112. Biofuel Scenario in India

India, a fast growing economy facing the challenge of meeting a rapidly increasing demand for energy, ranks sixth in the world in terms of energy demand. Its economy is projected to grow at 7–8 percent over the next two decades and there will be a substantial increase in demand for oil to manage transportation and to meet various other energy needs. While India has significant reserves of coal, it is relatively poor in oil and gas resources. Due to stagnating domestic crude production, India imports approximately 72 percent of its petroleum requirement. The global annual requirement of petroleum products s approx. 17,000 MMT, out of which estimated Indian requirement is 120 MMT. Our domestic production of crude oil and natural gas will remain around 34 millon tones during 2006–07. The huge gap between demand and supply may be met only by import. The net import burden has increased from $22.6 billion (Rs. 101,963 crores) in 2004–05 to $34.1 billion (Rs. 150,557 crores) in 2005–06 and taking into account, the average prices till now during the current year, the net import bill for 2006–07 could be of the order of $43.3 billion (Rs. 190,000 crores). The increasing trends show one and half times increase annually and if the present increasing trend continues, it would be a matter of very serious concern for the country. If the corrective measures are not taken in time, the India's maximum revenue will drain towards the import of petroleum products. Bio-fuels are renewable sources of energy derived from biological raw material. Two sources of bio-fuels – ethanol and bio-diesel are gaining worldwise acceptance as one of the solutions for problems of environmental degradation, energy security, restricting imports, rural employment, agricultural economy, owing to reduced dependence on oil import; savings in foreign exchange and reduced vehicular pollution. Two major bio-fuels for the transport sector, bio-ethanol and bio-desel, are becoming popular in many countries across the world.