Bio-fuel sector needs more incentives: Govt

The agriculture ministry has asked for more incentives to local producers of biodiesel and rationalisation of the customs duty structure on raw materials for bio-fuel production to make such imports domestically and internationally competitive.

Addressing the 'Bio-energy Tech-2007' convention today, Union Agriculture Minister Sharad Pawar said the country had vast potential of producing bio-fuel from the biomass generated by agriculture and forests.

Besides, bio-fuel can be derived from several crops such as sugarcane, cassava, sweet sorghum, maize and sugarbeet, and the seeds of tree species such as jatropha and karanj.

Pawar said the National Oilseeds and Vegetable Oils Development Board (NOVOD), under the agriculture ministry, had already begun research, development and promotion work on oilseed trees such as jatropha and karanj.

The board had set up a countrywide network for identification and development of elite planting material for bio-fuel producing trees and plants. Nurseries for producing elite planting material of these plants have been set up on 10,000 hectares in 21 states.

The NOVOD is offering back-ended, credit-linked subsidy for encouraging bio-fuel production.

However, more incentives are required for the purpose. Pawar said the estimated 5 per cent blending of petro-diesel with biodiesel would require about 25 lakh hectares of waste land to be brought under jatropha and karanj plantations.

To promote bio-fuels on such a scale, it was necessary to make farmers understand that these ventures would be profitable, the minister said. The interests of various other stakeholders would also have to be taken care of, he stressed.

Justifying the need for encouraging the use of bio-fuel, Pawar said the country's current annual petroleum products requirement was estimated at 124 million tonne.

Nearly 72 per cent of this was met through imports from the Gulf region, one of the most volatile parts of the world.

Some of the delegations attending the convention emphasised the need for increasing the availability of bank loans to farmers to encourage them to go in for raising bio-fuel plantations.