Treat Ethanol As a Stand-Alone Fuel

The sharp drop in crude oil prices ought not to push biofuels on to the backburner, when it comes to policy design and implementation. The use of cane as feedstock to distil ethanol - for blending with petrol - does make it a sustainable fuel substitute with potential for raising output. Also, the plantation of biodiesel plants like Jatropha in wastelands, pan-India, would boost blending with diesel, the most used automotive fuel. In any case, crude prices can be expected to harden in the foreseeable future, thus making biofuels all the more attractive. So it makes no sense to go slow on the national biofuels policy firmed up last September. True, the ongoing global economic downturn would tend to dampen investor sentiments for fuel substitutes, in the face of weak demand. Yet proactive policy can better coagulate funds for follow-through. Note that the direct employment potential in the ethanol production chain can be many times that of a petroleum refinery. Besides, the use of ethanol-blended petrol can mean a significant reduction in tailpipe exhausts of toxics, greenhouse-effect causing gases and sundry particulate matter. It's clearly green.

We have had 5% ethanol blending with petrol since 2003, but the planned increase in the mix to 10% - beginning in October last year - appears to have been practically shelved. The way ahead is to have in place a policy that deems ethanol a stand-alone fuel, and not just a by-product of the sugar industry with all its inefficiencies. However, domestic sugarcane cultivation has been falling over the years, due to a surfeit of agronomical factors. So, apart from directly distilling for ethanol (to shore up productivity), the prospects of growing cane overseas needs to be seriously explored. Requisite forward and backward linkages for ethanol are also needed to meet the target of 20% ethanol-blending by 2017. As for biodiesel, the plan to remove all central taxes on the commodity is a welcome step. Yet the key is to develop better processes for producing biodiesel from Jatropha seeds. The logistics of growing jatropha over large tracks of wastelands also need to be kept in mind.

(The Economic Times: 7.2.2009)