National News About The Edible Oil Industry

Bio-Diesel : New Era Fuel

By

 Mr. B. V. Mehta, Executive Director, SEA

(This Paper prepared by Mr. B. V. Mehta, E.D., SEA was circulated as Background Paper for the benefit
of the Delegates at the Seminar on "Energy For Ever : Biofuels" organised by ASSOCHAM at  New Delhi
on 5th July, 2005)

Today in India, Petroleum import bill is likely to jump to US $25 billion dollars this fiscal from US$16.8 billion  in 2003-04 and Current yearly consumption of diesel oil in India is approximately 40 million tones forming about 40% of the total petroleum product consumption. With this scenario, there is urgent need to develop attractive fuel such as Bio-diesel in the country. The potential demand for Biodiesel at 20% blend is thus estimated at 13.38 million tonnes per annum by 2012. With strategic exploitation of the potential of bio-diesel the country will gradually reduce its dependence on huge imports of crude fossil oils and could even become self sufficient in twenty years.

Biodiesel is a methyl ester formed by trans-esterification of vegetable oils with methanol in the presence of a catalyst to give methyl ester and glycerol. It can be used in place of petroleum based diesel or can be mixed with it in any proportion, without any modifications to the engine. The use of biodiesel results in reduction of hydrocarbon emissions by 50% less than that measured for diesel fuel.

Biodiesel is produced by trans-esterification of many vegetable oils, including Pongamia and Jatropha. These oil trees are hardy trees that require minimum water and they grow in all soils.  Jatropha Curcas is Latin American in origin and thrives in arid and semi-arid tropical regions. Pongamia Pinnata is a native of the Western Ghats and is a hardy tree that grows all over the country, from the coastline to the hill slopes.

With the rising of the energy plantations to produce biodiesel, farmers can develop and utilize wastelands under agro-forestry model and improve income. Rural women labour will have more employment opportunities and soil fertility and conditions will improve. The plantation will further help in environmental amelioration. Biodiesel so produced can also meet the need of rural energy requirement.

BIODIESEL SOURCE

Pongamia  pinnata  and Jatropha curcus are the two main species suitable for biodiesel extraction. While the experience as yet is limited in both the species, Jatropha seems to be the most promising alternative.

Jatropha curcas plant shows promise for use as an oil crop for biodiesel. The Jatropha plant is latin American in origin and is closely related to the castor plant. It is a large shrub/small tree able to thrive in number of climatic zones in arid and semi-arid tropical regions of the world. An easy to establish perennial it can grow in areas of low rainfall of 250mm per year and is drought tolerant.

Pongamia pinnata is a native of the Western Ghats and grows in dry places far in the interior and up to an elevation of 1000 m. It is a hardy tree that mines water for its needs from 10 meter depths without competing with other crops. It grows from the coast line to the hill slopes and the cattles do not browse it.

Pongamia pinnata (Rainfed)

§         Does not compete with other crops

§         Coastline to the hill slopes

§         Cattles do not browse it

§         Contains 20-25% oil

§         Plantations yield over 50 years

§         Under rainfed conditions

§         Gestation period is five years

§         Spacing 5mx5m

§         Cost of plantation is Rs. 5000/- per acre

§         Income from sixth year is Rs. 10,000/- (Rainfed)

§         Income of Rs. 3000/- from intercrops (Rainfed)

Jatropha curcas (Irrigated)

§         Drought Tolerant

§         Poor degraded Soils

§         Not grazed by Animals

§         Responds well to Irrigation

§         Contains 25-30% oil

§         Plantations yield over 30 years

§         Gestation period is three years

§         Spacing 3mx3m

§         Cost of plantation is Rs. 11000/-  per acre

§         Income from fourth year is Rs. 10,000/- (Irrigated)

§         Income of Rs. 5000/- from intercrops (Irrigated)

Cultivation of Jatropha curcas

Cultivation can be taken up as contract farming or command area allotment system. Since the processor also has multiple risks, contract farming may not take-off. Allotment of command areas to processors (like Oil Palm) together with obligation for farm extension work is recommended.

Yield

The estimated yield for rainfed area is 700 kg – 1000 kg. and for irrigated area is 2.5 tonne - 3.5 tonne per acre.

Purchase Price of Seed

It is recommended that purchase price of seed to maximum of Rs. 5 per kg. for Jatropha curcas and Rs. 4 per kg. for Pongamia pinnata.

Advantages of Bio-diesel

• Bio-diesel is eco-friendly, bio-degradable, non-toxic and essentially free of sulphur, lead and aromatics.
• Domestically produced renewable source reducing country’s dependence on imported fuel thereby saving precious foreign exchange.
• No modification required in engine, fuel handling and delivery systems.
• It gives similar torque, horse power and mileage per gallon.
• It is a more safe & clean alternative to petroleum diesel & easy to store and handle.
• It cuts down on targeted emissions & hence lowers pollution in air. It reduces particulate matter by 31%, Carbon monoxide by 21% and total hydrocarbons by 47% along with sulphur & aromatics. It also reduces a major green house gas components in the atmosphere.
• Using 100% Bio-diesel (B100) will further reduce emissions & carcinogens.
• Due to its lubricating properties, engine parts function smoothly without any friction between the parts. Increases life of engine by checking corrosion factor.
• Its detergent properties keeps injection fuel pumps and filter clean. Extra heating of parts is also avoided.
• It has a very high Flash Point (300ºF) making it one of the safest of all alternative fuels.
• Due to its higher cetane number it gives higher combustion efficiency and smoother combustion.
• Job opportunities in urban and rural areas in India. It will also check soil erosion due to growing up of trees like Jatropha & Karanja in hill areas in near future.

Anticipated Risk Factors

Farmer’s Risk

While growing Jatropha and Pongamia  a promising opportunity for the farmers, because they are new crops, they face some basic risks too such as:

a.      Yield risk

b.      Price risk

c.      Liquidity risk (availability of the buyer)

d.      Loss of income during the gestation period

Processors’s Risk

Producing biodiesel is also an attractive opportunity for the processors too, but even they also face certain basic risks such as :

a.    Price risk

b.    Liquidity risk (only with respect to availability of raw material; liquidity may not be
 a   problem on the sales side)

c.    Cost of the gestation period (as the capacity will have to be built up ahead of gestation
period of raw material production)

Although there are significant benefits to the economy in general, since both the farmers and the processors face the risks as mentioned above, the Government will need to step in and help the nascent sector navigate until the markets evolve.

Government Support to Farmers

1. Government Incentives and Subsidy may be adopted as per the guidelines of NOVOD Board. Government to focus on wasteland utilization instead of using the cultivated lands and the programme should be taken up in all the districts, instead of rain shadow districts.  The programme be given equal importance to Jatropha and Pongamia, instead of concentrating on Jatropha alone and inter crops should be encouraged during the gestation period.

2. Government to provide support price scheme whenever the market prices are lower than Rs 5 per kg.

3. Instead of subsidy on drip irrigation, Government to provide support in the form of insurance premiums and interest subsidy as experts feel that drip irrigation is not required for Jatropha Plantation.

4. Further Government also to immediately issue a public notice explaining the risks, estimated yields and limitations of cultivation of Jatropha and Pongamia along with recommended package of practices.

Government Support to Processors

a.      a.    As the name suggests, Biodiesel be treated as renewable energy and processors be provided
         all  the concessions as applicable to the producers of renewable energy.

2. Government to recognise the bio-fuel industry as infrastructure sector, and exempt the industry from all taxes and duties for ten years.

c.       c.    Government to mandate blending of bio-fuels in diesel, to assure consistent demand.

4. The Government to encourage Indigenous Technology and Domestic Raw materials so that the full benefits of Bio-diesel Programme could be derived by all at reasonable cost.
5. Further Government to take steps to encourage research on bio-diesel in Agricultural Universities.

Bio-diesel Scenario in India: