Indian Oil Minister, Dharmendra Pradhan, estimates that a government regulated move towards sustainable or bio-fuels will capture the growing demand for petrol and diesel in the country.
Mandatory blending programmes will require 20% ethanol in petrol and 5% bio-diesel in diesel by 2030. As the demand for petrol rises from 30 billion litres to 50 billion litres, ethanol will compose 10 billion litres of total consumption. At INR 50 per litre the ethanol fuel market will be valued at INR 500 billion or USD 7.7 billion. Similarly, as the demand for diesel grows at a projected rate from 90 billion to 150 billion litres by 2030, bio-diesel will compose 75 billion litres of sales. At INR 50 per litre, bio-diesel will be a INR 400 billion or USD 6.1 billion market.
Together bio-diesel and ethanol integrations in fossil fuel will create an INR 1 trillion or USD 15 billion bio-fuel market by 2030.
India’s three chief Oil Marketing Companies (OMCs) were early investors in the switch to bio and alternative fuels. The investments aimed to fund a self-sustaining renewable energy market, expelling cost-reductions to benefit freight transporters and expedite India’s commitment to reduce carbon emissions. Indian Oil, Bharat Petroleum Corp. and Hindustan Petroleum Corp., remain central players in the transition to sustainable fuels. Each of the OMCs will sell compressed natural gas for vehicles from their existing 54,000 fuel stations around the country to expedite bio-fuel adoption.
The government currently has five key areas of focus: Bio-Ethanol, Bio-Diesel, Advanced Bio-fuels, Drop-in fuels and Bio-CNG. Pradhan also suggested a sixth option – methanol. India already possesses technology that can facilitate coal-to-gas and gas-to-coal conversion. Methanol is an efficient fuel that can be produced from agricultural and forest waste among other components. It would also blend with diesel and petrol to further reduce the economic and environmental cost of fossil fuel consumption as well as contribute to the nation’s multi-billion dollar sustainable fuel market.