Incentive structure of India’s biofuel programs: status, shortcomings and implications

Abstract

With more than 95% of India’s ground transport dependent on imported fossil fuel, India has made a concerted effort in the last decade to promote biofuels. India launched a biofuel mission in 2003 and subsequently adopted a national policy on biofuels in 2009. It established a 20% blending target by 2017 for both biodiesel and bioethanol. Along with this, it has advocated various policy measures to implement the target. In tune with the national policy, different state governments have, in addition, introduced a gamut of incentives to promote its growth. The objective of this paper is to analyze the incentive structure of India‘s biofuel program and to contrast it with international perspectives, to understand the positive and negative aspects of the program. This review argues that while it will be possible for India to meet its biodiesel target, it is unlikely that it will meet its bioethanol target.

Financial & competing interests disclosure

The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

No writing assistance was utilized in the production of this manuscript.