Indian Biodiesel Industry in Trouble as Imports Get Boost

By Narsi Santhanam • Jul 18th, 2009 • Category: Uncategorized

Indian Finance Minister plans to reduce customs duty on biodiesel imports, but leaders of domestic industry say the government still must increase the allowable blend past the current 5 percent.

Advocates of biodiesel in India have been cheered with news that Finance Minister Pranab Mukherjee said yesterday that the 2009-10 budget reduces the customs duty on imports of the fuel from 7.5 percent to 2.5 percent.

The decision is expected to lower prices and increase consumption; however, it could end up hurting the domestic biodiesel industry, according to a report today in Delhi Hardnews.

The lower duty is expected to increase the supply of palm oil-based biodiesel from countries such as Indonesia and Malaysia (see Indonesia, S. Korea partner for seaweed biodiesel). But the current biodiesel market is capped at a 5-percent blend of biodiesel, thanks to a long-standing mandate from the Bureau of Indian Specifications.

Industry group Biodiesel Association of India has now asked for the limit to be raised to 20 percent biodiesel in order to create a larger market. That’s the standard the Indian government has set for 2017 (see India, EU affirm new biofuels).

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Narasimhan (Narsi) has extensive experience in understanding renewable energy markets and strategic levers for success in these markets. His special focus has been his work on the Indian renewable energy industry. His work in the previous 15 years have spanned market and industry research, product management and international sales, and strategic consulting. see more http://www.eai.in/ref/team/ns.html

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