The National Policy on Biofuels 2018 is a comprehensive policy framework notified by the Ministry of Petroleum and Natural Gas on June 8, 2018, to promote the use of biofuels in India. It replaced the earlier, more cautious National Policy on Biofuels 2009. The policy was created to address India's heavy reliance on imported crude oil, enhance energy security, support farmer income by creating an assured market for surplus agricultural produce, and mitigate climate change.
The policy works by categorizing biofuels into Basic Biofuels (First Generation or 1G, like bioethanol and biodiesel) and Advanced Biofuels (Second Generation or 2G, from lignocellulosic waste, and Third Generation, from algae). A key mechanism is the expansion of permissible feedstocks for ethanol production, allowing the use of sugarcane juice, sugar beet, damaged food grains like broken rice, and rotten potatoes, which are unfit for human consumption. It also allows the conversion of surplus food grains to ethanol, subject to the approval of the National Biofuel Coordination Committee (NBCC). The policy initially set an indicative target of achieving 20% blending of ethanol in petrol (E20) and 5% blending of biodiesel in diesel by 2030.
The policy connects directly to the Ethanol Blended Petrol (EBP) Programme, which was first launched in 2003. It also aligns with the government's Make in India and Atmanirbhar Bharat initiatives by promoting domestic production and indigenous technology.
The policy was significantly amended in May 2022. The most crucial change was advancing the 20% ethanol blending target from 2030 to the Ethanol Supply Year (ESY) 2025-26. The amendments also further expanded the list of feedstocks, permitted the export of biofuels in specific cases, and added new members to the NBCC. The core structure of categorizing biofuels and the mechanism of expanding feedstock flexibility remained, but the scale and timeline of the blending targets were accelerated.