A new study published by the World Resource Institute (WRI) has sparked new debates about bioenergy. The Report titled, “Avoiding Bioenergy Competition for Food Crops and Land,” show that any dedicated use of land or growing bioenergy inherently comes at the cost of not using that land for growing food or animal feed, or for storing carbon. Particularly concerning, experts say “Bioenergy, energy derived from any fuel that comes from biomass, is an inefficient use of land to generate energy,” (Searchinger and Heimlich, 2015). Here’s the problem: India’s growth is driving just this type of energy consumption.
India’s Economy is Expected to Grow
According to the World Bank, India’s economy is expected to grow by about 5.6 percent in Indian fiscal year (IFY) 2014/15 (April-March), an increase over the sub-five percent levels in the previous year. This would be the strongest among major developing economies between 2013 and 2016. Importantly, India’s growth, which drives energy consumption across all major sectors, would make India the fourth largest energy consumer, following the United States, China, and Russia (GAIN Report, 2014).
India’s Biofuel Policy
The Government of India (GOI) approved India’s National Biofuel Policy in 2009. The policy encourages use of renewable fuel as an alternative to petroleum and proposes to supplement India’s fuel supply with a 20 percent biofuel (i.e. bioethanol and biodiesel) mandate by end of 12th Five-Year Plan (2017).
The salient features of the policy, include: strengthening India’s energy security; farming degraded soils or wastelands not otherwise suited to agriculture; providing financial incentives for feed stocks, conversion processes, production units and innovation; advancing biofuels technologies in the marketplace; and, meeting the energy needs of India’s vast rural population by stimulating rural development and creating employment opportunities and addressing global concerns about containment of carbon emissions through use of environment friendly biofuels (GAIN Report, 2014).
Implications for Domestic Energy Base
First, biofuels are an alternative energy option due to the availability of feedstock crops. Since the sugar industry is one of India’s largest industries, sugar cane and its processing byproduct are widely available for bioethanol production (Chand, Kumar et. al., 2008).
Second, while India’s domestic energy base is substantial, India continues to import significant amounts of energy resources. In IFY 2006/07, imports of fossil fuels grew at a rate of seven percent, which outpaced consumption growth by three percent. However, in last three fiscal years, higher petroleum prices led to demand contraction (GAIN Report, 2014). Currently, coal and oil constitute 66 percent of India’s total primary energy consumption basket. Natural gas maintains a seven-percent share of the basket, and renewables such as wind, geothermal, solar, hydroelectricity, and waste account for 25 percent of India’s total energy. Nuclear accounts for a one-percent share.
Third, the biofuel industry could have significant impacts on the health, education, and productivity of the rural poor population in India. Some anticipate that the biofuel industry will create new jobs for the poorest communities in India because biofuel production requires mostly unskilled labor, which is widely available in rural areas (Chand, Kumar et. al., 2008).
Finally, the poor are unlikely to reap any benefits or additional income from the biofuels industry. Biofuel production has the potential to cause harm to the rural and urban poor. The Indian government cited that there were over 30 million hectares of wasteland available for jatropha production around the nation. The question seems to be, whether biofuels widen or narrow the inequality gap?