An Economic Analysis of Biofuel Production and Food Security in India

Biofuels provide around 2% of total transport fuel today, by 2050, it is projected that 27% of the transport fuel will be shared by the biofuels globally. Some biofuels already perform well in economic terms, particularly sugarcane ethanol and other low cost agricultural biofuels. The biofuel program in India at niche stage though the policy has been framed out in 2003-04 to implement the biofuel blending program in India. India has carefully designed the biofuel policy and blending ratio to reduce CO2 emissions and import of the crude oil. In this study, the biofuel policy, biofuel production, biofuels requirement for blending, future biofuel production was estimated. The linear demand function was used to estimate the bioethanol and biodiesel demand. The possible ways to meet out the biofuels demand were explained. Proper policy making and domestic production support measures for sustainable biofuel production and infrastructure for anhydrous ethanol storage are the guidepost for the successful implementation of the biofuel program in India.