Intellectual Thoughts by Sanjay Panda: Alternate energy. A slow lane in India

Alternate energy. A slow lane in India

India's failure to agree a biodiesel policy has forced firms to shelve expansions plans, putting it way behind energy-hungry rivals like China in the drive to greener fuels, a top industry representative said.

The delay has also left edible oil processing companies, which have built capacity to turn 1.2 million tonnes of jatropha into biodiesel, in the lurch -- and Rs 9 billion ($227 million) poorer. New Delhi is blending ethanol with petrol, but has been unable to forge a framework for biodiesel as ministers differ over subsidies needed to kickstart the sector. "It is a clear example of how an indecisive government can jeopardise plans to popularise jatropha to reduce dependence on fossil fuel and pollution. One tonne of jatropha seed can yield 300 kg of biodiesel it is estimated.

India consumes 40 million tonnes of diesel a year, way above annual petrol demand of 8-9 million tonnes, and in 2003 announced plans to replace around five per cent of its diesel consumption with biodiesel made from jatropha, a crop which thrives here.By not agreeing to a subsidy or on a policy, the government has dealt a blow to biodiesel which should have been treated at par with ethanol. Some countries believe biofuels hold out the promise of major cuts in greenhouse gas emissions and are an alternative to scarce and expensive fossil fuels.

India is a major polluter and is likely to rise up the world's league of dirty nations as Asia's third-largest economy purrs along at annual growth rates of over 8 per cent. It imports 70 per cent of its crude oil requirements, and heavily discounts fuel sales by state firms, although on Thursday raised the price of petrol and diesel for the first time in 20 months.

Domestic oil retailers are required to mix ethanol with petrol to 5 per cent of volume almost nationwide and India plans to double that to 10 per cent from October 2008, when the new sugarcane crushing season begins.

But other countries have gone much further. Brazil allows as much as 50 per cent ethanol to be blended with petrol while China has gone ahead with plans to build one of the world's first large-scale jatropha-based biodiesel plant.

The basic reason behind the delay in the biodiesel policy is subsidy. Some ministries favour subsidy for the sector as it is in nascent stage, while the Finance Ministry seems to be opposed to the idea. Some experts say jatropha is several years of intensive research away from being a commercially viable biofuel.

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