Next Generation Biofuel: Can It Resolve India’s Pollution Crisis?

Most of us are aware that the menace of burning agriculture waste after harvesting is one of the biggest causes of pollution in Delhi in the months of November and December every year. Burning of agriculture waste releases harmful gases like carbon dioxide, carbon monoxide, sulphur oxides and a large amount of particulate matters.

What many are not aware of is that burning of agriculture waste is not just preventable but farmers can actually benefit from this waste. The next generation biofuel technology called Cellulosic biofuels can turn this agriculture waste into an additional income for farmers, and provide a renewable energy that can drive cars, and reduce India's trade deficit.

The fundamental difference between Cellulosic biofuel and first generation biofuel is that first generation biofuel is produced from food sources such as sugarcane juice, while Cellulosic biofuel is produced from the agriculture waste that is currently burned in the fields. Nearly 11,000 crore liter of first generation biofuel is now produced globally (as per Renewable Energy Policy Network for 21st Century), majority from corn and sugarcane juice.

In 2008, Ministry of New and Renewable Energy of India established a National Policy on Biofuels that proposed 20 per cent biofuel blending by 2017. While this is a step forward, the policy does not specify whether the target would be met by first generation biofuel, or Cellulosic biofuel. As of now only first generation biofuel is produced in India.

India has a population of 1.25 billion, and converting food source into fuel is not a sustainable solution. Therefore, a policy framework that specifically targets Cellulosic biofuel that are produced from agriculture waste, and offers dramatic reduction in greenhouse gas emission is needed.

"Advancement of Cellulosic biofuel can be brought forward in India through a policy framework that incentivize investments in this sector, as well as incentivise farmers to not burn but sell the agriculture waste generated," says Rajdeep Golecha, a USA-based energy expert, who has led a multi-billion dollar renewable energy investment, and research on Cellulosic biofuel.

The USA policy on biofuel is a good example. In 2007, US Congress passed a policy that incentivised biofuel investments in USA as well as mandated production of 13,600 crore liters of biofuels annually by 2022. Of this 6,000 crore liters was specifically mandated to be Cellulosic biofuel.

Cellulosic might be the answer to India's pollution woes, and energy demands. The country will produce 125 to 183 million tonnes of agriculture waste by 2020, which can be converted into 3,400 and 5,000 crore liters of Cellulosic biofuel annually, according to Bloomberg New Energy Finance.

"Current costs of Cellulosic biofuel would be higher than petrol; however, costs have been coming down significantly. In last 10 years there has been several fold reduction in production cost of Cellulosic biofuel," says Golecha. He further points out that with any new technology costs come down significantly when volume increases.

"The production of Cellulosic biofuel does require huge investments with return on investment spread over a long time. Based on some recent data, to convert 65 million tons of agriculture waste into Cellulosic biofuel could require investment in the range of Rs 75,000 crore," says Golecha. However, energy is a capital intensive industry and a proper policy framework can incentivize the industry for these investments.

Experts believe that the biggest barrier to renewable energy adoption in India is lack of political commitment. Once the policy framework and commitment attracts investment in Cellulosic biofuel, the industry can reduce investment risks using portfolio and biomass contracting strategies, as per a study by Golecha.

Besides a policy framework, infrastructure can be another hurdle for adoption of Cellulosic biofuel in India. A Cellulosic biofuel refinery requires as much as 5 lakh tone of biomass annually. This would require a robust transportation infrastructure and connectivity at villages.

Where Does India Stand?
Of the 11,000 crore liters, nearly 50 per cent production comes from USA, and the country has taken a clear lead in the adoption of biofuels. Brazil is at the forefront among the developing nations, with 20 per cent of global biofuel now produced in Brazil.

India is yet to make a mark in the biofuel industry. India's National Policy of 20 per cent biofuel blending by 2017 has laid down a roadmap for the phased implementation of the programme. However, at the end of 2015, India is nowhere near the target set out by the policy. India is the fourth largest consumer of energy in the world and imports nearly 80 per cent of its requirement. This demand is expected to only going to increase.

Research says that the cost of Cellulosic biofuel is likely to become competitive with petrol as volume increases and technology matures. India needs to promote investment in Cellulosic biofuel to reap the benefits of this transformation.