National Bio-fuel Policy

The National Policy on Bio-fuels (2009) endeavours to facilitate and bring about optimal development and utilisation of indigenous biomass feedstocks for production of bio-fuels. The policy also envisages development of the next generation of more efficient bio-fuel conversion technologies based on new feedstocks.

The policy sets out the vision, medium-term goals, strategy and approach to bio-fuel development, and proposes a framework of technological, financial and institutional interventions and enabling mechanisms.

The policy aims at mainstreaming of bio-fuels and, therefore, envisions a central role for it in the energy and transportation sectors of the country in the coming decades. The policy will bring about accelerated development and promotion of the cultivation, production and use of bio-fuels to increasingly substitute petrol and diesel for transport and be used in stationary and other applications, while contributing to energy security, climate change mitigation, apart from creating new employment opportunities and leading to environmentally sustainable development.

The salient features of the policy are as follows:

1. Bio-diesel production will be taken up from non-edible oil seeds in waste/degraded/marginal lands.
2. An indicative target of 20% blending of bio-fuels, both for bio-diesel and bio-ethanol, by 2017 has been proposed.
3. Minimum Support Price (MSP) for non-edible oil seeds would be announced with periodic revision to provide fair price to the growers.
4. Minimum Purchase Price (MPP) for purchase of bio-ethanol and bio-diesel would be announced with periodic revision.
5. Major thrust will be given to research, development and demonstration with focus on plantations, processing and production of bio-fuels, including Second Generation Bio-fuels.
6. Financial incentives, including subsidies and grants, may be considered for second generation bio-fuels. If it becomes necessary, a National Bio-fuel Fund could be considered.
7. A National Bio-fuel Coordination Committee, headed by the Prime Minister, will be set up to provide policy guidance and coordination.
8. A Bio-fuel Steering Committee, chaired by the Cabinet Secretary, will be set up to oversee implementation of the policy.