Important for:

UPSC, Haryana HCS, Punjab PCS
Prelims: Biofuel, palm oil, biodiesel (B50)
Mains: GS Paper 3 — Economy, Agriculture, Energy Security

Why in News?

Indonesia’s expansion of palm oil-based biodiesel blending (B50 programme) is expected to reduce global supply of palm oil, potentially increasing cooking oil prices in India.

What is the B50 Biofuel Programme?

➤ A fuel blend of:

• 50% palm oil biodiesel
• 50% conventional diesel

Objective:

• Reduce crude oil imports
• Promote renewable energy
• Support domestic palm oil industry

Why Does This Affect India?

1. Reduced Palm Oil Exports

• Indonesia diverts supply for domestic fuel

2. Supply-Demand Imbalance

• Less global availability
• Prices increase

3. India’s Dependence

• India imports:
  → Large share of palm oil from Indonesia

Why India Imports So Much Edible Oil

Key Reasons:

• Low domestic production
• High consumption demand
• Policy focus on cereals over oilseeds

Global Market Impact

• Palm oil = major global edible oil
• Price rise impacts:
  • Food inflation
  • Industrial products

Impact on India

Negative:

• Rising cooking oil prices
• Increased inflation
• Higher import bill

Possible Positive:

• Incentive for domestic oilseed production

Are Biofuels Always Climate-Friendly?

➤ Not always

Concerns:

• Deforestation for palm plantations
• Environmental degradation
• Land-use conflicts

Key Insight for UPSC

➤ This issue highlights:

• Link between:
  • Energy policy
  • Agriculture markets
  • Global trade

PRELIMS PRACTICE QUESTIONS

Q1. Biodiesel is produced from:

A. Coal
B. Petroleum
C. Vegetable oils
D. Uranium

✅ Answer: C

Q2. B50 refers to:

A. 50% ethanol blending
B. 50% biodiesel + 50% diesel
C. 100% biodiesel
D. 50% petrol

✅ Answer: B

Q3. India imports most of its palm oil from:

A. USA
B. Indonesia
C. Russia
D. Australia

✅ Answer: B

Q4. Which factor increases cooking oil prices?

A. Increased supply
B. Reduced exports
C. Low demand
D. High production

✅ Answer: B

Q5. Biofuels may cause:

A. Pollution reduction only
B. No environmental impact
C. Deforestation
D. No land use change

✅ Answer: C

CBL Mains Practice Question

“Energy transition policies can have unintended consequences on food security.”
Discuss with reference to biofuel expansion and edible oil markets.

FAQs

1. What is Indonesia’s B50 programme?

A biodiesel blending policy using palm oil.

2. Why will cooking oil prices rise in India?

Due to reduced palm oil exports and supply shortage.

3. Why is India dependent on imports?

Low domestic oilseed production.

4. Are biofuels always sustainable?

No, they can lead to deforestation and land-use issues.

5. Which GS paper covers this topic?

GS Paper 3 — Economy & Agriculture.