According to the EoI, Oil Marketing Companies (OMCS) will provide complete off-take guarantee for bio-diesel produced by UCO in 100 select cities initially. OMCs have fixed the price of buying bio-diesel to Rs 51 per litre for the first year, Rs 52.7 for the second year and Rs 54.5 for the third year.
OMCs will also bear the cost of transportation and GST in the first year.The minister while delivering his speech at the occasion highlighted the government’s push on alternative fuels like Ethanol, Second Generation Ethanol (2G Ethanol), Compressed Bio-Gas (CBG) and bio-diesel, and added that all the four alternatives will help in reducing the country’s crude oil import dependence.
He advised NOCs to extend the three-year off-take guarantee for CBG as developers have shown hesitancy in setting-up CBG plants because of only a three-year off-take guarantee period. Pradhan also said that the Petroleum Secretary will be talking to his respective counter-part in order to ease financing of such projects.
According to Pradhan, OMCs have already issued 300 LoIs under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme and ethanol blending in petrol has gone up to 8 per cent.
Sandeep Chaturvedi, President of Bio-diesel association of India in a conversation with ETEnergyWorld said, “We did a survey across the country based on the development patterns of the cities, population and per capita oil consumption. After which we short-listed 100 cities along with OMCs, based on which the EoI has been published. What any industry requires is assured market and feed-stock… now it has been taken care of.”Chaturvedi added that used cooking oil generation currently is close to 140 crore litre and there are multiple process through which UCO can be converted to bio-diesel, adding that the sector does not require any special subsidies to grow.
According to Shiva Vig, founder and Chief Executive Officer (CEO) at BioD Energy India, a company involved in converting cooking oil to bio-diesel there are close to 20 plants in India involved in converting oil to bio-diesel.
“There are about 20 plants in India, but they cannot make bio-diesel from used cooking oil they can only make it from good quality oil which is mostly imported,” Vij told ETEnergyWorld in an interview.
He added that the company currently is capable of producing 3 lakh litre per month of bio-diesel from used cooking oil, sourced from 4,000 restaurants and will be participating in the EoI floated by OMCs.
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