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Rediff.com  » Business » IOC wants 50,000 acres for biofuel cultivation in UP

IOC wants 50,000 acres for biofuel cultivation in UP

Last updated on: January 05, 2010 02:24 IST

New government policy on biofuels may consider financial incentives.

Indian Oil Corporation, the country's biggest oil marketing company, is looking to acquire 50,000 hectares of wasteland in Uttar Pradesh for plantation of non-edible oilseeds, such as jatropha and karanjia, that are used for biodiesel production.

"We are in talks with the state government to acquire wasteland in the Lalitpur area near Jhansi. Plantation on this land will be done partly by IOC and partly through contract farming," said B M Bansal, director, business development, at IOC.

The company has already acquired 30,000 hectares in Chhattisgarh and another 2,000 hectares in Madhya Pradesh. "We have planted 1,000 hectares so far and aim to plant 10,000 hectares this year. Seeds from the plantations will start coming after three to four years," he added.

IOC has also entered into a MoU with Indian Railways for plantation of jatropha on railway land.

The Union Cabinet last month approved a national policy on biofuels that aims to implement 20 percent blending of biodiesel with diesel and ethanol with petrol (the current rule is 5 percent) by 2017. The new policy may consider financial incentives such as subsidies and grants for biofuel production. The policy also envisages setting up of a National Biofuel Fund and a National Biofuel Coordination Committee headed by the prime minister.

The government will also announce a minimum support price for such oil seeds. A minimum purchase price for purchase of bioethanol and biodiesel would also be announced with periodic revision.

The current rule on 5 percent ethanol blending with petrol is still not successful. Ethanol is being produced by sugar mills from molasses, a byproduct of sugar.

The research and development division of IOC has perfected a process to produce biodiesel from various non-edible oils, especially from jatropha and karanjia. The biodiesel produced has been tested for its properties and meets the stringent international standards. Extensive field trials have been conducted by IOC using five and 10 percent biodiesel blends in collaboration with Indian Railways and Haryana Roadways. A reduction of 10-15 percent in smoke density has been observed with the use of biodiesel blends.

Biofuels are derived from renewable bio-mass resources and help promote sustainable development. Beside supplementing conventional energy sources in meeting the rapidly increasing requirements for transportation fuels associated with high economic growth, as well as in meeting the energy needs of India's vast rural population.
Ajay Modi in New Delhi
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