Biofuel Alliance To Create Huge Opportunity For India

Prime Minister Narendra Modi on Saturday launched the Global Biofuels Allinace at 18th G20 summit in New Delhi. This Initiative will develop an alliance of governments, international organisations and Industry to facilitate adoption of biofuels.

Bringing together the biggest consumers and producers of biofuels to drive biofuels development and deployment, the initiative aims to position biofuels as a key to energy transition and contribute to jobs and economic growth.

So far, 19 countries and 12 international organizations, both members and non-members of G20, have agreed to be a part of the union. Brazil, India, and the US, being some of the largest producers and consumers of biofuels, are the founding members of the GBA.

With this move, auto sector is going to become the largest beneficiary of GBA as it is facing many challenges including rising fuel prices. It will reduce the dependency of these companies on the fossil fuels and come up with a sustainable solution to the fossil fuel.

Meanwhile, Minister of Petroleum and natural Gas and Housing & Urban Affairs Hardeep Singh Puri said that India will show the world a new path on biofuels.

Expressing his views through a series of posts on social media platform ‘X’ the Minister noted that following the mantra of ‘Vasudhaiva Kutumbakam’, this effort of Prime Minister Narendra Modi will definitely reduce the dependence on petrol and diesel across the world.

Puri observed that world’s quest for cleaner and greener energy has gained historic momentum with launch of GBA on sidelines of the G20 Summit.

He noted that the visionary GBA supported by G20 nations and energy related global organisations like International Energy Agency (IEA), International Civil Aviation Organization (ICAO), World Economic Forum (WEO), and World LPG Association among others will strengthen global biofuels trade and best practices allowing the members to successfully face the Energy Quadrilemma.

“This will bolster the transformation of our farmers from ‘Annadatas to Urjadatas’ as an additional source of income. In last nine year we have given INR 71,600 cr to our farmers. With E20 implementation by 2025, India will save about INR 45,000 cr in oil imports and 63 MT of oil annually,” he added.

GBA will support worldwide development and deployment of sustainable biofuels by offering capacity-building exercises across the value chain, technical support for national programmes and promoting policy lessons-sharing. It will facilitate mobilising a virtual marketplace to assist industries, countries, ecosystem players and key stakeholders in mapping demand and supply, as well as connecting technology providers to end users.

It will also facilitate development, adoption and implementation of internationally recognized standards, codes, sustainability principles and regulations to incentivize biofuels adoption and trade.

The global ethanol market was valued at USD 99.06 billion in 2022 and is predicted to grow at a CAGR of 5.1 per cent by 2032 and surpass USD 162.12 billion by 2032. As per IEA, there will be 3.5-5x biofuels growth potential by 2050 due to Net Zero targets, creating a huge opportunity for India.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "Since there is a global consensus on sustainability and renewable energy, the biofuel alliance proposed at the G20 summit is likely to be taken up in right earnest. Since India is the second largest producer of sugar, after Brazil, the Indian sugar industry stands to gain from the decision to increase ethanol blending with petroleum products. Sugar prices have gone up by around 3 per cent during the last one month, the prospects for sugar companies have improved. But the good news is already in the price with many sugar stocks trading at 52-week highs."

Meanwhile, India is closely monitoring the risks of the fast-paced developments in the cryptoasset ecosystem.

"We endorse the Financial Stability Board’s (FSB’s) high-level recommendations for the regulation, supervision and oversight of crypto-assets activities and markets and of global stablecoin arrangements. We ask the FSB and SSBs to promote the effective and timely implementation of these recommendations in a consistent manner globally to avoid regulatory arbitrage," the declaration read.