India targets biofuels market expansion of up to US$7.5 bn by 2022
India is stepping up efforts to cut its reliance on energy imports and is targeting a more than seven-fold expansion of its biofuels market over the next six years.
According to the country’s Oil Minister, Dharmendra Pradhan, the market could be boosted to Rs500 billion (US$7.5 billion) from the current Rs65 billion by blending 5% of biodiesel with regular diesel and 10% ethanol with gasoline. The country would require 6.75 billion liters of biodiesel and 4.5 billion liters of ethanol for blending over the next six years.
The US$2 trillion economy has struggled for a decade to blend more ethanol with gasoline, and biodiesel with regular diesel. This year’s goal is blending 5% for both gasoline and diesel.
India’s crude consumption growth is expected to outstrip all other nations in the future years. It imports about 80% of its crude requirement.
It is not aiming to reduce overseas energy purchases by 10 percentage points by the year 2022, through increasing domestic output and the use of alternative fuels.
“Growth in the biofuels market will help India reduce import dependence,” the oil minister said at a conference in New Delhi.
State-run fuel retailers Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. are investing Rs90 billion to build ethanol plants and develop infrastructure for biofuels, the oil ministry said. Companies like Austria’s Munzer Bioindustrie GMBH, India’s Praj Industries Ltd. and CVC India Infrastructure Pvt also have biofuel project plans.
“We are preparing to build multiple biofuel projects for nearly 30 billion rupees over the next two years and will also raise funds for the same,” Praj Industries executive chairman, Pramod Chaudhari, said.
The Indian government will consider meeting the shortfall between the costs and estimated revenues from biofuel projects to make them viable and help achieve the blending targets.
“The ministry of new and renewable energy and oil ministry are working on a new scheme for providing viability-gap funding for biofuel projects,” said Renewable Energy Minister Piyush Goyal. He also handles the power ministry.