Bio-diesel producers eye exports

There may not be a market for bio-diesel in India, as yet, but some enterprising firms are investing in bio-diesel plants with an eye on the export market.

"At least four bio-diesel manufacturing plants, set to be commissioned in the next few weeks, will export the product to Europe," said an industry official who's setting up a plant in Andhra Pradesh.

Three plants are coming up in Andhra Pradesh and one in West Bengal, at a total investment of around Rs 600 crore. They will import feedstock from Indonesia and Malaysia, since there is almost no availability of feedstock (like jatropha and pongamia) in the country.

Europe has a huge demand for bio-diesel as the bio-diesel blending in diesel programme has been implemented in various countries.

"Manufacturers in India can hope to earn at least $200 per tonne more from exporting their product to Europe rather than sell it to the oil companies in India for blending with diesel," the official said.

While domestic diesel is sold at a subsidised price of Rs 34 per litre in Delhi, for instance, the government wanted to procure bio-diesel at Rs 26 per litre. Bio-diesel manufacturers say that anything below Rs 34 per litre is not viable.

"Until domestic pricing becomes realistic, we will feed the export market, which will be our primary market," said the official.

FEEDSTOCK CHALLENGE
Farmers in the country have been reluctant to cultivate jatropha as the period from planting to maturing of the seeds is around four years. Besides the gestation period of the crop, the farmers are also not seeing assured buyers for the crop.

"The export plants will break this chicken-and-egg situation. By getting our plants running, we will send a message to the farmers that they actually do have assured buyers for their jatropha," the official said.

As far as the government initiatives go, a National Mission of Bio-diesel was recommended by a committee under the Planning Commission in April 2003. However, such a mission is yet to be launched.

Meanwhile, a Bio-diesel Purchase Policy was formulated by the petroleum ministry on January 1, 2006, under which 20 purchase centres of the oil marketing companies were identified. No seller of bio-diesel has been registered at these centres so far.

Nevertheless, there is a plan for 10 per cent bio-fuel blending by 2017. Considering that around one tonne of bio-diesel is produced from one hectare of jatropha plantation, the country would need to have at least 7 million hectares of cultivation in order to replace 10 per cent of diesel.

"For that programme to be successful we would need a revolution in line with the French Revolution," the official said, adding that government policy has not helped take the programme off the ground at all.