Renewable energy investments in India reached $10.3 billion in 2011, 52 percent higher than the year before, making it the highest growth of any significant economy in the world.
Although investment in wind and solar has
been largely responsible for propelling India
into its leading position, as identified in a recent
survey by the Pew Charitable Trusts, India is
paying attention to biofuels as well.
In 2009 the Government of India adopted a National Biofuels Policy that aims for the “mainstreaming of biofuels and, therefore, envisions a central role for it in the energy and transportation sectors of the country in coming decades.”
In April, the country entered into a clean energy research partnership with the U.S. that includes development of advanced biofuels.
The motivation for India is clear.
-- India is the fourth largest petroleum consumer in the world.
-- It possesses only 0.5 percent of the world’s oil reserves but consumes 3.4 percent of annual worldwide production, requiring it to import more than three-fourths of its crude oil with imports projected to grow to 90 percent by 2025.
-- India’s vehicle population has grown from 49
million to more than 65 million over the past
five years and is expected to grow annually by
8 to 10 percent.
-- India is the world’s fourth largest contributor
to carbon emissions (although in per capita
terms its emissions are very small).
It all adds up to a growing demand for developing clean, sustainable transportation fuels. India has adopted a national biofuel target of a 20 percent blend of ethanol with gasoline and 20 percent of a biodiesel with diesel fuel by 2017.
These are ambitious targets. Adding to the challenge is the national policy’s requirement that biofuels must avoid conflict with food production. It requires that crops for biodiesel feedstock be grown in India on degraded or waste land not suited for food crops. And, an initial stipulation required that ethanol be made preferably from molasses, a by-product of sugarcane, rather than directly from sugarcane juice; the latter can be used if sugarcane is in excess supply. Molasses is the primary raw material for industrial and potable alcohol, a growing and highly profitable industry in India.
Working in its favor is that India is the world’s second largest grower of sugarcane, behind Brazil; that the national policy allows for market and price incentives; and that its demand forgasoline, while growing, is relatively small by U.S. standards.
Meeting the Targets
India has had trouble meeting its initial 5 percent ethanol blend target set in 2003 in years
when sugar production falls and prices set for fuel can’t compete with other, more profitable
uses of ethanol for industrial and beverage alcohol. With 2017 just five years away, can India
hope to meet its more ambitious targets and satisfy its food security goals as well?
For at least the ethanol blend component, a new economic study by Madhu Khanna, professor of agriculture and consumer economics at the University of Illinois, and colleagues at the Energy Biosciences Institute suggests that it may be possible, but it will depend on a number of factors and key policy decisions.
The paper, “Can India Meet Biofuel Policy Targets? Implications for Food and Fuel Prices,” analyzes the cost-effective mix of feedstock needed to meet a 20 percent ethanol blend and its implications for food prices. It looks at the implications of meeting the mandate through the use of molasses for ethanol, the direct use of sugarcane for ethanol, and the price of ethanol. It also exam ines the economic incentives needed for ethanol producers and blenders to meet the mandate.
On the good news side, the analysis shows that “the trade-offs been food and biofuels production are relatively small” in the three scenarios tested. The increase in sugarcane acreage (about 1 million hectares) needed to produce enough ethanol to meet the blend target is met by a small reduction (about 1 percent) in the acreage currently planted in rice and wheat.
“Counterintuitively we found that requiring the use of molasses for ethanol production instead of sugarcane juice would have only a small effect on reducing the food vs. fuel trade-off; instead it would exacerbate the fuel vs. alcohol trade-off and result in sugar and alcohol producers and consumers cross-subsidizing ethanol consumption,” said Khanna.
The analysis found that the main impact of the ethanol mandate would be to significantly increase prices in the alcohol market and raise fuel prices substantially. “The distributed effects of the blend mandate on the sugar, alcohol, and fuel sectors and on the taxpayers will depend on the fuel pricing policies implemented by the government,” the analysis concludes.
The diesel blend target is a different challenge. Some 40 percent of automobiles in India use diesel, as do trucks, and many stationary sources, but domestic biodiesel production is proceeding slowly, according to a 2011 report by the USDA’s Foreign Agricultural Service.
Currently, India relies on biodiesel produced from edible oil waste, animal fats, and other oils to produce a relatively small amount, between 140 and 300 million liters, a year. As part of its national strategy India has focused on large- scale plantation planting of jatropha, an oil-rich native shrub, setting a goal of planting as many as 13.4 million hectares of marginal lands by the end of 2012. But, that has been slow to be realized and there’s not enough jatropha yet for commercial biodiesel production, according to
Toward Advanced Biofuels
In a move to accelerate research and development in India of clean energy, including advanced biofuels, the U.S. Department of Energy in April
announced a $125 million, five-year program to fund a U.S.-India Joint Clean Energy Research and Development Center. An additional $25 million will come from the Indian government.
Development of sustainable, lignocellulosic biofuels systems will be the focus of the U.S. team led by the University of Florida while the Indian Institute of Chemical Technology-Hyderabad will lead the Indian team comprised of a total of ten institutions ranging from technology and university research centers to agricultural institutes and industry partners.
Among the researchers’ goals will be to develop and optimize several biofuel crops, including high-yield biomass sorghum, sweet sorghum, pearl millet, bamboo, and switchgrass, said Pratap Pullammanappalli, associate professor at UF’s Institute of Food and Agricultural Sciences.