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Cabinet approves National Biofuel Policy
May 17, 2018

The Cabinet on Wednesday approved the National Policy on Biofuels which allows doping of ethanol produced from damaged foodgrains, rotten potatoes, corn and sugar beet with petrol to cut oil imports by Rs.4,000 crore this year alone.
Till now only ethanol produced from sugarcane was allowed to be mixed in petrol.
A meeting of the Union Cabinet, headed by Prime Minister Narendra Modi, approved the new policy which categorises biofuels as First Generation (1G), which produce bio-ethanol from molasses and bio-diesel from non-edible oilseeds.
Second Generation (2G) ethanol can be produced from municipal solid waste and Third Generation (3G) fuels like bio-CNG.
The Policy expands the scope of raw material for ethanol production by allowing use of sugarcane juice, sugar containing materials like sugar beet, sweet sorghum, starch containing materials like corn, cassava, damaged food grains like wheat and broken rice, and rotten potatoes, an official statement said.
It also allows use of surplus food grains for production of ethanol for blending with petrol with the approval of National Biofuel Coordination Committee, it said.
Under the policy, a viability gap funding scheme for 2G ethanol bio refineries of Rs.5,000 crore in 6 years in addition to additional tax incentives, higher purchase price as compared to 1G biofuels” will be provided, it said.
The policy also encourages setting up of supply chain mechanisms for biodiesel production from non-edible oilseeds, used cooking oil and short gestation crops.
Mixing of one crore litre of bio-ethanol in petrol saves Rs.28 crore of foreign exchange on oil imports. The ethanol supply year 2017-18 is likely to see a supply of around 150 crore litres of ethanol which will result in savings of over Rs.4,000 crore of forex, the statement said.

The Hindu Business line