On August 21, 2024, the Ministry of Petroleum and Natural Gas announced significant amendments to the Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool Fasal Awashesh Nivaran) Yojana. This update, detailed in Notification S.O. 3544(E), aims to refine and expand the scheme originally notified on March 7, 2019.
1. Overview of the Amendments
The Pradhan Mantri JI-VAN Yojana, designed to promote the development of biofuels, has been updated with new provisions to enhance its scope and effectiveness.
2. Key Changes in the Pradhan Mantri JI-VAN Yojana
a. Terminology Update
- Substitution of “2G Ethanol”: The term “2G ethanol” has been replaced with “Advanced Biofuels.” This change reflects a broader focus on advanced biofuel technologies beyond just second-generation ethanol.
b. Objectives and Targets
- Revised Objectives (Clause 3.1.1): The scheme now aims to establish approximately 12 commercial scale and 10 demonstration scale Advanced Biofuel Projects using non-food biomass and other renewable feedstocks. This broadens the scope of projects covered under the scheme.
- Enhanced Commercial Viability (Sub-clause 3.1.1(a)): The new objective emphasizes improving the commercial viability of advanced biofuel projects, ensuring that they are financially sustainable.
- Financial Target (Sub-clause 3.1.5): The revised target includes a financial commitment of ₹1969.50 crore from the Government to support the setup of these projects.
c. Financial Support Mechanism
- Commercial Projects (Sub-clause 3.3(ii)): Financial assistance for commercial projects is now capped at 20% of the project cost or ₹5 crore per 10 lakh litres of the biorefinery’s annual capacity, whichever is lesser. Additionally, the maximum financial outlay per project is set at ₹150 crore.
- Demonstration Projects (Sub-clause 3.3(vi)): Milestones for financial assistance in demonstration projects will be determined by the Scheme Approval Committee (SAC), providing flexibility in project evaluation.
- Scheme Duration (Sub-clause 3.3(ix)): The scheme will now run from 2018-19 to 2028-29, extending the timeline for project implementation and support.
d. General Conditions
- Preference for Innovation (Sub-clause 4.6(i)): SAC may prioritize project proposals that introduce new technologies and innovations in biofuels, fostering a more dynamic and forward-thinking sector.
- Eligibility of “Bolt on” and “Brownfield” Projects (Sub-clause 4.6(viii)): The scheme now includes provisions for “bolt on” plants and “brownfield” projects, expanding the range of eligible projects.
- Performance Guarantees and Risk Sharing (Sub-clause 4.6(xi)): New guidelines require contractual arrangements between project proponents and technology providers to include performance guarantees and warranties. SAC will suggest additional safeguards for risk sharing as needed.
- Flexibility for Future Amendments (Sub-clause 4.6(xii)): The scheme allows for further amendments with the approval of the Minister of Petroleum and Natural Gas, ensuring it remains aligned with technological advancements and market conditions.
3. Implications of the Amendments
These amendments to the Pradhan Mantri JI-VAN Yojana represent a significant shift towards a more inclusive and flexible approach to promoting advanced biofuels. By expanding the scope of eligible projects, increasing financial support, and incorporating provisions for innovation and risk management, the revised scheme aims to drive growth in the biofuel sector and support the transition to sustainable energy solutions.
For stakeholders in the biofuel industry, these changes offer new opportunities and challenges. Project developers will need to navigate the updated financial and operational criteria, while policymakers will continue to refine the scheme to keep pace with evolving technologies and market trends.
These amendments come into effect from August 9, 2024, the date of Cabinet approval.
