Cane to grass

Delhi got its first station selling ethanol-blended petrol on Tuesday. This brings the capital within the ambit of an ambitious government programme to mandate a 5 per cent blend of biofuel in all sales of petrol, thereby curbing to some extent oil imports and hopefully cutting on carbon emissions. Mention biofuels, and two very different opinions are immediately on offer. For some, they are the antidote to two contemporary problems: huge import bills for oil-deficient countries and climate-changing emissions from hydrocarbons. For others, the idea of vast acreages of farmland being used for growing plants to be converted to fuel brings visions of food shortages, or at the very least hikes in cereal prices. The reality lies somewhere between the two.

India hopes to get most of its biofuel from sugarcane, like Brazil and unlike the United States, which uses corn. This is an important distinction for a reason other than the mere diversion of cereal from the food basket. That diversion has already led to an increase in the price of corn in North America, especially in Mexico, where it is a major staple. Extracting ethanol from sugar is a more energy efficient process than getting it from corn. Incidentally, research suggests that a third alternative may be even cheaper and more energy efficient: biofuel from cellulose-rich agricultural waste and grasses.

That last option should be kept in mind as the government works out fuel pricing to encourage ethanol. For now, fuel from sugar offers hope of getting opportunities to sugarcane farmers. To tap further into the export market for biofuels, it would thus make sense for India to lobby against the huge tariff barriers being erected in many countries. But the industry should also be mindful that ongoing research could deliver a cheaper option. Flexibility should thus be worked into the sector8217;s strategy. Biofuels are inevitable. But to reap the full benefit, the trick is to anticipate and quickly adapt to new technological breakthroughs 8212; and also to possible volatility in global oil prices.