India is the world’s 6^th largest consumer of energy with current consumption of 17.3 billion liters (4.57 billion gallons US) per year of gasoline. Demand is expected to grow 8.5% every year till 2020. Assuming a barrel of crude oil costs US$100, India will spend US$19.4 billion on importing gasoline by 2020.

The Bloomberg study “Next-generation Ethanol: What’s in it for India’s commissioned by Novozymes was presented at event organized under the aegis of the Danish Embassy in India in cooperation with India’s Ministry of New and Renewable Energy. According to the report, biofuels from agricultural residues are an important existing alternative to liquid fuel which is environmentally sustainable and should be pursued aggressively.

By converting agricultural residues into fuel ethanol, India has the potential to reduce its dependence on imported petroleum. What’s more interesting is that this can be achieved without changing today’s agricultural land-use patterns or cultivating new energy crops. In addition, we already have the technology ready for deployment.

—Thomas Nagy, Executive Vice President, Novozymes

While the potential is high, the report states that issues like lack of policy implementation, absence of any incentive for collection of agriculture residue (only 25% of the waste is recovered from the fields) and requisite infrastructure need to be addressed for the optimum development of India’s advanced biofuel potential.

The report stresses that the emergence of a dynamic bioethanol industry depends on policy-makers putting in place India-wide mandates, coherent and innovative policies at the center and state levels, with policy incentives that actively encourage value chain stakeholders to make the necessary behavioral changes and investment decisions. Clear-cut policies and legislation with penalty for non-compliance will stimulate the growth of the biofuels sector.