Biodiesel – The Alternative Fuel

5 min read

Children born today, will see the world swerving to dangerous and irrevocable levels of climate change, by the time they reach their adulthood going by the kind of emissions at current rates. The world discharged a record amount of greenhouse gases into the atmosphere this year.

Annual carbon dioxide emissions exhibited a strong rise of 2% over 2013 levels, putting the total emissions this year to a trajectory of 35.3 billion tons. That means the global ‘carbon budget’, calculated as the total emission beyond norms – world’s governments cannot afford to allow further emissions and temperatures pushed beyond 2 ͦC above, i.e. pre industrial temperature levels. To this date, the respective governments have exhausted their ‘global carbon budget’. And this is likely to be usurped by just one generation, or in 30 years from now.


Global Biofuels Market Outlook (2014-2020) - Market Size

Scientists think climate change is likely to have disastrous and irretrievable effects, including rising sea levels, droughts, polar melting, floods and sudden increase/decrease in climate. In the world carbon emission congress, it is calculated that this threshold is likely to be breached, if global emissions top 1,200 billion tonnes, giving a “carbon budget” to stick to in order to avoid dangerous warming.

The top 3 emitting regions in 2013, together accounting for more than half (55%) of the total global CO2 emissions, are China (10.3 billion tons CO2 or 29%), United States (5.3 billion tons CO2 or 15%) and European Union (EU28) (3.7 billion tons CO2 or 11%).

 What is the best alternative ?

Biodiesel – The Alternative Fuel


Bio-diesel, derived from the oils and fats of plants like sunflower, rape seeds, Canola or Jatropha Curcas, can be used as a substitute or an additive to diesel. It is also being produced with the help of algae and micro algae. As an alternative fuel, biodiesel can provide power similar to conventional diesel and thus can be used in engines. Biodiesel is a renewable liquid fuel that can be produced locally thus helping reduce the country’s dependence on imported crude.

Global Production:

Global bio-fuel production has been growing steadily from 16 billion litres in 2000, 100 billion litres in 2011 to 113 billion litres in 2013 (IEA, 2014d). Consumption of bio-fuel in road transport has increased by 2% globally in 2013. The two leading countries are the United States with a share of 45.6% and Brazil with a share of 21.2% in global bio-fuel consumption. In 2013, the EU28 as a whole had a share of 20.8% in global total with Germany and France the largest contributors.

United States:

United States back in 1992 had taken initiatives to reduce carbon emission by implementing ‘Energy Policy Act of 1992’ to reduce its carbon emission and search for alternative fuels for Clean and Safe Energy, which gave rise to the industrial production of Bio-Fuels. US by far is the largest Bio-Fuel producer and consumer in the world, producing almost 7.57 thousand MT per day, 45.6% of world’s production.


India on the other hand is producing just 1.98 thousand barrels per day, just 0.5% of world’s production. India have developed 100% pollution free Bio-Diesel in University of Petroleum, Dehradun. Research let by scientists and fellow professors have resulted in the creation of pollution free fuel that can change the course of crude oil.

Current Indian government led by Narendra Modi have announced retailing of Bio-Diesel, which can reduce the dependency on traditional crude oil. On 17th Jan 2015, Union Cabinet gave approval to bio-diesel manufacturers to sell the fuel directly to consumers.

India consumed 68.88 million tons of Diesel in FY 2013-14. Bio Diesel as of now, is less than 0.01% of total diesel consumption of the country. Government initiatives can reduce the gap and can help the country in becoming self-sufficient in green energy.

India is an importer of Bio Diesel. Due to the lack of companies and production capacity of plants, India became a net importer of Bio fuels. Indian Bio Fuels Industry has become more robust after the change in the policies by central government

Bio Fuels industry in India will gain its momentum on account of increasing fuel consumption, continuous depletion of natural resources, economic strengthening and change in policies. Bio Fuels production in the India has witnessed a CAGR of 58% over 2008-12 and consumption expanded at a CAGR of 43.2% over the same period. India having abundance of resources will easily become one of the leading producers of bio diesel by 2020.

If India, converts 5% of its demand of diesel into bio-diesel till 2020, they can easily strengthen their economy. Increase in local made bio-diesel will help country to mature economically as well as fundamentally. India can reduce their imports which will lead to strengthening of Currency, which will reduce the import cost in terms of Indian Rupees.

Implications on World Economy:

Pledges made by countries to slash carbon emissions are deeply inadequate to take them down to safe levels by 2030 and put the brakes on global warming.
The world’s major emitters numbers show that global emissions could reach about 57-59 billion tons of carbon dioxide equivalent (GtCO2e) by 2030.

The emissions must fall to 32-44 GtCO2e by 2030 for a 50-66 per cent chance of reaching the goal of limiting average global warming to two degrees Celsius over Pre-Industrial levels.

Goals of United States, EU and China, placed them on target for a joint output of 20.9-22.3 GtCO2e in 2030. That puts the rest of the world have to emit no more than about 23 GtCO2e. Yet current and planned policies point to a level of 35GtCO2e. Implying, a significant probability of global warming of more than 2 degrees.

An Alternate to Reduce Pollution is Biodiesel:

Bio Diesel have negligible or no carbon emission at all. Carbon Dioxide Emission by burning traditional diesel fuel accounts to 22.32 pounds/gallon (2.68 kg/liter), whereas Bio Diesel produces almost 0.13 kg/liter which can be reabsorbed by Nature. Except American nations all other countries are using low carbon emission bio diesel whereas USA and Canada are using the bio diesel which is emitting nearly the same amount of CO2 in the atmosphere, which diesel fuel emits, making their effort of Green Earth a ‘Flaw’.

Global Biofuels Market Outlook (2014-2020) - Market Size
Biodiesel – The Alternative Fuel

Bio Diesel can help developed nations to become self sufficient in energy production. Asia accounts to 33.6% of World’s fuel consumption followed by North America accounts to 24.6% and Europe accounts to 21.3% of world’s fuel consumption. Most of the countries in North America and Europe are developed and have a high consumption of fuels.

Bio Diesel production will easily reduce dependency of nations in traditional fuels and generates revenue from their local markets. If world’s nations substitute diesel to bio diesel, phenomenon is going to cost only major crude oil producing nations specially Middle East, USA, Canada, Venezuela and other African nations.

Implications on India’s Economy

In 2010, India launched it’s first Bio-Diesel train in the country. With a blend of 10% Bio Diesel, this train will reduce the emission by 8-12% on a longer run. Country is converting all of its railway network to Bio Fuels and will increase dependency on renewable fuels in future. As per current government policies, India will start producing Bio Diesel in a massive quantity from 2016, with a goal to tap 2% of the diesel consumption till 2017 and 5% till 2020.

Currently Bio Diesel prices in India ranges from IN₹ 32-38 , whereas Diesel costs IN₹ 58.87. Local population is thriving for cheap and best fuels and Bio Diesel apart from being pollution emanating is also cheaper than normal fuel.

India have all the resources necessary to produce bio fuels. Vast arable land, high manpower, cheap labour and cheap agriculture production will help the country to produce enough bio diesel which can fulfill its local demands easily.

India imported 171729 (1,000 MT) of Crude oil in FY 2011-12 which valued at IN₹6.7 Lakh Crore (US$ 10.55 billion) which accounts to 25-28% of total imports of the country. If India, converts 5% of its diesel consumption to Bio Diesel, Crude imports can be reduced 4.6-4.8%, which helps the country to save US$ 422 Million and can reduce Current Account Deficit by 1.8% YoY. This change will also lead to strengthening of the currency by 3-4% YoY. A decline in US Dollar against Indian Rupee will make Indian exports competitive and exports also might decline by 0.2-0.5%.

India can thus use this money in other sectors and also gets a leverage to buy arms and machinery at a much cheaper cost which will further improve Indian Rupee Purchasing Power Parity. 

Mordor Intelligence

Enter your details..

Name error message

Email error message

Phone error message

Textarea error message