Economics of biofuel
Context
- The government’s bid to raise the level of ethanol blending in petrol to 20 per cent (E20) by 2025, instead of 2030, needs a serious rethink.
Why does E20 by 2025 need a revisit?
- A recent report released by a private policy analyst rules out the availability of enough raw material to produce the required 13.5 billion liters of ethanol.
- The 2018 National Policy on Biofuels envisages using agricultural produce, such as sugarcane, rice, and maize, to make alcohol. However,
- These crops already have committed demand for food, feed, and other purposes.
- The scope of expanding the areas under them is limited because of scarcity of both land and water.
- While sugarcane and rice are water guzzlers, the output of maize is already insufficient to meet the demands of the poultry and starch sectors.
- India does not hold much land to grow crops exclusively for biofuel production like other countries like Brazil, the world’s leading sugar and ethanol producer have.
- The productivity of these crops in India is lower than the global averages and their use for food and feed has to be given priority.
- For a country like India, where malnutrition is rampant, and its ranking on the global hunger index is low, diverting food grains like rice and corn for ethanol production seems inappropriate.
- Most of the existing vehicles are, typically, not made to run on high ethanol-doped fuels because they would require modifications for this purpose.
- Besides, the level of emission reduction achieved by replacing a small part of petrol with ethanol is found to be too meager and it requires a high cost to be invested.
Way Forward
- To augment the supply of ethanol for mixing with petrol, producing it by deploying second-generation (2G) technology would be a step in the right direction.
- 2G technology enables converting farm wastes, including crop residues like stubbles, straws, and stalks, into alcohol.
- Along with already coming up 2G ethanol plants are in Panipat (Haryana), Bathinda (Punjab), Baragarh (Odisha), and Numaligarh (Assam), setting up more such plants would provide ethanol for petrol-doping and also mitigates the menace of crop residue burning, which adds to air pollution.
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