Running On Empty

This has led to a strange situation on the ground. On one hand, entrepreneurs are setting up transesterification plants, which will convert jatropha seeds into oil that can be blended with diesel or used neat to run cars, trains and gensets. But, in the absence of viable jatropha supplies and escalating crude oil prices, most entrepreneurs are now depending on other vegetable oil or waste oil to employ in their plants; some are even willing to import expensive palm oil from Malaysia. The Ministry of Petroleum is currently witness to hectic lobbying to cut down the import tariff for palm oil intended for biodiesel plants.

8220;We are three years late. By now we should have had full-fledged plantations and jatropha seeds available in the market,8217;8217; says S Shukla, member of the National Biofuel Mission and chairman of the Chhattisgarh Biofuel Development Authority. Barring a few states working on individual initiative, however, there is no concrete national plan despite the grand pronouncements on the wonder fuel.

None other than President A P J Abdul Kalam, one of the strongest votaries of biofuels, has publicly expressed his unhappiness at imported vegetable oils8212;rather than non-edible jatropha8212;being used in biodiesel blends. He was the first one to seek a comprehensive policy on biofuels, urging that 30 million hectares be used to grow 60 million tones of green fuel over five years.

Wonder Years

Several arguments were made for jatropha when the first committee on the development of biofuel, chaired by N D Tiwari, submitted its report in April 2003. One, it would reduce the massive crude oil import bill Rs 19,000 crore every year, two, it would put India8217;s vast wastelands 55 million hectares into use. And three, it would provide employment to millions of farmers.

But with plants running on imported vegetable oil instead of homegrown, low-maintenance jatropha, biodiesel is not turning out to be the wonder it was touted to be.

At the moment, most fuel plants are in their planning stage, with commercial production still a few months away. 8220;The plants will come up. And, in the absence of jatropha seeds, there will surely be leakage from the edible oil sector,8217;8217; warns Alok Adholyaya, director of biotechnology, The Energy Resources Institute TERI. 8220;This can only be a stop-gap arrangement. India not only has to grow jatropha but has to diversify its feedstock into sunflower, mahua, neem and rice bran to ride the biofuel wave,8217;8217; he adds.

That the policy is vital to this end goes without saying. Besides signifying the government8217;s seriousness on biofuel plans already announced, it will lay down the sales tax, excise duty and VAT and make the industry a 8216;thrust area8217;, thus ensuring fast-track clearances for the plants. With these configurations in place, it can expect some response to its purchase policy of Rs 25/kg of jatropha seeds, which has been a flop so far.

The policy will also decide the proportion of money to be disbursed from the Rs 1200-crore kitty cleared by the Planning Commission for plantation of jatropha saplings in wastelands and forests.

Without these vital statistics undecided, the high-powered Biodiesel Mission is a body without brains. It has met twice and dissolved twice, saying it has to wait for the policy.

In the Works

SO where is this elusive policy? Right now, it is with the Ministry of Non-Conventional Energy Sources, which is drafting a Cabinet note for circulation over the next few weeks. 8220;It should be finalised within three months,8221; says S N Chopra, special secretary at the ministry. 8220;It is natural for a government process for a comprehensive policy to take this long. Comments of various concerned ministries have to be sought and incorporated before a Cabinet note can be prepared.8221;

Therefore, while big-name politicians8212;including Agriculture Minister Sharad Pawar and Rural Development Minister Raghuvansh Prasad Singh8212;have made the right noises on biodiesel, only Rs 50 crore has been spent on jatropha plantations/ nurseries last year.

Some state governments, meanwhile, have been more proactive in wanting to use their wastelands. Chhattisgarh, for instance, has planted 80 million saplings of jatropha, covering 20,000 hectares in the first phase. It has also finalised the basis under which private companies can plant jatropha on government land.

Andhra Pradesh has set up an independent department to put 728,000 hectares of cultivable wasteland to productive use. The state government roadmap sees oil majors like Indian Oil Corporation and Reliance Industries bringing 4-5 million acres of land in seven or eight districts under jatropha.

Tamil Nadu, too, has a project to produce 100 per cent biodiesel from jatropha. While D1-Mohan Bio Oils Limited plans to bring one lakh hectares under jatropha cultivation in Tamil Nadu, Indian Overseas Bank has signed a deal with the Coimbatore-based Classic Jatropha Oil India Ltd for promoting cultivation of jatropha under contract farming.

For all the evident enthusiasm, however, there8217;s still a vital role that only the government can play. There are nearly 300 varieties of jatropha in India and research needs to be conducted to select the maximum-yield seeds.

There has been some research but not enough. TERI plans to demonstrate the economics of biofuels with its 8,000 hectares under jatropha in Andhra Pradesh which will attain 8216;seed-to-oil8217; capacity in the next four years. The University of Hohenheim has been developing diesel blends in collaboration with the Council for Scientific and Industrial Research CSIR, which have been tested on Mercedes Benz C-class cars.

But it could only be a matter of time before it burns away.

Playing the field

D1 Oil plc.

Newcastle-based firm has 10,000 hectares of jatropha in India, and plans to hit 1 lakh hectares in Tamil Nadu alone

Reliance Industries Ltd

200 acres of land at Kakinada in Andhra Pradesh, besides projects elsewhere

Emami

Plans Rs 15 billion bio-diesel plant at Haldia. To use palm oil as raw material initially

Godrej Agrovet

Plans to invest Rs 5 billion in bio-fuel plant cultivation in Gujarat and Mizoram. Will also set up processing plants in Gujarat

British Petroleum: 9.4 bn in TERI jatropha project

Vinod Khosla: Venture capitalist has invested Rs 117 crore in Praj Industries8217; biofuel project

Elsewhere8230;

Richard Branson: 350 million in ethanol to fly aircraft

US Government: 160million for pilot biofuel plant

Bill Gates: 84 million in Pacific Ethanol

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