India’s tryst with Biofuels – The Hits, Misses, Learning and the way ahead

India’s Biofuel policy originally envisaged to start in the early 2000s, really started taking shape from 2014 onwards and in the last decade has since become the most glazing exception to the conventional government targets, where the deadline to produce 10.16 billion litres of Ethanol was preponed 5 years behind the original date in 2021 roadmap set by NITI Aayog.

It is also a case study on what kind of ground impact a coordinated industry and government action can produce. Today, the scale at which India has built its current capacity is phenomenal. This capacity is not just in terms of ethanol production, but also for collecting feedstock, educating farmers and managing the brand new and massive supply chain emerging out of this industry. To give context for scale, while Brazil produces more sugarcane than India, there are 55 million farmers involved in the sugarcane ecosystem as compared to approximately 70,000 in Brazil. Therefore, the scale of effort and its consequent success have to be the first thing one should appreciate.

The second would be how it has completely transformed what agriculture means in India. Till 2023 roughly 80% of all ethanol used for blending came from sugarcane and as a result we saw the cane farmers’ income increase to more than 50% in this period- which in a country where over 40% of people working in agriculture is a significant thing.

The Indian sugarcane economy is fundamentally different from Brazil not only because of the different land holding sizes and number of farmers involved but also in the fact that in India the price at which the sugarcane is bought from the farmer and at which the ethanol is sold for blending is fixed up by the government and this has enabled the administration to keep the program focused on its key objective of augmenting farmer incomes for both maize and cane which otherwise had always been a balancing act with the food inflation rates of the time. To give context, the Indian government is currently also running the world’s largest food security program, providing essential ration to 800 million people and sugar is notified under the Essential Commodities Act making it in the government’s interest to also keep the sugar prices in check.

So in a country where the agriculture crisis fueled by a burning planet is such that a farmer kills themselves every one hour, Biofuels have come in as a breath of fresh air and hope. It has unlocked a completely new market for the farmers, one where they don’t compete with food prices but are energy producers for the country.

Owing to this efficient and at scale impact of Biofuels domestically, the Indian government made the Global Biofuels Alliance (GBA) a fulcrum of its G-20 presidency in 2023. As a result, Biofuels are once again the talk of the town in global energy transition dialogues. With partners like Brazil and USA among others we hope that we can similarly engender capacities in other agricultural nations not only to make them self-reliant but also due to the fact that close to half of the global south population is engaged in agriculture even today.

While many developed nations are in the process of figuring out the balance between food and biofuel production, India due to its regulatory structure as sugar being an essential commodity has been able to ensure that balance both in policy and execution and might even be a model for the concerned countries to follow.

However, the only aspect that is still missing in India’s tryst with Biofuels is the environmental one. While the government does celebrate the fact that 70 million tons of CO2 has been abated due to the EBP but India still lacks a formal system for accounting this reduction or incentivizing it further like Brazil’s RenovaBio or USA Inflation Reduction Act of 2023.

This becomes especially relevant when juxtaposed with the fact that our per capita emission is half of the global average and similarly the carbon footprint of our ethanol in the range of 14-16 gm CO2/MJ, one of the lowest in the world. Given that India is positioning itself even as a major SAF production hub for the world or even for domestic purposes of reporting like on the NDCs as per the Paris Agreement, not having a system that captures our most unique advantage seems to be quite counterproductive. Moreover, as more farmers shift from manual to mechanized harvesting, fertilizer and other inputs increase with climate change and more and more technology is deployed, having such a system incentivizing carbon reduction would ensure sustainable development of the industry while also ensuring its competitiveness globally.

Today, India has already produced 7.5 billion liters of ethanol this year and already dispensing a 20% blend on most outlets, we stand at a unique moment while deliberation of the next steps or the plan beyond 2025 are being made at the highest levels. The government is most likely to increase the base blend from 20% as the industry already has the capacity to produce more than what is required for 20%, but still there are there are many key questions that hinge on this- the most important of which is will a price differentiation be allowed to pass on to the consumer given that lower calorific value of ethanol when compared to gasoline and that there is in fact a notable decrease in mileage beyond 20% blending which does not exist presently.

Another question is on the feedstock availability and the impact of climate change on the same. As we have now crossed 9 of the 14 irreversible tipping points and be crossing 1.5 degree celsius any day from now, agriculture will be the most impacted sector owing to its direct dependence on natural resources like rain, soil etc. While this makes quick deployment of biofuels even more important it also brings in the responsibility to embed climate resilience in the agri supply chains from yesterday- this includes ensuring availability of water especially in the drought prone areas, increase soil health all across as well as educating and incentivizing the farmers to practice organic farming.

A key component of this strategy should be to focus more resources on Research and Development on each aspect of the supply chain from developing climate resilient varieties to efficient ways of pest control and product valorization. This will also go hand in hand with our goals for even the emerging categories of biofuels in the aviation and shipping sectors.

In conclusion, India’s biofuel journey is no longer a peripheral story of energy substitution, but a central pillar of how the country imagines its agricultural future, its climate responsibility, and its role in global energy transitions. The task ahead is not merely about hitting blending targets but about embedding resilience, equity and sustainability into the very DNA of this new ecosystem