Maarg Manthan · Topic 12.10

National Policy on Biofuels

Environment & Ecology › Energy Resources · Topic 12.10

The National Policy on Biofuels was approved by the Union Cabinet in May 2018 and administered by the Ministry of Petroleum and Natural Gas, to promote domestic production and use of biofuels, reduce import dependence on crude oil, cut emissions and create rural income and jobs. It classifies biofuels into basic biofuels (first generation bioethanol and biodiesel) and advanced biofuels (second generation ethanol, municipal solid waste to drop-in fuels, third generation biofuels from algae and bio-CNG). The policy set indicative targets of 20 percent ethanol blending in petrol and 5 percent biodiesel blending in diesel by 2030; in 2022 the government advanced the ethanol target to 20 percent by 2025-26 after reaching 10 percent in 2022. It allows more feedstock, including sugarcane juice, sugar-containing materials, starchy materials such as maize and cassava, and surplus or damaged food grains with approval of the National Biofuel Coordination Committee, and provides for viability gap funding for second generation ethanol. The Pradhan Mantri JI-VAN Yojana (2019) supports advanced biofuel plants.

5 min read · UPSC Prelims · Environment & Ecology · Energy Resources

At a Glance

Approved May 2018
Ministry Petroleum and Natural Gas
Ethanol target 20 percent, advanced to 2025-26
Biodiesel target 5 percent by 2030
Scheme JI-VAN Yojana
Exam link UPSC Prelims, Environment & Ecology: Energy Resources

Where Does It Fit?

This topic follows electric mobility and covers the other main route to cutting petroleum use. It builds on the account of biofuels and biogas earlier in the macro. Previous topic: National Electric Mobility Mission Plan. Next topic: Thorium, uranium-233 Key…">India’s Three-Stage Nuclear Power Programme.

What Does the National Policy on Biofuels Say?

Provision	Details
Approval	Union Cabinet, May 2018; replaced the 2009 National Policy on Biofuels
Categories	Basic biofuels (1G ethanol and biodiesel) and advanced biofuels (2G ethanol, drop-in fuels, 3G algae biofuels, bio-CNG)
Blending targets	20 percent ethanol in petrol and 5 percent biodiesel in diesel by 2030; ethanol target advanced to 2025-26 in 2022
Feedstock	Sugarcane juice, sugar beet, sweet sorghum, starchy crops, damaged or surplus food grains, and biomass for 2G fuels
Coordination	National Biofuel Coordination Committee chaired by the Minister of Petroleum and Natural Gas
Support for 2G	Viability gap funding for second generation ethanol plants and extra tax and pricing support
Used cooking oil	Encourages collection of used cooking oil for biodiesel

How Is the Policy Implemented?

Ethanol Blended Petrol programme: oil marketing companies buy ethanol from distilleries at administered prices
PM JI-VAN Yojana: 2019 scheme with financial support for commercial and demonstration 2G ethanol projects
Interest subvention: support for distilleries to raise ethanol capacity
Reduced GST on ethanol: lower tax rate on ethanol for blending
Sugar sector link: ethanol offers cane farmers and sugar mills an extra income and helps clear sugar surplus
Concerns: use of food grains, water for sugarcane and rice, and fuel efficiency
Biodiesel: blending remains low because of feedstock limits
Compressed biogas: SATAT scheme links to the policy

What Else Should You Remember?

2009 policy: the earlier biofuel policy with a 20 percent blending target by 2017 that was not met
Ethanol blending achievements: blending rose from low single digits to 10 percent in 2022 and higher later; check latest data
Ethanol supply year: measured from November to October
E20: petrol with 20 percent ethanol
E100: pure ethanol vehicles discussed for future
Flex fuel vehicles: can run on varying ethanol blends
Water for ethanol: sugarcane and rice need large amounts of water
Food security: use of surplus rice and maize for ethanol is allowed only under limits
Maize demand: rising ethanol use has raised maize demand
Second generation: uses straw, bagasse, cotton stalks, municipal waste
Panipat 2G plant: Indian Oil’s plant in Panipat uses paddy straw
Biodiesel feedstock: non-edible oilseeds like jatropha and karanja, used cooking oil
RUCO: Repurpose Used Cooking Oil, an initiative by FSSAI to collect used oil
Rural economy: farmers gain from selling residues and crops
Foreign exchange savings: ethanol blending has cut crude oil import spending
Emissions: ethanol burns more cleanly but lifecycle benefit depends on feedstock
Vehicle compatibility: older vehicles may need modifications for higher blends
Global Biofuels Alliance: launched by India at the G20 summit in 2023 to promote biofuels worldwide
Link to previous: see National Electric Mobility Mission Plan
Link to next: see India’s Three-Stage Nuclear Power Programme
Link to biofuel basics: see Biofuels and Biogas
Caution: blending percentages and dates are updated, so check the latest notifications
Exam hint: learn 2018, the 20 and 5 percent targets, categories and JI-VAN Yojana
Pricing of ethanol: the government fixes ethanol procurement prices for different feedstocks each supply year
Distillery capacity: India has expanded distillery capacity, often by using cane juice, grain and molasses
Surplus sugar: diverting cane to ethanol helps balance sugar supply and cane payments
Crop residue use: 2G ethanol and compressed biogas can create value for paddy straw and reduce stubble burning
Import substitution: every litre of ethanol blended replaces petrol that would otherwise be imported
Tax support: lower GST on ethanol for blending supports its purchase by oil companies

Why Does It Matter for the Exam?

Policy year: 2018
Targets: 20 and 5 percent
Scheme: JI-VAN Yojana
Current affairs link: E20 and Global Biofuels Alliance
Common errors: confusing basic and advanced biofuels

As an analytical point, the policy tries to turn farm surplus and waste into fuel, but its gains depend on feedstock choice. Waste-based advanced biofuels avoid the food and water trade-offs of crops that need irrigation.

Why Is This Topic Important?

Aim Cut imports
Tool Blending
Risk Food, water

What Came Next?

The next topic covers India’s three-stage nuclear power programme. Next topic: India’s Three-Stage Nuclear Power Programme.

Key People and Terms

Basic biofuel First generation fuel
Advanced biofuel Later generation fuel
E20 20 percent ethanol blend
NBCC National Biofuel Coordination Committee
VGF Viability gap funding
RUCO Used cooking oil collection

Exam Corner

Points to Remember

Policy approved in 2018.
Targets: 20 percent ethanol, 5 percent biodiesel.
Ministry: Petroleum.
Scheme: JI-VAN 2019.
Alliance: 2023.

Do Not Confuse With

Basic and advanced biofuels First generation versus later generations
2009 and 2018 policies Old versus current policy
SATAT and JI-VAN CBG plants versus 2G ethanol support

Memory Hook

Eighteen policy, twenty and five, JI-VAN for advanced, waste turns to fuel.

Mains Angle

Questions ask for targets and categories. These points help.

Aim Imports, income
Targets E20
Risks Food, water

A Question You May Face

An original practice question, not a past paper question.

“Examine the National Policy on Biofuels, 2018. What are the opportunities and concerns?”

How to Answer

Aim Imports.
Categories Basic, advanced.
Targets E20.
Concerns Food.

GS Relevance

Prelims: targets, categories, bodies. GS Paper 3: bioenergy policy and import reduction.

Frequently Asked Questions

What is the National Policy on Biofuels, 2018?

It is a policy approved by the Union Cabinet in May 2018 to promote biofuels in India. It categorises biofuels as basic and advanced, sets blending targets of 20 percent ethanol in petrol and 5 percent biodiesel in diesel by 2030, widens the range of feedstock and supports second generation ethanol plants.

What are the targets for ethanol blending in India?

The policy set an indicative target of 20 percent ethanol blending in petrol by 2030. In 2022 the government advanced the target to 2025-26 after India reached 10 percent blending, and the programme has been scaling up. The latest percentage reached and rules for higher blends should be checked in official updates.

What are advanced biofuels?

Advanced biofuels include second generation ethanol made from non-food biomass such as straw and bagasse, drop-in fuels from municipal solid waste, third generation biofuels from algae and bio-CNG. They avoid direct competition with food crops, and the policy offers viability gap funding to support them.

What is the PM JI-VAN Yojana?

The Pradhan Mantri JI-VAN Yojana, Jaiv Indhan Vatavaran Anukool Fasal Awashesh Nivaran, launched in 2019, gives financial support to commercial and demonstration projects for second generation ethanol using agricultural residues and other biomass. It aims to create an advanced biofuel sector and reduce crop residue burning.

What concerns exist about ethanol blending?

Concerns include use of food grains and water-intensive crops like sugarcane and rice, which affects food security and water resources; effects on vehicle performance and compatibility; dependence on a few feedstocks; and uncertain lifecycle emission benefits. Using waste-based feedstock and diversified crops can reduce these concerns.

PYQ Practice — Statement Analysis

1 The Biofuels Policy was approved in 2018.

True

It replaced the 2009 policy.

2 The policy target is 50 percent biodiesel blending.

False

It is 5 percent.

3 Second generation ethanol uses non-food biomass.