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A newly planted jatropha plantation in April 2004 Tree Oils of India Ltd.

Jatropha seeds – seeds of prosperity?

Economic development in India has led to huge increases in energy demand, which in-turn has encouraged development of the Jatropha Cultivation and Biodiesel Production Systems

Communities in rural India need to develop alternative energy options that will be good for the environment and help promote sustainable livelihoods in the region, without exposing them to such adverse effects of modernization as cultural transformations, and allowing them to retain independence in the face of globalization.

The establishment of the Jatropha cultivation and local, community-based production of environmentally friendly biodiesel fuel can lead to income improvement in these regions. Establishment and ongoing improvement of a Jatropha System will benefit four main aspects of development and secure a sustainable way of life for village farmers and the land that supports them.

THE FOUR MAIN BENEFITS OF JATROPHA CULTIVATION:

(1) Renewable Energy

(2) Erosion Control and Soil Improvement

(3) Promotion of Women employment

(4) Poverty Reduction.

WHY AND HOW TO BUILD A BIODIESEL INDUSTRY:

Jatropha cultivation and biodiesel production should be a low-risk venture with attractive returns.

Private investors can help in funding Jatropha cultivation and biodiesel production development.

Jatropha refining is a challenge that will build the technical capacities of rural entrepreneurs.

There are new work opportunities in Jatropha cultivation and biodiesel production related sectors, and the industry can be grown in a manner that favors many prosperous independent farmers and farming communities.

A compendium of the latest biodiesel developments through 2005 in India:

Jatropha seedlings

Price Policy for BioDiesel: Public sector oil firms have announced a price of Indian Rupees 25 (US$ 0.56) per liter for procuring bio-diesel extracted from non-edible oilseeds for mixing in diesel. The program to sell diesel mixed with non-edible oil extracted from Jatropha Curcas and Pongamia Pinnata, which could cut India’s import dependence, but would take 4-5 years to launch on commercial scale. It will take time for adequate quantities of Jatropha Curcas and Pongamia Pinnata to be planted and oil extracted for mixing in diesel.

Bio-Diesel Credit Bank: The Petroleum Conservation Research Association (PCRA), launched a Bio-Diesel Credit Bank. It will co-ordinate activities relating to Carbon Credits. Several Field trials have been performed.

Indian Oil Corporation (IOC) placed an order of 450 kiloliters of bio-diesel in 2004, for field trials with the Indian Railways and State Roadways. IOC will be able to supplement 5% of diesel with bio-diesel in three years. The first phase of the project, by Daimler-Chrysler India, in 2003-04 saw production of the indigenous biodiesel and completion of road trials on two C-Class Mercedes-Benz cars. The cars, powered by pure (neat) Biodiesel, traversed the rugged terrain of the country in April-May, 2004, and clocked over 5,900 kilo meters under very hot and humid conditions.

The Council for Scientific and Industrial Research (CSIR) is now in talks with country’s biggest truck and bus maker Tata Motors and Indian Oil to take its biofuel project to the next stage, for testing its vehicles on bio-diesel developed from jatropha plant.

Jatropha flowers

It is likely there will be a clear-cut and updated Indian government bio-diesel policy by early 2006, after the Energy Policy Committee submits its report to the government by November 30, 2005. An in-principle approval is expected to be given by that time, which will be worked into a formal bio-fuel policy later. The report from the committee is expected to make specific proposals which will then be forwarded to the Energy Co-ordination Committee for final acceptance by the government.

The Indian government is likely to change the excise duty structure for biofuels in the next Budget to make their use attractive. Petroleum ministry officials said the excise duty on biodiesel and ethanol is likely to be made nil and states would be asked to have a favorable sales tax regime.

The Indian government plans to assist states to promote Jatropha cultivation for increasing bio-diesel production in the country under the National Rural Employment Guarantee Scheme, the Rajya Sabha was informed on 7 Dec 2005.

The Andhra Pradesh government has introduced a draft biodiesel policy to facilitate both investors and farmers to plant oil-bearing trees on 1.5 million acres in the next four years. Also, a risk fund of Indian Rupees 2.0 Billion is expected to be created, as a loan to the state government, to support small and marginal farmers having up to five acres of land. There is also a proposal for constituting a biodiesel board, which would be an autonomous board for integrated development of jatropha cultivation and bio-diesel oil in the state. The proposed board, having legal authority, will monitor the tripartite agreement signed between the stake holders, besides assisting, encouraging, and promoting jatropha cultivation, according to the officials involved in preparing the draft policy. Following the constitution of policy, the government is determined to promote contract farming for buyback of jatropha seeds. The minimum buy-back price will be fixed considering the different variables including the quality and quantity of the produce. A special department called the Rain Shadow Area Department has been created as a special purpose vehicle for planning, coordinating, monitoring and implementation of the biodiesel program. Two small units are already in commercial production.

Jatropha fruits

Aatmiya Biofuels Pvt Ltd, 68,G.I.D.C. Por Ramangamdi Taluka & District Vadodara, Gujarat- 391243, Phone No : 0265 2885009, Mobile No : 09879359010, has commercialized the production of biodiesel in Gujarat on 8th March 2005 and now producing 1000 liters/day. The company is promoted by Mr. Umakant Joshi, umakantjoshi@hotmail.com a Chemical Engineer who graduated with an M.S. from the University of Vadodara, then was a post-graduate in Chemical Engineering at Delaware University (USA), specializing in Bioenergy.

Gujarat Oelo Chem Limited (GOCL), a Panoli-based firm started on 12th of March 2005, producing bio-diesel from vegetable based feedstock. It released the first commercial consignment of bio-diesel to Indian Oil Corporation (IOC). Head Office : Gujarat Oleo Chem. Ltd., D-315, Crystal Plaza, Oshiwara Link Road, Andheri(W), Mumbai- 400053, Tel : 91-22-2673 3369 / 70 / 71, Fax: 91-22-2634 9195. E-mail: gocl@bom5.vsnl.net.in, Website: www.gujaratoleochem.com. Regd. Off & Works: Plot No. 631-639, GIDC, Panoli, 394 116, Tel : 91-2646-271 730 / 731 / 647, Fax : 91-2646-272195. A number of companies are planning to set up new units.

Kochi Refineries Ltd. (KRL) is setting up a pilot plant with a US firm to extract biodiesel from rubber seed oil. An R&D exercise, the company proposed to look at the feasibility of the project and would initially have a pilot plant set up with a daily capacity of 100 liters. The company has initiated studies into the availability of rubber seed oil from neighboring Tamil Nadu, especially from the Nagercoil belt.

Another Kochi-based company, TeamSustain Ltd., a division of US-based Dewcon Instruments Inc, is in talks with a US firm for setting up a biodiesel plant in Kochi.

Some of India’s ideal growing regions for jatropha

Pune-based Shirke Biohealthcare Pvt. Ltd., 11, Navrang Plaza, Tingre Nagar, Vishrantwadi, Airport Road, Pune, India, 411 015. Tel: 91-20-5623 3110, Cell : 91-9422010236, Fax : 91-20-2581 3993, jet_india@rediffmail.com, is setting up a refinery at Hinjewadi, with a capacity to process 5,000 liters biodiesel per day from Jatropha plant. The refinery will also produce 1 MW power with the oil cake, apart from natural gas which will be used to run the power plant.

Renewable energy company Bhoruka Power Corporation Ltd, has received a grant of 100,000 dollars from the US government to conduct a detailed feasibility report for a bio-diesel project in State of Karnataka. The study envisages use of Neem or Pongamia non-edible oilseeds for production of bio-diesel as well as power.

Southern Online Biotechnologies Limited, which is setting up a bio-diesel project in Andhra Pradesh, has signed memorandum of understanding with several government bodies and non-governmental organisations, for procuring raw material like Pongamia Pinnata (Karanja or Kanuga) and Jatropha seed. The oil extracted from this seed is used to produce bio-diesel. The company is setting up the bio-diesel project at an estimated cost of Indian Rupees 150 million at Choutuppal in Andhra Pradesh, with technology from a German company named Lurgi. The plant capacity is 30 tons per day or 90,000 tons per annum. It would require around 100 tons of seeds per day. The annual requirement of seeds is around 32,000 tons. As the current availability of seeds in the state is less than 4,000 tons, company will use other raw materials like acid oils, distilled fatty acids, animal fatty acids and non-edible vegetable oils like neem, rice bran, etc.

Jain Irrigation System Ltd., has plans to set up a Indian Rupees 480 million large-scale commercial bio-diesel plant, with a capacity of 150,000 tons per day in Chattisgarh by 2008. R&D work is being done at a 3.0 tons per day biodiesel pilot plant at Jalgaon, built at a cost of Indian Rupees 5.0 million. This will be followed by another biodiesel plant with a capacity of 10 tons per day at Jalgaon. The current concern in the biodiesel industry is finding adequate farmland to make sure the industry receives a regular supply of feedstock.

Nova Bio Fuels Pvt. Ltd., is setting up a Indian Rupees 200 million, biodiesel plant with a capacity of 30 tons per day in Panipat in 2006. Their plant would also supply glycerine to local pharma companies.

Natural Bioenergy Limited is setting up an integrated biodiesel facility in Andhra Pradesh. The 300 tons per day biodiesel plant will come up in the port town of Kakinada at an estimated cost of Indian Rupees 1.4 billion and would be a 100 percent export-oriented unit.

An modern biodiesel plant (cost: Indian Rupees 9.0 million) is coming up in Ganapathipalayam village, about 20 km away from Pollachi. KTK German Bio Energies India, commenced commercial production of biofuel in January 2006. The plant will use rubber seeds for extraction of biodiesel.

Biodiesel extracted from Pomgamia pinatta (Karanja) seeds was commercially launched in Pune in January 2006. The fuel has been produced and marketed by Pune-based Mint Biofuels, Though the plant initially had a capacity of 100 litres per day, it was scaled up to 400 litres per day. The company will set up a Indian Rupees 300 million plant at Chiplun, which will have a capacity of producing 5,000 tons of fuel per year. Plans are afoot to increase the capacity of the plant to 100,000 tons within a period of four years. Mint Biofuels is using karanja (Pongamia pinnata) as the feedstock based on its high yield per acre. They have found karanja starts yielding from the 4th or 5th year after plantation and yields more than 10 kg per tree from the 10th year onwards. The Wealth of India report on this plant says that the yield varies between 9-90 kg per tree, but trees giving more than 90 kg are found in natural habitat. Mint Biofuels are using rigorous selection procedures for selecting planting material. Since karanja is a tree growing to a height of 20-25 feet (even if it is unattended) it requires minimal aftercare and irrigation after it has established.

Vijayawada based Sagar Jatropha Oil Extractions Private Limited is setting up an Indian Rupees 100 million jatropha oil extraction unit at Gannavaram. The company has also experienced success with contract farming of the jatropha plant in the state. Jatropha oil is mixed with diesel to produce biodiesel.

British Petroleum on Feb. 2, 2006, declared that it will fund a $9.4 million project in India to see if biodiesel can be produced from a non-edible oil bearing crop. The project by The Energy and Resources Institute in the southern state of Andhra Pradesh will study the feasibility of producing biodiesel from the crop Jatropha Curcas. The 10-year project will cultivate around 8,000 hectares of wasteland with the crop and install equipment needed for seed crushing, oil extraction and processing, to produce 9 million liters of biodiesel per year. The project will also include an environmental and social impact assessment. TERI will run the project’s daily operations.

Alcohol: There is hope for petrol users dreading the prospect of paying more. With the government’s decision to go ahead with the ethanol blended petrol, the cost of petrol may actually go down in the coming months, even if the government decides, as looks likely, to hike petrol prices.

Last year, India’s central government directed 10 states and a few Union territories to go green by blending ethanol (the fuel mix being 95% petrol, 5% ethanol) with petrol. With the central government having finalised tenders for procuring ethanol, north Indian states will get the green fuel faster than others. At 5% cars do not require any design changes.

Rising crude prices: The rising crude oil prices will lead to higher usage of vegetable oils and fats as alternative fuel. Demand for bio-fuels will invariably increase, it is expected that the demand for bio-fuel from vegetable oils and fats will shoot up to 3 million tons a day.

Dr. APJ Abdul Kalam President of India

PRESIDENT PLANTS JATROPHA SAPLING IN RASHTRAPATI BHAVAN

The President of India, Dr. A.P.J. Abdul Kalam has planted Jatropha saplings in Rashtrapati Bhavan. To begin with 800 plants are being planted for educational purposes to promote the use of herbal plants for extracting oil from which biodiesel can be produced. This is being done in collaboration with G.B. Pant Agricultural University, Pantnagar and National Botanical Research Institute, Lucknow. A demonstration of Agricultural implements being operated by biodiesel was also made before the President. President of India Dr. A P J Abdul Kalam always emphasizes the potential of plantations of Jatropha Curcas. Every State Government is taking steps to promote Jatropha Curcas and Pomgamia Pinatta.

Chhattisgarh: The government has planted 80 million saplings of jatropha in 2005, a source of biofuel, as the state attempts to tap non-conventional energy sources. It has set a target of cultivating jatropha plantations in one million hectares in 2006, covering 20,000 hectares in the first phase. The government would work with NGOs for starting 350 jatropha nurseries, each spread over a maximum of 500 hectares, in 2005.

The state of Andhra Pradesh has taken the lead in encouraging Jatropha Plantations. The state government has set up a separate department for bringing into productive use the 728,000 hectare cultivable wasteland available for cultivation of Jatropha plantation for production of bio-diesel. The state government is drawing up a roadmap, which will see the involvement of oil majors like Indian Oil Corporation (IOC) and Reliance Industries, to make the state the biggest producer of bio-diesel. It is planning to bring between 4 and 5 million acres of land in seven to eight districts of the state under biodiesel plantations and ensure that micro-irrigation is used in a big way in these areas. This will change the ecology of the area.

In Tamil Nadu underutilised lands could turn into fertile farms and farmers can be assured of a price for their produce. There is a project to produce 100 per cent biodiesel from jatropha. D1-Mohan Bio Oils Limited (a joint venture of Mohan Breweries and Distilleries and U.K.based D1 Oils Plc) plans to bring one lakh hectares under jatropha cultivation in Tamil Nadu. Indian Overseas Bank signed an agreement with Coimbatore based Classic Jatropha Oil (India) Ltd for promoting cultivation of jatropha curcas in Tamil Nadu under contract farming. Classic Jatropha Oil, a subsidiary of Tirupur based major knitwear exporters, has been involved in developing the Jatropha cultivation for a long time.

India’s vehicular pollution is estimated to have increased eight times over the last two decades. This source alone is estimated to contribute about 70 per cent to the total air pollution. With 243.3 million tons of carbon released from the consumption and combustion of fossil fuels in 1999, India ranked fifth in the world behind the U.S., China, Russia and Japan. India’s contribution to world carbon emissions is expected to increase in the coming years due to the rapid pace of urbanisation, shift from non-commercial to commercial fuels, increased vehicular usage and continued use of older and more inefficient coal-fired power plants.

The same jatropha plantation only 14 months later Tree Oils of India Ltd.

D1 Oil Plc. : A UK producer of green fuel, Newcastle-based D1 Oil Plc, has 10,000 hectares of the crop planted in India and its target of 267,000 hectares by the end of 2006 is on track. Labland Biotech have tied up with British oil company D1 Oils to produce jatropha and trade in it. The company will encourage hundreds of farmers to cultivate the crop under an arrangement with the company.

A jatropha seed contains 31 to 37 per cent extractable oil. A jatropha plantation over 100,000 hectares is expected to yield 250,000-300,000 tons of crude jatropha oil per annum. It is estimated that an initial 100,000-hectare jatropha farm will yield revenues of $100 million per annum. Reliance is also in talks with Maharashtra, Gujarat, Andhra Pradesh and Rajasthan Governments, to get access to land for contract farming.

Godrej Agrovet Ltd is planning to invest over Indian Rupees 5.0 billion, for jatropha and palm oil cultivation in the states of Gujarat and Mizoram. The company would cultivate jatropha or palm oil according to the nature of the waste land in these states.

According to industry sources, Godrej Agrovet would invest Indian Rupees 2.5 billion for bio-fuel plant cultivation along with the palm oil processing and plant cultivation project in Gujarat while it would invest Indian Rupees 2.5 billion for both jatropha and palm oil cultivation in Mizoram. Godrej would be cultivating both jatropha and palm oil in an area over 10,000 acres in Mizoram as per the fertility of the land. The company is also in the process of setting up mills in Walia (Gujarat) at an estimated cost of $ 10 million.

Emami Ltd, one of the leading toiletries outfit in the country, is planning to enter into the farming of jatropha, a source of biodiesel. The company might float a joint venture outfit with a leading European company in the field of bio-diesel for the new business. Emami group is now talking to some companies in United States, UK and Austria for technical collaboration for the extraction of oil from jatropha. The project will be first of its kind in the Eastern India. The company will start farming of jatropha in Suri in West Bengal and Balasore in Orissa.

Biodiesel will have a pronounced impact on edible oil prices : Prices of both palm and soy oils will firm up in the coming months, with demand for biodiesel alone grabbing at least six million tons of oils despite the slower growth of the economy.

Crude Palm Oil futures have gone up from 1,300-1,500 ringgit to a new higher range of 1,400 to 1,600. As the period October to February advances, prices will creep towards the upper end of this range. Crude de-gummed soy oil would be in the range of $460-500 per ton free on board, while RBD palm olein will be in the $400-450 band and crude palm oil will be between $370-420 free on board.

Malaysia and Indonesia are the world’s largest producers and exporters of palm oil, while Brazil and Argentina are among the top soy oil producers. From mid-2006, the use of soy oil for biodiesel will have a pronounced impact on prices, and the total biodiesel capacity coming on stream by the end of 2006/07 will require 1.6 million tons of soya oil. Edible oil imports by India, the world’s leading buyer, in 2005/06 could remain flat at around 5.65 million tons, but imports of soy oil will go up at the expense of palm oil.

Satish Lele

About the Author: Satish Lele’s services seek to make Jatropha cultivation and biodiesel production a low-risk venture with attractive returns. He is helping to attract private investors in Jatropha cultivation and biodiesel production development, and promotes and recognizes endeavors to build the technical capacities of rural entrepreneurs.