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The Indian economy is one of the fastest-growing economies in the world and the import of non-renewable sources of energy to fulfil India’s energy consumption requirements plays a pivotal role to balance the economic structure, leading to the necessity for alternative sources of energy. Due to the very reason, the production and usage of Biofuels are gaining much importance. Globally it caught attention over the decades but the Indian bio-energy sector is still underdeveloped. Biofuels, being a derivative of renewable biomass resources such as plastic, municipal solid waste, forestry residues, agricultural wastes, surplus food grains, etc have great potential, acknowledging the very fact, on 4th of June 2018 India introduced its ‘National Policy on Biofuels’. The existing national policy on Biofuels aims at mainstreaming Biofuel to offer a central role for the Biofuels in the energy and transportation sectors of the country in the upcoming decades. The policy categorizes biofuels as “Basic Biofuels” viz. First Generation (1G) bioethanol and biodiesel & “Advanced Biofuels” viz. Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels. Third Generation Biofuels (3G), CNG, etc. to allow extension of proper financial and fiscal incentives under each category. To produce ethanol for blending with petrol, the policy allows the usage of surplus food grains with the approval of the National Biofuel Coordination Committee.


According to the policy of 2018, the government intends to boost the usage of Biofuels in the energy and transportation sector through the advancement of Biofuels production from the domestic feedstock. For which initiatives like development of 2G Ethanol and transferring the technology to the Oil Marketing Companies (OMC) were undertaken by the Department of Bio-Technology. The Indigenous Cellulolytic Enzyme is developed to foster Biofuels production in India. Also, various training and awareness programmes have been introduced to encourage more people to join the Biofuel industry, which did offer efficient outcomes but was not significant enough.

The Government of India provides a lot of incentives and financial policies to promote Biofuel, as an alternative source of energy. The profitable Biofuel development heavily affects the other related sectors of the economic strata; agriculture being one of them. The Biofuels thrust is on the supply side even though the demand-side factors also play a major role in promoting Biofuels. The policy revolves around the Research and Development (R&D) in processing and Production technologies of byproducts along with Biofuel value chain.

Trade-in Biofuels, state participation in Biofuel programmes and creation of awareness acts as the institutional policies that promote the Biofuel industry. Taking in view the market situations, along with Oil Marketing Companies and other related companies, all associate with Biofuel industries. To lower the adverse effect on the local market for Biofuel production, the policy proposes an embargo on the import of Biofuels and thus prohibits the export of Biofuels too. Which happens to create an issue of a debate dividing the opinions into for and against the prohibition on the import of Biofuels. But the policy seeks to set up scientific and technical co-operation (bilateral and multi-lateral) in the Biofuel sector but following national priorities to include joint research and technology development, field studies, pilot-scale plants, and demonstration projects involving R&D institutes and industry.


Development of Biofuels can help both rural and urban sector to grow. And there exists a varied range of scope for the same. Efforts for producing sustainable biofuels can be made by ensuring the use of wastelands and municipal wastes that get generated in the cities. With the capacity to enhance the independence of the transportation sector with climate change mitigation by reducing GHG emissions, Biofuels are receiving significant attention. But to have the commercial success of the Biofuel industry, advanced technology with encouraging finance policies would be required to support the mechanism, only then Biofuel can truly act as an alternative source of energy. A well designed and well-implemented biofuel solution can act as a boon for the economic structure of India.

Written by Oindrila Roy Muhuri of Indian Institute of Legal Studies

Edited by Annanay Goyal

Post Author: lawgical forum

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