According to reports, Novozymes A/S (NZYMB), the biggest producer of enzymes used for biofuels, says Indian interest doubled in the past year as costlier oil spurs demand for alternatives.
“India could be one of the biggest markets for us in a few years,” said G.S. Krishnan, regional president for the Danish company. “The push will primarily come from the oil bill.”
The rupee’s 15 percent drop against the dollar in the past year has made oil imports more expensive, nudging the current-account deficit to a record last year and inflation to the highest in Asia. Imports meet 80 percent of Indian oil needs.
Demand will mostly be from state oil companies including Indian Oil Corp. (IOCL), mandated to sell gasoline blended 20 percent with ethanol by 2017 under a government policy to improve energy security, according to Krishnan at Bagsvaerd-based Novozymes.
They have been unable to meet a lower 5 percent interim goal as supply is unaffordable, he said. In recent ethanol tenders, foreign suppliers quoted prices of 90 rupees ($1.44) a liter, about 60 percent more than companies can pay, he said.
India, the second-largest sugar producer, has the means to meet demand more cheaply by producing biofuels from agricultural waste, Krishnan said.
India could save $19.4 billion a year replacing gasoline imports with ethanol by 2020 by developing a local industry, according to a 2011 Bloomberg New Energy Finance study that assumed a crude oil price of $100 a barrel.
Europe, the Middle East and Africa accounted for 37 percent of Novozyme’s sales last year, according to a group financial statement last month. It didn’t provide a figure for India.