For lower fuel prices and emissions(Hindu summary-5th July 2018)

www.iasinsights.in ; www.iasgyaan.com posts Hindu  summary about Rising fuel prices and carbon emissions and what to be done?

For lower fuel prices and emissions

The Hindu

Context:

  • Raising fuel price shocks —> Increased taxes by the public
  • Need to save forex by reducing oil imports
  • In the wake of  World Health Organisation alert that has already declared 14 Indian cities as among the most polluted in the world, effort to reduce carbon emissions is needed.

What was the goal ?

Rising fuel demand and toxic emissions compelled previous governments to come up with policies.

  1. The Ethanol Blended Petrol Programme (EBP),2003 focused on 5% blending of molasses-based ethanol with petrol.
  2. By 2008, it pushed for the blending target to be 10%.
  3. National Biodiesel Mission proposed a two-phase strategy for biodiesel production from Jatropha seeds to achieve a 10% blending mandate with diesel by 2012. These targets were not met.
  4. In 2009, the NPB (National policy on Biofuels) proposed a revised target of 20% blending for ethanol and bio diesel by 2017. This is yet to be achieved.

Global ethanol blending facts:

  • Fuel blending with ethanol varies from 85% (E85) in Australia
  • 100% (E100) ethanol in Brazil, where the ethanol blending mandate is 27% (E27).
  • In contrast, India has an abysmal 2-4% blending rate which is <5%(basic target)
  • The mains reason for such low blending rate is lack of ethanol supply by states.

National Policy on Biofuel objectives:

  • Reduce air pollution,
  • Maintain affordable transportation fuel prices,
  • promote clean and sustainable fuels,
  • energy self-sufficiency, and
  • Reduce dependence on crude oil imports.

Challenges 

  • There is no defined future road map for India in it.
  • The government is looking at sourcing untested technologies like the production of 2G ethanol.
  • The policy is totally silent on octane (which is blended with petrol), which has direct consequences on health,air quality and pollution as it assists in proper combustion of fuels, thereby affecting vehicular emissions.
  • 2G ethanol which has not been proven commercially is flawed as it requires heavy funding which made government uninterested.
  • 10,000 crore to set up 12 2G biorefineries across 11 States was spent, where the foundation stone of one biorefinery in Bathinda, Punjab, nothing more has developed on this front.
  • No transparency in selection process for awarding contract to oil marketing companies.
  • Some states yet to start ethanol blending. Ex: Odisha.

What to be done?

  • Increase of Central government taxes on fuel, which have doubled after 2014.
  • clear thinking for increasing ethanol production to reduce oil imports and the current account deficit is needed.
  • The government should look at importing ethanol in the interim, thereby creating consistency of supply, and providing relief from the pollution created by fossil fuel burning. Facilitating import of ethanol will make up for the inconsistency in the availability of domestic ethanol, thereby ensuring the accomplishment of the present blending mandate of 10% (E10).
  • Philippines, which have seen resounding success in achieving their blending mandate, consistency in ethanol supply, and foreign exchange savings.
  • Focus on 1G mechanism of ethanol blending instead of waiting for 2G ethanol blending.

Conclusion:

  • Nearly 3000cr can be saved by blending of fuel
  • Consistent supply of ethanol will serve as a substitute for expensive and harmful imported aromatics like BTX contributing to foreign exchange savings worth approximately ₹1,500 crore since ethanol has an octane rating of 113, while the mandated octane rating for fuel is 91.

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