Financial Daily from THE HINDU group of publications
Friday, Jan 31, 2003
Industry & Economy
Draft policy highlights need for a biofuel movement
BANGALORE, Jan. 30
A DRAFT national policy on non-edible oils as biofuels has suggested a massive national campaign, some substitution in diesel and fiscal incentives to agencies that promote the generation, sale and use of these oils.
The use of biofuels should be encouraged on the lines of ethanol-laced petrol. They should form 5 per cent of diesel in the next three years and gradually increased to 20 per cent by 2010, says the draft put into limited circulation by SuTRA of Indian Institute of Science (IISc) and Samagra Vikas Trust.
The document will be taken up at the all-India seminar on a national policy for biofuels being organised here on February 1 and 2 at the behest of the Union Ministry for Rural Development. Union Minister for Petroleum & Natural Gas, Mr Ram Naik, is slated to open the two-day seminar.
SuTRA (Sustainable Transformation of Rural Areas), an arm of the IISc's Department of Mechanical Engineering is a key proponent of pongamia oil as a biofuel and has demonstrated it for some years in a cluster of villages near Tumkur.
According to Prof. Udipi Shrinivasa, Chief Programme Executive of SuTRA, and one of the authors of the policy, biofuels are relevant to India and can greatly mitigate its staggering oil import bill of Rs 90,000 crore. In 2000, 64 per cent or 90 million tonnes of the oil consumed domestically oil required was imported against a home production of 32 million tonnes.
The draft argues that besides fuel security for the country, the spin-offs can mean improved rural incomes and jobs, environment-friendly mechanisms and a better carbon trading position as biofuels sequester atmospheric carbon.
With the Gulf oil sources prone to wars and the country's crude reserves estimated to last only another 21 years, votaries of biofuels say these can be the future of the country and a beginning should be made now.
Many countries are working on such projects, says Dr Shrinivasa. In a model but expensive way, New Zealand has totally done away with oil import and makes its own petrol from natural gas. With two-thirds of Indians being land-based, he says it makes sense to go the biofuel way as both demand and supply can be local. Diesel needs to be substituted because the petrol - diesel consumption is in a 1:8 ratio.
Apart from pongamia, other non-edible oilseeds like mahua, jatropha and rubber are also available in plenty in the country. These need to be grown and processed in a focussed, systematic way. They should be treated as a farm produce and all activities like processing and marketing should be given a ten-year tax holiday by both the Centre and the States, the document has suggested.
FIs and the National Bank for Agriculture and Rural Development (Nabard) should treat this as a priority-lending sector. Educative campaigns should be made in local languages to rope in women, village level diploma and graduate entrepreneurs and gram panchayats into the biofuel movement.
The core of the proposed action plan include:
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