The government’s ambitious biofuel programme, marred by glitches since its launch in 2003, seems finally to be running aground. While the blending of diesel with biofuel derived from jatropha remained a non-starter right from the beginning, admixing petrol with ethanol – which took off after several hiccups – has failed to go beyond an admixture level of five per cent. Even this is getting harder to sustain. The 2009 National Policy on Biofuels enthusiastically imagined raising this proportion gradually to 20 per cent by 2017. These goals look certain to be missed. Most of the oil marketing companies, which committed substantial amounts to jatropha plantations and processing facilities, are reported to have abandoned these plans, finding them to be unviable, both technically and economically. Together, they had planned for 180,000 hectares of jatropha; barely a few thousand hectares have actually been planted so far. The survival rate of the plants, too, is poor.
Indeed, the problems faced in jatropha cultivation are many and apparently insurmountable. This is not surprising; the hopes expressed earlier, that jatropha was a hardy plant that would thrive on arid and wasteland without much aftercare, were ill-founded. Agricultural scientists were always unwilling to endorse such claims, since little was known about the agronomy or productivity of jatropha. Their misgivings have now been vindicated by the actual field experience of investors in jatropha. Even the many open-handed incentives offered by the Centre and state governments – tax concessions, subsidies, minimum support prices for jatropha seeds and free or easy access to land – have failed to prop up the production of jatropha-based biodiesel.
The economics of the combination of petrol and ethanol seems unpromising — even if the current face-off between the oil firms and ethanol producers (the sugar industry) over its pricing is amicably resolved. A recent study by the New Delhi-based National Centre for Agricultural Economics and Policy Research (NCAEPR) assessed the production cost of ethanol from molasses, a byproduct of sugar processing, at between Rs 24 and Rs 32 a litre at 2010 prices. It would, thus, make little sense for the sugar industry to continue to supply ethanol for mixing with petrol at the present price of Rs 27 a litre — especially because the other users of ethanol, notably the potable liquor industry, are willing to pay a higher price for it.
The long-term availability of ethanol is also an issue. Going by the NCAEPR reckoning, even a 10 per cent admixture of ethanol with petrol would require the area under sugarcane to be doubled. This is impractical, given constraints on the availability of land even for vital industrial and infrastructure projects. Besides, sugarcane is a high water-consuming crop and water is even scarcer than land. Thus, any programme to produce green fuel – jatropha oil or ethanol – which needs a commitment of land and water is ill-advised. The more practical approach is to look towards other sources of renewable energy, including solar, wind and hydro-energy, to strengthen India’s energy security.