Biodiesel body seeks continuation of Central Excise exemption

Biodiesel Association of India (BDAI), the apex industry body for bio-diesel in its pre-Budget memorandum to the government of India has recommended that India needs promotional policy and taxation rates for green fuel biodiesel. The Association said that promoting green fuel biodiesel would go long way in curbing vehicular emission and to protect environment.

At present, the use of Biodiesel is completely voluntary and there is no obligation on the polluters to reduce the emission by using Biodiesel. A national policy that mandates the use of green fuels is urgent need of the hour. Any tax on Biodiesel will discourage users.

The Association has been urging the government for amending the Biofuels policy of 2009 to achieve the national target of reducing crude imports by 10%. While the ministry of Petroleum and natural Gas has been gearing up the blending and distribution networks across the country. There is an urgent need for policy support in term of availability of feedstock to meeting the huge demand for Biofuels.

Recently BDAI filed a petition at National Green Tribunal (NGT) and apprised the Court about the benefits of the green fuel, citing the finding of research and studies in UK, USA and other countries.

"The states are required to declare a promotional VAT rate for Biodiesel blending. Biodiesel being a green fuel should not be taxed at par with High Speed Diesel (HSD) after blending," said Sandeep Chaturvedi, President of BDAI.

The BDAI has called upon the Finance Ministry for continuation of Excise Duty exemption on Biodiesel and its inputs even after April 1, 2017 till notification of revised National Biofuels Policy. This could be one of the steps to provide a reliable and functional solution to the problem of heavy vehicular/Industrial pollution in the cities of India.

The BDAI also seeks implementation of the pending National Policy on Bio-fuels. In the year 2009 the Ministry of New & Renewable Energy, Government of India also came out with a National Policy on Bio-fuels. The Policy sets out the vision, medium term goals, strategy and approach to bio-fuel development, proposes framework of technological, financial and institutional interventions and enabling mechanism, however the policy is yet to be notified.

"An indicative target of 20% blending of bio-fuels, both for bio-diesel and bio-ethanol, by 2017 is proposed. Blending levels prescribed regarding bio-diesel are intended to be recommendatory in the near term," the BDAI President added.

"To start with we can aim at achieving 10% blend of bio-diesel with petrol and diesel, which will bring about substantial reduction in the greenhouse gas emission and gradually increase blending of bio-diesel with petrol and diesel.