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Cabinet approves Amendments to the National Policy on Biofuels 2018; PSEs to take call on Disinvestment or Closure of their Subsidiaries

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Cabinet approves Amendments to the National Policy on Biofuels -2018

On May 18, 2022, the Union Cabinet chaired by Prime Minister (PM) Narendra Modi approved amendments to the National Policy on Biofuels 2018.  Under this the target of 20% ethanol-petrol blending advanced by 5 years to 2025-26 from 2030.

Key Amendments:

i.Allowing more feedstocks for production of biofuels,

ii.Promotion of the production of biofuels in the country, under the Make in India programme, by units located in Special Economic Zones (SEZ)/ Export Oriented Units (EoUs)

iii.Granting permission for the export of biofuels in specific cases

iv.Add new members to the National Biofuel Coordination Committee (NBCC)

v.To grant permission for export of biofuels in specific cases

vi.To delete/amend certain phrases in the Policy in line with decisions taken during the meetings of NBCC.

Benefits of Approval to Amendments to the National Policy on Biofuels 2018 

i.This approval will foster developments of indigenous technologies on the lines of Make in India drive and generate more employment.

ii.It will reduce the import of petroleum products by the generation of more and more biofuels.

iii.It will also aid India in becoming ‘energy independent’ by 2047.


The National Policy on Biofuels 2018 was notified by Ministry of Petroleum and Natural Gas (MoPNG) in June 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 NBCC meetings to increase biofuel production, recommendation of the Standing Committee and the decision to advance to introduce Ethanol Blended Petrol with up to 21% ethanol throughout the country from April 1, 2023, amendments are done to the National Policy on Biofuels.

Cabinet approved the proposal to allow PSEs to take a call on Disinvestment or Closure of their subsidiaries

The Union Cabinet also approved the proposal for empowering the Board of Directors (BoDs) of the holding / parent Public Sector Enterprises (PSEs) to recommend and undertake the disinvestment (both strategic disinvestment and minority stake sale) or closure of any of their subsidiaries/units/stake in joint ventures (JVs).

  • This decision is in lines with the new PSE policy, 2021 to minimize presence of government PSEs.

The cabinet also made the Alternative Mechanism responsible for reviewing the process of disinvestment and closure of units undertaken by PSUs. The Alternative Mechanism comprises Finance Minister Nirmala Sitharaman, Minister for Road Transport and Highways Nitin Gadkari and Civil Aviation Minister Jyotiraditya Scindia.

Current Scenario:

Presently, the BoDs of Parent PSEs have been delegated certain powers under the Maharatna, Navratna and Miniratna categories to make equity investment to set up financial JVs and wholly-owned subsidiaries and undertake mergers and acquisitions subject to certain conditions. 

  • They largely had no control over the disinvestment and closure of their subsidiaries, units, or JV stakes except some limited powers given to Maharatna PSEs for minority stake disinvestment of shareholding in their subsidiaries.

Guiding Principles:

The process for undertaking the strategic disinvestment /closures to be followed by the PSEs on the principles of competitive bidding, and consistent with the guiding principles to be laid down. 

  • For strategic disinvestment, guiding principles will be laid down by the Department of Investment and Public Asset Management (DIPAM). 
  • For closure, Department of Public Enterprises (DPE) will issue guiding principles.

Recent Related News

i.MoPNG has set up the Energy Transition Advisory Committee(ETAC) headed by the former petroleum secretary Tarun Kapoor, who resigned from the office, to draft the strategy.

ii.As per the statement of the International Energy Agency (IEA), the India is on course to surpass China as the world’s 3rd largest ethanol consumer by 2026.

About Ministry of Petroleum and Natural Gas(MoPNG):

Union Minister– Hardeep Singh Puri(Rajya Sabha- Uttar Pradesh)
Minister of State– Rameswar Teli(Constituency- Dibrugarh, Assam)