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India is concentrating on improving energy security and lowering its carbon footprint by producing biodiesel, an environmentally beneficial substitute for conventional fossil fuels. Biodiesel is produced by fermentation, transesterification, and thermochemical processes from biomasses such as agricultural residue, wastewater, algae, and waste food.

To take advantage of the benefits the large-scale biofuel production offers in terms of the environment, economy, and society, India has created a National Biofuel Policy. The National Policy of Biofuels 2018 was modified in 2022 to meet two goals: to achieve a 20% Ethanol Blending target in Gasoline by FY 2025-26 starting in 2030 and to allow more feedstock for biofuel plants Various generations of biofuels are distinguished by the processes used in their production and acquisition. 

Economic Potential of Biofuel

Biofuels and other new renewable energy sources present chances to lessen dependency on fossil fuels and contribute to the mitigation of climate change. Biofuel can also replace food and energy, two necessities but very different commodities. However, the potential to lessen dependency on fossil fuels has significantly increased interest in biofuel, especially in nations that import a lot of petroleum. 

In a similar vein, India lacks energy and transportation fuel independence. Approximately 84% of crude oil and petroleum products are modified in India. Annually to meet its demand, at a cost of roughly US$77 Billion in  2020–2021. In the midst of all of this biofuels are becoming more and more popular as a substitute and help the green economy. The Indian government implemented a biofuels policy aimed at encouraging the sector and lowering the country’s imports of petroleum and crude oil.

Biodiesel Regulations in India

National Biofuel Policy (2009 and 2018)

India’s government has implemented several policies and initiatives to promote biodiesel production and reduce its reliance on fossil fuels. The National Biofuel Policy (2009) aimed to develop domestic biomass feedstock for biofuel production, with a revised policy (2018) proposing a blending target of 20% Ethanol in Petrol and 5% Biodiesel in Diesel by 2030. These policies categorized Biofuels into three generations: 

Sustainable Alternative to Affordable Transportation (SATAT) aims to establish compressed biogas production units to make compressed BioGas (CBG) available as a green Fuel. 

Environmental Potential of Biodiesel

Biofuels such as blending Ethanol in Petrol Biodiesel and CNG, have the potential to significantly reduce carbon dioxide emissions. However, their production costs are high and can have adverse environmental impacts, such as soil erosion and excess phosphorus and nitrogen discharge. Deforestation and clearing of vegetation land for biofuel crops are not suitable. Cellulosic ethanol can cut greenhouse gas emissions by up to 86%, while biodiesel can achieve 100% sulfur dioxide reduction. Oxygen molecules in biodiesel aid in complete combustion, and biodiesel combustion in diesel engines is 40-50% lower than regular diesel. Biofuels also have indirect benefits, such as waste management, as India generates 62 million tonnes of waste annually and is expected to generate 165 million tonnes of solid waste by 2030.

Challenges in Biodiesel Production

Biodiesel production in India faces a few challenges that need to be addressed to ensure the sustainability of the industry. 

1. Availability of feedstock and Production Costs

Although India has an abundance of biomass, using it to produce biodiesel is not without its difficulties. The expense of gathering and transporting biomass residues to biodiesel plants is a major problem. It is necessary to maintain an effective supply chain for feedstock handling, transportation, and collection. Cooperatives or agricultural groups can be encouraged to take part in the process to accomplish this.

2. Quality Problems

Different plant species produce distinct amounts of oil that can be used to produce biodiesel. Standardization and compatibility with current engine technologies and fuel distribution systems are hampered by this inconsistency.

3. Land Use and Nutrient Challenge

A large-scale implementation is required to replace a significant amount of fossil fuel, which in turn requires substantial land use. This is true regardless of the growth strategy used and the effectiveness of oil extraction. Furthermore, particular nutrients like nitrogen, iron, phosphorus, and sulfur are needed for algae-based biodiesel, a 3G biofuel, and their availability changes depending on market conditions.

4. Economic Viability

The economic viability of biodiesel is impacted by the fact that it is still more expensive to produce in India than fossil fuels.

5. Policy and Regulatory Support

The expansion of the biodiesel market in India may be impeded by the ongoing need for strong policies and regulatory support. In order to foster competition amongst producers of bioenergy, mandated blending with conventional fuels, subsidies, and incentives are required.

6. Feedstock Pre-Treatment

In order to facilitate the conversion of the carbohydrates in lignocellulosic biomass, feedstock must be pre-treated. When selecting a pre-treatment technique, effectiveness in preventing product deterioration should be given top priority. This factor has a direct impact on production costs, as well as the costs of fermentation and enzymatic hydrolysis that follow. Pre-treatment is an essential area for optimization because it accounts for a large portion of the overall costs associated with producing bioethanol.

7. CO2 Utilization

During the production of biodiesel, CO2 produced should also be taken into account. Ensuring that CO2 is utilized efficiently and does not present environmental risks would be a significant challenge.

8. Non-Edible Feedstocks

India is making a significant effort to produce biodiesel from non-edible oil sources. The unsuitability of land for cultivation, high cultivation costs, low productivity, and insufficient seed availability are some of the difficulties in this area. 

Policy and Government Insights of Biofuels

India has amended its National Policy of Biofuels 2018 to promote clean energy and reduce carbon emissions. The policy, which was first implemented in 2003, required a five-percent ethanol blend percentage in gasoline for nine states and four union territories. The 2009 policy was more stringent, mandating a 20 percent blending rate for both ethanol and biodiesel by 2017. 

However, this was not achieved, leading to the launch of a new national biofuel policy in 2018. The main changes include allowing more feedstock options for biofuel plants, moving the ethanol blending target to ESY 2025-26 from 2030, promoting biofuel production in Special Economic Zones/Export Oriented Units, adding new members to the NBCC for export permission, and deleting/amending certain phrases. The Expert Committee on the Roadmap recommends that 13.5 billion liters of ethanol be produced by 2025 in India.


Biofuels can contribute to environmental health, waste management, and reduced fossil fuel dependency. India should focus on sustainable production of advanced second and third-generation biofuels with clear policy and financial support. India’s efforts in biodiesel production represent a step towards energy security and reducing carbon footprint. A combination of favorable government policies, community participation, and private-sector cooperation is needed for success. India’s commitment to sustainability and innovation is set to transform its energy landscape.
We at Advance Biofuel are India’s leading biofuel and biodiesel plants Manufacturer.  we also manufacture fuel ethanol and distillation plants. Do join us in following the Green India journey!