Daily Prelims Notes 30 March 2022
- March 30, 2022
- Posted by: OptimizeIAS Team
- Category: DPN
Daily Prelims Notes
30 March 2022
Table Of Contents
- Trips Waiver
- Disruption of essential services in nationwide strike
- WTO-EU Norms
- Import policy
- Sri Lanka Economic Crisis
- Shadow Banking
- Limits To Growth
- LATAM Nations
- Ethanol Blending
Context: India risks being left out of TRIPS waiver
New Draft TRIPS Waiver plan
- Draft waiver includes only COVID-19 vaccines and not other COVID-19 medical products
- Draft waiver proposes to waive only patents and not other IP rights.
- Draft waiver is not universal. Only those developing countries that exported less than 10% of world exports of COVID-19 vaccine doses in 2021 are covered for exportation and importation
What is Patenting all about?
- Patenting: WTO members have to provide patent protection for any invention, whether a product (such as a medicine) or a process (such as a method of producing the chemical ingredients for a medicine), while allowing certain exceptions. Patent protection has to last at least 20 years from the date the patent application was filed.
- Non-discrimination: Members cannot discriminate between different fields of technology in their patent regimes. Nor can they discriminate between the place of invention and whether products are imported or locally produced.
- Three criteria: To qualify for a patent, an invention has to be new (“novelty”), it must be an “inventive step” (i.e. it must not be obvious) and it must have “industrial applicability” (it must be useful).
- Disclosure: Details of the invention have to be described in the application and therefore have to be made public. Member governments have to require the patent applicant to disclose details of the invention and they may also require the applicant to reveal the best method for carrying it out.
Exceptions from Patenting
- Governments can refuse to grant patents for three reasons that may relate to public health:
- inventions whose commercial exploitation needs to be prevented to protect human, animal or plant life or health
- diagnostic, therapeutic and surgical methods for treating humans or animals
- certain plant and animal inventions
Under the TRIPS Agreement, governments can make limited exceptions to patent rights, provided certain conditions are met. For example, the exceptions must not “unreasonably” conflict with the “normal” exploitation of the patent.
- The TRIPS Agreement says governments can also act to prevent patent owners and other holders of intellectual property rights from abusing intellectual property rights, “unreasonably” restraining trade, or hampering the international transfer of technology.
- Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner.
- The agreement allows compulsory licensing as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting research and development into new drugs. But the term “compulsory licensing” does not appear in the TRIPS Agreement. Instead, the phrase “other use without authorization of the right holder” appears in the title of Article 31. Compulsory licensing is only part of this since “other use” includes use by governments for their own purposes.
What are the grounds for using Compulsory Licensing?
- The TRIPS Agreement does not specifically list the reasons that might be used to justify compulsory licensing.
- In Article 31, it does mention national emergencies, other circumstances of extreme urgency and anti-competitive practices — but only as grounds when some of the normal requirements for compulsory licensing do not apply, such as the need to try for a voluntary licence first.
Parallel imports, Grey imports And ‘Exhaustion’ of Rights
- Parallel or grey-market imports are not imports of counterfeit products or illegal copies. These are products marketed by the patent owner (or trademark- or copyright-owner, etc) or with the patent owner’s permission in one country and imported into another country without the approval of the patent owner.
- For example, suppose company A has a drug patented in the Republic of Belladonna and the Kingdom of Calamine, which it sells at a lower price in Calamine. If a second company buys the drug in Calamine and imports it into Belladonna at a price that is lower than company A’s price, that would be a parallel or grey import.
- The legal principle here is “exhaustion”, the idea that once company A has sold a batch of its product (in this case, in Calamine), its patent rights are exhausted on that batch and it no longer has any rights over what happens to that batch. The TRIPS Agreement simply says that none of its provisions, except those dealing with non-discrimination (“national treatment” and “most-favoured-nation treatment”), can be used to address the issue of exhaustion of intellectual property rights in a WTO dispute.
Doha Declaration on TRIPS And Public Health
- A large part of this was settled at the Doha Ministerial Conference in November 2001. In the main Doha Ministerial Declaration of 14 November 2001, WTO member governments stressed that it is important to implement and interpret the TRIPS Agreement in a way that supports public health — by promoting both access to existing medicines and the creation of new medicines.
- They therefore adopted a separate declaration on TRIPS and Public Health. They agreed that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. They underscored countries’ ability to use the flexibilities that are built into the TRIPS Agreement, including compulsory licensing and parallel importing. And they agreed to extend exemptions on pharmaceutical patent protection for least-developed countries until 2016.
2. Disruption of essential services in nationwide strike
Context: Nationwide strike has disrupted essential services
What are Essential Services?
The Essential Services Maintenance Act, 1968 is an Act to provide for the maintenance of certain essential services and the normal life of the community. Essential service as per the aforesaid Act in Section 2(1) (a) means-
- Any postal, telegraph or telephone service;
- Any railway service or any other transport service for the carriage of passengers or goods by land, water or air with respect to which Parliament has the power to make laws;
- Any service connected with the operation or maintenance of aerodromes, or with the operation, repair or maintenance of aircraft;
- Any service connected with the loading, unloading, movement or storage of goods in any port;
- Any service connected with the clearance of goods or passengers through the customs or with the prevention of smuggling;
- Any service in any mint or security press;
- Any service in any defense establishment of the Government of India;
- Any service in connection with the affairs of the Union, not being a service specified in any of the foregoing sub- clauses;
- Any other service connected with matters with respect to which Parliament has the power to make laws and which the Central Government being of opinion that strikes therein would prejudicially affect the maintenance of any public utility service.
- The public safety or the maintenance of supplies and services necessary for the life of the community or would result in the infliction of grave hardship on the community, may, by notification in the Official Gazette, declare to be an essential service for the purposes of this Act.
(b) “Strike” as defined under the Section 2 (b) aforesaid Act means the cessation of work by a body of persons employed in any essential service acting in combination or a concerted refusal or a refusal under a common understanding of any number of persons who are or have been so employed to continue to work or to accept employment, and includes-
- refusal to work overtime where such work is necessary for the maintenance of any essential service;
- any other conduct which is likely to, result in, or results in, cessation or substantial retardation of work in any essential service.
Can government prohibit strike?
If the Central Government is satisfied that in the public interest it is necessary or expedient so to do, it may, by general or special Order, prohibit’ strikes in any essential service specified in the Order. An Order so made shall be published in such manner as the Central Government considers best calculated to bring it to, the notice of the persons affected by the Order. An Order made shall be in force for six months only, but the Central Government may, by a like Order, extend it for any period not exceeding six months if it is satisfied that in the public interest it is necessary or expedient so to do. Upon the issue of an Order:
- no person employed in any essential service to which the Order relates shall go or remain on strike;
- any strike declared or commenced, whether before or after the issue of the Order, by persons employed in any such service shall be illegal.
Important features of ESA:
Section 4 of ESA Penalty for illegal strikes. Any person who commences a strike which is illegal under this Act or goes or remains on, or otherwise takes part in, any such strike shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to two hundred rupees, or with both.
Section 5: Penalty for instigation, etc. Any person who instigates, or incites other persons to take part in, or otherwise acts in furtherance of, a strike which is illegal under this Act shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both.
Section 6: Penalty for giving financial aid to illegal strikes. Any person who knowingly expends or supplies any money in furtherance or support of a strike which is illegal under this Act shall be punishable with imprisonment for a term which may extend to one- year, or with fine which may extend to one thousand rupees, or with both.
Section 7: Power to arrest without warrant. Notwithstanding anything contained in the Code of Criminal Procedure, 1898, any police officer may arrest without warrant any person who is reasonably suspected of having committed any offense under this Act. This Act to override other laws. The provisions of this Act and of any Order issued thereunder shall have effect notwithstanding anything inconsistent there with contained in the Industrial Disputes Act, 1947, or in any other law for the time being in force.
Section: External sector
India has complained at a WTO meeting of the sanitary and phytosanitary committee about the new regulations imposed by the EU restricting the export of a broad range of commodities including several spices, guar gum, calcium carbonate and food supplements containing botanicals originating from India, alleging pesticide contamination.
- Pesticide detected was ethylene oxide, a substance classified as a mutagen, a carcinogen and a reproductive toxicant.
- EU maximum residue levels (MRLs) standards on pesticides such as ethylene oxide and dichloroethanol are low and do not apply in most countries.
- Agreement on the Application of Sanitary and Phytosanitary Measures
- The Agreement on the Application of Sanitary and Phytosanitary Measures (the “SPS Agreement”) entered into force with the establishment of the World Trade Organization on 1 January 1995.
- It sets out the basic rules on food safety and animal and plant health standards that governments are required to follow. Together with the Technical Barriers to Trade Agreement, it seeks to identify how to meet the need to apply standards while avoiding disguised protectionism.
- The basic aim of the SPS Agreement is to maintain the sovereign right of any government to provide the level of health protection it deems appropriate, but to ensure that these sovereign rights are not misused for protectionist purposes and do not result in unnecessary barriers to international trade.
- The SPS Agreement allows WTO members to set their own standards on food safety and animal and plant health. But these standards must be based on science, applied only to the extent necessary to protect human, animal or plant life or health, and not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.
- Members are encouraged to use international standards, guidelines and recommendations but may adopt higher levels of protection if there is scientific justification for it, or if they are based on appropriate assessment of risks. The SPS Agreement allows countries to use different methods of control, inspection and approval procedures to verify compliance with adopted standards. Transparency regarding governments’ SPS regulations is a key provision to avoid unnecessary barriers to trade.
- According to Article 7 of the SPS Agreement, members shall notify changes in their sanitary or phytosanitary measures and provide information on their sanitary or phytosanitary measures in accordance with the provisions of Annex B. The Members’ transparency toolkit contains all the relevant information for members to fulfil their transparency obligations regarding SPS measures.
- Committee on Sanitary and Phytosanitary Measures
- The SPS Committee is the forum where WTO members discuss issues related to the implementation of the SPS Agreement and potential trade concerns. All decisions are reached by consensus. The Agreement also mandates the SPS Committee to develop a procedure to monitor the process of international harmonization and to coordinate with the relevant organizations.
Which are the relevant standard-setting organizations for the SPS Agreement?
- FAO/WHO Codex Alimentarius Commission (Codex): for food safety
- World Organization for Animal Health (OIE): for animal health and zoonoses
- FAO International Plant Protection Convention (IPPC): for plant protection.
|Agreement on the Application of Sanitary and Phytosanitary Measures v/s Agreement on Technical Barriers to Trade |
The SPS Agreement covers all measures whose purpose is to protect:
The TBT (Technical Barriers to Trade) Agreement covers all technical regulations, voluntary standards and the procedures to ensure that these are met, except when these are sanitary or phytosanitary measures as defined by the SPS Agreement.
TBT measures could cover any subject, from car safety to energy-saving devices, to the shape of food cartons. To give some examples pertaining to human health, TBT measures could include pharmaceutical restrictions, or the labelling of cigarettes. Most measures related to human disease control are under the TBT Agreement, unless they concern diseases which are carried by plants or animals (such as rabies). In terms of food, labelling requirements, nutrition claims and concerns, quality and packaging regulations are generally not considered to be sanitary or phytosanitary measures and hence are normally subject to the TBT Agreement.
On the other hand, by definition, regulations which address microbiological contamination of food, or set allowable levels of pesticide or veterinary drug residues, or identify permitted food additives, fall under the SPS Agreement. Some packaging and labelling requirements, if directly related to the safety of the food, are also subject to the SPS Agreement.
SPS Agreement the only justification for not using such standards for food safety and animal/plant health protection are scientific arguments resulting from an assessment of the potential health risks. In contrast, under the TBT Agreement governments may decide that international standards are not appropriate for other reasons, including fundamental technological problems or geographical factors.
Also, sanitary and phytosanitary measures may be imposed only to the extent necessary to protect human, animal or plant health, on the basis of scientific information. Governments may, however, introduce TBT regulations when necessary to meet a number of objectives, such as national security or the prevention of deceptive practices.
Section: External sector
To augment domestic supplies of pulses and stabilize their retail prices, the government has extended the ‘free-import’ policy for two varieties — tur and urad — by a year to the end of FY23.
In India, the import and export of goods is governed by the Foreign Trade (Development & Regulation) Act, 1992 and India’s Export Import (EXIM) Policy.
India’s Directorate General of Foreign Trade (DGFT) is the principal governing body responsible for all matters related to EXIM Policy.
Importers are required to register with the DGFT to obtain an Importer Exporter Code Number (IEC) issued against their Permanent Account Number (PAN), before engaging in EXIM activities. After an IEC has been obtained, the source of items for import must be identified and declared.
The Indian Trade Classification – Harmonized System (ITC-HS) allows for the free import of most goods without a special import license.
Certain goods that fall under the following categories require special permission or licensing.
- Licensed (Restricted) Items – Licensed items can only be imported after obtaining an import license from the DGFT. These include some consumer goods such as precious and semi-precious stones, products related to safety and security, seeds, plants, animals, insecticides, pharmaceuticals and chemicals, and some electronic items.
- Canalized Items – Canalized items can only be imported via specified transportation channels and methods, or through government agencies such as the State Trading Corporation (STC). These include petroleum products, bulk agricultural products such as grains and vegetable oils, and some pharmaceutical products.
- Prohibited Items – These goods are strictly prohibited from import and include tallow fat, animal rennet, wild animals, and unprocessed ivory.
Free Import Policy– Under the regime, introduced in May 2021, specified pulses can be imported without any quantitative restrictions.
Duty-Free Import Authorisation (DFIA)-It is a scheme under which duty-free import of inputs, fuel, oil, energy sources, a catalyst which is required for the production of export goods is allowed.
Against such duty exemption, the importer is required to meet certain export obligations w.r.t. the finished goods.
The minimum value addition of 20% is mandatory to be required to be achieved.
This scheme is mainly used for imports of raw sugar to be used in producing an export product.
Section: External sector
Sri Lanka is going through its worst economic crisis since 1948 when the country gained independence.
- Inflation– surged to around 15% in february2022, the prices of essential items such as food, fuel and medicines rose to a record high leading to state led rationing.
- Supply disruption–
- Daily power cuts of more than seven hours.
- Cancellation of the school examinations due to shortage of ink and paper.
- The country’s debt to debt-to-GDP ratio was 119 per cent in 2021.
- Depletion of forex reserves– A heavily import-dependent nation is left with just $2-billion reserves, leaving Sri Lanka not able to import even essential commodities.
- Diminishing Inflow of Foreign Currency- The pandemic has affected all major sources of foreign exchange earnings like exports, worker remittances, etc.
- The collapse of the tourism industry-contributing nearly 10 percent of its GDP. The pandemic, coupled with the 2019 Easter bombings, led to a fall in the tourism revenues from $7.5 billion in 2019 to $2.8 billion last year.
- Agricultural Distress-blanket ban on chemical fertilisers by the administration last year and adoption of an “organic only” approach crippled the agriculture sector with tea cultivation and its exports, one of the mainstays of the economy, getting affected.
- Ukraine crisis-
- A significant portion of tourists who travel to Sri Lanka are from Russia and Ukraine.
- Sri Lanka exports its tea to these two nations and imports almost half of its wheat and sunflower oil from them.
- The war has caused oil prices to spike, exacerbating its forex crisis.
- Sri Lanka declared an economic emergency to control food supply amid soaring inflation.
- The emergency provisions allow the government to dictate retail prices for essential food items and seize stocks from traders.
- The emergency law enables authorities to detain people without warrants, seize property, enter and search any premises, suspend laws and issue orders that cannot be questioned in court.
- The military will oversee the action which gives power to officials to ensure that essential items are sold at government-guaranteed prices.
- Devaluation of currency-making exports more competitive
- Import curbs to reduce unnecessary outflow of forex reserves
- Partial revocation of fertilizer ban
- Approached the IMF for debt restructuring and a possible bailout.
Impact on India
- Influx of refugee
- Imported inflation and currency depreciation
- Loss of confidence of investors in Asian market- could cause capital outflows
|India- Sri Lanka commercial relation|
Sri Lanka is one of India’s largest trading partners among the SAARC countries. India in turn is Sri Lanka’s largest trade partner globally. In 2020, India was Sri Lanka’s 2nd largest trading partner with the bilateral merchandise trade amounting to about USD $ 3.6 billion.
Sri Lankan exports to India have increased substantially since 2000 when ISLFTA came into force and more than 60% of Sri Lanka’s total exports to India over the past few years have used the ISFTA benefits.
However, there has been a high growth in India’s exports to Sri Lanka, resulting in a widening of the balance of trade. This is largely because of the lack of export capacity from Sri Lanka to service Indian requirements and also due to increase in imports from India because of competitiveness of our exports.
India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka. A number of leading companies from India have invested and established their presence in Sri Lanka.
According to BoI, FDI from India amounted to about US$ 1.7 billion during the period 2005 to 2019.
The main investments from India are in the areas of petroleum retail, tourism & hotel, manufacturing, real estate, telecommunication, banking and financial services.
Section: Banking Policy
Why in the news?
Infrastructure Leasing & Financial Services Ltd (IL&FS) has addressed debt resolution of Rs 55,000 crore, or nearly 55 per cent of the debt, after the group became a defaulter, and the government superseded its board in October 2018.
Shadow banks were first hit in 2018 when a major infrastructure financier IL&FS Group defaulted. Risks roared back when Dewan Housing and Altico Capital India Ltd. also failed to honor debt repayments the following year.
Shadow lenders fund a wide range of businesses from small holiday tour operators to property giants, any setback would not bode well for the economy as a whole.
Non-bank finance companies and housing finance firms are the largest borrowers of funds from the nation’s financial system, hence any failure of a shadow lender could act as a solvency shock to their banks.
Causes of shadow banks crisis?
- Liquidity crunch-After the IL&FS collapse, the entire sector is facing a crisis of confidence. Several shadow banks are finding it difficult to raise money from banks, mutual funds and the rest of the financial system.
|Shadow Banks are so called because they work almost like Banks except that they are not as broad based in their reach as the latter. For instance, both Shadow Banks and NBFCs take deposits and extend loans, though their area of focus is narrower than the traditional banks.|
In addition, the Shadow Banks and NBFCs often lend to high risk borrowers with poor credit history as well to projects that are not as gilt edged as those that the traditional banks lend to.
The term ‘shadow bank’ was coined by Paul McCulley in 2007.
Examples of shadow lenders include Special Purpose Entities, Non Banking Financial Companies (NBFCs), Hedge Funds etc.
These institutions function as intermediaries between the investors and the borrowers, providing credit, thus, leading to financial inclusion and hence generating liquidity in the system.
Section: Sustainable Development
Context: Resource depletion
- The club of Rome was formed in 1968 in Rome to study the common futures of earth.
- In 1972, the club of Rome released a paper “limit to growth”. Under this paper, a detailed analysis was done on mankind’s sustainability whether mankind will sustain it in the long run or not. The club of Rome also did a detailed study on Malthus’s theory on population and gave a report on world resources and the ability to absorb the pollution.
What is the limit to growth?
- Limit of growth theory says nature had set a limit beyond the limit development cannot possible.
- The limit to growth model was developed by D. H. Meadows on the basis of system dynamic principle.
- The basic assumption in this model:
- We have limited resources available on earth.
- Limited agricultural land
- Earth has a limited capacity to consume the pollution
- The model also gives the importance of technology & innovation to change productivity.
- The model does not give much importance to recycling & pollution control mechanism
- There are five variables or input used in this model:
- Per capita food availability
- Per capita industrial production
- Natural resources or non-renewable resources
- The output will differ with Changes in these five variables. For example, if the population is increasing then per capita food availability will decrease. If industrial production is increasing then pollution will be increasing
- The theory is based on the thesis that “the continued growth leads to infinite quantities that just do not fit into a finite world.” This basic idea has been elaborated in a highly complicated model which cannot be easily described in equation form.
- Among the various relationships, there are “feedback loops” that register the effects of changes in one variable such as food production on another variable like population growth.
- For example, population growth is positively related to food production, But food production is negatively related to pollution, and pollution, in turn, is positively related to industrial output.
- The model also uses past data on such factors as growth rates of population, industrial output, and agricultural production, and the estimates of rates of technological progress. These factors would lead to the use of new resources, raise agricultural productivity, and control pollution.
- The Limits to Growth (LTG) was an alarming report predicting the collapse of the world economy in the 21st century.
- It does not account for the infinite possibilities in human innovation.
- The prediction was based on data and computer simulation techniques which could not have been so refined, exact, and sophisticated like that of today.
Section: Economic Geography
Context- The KhanijBidesh India Ltd or KABIL is engaging with primarily LATAM nations for Lithium Reserves and Cobalt Mines.
- India has committed to invest $6 million jointly with the Australian government in lithium and cobalt mines in Australia in the next six months.
- The KhanijBidesh India Ltd or KABIL – a mining joint venture between the state-run National Aluminium Company Ltd (NALCO), Hindustan Copper Ltd and Mineral Exploration Corp Ltd – has signed a preliminary agreement with Australia’s Critical Minerals Facilitation Oﬃce (CMFO).
- Engagements are also underway with other source countries (primarily LATAM nations) such as Argentina, Bolivia, Chile.
- Latin America is the portion of the Americas comprising countries and regions where Romance languages—languages that derived from Latin—such as Spanish, Portuguese, and French are predominantly spoken.
- The term was originally used to refer to places in the Americas that were ruled under the Spanish, Portuguese, and French empires.
- The countries included are: Argentina, Bolivia (Plurinational State of), Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, the Dominican Republic and Uruguay.
- Lithium Triangle is an intersection of Chile, Bolivia and Argentina, known for high quality salt flats.
- Salar de Uyuni in Bolivia, Salar de Atacama in Chile and Salar de Arizaro in Argentina contains over 45%of known global lithium reserves.
- Beneath Salar de Uyuni, the world’s largest salt flat lies the world’s greatest lithium deposits.
- Bolivia, one of South America’s poorest countries, envisions development by harvesting lithium on an industrial scale from underground saltwater brines.
- It can be mined from rock or processed from brine.
- Lithium dissolved in underground saline aquifers called “brine”, pumped to surface by wells and then allowed to evaporate in vast knee-deep ponds.
- Lithium is a chemical element with symbol Li and atomic number 3.
- It is a soft, silvery-white alkali metal.
- Under standard conditions, it is the lightest metal and the lightest solid element.
- Lithium is highly reactive and flammable, and is stored in mineral oil.
- It never occurs freely in nature, but only in (usually ionic) compounds, such as pegmatitic minerals, which were once the main source of lithium.
- Due to its solubility as an ion, it is present in ocean water and is commonly obtained from brines.
- Lithium metal is isolated electrolytically from a mixture of lithium chloride and potassium chloride.
- Lithium is a key component used in Electric Vehicle batteries. And India, through its ₹ 18,100- crore PLI scheme is oﬀering incentives for companies to build battery cells locally.
- China and Hong Kong are the biggest lithium battery suppliers to India.
- Lithium and its compounds have several industrial applications, including heat-resistant glass and ceramics, lithium grease lubricants, flux additives for iron, steel and aluminium production, lithium batteries, and lithium-ion batteries.
- It works with other elements, drugs, enzymes, hormones, vitamins, and growth factors in the body in many different ways. People use it for medicine.
- Lithium salts have proven to be useful as a mood-stabilizing drug in the treatment of bipolar disorder in humans.
Section: Sustainable Development
Context- India has achieved 9.45 percent of ethanol blending with petrol and is likely to achieve 10 percent blending by end of this year. It has targeted 20 percent blending by 2025.
- Ethanol is an agro-based product, mainly produced from a by-product of the sugar industry, namely molasses.
- It is one of the principal biofuels, which is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration.
- Ethanol is considered a renewable source of energy.
- It is derived either from feedstocks such as sugarcane juice or molasses, considered first-generation sources, or through the non-starch-based fibrous part of plant materials (lignocellulosic parts) which include paddy straws, bagasse, forest residues, and others.
- Ethanol is used for blending with petrol due to its characteristics which lead to benefits such as an increase in engine efficiency, better fuel quality due to its higher octane number.
- Due to its complete combustion quality, ethanol leads to lesser emissions of carbon monoxide, and other particulate matter (PM).
Generations of biofuels
- First generation biofuels – First-generation biofuels are made from sugar, starch, vegetable oil, or animal fats using conventional technology. Common first-generation biofuels include Bio-alcohols, Biodiesel, Vegetable oil, Bio-ethers, Biogas.
- Second generation biofuels – These are produced from non-food crops, such as cellulosic biofuels and waste biomass (stalks of wheat and corn, and wood). Examples include advanced biofuels like bio-hydrogen, bio-methanol.
- Third generation biofuels – These are produced from micro-organisms like algae.
- Four Generation Bio-fuels-It uses genetically modified (GM) algae to enhance biofuel production.
- The Department of Food and Public Distribution (DFPD) is the nodal department for the promotion of fuel grade ethanol producing distilleries in the country.
- The Government has allowed ethanol production/procurement from sugarcane-based raw materials viz. C & B heavy molasses, sugarcane juice sugar sugar syrup, surplus rice with Food Corporation of India (FCI) and maize.
Ethanol Blended Petrol (EBP) Programme:
- The Ethanol Blended Petrol Programme was launched in 2003 with an aim to promote the use of renewable and environmentally friendly fuels and reduce India’s import dependence for energy security.
- Starting with 5% blending, the government has set a target of 10% ethanol blending by 2022 and 20% blending (E20) by 2030.
- The programme is implemented in accordance with the National Policy on Biofuels.
- Under this programme, oil marketing companies (OMCs) will procure ethanol from domestic sources at prices fixed by the government.
- Till 2018, only sugarcane was used to derive ethanol. Now, the government has extended the ambit of the scheme to include foodgrains like maize, bajra, fruit and vegetable waste, etc. to produce ethanol.
- This move helps farmers gain additional income by selling the extra produce and also broadens the base for ethanol production in the country.
- However, there are some challenges along the way. For instance, the dependency on feedstock for ethanol production would result in an additional burden on the farms and feedstock, and object to using first-generation sources for the production of ethanol for blending purposes.
Out of the total ethanol produced in the country, 91 percent came from sugarcane alone. According to NITI Aayog sugarcane and paddy (the feedstock source of ethanol) use 70 percent of India’s irrigation water leading to a lack of water availability for other crops.
India ranks 94 out of the 107 countries around the world in the Global Hunger Index 2020. With this background, questions are often raised about using feedstock and farmlands for energy crops instead of food.
Large-scale land diversion for this project would be in contravention of the other priorities of the Indian government such as food production, adoption to renewable sources of energy and water security of the country.
The shift of the government from second-generation sources, mostly agricultural waste and by-products, to the first generation, is not sustainable in the long term and is going away from the real objective of using biofuels.
Read More: https://optimizeias.com/ethanol-blending/