Indian Renewables and the Circular Economy Paradigm

In contrast to the ‘take-make-waste’ linear model, a circular economy approach to economic development is today widely favoured because it benefits businesses, society, and the environment.

Regenerative by design, it aims to gradually decouple growth from the consumption of our planet’s finite resources. This month, we share snippets from Samir Somaiya, CEO of Godavari Biorefineries, who talks about India’s renewables and the circular economy strategies his company is taking to develop the industry.

Biorefining is the process of converting feedstock into value added products such as foods, fuels, electricity, chemicals, pharmaceuticals, fragrance chemistry, bio materials, agrochemicals and more.  In a press release with Chemical Engineering World, Somaiya illustrates an example of how Godavari Biorefineries has pivoted toward being a circular and cascading biorefinery that continuously strives to add value: 

“A few years ago, we installed an incinerator boiler to recover energy from our waste. Now, we are implementing a process to extract potash from the ash from the incinerator. This potash will then be sold to our farmers.”

Currently, India imports almost all 4 million tonnes of its potash needs, but this could be different in the future. If more companies start producing potash from waste, especially as subsidies for potash-based fertilisers were recently cut amidst an attempt to contain fiscal deficits, India can reduce its import reliance.

Godavari Biorefineries invests heavily in energy efficiency and engineering to convert available surplus bagasse (the fibrous by-product of sugar production from sugarcane stalks) into next generation feedstock. They also produce acetic acid from renewable sources instead of from petroleum feedstock, which substitutes conventional materials without loss of functionality.  Mandala’s investment proceeds were used to kickstart and accelerate some of the key products and processes that form part of Godavari’s integrated biorefinery model today.

The next phase of growth in renewable chemicals in India rests on two key factors: renewable chemical prices compared with that of conventional fossil-based chemicals, and the willingness of the end user to pay a price premium for renewable-derived feedstock. There are signs in the skincare sector that show responsibly sourced, traceable, renewable and biodegradable chemicals can command a price premium from the end customer. 

Of course, capital outlay for the development of renewables industry does not come cheap, and initiatives like the US’ Bio-Preferred Program and EU carbon markets enjoy the support of governments that sponsor investment in research, heavily capital-intensive pilot plants, and commercialization of renewable processes and technologies. Likewise, India’s Viability Gap Funding (VGF) program subsidises up to 20% of project costs for Greenfield facilities to make 2G ethanol (ethanol from biomass). 

Somaiya believes India should take a ‘bolt-on’ approach in both 2G ethanol and biofuel, adding onto existing infrastructure the equipment and technology necessary for production of ethanol and biofuel. This way, funding needs can be drastically reduced. With a strong agriculture base and abundance of biomass, India needs to focus on education and research to harness its dormant potential in renewable energy and chemicals. 

Biofuels a possible answer to India’s sugar surplus crisis, renewables growth part of circular economy 

Indian sugar millers face a multitude of issues: unsold sugar stocks, cane dues and unpaid interests. With performance feasibility, production capacity, and the consumer market overturned by the raging coronavirus, a bailout package seems to be the only favorable solution to the sugar surplus crisis, Somaiya shared recently in an interview with Chinimandi News

Taking a longer term view, Somaiya argues that India has long proven itself to be a surplus producer of sugarcane, and suggests ways this surplus can be utilised to meet the country’s burgeoning food and energy needs. 

How Godavari Biorefineries leads the Indian sugar industry in building a sustainable bio-fuel economy

-Expanded distillery capacity from 200,000 lpd to 320,000 lpd last season, and to 400,000 lpd this season
-Manufactures ethanol via sugarcane syrup and B Heavy molasses, diverting over 40% of sugar towards ethanol
-Created optionality between sugar and ethanol
-Actively supports government policies on producing 2G ethanol, and Bio-CNG
-Pioneered the use of renewable feedstocks to make chemicals, materials and renewable power with applications in pharmaceuticals, agriculture, flavours and fragrances coatings
-Working on intercropping with farmers to improve their agronomy so that they farm and earn better

Long-term policies recommended for the growth of India’s ethanol industry

To get to production levels in Brazil and the USA, India will need a wide variety of renewable biomass. Apart from pushing for the use of sugarcane juice and B Heavy molasses in ethanol, increasing the ethanol blend rate in petrol will go a long way to help meet India’s energy security needs. Already, the Government has indicated bold targets to move towards a 20% blend rate. In states that already have ethanol surplus, the blend rate can be increased more quickly. Promoting flex fuel cars like Brazil has done is another strategy to further increase adoption rates. Overall, the pace of transformation will rely on how quickly sugar companies can obtain regulatory approvals and financing to build distillation assets and divert their sugar surplus to ethanol.

In the short term, the surplus sugar will have to be exported. India has exported a new high of nearly 6 million tons of sugar this season and sugar millers will need continued government support on export policies.