Confusion reigns supreme over biofuel policy

India's biofuels policy is clearly suffering from a too-many-cooks syndrome, with multiple ministries holding divergent views on the basic contours of the policy.

"There is total confusion on the biofuels policy. Each ministry "� petroleum and natural gas, new and renewable energy (MNES) and rural development (RD) "� is carrying out its own programme," a senior government official said.

"The confusion has resulted in the biofuels programme being delayed," said the official.

The petroleum ministry launched a nationwide ethanol-blended petrol programme from November 1, 2006. The ethanol doping was fixed at 5 per cent, which was planned to be raised to 10 per cent by July 2007.

Five months after the November deadline, Petroleum Minister Murli Deora launched the ethanol-blended petrol programme on a national level in Hyderabad on Thursday.

While the ethanol-blending policy is being implemented, the MNES framed a national policy on biofuels which targets 5 per cent blending across the country by 2012, and 10 per cent by 2017.

The ethanol-blending programme was tried a few years before, in 2003. A 5 per cent blending was started in nine sugarcane growing states and contiguous Union Territories. That programme failed to take off due to decline in sugarcane production, restrictions on inter-state movement of ethanol and the suppliers backing out.

Under the current programme which was supposed to be nationwide, prices for the purchase of ethanol by the oil marketing companies has been fixed in only nine states, at Rs 21.50 per litre.

The biofuels policy also provides for mixing of up to 10 per cent biodiesel with diesel. However, the RD ministry is also coming out with a national mission on biofuels, which primarily deals with bio-diesel.

"The RD ministry's biodiesel mission, which falls just short of being a policy document, deals primarily with cultivation of jatropha. But the mission brings in another ministry, which just confuses the entire programme," the government official said.

To import or not
There is confusion on timelines for implementation of the policy, as well as on the basics like imports. In a recent Cabinet note on biofuels, the petroleum ministry, which had earlier been stressing that indigenous production of biofuels was a focus of the policy, has reversed its stand and favoured import of ethanol and bio-diesel.

Said a senior oil ministry official: "The failure of the programme so far is blamed on us. So, we cannot take the responsibility of procuring domestic ethanol."

While the sugar producers have the capacity to meet the demand for the 5 per cent blending programme, about 565 million litres, the knotty negotiations on price has forced the government to look at alternate sources outside the country.

"Biodiesel imports will hamper the growth of domestic industry and threaten country's food security as we depend heavily on edible oil import. Countries like Malaysia and Indonesia that currently supply palm oil to India, will divert it to biodiesel for supplying to India," said Sandeep Chaturvedi, president, Biodiesel Association of India.