Have we given a quiet burial to jatropha biofuel projects?
New Delhi 03-May-2012
The biofuel industry in India has not been forging ahead to the level of expectations and it is much behind the targets and schedules.
The recent decision of IndianOil to review its jatropha biofuel programme, which was launched with fanfare a few years back, is a big set back to the Indian efforts to find alternate source of fuel in tune with the country’s strength. It now appears that Indian jatropha biofuel industry has been given up for all practical purposes.The efforts to find appropriate biofuel in India, as substitute to petro fuel, has been largely focused on jatropha. Compared to the other tree borne oil species and other sources, jatropha is viewed as appropriate choice for the production of biofuel in current Indian scenario, due to its following features:
Proven ability to thrive in the variety of agro climate
Lower gestation period compared to other tree borne species
Low water requirement per plant per day during non-rainy days
Several corporations, petroleum companies and private companies have entered into memoranda of understanding with state governments to establish and promote jatropha plantations on government-owned wastelands or by contract farming with small and medium farmers. However, only a few states have been able to actively promote jatropha plantations despite government incentives.
Around 9.28 lakh hectares of wastelands are reported to have been cultivated with Jatropha plantation in several states. Most of the jatropha plants in the country are presently under growing stage. To produce jatropha biofuel from jatropha seeds, around 20 biodiesel plants of varying capacity ranging from 10,000 to 100,000 metric tonnes per year have been set up in India. However, the present commercial production of biodiesel from jatropha and non-edible oilseeds in India is at negligible level and most of the facilities are not in operation, due to poor economics and marketing constraints.
The petroleum ministry announced a bio-diesel purchase policy, which came into effect from January 1, 2006. The policy prescribed for the State-owned oil marketing companies to purchase the product of prescribed BIS specification from registered authorised suppliers through 20 purchase centres at a uniform delivered price of Rs 26.50 per litre (inclusive of all taxes).There has been negligible commercial sale of jatropha biodiesel across the biodiesel purchase centres set up by Government of India, as the government notified biodiesel purchase price of Rs 26.5 per litre is found to be below the estimated biodiesel finished production cost of around Rs 40 per litre and therefore the government notified price is not acceptable to the producers.Whatever little biodiesel produced is now sold to the unorganised sector (irrigation pumps, agricultural usage, diesel generators etc) and to experimental projects carried out by automobiles and transport companies.
Important players
The important industry players who have been involved in jatropha cultivation/production of jatropha biofuel include Emami Biotech, Bharat renewable Energy Ltd., (joint venture between BPCL, Nandan Biomatrix Ltd., Shapoorji Pallonji Co. Ltd.,), IndianOil – CREDA, Reliance Life Sciences, Indian Oil Ruchi Biofuel P Ltd., Tata Energy Research Institute and others. Department of Biotechnology, Government of India initiated a micro mission programme on production and demonstration of superior quality planting material of Jatropha. A few other agencies in the country have also undertaken research programmes to optimize the cultivation of jatropha and improve the oil extraction process from the seed etc.
Unfortunately, such research programmes are yet to give tangible results in spite of long years spent and considerable investment made. However, the Indian jatropha industry is now suffering due to the following issues:
Lack of feedstock supply (jatropha seeds)
Low yield of seeds from the present jatropha plantations
Uneconomic price offered by the oil companies for purchase of jatropha biofuel
Regulations by the Government of India on selling biodiesel, which are irksome to some extent
A government study revealed that the farmers rarely followed scientific methods of cultivation and maintenance practices for jatropha plantation, as a result of which the seed yields were low. The study has also revealed that the source of planting material was not known in many cases and proper record of the availability of seeds and seed oil content was not being maintained.
As more than 70 per cent of Indian fuel demand is presently met by import and the demand for fuel is steadily increasing, there is urgent need for the development and use of alternate fuel such as jatropha biofuel. Large tract of waste land is available for cultivation of energy crops.While the National Mission on biofuels was launched way back in 2003, there does not exist a formal policy that has been passed into law relating to biofuels. Blending of biofuel is yet to be implemented to the targeted level.
According a review conducted by the IndianOil, high costs, uncertain yield, less availability of wasteland are some of the reasons that are reported to have compelled the IndianOil to review its biofuel business strategy. However, IndianOil says that it is still committed to its ongoing jatropha plantation projects in Madhya Pradesh, Chhattisgarh, and Uttar Pradesh. A review of the Madhya Pradesh projects will be done at the end of 2013-14, while operations of the UP project will be reviewed soon.
The Indian jatropha biofuel industry is now at the cross roads. The future prospects for the industry would depend on factors like, the ability of the Indian R&D institutions to improve the yield of jatropha seeds in plantations, the government’s subsidy support and marketing support by oil companies to jatropha biofuel producers.However, lack of confidence of many industry players who have invested in jatropha plantations and in biodiesel production facilities are clearly evident. They have incurred huge losses and are suffering.
The decision of the IndianOil to review its biodiesel programme after spending so much of time and investment appears to be the last nail in the coffin of Indian jatropha bio diesel industry.
