Types of Biofuels: Advantages, Disadvantages, and its Impact on Indian Agriculture

14 Jul 2023
Types of Biofuels: Advantages, Disadvantages, and its Impact on Indian Agriculture
The market demand for biofuels in India was 0.17 million tonnes in 2020-21. It is predicted to grow at the compounded annual growth rate (CAGR) of 8.60 per cent to reach 0.26 million tonnes by 2030. At present, India is implementing the 2nd generation biofuels. The types of biofuels in India are bioethanol, biodiesel, and biogas, among others.

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Biofuels are renewable energy sources derived from organic matter such as plant and animal waste. They play a vital role in the worldwide effort to reduce the dependency on fossil fuels and lessen the adverse effects of climate change.

India imports more than 40 per cent of its energy demand and it is set to grow in coming years, according to the Energy Statistics India, 2023. The Indian government has initiated policies to reduce import dependency by diversifying the energy sources from fossil fuels to electric vehicles and renewable energy like biofuels.

This blog discusses the different types of biofuels in India, highlighting their importance, impact on agriculture, advantages, and disadvantages.

What are Biofuels?

Biofuels are renewable energy derived from organic matters like plants and animals. They are of several types depending upon their source. They can exist in the form of solid, liquid and gases. For instance

  • Wood, dried plant and manures are solid biofuels.
  • Bioethanol and biodiesel are liquid biofuels.
  • Biogas is a gaseous biofuel.

Types of Biofuels in India

Biofuels Classification



First Generation Biofuels

Produced from edible crops like corn.

Ethanol, Biodiesel and Biogas

Second Generation Biofuels

Produced from non-edible crops like crop residues, husk, etc.

Cellulose Ethanol, Algal Biofuel

Third Generation

Produced from micro-organisms.

Bio CNG, Biohydrogen, Butanol

Fourth Generation

Produced from genetically modified organisms.



First-Generation Biofuels

First-generation biofuels are derived from edible crops such as sugarcane, corn, and oilseeds using conventional technology. In India, bio-alcohols, ethanol, biogas, and biodiesel are the primary types of first-generation biofuels.


  • Ethanol is produced by fermenting the sugars found in crops like sugarcane, corn, and sorghum. It is commonly used as a blending agent in gasoline.
  • The ethanol advantages are renewability, potential to reduce greenhouse emissions, and support for agricultural economies.
  • However, challenges such as high production costs, competition with food crops, and limited availability of feedstock can hamper its widespread adoption.


  • Biodiesel is derived from vegetable oils, animal fats, or recycled cooking oils through a process called transesterification. It can be blended with or used as a substitute for diesel fuel.
  • Biodiesel offers advantages like lower carbon emissions, reduced dependence on fossil fuels, and support for local agriculture.
  • However, issues related to feedstock availability, land use conflicts, and potential impact on food prices need to be carefully addressed.


  • Biogas is generated through the anaerobic decomposition of organic matter such as animal and human sewage.
  • It primarily consists of methane and carbon dioxide, but also contains smaller amounts of hydrogen sulphide, hydrogen, carbon monoxide, and siloxanes.
  • Biogas finds widespread applications in heating, electricity generation, and as fuel for automobiles.

Second-Generation Biofuels

Second-generation advanced biofuels are produced from non-edible feedstock, including agricultural waste, dedicated energy crops, and organic waste. To produce these fuels, thermochemical and biochemical process are used.

India has been actively exploring second-generation biofuels to overcome the limitations of first-generation biofuels. On World Biofuel Day on 10 August 2022, Indian government announced to set up 2nd generation ethanol plant at Indian Oil Corporation’s refinery in Haryana.

Under second-generation biofuels, following types of biofuels are covered:

Cellulosic Ethanol

  • Cellulosic ethanol is derived from lignocellulosic biomass, which includes agricultural residues like wheat straw, rice husk, and sugarcane bagasse.
  • This type of biofuel energy offers advantages such as utilizing waste products, reduced competition with food crops, and potential to achieve higher yields compared to first-generation biofuels.
  • However, the technology for large-scale production of cellulosic ethanol is still in the developmental stage and requires further research and investment.

Algal Biofuel

  • Algal biofuel is produced from algae, which have a high oil content. Algae can be grown in non-arable land and utilize various types of water resources, including wastewater.
  • Algal biofuels offer advantages such as high productivity, carbon neutrality, and the potential to reduce land use conflicts.
  • However, challenges related to the scale-up of production, cost-effectiveness, and maintaining optimal growth conditions remain.

Third-Generation Biofuels

Third generation biofuels are formed from micro-organism such as algae. Some of them are:

Bio-Compressed Natural Gas (Bio-CNG)

  • It is obtained through the anaerobic absorption of organic waste, such as food waste, agricultural residues, and animal manure.
  • The biogas generated from this process is upgraded and compressed to achieve the quality and energy density comparable to natural gas.
  • Bio-CNG can be used as a replacement for fossil-based compressed natural gas in vehicles.


  • India has been exploring the production of biohydrogen, which involves the fermentation of biomass or organic waste by certain bacteria or algae. This process produces hydrogen gas, which can be used as a clean fuel source.
  • Biohydrogen has the potential to contribute to India's energy transition by reducing carbon emissions and dependence on fossil fuels.

Fourth Generation Biofuels

4th generation of biofuels are usually obtained from the genetically engineered crops. Fourth generation biofuels are then converted using second generation approaches.

Here, the carbon is seized after pre-combustion of fuel. It is still not fully used and is still in research process.

Biofuels and Tractors in India

In 2018, government amended the Central Motor Vehicles Rules, 1989, to include dual fuel vehicles for construction equipment vehicles (CEV) and agricultural tractors. Dual fuel means use of diesel and biofuels as primary and secondary fuels, respectively.

In fact, in 2007, the top tractor manufacturing company Mahindra Tractors launched India’s first biodiesel run Arjun International 75757 tractor for Maharashtra market. It is a 75 HP tractor.

Impact of Biofuels on Indian Agriculture

With the emphasis on biofuels, Indian agriculture is all set to enter the energy sector. Now, it will not only be related to foodgrain production but also related to fuel production. Let us see the impact of biofuel production on agriculture.

  • It will have a positive impact on the farm incomes and overall prosperity of the agriculture workforce.
  • It will help accelerate crop diversification in providing farmers with alternative source of income. As a result, agriculture sector will become more sustainable and resilient.
  • It will help create employment opportunities in agriculture sector and rural sector by creating jobs along the entire value chain. This will help alleviate rural poverty.
  • The production of biofuels can lead to increased pressure on Indian agriculture to meet the growing demand for biofuel feedstocks, potentially affecting the availability and prices of food crops.

Advantages of Biofuels

  • Carbon neutrality: Biofuels can be carbon neutral or even carbon negative. This is because carbon dioxide released during combustion is offset by the absorption of it during growth of plants.
  • Renewable and sustainable: Unlike fossil fuels, which are finite resources, biofuels can be continuously produced if there is a supply of biomass. They offer a more sustainable alternative to conventional fuels.
  • Mitigate climate change: The use of biofuels can significantly reduce greenhouse gas emissions, can mitigate climate change impacts, improve air quality, and reduce the overall carbon footprint.
  • Energy independence: By producing biofuels domestically, countries like India can reduce their reliance on imported fossil fuels and build a more self-reliant and resilient energy system. It will result in enhanced energy security.
  • Rural development: It can stimulate rural development by creating employment opportunities and enhancing the income of farmers. By promoting the cultivation of biofuel feedstock, India can support rural economies and reduce poverty.

Disadvantages of Biofuels

  • Land use conflicts: The cultivation of crops for biofuels can lead to land use conflicts, as there may be competition between food crops and biofuel feedstock.
  • Feedstock availability: The availability and sustainability of feedstock are significant challenges in biofuel energy production making it one of the core disadvantages of biofuels.
  • Increased pressure on resources: The cultivation of dedicated energy crops can compete with food production and may lead to increased pressure on water resources and deforestation.
  • Technological limitations: Many second-generation biofuel technologies are still in the developmental stage and face technological and economic hurdles.
  • Cost challenges: Scaling up production and making biofuels cost-competitive with conventional fuels remain key challenges.


Biofuels offer India an opportunity to reduce its reliance on fossil fuels, mitigate climate change, and promote rural development. While first-generation biofuels like ethanol and biodiesel have made significant contributions, the development and adoption of second-generation biofuels hold great potential and similarly third and fourth generation biofuels have respective advantages.

By addressing the challenges related to feedstock availability, technological advancements, and sustainable production practices, India can harness the benefits of biofuels and accelerate its transformation to a cleaner and more sustainable energy future.

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