The Government on India is proposing to introduce mandatory blending of ethanol in transport fuels to the extend of 5%.This means that the major transport fuel providers like IOC,BPCL and other will have to ensure that 5% of the petrol they sell will be mixed with 5% ethanol.The US is the biggest user of mandatory blending which has recently come under harsh criticism.The reasons given for supporting blending is that it reduces the requirements of fossil fuels which leads to lower carbon emissions,improves energy security and reduces pollution.However none of these advantages are seen in real life.In fact it has the massively negative consequence of increasing food prices which leads to the starvation of the poor globally.The Corn Industry in the USA has become a major lobbying force which makes the US government persist with the policy resulting in sharp increase in corn prices to the detriment of consumers.

Biofuels were all the rage during the Bush administration which mandated the use of biofuels for the Transportation Industry.It led to a huge boom in biofuel stocks like Verasun,Pacific Ethanol due to a confluence of positive factors like a) Increasing Oil PricesĀ  b) Regulatory Action c) Low Raw Material Prices.However Biofuels from Crops can never […]