The overdependence on fossil fuels has given birth to energy insecurity and environmental concerns. The increasing greenhouse gas (GHG) levels impact heavily on our ecosystem. Such pressing concerns demand a quick sustainable alternatives to fossil fuels.
In this aspect, biodiesel turns out to be the best option considering the profitability of biofuels. The export volume of biodiesel in India in 2022 was 10 million litres and is expected to increase due to the implementation of the National Biofuel Policy in 2018.
India’s Dependence on Fossil Fuels: Current Scenario
India’s increasing population and growing economy are a few of the factors that increase fuel consumption. We procure 80% of our energy needs from oil, coal, and biomass. The cumulative petroleum product demand is over 3.7 million barrels per day.
The prime contributor to this increasing demand is the transportation and industrial requirements. Hence, the import of fossil fuels is increasing at an alarming rate. With only 17.9% of crude oil procurement from domestic production, India has to import a lion’s share from other countries resulting in economic challenges.
In the same context, India is the largest consumer of vegetable oil or cooking in the world. As mentioned, the prime feedstock of biodiesel is cooking oil, palm stearin, palm fatty oil, soya acid oil, etc. Also, inedible vegetable oils extracted from neem, jatropha, and karanj are used for biodiesel production. These inedible oils don’t cause food insecurity as they are grown in barren non-cultivable land. Hence, proper recovery of used cooking oil and other sustainable feedstock sources can replace the fuel import demand by 40%.
The target to blend 20% biodiesel in traditional petrol or diesel moved to 2025 from 2030. India is gearing up for a quick energy transition to reduce its dependence on fuel imports. This step will promote biodiesel production throughout the country and contribute to the vendor’s profitability and India’s economic growth.
Biodiesel: The Answer to Green Renewable Energy Source and Sustainability
Biodiesel has become the prime pillar of the biofuel movement in India. Since 2018, many major biodiesel manufacturing units have surfaced. Its feedstock is mainly used cooking oil, inedible vegetable oil, oil byproducts, and animal fat waste. These resources undergo catalytic transesterification to formulate fatty acid methyl ester (FAME), also known as biodiesel.
Its important features are:
- Renewable fuel, an alternative to fossil fuels
- Biodegradable in nature and is much safer than conventional fuels
- Less toxic in terms of GHG emissions compared to petrol and diesel.
This eco-friendly biofuel is a perfect renewable energy source that can drive India’s energy transition movement faster. In fact, the national policies and government initiatives will increase biodiesel production and primary energy demand. On the other hand, railway, aviation, and other industrial sectors will become the key biodiesel users offering immense potential for expansion in the biodiesel production section.
To understand the economic impact and profitability of biofuels in India, let us discuss them in the following aspects.
Profitability and Economic Impact of Biodiesel
Import Diesel Bill Reduction
The average diesel import of India is 0.07 million tonnes between 2014 and 2024. As mentioned, this import has procured 80% of the cumulative fuel needed. As India is planning to boost biodiesel production, this requirement will be reduced considerably. Over the years, diesel prices have increased causing inflation to a considerable extent. By introducing biodiesel, the import bill on diesel can be reduced remarkably. It is speculated that India can save as much as Rs. 12,000 Crore if biodiesel is produced from used cooking oil, vegetable oil byproducts, and inedible vegetable oils.
This step will boost the economic condition of India. This massive profit from import bill reduction through biodiesel production can significantly uplift India’s economic condition.
Uplifting Local Economies :
The current policies and schemes promoting biodiesel production will automatically enhance local businesses. For biodiesel manufacturers, local businesses can procure used cooking oil, inedible vegetable oils, oil byproducts, and animal tallows. On the other hand, local small-scale manufacturers can supply their biodiesel produce to oil marketing companies.
The current increase in domestic biodiesel demand will create a stable market for local manufacturers and oil marketing companies for years. The profitability of biofuels will be distributed among the entities in the manufacturing and supply chain and contribute to the overall economic development of our country.
Reinforcing National Energy Security :
As mentioned, India, being the largest consumer of vegetable oils in the world, imports 60% of its annual consumption (23-24 million metric tonnes). In this aspect, more than 220 crore litres of used cooking oil can be retrieved from various sources. Hence, it supports the hidden potential of producing biodiesel and reducing its annual diesel import bill.
This immense feedstock is enough to reduce the fossil fuel dependency of India. The prime criterion behind its success is the proper procurement of used cooking oil and other feedstocks for biodiesel across the country. Sustainable policies are being implemented for such feedstock retrieval and reinforcing national energy security.
Waste Management :
The commercial food sector and households generate used cooking oil abundantly. Most of the time, this oil is drained to local sewer systems. It either blocks the sewage channels or ends up in the rivers and seas. Promoting biodiesel production also reinstates responsible disposal of used cooking oil. Commercial and individual users will pay heed and collaborate with the local used cooking oil collectors.
This waste can be converted to biodiesel contributing to the overall profitability of biofuels in India. Such responsible disposal will manage waste properly and will reduce municipal expenses considerably. This step of waste-to-wealth creation will also uplift local economies by providing a new venue to earn.
Economic Stability and Profitability Ensured with Biodiesel
Biodiesel production does not have any impact on food security, unlike other biofuels. It can also assist us in managing proper disposal of used cooking oil, animal fat, etc. In a nutshell, it establishes economic stability by providing a waste-to-wealth path and benefits the local and national economies.
The above points clearly state how biodiesel can be the best green alternative to petrol and diesel in India. Get in touch with Mag Tech to understand the profitability of biofuels and the economic potential of biodiesel production inside out.
