Introduction
An overview of different fuel options, their production, consumption, imports, and the costs associated with them were mentioned in the previous article. Long-term policies by the Indian government to reduce fuel import dependence were also discussed. In this article, we look at different fuel options available to achieve the same.
Biofuels
Fuels that are produced from biomass are loosely terms as biofuels. They can be produced from plants or agricultural, domestic, or industrial biowaste. They have superior environmental benefits, are cost-competitive with fossil fuels, reduce import dependence on fossil fuels, and help with the recycling of waste feedstock.
Bioethanol
India has targeted ethanol blending in petrol of 20% (E20) by 2025-26 to reduce import costs. Ethanol blending also significantly reduces CO, HC, and NOx emissions [1]. It achieved ethanol blending of 12% (E12) in October 2023 [2]. India produced 502 crore liters of ethanol of which 75% is from sugarcane-based sources, 15% from excess rice, 4% from maize, and the remaining 5% from damaged food grains. Within cane-based sources, 63% came from B-heavy molasses, 35% from sugarcane juice, and just 1% from C-heavy molasses.
To achieve E20 blending, it is estimated that 1016 crore liters of ethanol is required. For other use cases, 334 crore liters are required. Assuming an 80% plant utilization factor, around 1700 crore liters of ethanol production capacity is required by 2025-26. The current capacity is 1380 crore liters of which 875 crore liters are molasses-based and 505 crore liters are grain-based [3]. The price of ethanol varies from INR 50-65 per liter for different sources [4].
Recently, the government banned the utilization of sugarcane juice/syrup for ethanol production [5]. The ban has been revoked but sugar diversion towards ethanol production has been capped [6]. Also due to volatility in monsoon, sugarcane production is lower. Thus, ethanol production is expected to take a hit as compared to last year. Also, ethanol production using sugar is not long-term sustainable since 1 L of ethanol requires 2400-3100 liters of water [7]. Thus, there is an urgent need for ethanol production using other sources. Other main sources for ethanol production are a) maize, damaged food grains based, b) soyabean oil, waste oil, and animal fat, c) cellulosic material like wood chips, rice/wheat straws, and other agricultural residues [8].
Among food sources, damaged food grains, and maize are good options since the yield (per ton of feedstock) of ethanol from these sources (380-400 L) is higher as compared to sugarcane sources (70 L). Maize is also a less water-intensive crop as compared to sugarcane.
India imports half of its edible oil requirements which includes palm, soybean, and sunflower oil. Imports stood at 16.5 million tons (MMT) for the year ending October 2023 [9] which amounts to $16.7 billion. Thus, bioethanol production using imported edible oil doesn’t make sense. However, sourcing and using waste edible oil for bioethanol production can be explored.
The use of cellulosic materials can be a huge boost for bioethanol production since they are available in huge quantities and also help with clearing agricultural residue and reducing stubble burning. However, many private companies like Clariant, and DowDuPont have shut down their experimental plants due to losses [10] [11]. New startups are entering into this market as well [12]. Second-generation (2G) ethanol plants utilize this feedstock. If the challenges are handled, the use of lignocellulosic materials as feedstock seems the most promising route for bioethanol production since unlike sugarcane or maize, cellulosic feedstock doesn’t affect India’s food security.
Biodiesel
Currently, ethanol blending is limited only to petrol. However, import quantities of diesel are three times that of petrol. So, substitution for diesel is crucial. Currently, biodiesel is the only alternative to diesel. Biodiesel production in 2022 was 18.5 crore liters [13]. It is mainly produced from vegetable oil, waste cooking oil, animal fat, etc. India produces 3 million tonnes of waste cooking oil [14] but this supply is scattered. Thus, due to limited feedstock and an unorganized supply chain, biodiesel production has faltered. Another option is to plant trees like Jatropha curcas, hippe, neem, simarouba, etc. in barren lands and use their non-edible oil for biodiesel production [15]. In Karnataka, there is an installed daily capacity of 3 lakh liters of biodiesel, but actual production is at 10-15% due to lack of feedstock. Even though the government had set a target of 5% biodiesel blending by 2030, current blending accounts for only 0.3-0.5% [16]. Currently, oil companies are exploring the addition of ethanol, methanol, and dimethyl ether (DME) to diesel.
Compressed Biogas (CBG)
Natural gas/CNG/LNG is the cleanest fossil fuel and is a key ingredient during the transition to a better energy mix. It produces half as much CO2 as compared to coal for a similar amount of energy output. On average, coal-to-gas switching reduces emissions by 50% when producing electricity and by 33% when providing heat [17]. Along with methanol, LNG is becoming a preferential marine fuel to power ships since it emits 25% less CO2 than conventional marine fuels for the same power output. So alternate forms of natural gas are essential.
Sustainable Alternative Towards Affordable Transportation (SATAT) was launched in 2018 to promote the production of Compressed Biogas (CBG) [18]. CBG production in 2022-23 was 11,227 tons. Minimum procurement price has been set at 46 INR per kg till 2029 fiscal year-end. Feedstocks for CBG include food waste, animal waste, agricultural residue, etc. The technology for CBG production is well established. So, the bottleneck for higher production quantity is the feedstock collection and logistics.
Others
Apart from the feedstock discussed, there are alternatives like algae and seaweed which can be used to produce bioethanol, biodiesel, methane, etc. [19] [20]. These require fresh or seawater ponds with plenty of sunlight for vegetation to grow which are then chemically processed to produce fuels. The main issue with them is economical scaling to meet the requirements.
The government has mandated 5% biomass co-firing in thermal power plants from 2024-25. This obligation shall increase to 7% from 2025-26 [21]. Biomass pellets can be made from various types of agricultural residues such as stubble/straw/stalk/husk from crops like paddy, soya, cotton, gram, jawar, mustard, sesame, sunflower, jute, coffee, bamboo, dry leaves, trimmings, pinecone/needle, elephant grass, groundnut shell, coconut shell, castor seed shell, etc. In theory, there is a huge potential for biofuel production to scale up. However, apart from the logistics issue, the feedstock required is common for most of the bioethanol, CBG, and bio pellets production. So, they get diverted based on the pricing and the yield per ton of feedstock available.
Synthetic fuels
The last category of alternate fuels is synthetic fuels. It can involve carbon capture and electrolysis of water to generate green hydrogen. These are then combined to produce fuels like ethanol, methanol, dimethyl ether, methane, etc. Fuels thus produced are called synthetic or e-fuels. They can be carbon neutral if the carbon atoms are captured from the atmosphere and re-utilized. Simpler chains can be combined to create longer hydrocarbon chains like petrol, diesel, and sustainable aviation fuel (SAF) using Fischer-Tropsch (FT) processes [22]. These are energy-intensive processes. Thankfully, rapidly falling solar prices enable such fuels to be produced at a scale at cost-competitive prices before 2030. The main advantage of such fuels is they are not dependent on feedstock availability and logistics. They also create massive demand for renewable energy sources like solar and wind, nascent technology like CO2 capture, and green hydrogen markets, thus, ultimately pushing the world towards sustainable fuel production.