The failed economics of bio-fuels

Sample this: crude oil reserves in the world are estimated to be in the region of 2,390 billion barrels. Of this, say oil and gas analysts, between 45% to 70% reserves have already been exploited leaving behind limited stocks to pump out. Adopting alternative fuel options, in such a scenario, becomes critical.

Now check this: the use of 5% ethanol-blended petrol was mandated three years ago in nine states and four union territories. The sugar industry, in anticipation of big demand, set up factories to make ethanol—a derivative from molasses—with capacity totalling 800 million litres a year. With ethanol consumption virtually zero owing to a lack of interest among oil public sector units and at the petroleum ministry in pushing use of the product, the new units remain grossly under-utilised.

Financial Express