Oil ministry banks on biofuel to meet oil import reduction target

Oil minister Dharmendra Pradhan says that the government has identified bio-energy as a new segment in the nation’s energy basket


Dharmendra Pradhan also urged investors to come up with viable energy generation businesses around the Swachh Bharat campaign using urban waste. Photo: AFP
Dharmendra Pradhan also urged investors to come up with viable energy generation businesses around the Swachh Bharat campaign using urban waste. Photo: AFP

New Delhi: The oil ministry has decided to add more biofuels from various sources in the country’s energy mix to reduce India’s dependence on crude oil imports.

The idea is to promote generation of environmentally friendly fuel from sources including used vegetable oil, agricultural and urban waste and biogas that could help save valuable foreign exchange.

Oil minister Dharmendra Pradhan told reporters on Thursday night that the government has identified bio-energy as a new segment in the nation’s energy basket. “This will comprise ethanol, biodiesel, bio-condensed natural gas etc. Agricultural waste, urban waste and forest waste can be utilized in generating biofuels,” Pradhan said, adding that if this segment grows to account for about 10-15% of the country’s primary energy basket, it could become a Rs1 trillion market.

The minister also urged investors to come up with viable energy generation businesses around the Swachh Bharat campaign using urban waste.

The focus on alternative sources of energy, which could replace fossil fuels, stems from the rising trend in domestic energy consumption. India, already the third largest energy consumer in the world after the US and China, imported 82% of its petroleum requirement in the April-October period. In the same period a year ago, import dependence was 80%, according to Petroleum Planning and Analysis Cell, an arm of the oil ministry.

Prime Minister Modi had in March 2015 set a target of lowering import dependence in oil by 10 percentage points to 67% by 2022, when the country will celebrate 75 years of independence.

India’s renewable energy capacity expansion programme and the plan to promote use of electric cars are expected to aid this move by reducing consumption of diesel for power generation and lowering dependence on petrol and diesel for transportation. B. Ashok, chairman of state-owned Indian Oil Corp., said the company will make investments in biofuel projects on a priority.

As many as 24 waste-to-energy projects to produce 233MW are in different stages of construction at present and five projects of 79MW have been tendered, adding up to a total of 312 MW. Once this capacity comes on stream, waste-to-energy capacity in the country will go up by six-fold from the current 53MW, according to information available with the urban development ministry.

An oil ministry official, who declined to be named, said that a panel of secretaries has earlier this month reviewed the steps taken to cut fossil fuel imports. Accordingly, state-owned Oil and Natural Gas Corp. and Oil India Ltd have been asked to adopt new technology and processes to boost oil recovery from producing fields and to bring fresh discoveries to production quickly.

India imported 202 million tonnes of oil in 2015-16, 60% of which came from the Middle East, 19% from West Africa, 15% from Latin America and 2.5% from South East Asia.

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