Bio -diesel -India

While ethanol blending happened between now started now and resumed the bio-diesel blending never take off. The government focused on usage indigenous feed stock  such as Jatropha. Companies like RIL,Indian oil  ,Ruchi among others have acquired huge tracks of oil  for Jatropha  plantations which will yield crops in the next in the next two years but market yet to be developed. Moreover the national bio-diesel mission under which investments are being made for cultivation and research of Jatropha,has been dropped.

“The government has not come up with an effective policy on pricing. We cannot produce and sell RS 26.50 a litre since cost of palm acid  oil is high .” said Aklesh Saraf director Ruchi  bio-fuel. Ruchi Soya has a total 10,000 litres bio-diesel capacity  in Kakinada and produced some quantities of bio-diesel in 2008& 2009.With  cost of palm acid oil moving RS 25 to RS 40 ,the company says producing bio-diesel is not feasible. West Bengal and Andhra Pradesh  also imposed VAT on bio-diesel equaling that of diesel.

Calcutta based Emani group which has invested 150 crores in setting up a 1,00.000 ton bio-diesel unit at Haldia  started supplying bio-diesel to Calcutta Tramways early last year , however  petroleum ministry sent a circular to West Bengal  government should ensure that the using un authorized sale and possession of bio-diesel   to be stopped.

Unless government takes positive steps in respect pricing and marketing freedom the program cannot be successful

Emani bio-tech   director for S.K. Monda Chaturvedi says government should allow direct sale of bio-diesel to industrial consumers so that market is developed and existing capacities utilized. Retail sale should be done through oil marketing companies but since it now happening. The government should allow product like bio-diesel ,which has a high flash point and is safe to store and handle Chaturvedi said.

To set up bio-diesel plant should have your own Jatropha  plantations. 200 hectares land required to set up 1000 liters per day plant. Most of Jatropha oil is currently produced in India is used as a bio-kerosene and is used for lighting lamps and for stoves. It also used as a fuel additive and manufacture of bio-diesel.

There are large plants set up a capacity 3,00,000 litres per day  and medium sized plants with a capacity 30,000 litres per day in addition number of small plants. Practically all plants are running very low capacity due to lack of Jatropha oil. Logistics of seed collection is challenging. You  get seeds in once in a year. These will have to be stored thought the year.  This requires huge capacity of land and working capital which beyond capacity of small plants.

India -bio diesel policy finally announced on 23rd December 2009. Some points to be noted about government policy.

.. Plantations of Jatropha tree bearing non-edible oil by community cultivated in waste lands and forest lands and non forest land. Contract forming on private waste lands can be taken up through maximum support price mechanism. Plantations on agriculture land will be discouraged.

..Major  instrument of this policy is minimum support price (MSP)with periodical revision so as to ensure fair price to farmers. The details of MSP mechanism will be worked out carefully after consultations with government agencies and states.

--Employment provided in plantations of trees and shrubs  bearing non-edible oil seeds eligible to coverage under national rural employment guarantee program (NREGP).

..Minimum purchase price (MPP) for bio-diesel by oil marketing companies (OMC) will be linked to prevailing retail diesel price.

.. Financial incentives, including   subsidies and growth may be considered upon merit for new and second generation feed stocks, advanced technologies and conversion process, and production united based on new
And second generation  feed stocks.

… Bio-ethanol already enjoys concessional  excise duty 16 per cent and bio-diesel exempted from excise duty. No other central taxes are proposed to be levied on bio-diesel and bio-ethanol.

--- Import of free fatty acids (FFA) oil will not be permitted for production of bio-fuel.

India bio-diesel capacity estimated 6,00,000 tonnes  per year . Government likely fix a price of RS 34 per litre for purchase of bio-diesel (OMC) .

Bio diesel in India Failed take up  following reasons

Non -availability of oil : in India edible are short supply and country has to import 40 per cent requirement . Hence prices of edible oil higher than that of petroleum  diesel.  Due this edible oil are not viable and hence cheapest source is   non edible oil.

Indian culture use vegetable oil for lamps for lighting the homes and temples. When price vegetable oil shot up people turned a bit cheaper non-edible oil. This requirement of this sector is more than 15 million tonnes (bio-kerosene).

All over the world edible oil are used edible are used manufacture of bio-diesel. There are rapeseed in Europe ,Soya in America and palm in south east Asia.

Collection of non-edible oil seeds is manual lab our operation and large bio-diesel  plant it is a logistic night mare. Manpower is a challenging job for Jatropha seed collection. The price of seeds of Jatropha is currently  high because of most of it used for plantations purposes. As this price the cost of bio-diesel  3 times the pump petroleum diesel. Most edible oil used currently stable ( don’t get rancid). They don’t decompose much on storage. Hence these are preferred for transesterification   process. Non edible oil are not stable and need a pretreatment adding to cost of manufacture of bio-diesel .

The use of oil for lamps and cottage washing industry can use vegetable oils with high fuel fatty acid contents. Since price edible oil doubled many soap manufacturers in un organized sector are using these oil as these are cheaper. 

There are billion of other trees (Karanj  Mahua, neem )  all over India with oil bearing seeds . Traditionally  (Pongamia, Pinatta) is planted with high ways, railways and canals. Petroleum pump owner along with high ways should buy these oil pack in one litre pack sell them as fuel additive. Neem (Azardirachta Indicia ) is planted every where for purification of air. Mahua( Madhuca indica ) and sol  ( Shorea Robusta ) grow s widely in forests. Collection and processing mechanism for these seeds not yet developed. 

Government approved  policy on bio-fuel on 11th September  2008.The union  Cabinet in its meeting gave approval for national policy on bio-fuel prepared by New renewable energy. A proposal on national policy on bio-fuel and its implementation was prepared after wide consultations and inter ministerial deliberations.

The following are  important points to be noted.

1. Target 20 per cent of bio-fuels blending of bio-ethanol and bio-diesel   by 2017 .
2.Bio-fuel production to be taken up from non-edible seed waste produced from waste lands.
3. Focus would be on indigenous production of bio-diesel feed stock and import of free fatty  acid (FFA) based such oil palm etc would not be permitted.
4.Bio- diesel plantations on community , government / forest waste lands would encouraged while plantation on fertile irrigation lands would not be encouraged.
5.Minimum support price (MSP) with provision of periodic revision bio-diesel oil seeds could be announced to provide fair price to growers. The detail about MSP mechanism enshrined in national bio-fuel policy would be worked out carefully subsequently and  considered by bio-fuel steering committee.
6.Minimum purchase price (MPP) for purchase of bio-ethanol by OMCs would be based  actual cost of production and import price of  bio-ethanol and in-case of bio-diesel MPP should be linked prevailing retail diesel price.

The national bio-fuel policy envisages bio-fuel namely bio-diesel and bio-ethanol may be brought under ambit of “declared goods’ by government to ensure unrestricted movement of bio-fuel within outside states. It stated in the policy that no taxes and duties should be levied on bio-diesel.

OMCs has declared their own bio-diesel policy. They now are planning to offer RS 34 per litre which still less than current manufacture cost of bio-diesel.

Government has large tracks of waste land and forest land which can be offered for plantations of Jatropha.  Some states like Chhattisgarh there are lands already lease  out to Indian oil corporation.

UttarPradesh  Jatropha mission of U.P. was in joint venture of BPCL, Nandan Biometrics  and Shapoorji Pallanje  was supported by UttarPradesh .UttarPradesh has lot of saline waste lands in eastern U.P. are suitable for Jatropha plantations.

At present use of Jatropha/Pongamia oil is extracted by expeller being marketed  as fuel additive and saves 2 to 5 per cent when added petroleum fuel and also improvement the lubrication of engine and improve pick of engine.

Bio-diesel reduces  co2 emission  from atmosphere if government support fast growing business Jatropha ,castor or barren  and desert land which can  fix up 3 tons carbon dioxide per acre per year .

Following points are suggested for promotion of bio-diesel

-- Local state governments remove sales tax or reduce sales tax and encourage the bio-diesel industry.
--Bio -diesel manufacturers should be allowed to sell bio-diesel  directly to industrial consumers and while OMC to sell bio-diesel in retail.
-- A formula to be worked out such that bio-diesel price should sold little higher above petroleum diesel and government should reimburse addition burden to oil marketing companies since bio-diesel is fuel additive and it saves  economically for user by consuming less oil for same distance.
-- government should liberally issue bank loans for setting up bio-diesel plants with subsidies for encouraging bio-diesel industry.
--Government should review policy on bio-diesel once six months and implementing new schemes regularly in consultation with New Renewable energy department and oil marketing companies and bio-diesel manufacturers till consumers to attract bio-diesel on regular use as bio-fuel are environmentally friendly fuels.