India Next-Generation Ethanol Could Ignite With Right Spark

Bloomberg New Energy Finance: India is home to major agricultural waste feedstock resources, but lacks long-term policies to attract private capital

NEW DELHI, LONDON & NEW YORK--()--India's agricultural sector, long the backbone of its economy, has the potential to become a major supplier of feedstock to a next-generation ethanol sector, research from Bloomberg New Energy Finance finds in a new study. The more than 125 million tonnes of otherwise mostly unused agricultural residues from rice, wheat, maize and other crops estimated to be available by 2020 could potentially be converted into 34bn litres of such fuel per year with the right policies and a flood of new investment.

By 2020, next-generation ethanol could be over a $15bn per year industry, assuming significant new policies are implemented and unprecedented investment is attracted, according to the BNEF study "Next-Generation Ethanol: What’s in it for India?"

The creation of such an industry would potentially have a significant impact on the Indian economy, including lower greenhouse gas emissions from transport fuels, reduced dependence on oil imports, and job creation. Under the most aggressive scenario envisioned by Bloomberg New Energy Finance, up to one million workers could be hired to collect and process agricultural waste feedstock, and then convert it to fuel in the next decade. Next-generation ethanol has the potential to displace more than four-fifths of India's forecasted gasoline demand by 2020, and cut greenhouse gas emissions from road transport gasoline by up to 69%.

All of this is contingent, however, on new fuel production technologies continuing to make important progress over the next decade. Today, a litre of next-generation ethanol using cellulosic or hydrolysis processes cannot be produced for less than a litre of conventional gasoline without major government assistance.

Next-generation ethanol involves converting biomass residues such as wheat straw and rice husks, via biological processes into a fuel that will substitute for gasoline (petrol). At present, ethanol in India is mostly manufactured using first-generation technology from molasses and food crops such as sugarcane.

To foster a next-generation biofuels sector, policy-makers could consider two priorities, according to the study. The first is a specific mandate for next-generation ethanol, obliging oil marketing companies to use a rising proportion of the fuel in their overall mix. The second involves financial incentives for farmers to collect a sustainable proportion of the waste typically left on their fields or burnt after the harvest.

The report was commissioned by Novozymes, a world leader in bio-innovation, but the analysis, content and conclusions are exclusively those of Bloomberg New Energy Finance.

About Bloomberg New Energy Finance

Bloomberg New Energy Finance (BNEF) is the world’s leading independent provider of news, data, research and analysis to decision‐makers in renewable energy, energy smart technologies, carbon markets, carbon capture and storage, and nuclear power. Bloomberg New Energy Finance has staff of more than 180, based in London, Washington D.C., New York, Tokyo, Beijing, New Delhi, Singapore, Hong Kong, Sydney, Cape Town, São Paulo and Zurich.

Bloomberg New Energy Finance Insight Services provide deep market analysis to investors in wind, solar,

bioenergy, geothermal, carbon capture and storage, energy efficiency, and nuclear power. The group offers Insight Services for each of the major emerging carbon markets: European, Global Kyoto, Australia, and the U.S., where it covers the planned regional markets as well as potential federal initiatives and the voluntary carbon market. Bloomberg New Energy Finance’s Industry Intelligence Service provides access to the world’s most comprehensive database of investors and investments in clean energy and carbon. The News and Briefing Service is the leading global news service focusing on clean energy investment. The group also undertakes applied research on behalf of clients and runs senior‐level networking events.

New Energy Finance Limited was acquired by Bloomberg L.P. in December 2009, and its services and products are now owned and distributed by Bloomberg Finance L.P., except that Bloomberg L.P. and its subsidiaries (BLP) distribute these products in Argentina, Bermuda, China, India, Japan, and Korea. For more information on Bloomberg New Energy Finance: http://www.bnef.com.

About Bloomberg

Bloomberg is the world’s most trusted source of information for financial professionals and businesses. Bloomberg combines innovative technology with unmatched analytics, data, news, and display and distribution capabilities, to deliver critical information via the Bloomberg Professional service and multimedia platforms, including Bloomberg Businessweek and Bloomberg Markets magazines. Bloomberg's media properties span television, radio, digital and print, making up one of the world’s largest news organizations. Headquartered in New York, the company employs more than 12,900 people in 166 locations around the world.

The BLOOMBERG PROFESSIONAL service and data products are owned and distributed by Bloomberg Finance L.P. (BFLP) except that Bloomberg L.P. and its subsidiaries (BLP) distribute these products in Argentina, Bermuda, China, India, Japan and Korea. BLOOMBERG, BLOOMBERG NEWS, BLOOMBERG TELEVISION, BLOOMBERG RADIO, BLOOMBERG MARKETS AND BLOOMBERG.COM are trademarks and service marks of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. All rights reserved.

Contacts

Bloomberg
Sarah Feinberg, +1-202-654-4360
Sfeinberg2@bloomberg.net

Release Summary

india

Contacts

Bloomberg
Sarah Feinberg, +1-202-654-4360
Sfeinberg2@bloomberg.net