Five per cent non-edible oil from Jatropha, Pongamia etc (bio-diesel) will be mixed with diesel during trial runs and the percentage increased to 20 in phases, Petroleum Minister Mani Shankar Aiyar said unveiling the new bio-diesel purchase policy in New Delhi.

Automobile engines do not require any modification for using diesel doped with 20 per cent bio-diesel as fuel, he said.

"It is imperative that the bio-diesel offered for blending in diesel is of standard quality. Therefore, it would be necessary that only those bio-diesel manufacturers who get their samples approved and certified by the oil companies and get registered as authorised suppliers would be eligible for assured purchase of product," the new policy states.

With effect from January 1, 2006, the public sector oil companies - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp - would purchase, through its select purchase centres, bio-diesel that meets fuel quality standard prescribed by Bureau of Industrial Standards.

"The purchase centres have been identified," the policy said. These are located at Ghatkesar in Andhra Pradesh (also for Jharkhand and Orissa), Mandirhasaud in Chattisgarh, Bijwasan in Delhi, Kandla in Gujarat, Rewari in Haryana, Devanagunthi and Mangalore in Karntaka, Manmand, Borkhedi- Nagpur, Loni and Vashi in Maharashtra, Bhatinda in Punjab, Sanganier-Jaipur and Salawas in Rajasthan, Korrukupet Chennai, Narimanam and Karur in Tamil Nadu and Panki and Amousi-Lucknow in Uttar Pradesh.

"The oil marketing companies shall buy bio-diesel which meets the prescribed BIS standard, at a uniform price, as may be decided by the oil marketing companies from time to time, depending on market conditions," the new policy said.

"The initial purchase price of bio-diesel by the oil marketing companies will be Rs 25 per litre," it said.

Jatropha can be planted on degraded forest land, farmers' field boundaries to provide protective hedge, fallow land, on farmers' holdings as agro-forestry along with agricultural crops, public lands along railway tracks, highways, canals, community and government land in villages.

"Such plantation can also be done under the poverty alleviation programs of the government," the policy said.