Transforming agricultural waste into biofuel could create up to one million jobs in India over the next decade, while radically improving India’s energy efficiency by meeting up to 59% of the demand for transport gasoline through greener fuels by 2020, according to a new study released today. The Indian Government has already announced an ambitious target of 20% of biofuels in transport by 2017 as part of its Indian Biofuels Policy.

The Bloomberg New Energy Finance study “Next-generation Ethanol: What’s in it for India” commissioned by Novozymes, the world leader in bioinnovation and industrial enzymes, was presented today at en event organized under the aegis of the Danish Embassy in India in cooperation with the Ministry of New and Renewable Energy.

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

Given concerns regarding energy security and CO2 emissions, such a trajectory is neither desirable nor economically or environmentally sustainable. According to the report, biofuels from agricultural residues are a critical existing alternative to liquid fuel which is not only environmentally sustainable but offers huge potential and thus needs to be pursued aggressively.

Expanding on the potential of advanced biofuels, Thomas Nagy, Executive Vice President, Novozymes, said, “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.”

Unlocking the Indian biomass potential would create around a million aggregated jobs between 2010 and 2020, thus providing the much-required impetus for inclusive growth by providing employment in rural India.

Imperatives for Success

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 centre and state levels, with solid 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.