'Wonder plant' to fuel
India By Siddharth Srivastava
NEW DELHI - Runaway crude oil prices have
lent new urgency to India's quest for alternative
and renewable fuels, and biofuels, especially
biodiesel using the jatropha plant and, to a
lesser extent, ethanol, are increasingly being
seen as an appealing option.
Recently,
private sector giant Reliance Industries Limited
(RIL) set aside US$500 million to set up a
biodiesel refining plant and earmarked 200 acres
of land at Kakinada in Andhra Pradesh as a pilot
project to cultivate jatropha shrubs.
Jatropha, a tree originating in the
Western hemisphere (species name Jatropha
curcus), produces fruit which, though
inedible, contains a nut with a very high oil
content; once extracted, the oil
can be
used as a fuel without further refining. The RIL
facility, near the existing 33 million tonne per
annum crude oil refinery at Jamnagar, Gujarat, is
expected to be ready by 2008.
Last
month, venture capitalist Vinod Khosla set off an
exponential
rise in the share price of a mid-sized
Pune-based company, Praj Industries, by buying a
10% equity stake. Praj is a technology leader in
ethanol production.
According to Khosla,
ethanol as an alternative to petrol (gasoline)
would break even in the US at crude price levels
of $35 per barrel (prices are currently hovering
around $70 and many are predicting they will soon
breach $100). Khosla notes that "E85" (a blend
containing 85% ethanol and 15% gasoline) is far
less polluting than gasoline.
In February,
global energy major British Petroleum (BP)
announced that it would invest $9.4 million in
biodiesel production in India. The 10-year project
aims to cultivate 8,000 hectares of wasteland with
jatropha to produce 9 million liters of biodiesel
every year.
Allaying fears that the
cultivation could affect farm produce, BP vice
president Phil New said, "Because Jatropha is
drought-resistant and can grow on marginal land,
it offers the possibility of an economically,
socially and environmentally sustainable
contribution to energy security challenges in
India."
The Indian government has
identified 39 million hectares (almost 100 million
acres) of land suitable for growing jatropha,
cheerily termed "the wonder plant" by Rajasthan
state's "Center of Excellence for Jatropha
Biodiesel Promotion".
The government
claims that, if fully exploited, the said 100
million acres could produce biodiesel that can
substitute for 20% of the country's diesel
consumption in five years, far higher than the
present 2%. Jatropha cultivation is part of a $300
million biodiesel program, in which plant oils are
blended with regular diesel.
Indian
Railways, one of the biggest diesel guzzlers, has
planted jatropha on thousands of acres of land
along rail tracks. The railway is preparing a
"bio-locomotive" to run on August 10,
International Biodiesel Day.
India is not
alone in tapping biodiesel's potential. Across the
world, there is a search for crops that can help
reduce dependence on imported oil. Palm oil, sugar
cane, coconuts, castor oil and even cow dung have
been explored as alternatives. Ethanol (typically
mixed with gasoline) is distilled mostly from corn
in the United States and sugarcane in Brazil and
Asia. Biodiesel comes mostly from rape seed in
Europe, vegetable oil in the US and oil palm,
coconut oil or jatropha oil in Asia.
In
the US, a $40 million biodiesel refinery, probably
the country's largest, will be built in Grays
Harbor County, in western Washington state.
Seattle-based Imperium Renewables is aiming to
open the facility by the end of next year and
produce as much as 100 million gallons of the
plant-based fuel annually - a big boost to the
incipient industry, now struggling to break even.
The investment followed the Energy Freedom
legislation passed in the state earlier this year,
which made it mandatory that 2% of all diesel used
in Washington be biodiesel by 2008. The US
Department of Agriculture says biodiesel can
reduce carbon emissions by 78%.
Both India
and China are seriously looking at Brazil's
success with alcool, as ethanol is called
in Portuguese. Brazil is estimated to save $50
billion per annum in terms of petroleum imports.
India, like Brazil, has large tracts of land under
cane cultivation. Both the Chinese and Indian
governments are extending tax incentives to make
biofuels economically feasible. China has set
itself a goal of generating 30 gigawatts (GW) of
installed power generation capacity using
renewable sources within the next 15 years.
Europe has dominated the biodiesel
industry to date, accounting for 90% of global
production. The EU produced 2.4 million tons of
biofuels in 2004, amounting to 0.8% of EU gasoline
and diesel consumption. Of this, ethanol made up
0.5 million tons and biodiesel 1.9 million tons.
The EU has ruled that all fuels should contain
5.75% biofuels by 2010.
Experts, however,
warn that over-enthusiasm about biofuel
cultivation could affect agricultural production
for human consumption and result in famines in
areas of scarcity and drought. The balance needs
to be right, especially for a country such as
India which has shown anemic increases lately in
agricultural production and productivity.
But there is no doubt that fast-growing
countries such as India and China need to act
fast, given spiraling domestic fuel demands. After
China, India has the fastest-growing motor vehicle
industry in the world, currently totaling over 8
million vehicles sold per year (including
passenger cars, utility vehicles, commercial
trucks, and two- and three-wheeled vehicles).
Booz-Allen Hamilton and McKinsey has
estimated that the Indian domestic passenger car
market of 1 million (70% of which are currently
small cars) will double by 2010 and cross 3.5
million by 2015.
In China and India, with
populations of 1.3 billion and 1.1 billion,
respectively, fewer than 10 in 1,000 driving-age
inhabitants currently own a car. Yet purchasing
power in these two countries continues to rise, as
shown by projected 2006-2020 GDP annual growth
forecasts of 5.5% for India and 5.2% for China.
The developments related to biodiesel are
concomitant with efforts to develop other
renewable energy sources. There have been recent
big-ticket announcements by the Indian wind-energy
firm Suzlon Energy, which said it planned to
invest $60 million in a factory in the eastern
Chinese port city of Tianjin. The company has also
acquired Belgium's Hansen Transmissions
International NV, one of the largest wind energy
and industrial gearbox manufacturers in the world,
for $500 million.
India's Planning
Commission, in its draft integrated energy policy,
has estimated power generation capacity
requirement reaching 627,088 MW in the year 2031,
up from the present capacity of 130,000 MW. It is
estimated that wind, small hydroelectric and
biomass sources have the potential to generate
80,000 MW of this.
Siddharth
Srivastava is a New Delhi-based
journalist.
(Copyright 2006 Asia Times
Online Ltd. All rights reserved. Please contact us
about sales, syndication and republishing
.)
rise in the share price of a mid-sized
Pune-based company, Praj Industries, by buying a
10% equity stake. Praj is a technology leader in
ethanol production. 
