What’s the news?

• India grapples with soaring international oil prices, hitting nearly $100 per barrel, amid its record high import dependence on crude oil and products at 87.3% in FY2023.

Central idea

• As the third-largest consumer of crude and related products globally, India faces a critical challenge in securing its energy future. However, the recently formed Global Biofuel Alliance under India’s G20 presidency presents a promising opportunity to harness clean bioenergy and enhance energy security while optimizing public spending.

India’s Ethanol Blending Program

• In 2003, India initiated its ethanol blending program, but progress remained sluggish for over a decade.
• In 2022, after sustained policy efforts, the program achieved a significant milestone by achieving a 10% ethanol blending rate in petrol.
• The government now aims to accelerate progress, targeting a 20% (E20) blending rate by FY25–26, advancing the original timeline by five years.
• Ethanol producers supplied approximately 430 crore litres of ethanol in 2022, with demand projected to soar to nearly 1,100 crore litres by 2025.
• Achieving this target hinges on substantial investments and ensuring an adequate supply of feedstock for domestic ethanol production.

Mobility needs in India

• Two-Wheelers Dominance: Nearly 60% of India’s petrol demand is attributed to two-wheelers. These vehicles are essential for meeting the mobility requirements of people across various economic strata, from urban commuters to rural residents.
• Four-Wheelers’ Growing Demand: While two-wheelers dominate, the demand for four-wheelers is steadily increasing. Approximately 55% of respondents in a 2021 study indicated their desire and need to own a four-wheeler. A NITI Aayog report also predicts a significant growth in petrol demand from four-wheelers by 2030.

The Role of Biofuels, Specifically Ethanol

• Reducing Petrol Consumption: One of the primary roles of biofuels, such as ethanol, is to reduce the overall consumption of petrol (gasoline). By blending ethanol with petrol, India can lower its dependence on imported crude oil, mitigate greenhouse gas emissions, and enhance energy security.
• Blending to Reduce Emissions: Ethanol blending in petrol is an effective strategy to reduce carbon emissions and air pollution. This is crucial for addressing India’s air quality challenges and its commitment to combating climate change.
• Promoting Bio-Energy: Biofuels, including ethanol, can be produced from agricultural crops and biomass sources. This provides an additional income stream for the farming community, contributing to rural development and income generation.
• Supporting Sustainable Agriculture: The cultivation of crops for biofuel production can be aligned with sustainable agricultural practices, including crop diversification and efficient resource use.

Challenges with Electric Vehicles (EVs)

• Limited Availability and Affordability of EVs: While EV adoption is increasing, there is still limited variety in EV models compared to traditional vehicles. This limitation can impact consumer choice and adoption. Additionally, the upfront costs of EVs are often higher, which can deter potential buyers.
• Charging Infrastructure: The need for expanding charging infrastructure is emphasized, highlighting that the development of charging stations is essential for the widespread adoption of EVs. The lack of charging stations can create range anxiety among EV users.
• Range Anxiety: EVs generally have a limited range compared to traditional vehicles, and addressing this concern is crucial to alleviating consumer fears about long-distance travel.
• Charging Time: While not explicitly mentioned, the article indirectly alludes to the longer charging times for EVs compared to refueling traditional vehicles. Fast-charging stations are discussed as a solution to reduce charging times.
• Battery Technology and Supply Chain: The article briefly touches upon battery cost and supply chain challenges, noting that the cost of EV batteries remains relatively high and disruptions in the global supply chain can impact EV manufacturing.

Way forward

• Expediting Ethanol Blending Program: Accelerate efforts to achieve the ambitious target of 20% ethanol blending (E20) by FY25–26. Prioritize investments in ethanol production facilities to meet the rising demand for ethanol.
• Infrastructure Development: Focus on rapidly developing the necessary infrastructure for the efficient distribution and sale of ethanol-blended petrol, including retrofitting existing petrol pumps and establishing new ones.
• Research and Development for 2G Technologies: Allocate resources to research and develop second-generation (2G) biofuel technologies that can utilize non-food crop feedstocks, diversifying biofuel sources.
• Balanced Approach: Recognize the complementary nature of biofuels, electric vehicles (EVs), and other sustainable mobility solutions. Promote EV adoption, particularly in public transit and urban settings, alongside biofuel promotion.
• Supportive Policy Framework: Ensure the presence of consistent and supportive policy frameworks that incentivize biofuel production, distribution, and usage. Explore pricing mechanisms to encourage responsible private vehicle usage in urban areas.

What else?

• First-generation Production: Much of India’s supply of ethanol for the blending program comes from first-generation production. This primarily involves using underlying sugars in food crops, with the majority sourced from sugarcane (84 percent) and grain (16 percent).
• Food-Energy-Water Nexus: Considering the food-energy-water nexus in ethanol production is important. Food crops used for ethanol require fertilizers, water, and energy subsidies for their production.
• Climate Change Considerations:

• While ethanol production provides a new income stream for the farming community through assured procurement, it’s crucial to recognize that climate change can lead to significant variations in rainfall and yields. These variations can make the ethanol supply vulnerable to supply shocks.
• Therefore, India needs a robust assessment of these trade-offs and a clear research and development plan for second-generation (2G) ethanol technologies before scaling up ethanol production.

Conclusion

• In an era when the automobile industry grapples with the transition to EVs, India’s strategic and actionable plan for transforming its mobility landscape not only promises to reduce the import bill but also provides the nation with the time required to transition a cornerstone industry of its economy. The Global Biofuel Alliance, alongside well-considered policy initiatives, will be pivotal in steering India toward greater energy security and sustainability.

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