Wednesday, May 16, 2007



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India, till now, doesn't have a well-developed Biofuel industry. But the
government has now realized the need of the hour and is framing policies
to rev up the green fuel production from sugarcane.

According to a recent report on "Indian Biofuel Industry" published by
RNCOS, environmental safety, together with security and diversity of
energy supply, are the principal aims of the Indian Government for the
Biofuel industry. These factors are working as the main impetus for the
growth of the Biofuel industry.

The Indian government has recently instituted its policies to promote
the production and usage of Biofuel, with the effort directed on
encouraging the ethanol blending with gasoline, and blending of Biofuel
extracted from non-edible oils with diesel.

As per recent news, India, the second largest sugar producer in the
world, may give permit to sugar mills to make use of low-grade sugar to
produce ethanol to compensate for the price fall in the midst of record
yield. "We're seriously thinking of allowing the use of secondary sugar
for ethanol manufacturing,'' said Sharad Pawar, Agriculture Minister, in
New Delhi, as reported by THE FINANCIAL EXPRESS on May 1, 2007. The
Foreign Agricultural Service at the US Embassy in New Delhi predicted in
a report dated April 20, 2007 that sugar production in India might touch
the mark of 27.43 Million Tons in 2007. Production may further increase
to around 28.8 Million Tons by September 2008.

Presently, the government policies allow sugar mills to prepare Biofuel
from molasses (and not sugar) to ensure sufficient sugar supplies. The
Centre, in May 2006, passed a law stating the blending of 5% ethanol in
gasoline from November 2006.

Sugar mills, interested in establishing ethanol production facilities
(using sugarcane and molasses), are being given subsidized loans of upto
40% of the project cost from the government controlled Sugar Development

The need to cut India's reliance on crude oil imports, provide
environment-friendly alternative sources of fuel, and to support the
Indian farmers by developing methods to keep sugarcane production high
is driving the Biofuel policies.

According to the RNCOS report "Indian Biofuel Industry", a large
proportion of arable area in India is under sugarcane production. The
annual production of sugarcane for the year 2006 was about 266.89
Million Tons. However, the praxis of producing ethanol directly from
sugarcane hasn't picked up in the country till yet, indicating huge
opportunity for the development of production of ethanol.

The market research report presents a detailed picture of the Indian
Biofuel industry with the foci on Indian Biofuel policy, demand & supply
statistics, driving forces, opportunities, challenges, jatropha
cultivation scenario, government initiatives, and future of the industry.


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