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Impact of Biodiesel on Indian Economy

The Indian government aims to focus on biodiesel production through used cooking oil (UCO). It has set up various boards and associations to manage UCO collection for efficient biodiesel generation. This initiative will have a multifold impact on the Indian economy. 

Reduction in Import Bill – India meets its diesel needs primarily through imports. The average import of diesel in India has been 0.09 million tons from 2014 until 2021. This has taken care of over 80% of the fuel needs of India. Hence, shifting from imports to UCO for diesel production will lead to a significant reduction in the import bills. Approximately, India would save up to 12000 crores if it starts generating biodiesel through UCO.

Beneficial for Local Economies – A biodiesel distribution program focusing on farmers and local businesses will benefit local economies. The former will grow the feedstock; the latter will produce and distribute fuel to consumers. This is how the economy will ensure energy security. Moreover, it will promote a healthy local environment and will help achieve goals of doubling farmers’ income and employment generation.

Increased National Energy Security – India is the largest vegetable oil consumer in the world. Hence, the potential for UCO collection is approximately up to 220 crore liters. The scope of biodiesel generation through UCO is immense in India. This will supplement conventional energy resources as well. It will eliminate the dependence on imported fuels in a sustainable manner while simultaneously meeting the energy needs of India. Moreover, it will promote rural development through feedstock production, thereby putting a halt on limited, non-renewable, and polluting fossil fuels.

Ecological Solution for Fuel Needs – India generates three to four million tons of UCO. This UCO is easily convertible into biodiesel. Biodiesel is a clean and renewable fuel alternative. Apart from this, it will also enable technological advancement. This advancement will further promote the efficient disposal of UCO with all the benefits secured.

Fulfill Global Climate Commitments – Along with employment opportunities, this switch will make climate change mitigation sustainable. Moreover, in comparison to petroleum, biodiesel reduces the emission of carbon monoxide, particulate matter, unburned hydrocarbons, and sulfates. Biodiesel is a natural resource obtained from used cooking oils. It will enhance the UCO disposal process and extend an essential by-product as well.

Improved Waste Management – Be it an individual household or the commercial food sector, all of them generate UCO in abundance. This brings up the important subject of shouldering the responsibility of its disposal. Numerous authorized UCO collectors/ aggregators ensure UCO collection. They collect UCO to deliver it to Biodiesel industries for biodiesel production. Thereafter, UCO is converted from waste to feedstock with ease. Not only can the disposal process become easy, but it can also enable the creation of biofuel. Simply put, it is a waste to wealth creation. 

Accomplish Biofuel Demands – Presently, the biodiesel blending percentage in diesel is not even 0.1%. However, India aims to increase it up to 5% by 2030. Rather than looking for a disposal strategy, converting UCO into biodiesel will save cost and add commercial value. As per estimates, India would save up to Rs7 per liter with an increased biodiesel blending percentage. In a nutshell, we would efficiently accomplish our fuel needs with guaranteed profits. Increasing usage of biofuel will derive some immediate benefits.

Enhanced UCO planning and disposal 

Decrease in environmental degradation

Up to 75 percent reduced imports on petroleum products

Improved trade deficit

Employment opportunities

Overall, it makes it easier for the government to manage UCO and maximize its potential. State BioDiesel Board or BioDiesel Association of India authorizes UCO collectors/ aggregators. This elicits organized collection, regulation, and disposal of UCO. The cost of collecting UCO, managing it, and producing biodiesel might seem high but the overall economic cost comes out in the negative. After analyzing its impact on the Indian economy, one can say that India needs more biodiesel plants.