India’s bioenergy segment is evolving rapidly as the country makes efforts to reduce its dependence on imported fossil fuels and incorporate more renewables across power, transport and other industries. The segment has witnessed the introduction of many enabling policies and programmes to drive the development of bioenergy in India and help realise the country’s bioenergy potential in meeting the country’s climate goals. At a recent industry event, “Bio Energy Summit 2023”, organised by the Confederation of Indian Industry, Minister of Petroleum and Natural Gas, Hardeep Singh Puri, discussed the role of bioenergy in India’s energy security and the way forward. Edited excerpts…
Energy security has both a time context and a geographical context. Achieving energy security, for a country like India, which has a population of 1.4 billion, at a time when there is global turbulence poses additional challenges. In recent times, we have increased the number of countries from which we source energy. Moreover, while India is the fifth largest economy in the world, it has a very low per capita income. Thus, pricing and ensuring affordability form a key part of strengthening energy security in the country.
The pricing of petroleum is determined by several factors, including the cost of production, the point of source and different global indices. Add to that the cost of insurance, cost of trade and the exchange rate, which have a significant impact on petroleum and gas pricing. Finally, given the final margin and dealers’ margin and then the imposition of excise duties by the central and state governments, the cost of conventional fuels is affected by a multitude of external factors. As a result, we are working hard to ensure not only the availability of sufficient energy, but also its affordability.
Further, we have been expanding the Indian energy basket. We are also increasing the production of energy in all spheres with a key focus on renewables and diversifying the suppliers in each segment. Furthermore, we are escalating without any hesitation on the ethanol front, utilising material such as maize, damaged food grain, agricultural waste and municipal solid waste to generate ethanol-based energy. A key achievement in this regard has been our movement from about 1.4 per cent ethanol blending in 2014 to 10.17 per cent today. We are also on our way to achieving the target of 20 per cent blending, which is likely to happen over the next one or two years. By 2024-25, it is also likely that we will have 20 per cent blended ethanol available in petrol pumps. These are some of the ways in which we are pushing for energy security with the help of our bioenergy potential.
While, during the 2020 Covid pandemic period there was high uncertainty about the success and potential progress of emerging means of clean energy such as ethanol and compressed biogas, today we can say with certainty that the sector is doing well and has managed to capitalise on the market advantage we have.
India is expected to become the third largest economy in the world by 2030. As the Indian economy continues to grow at 6.5 per cent plus or at 7 per cent, we would need more than what we have, in terms of energy and other resources. India is expected to witness a 25 per cent increase in energy demand between now and 2040. Our Green Hydrogen Mission is also all set to enable India’s energy transition and meet its energy demand. Moreover, India seeks to become a green hydrogen hub, which will cater not only to the domestic market but also to foreign markets through exports. An enabling policy and regulatory environment has now been created for the private sector to step in and lead the country’s Green Hydrogen Mission to meet India’s climate commitments in a timely fashion.
In terms of overall global demand, in some parts of the world there is either saturation in terms of how much they can consume because they have already established themselves as highly industrial and developed economies consuming a large amount of energy per capita, or there is a situation like ours where economic activity is increasing exponentially and energy demand is rising simultaneously. Going forward, I can say with confidence that India is where the opportunity lies for meeting the global clean energy demand. Biofuels such as compressed biogas and ethanol will play a key role in this regard and we are proactively involved in ensuring that our policy mix supports this endeavour.
If you look at what is happening in the bioenergy sector today and also its associated segments, it is a fascinating field. Take ethanol, for instance. I was fascinated by my prior travels to Brazil, which has three times our land area and 23 per cent of the world’s freshwater reserves. The country was one of the first movers in the ethanol space and India is now at a juncture where it is ready to collaborate with countries like Brazil. We have achieved our target of 10 per cent ethanol blending five months ahead of the designated deadline. With the right policy mix and support from the government, coupled with an equally proactive approach by the private sector, we can go a long way in harnessing India’s bioenergy capacity to the fullest. To give a brief overview of what we have done in the ethanol and biofuels segment, we have set a target of 20 per cent ethanol blending by 2023. The National Bioenergy Programme was also recently notified. The government is also providing central financial assistance to these projects through various schemes.
Furthermore, moving to a slightly related question that is often asked: which technology does the government favour in the bioenergy segment? At present, we are highly technology-neutral. Most technologies today are at a nascent stage and we welcome all of them to be able to identify the most suitable technology for specific purposes and segments over the coming years, be it for bioenergy, green hydrogen or other emerging clean energy areas. We are extremely confident that green hydrogen will succeed in India because of the emerging and ever-rising demand, our favourable capacity to produce and the subsequent capacity to consume green hydrogen, not only in India but also in countries across the world. An entire ecosystem has now been established and things are in place. The government merely has a facilitatory role to play in terms of policies and regulations in this environment. The other economic operators in this ecosystem can draw comfort from the environment that has been created.
Climate negotiators all over the world have stepped in with full force to create an environment of collaboration and enthusiasm for creating and meeting the climate targets. The COP series have played a key role in establishing targets for various countries. As far as India is concerned, if the country commits to something it truly means it. Once a target is set, we do our very best to not deviate from it. While many countries have gone back to conventional means of energy owing to the gas crises and other geopolitical issues, we are bent upon pushing clean energy to keep the momentum of India’s energy transition going. Our government has set an ambitious target of achieving net zero emissions by 2070, and we are certain that we will reach this target. Consultations and discussions are an integral part of decision-making and setting commitments in my opinion. For instance, the Millennium Development Goals, which preceded the Sustainable Development Goals (SDGs), were set by think tanks and intellectuals themselves. However, SDGs were created in consultation with countries, stakeholders, civil society and people at the grassroots level, which is why I believe in their success going forward. These goals are far more democratic and far more in the public domain. Thus, the SDGs will succeed because India will succeed and vice versa. India’s presidency at G20 will also give solutions to the energy crises that the world is facing today.
To conclude, India’s energy security is important to create resilience in the economy. When it comes to the bioenergy sector, we are uniquely placed in the market. Bioenergy is one of the safest sources of energy and is likely to remain free of any tragic incidents as have been seen in energy segments such as nuclear plants in the past. This is the time to push for scaling up the sector as much as possible and we are playing our part in this by creating the right policy mix for bioenergy and biofuels. There is no doubt that there are some gaps that need to be filled, but we are certain that with determination and contribution from other stakeholders, bioenergy can be scaled up in no time.
