Solvent extractors seek tax relief for jatropha processing

The solvent extractors, at a seminar organised by The Solvent Extractors' Association of India (SEAI), said a ten-year tax relief was needed to encourage units process jatropha for biodiesel.

In response to this, a government official suggested that it was very likely that the upcoming Union Budget will include biodiesel in that segment.

"Apart from tax relief, we also feel that the minimum support price (MSP) of jatropha must be lowered from Rs 5 per kg at present as the end cost is too high, at over Rs 27 per litre when the biodiesel cost is at Rs 25 per litre decided by the Centre," said O P Goenka, chairman of the SEAI's National Seminar on Technology Upgradation in Vegetable Oil Industry on Saturday.

The National Oilseeds and Vegetable Oils Development Board (Novod Board) director R S Kureel begged to differ with industry members.

"With the MSP of Rs 5 per kg for jatropha seed, the final cost of producing biodiesel including processing, comes to about Rs 20 per litre. Also, the meal that is produced can be used as a bio-fertiliser and if it is detoxified, it can be used as cattlefeed. Thus, the whole system is profitable for the processors," said Kureel.

The intoxication level of meal from jatropha seed is high and thus, can be used as a bio-fertiliser as it kills germs in the soil. Further, post-detoxification (using methanol as an input), meal can be converted into cattlefeed (along with glycerol as an output).

Among other measures to encourage solvent extractors, Goenka also called for increase in the biodiesel rate decided by the Centre, preference for meal produces from jatropha and assurance of seed supply at the units.

Solvent extractors in India are looking at biodiesel as a good opportunity as many have found crushing domestically produced oilseed as unviable in view of cheaper edible oil imports.

Considering big business opportunity in India, many international biodiesel technology companies have started coming here.

Austria-based Biodiesel International (BDI), the world market leader in multi-feedstock facilities for the production of biodiesel, has sent a representative to India following a rise in enquiries coming from India.

"The number of enquiries from India are now five in a week. India has the potential to produce biodiesel profitably - as there is political willingness as well as feedstock - and this is why processing units are looking at it as a good business opportunity," said Hermann Stockinger, a senior executive at BDI.

Stockinger, however, said the government should look at subsidy on the end-product rather than feedstock, like in Germany where the biodiesel produced from rapeseed is tax-free.

"This way, the market can be allowed to open up and business opportunity to develop even further," he said.