Global warming along with conservation measures initiated for forex provide impetus for biofuels in India. The government of India has set up a ambitious target of 20% blending of biofuel by 2017. It has met only 5% of the target by 2016 due to regulatory hurdles. Sugarcane sector which is mostly present in co-operative sector which finds difficulty in raising investment for ethanol production . Further fluctuation in sugar price also affects production.
Bioethanol is also inflammable which brings risk and increases safety measures and costs. Another hurdle is excise duty on transportation and storage of ethanol have to be revised and incentivised when compared to crude oil. Most commuter vehicles are yet to be ready for bio-fuels, where efforts to be multiplied to bring them for effective take off for bio fuels. The developed world has moved from first generation fuels of bio ethanols to third generation fuels like fuel cells. Now India should make progress to kick off projects in second generation fuels like syngas and methanol.