Sunday, 2 August 2015


Government of India ("GOI") on July 31, 2015 issued a draft notification w.r.t. mass emission standards for vehicle engines that can operate completely on bio-diesel. As per India's legislative standards, the draft notification will become LAW once notified in the official gazette after considering suggestions/objections from general public.

The draft notification proposes to amend Central Motor Vehicle Rules, 1989 by inserting a new rule 115G (Mass Emission Standards for BIO-DIESEL (B100)According to the draft rule newly manufactured vehicles fitted with compression ignition engine compatible to run on diesel or mixture of bio-diesel up to 100% biodiesel (B100) shall be type approved as per prevailing diesel emission norms. The compatibility of vehicle to level of bio-diesel blend or B100 shall be defined by the vehicle manufacturer and the same shall be displayed on vehicle by putting a clearly visible sticker. Test requirements for the type approval and extension for different classes of vehicles are specified in the draft notification.

Once implemented, this will become a fortune tuner for the people and companies engaged into non-edible oil seed plantations, manufacturing and distribution of bio-diesel. As discussed in my earlier blogs, GOI has already decided to grant marketing rights to private bio-diesel manufacturers and as a result (i) Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 is likely to be amended to give marketing/distribution function to private bio-diesel manufacturers/their authorized dealers as well; (ii) relaxation is proposed in Marketing Resolution No.P-23015/1/20001-Mkt.dated 08.03.2002 to give marketing rights for B100 bio-diesel to private bio-diesel manufacturers/authorised dealers for direct sales to consumers; and (iii) The price of bio-diesel will now be market determined. 

Bio-ethanol already enjoys concessional excise duty of 16% and bio-diesel is exempted from excise duty. No other central taxes and duties are proposed to be levied on bio-diesel and bio-ethanol. Custom and excise duty concessions would be provided on plant and machinery for production of bio-diesel or bio-ethanol, as well as for engines that run on bio-fuels for transport, stationary and other applications, if these are not manufactured indigenously. 

Foreign Investors

Biofuel technologies and projects enjoy 100% foreign equity through automatic route provided bio-fuel is for domestic use only, and not for export. However, plantation (i.e. non-edible oil seeds etc.) is not open for foreign investment.


1. (August 2, 2015). Draft Notification.  

2. (June 21, 2015)

3. (June 21, 2015)

4. (June 21, 2015)

5. (June 21, 2015)

6 (August 2, 2015)

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