India amends national biofuels policy to advance blending target by 5 years

SOURCE: S&P Global Commodity Insights

India has advanced blending target of 20% ethanol in petrol by five years to 2025-26 through an amendment to National Policy on Biofuels -2018, an official union cabinet release said on May 18th 2022.

The amendment also allows more feedstocks to be used in production of biofuels with an aim to reduce reliance on imported oil for meeting India's energy needs. The decision to advance blending deadline was taken at cabinet meeting chaired by Indian Prime Minister Narendra Modi on May 18th 2022.

According to market sources, the amendment is likely to further boost supplies of ethanol and other by products, as India is the world's second-largest producer of sugar after Brazil, which remains the primary raw material for ethanol production in the country.

The advanced target of blending 20% ethanol in petrol (20% ethanol, 80% petrol) by 5 years to 2025-26 from 2030, is considered a significant upgrade from the current blending norm mandates that allows 10% of ethanol blending in petrol. The amendment also proposes promoting the production of biofuels in the country, under the Make in India program by units located in Special Economic Zones or export oriented units.

"National Policy on Biofuels - 2018" was notified by Petroleum and Natural Gas Ministry in June 2018 in supersession of National Policy on Biofuels, promulgated by the ministry in 2009.

The cabinet also approved granting "permission for export of biofuels in specific "cases," the release said "Recently, high crude prices have opened a huge opportunity to go aggressive for a higher blending target next year " said an official of the oil ministry.

The National Biofuel Coordination Committee in its meetings also decided to advance introduction of 20% ethanol blended petrol from April 2023, to comply with the Indian PM's vision of the country becoming 'energy independent' by 2047. India, the world's third-largest crude import and consumer, meets around 85% of oil demand via overseas purchases.