India: Study on Cross-Sectoral Implications of Biofuel Production and Use

Sovereign Project | 42525-012

Summary

India has many years of experience using renewable energy sources to fulfill the energy needs of its population. This includes exploitation of both traditional sources (such as biomass)and nontraditional sources (such as wind power). India has been the region's research hub on the use of biomass for electricity generation as well as development of biofuels, mainly to replace fossil fuels used in the transport sector. Up to now, the production of biofuels in India has concentrated on ethanol and the use of non-edible sources such as Jatropha. It is expected that the focus will remain on non-edible sources in the foreseeable future. Thesebiofuel interventions are well placed within India's Integrated Energy Policy of 20064 and the National Action Plan of Climate Change of 2008. India has an estimated 64 million hectares (ha) of wasteland, out of which about 17 million ha are likely to be suitable for biofuel crops.

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Project Name Study on Cross-Sectoral Implications of Biofuel Production and Use
Project Number 42525-012
Country India
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7250-IND: Study on Cross-Sectoral Implications of Biofuel Production and Use
Technical Assistance Special Fund US$ 500,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector

Energy - Renewable energy generation - biomass and waste

Gender Equity and Mainstreaming No gender elements
Description

India has many years of experience using renewable energy sources to fulfill the energy needs of its population. This includes exploitation of both traditional sources (such as biomass)and nontraditional sources (such as wind power). India has been the region's research hub on the use of biomass for electricity generation as well as development of biofuels, mainly to replace fossil fuels used in the transport sector. Up to now, the production of biofuels in India has concentrated on ethanol and the use of non-edible sources such as Jatropha. It is expected that the focus will remain on non-edible sources in the foreseeable future. Thesebiofuel interventions are well placed within India's Integrated Energy Policy of 20064 and the National Action Plan of Climate Change of 2008. India has an estimated 64 million hectares (ha) of wasteland, out of which about 17 million ha are likely to be suitable for biofuel crops. Under the current biodiesel strategy, about 400,000 ha of marginal land are to be brought under biodiesel crop cultivation. It is expected that India will achieve a target of 20% blending of biodiesel by 2012. In 2005, India introduced a biodiesel purchase policy6 that allowed public sector oil marketing companies to

purchase biodiesel at 20 identified centers in different states.

Project Rationale and Linkage to Country/Regional Strategy

A variety of issues involving the production and use of biofuels need to be understood before interventions in this sector. These include issues involving usage of land, water, and

labor; replacement of food crop cultivation with biofuel crop cultivation; and adverse environmental and social impacts. These issues require careful attention and need to be

addressed in an integrated manner. Taking them in isolation could lead to conflicting conclusions and recommendations leading to suboptimal solutions in the context of overall

economic development. Therefore, a balanced view on biofuel production and use is required considering these interactions among different sectors. An in-depth study on the production and use of biofuels would allow the Government to have appropriate and balanced interventions in this sector. This would optimize the contribution of biofuels in replacing high carbon-emitting fuels.

Impact The impact will be improved energy security and low carbon energy sector development through appropriate bio-energy interventions. The indicators will be reduction in projected oil imports and greenhouse gas emissions.
Project Outcome
Description of Outcome The outcome of the TA will be well informed interventions in the bio-fuels sector with due consideration given to the cross-sectoral implications and multi faceted nature of the impacts of bio-fuel production and use in India. The indicator will be Government acceptance of a national policy and strategies on bio-fuel production and use accepted by the Government.
Progress Toward Outcome ADB in coordination with the Department of Economic Affairs (DEA), conducted various workshops to update knowledge on bioufuels and understand recent developments in bioufuels. It is likely that the recommendations of the TA will be followed by the Government of India and that would result in avoiding some economic waste in ethanol sector. Further, development of biodiesel sector as suggested in the study would result in inclusive growth, rural development, reducing the import bill of diesel and significant reduction in Carbon emissions in India in the future. However, there were no adequate representation from the line ministries during the workshops and no firm decision was made about the implementation of the recommendation of the study.
Implementation Progress
Description of Project Outputs

1. Report encompassing (i) review of the work on bio-fuels already carried out for South Asia, compilation of international experience in production and use of bio-fuels; (ii) critical analysis of bio-fuels environment in India in relation to international experience, considering cross sector implications; (iii) conclusions of the analysis in relation to India and suggestions for possible interventions in the sector.

2. Outreach program targeting all stakeholders in the bio-fuels sector.

Status of Implementation Progress (Outputs, Activities, and Issues)

ADB completed the study and the Final Report - Study on Cross Sectoral Implications of Biofuel Production and Use was prepared and delivered to DEA. The Final Workshop held in Delhi on 15 July 2011 was attended by over 40 policymakers and representatives from the academe and private sector.

ADB's publication, Food Security, Energy Security, and Inclusive Growth in India was also launched during this event. Three other ADB publications were produced under the TA.

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

Five international and 3 national consultants were engaged under the TA. In addition the DEA appointed a steering committee comprising representatives from 10 line ministries to provide inputs at various stage of the study.

ADB also appointed 4 members of the Oversight Commitee comprising eminent persons to ensure that the the quality of the outputs.

Procurement Not required under the TA.
Responsible ADB Officer Herath M. Gunatilake
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Department of Economic Affairs Ms. Anuradha ThakurMinistry of Finance
North Block
New Delhi-110001, India
Timetable
Concept Clearance 18 Nov 2008
Fact Finding 14 Jul 2008 to 18 Jul 2008
MRM -
Approval 13 Mar 2009
Last Review Mission -
PDS Creation Date 14 Aug 2009
Last PDS Update 30 Mar 2012

TA 7250-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Mar 2009 09 Apr 2009 09 Apr 2009 31 Dec 2009 31 Jul 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 125,000.00 0.00 0.00 0.00 625,000.00 13 Mar 2009 401,515.54

Safeguard Documents

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Evaluation Documents

See also: Independent Evaluation

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