The much-awaited National Policy on Bio-fuels, unveiled by the government after the Cabinet’s approval, is good in parts but has a few impractical provisions. While it envisages the removal of all Central taxes on bio-fuels and according to them “declared goods” status to ensure a uniform VAT of 4 per cent in all states, the target of 20 per cent doping of vehicular fuel by 2017 seems patently unrealistic. For, there are serious doubts about the availability of adequate ethanol to be mixed with petrol as also of jatropha-based bio-diesel for replacing one-fifth of hydrocarbon diesel. For ethanol production, the chief raw materials available in India are the sugar industry’s by-products like molasses or non-traditional crops like sweet sorghum. These resources together are insufficient to produce enough ethanol, which will force the government to shelve its plan for 10 per cent doping of petrol from October. The scope for increasing its availability is rather limited unless cane juice is converted directly into alcohol. The pricing of ethanol is also an issue. With prices of molasses and rectified spirit having already spurted, the sugar industry is reluctant to sell ethanol to the oil marketing companies at the government-fixed price of Rs 21.50 a litre. The other alcohol-based industries, including the potable liquor manufacturers, who need ethanol of far lower purity, are willing to pay substantially higher prices for it. Where bio-diesel is concerned, jatropha or any other such plant, will have to be grown on an estimated 35 million hectares to meet the assessed requirement. Such a move will make it the second most extensively cultivated crop, next only to rice. The availability of such a large chunk of land is doubtful unless some arable land is also used for this purpose, which the country can ill-afford to do.
Moreover, the policy makers seem to have overlooked the plea made by global bodies like the United Nations that the human and environmental repercussions of large-scale bio-energy plantations and the food security concerns they cause need to be weighed carefully. Indeed, the land-based agro-fuel route can potentially lead to inflation and food shortages, as was witnessed some months ago when the high cost of crude oil had spurred large-scale conversion of coarse cereals, vegetable oils and sweeteners into bio-energy, resulting in food shortages and high food inflation in several countries. Indeed, such concerns assume far greater significance in India because the new policy, even while pitching for much higher use of bio-fuels, discourages the import of feedstock for bio-fuel production. This increases the dangers of arable and forest land being diverted to mono-cropping of bio-energy plantations that are ecologically suicidal. In India, a sizeable part of fuel needs of the rural population is met even today from agro-based fuels, such as fire wood, cow dung, crop residues and other agro-wastes. Putting further strain on the land for producing bio-energy may, therefore, not be feasible without impinging on the farm sector’s ability to cater to other fundamental needs for food, fibre, fuel and shelter. In any case, the per capita availability of land has already shrunk to woefully low levels. Nevertheless, the need for replacing at least a part of hydrocarbon energy with environmentally safe and renewable energy cannot be ignored. What is needed, therefore, is to set the goals realistically and achieve them.
