India proposes biodiesel policy

The Indian government has declared a biodiesel purchase policy to replace fossil fuels through non-conventional means of energy.

The declaration follows an announcement in May 2007 to establish enterprise-driven biodiesel production, to test, develop and demonstrate cost-benefit analysis of the programme.

'The salient features of the policy are that the public sector oil marketing companies will purchase biodiesel meeting the Bureau of Indian Standard specifications through their select purchase centres,' Murli Deora, the minister for petroleum and natural gas, says.

The policy was introduced as minsters felt the issue of energy security important in relation to the rapidly expanding Indian economy. A review on energy sources would help sustain the growth in a more environmentally-friendly way, particularly with a focus on using biodiesel.

India's biofuels industry is still in its early stages. Biodiesel demand potential is significant in India. Salil Singhal, deputy chairman of Confederation of Indian Industry (CII) Northern Region, remarks: 'The development of bio-energy is important for rural, economical and agricultural growth. Bio-energy is critical to India's energy mix.'

Over 30% of India's primary energy comes from non-commercial sources of energy that include agricultural and forest waste, wood chips, animal waste and biofuels made from non-edible oils. The share of such non-commercial energy is second only to coal which accounts for around a third of India's primary energy mix. Bio-energy meets approximately 60% of the domestic energy needs of India, Singhal adds.

Biodiesel manufacturers interested in supplying biodiesel will register with state-level coordinators. Producers proposing to manufacture biodiesel from non-edible oils will be given priority.

Oil marketing companies will decide a uniform delivered price for buying biodiesel, to be frozen for six months with a review following after that. Panchayati Raj institutions would undertake the purchase of biodiesel as a rural business hub activity. The ministry has identified 20 biodiesel procurement centres in nine states.