New Delhi: The oil ministry has circulated a Cabinet note for inter-departmental consultation on allowing 5 per cent blending of environment-friendly biofuels in diesel that would be consumed by bulk users such as the railways and defence establishments, government officials said.
Minister for Shipping, Road Transport and National Highways Nitin Gadkari said appropriate policy changes would be made to encourage use of alternative fuels that would reduce India’s dependence on crude oil imports. India imports 80 per cent of crude oil it processes and its last year’s petroleum import bill was over $155 billion. Bio-diesel produced in the country is being exported and the government needs to amend policies to change the situation.
The minister was speaking at a biodiesel conference held in Delhi. Officials in the ministries of petroleum, railways and new & renewable energy said the government initially planned to open bio-diesel use in railways and defense sectors to check on quality.
“We can’t immediately allow sale of bio-diesel in retail pumps either directly by producers or through public sector oil marketing companies. First, we need to address quality issues. And it will be a challenge for the domestic bio-diesel producers to meet 5 per cent fuel demand of railways and defense sectors,” one official said requesting anonymity.
Bio-diesel Association of India President Sandeep Chaturvedi said the government should allow direct sale of bio-diesel to bulk users that would save foreign exchange worth over Rs 400 crore. “While drugs, cosmetics can be sold directly to consumers, there is restriction on selling clean fuel to bulk consumers,” he said.
Officials said the government may gradually raise its scope to passenger vehicles. Bio-diesel is made from virgin or used vegetable oils and animal fats, which is a diesel substitute and requires no engine modifications up to 20 per cent blend.
Railway Minister Sadanand Gowda stressed on the need to promote biofuels. The industry should ensure that it is also genuinely sustainable and cost-effective for end consumers, he said.Railways and defence sectors account for about 5% of 69 million tonne diesel consumption. Railways alone consumes over 3 crore litre of diesel worth Rs 16,000 crore annually.
Bio-diesel use could be later extended to mobile towers, industrial generator sets and agri-equipment, officials said. Bio-diesel project was conceived in 2003 by the erstwhile NDA government headed by Atal Bihari Vajpayee.
The Bureau of Indian Standards ( BIS) has already evolved a standard (IS-15607) for bio-diesel, which is also known as B100 on the lines of American and European standards.
India’s installed bio-diesel capacity is about 1.2 million tonne per annum, but only 7 per cent of the capacity is currently utilised because of restrictions.