Evaluate the prospects and challenges of biofuels and green hydrogen as pillars of India's energy transition.

India imports 85% of its crude oil requirement [1]. Biofuels and green hydrogen could therefore do two jobs at once: cut import dependence and cut emissions. They show real promise. Today, however, they are emerging pillars of the transition, not yet load-bearing ones.

Prospects

• Import substitution: E20 (petrol blended with 20% ethanol) was launched at India Energy Week (IEW) 2023 at 84 outlets in 11 States/UTs. It was linked to a 20% blending target by 2025 [2].
• Rural incomes and more feedstocks: At IEW 2025, a BPCL–National Sugar Institute MoU aimed to scale up sweet-sorghum ethanol and train farmers [3].
• Hard-to-abate sectors: Green hydrogen can decarbonise refining, fertilisers, steel and mobility. The IEW 2026 Hydrogen Zone showed technologies for producing, storing and using it [4].
• Policy backing: A Parliamentary Standing Committee recommended an expert group to design policies that cut fossil-fuel demand. The government's approach includes green hydrogen, EVs and biofuels [5].
• Diplomatic leverage: IEW 2027 focuses on energy security and affordability for the Global South [6]. This gives India a platform to share its transition model.

Challenges

• Investment gap: At IEW 2025, IOCL signed a USD 7 billion, 14-year LNG contract with ADNOC. The clean-energy deals were only a wave-energy pilot and an ethanol MoU [3]. Binding capital still goes mainly to fossil fuels.
• Food–water trade-off: Ethanol made from sugarcane and grain competes with food security. It also adds pressure on groundwater in water-stressed regions.
• Cost and infrastructure: Green hydrogen still costs more than grey hydrogen made from natural gas. It needs cheap round-the-clock renewable power, electrolysers, storage and pipelines.
• Fiscal dependence: Petroleum provides 14% of the Centre's tax revenue and 15% of states' own tax revenue [1]. A fast shift away from oil would therefore strain both budgets.

Verdict Biofuels are a proven, near-term lever. Green hydrogen is a long-term strategic bet that still depends on falling costs.

Overall, both fuels can reduce import dependence and emissions, but they are not yet funded at the scale of fossil fuels. To become true pillars, India should turn MoUs into binding offtake contracts, move to non-food 2G feedstocks and use mission-mode support to bring down electrolyser costs. Done this way, they can advance SDG 7 and SDG 13 and help India meet its net-zero 2070 commitment.