Biofuels to energise the future; sees $8.5 mln global investments

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New Delhi, Feb 10 (UNI) With rising crude prices, the demand for biofuels is expected to rise further as it shapes the future strategies of the automobile industry with global investments of 8.5 millon dollars by manufacturers in 2007.

''With the cost of fossil-based fuel going north and depleting reserves, people are now looking at biofuels as an alternative,'' Winrock Vice President Somnath Bhattacharjee told UNI.

Winrock is a non-governmental NGO working in the areas of energy, climate change and mineral resource management.

With energy security, environment protection and climate change driving this development, the number of biofuel plants stood at more than 2,000 plants in 2007 globally, of which about 65 per cent were ethanol-based, while the rest were biodiesel and others.

China is also gearing up to play a dominant role in the biofuels market. The investments in China are estimated to be over 100 billion dollars per year for new plants. About 50 billion litres ethanol and 11 billion litres biodiesel were produced in 2007 with growth rate of over 15 per cent.

''The Indian biofuel industry also has a great potential. But due to lack of large-scale availability of feedstock, the Indian biodiesel market is trailing as against its global counterparts,'' Mr Bhattacharjee said.

The energy demand of the transportation sector is expected to grow by six to eight per cent annually during the 11th five-year plan period. The automotive vehicle population is growing by 12-15 per cent per annum and this will, in turn, impact the transport sector's energy demand.

Diesel and petrol contribute to 98 per cent of the energy consumed in the transport sector.

India's crude oil and petroleum products supplies are largely import-dependant. With oil import expenditure increasing by more than six times in the last 25 years due to escalation in global demand and prices, biofuels are likely to be pressed into service.

This alternate form of fuel will be critical in reducing the dependence on fossil fuels, achieving greater energy security, and reducing noxious emissions.

It is likely to take a while for biodiesel to be established as an effective biofuel, since Jatropha plantations in the country are still in the initial stages of development, he added.

''The absence of a clear Government policy on Jatropha oil production has inhibited several biofuel manufacturers from entering this market,'' Mr Bhattacharjee said.

''We believe apart from the needs of transportation and industrial segment, biofuels can act as a boon to rural India as well as in the form of electrification,'' Mr Bhattacharjee said.

Country's first village electrification project, based on straight jatropha oil was inaugurated by Rural Development Minister Raghuvansh Prasad Singh on February 7.

''The village has already planted the jatropha for future fuel requirements. For the current needs, the villagers have procured the seeds and they have taken care of the tariff setting and bill collection,'' Mr Bhattacharjee said.

The grid has three six HP and one 10 HP digisets.

The Indian bioethanol market is also grappling with availability issues, as ethanol is primarily manufactured from molasses-a by-product of sugar. ''Since sugarcane production is cyclical, the availability and cost of production of bioethanol will vary depending on sugarcane crop yields,'' he said.

The country could not implement its ethanol-blending programme during 2003-2004 due to a low sugarcane output and the second phase of this programme was announced in September 2006, after a recovery in sugarcane production.

Overall, the Government and industry have to show greater initiatives toward the Jatropha program to help biodiesel manufacturers save costs. It is considering initiatives in the form of mandates for biodiesel as well.

Also, further research is necessary to aid in the development of alternate feedstock and improvement in production efficiency, Mr Bhattacharjee said.

There are media reports that Tata Chemicals, which is one of the world's leading inorganic chemicals manufacturers, may get into the biofuel business on a large scale if its pilot project at Nanded, Maharashtra, is successful. The project entails an initial investment of Rs 50 crore and will be operational in 2008-09.

Mukesh Ambani-promoted Reliance Life Sciences is also said to be planning a major foray into biodiesel based on jatropha, for which it is setting up a pilot facility in Kakinada, Andhra Pradesh.

Global energy majors such as D1 Oils, a UK-based biofuel company, and British Petroleum (BP), through a joint venture D1-BP Fuel Crops, have also evinced interest in India's biofuel sector as the country steps up jatropha plantation.

D1-BP Fuel Crops has lined up 160 million dollars for expansion of jatropha plantation in the country, South-East Asia and southern Africa over the next five years.

It is anticipated that globally about one million hectares would cater to biofuels over the next four years, with an estimated 3,00,000 hectares contributing each year to biofuels in South East Asia, India and south African countries.

UNI SR PDT RN1828

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