Indian Biofuels Market 2011

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY

Required Report - public distribution Date: 7/1/2011 GAIN Report Number: IN1159

India Biofuels Annual 2011

Approved By: Thom Wright Prepared By: Amit Aradhey Report Highlights: Biofuel production and consumption in India is at its nascent stage and is evolving. The Government of India (GOI) approved the National Policy on Biofuels on December 24, 2009. The policy proposes a target of 20 percent blending of biofuel both for bio-diesel and bio-ethanol by 2017. India‟s biofuel strategy continues to focus on use of non-food resources; namely sugar molasses for production of ethanol and non-edible oils for production of biodiesel. The government‟s current target of 5 percent blending of ethanol in petrol has been partially successful in years of surplus sugar production and unfilled when sugar production declines. Since commercial production of biodiesel in India (through jatropha) is small, large scale blending of biodiesel with conventional diesel has not yet started.

Post: New Delhi Executive Summary: The Government of India approved the National Policy on biofuels on December 24, 2009. The biofuel policy encourages use of renewable energy resources as alternate fuel to supplement transport fuels and proposed an indicative target of 20 percent blending of biofuel (bio-diesel and bio-ethanol) by 2017. Presently, the government is unable to implement compulsory blending of 5 percent ethanol in petrol. However, with an outlook of bumper sugarcane and sugar production in 2011/12, the government is likely to renew its focus and strongly implement the mandatory 5 percent ethanol blending in petrol provided the Union Cabinet takes a decision on the purchase price of ethanol for the Ethanol Blending Program. Production of biodiesel in India is commercially insignificant and will take a long time to be demonstrated...