**Executive Summary**
This document is the answer provided in the Lok Sabha on February 12, 2026, to Unstarred Question No. 2252 regarding the National Biofuel Policy 2018. It addresses the government's initiatives to promote biodiesel production, the basis for determining biodiesel prices, and biodiesel procurement volumes. The government aims to achieve a 5% biodiesel blend in diesel by 2030.
**Key Points / Main Content**
* **Biodiesel Definition:**
* Biofuels, including biodiesel, are explicitly defined as fuels produced from renewable resources and used in place of or blended with fossil fuels.
* Biodiesel is methyl or ethyl ester of fatty acid produced from non-edible vegetable oils, acid oil, used cooking oil or animal fat and bio-oil.
* **Biodiesel Promotion:**
* The government is taking measures to achieve a 5% biodiesel blend in diesel/direct sale of biodiesel by 2030.
* These measures include setting indicative blending targets, notifying guidelines for biodiesel sales for blending, and reducing the GST rate for procurement of biodiesel for blending programs from 12% to 5%.
* **Biodiesel Pricing:**
* From June 2021 to 2024, Oil Marketing Companies (OMCs) determined biodiesel prices considering domestic and imported feedstock prices, production costs, and profit.
* Currently, OMCs fix biodiesel prices based on domestic feedstock prices.
* **Biodiesel Procurement and Production:**
* OMCs procured 36.7 crore litres of biodiesel during FY 2024-25.
* As of January 31, 2026, biodiesel procurement reached 14.72 crore litres in FY 2025-26.
* The aggregate installed production capacity is approximately 450 crore litres per annum based on available feedstock like Non Used Cooking Oil (NUCO)/Used Cooking Oil (UCO).
**Impact Analysis**
**Oil Marketing Companies (OMCs)**
* **Impact:** OMCs are responsible for procuring biodiesel and determining prices based on feedstock costs.
* **Action Required:** Continue to procure biodiesel and set prices based on domestic feedstock prices.
**Biodiesel Vendors**
* **Impact:** Biodiesel vendors are registered with OMCs, and their production capacity is based on the Consent to Operate (CTO) issued by State Pollution Control Boards.
* **Action Required:** Must register with OMCs and adhere to CTO guidelines for production capacity.
**Consumers of Diesel/Biodiesel Blends**
* **Impact:** Impacted by the availability and pricing of blended fuel and any impact on vehicle performance.
* **Action Required:** No immediate action required, but consumers may need to be aware of biodiesel content in fuel and any related effects.
Key Entities Referenced
National Policy on Biofuels, 2018: A policy outlining the framework for the promotion of biofuels in India.
Oil Marketing Companies (OMCs): Organizations responsible for achieving the target of blending biodiesel as per the National Biofuel Policy.
Ministry of Petroleum & Natural Gas: The ministry responsible for matters relating to the petroleum and natural gas sector.
"Guidelines for sale of biodiesel for blending with high speed diesel for transportation purposes-2019": Guidelines issued for the sale of biodiesel for blending purposes.
LOK SABHA
UNSTARRED QUESTION No. 2252
TO BE ANSWERED ON 12th February, 2026
National Biofuel Policy 2018
†2252. SHRI CHANDRA PRAKASH JOSHI:
पे(cid:7069)ोिलयम और (cid:7079)ाकृितक गैस म(cid:7074)ं ी
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) whether biodiesel is being considered as a green/biofuel;
(b) the steps being taken to achieve the target of blending five per cent biodiesel by the year
2030 set by oil marketing companies under the National Biofuel Policy 2018 considering
the air pollution in the country along with the challenges being faced in the procurement of
the same;
(c) the basis on which the admitted price of biodiesel is determined;
(d) the quantum of biodiesel purchased so far in the years 2025 and 2026 along with the actual
installed production capacity and available feedstock; and
(e) the basis on which the admitted price of biodiesel is being determined since June 2021 to
2024 and the basis on which the newly admitted price is currently being determined?
ANSWER
पे(cid:7069)ोिलयम और (cid:7079)ाकृितक गैस म(cid:7074)ं ालय म(cid:7286) रा(cid:6996)यम(cid:7074)ं ी
((cid:7088)ी सुरेश गोपी)
MINISTER OF STATE IN THE MINISTRY OF PETROLEUM & NATURAL GAS
(SHRI SURESH GOPI)
(a): National Policy on Biofuels, 2018, as amended in 2022, explicitly defines biofuels as
fuel produced from renewable resources and used in place of or blended with, diesel, petrol or
other fossil fuels for transport, stationary, portable and other applications. Renewable sources are
the biodegradable fraction of products, wastes and residues from agriculture, forestry, tree based
oil other non-edible oils and related industries as well as the biodegradable fraction of industrial
and municipal wastes.
Biodiesel is methyl or ethyl ester of fatty acid produced from non-edible vegetable oils,
acid oil, used cooking oil or animal fat and bio-oil. As such, biodiesel is a biofuel.
(b) Government has taken several measures for promotion of biodiesel production to achieve
the indicative target of blending 5% biodiesel in diesel/direct sale of biodiesel by the year 2030,
which inter-alia include prescribing indicative target of blending of biodiesel in diesel / direct sale
of biodiesel under the National Policy on Biofuels, notifying of "Guidelines for sale of biodiesel
for blending with high speed diesel for transportation purposes-2019", reduction of GST rate for
procurement of biodiesel for blending programme from 12% to 5%, etc.(c) to (e): Since June 2021 to 2024, the price of Biodiesel was determined by Oil Marketing
Companies (OMCs) considering domestically available feedstocks as well as imported feedstock
prices, production cost, profit etc. Currently, Price of biodiesel are fixed by Oil Marketing
Companies (OMCs) considering domestic feedstock prices.
Oil Marketing Companies (OMCs) procured 36.7 crore litre of Biodiesel during Financial
Year (FY) 2024-25. In the current FY 2025–26, as on 31.01.2026, procurement of biodiesel has
reached 14.72 crore litre. Based on biodiesel vendors registered with OMCs, the aggregate
installed production capacity, as per Consent to Operate (CTO) issued by the respective State
Pollution Control Boards, is approximately 450 crore litre per annum using available feedstock
based on Non Used Cooking Oil (NUCO)/Used Cooking Oil (UCO).
*****