India’s Initiative of Global Biofuels Alliance at the G20 Summit

The creation of the Global Biofuels Alliance marks the beginning of a new phase in the quest for eco-friendly energy options. Countries from all over the world have also given their support to adopt biofuels and understand how important they are in reducing pollution and addressing climate change.

India, as the world’s third-largest consumer and importer of oil, grapples with the enduring challenge of its surging oil import bill. 

However, India is looking at increasing its biofuel production through varied sources in a bid to cut its import dependence on fuel at a time when the OPEC+ grouping has enforced successive production cuts.  

Global Biofuel Alliance (GBA) 

The Global Biofuel Alliance (GBA) was formally launched during the G20 Summit in New Delhi with the support of Prime Minister Narendra Modi. It includes a group of 30 countries and several international institutions, all working towards the adoption of biofuels to increase access to bioenergy in developing economies.

The alliance is led by India, the United States, and Brazil, and it aims to tackle important energy and economic problems by using eco-friendly biofuels.  

First, let’s understand what biofuels are. Well, they are derived from renewable sources such as biomass and agricultural waste, offering a greener alternative to conventional fossil fuels with lower carbon emissions.  

However, the alliance presents a promising solution. By promoting the utilisation of biofuels derived from sources like sugarcane, grains, and agricultural waste through this way oil-dependent countries can diversify their energy portfolio and reduce dependency on expensive oil imports.  

Industry Outlook 

In 2022, the worldwide ethanol market had a value of USD 99.06 billion, and it is expected to experience steady growth with a compound annual growth rate of 5.1% by 2032, reaching a projected value exceeding USD 162.12 billion by that year.  

Members of GBA 

The alliance includes 19 countries and 12 international organisations. Countries like Argentina, Brazil, Canada, India, Italy, South Africa, and the US are supporting the alliance. 

Moreover, G20 invitee countries support this alliance including Bangladesh, Singapore, Mauritius, and the UAE. Similarly, the eight non-G20 countries are Iceland, Kenya, Guyana, Paraguay, Seychelles, Sri Lanka, Uganda, and Finland. 

Additionally, some international organisations like the World Bank, Asian Development Bank, World Economic Forum, World LPG Organisation, International Energy Agency, International Energy Forum, International Renewable Energy Agency, and World Biogas Association also support this alliance. 

Members of the GBA are significant players in both the production and consumption of biofuels. Specifically, the USA accounts for 52%, Brazil for 30%, and India for 3%, making up a substantial 85% of global ethanol production and 81% of its consumption. 

Companies to watch for 

Now the question is, who will benefit from this? Of course, the country will benefit by reducing the import bill and lowering pollution using alternative fuels. Additionally, companies engaged in the production of alternative fuel from sugarcane, such as ethanol, will also benefit from this significant move.  

So, companies like Praj Industries, Shree Renuka Sugars, Dhampur Sugar Mills, and Balrampur Chinni Mills are among the leading companies engaged in the production of ethanol. Additionally, the stocks of these companies rallied on Monday. 

 Furthermore, other sugar companies like EID Parry and Dwarikesh Sugar also gained momentum after the announcement of this alliance. Meanwhile, the share prices of Dalmia Bharat Sugar, Sakthi Sugars, Avadh Sugar, Triveni Engineering, and Mawana Sugars reached their highest point in the past 52 weeks during today’s trading session.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.