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Can Pakoras Help Improve India’s Energy Security?

The use of waste oil derived biodiesel can reduce India’s dependence on crude oil imports and conventional petroleum products.

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Prime Minister Narendra Modi pitched India’s ambitious goal to become atmanirbhar in the oil and gas sector, in a meeting with heads of over 30 oil majors last month. Outlining a slew of reforms including modifications in licensing policies, financial incentives schemes, marketing initiatives, and enhanced biofuels production, Modi reiterated the need to raise domestic oil and gas production and reduce the country’s burgeoning crude imports. In FY 20, India’s crude import bill cost an astronomical $101.4 billion, accounting for 85 percent of domestic consumption. 

Biofuels-related initiatives are among the most promising of the many measures taken by the Government to reduce India’s crude import dependance. Biofuels are transportation fuels processed from biomass materials. They are blended with petroleum fuels and can be used as stand-alone fuels as well. The higher utilization of biofuels offers three main advantages – reduced volume of crude oil imports, sustainable solutions for biomass waste management and lower prices compared to conventional petroleum fuels. 

In June this year, the Government advanced its target to blend 20 percent ethanol in petrol by five years, from 2030 to 2025 – a significant jump from the current 8.3 percent blending rate. This measure alone can help reduce the crude import bill by Rs 30,000 crore annually. Subsequently, the Niti Aayog released a comprehensive roadmap for the ethanol sector, focused on measures to enhance its production capacity, and simplify licenses for the manufacture of fuel-efficient vehicles manufacturing. 

Ethanol processing can also help achieve multiple other policy objectives, including the diversion of excess cheap sugar to a relatively more remunerative product, like ethanol. Doing so will improve the financial status of sugar mills and reduce the time taken to repay cane dues to farmers. These measures indicate a positive step towards developing the ethanol processing sector. However, there are other concerns regarding the diversion of food grain crops or surplus rice with the Food Corporation of India for ethanol production in a country with high levels of hunger.

Even as ethanol continues to garner media and policy attention, a large untapped opportunity around biodiesel has remained in the shadows. The National Biofuels Policy, 2018 had set an ambitious target of blending five percent of biodiesel in diesel by 2030. However, as of this year, India’s blending rate was only a mere 0.09 percent. Enhanced biodiesel production offers four unique opportunities that go beyond addressing the fuel import bill challenge.

First, biodiesel is manufactured using waste products that consist of long chain fatty acid esters, such as vegetable oils, animal fats and used cooking oil (UCO). Since biodiesel feedstock is relatively cheaper than petroleum-derived diesel, a higher level of its blending into transportation fuel can help reduce fuel costs for India’s road transport sector, which consumes approximately 70 percent of all diesel produced in the country. 

Second, biodiesel produces 78 percent less CO2 than diesel upon burning, which can help reduce greenhouse gas emissions. The caveat here is that the utilization of specialized crops – soya, palm and peat to meet feedstock requirements, rather than biowaste, could reverse any potential gains from higher uptake of biodiesel.

Third, a concerted effort to promote biodiesel will lead to better biowaste management and could remove UCO from the food stream. Estimates suggest that approximately 60 percent of UCO generated in India finds its way back into the food stream through small scale pakora and snack shops. It is a known carcinogen, has considerable adverse health impacts and should be diverted to better end-uses such as biodiesel.

Fourth, India is considering several options for clean energy transitions, including the utilization of liquified natural gas (LNG) for heavy load transport. However, most alternatives are costly and require investments in pipeline infrastructure and engine alterations. Moreover, India has to rely almost entirely on natural gas imports to meet domestic requirements. Conversely, biodiesel could be supplied through existing fuel supply chains and vehicle fleets would not require any retrofitting. 

However, greater consumer awareness is critical to build confidence in biodiesel as a sustainable fuel. Edible oil inflation hit an 11 year high this year. This has led to an increase in the volumes of UCO diverted into the food stream to reduce food manufacturing costs. Over 40 percent of edible oils consumed in the country are in the commercial sector, that includes hotels, restaurants and food manufacturing, among others. Changes in consumer preferences, for food brands and supply chains that are UCO-free, can help set aside excess waste oil which can be diverted to biodiesel. 

Like any nascent industry, biodiesel requires State support to improve supply chain integrity, mediate pricing and trade issues, and simplify licensing and sales rules. With significant unmet demand and multiple co-benefits, it is important to chart out the necessary policy and regulatory reforms that can help India achieve its biodiesel blending targets faster. It is equally meaningful to pluck low hanging fruits, such as the removal of UCO from the food stream. Promoting the circular economy – where waste is eliminated, and resources are recirculated – can become a key anchor of the Modi Government’s policies to protect the environment, resources and raw materials. A renewed focus on biodiesel can prove to be among the simplest and most cost-effective means to do so.  

Nikhil Goveas is a sustainable development expert, at the Koan Advisory Group, New Delhi

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Atmanirbhar Bharat narendra modi

Nikhil Goveas

The author is a sustainable development expert, at the Koan Advisory Group, New Delhi

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