[National Policy on Biofuels] Change in policy causing hardship or contrary to group interest does not necessarily render it unconstitutional: Delhi HC

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Delhi High Court: A PIL was filed raising concerns regarding the National Policy on Biofuels, 2018 [“NBP 2018”], promulgated by the Ministry of Petroleum and Natural Gas, Government of India (respondent 2) on 04-06-2018, and subsequently amended on 15-06-2022. A division bench of Satish Chandra Sharma, CJ., and Sanjeev Narula, J., held that given the in-built mechanism of the NBP 2018, aimed at balancing the country’s competing needs, the Petitioner’s anxiety over the possible ramifications on accessibility and availability of food as well as the industry, does not call for this Court’s intervention.

Respondent 2 notified the NBP 2018 paving the way for the production of bioethanol from agriculture residues, biomass, food grains, starch-containing material etc. Until the notification of NBP 2018, bioethanol was sanctioned to be produced from non-food sources, such as molasses, cellulose, and lignocellulose material, including the petrochemical route. However, with the ambition of achieving a 20% ethanol blend in petrol, the NBP 2018 now facilitates the production of ethanol using food grains and further permits the diversion of such grains from the Food Corporation of India to distilleries. In keeping with the goals of EBP 2018, the National Biofuel Coordination Committee has approved the diversion of surplus rice and maize held by the FCI, towards the production of bioethanol.

Later, in December, 2020, an interest subvention scheme aimed at boosting and expanding ethanol production capacity was floated to attract distilleries that utilize grains and other feedstocks like sorghum and sugar beet, in addition to the previously included molasses-based distilleries. In June, 2021, the NITI Aayog released a report curated by an Expert Committee, outlining a “Roadmap for Ethanol Blending in India from 2020- 25” specifying that India will need 165 lakh metric tonnes of food grains to meet the desired goals. In formulating the NBP 2018, the policymakers have overlooked a critical perspective: India, a nation grappling with chronic undernourishment, relies heavily on free rations provided to approximately Rs 80 crore of its populace under the National Food Security Act, 2013. Utilizing the grains, which could otherwise be distributed through the Public Distribution System, for ethanol production seems both insensitive and ethically questionable on the Government’s side.

On perusal of the Global Hunger Index, India’s child wasting rate, indicating low weight relative to height, child stunting and child mortality underscores the worsening state of undernourishment in India. Multiple newspaper articles and the report of the National Health Survey, 2017, reveal disheartening statistics regarding child fatalities annually, attributed solely to hunger. Thus, in endorsing the transformation of food into fuel, the Government has neglected the inherent linkage between food prices and petroleum costs. As petroleum becomes costlier, biofuels gain profitability, allowing biofuel producers to bid higher for their raw materials. This will put those in hunger in direct rivalry with fuel demands. Historically, the economics of food and energy have operated in separate domains. However, the advent of food-based ethanol distilleries has caused an unsettling convergence. If the grain’s value as fuel surpasses its value as food, market forces will inevitably push it into the energy sector. Consequently, a spike in oil prices may induce a parallel rise in grain prices, amplifying hunger issues.

As alleged by the petitioner, the NBP 2018 which permits turning food into fuel is not merely a flawed policy, but also infringes upon the fundamental right to food, enshrined in Article 21 of the Constitution of India, 1950. The decision to channel the surplus grains for ethanol, rather than addressing the pressing malnutrition endemic, is deeply disconcerting. Thus, re-purposing food grains for ethanol production seems to be a departure from the constitutional obligations. Prioritizing ethanol production from rice may inadvertently incentivize farmers to cultivate more rice. Given that rice cultivation is particularly water-intensive in India, this could exacerbate groundwater shortage, a resource essential to human survival. Food grains also serve as a pivotal fodder source for livestock. The principle of food security aims to ensure consistent and reliable access to essential food, fostering an active and healthy life built on the four pillars of availability, accessibility, utilization, and stability of food. Eradication of hunger and malnutrition must be of paramount importance for the Government. Hence, diversion of food sources towards fuel production must not be permitted.

The NBP 2018 permits use of food grains including damaged grains like wheat and broken rice as feedstock for ethanol production. While the NBP 2018 aims to meet burgeoning energy needs and targets a 20% ethanol blend with petrol by the year 2025- 26, as alleged by the petitioner such a shift might precipitate unforeseen consequences for the masses, particularly a potential food grain shortage, that could leave many citizens starving.

The Court noted that while the specifics of the Petitioner’s concerns over the NBP 2018 vary, the central theme seems to be the potential negative implications of the policy on various sectors, resource allocation, and the overall public interest. The petitioner’s challenge is a multi-faceted one, that goes beyond mere policy implementation. There is an underlying misgiving about the economic viability of businesses that might find themselves competing for similar resources now earmarked for biofuel production. This is especially pertinent in respect of feedstock like industrial waste, agricultural residues, and damaged food grains. Industries that previously relied on these as primary resources may be put in a precarious situation. His apprehensions are rooted in the belief that access to nutritious food is the foremost obligation of the State, and by directing food stuff towards bioethanol production, the Government is drifting from their duty.

The Court further noted that juxtaposing the petitioner’s concerns against the holistic benefits of NBP 2018, it is clear that the intention behind the policy is to create a more sustainable and self-reliant energy model for the country. By focusing on biofuels, the nation can reduce its dependency on fossil fuels, thereby stabilizing energy costs in the long run and insulating the economy from the volatile global oil market. Moreover, the potential competition for resources such as industrial waste or agricultural residues can spur innovation in sourcing and recycling methods, leading to a more efficient utilization of resources. The worry that farmers might shift their focus to biofuel feedstock at the cost of essential food crops underestimates the checks and balances built-in NBP 2018. By diversifying the energy portfolio, the nation not only reduces its carbon footprint but also stimulates growth in the agricultural and industrial sectors. The job creation potential in bio-refineries, feedstock cultivation, and related research and development sectors, can offset potential job losses in traditional sectors.

The Court concluded that the court’s intervention in economic policies, a domain largely reserved for specialists, is not customary. Economic policies, by their nature, involve intricate complexities best understood and acted upon by expert bodies. It is recognized that even among experts, opinions can vary widely. The courts should abstain from making determinations in such intricate matters, especially in the absence of specialized insight. The resolution of such issues is best left to the wisdom of the relevant authorities, who possess the requisite expertise, resources, and constitutional mandate to address the myriad of challenges and considerations inherent in the development and execution of national policies.

Thus, the Court held that there is no illegality, arbitrariness, or irrationality in formulation of the NBP 2018.

[Neeraj Kumar Dubey v Union of India, 2023 SCC OnLine Del 6833, decided on 18-09-2023]

Advocates who appeared in this case :

Mr. Sanjeev Anand, Senior Advocate with Mr. Raghav Alok and Ms. Vasudha Trivedi, Advocates for petitioner

Mr. Chetan Sharma, ASG with Mr. Apoorv Kurup, CGSC with Mr. Amit Gupta, Mr. Ghansyam Jha and Mr. Vikramaditya, Advocates for respondents

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