The unspoken biofuel

The unspoken biofuel

If you are following the Indian renewables scenario, you would have doubtless come across repeated news about the success of ethanol blending in petrol. Ethanol blending is nearing 10% nationwide, and so enthused is the government that it is advancing some of the targets for ethanol blending from 2030 to 2025.

But you will rarely come across any government official talking about biodiesel blending percentages. That is because it makes for really poor PR – EAI estimates suggest that it could be at best 0.3% and could be as low as 0.15%, while we should have reached over twenty times that proportion by now (and the efforts on biodiesel blending have been ongoing for well over a decade)

Basically, we are still close to zero when it comes to biodiesel. And based on our research, the prospects for the next few years do not look much better.

India is a diesel country – we use about 80 million tons of diesel a year (70% for transport, most of the rest in gensets) and only about 30 million tons of petrol/gasoline (almost 100% for transport). Which means that the overall biofuel blending percentage for diesel & petrol together is less than 3%.

There are many reasons for such a poor performance on biodiesel, but that should be for another post another day Right now, these stats bring home the following point –

It is better to have very modest expectations when it comes to contribution of biofuels to overall transport decarbonization by 2030. Something like solar (which has gotten from close to zero in 2010 to 50 GW by 2022), combined with electric vehicles, has a much higher potential to provide scaled decarbonization of transport.

This is a challenge for investors in biofuels, especially biodiesel: If biofuels can’t scale fast, but EVs can, why bother to invest in it? (And not just transport, solar + batteries can replace gensets as well, the other end use segment for biodiesel)

See my LinkedIn post on this topic