Association for Public Policy Analysis & Management

Biofuels derived from lignocellulosic biomass (referred to as second generation biofuels), particularly from agricultural crops, residues, forestry residues, waste, and purpose-grown non-food feedstock are being supported in India for meeting multiple strategy objectives such as local air pollution reduction, climate change mitigation, energy security and development of rural economy. They hold the potential to significantly increase the available quantities of biofuels without putting additional pressure on the agricultural and forestry systems, and without raising public concerns about a trade-off between food and fuels. However, while technologically feasible, techno-economic feasibility remains suspect with a number of uncertainties.

This paper examines the feasibility of a second-generation biofuel future for India. If they are to capture a significant share of the market for transportation fuels, second-generation biofuels will have to advance to large-scale commercial production over the coming decade and prove their ability to achieve cost and sustainability targets. There is a need to bridge the ‘valley of death’ between pilot plants and large commercial-scale facilities. There have been limited studies of biofuel roadmaps for India which also consider the sustainability and feasibility aspects of second-generation biofuels using actual plant data.

The paper will look at these interrelated questions:

1. What is the supply of biofuels that is needed for meeting blending targets mandated by the Government of India and how do these compare with India’s GHG (greenhouse gas) mitigation targets?
2. How sustainable are 2G biofuels in terms of GHG emissions and how can this be improved
3. How do biofuels compare with the economics of conventional fuels in India and what are the options for improving their feasibility?

The answers to these questions are then used to draw up policy recommendations and a biofuel roadmap for India.

For the first question, 4 scenarios upto 2030 are explored to determine biofuel requirements under the Business as Usual case, the National Biofuels Policy, India’s Paris Agreement commitments and a global maximum 2 deg C temperature rise scenario. The Global Change Assessment Model (GCAM) is used to develop these scenarios.

To assess second generation bioethanol sustainability, the paper will compare its life cycle GHG emissions with Indian gasoline. The paper will present a life cycle analysis of bioethanol production from rice straw and use the design results from an Indian 15000 TPA bioethanol plant. A sensitivity analysis to farm emission allocations, yield increases, electricity cogeneration and enzyme recycling is also performed.

Next, the paper will examine the economic feasibility of bioethanol production from rice straw. The price is compared with the market prices and the sensitivity to raw material prices is studied. Options to improve the economic feasibility using cogeneration, lignin valorization and enzyme recycling are also examined.

Lastly, the paper will summarize a set of broad policy recommendations in terms of blending mandates (which is the preferred tool in India) and other actions considering a stakeholder analysis and seasonal & regional availability constraints of biomass residues.