National Policy on Biofuels

In October 2007, India's cabinet made a series of announcements regarding ethanol production and proposed an indicative target of 20% blending of biofuels, by 2017, both for bio-diesel and bio-ethanol.

A National Policy on Biofuels outlining the same target was approved by government in December 2009. In order to avoid a conflict between energy security and food security, the policy promotes only fuels derived from non-edible plants, waste, degraded or marginal lands. The policy offers farmers and cultivators a minimum support price for non-edible oil seeds, as well as a minimum purchase price for fuel.

The government is formulating a national policy on biofuels to introduce financial incentives, develop R&D for production and commercialisation of ethanol and jatropha and establish a national biofuel development board.

The policy set a uniform price of INR21.50 (USD0.35) per litre for ethanol. Since October 2007, 5% blending of ethanol with petrol has been mandatory, increasing to 10% from October 2008.