Although biodiesel is very similar to petroleum diesel, and can be used as a substitute, it is much cleaner a fuel. The emission of unburnt hydrocarbons, carbon monoxide and particulate matter is substantially lower than that from petroleum diesel. It has almost no sulphur, no aromatics, and about 10 per cent built-in oxygen that helps it burn fully.

There is an acute shortage of power for decentralized communities of the rural sector in India even after installing power generation capacity of about 110,000 MW. In order to meet rural energy needs, the decentralized power generation is an alternative measure and can be produced through renewable energy sources. There is tremendous potential of utilizing biomass in India, but direct use of biomass leads to inefficiency. Therefore in order to effectively utilize biomass, it is converted into biofuels such as biodiesels, ethanol, biogas and producer gas etc.

Majority of rural households in India use only kerosene for lighting. Most of the lamps are hurricane-type, which produce very poor light intensity of about 60

fiscal deficit. Diesel, the largest consumed petro-product in India is
also largely used in rural areas for agricultural purposes as well as meeting other energy needs. Cheaply available kerosene is being mixed with diesel and used in place of pure diesel. This is not only causing misuse of subsidized kerosene, damage to plant and machinery using it but also