving economic accessibility.

(ii) Farmers could gain from selling their agricultural wastes to the industries.

(iii) Sugar industries would divert the by products to alcohol industries as the prices offered by oil companies were not attractive. Now the oil companies have alternatives like agricultural waste, municipal waste etc.

(iv)Ethanol supply of around 150 crore litres in 2017-18 could save foreign exchange worth over ₹4,000 crore due to less dependence on oil import.

(v)Would reduce pollution as it incentivises farmers to sell agricultural wastes instead of burning them.

(vi)Would provide cheaper alternatives to consumers who are burdened by the rising fuel prices.

6.Challenges:

(i)lack of technology to use biofuel efficiently

(ii)Right pricing to encourage the use of alternate inputs.

(iii)Farmers could be tempted to sell their surplus food grains for ethanol production. This might result in inflation of prices of foodgrains.

(iv)The supply chain infrastructure to take the biofuels to end consumers is inadequate.