Is India being too hasty in introducing mandatory ethanol blending? The government is on the verge of announcing a policy of 10% blending with petrol from October 2008.
Those in favour point out that introducing ethanol to the fuel mix will cut India’s dependence on imported oil and contribute to energy security.
The move will keep the agricultural lobby happy as sugarcane farmers and sugar companies are suffering as a result of oversupply this year.
However, the experiences of other countries suggest that India needs to do some careful thinking. A big concern is whether there will be enough local ethanol supply. There are doubts on whether ethanol will turn out to be environmentally friendly as growing sugar cane, to produce ethanol, involves cultivation of vast tracts of land plus water, labour and fuel.
Some economists also question if India should look at importing ethanol rather than producing it locally.
For more on the world of ethanol and biofuels turn to Simon Robinson’s The Big Biofeuls Blog.