India approves biofuel policy

Delhi : The Government of India has set an indicative target of a minimum 20 per cent ethanol-blended petrol and diesel across the country by 2017.

This was the highlight of the National Policy on Biofuels, which was cleared by the Cabinet on Thursday.

It also set up of an empowered National Biofuel Coordination Committee, headed by the Prime Minister and a Biofuel Steering Committee headed by Cabinet Secretary.

The policy has also suggested removing all central taxes on bio-diesel and according declared goods' status to biofuels that would ensure a uniform 4 per cent sales tax on the product across states.

As per the policy, a certification mechanism would be put in place for the blending exercise that would have to conform to Bureau of Indian Standards (BIS) specifications.

The government has already initiated a bio-fuel strategy, under which 5 per cent ethanol blending in petrol is mandatory across the country and this would go up to 10 per cent from October this year.

Bio-diesel production will be taken up from non-edible oil seeds in waste, degraded and marginal lands. The focus would be on indigenous production of bio-diesel feedstock and import of Free Fatty Acid (FFA) based such as oil, palm etc. would not be permitted, the policy said.

The Minimum Support Price (MSP) with the provision of periodic revision for bio-diesel oil seeds would be announced to provide fair price to the growers.

Minimum Purchase Price (MPP) for the purchase of bio-ethanol by the Oil Marketing Companies (OMCs) would be based on the actual cost of production and import price of bio-ethanol. In case of bio-diesel, the MPP should be linked to the prevailing retail diesel price, the policy said.