India Chemicals Blog

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.

The Indian cabinet has approved a national biofuel policy that is likely set a higher blending target.

Details of the policy have not been announced but it has been reported that the government will mandate 20% ethanol or biodiesel blended petrol by 2017. Currently, the country has 5% ethanol blending which would rise to 10% from next month.

Experts have already started questioning the wisdom of the new policy. Will enough land be available for biofuel crops such as jatropha? And what implications would this policy have on India's food production?

Higher use of biofuels will intensify the debate on the use of farmland for fuel in India, and encourage farmers to reduce grain cultivation for food, says TK Bhaumik, an economist with Assocham, a leading business chamber.

"Land is not elastic. If there is more pressure to grow oilseeds or corn to derive biofuels and farmers get a good price for them, they will obviously neglect grain production," he adds.

Green chemistry is gaining ground in India with alert companies following the global trend to make products from renewable feedstocks, reduce waste and energy consumption.

Pradip Kadakia, Abhishek Nigam and Ashwin Rao of Tata Strategic Management Group (TSMG) say that Indian chemical companies are making good progress in lowering the industry's environmental footprint by adopting green chemistry strategies.

They point out that growing environmental consciousness has resulted in increasing demand for green products and processes such as green buildings. These buildings cost 3-8% more than conventional buildings but payback in less than three years through operational savings. More than 300 green buildings have already been constructed in India and 700 more are due to be built by 2010. These buildings materials will spur demand for products such as high performance glass, low VOC paints and fly ash blocks.

India with its huge arable land area has a good potential for bioresources. And despite concerns about using land for non food applications, national laboratories, academic institutions and companies are actively pursuing biodiesel, bioethanol, bio-surfactants, biopolymers and biopharmaceuticals. They cite the example of Godavari Biorefineries that has started manufacturing products from renewable resources forming an entire value chain from sugarcane to sugar to other products such as ethanol, chemicals and biofertilisers.

But though green chemistry has taken off more support will be needed from the government. And companies too need to plan out their strategy carefully rather than simply following a global trend. TSMG suggests building clear sustainability goals that can be translated to market facing goals. And companies also need to assess life cycles of existing products and look for opportunities to introduce green products.

And opportunities can come up in unexpected areas. A recent report in ICIS Chemical Business highlights the move by sporting good manufacturers to incorporate chemicals based on renewable resources.

For example, Merquinsa, a Spanish thermoplastic polyurethane (TPU) producer, is collaborating with Brooks Sports, a Washington, US-based sports equipment company, to develop sustainable performance running footwear. The bio-TPUs are renewable-sourced, with 20-90% bio-content, says Merquinsa.