Govt seeks subsidies to promote bio-fuel use

Five per cent of vehicles in India will run on bio-fuels by 2012, according to the new draft bio-fuel policy, reports Chetan Chauhan.

Updated on: Jan 5, 2007, 24:29:00 IST

None | By Chetan Chauhan, New Delhi

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Five per cent of vehicles in India will run on bio-fuels by 2012, according to the new draft bio-fuel policy.

Government subsidies and financial incentives for industry and farmers have been sought to achieve this target. The Cabinet will take up the policy for consideration later this month.

Vehicles will run on petrol blended with ethanol made from sugarcane and on bio-diesel from oil extracted from Jatropa seeds. At present, bio-fuels are available only in select cities like Faridabad.

"By 2017 we intend to supply bio-fuels for 10 to 20 per cent vehicles running on Indian roads," a government official said. At present, a litre of ethanol costs Rs 20 and bio-diesel Rs 21, both of which will come down with the increase in production.

Before that, the government expects an increase in demand for bio-fuels given the increase in petroleum product prices. This will have to be met through imports. However, in order to protect the domestic bio-fuel industry, the ministry for non-conventional and renewable energy has sought the Cabinet's approval for imposing duties and taxes on imported bio-fuels. This will be done in consultation with the finance ministry and agriculture ministry.

Since farmers have stepped up cultivation of sugarcane and Jatropa for bio-diesel, the ministry has also suggested setting up a National Bio-fuel Board for coordinating and monitoring new programmes. The board, headed by the prime minister, will approve policy and an executive council will deal with business issues.

In addition, the state governments will be be advised to promote a framework for public private partnership to encourage entrepreneurship, the policy says. Andhra Pradesh has taken the lead by approving a new bio-fuel policy and offering incentives for Jatropa farming.

The policy document says targets for operation of petrol and diesel vehicles on bio-fuels would be prepared which will also include rules for conversion of petrol vehicles to bio-fuel mode.

To promote the cleaner fuel, the ministry has sought excise duty concessions on all bio-fuels and equipment related to its production. The ministry also wants financial incentives to increase oil production, for engine development, its application and conversion of petrol engines to bio-fuel mode. Insurance cover will be offered to the bio-fuel industry, the document adds.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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