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Rediff News  All News  » Business » Govt's biofuel dream fails to take off

Govt's biofuel dream fails to take off

April 27, 2010 09:48 IST

BiofuelIt was supposed to replace a fifth of India's diesel consumption by 2011 -- a projection that led the government to identify 4,00,000 square kms (98 million acres) of land where it could be grown.

'It' here being jatropha, a genus of around 175 succulent plants, shrubs and trees, touted as one of nature's answers to the global energy crisis.

The seed produces an oil substitute for diesel -- each seed containing 30-35 per cent oil and 65-70 per cent oil cake. A single hectare can yield 1,500-1,755 litres of jatropha oil, equivalent to 1,668 litres of biodiesel.

And so, many private companies, from Reliance Industries to many small and non-household names, plus public sector majors Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, made huge investments in jatropha and solvent extraction plants to produce bio-diesel.

But, nothing's so easy in nature.

Initially, the industry thought jatropha could be grown on wasteland, without irrigation.

They got it wrong, as good care is required for at least three years of the total plant life of 40-45 years, in which moderate irrigation is also required, says Preeti Kaur, an analyst with the Chhattisgarh Renewable Energy Development Agency.

And so, investments worth over $5 billion across the country are stuck because of failure of jatropha plantations.

The companies in question are now putting money in research and development to introduce high-quality drought-tolerant seeds in a bid to save their investments.

"The plans have almost failed and our investments are stuck due to the poor quality of jatropha seeds. Other than this, small land holdings is a major reason for failure of jatropha plantations," said Kaur.

It's not that jatropha is an unknown commodity.

The oil from jatropha curcas seeds is used to make biodiesel fuel in the Philippines and Brazil. Jatropha oil is also being promoted as an easily-grown biofuel crop in hundreds of projects across the globe.

In India, too, jatropha has been planted along the railway line between Mumbai and Delhi. The train fuel itself has 15-20 per cent biodiesel.

According to a study by Mumbai-based Jatropha Agro, one tree yields up to two-three kg jatropha seeds per year under normal conditions without drip irrigation.

One hectare can have 2,500 plants, constituting a total yield of 5,000 kg, or five tonnes.

That is not enough. At present, 76 leading research institutes are working overtime to introduce a new genotype of a higher yield.

The national biofuel policy had mooted that jatropha be grown on a big enough scale to produce 'green' fuel, enough to replace as much as 20 per cent of petrol and diesel consumption by 2017.

This would require bio-energy plantations over between 30 million and 40 million hectares, more than the total area under wheat today. The Centre has allocated Rs 5,000 crore (Rs 50 billion) to spur the cultivation of the plant.

For instance, petroleum ministry sources say BPCL has planted jatropha trees on vacant land at various depots is to launch a project to set up a biodiesel value chain in UP.

The project envisages planting biofuel on land belonging to panchayats, covering a million acres of wasteland over a period of time.

The UP government has accorded its approval and the process to identify the wasteland is on.

IOC has entered into a deal with the railways to study what can be done. It has taken up plantation on 62 hectares railway land at Surendranagar in Gujarat. About 1,50,000 saplings have been planted at the site.

IOC has also formed a venture with the Chhattisgarh government to produce 30,000 tonnes biodiesel per annum by planting jatropha over 30,000 hectares of revenue wasteland.

However, progress has been tardy: Of the 30,000 hectares, plantation has been done only on 626 hectares.

Similar plans were prepared for Madhya Pradesh, where the state government made an offer of 2,000 hectares of wasteland in Jhabua district.

However, IOC could get only 241 hectares during 2009. In Rajasthan, in 2008, the state government asked IOC to undertake plantation on 20,000 hectares of degraded forest land in Dungarpur. A feasibility study is underway.

"We are aware of the problems and are working with research institutes to develop high-yield seeds to make the project viable," said Dinesh Shahra, managing director of Ruchi Soya Industries, which plans to become India's largest biodiesel producer by 2020.

The company is looking at one-million-tonne biodiesel production by the end of the decade, of which about 600,000 tonnes will be jatropha oil.

Ruchi Soya has entered into a 50:50 partnership with IOC for planting jatropha in Uttar Pradesh.

The project will cost Rs 437 crore (Rs 4.37 billion), a part of which will be funded by the UP government under the National Rural Employment Guarantee Scheme scheme.

This will also enable the company claim carbon credits. However, the feasibility report is still being prepared.

Companies will succeed only if they invest on research and development, work in close relationship with farmers and provide for the latter's livelihood during the three gestation years.

Without such backing the effort will die, says Souparna Lahiri of the National Forum of Forest People and Forest Workers.

Dilip Kumar Jha & Sanjay Jog in Mumbai