Beyond blending: Is India ready for biofuel 2.0?

In this exclusive interview with India Business & Trade, Dr. Sanjukta Subudhi, Senior Fellow at TERI and a leading voice in microbial biofuels and the circular bioeconomy, shares how India can leap from being a low-cost biofuel producer to a global tech powerhouse. She unpacks the country’s ethanol success story, the road to Sustainable Aviation Fuel (SAF), and how innovations like carbon valorization and flex-fuel vehicles can shape India’s clean energy future.

IBT: How can India transition from being a cost-effective biofuel producer to a global leader in technology and innovation? What can we learn from Brazil and the US in this regard?

Dr. Sanjukta Subudhi: India, as the third-largest energy consumer globally, relies heavily on fossil fuels (around 75%), leading to significant greenhouse gas emissions. To address climate and energy security goals, India has set a Net Zero target for 2070 and aims to meet 50% of its energy demand from renewable sources by 2047.

Biofuels have emerged as a promising renewable energy source in the last decade. Derived from diverse feedstocks like agricultural residues, algae, animal waste, and forest biomass, they offer a pathway to reduce carbon emissions, cut fossil fuel imports, and generate rural employment.

India produces about 750 MMT of biomass annually, with an estimated 228 MMT available as surplus. This biomass contains 65–70% carbohydrates and 25–30% lignin—components that can be used to produce biogas, bioethanol, biodiesel, and biohydrogen. While 1G biofuel technologies are already commercialized in India, 2G biofuels (e.g., from agricultural waste) are still not cost-competitive due to expensive enzymes used in biomass hydrolysis and the underutilization of lignin.

To make 2G biofuels viable, India must develop robust, low-cost enzymes with high sugar recovery efficiency, and explore lignin valorization to produce high-value biochemicals that can offset production costs. Additionally, selecting microbes capable of fermenting both pentose and hexose sugars is key to improving biofuel yields.

Cost reduction can also be achieved by cultivating high-yield energy crops on marginal or unused lands, supporting feedstock supply and increasing farmers’ income.

India can accelerate progress through global research collaborations and public-private partnerships, particularly under platforms like the Global Biofuel Alliance. Lessons from Brazil and the US are instructive. Brazil leads in sugarcane-based bioethanol, achieving 27% blending, and has advanced energy crop development. India could benefit from joint ventures with Brazil in 2G biofuel technologies, biorefineries, and international biofuel standards.

Meanwhile, the US has excelled in corn-based bioethanol and biodiesel production, supported by policies like the Renewable Fuel Standard and innovations in low-cost enzyme technologies. India can adopt a similar R&D-led PPP approach to co-develop and scale up affordable, advanced biofuel technologies.

By learning from these models and investing in innovation, India can transition from being a cost-effective biofuel producer to a global leader in biofuel technology and sustainability.

IBT: With E20 rolling out and E30 in discussion, how ready is India’s vehicle fleet, fuel infrastructure, and quality control systems? What helped us reach 20% blending, and what challenges persist?

Dr. Sanjukta Subudhi: India’s ethanol blending has seen a sharp rise—from 1.53% to 19.9% as of July 2025—thanks to policy support, feedstock diversification (including surplus grains, molasses, and lignocellulosic biomass), and expanded distillery capacity.

However, current ethanol production still heavily depends on sugar and grain-based feedstocks. Since grain-based ethanol competes with food supply, the focus must shift to promoting high-yield sugarcane cultivation and advancing 2G bioethanol technologies using crop residues like bagasse and straw. Schemes like the modified PM Ji-VAN Yojana are helping incentivize this shift.

Vehicle compatibility is a major hurdle. Most existing vehicles are designed for E10 and are not fully compatible with E20. To bridge this gap, manufacturers like Maruti Suzuki, Tata Motors, and Hyundai are developing flex-fuel vehicles (FFVs) that can run on higher ethanol blends, with Maruti planning E20-compatible launches in 2025.

Wider E20 adoption will also require an extensive rollout of compatible fuel across retail outlets and infrastructure upgrades in storage and dispensing systems. Ethanol’s chemical properties demand careful handling and robust quality control to ensure performance and safety.

Globally, Brazil and the US offer successful models. Brazil leads with FFVs compatible with E27 blends and strong agri-tech support, while the US has made strides in low-cost enzyme tech and biofuel policy. India can learn from both in scaling vehicle readiness, infrastructure, and R&D for higher ethanol blends.

In short, while India has made rapid progress in ethanol blending, moving beyond E20 will require coordinated action across technology, agriculture, automotive, and policy domains.

IBT: How can rising biofuel demand become a reliable and climate-resilient income source for farmers? Can digital tools like AI, IoT, and blockchain enhance supply chain efficiency?

Dr Sanjukta Subodhi: Ethanol blending has significantly increased from 1.5% in 2014 to 19.92% in 2025 (almost 13 fold increase) . This has contributed towards Rs 1.41 lakh crore savings through reduction of oil imports and boosted farmers’ income (Rs. 1.21 lakhs crores). EBP has significantly contributed for country’s economic growth. 

IBT: As biofuel adoption grows, how can India ensure credible sustainability claims and attract ESG-focused investments? Can carbon-credit markets play a role?

Dr Sanjukta Subodhi: Biofuels are low carbon fuels and contribute significantly to the reduction of green house gas emissions. Ethanol blending with gasoline under EBP program has contributed for reduction of carbon emission by 717 lakh tonnes.

Biofuel adoption has further potential to reduce carbon emissions through integration with biogenic CO2 capture (fractions CO2 released from the biomass during bioethanol and biogas, biohydrogen production) and its conversion to other biofuels like bio methanol. Hence, it is suggested to integrate biofuel production processes with biogenic Co2 capture for production of additional biomolecules. This can help to make this process cost economical and more greener and can attract ESG- focused investments. 

IBT: Can India emerge as a major Sustainable Aviation Fuel (SAF) supplier by 2030? What one disruptive force could reshape the country’s biofuel landscape in the coming years?

Dr Sanjukta Subodhi: Currently, SAF is primarily produced from oil based feed through HEFA pathway. However major challenge is feedstock availability. Hence SAF production through Alcohol to Jet path way is gaining momentum as bio-ethanol production is already commercialized. India has already pioneered in Bio-ethanol production and great potential to produce SAF using bioethanol as feed. 2G bioethanol based SAF will help in gaining more carbon credits. Current major challenge is high cost and lack of indigenous technologies. It is thus essential to advance technologies for development of low cost indigenous technologies for SAF production from bioethanol and as well as from higher bio alcohols. This needs investment of R&D in advancing these technologies, which will help in reducing the SAF cost and can help India to pave the way in SAF production indigenously.  

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Dr. Sanjukta Subudhi is a microbiologist and Senior Fellow at TERI, where she leads the Microbial Biofuels & Biochemicals area in the Advanced Biofuels Division. Her research spans microbial production of advanced biofuels—such as biohydrogen, biobutanol, and biojet fuel—from both first- and next-generation feedstocks, along with green biochemicals aligned with circular bioeconomy principles.

She heads the Tata Chemicals Ltd–TERI Centre of Excellence on integrated bioprocessing and has over 65 publications, 4 patents, and 2,200+ citations to her credit. Dr. Subudhi also contributes to national and global bioenergy platforms, including the G20 RD20 framework and DBT’s BioCARe Task Force. In 2024, she convened the G20 RD20 Clean Energy Conference hosted in India, further reinforcing her leadership in advancing sustainable biofuel technologies.