Search

The last one to two decades have seen several countries stipulating a mandatory requirement of 5–10% blending of biofuels with petrol and diesel. The mandatory blending has triggered a rapid growth in the biofuel sector. Several governments have put in place biofuel policies that have a bearing right from the production of biofuels crops at the farm to their conversion into transport-grade biofuels to be utilised for blending purpose. This paper highlights the salient features of India's biofuel policy and discusses how it influences the economic viability of ethanol production and its commercialisation in the country. The Government of India provides a wide range of policy incentives to promote biofuels as an alternative energy source. The policy challenges affecting biofuel development are discussed under the framework adapted from the Global Subsidies Initiative of Steenblik (2007) showing the existing policies and distortions along the biofuel supply chain to promote alternate feedstocks. For long-term sustainability of ethanol production for blending mandates, this paper explores the options to augment bioethanol production using alternative feedstocks like sweet sorghum that is grown in the drylands and policy support required for its promotion, which will benefit all the stakeholders of the bioethanol supply chain in the long run.