EAI perspectives

The business case for biofuels for India is clear - we import almost 80% of all liquid fossil fuels (gasoline & diesel) which presents a huge drain on our forex, besides liquid fossil fuels being a major source of greenhouse gases whether they are used in industry or in transport.

There are two major variants within biofuels - ethanol and biodiesel. Of the two, ethanol has had a reasonably successful history, given that most ethanol is produced by the large, organized sugar factory based distilleries.

Biodiesel has however seen a pretty volatile past ten years in India, with significant uncertainties both from the demand and supply angles.

In this context, while the blending of ethanol with petrol has reached close to 10% by 2022, biodiesel blending in diesel is less than 1%.

The main challenge with biodiesel has been the insecurity from the supply side. Unlike ethanol, which is made mainly from molasses, the by product from sugar making, biodiesel is being made from a variety of sources - palm oil refining waste, used cooking oil and animal tallow to name the three most prominent sources. All these sources have shown supply side challenges in the past. And with the quality of biodiesel from the unorganized sector also being suspect - along with uncertainties in supply quantums, is it any wonder that this sector has been in the doldrums?

Startups such as Buyofuel have the potential to start ironing out some of the challenges noted above - both in terms of quantity and quality. Though some of the intrinsic supply side challenges present especially in the biodiesel sector might be difficult to be tackled by such startups, organizing information and aggregating suppliers at one place has the potential to kick off biodiesel use in small scale and retail sectors within a short timespan.

Team EAI wishes Buyofuel the very best!