Trade and markets


Commodity Group
Policy Category
Renewable energy
Policy Instrument
Biofuel policy
Released its National Policy on Biofuels, which includes indicative mandatory blending targets for biodiesel by 2030 and emphasizes the reliance on biofuels produced from domestic raw materials.
India’s recently released National Policy on Biofuels envisages indicative targets of 20 percent gasoline blends for ethanol and 5 percent diesel blends for biodiesel by 2030, which compares to current penetration rates of around 3 percent and less than 0.2 percent for ethanol and biodiesel respectively. Road and rail transport is estimated to account for about half of total biodiesel consumption, with off-road farm transport and various stationary and portable applications accounting for the remainder. Today’s low biodiesel penetration rate is attributed to multiple constraints, notably the lack of a dedicated, integrated supply chain, limited feedstock availability, and restrictions on imports. India’s six biodiesel plants hold a combined installed capacity of 574 000 tonnes per year, whereas actual output in 2018 is estimated at merely 165 000 tonnes. Currently, the main feedstock used are palm stearin, UCO and animal fats. The Government’s new biofuel policy focuses on fuels produced from domestic raw materials. In the case of biodiesel, the recommended feedstock comprise non-edible oilseeds, used cooking oil (UCO), animal tallow, acid oils and algae. The policy includes strict rules to prevent UCO from re-entering the food chain and envisages the establishment of appropriate collection mechanisms to increase the supply of UCO for biodiesel production (see also MPPU Aug.’18). Moreover, it recommends the use of wastelands and inter-cropping for feedstock generation, with a focus on non-edible oil bearing trees and crops as well as other biomass, for which suitable supply chain mechanisms and fair price mechanisms are to be put in place. With regard to non-edible oilcrops, trials with jatropha curcas, an oilplant promoted under India’s National Biodiesel Mission, raised multiple questions about the crop’s agronomic and economic viability (see also MPPU June’13).