ECC approves policy recommendation for use of biodiesel as an alternative fuel

The Economic Coordination Committee (ECC) of the Federal Cabinet has approved the Policy for use of Biodiesel as an Alternative Fuel in its meeting held on 15th February 2008. The Policy Recommendation was formulated by the Alternative Energy Development Board and marks achievement of another major milestone in the Alternative Renewable Energy Sector of Pakistan. Salient features of the approved Policy are as follows:

i) Ministry of Water & Power in coordination with AEDB shall be the apex coordinating and facilitating body for the national Bio-Diesel programme.
ii) Gradual introduction of bio-diesel fuel blends with petroleum diesel so as to achieve a minimum share of 5% by volume of the total Diesel consumption in the country by the year 2015 and 10% by 2025.
iii) Oil Marketing Companies (OMCs) to purchase Bio-Diesel (B-100) from Bio-Diesel manufacturers; and sell this Bio-Diesel blended with Petroleum Diesel (starting with B-5) at their Points of Sale.
iv) Ministry of Petroleum & Natural Resources shall come up with the fuel quality standards for B-100 and blends up to B-20.
v) OGRA shall regulate the pricing mechanism of various blends of Bio-Diesel (B-5, B-10 etc.) and ensure its cost-competitiveness with Petroleum Diesel.
vi) All imported plant, machinery, equipment and selective raw material, e.g. Jatropha, for use in production of Bio-Diesel shall be exempted from Customs Duty, Income Tax and Sales Tax.