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June 04, 2009 | Jim Lane | Comments 2

D1 Oils, BP joint venture has “value of zero” as fundraising efforts falter

The following announcement ran this morning on axl.co.uk, regading D1 OIls:

4 June 2009

On 4 February 2009, D1 Oils and BP International (”BP”) announced their intention to market a substantial share in their joint venture for the global planting of Jatropha, D1-BP Fuel Crops Limited (”D1-BP Fuel Crops” or “the Joint Venture”).

It is now judged that the outcome of this fundraising process is uncertain, and the Board of D1 Oils anticipates that the Joint Venture will therefore have a carrying value of zero for accounting purposes in D1’s preliminary results for the year ended 31 December 2008.

Nevertheless, the board of D1 Oils strongly believes there remains value in the D1-BP Fuel Crops business, and D1 Oils and BP are entering discussions on its future that may result in the restructuring of the Joint Venture.

The Company will keep the market updated on further material developments.

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    1. It’s just a blip on the radar. At the beginning, every new biofuel crop goes through a period of trial and error. Other second generation feedstocks are also experiencing yield problems for the same reasons as Jatropha–failure to address the soil and water requirements of the plant, poor planting procedure, labor problems, and the greenrush investment mentality of the past five years.

      The difference with Jatropha biodiesel is that because of its unique combustion properties it has an important niche in the European high end diesel fuel market (Mercedes, BMW, Audi) and in the aviation fuel market. It’s the supply side that’s in trouble, not the demand.

      And even in the worst case, if your Jatropha biodiesel plantation doesn’t work out you’re not left with a field of wild grass, but with the king of medicinal trees, grown in back yards all over the tropical world because, among other things, it cures cancer.

    2. Jatropha Curcas Linn’s agricultural opportunity is being erroded by many companies jumping into planting the species while believing that this tree can produce high yields of oil seeds when established on marginal or degraded land areas, with no nutrient support and/or little water. The species certainly does have wonderful characteristics. When optimized, within a controlled environment, the claims for up to 5Mt of Oil per Ha can actually be arrived at, even exceeded.

      All the fuel we use world wide is delivered to us on a “least cost” basis. Governments apply tax in order to establish their share of revenue from commercial activity so we live with the illusion that fuel is really very expensive. Liquid bio fuels, by comparison with liquid fossil fuels, are substantantially more expensive to bring to market. The more so if we try to move them, semi-finished, to export locations far distant from the regions of primary production.

      Unlike most promoters of Jatropha Curcas Linn I have focused on the physical agricultural features that one may improve in order to increase yields. Certainly, selecting plants that show strong desirable characteristics is a good primary approach; however (in my opinion) much more than trying to improve genetic or phenotypic characteristics in order to get improved yields there was a requirement to investigate improving physical agricultural characteristics. These tend not to be seen as least cost solutions but, cost benefit analysis when set against improved harvests, speed of improvement and/or ability to deploy improvements rapidly favors innovation focused on the management of physically limiting circumstances.

      While I use the Kilimanjaro Region to illustrate a complete agriculture to industry template for the delivery of a Bio Jet Fuel as a drop in solution I have also investigated sub-tropical regions across Africa, Asia, India, South and Southern America as well as some island states for similar opportunity.

      Frequently we have been assessing areas of land that have been degraded or simply not brought into agricultural productivity because they are remote, semi-arid, poor quality soils or sands. Some times, and this is the low hanging fruit, we are able to appraise large land areas that have many commercially desirable characteristics (in terms of being available for Jatropha) proximity to community, urban conurbations and services, sub tropical sunlight conditions, nutrient availability and much more. However; in all circumstances, the most limiting of physical characteristics is water; rather than the genetic or phenotypic characteristic of the plant species.

      For quite some time my view of conducting relentless research into delivering an improved seed that would lead to establishing Jatropha stands that were either better adapted to various limitations or, in improved circumstances, likely to deliver more seeds with higher oil content has been rather jaundiced; and will remain so.

      By attending to physical limitations adopting tree management activities, introducing complimentary organisms to the seed coat – hence root systems, promoting improved pollination to fruit setting and protecting Jatropha Curcas trees from decease, excess wind impacts (heavy rains also impact negatively on harvest yields if this occurs at a critical time) while ensuring that there is a delivery of organic fertilizer; we discover that Jatropha Curcas yield potentials can exceed those of Palm. Under ideal, optimized, conditions Jatropha Curcas Linn will mature at by four years and from the fifth year will produce high yields of oil seed.

      The problem is that many seek to establish community or commercial plantations at “least cost” from planting out in semi-arid underutilized and/or degraded land areas, using the minimum amount of inputs; mechanical, physical or natural. This method would be least cost if there was a level of positive return. In fact it is “most cost” because there is zero return having expended considerable resources.

      The promotion of Jatropha Curcas Linn for the generation of bio fuels or commodities requires investment and the participation of poor people who happen to have access or be available to work on poor quality land in the sub tropics where Jatropha can thrive. One of the many glorifications of Jatropha Curcas Linn is that active participation by the rural poor will deliver sustainable incomes that add values to rural livelihoods assisting with the long term reduction of poverty which can lead to an improved quality of life for many.

      The benefits of GHG emission reductions, decentralized supplies of Bio Jet Fuel, stand-by electrical power as well as animal feed and/or fertilizers at the top end of this project opportunity should mean that a “least cost” solution affords sustainable primary activity as the foundation that any up-stream technology depends upon.

      This is why Centres of Excellence are required in all the regions where one would seek to grow Jatropha Curcas Linn and manage the yields up stream to a highly standards driven technology platform in order to successfully deliver first class quality products into a global industry.

      If, as many have been suggesting, millions of Ha’s of degraded or formally underutilized land areas are to be planted with Jatropha Curcas trees then at one and the same time is there an innovative way of introducing a simple water management system?

      The answer is yes!

      KBC-JCL
      BIO JET FUEL JAT-8
      Dr Clive Richardson
      sp_edz@yahoo.co.uk
      Global
      mobile: +447788518096
      http://sites.google.com/site/jclbjf/Climate-ChangeBio-Jet-Fuel-Jatropha-Curcas-Linn/kilimanjaro-biofuels-corporation

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