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Oil ministry banks on biofuel to meet oil import reduction target.

The oil ministry has decided to add more biofuels from various sources in the country’s energy mix to reduce India’s dependence on crude oil imports.The idea is to promote generation of environmentally friendly fuel from sources including used vegetable oil, agricultural and urban waste and biogas that could help save valuable foreign exchange.

Oil minister Dharmendra Pradhan told reporters on Thursday night that the government has identified bio-energy as a new segment in the nation’s energy basket. “This will comprise ethanol, biodiesel, bio-condensed natural gas etc. Agricultural waste, urban waste and forest waste can be utilized in generating biofuels,” Pradhan said, adding that if this segment grows to account for about 10-15% of the country’s primary energy basket, it could become a Rs1 trillion market.

India’s renewable energy capacity expansion programme and the plan to promote use of electric cars are expected to aid this move by reducing consumption of diesel for power generation and lowering dependence on petrol and diesel for transportation. B. Ashok, chairman of state-owned Indian Oil Corp., said the company will make investments in biofuel projects on a priority.