India considers forming ‘biofuels alliance’ of countries

Indian government plans to ally with other countries, in a bid to meet ambitious renewable targets

India is reported to be considering forming an alliance of biofuels-producing countries that would facilitate technology transfer on advanced biofuels and other forms of co-operation as prime minister Narendra Modi’s government seeks to scale up production to meet ambitious blending mandates in ethanol and biodiesel.

According to news reports last weekend, India is keen that stronger international co-operation on biofuels is in place ahead of its hosting of the G20 summit next September. A move that if realised could help speed up deployment of foreign investment in what is being tipped to be one of the world’s biggest biofuels consuming countries.

“We are looking at having some kind of international collaboration when we take over the G20 presidency. All the major producers of biofuels are members of G20,” said an Indian government official cited in a report by Indian news site Mint.

Technology and infrastructure

The report said a future alliance would in its early stages focus on sharing of technology and transfer of technology for production of biofuel from advanced feedstock as well as second and third generation biofuels, rather than direct trade of the biofuels themselves.

India earlier this year signed a co-operation agreement with biofuels superpower Brazil, with other large countries in the sector such as US, Germany, Argentina and China also part of the G20 bloc of major rich-world and developing economies.

Under India’s Biofuels Law that was mandated in 2018, only feedstocks and biofuels sourced in India are eligible to meet mandates, a stipulation that was aimed at providing additional revenue streams for Indian farmers and biofuels producers.

However, the tight restrictions on trade don’t extend to foreign investment in biofuels infrastructure, with the Indian government keen to attract technology and know-how from overseas so that its domestic companies can scale up production of ethanol and biodiesel from feedstocks such as used cooking oil and agricultural residues such as rice husks.

US biofuels technology company Aemetis is already a large investor in India’s biodiesel sector, and last month, was selected by India’s three government-controlled oil marketing companies and a major oil refiner to supply biodiesel, while Austrian waste-based biodiesel Muenzer is expanding its production capacity in several states.

But foreign investment has been deemed insufficient to put India on track to meet blending targets, which require a 20% share for ethanol in the overall gasoline pool by 2025, double its current rate.

Although the current rate of 10% in 2022 was in step with government targets, the US Department of Agriculture said in a recent report that scaling up to the 2025 target would be “extremely challenging”.

In contrast with some of the breakthroughs in ethanol, biodiesel consumption in India barely registered in 2022 at 0.07 incorporated into the road-based biodiesel pool, compared with a mandate of 5% by 2030.

Besides the technological challenges of producing 2G and 3G ethanol, finding sufficient domestic supplies of feedstock and energy, such as electric power, and affordable fuels has also proved challenging, with India’s agriculture highly susceptible to water shortages, extreme weather such as floods and typhoons, according to researchers.

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