The second meeting of the GoM on bio-fuels would finalise the bio-fuel policy that would take up the issue of offering market price for heavy oil generating products. After the new bio-fuel policy gets the nod of the GoM and is in place, it would fix the minimum support price (MSP) for biofuel oil seeds for in case the market prices fall below the MSP.
The MSP would be fixed at a level that would provide adequate income to the cultivators and would be revisited periodically to ensure fair price for the farmers. The minimum purchase price for purchase of bio-diesel by oil marketing companies would be based on the prevailing prices of diesel. In case the price of diesel falls below the benchmark price of bio diesel, the government would compensate the oil marketing companies.
The GoM, headed by agriculture minister Sharad Pawar, will also take up the issue of establishment of a National Biofuel Development Board. The board would evolve and put into practice a comprehensive policy aimed at promoting the cultivation of plantations for production of bio-fuel. The Planning Commission has made it clear that the formation of a National Biofuel Development Board be done only after discussions involving various ministries. The Planning Commission contended that that in view of a multiplicity of departments and agencies involved in the sector, the board is intended to provide overall coordination and policy guidance on different aspects of bio-fuel development and promotion in the country.
According to sources, the GoM, at its previous meeting held last month, had also discussed the proposal for establishment of a National Mission on Bio-diesel moved by the ministry of rural development. However, the GoM opined that no reliable scientific data or breakthrough has emerged so far in terms of yields, agricultural practices, necessary inputs, type of land and soil, cost and the economics of plantations of non-edible oil seed-bearing trees. In addition, since several departments and agencies were working in this area and had taken up plantations, particularly of jatropha, the GoM felt that before a large-scale demonstration programme is taken up, the results from the ongoing efforts of different agencies should be analysed.
Sources said that GoM suggested that the demonstration for the proposed National Mission on Bio-diesel should be suitably scaled down. According to sources, the presentation by Kirit S Parikh, Planning Commission member in charge of energy, water and perspective planning, highlighted issues and recommended policies relating to ethanol-blended petrol and biodiesel. Thereafter, presentations were made by the Indian Council of Agricultural Research, the department of bio-technology, department of science and technology and council of scientific and industrial research pertaining to the research and development aspect of bio-fuels.
The GoM was unanimous on the need for a clear linkage to be established between agencies undertaking technological development and various user organisations. According to GoM, there was a need for active participation and funding from the industry in areas of commercial research and development, along with benchmarking the indigenous R&D and technology development with international efforts and patents.