National Policy on Biofuels: A firm step towards ‘Atmanirbhar Bharat’ & energy sufficiency
The Union Cabinet has approved the very important amendments to the National Policy on Biofuels 2018, paving the way for ‘Make in India’ drive. This initiative would help reduce the import of petroleum products by generating more and more biofuels. Since many more feedstocks have been allowed for production of biofuels, these amendments will promote the Atmanirbhar Bharat and give an impetus to Prime Minister Narendra Modi’s vision of India becoming ‘energy independent’ by 2047.
The “National Policy on Biofuels – 2018” was notified by Ministry of Petroleum and Natural Gas on 04.06.2018 in supersession of National Policy on Biofuels, promulgated through the Ministry of New & Renewable Energy, in 2009.
Due to advancements in the field of Biofuels, various decisions taken in the National Biofuel Coordination Committee (NBCC) meetings to increase biofuel production, recommendation of the Standing Committee and the decision to advance to introduce Ethanol Blended Petrol with up to twenty percent ethanol throughout the country from 01.04.2023, amendments are done to the National Policy on Biofuels.
Now, more feedstocks are allowed for production of biofuels, besides advancing the ethanol blending target of 20% in petrol to ESY 2025-26 from 2030. The amendments also promote the production of biofuels in the country, under the Make in India program by units located in Special Economic Zones (SEZ)/ Export Oriented Units (EoUs) by adding new members to the NBCC and granting permission for export of biofuels in specific cases, and deleting/amending certain phrases in the Policy in line with decisions taken during the meetings of National Biofuel Coordination Committee.
The Union Cabinet also approved the proposal for empowering the Board of Directors of the Holding / Parent Public Sector Enterprises to recommend and undertake the process for Disinvestment (both strategic disinvestment and minority stake sale) or closure of any of their subsidiaries / units / stake in JVs.
The Cabinet has also empowered Alternative Mechanism to accord ‘in principle’ approval for disinvestment (both strategic disinvestment and minority take sale) / closure of subsidiaries / units /sale of stakes in JVs of Holding / Parent PSEs [except the disinvestment (minority stake sale) of Maharatna PSEs which was delegated to them and review the process of disinvestment / closure by Parent / Holding PSEs.
The process for undertaking the strategic disinvestment transactions / closures to be followed by the PSEs should be open, based on the principles of competitive bidding and consistent with the guiding principles to be laid down. For strategic disinvestment, such guiding principles will be laid down by DIPAM. For closure, DPE shall issue guiding principles.
Presently, the Board of Directors of Holding / Parent PSEs have been delegated certain powers under the Maharatna, Navratna and Miniratna categories to make equity investment to establish financial joint ventures and wholly-owned subsidiaries and undertake mergers / acquisitions subject to certain ceilings of net-worth. However, the Boards do not have powers for disinvestment / closure of their subsidiaries / units/ stake in JVs, except some limited powers given to Maharatna PSEs for minority stake disinvestment of shareholding in their subsidiaries. Therefore, approval of the Cabinet / CCEA was needed by Holding / Parent CPSEs, for disinvestment (both strategic disinvestment and minority stake sale) / closure of their subsidiaries / units or sale of their stakes in a JV, irrespective of the size of operations / capital deployed of such subsidiaries, etc. In line with the spirit of the new PSE policy, 2021 to minimize presence of Government PSEs and for functional requirement, further delegation in this matter have been provided through this decision.
The proposal intends to reform the functioning of PSEs by allowing greater autonomy to the Board of Directors of the Holding PSEs for taking decisions and recommend for timely existing from their investment in Subsidiaries / Units or JVs, which will enable them to monetize their investment in such subsidiaries/units/JVs at an opportune time or close their loss-making and inefficient subsidiary/unit/JV at right time. This will result in expeditious decision making and saving of wasteful operational/financial expenditure by the PSEs.
