India’s bioenergy sector is set to play an important role underpinning the country’s rapidly growing energy markets as robust policy frameworks boost ethanol and compressed biogas production and open new opportunities for biodiesel and sustainable aviation fuels, according to new report from the International Energy Agency (IEA).

The latest analysis, which provides forecasts for liquid and gaseous biofuel growth to 2030, shows that these fuels can strengthen India’s energy security by reducing reliance on imported fuels, support economic development and job creation, especially in rural communities – and also contribute to emissions reductions targets.

These benefits align closely with India’s national energy and climate objectives and are reinforced by the country’s abundant agricultural residues and organic waste, which provide a strong resource base for sustainable, modern bioenergy production, the report finds.

“India’s success in scaling up bioenergy shows what is possible when you have clear targets, predictable policies and coordination across government,” said IEA Executive Director Fatih Birol. “Ethanol and compressed biogas have helped meet rising demand while delivering tangible gains for energy security and rural development. Building on this momentum, India could unlock significantly larger volumes of sustainable biofuels this decade, including for key sectors such as aviation and industry.”

India’s ethanol industry stands out as one of the country’s most successful policy-driven energy stories. Since the launch of the National Policy on Biofuels in 2018, a suite of supply, demand, innovation and financing policies has helped annual ethanol consumption grow from less than 2 billion litres then to more than 11 billion litres today – making India the world’s fourth largest producer of liquid biofuels.

Compressed biogas, backed by 11 major national policies since 2018, has attracted strong investor interest, resulting in around 170 operational plants and a pipeline of almost 300 additional projects under construction.

Sustainable aviation fuels and innovative biofuels are also attracting more attention from investors. As demand for low-emissions fuels in aviation increases, so too does demand for bio-jet fuel.

In the IEA report’s main forecast, which reflects today’s policies and market conditions, liquid and gaseous biofuel use in India grows by more than 50% by 2030, with ethanol and compressed biogas accounting for the largest share.

Production could increase even more significantly, as outlined in the report’s accelerated case where enhanced policy support, improved access to feedstocks and expanded supply chains result in consumption more than doubling by 2030.

This would represent a sixfold increase in liquid and gaseous biofuel demand between 2020 and 2030.

The report shows how challenges to faster growth can be addressed.

Drawing on international best practices, the report identifies four policy priorities actions to accelerate the deployment of liquid and gaseous biofuels in India by 2030.

These include establishing a comprehensive sustainable fuels roadmap to provide long-term demand signals across all sources of modern bioenergy; developing integrated supply chains and enabling infrastructure; strengthening innovation support to close cost gaps for emerging fuels such as sustainable aviation fuels; and developing robust carbon accounting and sustainability frameworks to enable certification and participation in international markets. -TradeArabia News Service