Biofuels Digest Special Outlook Report on India
June 20, 2008
Biofuels Digest has prepared a special report from India, where a combination of state oil firms chasing down a proposed E10 mandate, as well as the importance of India as the center for global jatropha R&D, plus the sheer size of the Indian energy market, has made the country a cornerstone in the global biofuels market.
First, correspondent Joelle Brink files an overview of upcoming Indian state and federal elections, with energy policy at the forefront. Then, we offer a glimpse at the growth of jatropha research and cultivation with a look at Tree Oils India Limited. Finally, we look at the continuing efforts of the public and private sectors to effectively balance food and fuel in the production of ethanol from sugar cane.
Above: Jatropha platation in India (Tree Oils India R&D facility, Hyderabad)
India update
Reported by Joelle Brink, joelle.brink@gmail.com
“We are all preparing for the elections.”— Railway Minister Lalu Prasad
In India, six hotly contested state elections are taking place this year, leading up to the 2009 national elections. In all of them energy policy is fast emerging as one of the key political issues facing India. Second only to the controversial US/Indian civilian nuclear agreement is the debate about biofuels, and particularly ethanol. The ruling United Progressive Alliance government has so far been unable to secure enough ethanol to meet its existing 5% blending mandate, and failed again this year, largely due to lack of cooperation by the states, to secure enough to raise the mandate to 10%. In addition, the mainly Western controversy over the sustainability and environmental consequences of ethanol spread to India early this year.
But there are signs that the outlook for ethanol may soon improve. This week the Bihar state government approved a joint venture with Tamil Nadu-based Indian Gasohol Ltd (IGL) to build ten large scale commercial ethanol distilleries in northern and southern Bihar state. The ten plants will use sugar cane juice to produce ethanol and will have a combined output of 540 million metric tonnes. In addition, they will cogenerate 1450 megawatts of surplus power for rural electrification. The state government estimates that the project will create 50,000 direct and 400,000 indirect jobs. Indian Gasohol has also announced plans to begin producing corn ethanol in four districts of the state that are not suitable for sugar cane cultivation. Bihar State Cabinet Secretary Amir Subhanni told reporters that the Indian Gasohol project will primarily benefit the state’s farmers, who will earn 22,000 rupees (about US $500) per acre. Many Indian farm families now survive on $1-2/day, especially in Bihar, India’s poorest state.
Earlier, the three central government-owned oil companies—Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Indian Oil—had invested approximately $600 million in Brazil to buy/lease sugar cane plantations and related ethanol production facilities. Whether the Brazilian ethanol will be imported or sold abroad has yet to be determined. India, Brazil and South Africa, known as the G3 or Outreach 3, are partners in a mutual agreement to share technological and social initiatives.
Biodiesel focus: Tree Oils India
Tree Oils India Limited was established in 2003 to produce biodiesel from non-edible tree based oils (feedstocks). In order to facilitate commercial production of Tree Based Oils on large scale, TOIL established 120 Acres of R&D centre in India in 2003.
The plantation consists of: 60 acres of Pongamia, 40 acres of Jatropha, 5 acres of Moringa, 2 acres of Azadirachta, 1 acre of Sapindus, and 1 acre of Simarouba. TOIL also planted to conduct research: Madhuca, Candle Nut, Chinese Tallow, and Calophyllum.
Above: flowering Pongamia tree (Tree Oils India R&D facility, Hyderabad). Pongamia is native to India and South Asia, and cultivation is also in planning for Australia.
TOIL has also established nursery for Jatropha cuttings and Pongamia grafts and started Apiculture and Vermicompost activities. The focus was on developing an integrated Tree Based Oils Farming System to be adopted by the farmers under contract farming system in the next five years. TOIL has assisted in establishing Jatropha and Pongamia plantations for BioMassive, Sweden for their Jatropha plantation project in Tanzania; Global Green Energy, Sydney, Australia for their Jatropha plantation project in Ghana; Global Tree Oils, Singapore for their Jatropha plantation project in Thailand; Pacific Renewable Energy, Brisbane, Australia for their Pongamia research and plantation project in Australia; and Australian Biodiesel Group, Sydney, Australia for their Jatropha plantation project in Solomon Islands.
Sugarcane ethanol focus:
State-oil company Hindustan Petroleum Corporation has identified four sugar mills in Andhra Pradesh (out of 42 total in the state) as potential acquisitions as it attempts to secure sufficient ethanol production capacity to meet the country’s proposed E10 mandate. India will require 316 million gallons of ethanol to meet the E10 mandate. Only sugar mills are permitted to manufacture ethanol, under an order from the central government. Total ethanol production capacity from sugarcane in India is projected at 419 million gallons by the Indian Sugar Mills Association.
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