Biofuels

• Biofuels are liquid or gaseous fuels produced from biomass that are generally high in sugar (such as sugarcane, sugarbeet, sweet sorghum), starch (such as corn and cassava) or oils (such as soybeans, rapeseed, coconut, sunflowers, and palms). 
• The two most commonly used biofuels are ethanol and biodiesel.
• Categories of Biofuels:

1. First generation Biofuels: Mainly produced from food crop feedstock
2. Second generation Biofuels: Comes from non-food plants 
3. Third generation Biofuels: Micro-organisms like algae
4. Fourth generation Biofuels: Genetically modified (GM) algae to enhance biofuel production

National Biofuel Policy 2018 

• The National Biofuel Policy 2018 envisages an indicative target of 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel by 2030.
• The Policy categorises biofuels as “Basic Biofuels” viz. First Generation (1G) bioethanol & biodiesel and “Advanced Biofuels” – Second Generation (2G) ethanol, Municipal Solid Waste (MSW) to drop-in fuels, Third Generation (3G) biofuels, bio-CNG etc. to enable extension of appropriate financial and fiscal incentives under each category.
• The Policy expands the scope of raw material for ethanol production by allowing use of Sugarcane Juice, Sugar containing materials like Sugar Beet, Sweet Sorghum, Starch containing materials like Corn, Cassava, Damaged food grains like wheat, broken rice, Rotten Potatoes, unfit for human consumption for ethanol production.
• The Policy allows use of surplus food grains for production of ethanol for blending with petrol.

Expected Benefits

• India is highly dependent on imports for meeting its energy requirements and imports around 85% of its crude oil domestic consumption requirements. Promotion of biofuels will lead to reduction of this import dependency. 
• Diversion of excess sugarcane & sugar to ethanol is a correct way forward to deal with surplus stocks. 
• Agricultural residues/waste which otherwise are burnt by the farmers can be converted to ethanol and can fetch a price for these waste if a market is developed for the same. 

• By reducing crop burning & conversion of agricultural residues/wastes to biofuels there will be further reduction in greenhouse gas emissions. 
• The policy is also expected to ensure waste management benefits and raise infrastructure in rural areas.

Advancement of Target

• In 2022, the government amended the Biofuels Policy to advance the ethanol blending target of 20% blending of ethanol in petrol to 2025-26 from 2030.
• India achieved 10% ethanol blending in June 2022.

Why in News?

• The Cabinet Committee on Economic Affairs (CCEA) has revised the ethanol procurement price for Public Sector Oil Marketing Companies (OMCs) from ₹56.58 per litre to ₹57.97 per litre. 
• The new price is for the ongoing Ethanol Supply Year 2024-25, starting from November 1, 2024 to October 31, 2025, under the Ethanol Blended Petrol Programme of the Union Government. 

https://www.thehindu.com/news/national/centre-hikes-ethanol-procurement-price/article69155495.ece