Bio-fuels are environment friendly fuels derived from renewable bio-mass resources. In India, a definition of bio-fuels is provided in the National Bio-fuel Policy of 2009. As per that definition, ‘biofuels’ are those liquid or gaseous fuels produced from biomass resources and used in place of, or in addition to, diesel, petrol or other fossil fuels for transport, stationary, portable and other applications. In this context, 'biomass resources' refer to the biodegradable fraction of products, wastes and residues from agriculture, forestry and related industries as well as the biodegradable fraction of industrial and municipal wastes.
Three broad categories of bio-fuels are identified in India:
1. ‘bio-ethanol’: ethanol produced from biomass such as sugar containing materials, like sugar cane, sugar beet, sweet sorghum, etc.; starch containing materials such as corn, cassava, algae etc.; and, cellulosic materials such as bagasse, wood waste, agricultural and forestry residues etc.;
2. ‘biodiesel’: a methyl or ethyl ester of fatty acids produced from vegetable oils, both edible and non-edible, or animal fat of diesel quality; and
3. other biofuels: biomethanol, biosynthetic fuels etc.
Bio-fuels provide a strategic advantage to promote sustainable development and to supplement conventional energy sources in meeting the rapidly increasing requirements associated with high economic growth for transportation fuels.
The Indian approach to bio-fuels is somewhat different from the current international approaches since it is based solely on non-food feedstocks to be raised on degraded or wastelands that are not suited to agriculture, thus avoiding a possible conflict of fuel vs. food security.
An indicative target of 20% blending of bio-fuels, both for bio-diesel and bio-ethanol, by 2017 is proposed in the National Bio Fuel Policy announced on 24 December 2009 apart from various other initiatives for encouraging the production and usage of bio-fuels.It is also proposed to blend 5 per cent Bio-diesel to diesel to be used on diesel locomotives only on Indian Railways. Also see Ethanol Blending Programme in India.