Bio-Diesel From Field To Wheel

• India imports 70 percent of its oil requirement. In 2004 our crude oil import was in excess of Rs 1,20,000 crores. ($30 billion).
• About 70 percent of the total petroleum fuel consumed in India is diesel and 30 percent is petrol.
• Even if one-tenths of the import is substituted with bio-diesel, it is worth approximately Rs 12,000 crore ($3 billion) a year at 2004 oil prices.

On October 9, the Ministry of Petroleum and Natural Gas notified a Bio-diesel Purchase Policy, which provides for purchase of bio-diesel by oil marketing companies at the rate of Rs 25 per litre (inclusive of taxes/duties/transportation cost) with effect from January 1, 2006, at about 20 purchase centers in 12 states. The suppliers should have the capacity to supply minimum 10KL per tanker of bio-diesel meeting prescribed BIS specifications and should be registered with the state level coordinator of oil companies. The blending of bio-diesel at a maximum of 5 percent will be undertaken initially at these 20 centers depending on its
availability.

Commenting on the purchase policy, Mani Shankar Aiyar, minister for petroleum and natural gas, said, "In view of the growing demand of energy to sustain economic development, the new policy aims at setting up public-private-panchayati raj partnership to encourage bio-diesel production by jatropha cultivation on the wastelands."

He was speaking after inaugurating a conference on biofuels, "BioFuels 2012-Vision to Reality" organized by The Energy and Resource Institute (TERI) in New Delhi. He added that recently a MoU was signed among the 15 village panchayats of Faridabad and Mewat with a private company and the Indian Oil Corporation (IOC). Under the agreement, farmers will plant jatropha plants initially on 1,000 acres of land for the private company, which will later sell jatropha oil to the IOC at a minimum price of Rs 25 per litre.

Thus, the policy will enable farmers and bio-diesel producers get support price of Rs 25 per liter for jatropha oil and targets to bring one million hectares of land under Jatropha cultivation to supply blended diesel within the next few years.

Private industry initiatives

The role of private sector in this area has been limited till now. Automobile companies like Daimler-Chrysler, Tata Motors Ltd. (TML) have been conducting trial runs with bio-diesel, in addition to doing R&D on process technology, etc. The specifications of bio-diesel are such that it can be mixed with any diesel fuel and can operate in any compression ignition engine, i.e. diesel engine. Biodiesel can be blended in any ratio with petroleum diesel fuel. The worldwide trend is to initiate the program with 2-5 percent blending and increase it to 20 percent and thereafter 100 percent in a phased manner.

Dr Krishna Iyenger, manager, Engineering Research Centre, Tata Motors, said, "We are evaluating bio-diesel blend as a potential fuel and running trials on TML Staff-Bus fleet and on Indigo passenger car. In addition we are running joint trials with India Oil Corporation (R&D Centre) on car, LCV and engines. We are simultaneously studying the performance of the engine, emissions, specific fuel consumption, durability of fuel-system, engine, exhaust system, material compatibility and effects of fuel on vehicle operation. Our next step is the operation of TML Staff Buses on 20 percent bio-diesel blends and endurance trials on engines with 10 and 20 percent bio-diesel blends."

Similarly, DaimlerChrysler has been testing the bio-diesel produced by the Central Salt and Marine Chemical Research Institute (CSMCRI) in Bhavnagar for about a year. CSMCRI has developed a process for refining oil from Jatropha seeds at a reasonable cost without intensive use of energy. DaimlerChrysler is now testing Jatropha biodiesel in two Mercedes-Benz cars and one Viano van in the Himalayan terrain to ensure the consistency in results and also test run the vehicles for more mileage.

Some private companies have taken initiative in planting Jatropha and setting up bio-diesel production facilities. Southern Online BioTechnologies, a Hyderabad-based company is setting up 10,000 tons per year bio-diesel project in Chautupal, Nalgonda district, Andhra Pradesh. The foundation stone of the bio-diesel manufacturing facility was laid in early 2005 and the requisite technology support will be provided by Lurgi, Germany. The company is all set to conduct the trial runs in February 2006 and commercialize the biofuel by the first quarter of 2006. N Satish Kumar, managing director, Southern Online Biotechnologies said, "This is the first bio-diesel project to get a grant from GTZ, Federal Government of Germany because of the positive social, economic, and environmental benefits to local communities under bio-diesel segment. Also, the first bio-diesel project to get the host country approval from the Ministry of Environment, Government of India and the first bio-diesel project to go for validation/methodology approval under Gold Standard with the financial assistance from GTZ under terms of the Kyoto Protocol. We have obtained the letter of assurance for the sale of the bio-diesel from the Ministry of State for Rural Development, Government of India."

On the recent bio-diesel purchase policy announced by the government, Kumar said, "The Government of India should reconsider the price of the biodiesel by evaluating the present price of the seeds/seed oil, processing expenses and other industry expenditure."

A multinational company, which will soon set a base in India in the bio-diesel sector is the UK-based D1 Oils. This bio-diesel manufacturing company, will be setting up a 8,000 ton per annum capacity refinery in Chennai to produce bio-diesel in the country. The company is investing $2 million in India to set up the refinery, which is likely to be commissioned by 2007.

D1 Oils, which has formed a joint venture with Mohan Breweries and distilleries, has begun large-scale jatropha cultivation in Tamil Nadu, Andhra Pradesh and Chattisgarh. The company plans to have five million hectares of land under jatropha cultivation and to produce 2.7 metric tons of oil per hectare within five years. Earlier this year, D1 announced a partnership with Labland Biotech, a Mysore-based plant biotech firm, to produce some 100 million tissue culture-derived Jatropha plants. On its part, Labland Biotech has tied up with the Biotechnology Park, Lucknow for providing good-quality Jatropha seedlings for large-scale plantation with an assured buy-back arrangement for seeds. The company plans to bring an estimated 1.25 lakh acres in Karnataka under Jatropha in the next five years.

Besides, Ankleshwar-based Gujarat Oleo Chem has succeeded in commercializing the production of bio-diesel from vegetable based feedstock. The company has released the first commercial consignment of bio-diesel to IOC. Now IOC is conducting field trials with the Indian Railways and Haryana roadways. The Indian Railways had provided land in Surendranagar district of Gujarat for cultivation of jatropha seeds for this project. Gujarat Oleo Chem has drawn up an ambitious expansion plan to increase the production capacity of bio-diesel to 1 million tons per annum by 2007. The current level of production of bio-diesel is about 100 tons per day. The company is considering a joint venture for the proposed expansion for which it has received five to six proposals. The company has received encouraging response for bio-diesel both from within the country and outside, especially from Iran and the UK. Its product conforms to SPM specific D 6751, the international standard set by the US, and E DIN 51606, a European standard.

National Mission

The Government of India had set up a committee on development of bio-fuels in July 2002 under the chairmanship of Member, Planning Commission. The final report of the committee was presented to the Prime Minister's office in July 2003. The Ministry of Rural Development (MORD) was instituted as the nodal ministry for implementation of recommendations of the committee. The report recommended that the country must move progressively towards the use of bio-fuels, ethanol as substitute for petrol and bio-diesel as substitute for diesel. It has suggested launching a National Mission on bio-diesel based on Jatropha
plantation.

Present status

As the Nodal ministry, the MORD decided to get a Detailed Project Report (DPR) prepared on National Mission on bio-diesel and the Letter of Interest was issued to The Energy and Resource Institute (TERI), New Delhi in May 2004 for preparation of DPR.

TERI submitted draft DPR to MORD in September 2004 and thereafter, with inputs from series of discussions and views taken from various stakeholders, ministries and final DPR was submitted to MORD in February 2005. In turn the MORD submitted DPR/proposal to Planning Commission for in-principle approval. At present the proposal is being examined and clarifications awaited from MORD. Later the EFC/CCEA approvals will follow.

Bio-diesel program

The National Mission bio-diesel program consists of two phases. The first phase consists of demonstration projects spread on about 4 lakh hectares covering both forest and non-forest lands in various states across the country. The phase II of the mission will focus on uncovered areas during the 11th plan with a target to achieve 20 percent blending of bio-diesel with diesel.

The phase II of national mission is proposed to be people driven with the government playing the role of facilitator. It aims to expand the program to cover up to 11 million hectare in phase II during the 11th Plan. The implementation will be done in phased manner – The first step is toachieve 5 percent bio-diesel blend in diesel in nine states; then aim at 5 percent bio-diesel blend in all over the country. Later the bio-diesel blend percentage will be increased to 10 percent across the country and lastly work towards more than 10 percent bio-diesel blend in the entire country.

In order to achieve the set targets, the National Mission will look into nurseries development, plantation on forest and non-forest lands, seed collection and oil extraction centers, transesterification units, blending and marketing arrangements and research and development (R&D) studies to fill gaps in knowledge. In order to manage the entire program, there is a proposal to create a National Biodiesel Board.

To provide impetus to this industry, Dr R Mandal, advisor, Planning commission, said, "Classification of bio-diesel industry should be as per central revenue act in the category of 'Renewable Energy', 'GHG reduction', 'Pollution substitution'refinery. This classification will help biodiesel industry in faster clearance of projects, priority sector funding at low cost from financial institutions and will also help avail subsidies /concessions from the concerned departments of the state. In addition, this will also help in deciding sales tax/excise duty/customs duty on bio-diesel."

State government initiatives

Many states have formed nodal agencies for bio-diesel development and announced draft bio-diesel policies, for example Chhattisgarh, Uttaranchal, Rajasthan, Andhra Pradesh and Tamil Nadu. These states have initiated plantation programs. For instance, the Uttaranchal Bio-fuel Board has planted Jatropha in 10,000 hectares in 2005; in Chhattisgarh 8 crore saplings of Jatropha have been planted; while Andhra Pradesh plans to plant Jatropha on 16,000 ha and 3.3 crore Pongamia saplings in the state and Karnataka has planted 2 crore Pongamia saplings.

The states are also adopting different plant management approaches like Uttaranchal is using the joint forest management model on un-irrigated degraded forest lands; Chhattisgarh is using contract farming and joint forest management approach on waste fallow and agriculture land. Andhra Pradesh is planting Jatropha in agricultural land and Pongamia in the forests.

Now the road ahead in the area of biodiesel is to hasten the implementation of the biodiesel program and the formation of National Biodiesel Board along with nurturing the private initiatives in this sector.

Rolly Dureha