ADB approves $2.5 million for advanced biofuel development in India

Multilateral lending agency Asian Development Bank (ADB) on Monday said it has approved a $2.5 million (about ₹18 crore) technical assistance to support advanced biofuel development in India.

The grant is funded from the Asia Clean Energy Fund, financed by the Government of Japan under the Clean Energy Financing Partnership Facility, and the Republic of Korea’s e-Asia and Knowledge Partnership Fund.

In a statement, ADB said the technical assistance (TA) will support development of advanced bioethanol, bio-compressed natural gas, and biodiesel plants to demonstrate the best practices for suitable feedstock, efficient conversion technology, and sustainable biofuel value chain.

It will also support incorporating gender main-streaming design in the feedstock value chain to promote the empowerment of rural women in agriculture.

Using novel technology, advanced (or second-generation) biofuels could be produced from non-edible sources like agricultural residue, municipal solid waste, and used cooking oil. They can be used as bioethanol, biogas, and biodiesel for energy, transport, manufacturing, and medical purposes.

“This renewable energy will lower net greenhouse gas emission without threatening food security. India has a massive amount of wastes, but crop burning causes severe air pollution. If agricultural waste can be collected effectively as feedstock for biofuels, its sales will be able to supplement rural farmers’ income and negate the need to burn crop waste,” the statement said.

The advanced biofuels can provide simultaneous solutions to address energy security, waste recycling, climate change, and air pollution reduction.

The Manila-headquartered organisation further said that technical and financial barriers discourage commercial production of biofuels, such as the absence of technology standards, lack of feedstock supply chain mechanism, limited access to finance, and resultant high production costs and financial viability risks.

“The ADB’s TA will help address these obstacles and prepare for advanced biofuels’ commercial application and large-scale production,” it said.

ADB Finance Specialist for South Asia Jongmi Son said ADB supports the government of India’s National Policy on Biofuels established in 2018 to promote advanced biofuel market, which will harness waste, strengthen energy independence, create new industries and jobs, and mitigate global warming.

“The TA will take a cross-sector approach to tackle various thematic issues, such as energy security, transport mobility, agribusiness, financial stability, air and water pollution, waste disposal, public health, climate change, and the urban–rural divide,” Son said.

As per the statement, holistic studies will be conducted in aid of establishing technical designs, effective business models, catalytic financing schemes, regulatory frameworks, and awareness programs.

To boost advanced biofuel investments, ADB will collaborate with the Ministry of Petroleum and Natural Gas, the Oil Industry Development Board, and public financial institutions, such as the Indian Renewable Energy Development Agency and the National Bank for Agriculture and Rural Development.

ADB will also work with public oil companies, including the Indian Oil Corporation Limited and the Hindustan Petroleum Corporation Limited, it added.