Interview: Well-Defined Value Chain Required for Biofuels Sector to Grow in India

In a country like India, where the overall economic growth is fueled by its agrarian sector, biofuels assume great significance in light of the country’s ambitious goals of doubling farmers’ income, import reduction, employment generation, and waste-to-wealth creation. However, the country has, over the years, done little to propel the growth of biofuels as a means of alternative energy in the face of rising pollution levels, largely due to a lack of awareness and technological know-how.

Acknowledging the importance of abundant resources for biofuel in the country,  the union cabinet recently approved the National Policy on Biofuels 2018. Mercom’s news team contacted Charmaine Fernandes Sharma, the co-founder of Observing I, a company providing sustainable solutions for waste management and clean technologies, to learn more about the biofuel sector and the challenges this relatively-unknown but significant sector faces today.

Here are the edited excerpts from the interview:

Biomass makes up a small portion of the electricity generation in India and power generated from biomass has fallen year-over-year. Why do you think that is?

A comprehensive plan for effective utilization of various types of biomass does not exist in India as of today. Efficient and low-cost technologies for conversion of biomass to power is also required. The crucial issue is to identify and study the technologies, since many of them also emit polluting gases, or have the potential of catching fire.

The government can assess new technologies and constitute a professional body for passing the technology for pollution control emission and safety standards. As a low-cost resource material, there are very wide varieties of biomass available in nature – from pine needles in the Himalayan region to coconut waste in coastal countries, from agri-residues, to irrigated high density energy plantations.

Variety also exists for the end uses of biomass – from household cooking to megawatt level power generation. Feedstock that can be harnessed for biomass power production in India are outlined below:

Effective use of this feedstock needs sector wise planning for the collection, conversion to energy product and use, and distribution of the energy, either as a fuel or for production of electricity.

Further, production and supply of electricity to microgrids in rural areas can be a very successful model, but distribution of electricity requires special permissions, as I understand.

Biomass from industries like the sugar industry can be easily collected in bulk, and effective commercially viable production of bio-ethanol can be facilitated. Specially bred mustard varieties can produce reasonably high oil yields and are very useful in crop rotation with cereals and have the added benefit that the meal left over after the oil has been pressed out can act as an effective and biodegradable pesticide. But this would require farmer outreach programs, distribution of such seeds and extraction machines, and finally the plan for its beat utilization.

The utilization chain would involve:

  • Listing sources of biomass production and their calorific value
  • Biomass procurement
  • Biomass processing
  • Transportation
  • Power production

It is not always incentives, but just the creation of a well-defined value chain that will attract entrepreneurial activity and investment in this sector.

Considering agriculture is such a big part of the economy why hasn’t agricultural waste been turned into biofuel in greater volumes?

Agricultural waste can be harvested in small quantities or large volumes depending on the crop and its final product. For example, sugarcane can be collected from the sugar mills in bulk and that makes for easier and cost-effective processing.

Pine needles, which are plenty available in the forest regions, are being collected and used effectively for power generation; the villagers are paid ₹2 (~$0.0296)/kg for pine needles collected, so it has become a source of income for them.

In the case of wheat, the stubble remains in the ground and needs both labor and machinery to be extracted – the cost of that biomass will therefore be higher. It is an extra expense to the farmers, who opt for burning it and the resultant pollution needs no elaboration here.

The government can choose to provide incentives and loans for the removal of wheat stubble from the fields and offer a basic buying price. That will also facilitate the farmers’ investment in the following crops.

What should happen for the biomass sector to take off in India?

The government has to create a flow plan for easy collection and transportation of various types of biomass to the power generation units.

Testing of various biomass for its calorific value is absolutely essential in order to correctly compute the final cost of producing the fuels. The final amount of power generated will depend on the type of biomass and the process of conversion.

Establishing small power generation units spread over rural geographies where biomass is readily available must be encouraged. Distribution of power in the form of small microgrids must be made easy and commercially viable as an entrepreneurial activity.

Since there are many new technologies. There’s a need to identify, assess, and somehow certify sound technologies. Faulty technologies result in the emission of polluting gases like methane into the atmosphere.

About 25 years ago, when the biotechnology industry was new, the Maharashtra government had constituted an initiative called “Mahabioyatra”. Many of us entrepreneurs were invited to be members of this body, and provide input related to laboratory requirements, commercialization of products like enzymes, nutraceuticals, etc., and other matters that enabled policies that led to the growth of the industry in Maharashtra. Similar advisory bodies can be constituted for the biofuels and other sustainability sectors.

What are the entry barriers?

Since this is a core emerging field in India, the technologies are new and keep emerging.

It is necessary for the government bodies to create a method for bringing such technologies into play, and to understand that technology will progressively get more efficient and cost effective as it gets widely used.

The present standard tendering system has no room for new technologies, since the tender documents require that the technologies be in use for 10 years or so. The earnest deposits, financial background requirements etc. are all negative to new entrants and small technology players.

Another important issue is that the decision makers in most government bodies are not professionally qualified to understand or assess the technology, and therefore tend to reject new technologies and processes outright.

For instance, our waste conversion, zero-residue technology, has to be appraised by the municipal corporations. However, they do not know on what to base their decisions. Clearances from the state pollution control board are also given after the proposal is approved to set up.

There are no advantage points for Made in India technologies despite the Prime Minister emphasizing this point.

There is no green technology rating agency to certify that certain technologies are advantageous for reducing pollution.

The Technology Evaluation Committee (TEC) a government body, meets only twice a year, I am told.

Why is it hard to procure agricultural residue and turn it into biofuel instead of farmers burning it and causing severe air pollution?

Agricultural residue is actually a very complicated issue, and nobody is trying to understand the complexity. In earlier times, wheat and rice crops were hand harvested using sickles, and therefore the plant part remaining with the root was not more than one inch. Recent mechanized harvesters leave a length of 6 inches or so. Therefore, the quantity that is being burnt has increased almost six times for the same area of farm.

It is difficult for the farmers to further cut this length of plant again, since that would require work hours with no remuneration. This is the main reason for the increase in pollution, even though crop stubble burning has been a long-standing practice.

Is the policy of using 5-10% of biomass pellets alongside coal across the country a game changer?

I do not think so. Does it make sense to say we will reduce the poison being currently administered to you by 10 percent?

Since the pollution to the atmosphere from use of coal is already well documented, 5-10 percent of biomass pellets is not going to change the air pollution significantly. Most importantly, who is going to ensure this 10 percent reduction in use of coal?

It may be better to facilitate certain industries to move to use of bio-pellets completely. Brick kilns may be a good starting point. It is also essential to facilitate bio-pellets manufacture and sale at affordable prices; only then will the industries start using it.

How about ethanol supply? Can ethanol bio refineries be a viable option considering latest government incentives?

Ethanol fuel is the most common biofuel worldwide. The advantages of large scale production of ethanol can actually be a game changer since ethanol can be used in petrol engines as a replacement for gasoline; it can be mixed with gasoline to any percentage. Most existing car petrol engines can run on blends of up to 15% bioethanol with petroleum or gasoline. However, in this case too, the actual chain of large scale production, transportation, marketing and end-user point dispensation is yet to be established. The ethanol produced has to be transported to the oil companies, since the blending is done at the supply point only. The government purchase price has to be revised in order to make it attractive for investors to enter the bio-refinery space. In India, marketing and distribution of fuels is restricted to the large players in the field, since marketing and distribution is solely controlled by them. Private companies should be allowed into the space of production of bio-ethanol, blending marketing and distribution, only then will market forces competing against each other lead to attractive pricing to the consumer.

What do you think of the Biofuels Policy 2018? Any other thoughts on the sector?

The biofuels policy is definitely a step in the right direction, since it has clearly placed the importance and need for this sector to be identified as a core emerging sector.

The biofuel business in India is expected to touch ₹500 billion by 2022, based on the demand of petrol and diesel in the country, said Dharmendra Pradhan, Minister of State for petroleum and natural gas recently. He also assured all necessary policy support to biofuel manufacturers provided that the raw material or feedstock is procured in India. “Our condition is that the raw material has to be sourced from India. Our message to the industry is to manufacture as much energy as possible from the waste that is generated in India,” the minister said.

However, the need for clarity on biomass sourcing, use, efficient conversion technologies, and a proper master plan for enhanced use of biofuels is still missing. Rather than the use for blending, biofuels produced from locally available biomass, can also be used for electrification of rural areas. In developing countries, there is a fundamental need to reduce energy poverty and to meet the Millennium Development Goals.

Provision of electricity to rural areas through national grids is expensive per unit of electricity because rural consumers are more scattered and typically buy less electricity per consumer compared to urban consumers.

Instead of bringing the national grid to rural consumers, community scale electricity production units may be a more realistic solution for supplying electricity at a reasonable cost per kWh.

Earlier efforts in the field of biofuels, included government incentives for growing Jathropha as the miracle source for biofuels. In India, millions of marginal farmers and landless people were encouraged to plant Jathropha. However, the results have been disappointing. In India, 85 percent of the Jathropha farmers have discontinued growing it. This extraordinary collapse of Jathropha as a global biofuel has been ascribed by analysts to an overestimation of Jathropha capabilities, as the species is not yet sufficiently adapted to cultivation to provide sustainably high yields and economic returns, together with a lack of diligence in implementing nationwide cultivation plans.

The principal suggestion is that we should wake up to the fact that waste is a huge, low cost resource material and we should begin using it as such. Municipal solid waste and biomedical waste is generated in humungous quantities, both in urban and rural areas. It is set to grow at the rate of 25 to 40 percent per annum in the coming years. The government is already incurring costs in collecting the waste that is currently dumped in landfills that are already full for many years now. The only intervention required is to install the plants to convert the waste into useful and low cost, green energy products.

Saumy Prateek Saumy has been with MercomIndia.com as a staff reporter covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.