Universal Biofuels, an Indian subsidiary of USA-headquartered biofuels company Aemetis, has won a US$6M contract in a public tender process to supply biodiesel to Indian government-owned oil marketing companies (OMCs).

The government in India was reviewing whether to approve sales of 100% biodiesel by producers to retail fuel stations, but OMCs were already approved to market blended biodiesel to railroads, bulk customers and retail stations, Aemetis said in a statement on 10 May.

The use of up to 100% biodiesel to blend or replace diesel fuel was approved in 2016 but, at the moment, producers were limited to sales directly to bulk customers, such as trucking companies and OMCs.

Aemetis chair and CEO Eric McAfee said the move would mark a “milestone” for the company’s 50M gallon/year biodiesel plant in India.

“The 80% reduction in particulate emissions provided by biodiesel is important for the improvement of air quality in India. The large capital investment in India by Aemetis … is aligned with the goals of Prime Minister Modi and Chief Minister Naidu in Andra Pradesh,” McAfee said.

Aemetis’ Kakinada, Andra Pradesh plant was constructed in 2008 and expanded to produce refined glycerine in 2013.

India’s total diesel market was approximately 25bn gallons, according to Aemetis, of which less than 250M gallons was biodiesel.

OMCs provided approximately 70% of fuel consumed in India and the diesel fuel market was projected to grow at a rate of more than 5% per year.