Green fuels are the next frontier in India’s clean energy transition, promising reduced imports, rural income, and a path to net zero by 2070. High costs, storage gaps, and policy hurdles threaten progress. With pricing reforms, infrastructure investment, and farmer-centric models, India can unlock its potential as a global green fuel hub.
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Picture Courtesy: DOWNTOEARTH
Industry stakeholders are urging government to develop a national roadmap to expedite the adoption of green fuels.
Green fuels are renewable, low-carbon alternatives to fossil fuels, derived from biomass, waste, or renewable energy sources.
They reduce greenhouse gas emissions and enhance energy security by leveraging sustainable feedstocks.
Types of Green Fuels
Ethanol: Biofuel from sugarcane, maize, or agricultural waste (1G and 2G ethanol).
Bio-CNG: Compressed biogas from organic waste, a cleaner alternative to natural gas.
Green Hydrogen: Produced via electrolysis using renewable energy, ideal for heavy industries and transport.
Biodiesel: Derived from non-edible oils (e.g., jatropha) or used cooking oil, used in diesel blending.
Energy Security: India, the world’s third-largest energy consumer, relies on oil imports for over 85% of its needs, costing over $120 billion annually. Green fuels reduce this dependency.
Climate Goals: India aims for Net Zero by 2070. Green fuels like E20 cut emissions , bio-CNG is carbon-negative, and E85 reduces CO2.
Rural Economy: Biofuel production (e.g., ethanol from sugarcane) boosts farmer incomes; ₹1.21 lakh crore over the past 11 years. (Source: The Hindu)
Environmental Benefits: 2G ethanol tackles stubble burning by using agricultural waste, reducing air pollution.
Global Leadership: India’s ethanol success (third-largest producer globally) positions it to lead the Global Biofuels Alliance, enhancing its role in the Global South.
Pricing Issues: Administered ethanol prices deter producers.
High Costs of 2G Ethanol: 2G plants cost around ₹1000 crore vs ₹100 crore for 1G, limiting scalability. Output remains small-scale.
Tax Anomalies: High GST (40%) on flex-fuel vehicles vs 18% for hybrids discourages adoption.
Food Security Risks: 1G ethanol diverts sugarcane/maize, raising food prices. India became a maize importer in 2024 due to ethanol demand.
Policy Gaps: No clear roadmap, risking loss of E20 momentum. Diesel alternatives (e.g., isobutyl alcohol) need more R&D.
Ethanol Blended Petrol (EBP) Programme: Launched in 2003, achieved 10% blending in 2022, now targeting E20 by 2025. Saved ₹53,894 crore in forex since 2014.
National Biofuel Policy (2018, amended 2022): Sets 20% ethanol and 5% biodiesel blending targets by 2030; promotes 2G ethanol and bio-CNG.
PM-JI-VAN Yojana: Supports 2G ethanol plants using agri-residue, facilities operational in Haryana and Odisha.
GST Reduction: Ethanol for EBP taxed at 5% (down from 18%) to boost production.
National Green Hydrogen Mission: ₹19,744 crore to achieve 5 MMT production by 2030, with export potential via EU/Japan tie-ups.
India launched the Global Biofuel Alliance at a G20 summit in New Delhi: Coordinates agriculture, energy, and environment ministries to streamline biofuel projects.
Way Forward
Develop a Long-Term Roadmap: Create a post-2030 plan with clear targets for E85, bio-CNG, and green hydrogen to sustain decarbonization momentum.
Expand Storage Infrastructure: Development of a comprehensive green fuel infrastructure, including dedicated corridors for hydrogen pipelines, and decentralized solar expansion.
Shift to Market-Linked Pricing: Follow Brazil’s model, making ethanol 30% cheaper than petrol to boost demand. Phase out administered prices.
Promote 2G Ethanol: Subsidize 2G plant setup costs (e.g., grants) and scale R&D for cost reduction.
Level Tax Structures: Reduce GST on flex-fuel vehicles to 18%, aligning with hybrids, to encourage adoption.
Balance Food Security: Cap 1G ethanol production, prioritizing 2G to avoid food price spikes.
Integrate Green Hydrogen: Fast-track electrolyzer production and pilot hydrogen blending in transport.
Promote Circular Economy: Implement policies that promote the reuse, recycling, and repurposing of components from solar panels and wind turbines, minimizing waste and creating new economic opportunities.
Leverage Global Biofuels Alliance: Share ethanol expertise with Africa and ASEAN, promoting South-South cooperation.
Source: DOWNTOEARTH
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PRACTICE QUESTION Q. How can India integrate green fuels in transport and aviation sectors without affecting food security? (150 words) |
Green fuels are renewable or low-carbon fuels derived from sources like biomass, organic waste, and water, with a lower environmental impact.
Green hydrogen is produced by splitting water using an electrolyzer powered by renewable energy sources.
1G biofuels are produced from food crops, while 2G biofuels are derived from non-food feedstocks like agricultural waste.
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