India’s rapidly growing biofuels sector is playing a crucial role in the country’s energy transition, striking a balance between economic growth and sustainability, according to a report by S&P Global.
The report highlights the transport sector as a key area of focus for biofuel integration, as it is a significant source of emissions and heavily reliant on imported fuels. India is adopting a “multi-fuel mix” strategy, which goes beyond focusing solely on battery electric vehicles (BEVs) and hybrids. According to S&P Global, original equipment manufacturers (OEMs) in India are actively exploring and developing biofuel technologies, which will improve energy security, reduce greenhouse gas emissions, and support the agricultural economy.
Bioethanol production in India is steadily increasing, with the country approaching its target of 20% blending. However, the scaling up of bio-CNG (compressed natural gas) production and distribution still faces significant challenges that require concerted efforts to overcome.
India’s transport sector, driven by rapid economic growth, is facing rising energy demand and increasing environmental concerns. In response, the country is focusing on promoting alternative energy sources to pave the way for a cleaner, more self-sufficient transportation future.
“Bioethanol and bio-CNG are central to India’s strategy to reduce its dependence on fossil fuels, with oil imports accounting for about 88% of the country’s import demand and gas imports representing nearly 50%,” S&P Global noted. The report adds that biofuels will help conserve valuable foreign exchange and boost the nation’s economic resilience by decreasing reliance on crude oil and liquefied natural gas (LNG) imports.
Indian automotive manufacturers are investing in a range of technologies, including BEVs, hybrids, and flex-fuel vehicles, to meet the evolving demands for alternative energy. The growing focus on flex-fuel vehicles aligns with India’s bioethanol blending goals, offering consumers more options and supporting the expansion of the biofuels market.
The report also points out that CNG, supported by the government and more than 50 city gas distribution (CGD) companies, has gained significant traction, achieving a penetration rate of around 18% in the passenger car segment. The ongoing expansion of CNG refuelling infrastructure is providing consumers with a cost-effective alternative to conventional fuels.
