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Green boost: India’s Bioenergy sector looks to new government for growth and sustainability

As the Modi government embarks on its third term in power, the spotlight shifts to the burgeoning bioenergy sector, encompassing vital aspects such as ethanol, green hydrogen, compressed biogas, sustainable aviation fuel, and others. With the nation’s focus sharpening on renewable energy and environmental sustainability, the expectations from the new government are palpable among industry players. Industries are hopeful that the new government will provide the necessary support to propel them to greater heights. This support is crucial because it can pave the way for India to transition towards cleaner energy sources, reducing environmental impact and promoting sustainability. Good policies in this area not only foster industry growth but also contribute to India’s overall economic development and well-being.

Expectations from the new Government

Ethanol Policy Adjustments: The industry is seeking favorable adjustments to the ethanol policy, particularly the use of sugarcane juice (SCJ) and B-heavy molasses (BHM) for ethanol production. This would support the government’s goal of achieving 20% ethanol blending in gasoline by ESY 2024-25.

Energy Security: Ethanol blending helps reduce India’s dependency on imported fossil fuels, enhancing energy security.
Market Stabilization: Diverting excess sugarcane to ethanol production helps balance the sugar market by preventing oversupply and stabilizing prices.
Economic Benefits: The increased ethanol production can lead to substantial economic benefits for sugar mills, enabling them to invest in new technologies and infrastructure.

Financial Assistance for Multi-Feed Ethanol Plants: To enhance the resilience and flexibility of ethanol production, the industry is advocating for financial support to convert existing ethanol plants into multi-feed units capable of processing food grains in addition to sugarcane. This conversion would ensure a more adaptable production capacity, allowing the industry to respond better to varying supply and demand conditions. Financial assistance from the government would be critical in facilitating these upgrades.

Flexibility and Resilience: Multi-feed plants offer greater flexibility and resilience in ethanol production, allowing plants to switch between different feedstocks based on availability and market conditions.
Government Targets: Supporting the conversion to multi-feed plants aligns with the government’s ethanol blending targets and ensures a more robust supply chain for ethanol production.

Economic Viability: Financial assistance from the government would make these conversions economically viable, ensuring that ethanol production can continue uninterrupted regardless of sugarcane availability.

Support for Bio-CBG and Hydrogen Production
Bio-CBG (compressed biogas) and hydrogen are emerging as crucial components of India’s renewable energy landscape. The industry is looking for government incentives and support to develop bio-CBG and hydrogen production facilities. Such investments would not only diversify revenue streams but also significantly contribute to reducing the industry’s carbon footprint. This support is seen as essential for the industry’s transition towards more sustainable operations.

Renewable Energy Transition: Bio-CBG and hydrogen are key components of India’s renewable energy strategy, helping to reduce dependence on fossil fuels.
Diversified Revenue Streams: Investing in bio-CBG and hydrogen production provides sugar mills with additional revenue streams, enhancing their financial stability and sustainability.
Carbon Footprint Reduction: These technologies significantly reduce the carbon footprint of sugar mills, contributing to India’s climate goals.

High Capital Costs: The capital cost of setting up green hydrogen production facilities is still relatively high. This is a significant challenge, as India needs to scale up the production of green hydrogen to meet its ambitious renewable energy targets. Therefore, the new government should take steps to ensure that the cost of setting up the plant comes down.

Policy Support: Clear and consistent policies and regulatory frameworks are essential to incentivize investment in green hydrogen production and create a conducive environment for its growth. Therefore, the new government should ensure the same.

Addressing these challenges will require concerted efforts from the new government, industries, and stakeholders to promote research and innovation, invest in infrastructure development, and implement supportive policies to drive the widespread adoption of green hydrogen in India.

Boost to Sustainable Aviation Fuel:
The Centre has set an indicative target of 1% for blending sustainable aviation fuel (SAF) with conventional jet fuel for all international flights by 2027, marking a major step towards reducing carbon emission. This is expected to double to 2% by 2028 and become 5% by 2030. The targets were set after considering stakeholders’ feedback, which included the rising capacities of SAF from new plants in the country and projections of jet fuel sales. India has also launched the Global Biofuels Alliance (GBA), so the government should take steps to ensure that GBA can turn India into a major production and export hub for sustainable aviation fuel and give the country a chance to set international standards in the sector. The new government should take steps to ensure that several companies, including state-run Oil Marketing Companies (OMCs) and other oil firms, should work on technologies to produce SAF in India, which has to be low cost as SAF production has also been a challenge for the sector. Additionally, the new government needs to ensure the availability of abundant raw materials for the sector.

Anil Pise, MD, Raj Group while speaking to Bioenergy Times said, “As the new Government takes charge, technology providers in the ethanol, CBG (compressed biogas), and hydrogen production sectors have high expectations for policy reforms that will facilitate growth and innovation. Firstly, we anticipate streamlined regulations and incentives to encourage investment in renewable energy technologies. Clear and consistent policies regarding feedstock procurement, pricing mechanisms, and market access will be crucial for fostering a conducive environment for technology providers. Additionally, we hope to see increased government support for research and development initiatives aimed at advancing renewable energy technologies, particularly in the areas of efficiency improvement, cost reduction, and scalability.”

“Furthermore, enhancing collaboration between industry stakeholders and government bodies can significantly ease the path for technology providers. Establishing platforms for regular dialogue and consultation can help policymakers better understand the challenges faced by technology providers and tailor policies to address their needs. Moreover, initiatives to promote skill development and capacity-building programs can ensure a skilled workforce capable of driving innovation and technological advancements in the renewable energy sector. By implementing these measures, the government can create an ecosystem that empowers technology providers to thrive and contribute to India’s sustainable energy future,” he further added.

The ethanol, bio-CBG, green hydrogen, and other industries are at a critical juncture, and the support of the new government is pivotal for their future growth and sustainability. By addressing the demands and extending support for net-zero initiatives, the government can ensure these sectors thrive and contribute significantly to India’s economic and environmental goals. The collaborative efforts between the government and industry stakeholders will be crucial in realizing these aspirations.

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