Biofuels are emerging as a sustainable alternative to fossil fuels, offering environmental and economic benefits. Recognising their potential, the Indian government has introduced several policies and incentives to encourage biofuel production, blending, and adoption.
The National Policy on Biofuels, 2018, and its 2022 amendment have played a crucial role in expanding the scope of biofuel production in India. The policy identifies a broad range of feedstocks that can be used for biofuel production, including:
By expanding the scope of raw materials, the policy has opened new avenues for biofuel production and reduced dependency on conventional sources.
To encourage investment and adoption of biofuels, the government has implemented several measures, including:
The government has set indicative blending targets for biodiesel in diesel and facilitated the direct sale of biodiesel under the National Policy on Biofuels. This initiative aims to gradually replace traditional diesel with biodiesel, reducing carbon emissions and dependency on crude oil imports.
To incentivise the blending of biodiesel with high-speed diesel for transportation, the Goods and Services Tax (GST) rate was reduced from 12% to 5%. This move makes biodiesel procurement more affordable and promotes large-scale adoption.
In 2019, the government introduced “Guidelines for Sale of Biodiesel for Blending with High-Speed Diesel for Transportation Purposes”. These guidelines provide a structured framework for the sale and distribution of biodiesel, ensuring compliance with safety and quality standards.
The Pradhan Mantri JI-VAN (Jaiv Indhan – Vatavaran Anukool fasal awashesh Nivaran) Yojana, launched in 2019 and amended in August 2024, provides financial assistance for setting up advanced biofuel projects. This scheme focuses on:
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Published on: Feb 4, 2025, 2:41 PM IST
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