Union Cabinet approves enhanced Pradhan Mantri JI-VAN Yojana to drive biofuel investments and innovation

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the modified Pradhan Mantri JI-VAN Yojana to attract more investment in the field of biofuels. According to the Cabinet's decision on Friday, the approved scheme will also help in keeping pace with the latest developments in the biofuel sector.

"To keep pace with the latest developments in the field of biofuels and to attract more investment, the Union Cabinet, chaired by Prime Minister Narendra Modi, today approved the modified Pradhan Mantri JI-VAN Yojana," stated an official release from the Central government.

The Cabinet also informed that the modified scheme extends the implementation timeline by five years, i.e., until 2028-29, and now includes advanced biofuels produced from lignocellulosic feedstocks--such as agricultural and forestry residues, industrial waste, synthesis (syn) gas, algae, etc.--within its scope. "Bolt-on" plants and "Brownfield projects" would also now be eligible to leverage their experience and enhance their viability.

The government added that to promote multiple technologies and feedstocks, preference will now be given to project proposals featuring new technologies and innovations in the sector.

The scheme aims to provide remunerative income to farmers for their agricultural residue, address environmental pollution, create local employment opportunities, and contribute to India's energy security and self-reliance. It also supports the development of advanced biofuel technologies and promotes the Make in India Mission, helping India achieve its ambitious target of net-zero GHG emissions by 2070.

The government has been promoting the blending of ethanol with petrol under the Ethanol Blended Petrol (EBP) Programme, wherein Public Sector Oil Marketing Companies (OMCs) sell petrol blended with ethanol.

Under the EBP Programme, ethanol blending with petrol increased from 38 crore liters in the Ethanol Supply Year (ESY) 2013-14 to over 500 crore liters in ESY 2022-23, with a corresponding increase in the blending percentage from 1.53% to 12.06%. 

The blending percentage reached 15.83% in July 2024, and the cumulative blending percentage has surpassed 13% in the ongoing ESY 2023-24.

According to the government, OMCs are on course to achieve the 20% blending target by the end of ESY 2025-26. It is estimated that over 1,100 crore liters of ethanol will be required during ESY 2025-26 to achieve 20% blending, necessitating the installation of 1,750 crore liters of ethanol distillation capacity to meet the blending requirement and other uses (potable, chemical, pharmaceutical, etc.).

The government also emphasized its focus on alternative sources, like 2nd Generation (2G) Ethanol (Advanced Biofuels), to meet ethanol blending targets. Surplus biomass/agricultural waste, which contains cellulosic and lignocellulosic content, as well as industrial waste, can be converted into ethanol using advanced biofuel technology.

To encourage 2G ethanol capacity in the country and attract investment in this sector, the "Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool Fasal Awashesh Nivaran) Yojana" was notified on March 7, 2019, to provide financial assistance to 2G bio-ethanol projects.

Under the scheme, the first 2G Ethanol Project, set up by Indian Oil Corporation Limited at Panipat, Haryana, was dedicated to the nation by the Hon'ble Prime Minister on August 10, 2022. 

Other 2G commercial projects being set up by BPCL, HPCL, and NRL at Bargarh (Odisha), Bathinda (Punjab), and Numaligarh (Assam), respectively, are also nearing completion.