Monday, July 2, 2007

Commercial Fuel farming still unfeasable


Saikat Neogi, Hindustan Times
Email Author
July 02, 2007
First Published: 02:54 IST(2/7/2007)
Last Updated: 02:56 IST(2/7/2007)

Having acknowleged the benefits of biofuels in the seventies, India is
yet to formulate a comprehensive policy to promote this non-fossil fuel.
As a result, UNCTAD estimates that India loses Rs 20,000 crore of
foreign exchange annually due to a spiralling oil import bill.

India's biofuel progress has been like going one step forward and two
steps backward. In 2003, as a part of the Planning Commission's Biofuel
Mission, the Ministry of Petroleum and Natural Gas made it mandatory to
sell five per cent ethanol-blended petrol in nine states. Though the
initiative started off well, two successive sugarcane crop failures had
put the initiative on the backburner. But last year's record cane
production has pushed the ministry to restore its target, with plans to
double it by 2010.

Most of India's ethanol is made from molasses, a byproduct of the sugar
industry. This is a less profitable process as compared to Brazil's,
which produces ethanol directly from sugarcane feedstocks. Though Indian
sugar mills have shown interest in producing ethanol from sugarcane, Dr
P P Bhojvaid, senior fellow at The Energy and Resources Institute, says
like Brazil, the government should provide financial assistance to these

About 80 per cent vehicles in India run on diesel and its demand is five
times higher than petrol. The Biofuel Mission has set an ambitious
target to meet 20 per cent of the country's diesel requirements from
biodiesel by 2012. And since the demand for edible vegetable oil exceeds
supply, the government has decided to use non-edible oil seeds from
plants like jatropha and pongamia for the feedstock.

It is estimated that a 20 per cent biodiesel blend will require 110 lakh
hectares of jatropha plantation. Since there are only 4 lakh hectares
under cultivation currently, the country's ability to meet its ambitious
target is quite questionable. Satish Lele, Member of FICCI core group on
biofuels and author of Biodiesel from Jatropha, says that since
commercial production of biodiesel has not yet taken off in the country,
it will be difficult to produce biodiesel for 5 per cent blending with
diesel now, let alone 20 per cent by the end of 2012.

One of the main problems in initiating large-scale jatropha cultivation
is that of feasibility. For example, sugarcane plantation, on an
average, fetches the farmer Rs 70,000 per hectare. In comparison, a
jatropha farmer gets up to Rs 15,000 per hectare.

Farmers are further discouraged by the absence of support prices or
long-term purchase contracts. Joseph B Gonsalves, biofuel consultant
with UNCTAD says that the Centre needs to sponsor confidence-building
measures, establish a minimum support price for jatropha oilseeds, and
assure timely payments to farmers. Public-private partnership can help
set up infrastructure for seed collection, oil extraction, and blending.

The national programme on biodiesel is based on the availability of
wastelands for producing jatropha. Since wasteland use and development
comes under six different ministries and a plethora of laws, the
Planning Commission had suggested a comprehensive biofuel policy to cut
the red tape.

The commercial viability of biofuels will depend on future oil prices
and technological breakthroughs. To boost the share of fuel mix and
achieve maximum yield, the policy needs to encompass the entire economic
chain right from research and farming to production and marketing.

Check for earlier Pacific Biofuel posts:

No comments: