India: Restrictions on the import of Biofuels

August 24, 2018

In the modern world, there is an increased demand for energy sources in order to fulfil the needs of the technologically advanced world. With the awareness of the damage caused to the environment by the exhaustion of the limited non-renewable sources of energy, the modern world is witnessing a shift towards renewable sources of energy including biofuels.

Biofuels resources for energy

‘Biofuels’ are liquid or gaseous fuels produced from biomass resources and used in place of, or in addition to, diesel, petrol or other fossil fuels for transport, stationary, portable and other applications. These are efficient sources which can satisfy these energy requirements in an environmentally stable and cost-effective manner thereby reducing dependence on import of fossil fuels.

Government Policies

The Government of India formulated National Policy on Biofuels, 2018 (hereinafter referred to as “the policy”) which focuses on economic growth and human well-being. Recognizing the fact that energy is a critical input for socio-economic development, the policy aims at efficiency and security in order to provide access to optimally utilized environment friendly resources for energy generation.

The Policy aims to bring about promotion of the cultivation, production and use of biofuels to increasingly substitute petrol and diesel for transport and be used in stationary and other applications, while contributing to energy security, climate change mitigation, apart from creating new employment opportunities and leading to environmentally sustainable development.

In furtherance of the same, the Government has issued a notification dated August 21, 2018 whereby restriction has been imposed on the import of biofuels (hereinafter referred to as “notification”), only for the non-fuel purpose on an actual user basis for the following biofuels-

  • Ethyl alcohol and other denatured spirits,
  • Petroleum oils and oils obtained from bituminous minerals (other than crude) and preparations not elsewhere specified or included, containing weight 70% or more of petroleum oils or oils obtained from bituminous minerals (basic constituents of preparations containing biodiesel other than waste oils)
  • Biodiesels or mixtures not contain or comprising of less than 70% by weight of petroleum oils and oils obtained from bituminous minerals

Earlier, the import of these items was duty free, but now the same will only be allowed for the non-fuel purpose on an actual user basis indicative of a ‘Free’ to ‘Restricted’ approach.

Impact of the notification

Restriction to the import of biofuels appears to be in consonance with the objective of the policy keeping up the pace of developments in the field of biofuels as well as the ongoing concerns of the Government including Make in India, Swachh Bharat Abhiyan, Skill Development. This policy is expected to entail the benefits such as import reduction, cleaner environment, employment generation, waste to wealth creation as well as providing additional income to the farmers by utilization of the agricultural biomass produced during crop cultivation.

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