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Mar 06, 2006
Strategies for biodiesel

Biodiesel is at a cross-roads today. If one strayed from its appropriateness for local energy needs, chances are, the many grandiloquent biodiesel-farm scenarios that are being proposed will kill it.

In the West, biodiesel is produced mostly from field crops like rape-seed and soya. The debate on how much petroleum products -as fertilisers, equipment fuel etc- are consumed to produce their bio-equivalents is quite relevant. Will biodiesel enthusiasts in the West prevail if they are not subsidised by state policy?

Attempts to create distribution networks that match those of the petroleum companies will also fail. The petro industry built its empire when oil was practically free of cost and enough margins existed to invest in distribution assets. It makes little money sense to produce biodiesel in large acreages and then haul them to be made available all along highways.

D1 Oils plc of the UK leaps further afar. Its game-plan is nothing less than to harvest jatropha oil in India, haul it across to the UK, process it into biodiesel and market it globally. Until recently, it was constantly in the news signing deals with Indian partners, banks and farmers. It is a listed stock on the London Alternative Investment Market and not surprisingly investors appear to have started doing their sums: the stock has fallen by half in under 8 months.

D1 oils is talking of committing 140,000 hectares to jatropha in India. Many corporates are pondering it and new start-ups are being planned. There is everywhere a buzz about jatropha in India; it is the new mantra. ‘Jatropha is the wonder crop’, is the promotional pitch. ‘It resists droughts and produces plenty of oil that can be processed into biodiesel’.

There are sober voices questioning jatropha’s prospects in India.  Writing to a private list, Dr A D Karve, who knows a thing or two about rural India has said, “I have yet to meet a farmer who gets more than 1 ton/ha of jatropha nuts”. He says the soap industry has been buying non-edible oils at Rs 30 a kilo. Rural folk have gained an income from this market because “these oilseeds are only collected from wild plants and therefore the seed is available at a relatively low price”. Do note that jatropha is drought ‘resistant’, meaning it doesn’t die for lack of water; it does not mean it produces copiously under drought conditions.

Karve’s phrase ‘collected from wild plants’ is the key. If seeds are gathered from natural habitats and then milled for oil, biodiesel will be profitable. It’s moot however, if large investments in creating plantations will lead to profitable yields. They will bring up all the questions being asked of Western biodiesel farmers.

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