On BIO-FUELS And ETHANOL Programmes In India

August 22, 2007

NEWS Bulletin from Indian Society For Sustainable Agriculture And Rural Development ************************************ 1. Energy advisor Sethi criticises govt’s BIO-FUEL policies 2. Cos ready for Jatropha foray 3. ‘Look beyond sugarcane for ETHANOL’ says the study 4. BIO-FUEL has great export scope : study 5. BPCL mulls contract farming of jatropha ---- Energy advisor Sethi criticises govt’s bio-fuel policies http://www.financialexpress.com/news/Energy-advisor-Sethi-criticises-govts-biofuel-policies/211759/0 ASHOK B SHARMAPosted online: Tuesday , August 21, 2007 at 2306 hrs IST New Delhi, Aug 21 : A prominent energy expert in the government has criticised the proposed direct input subsidy and market intervention for promotion of bio-fuels in the country. Principal energy advisor to the government Surya P Sethi in a recent paper - Sustainable Policy Framework for Bio-fuels -said "I with all the humility at my command, must state my fundamental objection to direct input subsidies and interventions by the government in markets through the proposed National Bio-Fuel

Board." The new and renewable energy ministry has suggested setting up of a National Bio-fuel Development Board (NBDB) and formulation of a national bio-fuel policy. The NBDB would determine the minimum support prices (MSPs) for bio-fuel crops like jatropha, karanja seeds and oil-bearing materials. It also suggested that the government render financial support to oil processors for a period of five years. On the other hand, the rural development ministry has demanded a gross budgetary support of Rs 1,340 crore (Rs 13,400 million) for five years to set up a national mission on bio-diesel and the launch of its first demonstration phase of jatropha cultivation in 4,00,000 hectares. Sethi’s remarks comes at a time when a group of ministers (GoM) headed by Union agriculture minister Sharad Pawar is deliberating on the demands made by two rival ministries. Sethi suggested that

bio-energy be pursued as a domestically available energy and chemical feedstock option. This objective must not be diluted by a desire to meet other legitimate objectives like raising rural income and employment, creating another cash crop based on MSP and promoting renewables. Even any climate dividend should be treated as a bonus. The government should not distort markets by mandating blending, restricting rights to direct marketing of bio-fuels, imposing ad-hoc and differential taxes and duties on inputs and restricting import or movement of bio-fuels. Any taxes that should be imposed should be on outputs rather than inputs. There should be only output-based incentives. R & D outlays should be allowed as a deduction from taxes due and this incentive should be made tradable, he said. According to Sethi "Green Energy" are not always green. The total lifecycle emission of 5 major pollutants (carbon dioxide, volatile organic compounds,

PM10, Sox and Nox) are higher with corn-based ethanol (E85) compared to gasoline. However in India sugarcane-based ethanol has an overall negative energy balance when all energy inputs are considered. Sweet sorghum based ethanol, bio-diesel, cellolosic ethanol, farm and animal waste and wood plantations come out progressively greener, he said. Sethi is against compromising food security at the expense of bio-fuel programme. ---- Cos ready for Jatropha foray http://www.financialexpress.com/news/Cos-ready-for-Jatropha-foray/211841/ ASHOK B

SHARMAPosted online: Wednesday, August 22, 2007 at 0039 hrs IST New Delhi, Aug 21 :The Indian companies have geared up to enter into contractual agreements with farmers for largescale plantation of country’s cheap bio-fuel crop, Jatropha Curcas. The Delhi-based diversified agro processor, Tinna Oils & Chemicals Ltd alongwith the US multinational ADM has set up a Greenfield bio-diesel production plant in Latur in Maharashtra to produce 50 tonne per day. The plant will be run on ADM’s patented CD process. “Tinna is working with farmer groups to promote Jatropha cultivation and have also taken up its own cultivation. We have set up a nursery to produce our own high yielding saplings. We have started Jatropha plantation in 250 acre land in Swami Ramanand Teerth Marthwada University, Nanded as a model plantation. Our aim is to cover 20,000 acre under Jatropha in the next four years. However, we are facing many

constraints,” said the Tinna director, Gaurav Sekhri. S Sriram of Tata Chemicals is, however of the view that futuristic option for production bio-fuels can be from lignocelluosic biomass which is available in abundance. The public sector, petroleum companies are also not lagging behind. “We are in talks with farmers in one of the north Indian states for plantation of Jatropha,” said the executive director of Bharat Petroleum Corporation (BPCL), AK Bansal. He, however, suggested that the government should allocate fund for cultivation of Jatropha, extraction of oil from seeds and blending of auto-fuels. “We are prepared for blending of petrol and diesel to the extent of 30% to 40%,” he said. Pointing out the constraints in Jatropha cultivation, Sekhri said :”There is no clear policy to handover wastelands for Jatropha cultivation. Although some states like Chhattisgarh and Gujarat have come have come up with a policy, but

no land has so far been allotted. State governments have miserably failed when they took up Jatropha cultivation on their own. There was no proper care the survival rate of plants was abysmally low. Haryana is one such example.”-------------------------------- ‘Look beyond sugarcane for ethanol’ says the study http://www.financialexpress.com/news/Look-beyond-sugarcane-for-ethanol/211358/ ASHOK B SHARMAPosted online: Sunday , August 19, 2007 at 2322 hrs IST New Delhi, Aug 19 India should consider producing ethanol from sources other than

sugarcane juice or molasses for meeting the needs of 10% doping of auto-fuels. Crops like maize and sweet sorghum should be used for production of ethanol. Researches should be undertaken for cost-effective production of ethanol from lignocellulose - composed of cellulose, hemi cellulose and lignin, said a study conducted by a multinational consultancy and market research firm, Frost & Sullivan. Referring to the cyclical nature of sugarcane production in the country, the study noted that three years back, when the cane production declined, then the industry was able to produce only around 15 million tonne sugar. Not only had the country to import 5 million tonne sugar but also 447 million litre ethanol from Brazil. However, 2006-07 turned out to be a bumper year for cane production, resulting in 27 million tonne sugar output and about 10.8 million tonne of molasses. This

10.8 million tonne molasses can produce about 2,700 million tonne ethanol, sufficient to meet the needs of 5% doping of auto-fuel. In the context, the study suggested that ethanol production directly from sugarcane juice rather than from ethanol would be cost-effective and profitable proposition for the industry. The study said that in the futuristic scenario of mandatory 10% doping of auto-fuel, ethanol demand cannot be met solely from production from sources like sugarcane juice or molasses. At present, the ethanol production capacity in the country is about 2.5 billion litre against a need for 0.6 billion litre for 5% mandatory blending of auto-fuels. But all the ethanol produced cannot be used for auto-fuel blending, as about 90% of the ethanol produced are used by breweries, distilleries and other industries and hence, other alternative sources for cost-effective ethanol production needs to be explored,

the study said----------------------------- Bio-fuel has great export scope : study http://www.financialexpress.com/news/Biofuel-has-great-export-scope-study/210593/ ASHOK B SHARMAPosted online: Thursday , August 16, 2007 at 2126 hrs IST New Delhi, Aug 15 : If India can produce sufficient bio-fuel it can avail of the opportunity for exports to the European markets at a premium price said a study conducted by a multinational consultancy and market research firm, Frost & Sullivan India Ltd The study said that the EU directive for 5.75% mandatory blending of auto-fuel would create a demand for about 12 million tonne bio-diesel in 2010. This demand may not be met as there would be a shortage of about 5.35 million tonne of raw material for production of bio-diesel and hence there may be an opportunity for export of bio-diesel to Europe. Pointing to the growing consumption and possible shortage of bio-diesel in US, the study said that that exports to that country may not be possible in view of the likely protectionist measures. The American Soybean Association has already called for imported bio-diesel to be exempted from federal tax benefits, it said. “Though Indian bio-diesel market is still at a nascent stage, not only typical agribusiness companies but a number of new players including energy companies, fuel and energy traders, private equity investors, automotive

companies and financial investors are taking equity shares in various bio-fuels ventures across the world in order to tap the rapidly growing bio-fuel market,” the study said The Frost & Sullivan study also advocated raising bio-fuel production particularly from low cost effective Jatropha plantation in marginal and wastelands. India has the potential to produce enough bio-fuels not only for meeting its domestic auto-fuel blending programme, but also for exports, it said. It also cautioned that if India does not avail of this present opportunity in the times to come Malaysian and Indonesian palm oil based bio-diesel would dominate Indian market. ---------- BPCL mulls contract farming of jatropha http://www.financialexpress.com/news/BPCL-mulls-contract-farming-of-jatropha/210239/ ASHOK B SHARMA Posted online: Monday , August 13, 2007 at 2344 hrs IST New Delhi, Aug 13 State-run Bharat Petroleum Corporation Ltd (BPCL) is planning to enter into contract farming agreements with farmers for cultivation of bio-fuel producing plant jatropha. “We are in touch with farmers in a northern state and would soon enter into a contract for cultivation of the plant,” BPCL executive director AK Bansal said a conference organised by consultancy firm Frost and Sullivan here on Monday . He said farmers, oil companies and government should work together for the success of the

programme that envisages doping of diesel with non-edible oil to reduce the country’s oil import bill. Further, doping of auto-fuel with bio-fuels could considerably reduce carbon emissions by private vehicles, he added. Bansal urged the government to allocate subsidy for cultivation of jatropha, extraction of oil from its seeds and blending the non-edible oil in diesel. Local bodies and village panchayats should also be involved in the programme, he said. About 30-40% of biofuel can be blended with petrol and diesel against the present 5% (particularly in case of ethanol). ---------

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