The Top 10 Biofuels Stories of 2008: #9, India sets a 5 percent biofuels mandate, raises to 10 percent, misses the first target badly

In late 2007, India imposed a 5 percent biofuels mandate, and hiked the mandate to 10 percent in 2008. Chaos ensued.

As Biofuels Digest special correspondent Joelle Brink describes it: “The government couldn’t find enough ethanol to meet its 5% mandate. Since there was a sugar surplus at the time, one idea was to temporarily use the sugar surplus to produce enough ethanol to meet the target. However the sugar producers didn’t want to sell ethanol at the price the government–which establishes fuel prices and subsidies–was willing to pay.

“Sound familiar? So the govt. contracted with several Brazilian ethanol producers for imports by sea. No sooner had they done this than the sugar mills sued the government on the grounds that domestic suppliers had been passed over in favor of foreign competitors. They won their case, which left the govt holding useless contracts with Brazilian producers which they finally managed to convert into investment stakes.

“Bottom line, it’s likely some sort of new marketing plan will emerge to bail out the producers–maybe exporting cheap ethanol to the US?  Long-term, Bihar state plans to go with regional scale hybrid cellulosic plants that will generate 50,000 direct jobs plus supply contracts, and these are intended to absorb the current producers into a more profitable production network.”

Meanwhile, India has set a 20 percent target for 2017.

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