The tag of developing country and a huge energy demand (India stands at fifth position in energy consumption in the world) has forced India to depend on other countries for oil. This has increased the risk exposure of the country to the high price of the crude oil in the international market. With the increasing oil prices and being a part of the clean environment policies, India commenced on its Biofuels use journey in 2003. Basically, the Indian Biofuels sector is driven by ethanol and in case of biodiesel, the phase one consisting of pilot projects has almost been completed and the commercial production is expected to start in 2007 onwards.
- Ethanol production of India is ranked 4th largest in the world. However, the production capacity of India was much more than its actual production. With uses in different segments, ethanol demand is increasing in India.
- The biodiesel production is in its initial phase and the commercial production is still waiting for a start. The densities of raw materials for biodiesel production in India are high but it is lacking in production and plantation of raw material (Jatropha) for biodiesel production.
- Government’ primary objectives for Biofuels industry are environmental factors along with diversity & security of energy supply of energy. This is working as the primary driving force for the industry growth.
- Expanded Biofuels production has the potential to create new opportunities for sustaining the rural development in a market-orientated common agricultural sector.