Financial mechanism for biodiesel plantation needed: Parikh

New Delhi, Jan 29 (UNI) India needs to set up a financial mechanism for funding the large-scale plantation of raw materials used to produce biodiesel.

''We need to set up such a mechanism that farmers can get financial support. They can't wait two to three years for plantations to bear fruits,'' Planning Commission Member Kirit S Parikh told reporters at the Biodiesel Summit here today.

Jatropha, one of the raw materials used for production of biodiesel, starts bearing fruits in the second or third year of its plantation and produces harvestable yield of about 1.5 to 2.5 kg per tree.

Dr Parikh said up to 250 tonnes of oil can be produced if 60-65 hectares of wasteland, which the country currently possesses, are brought under cultivation.

Scouting for the introduction of the financial mechanism, he said that such a facility would reduce India's dependence on the imported oil.

Currently, the country requires more than 100 million tonnes of oil, which is expected to reach between 350 to 500 million tonnes in the next 25 years.

The consumption of high-speed diesel during 2005-06 was around 40 million MMT.

''Even five per cent blend of biodiesel in petrol diesel would save a significant amount of foreign exchange outflow,'' Petroleum Minister Murli Deora said in a written statement.

The country is spending ''exponentially increasing amount'' of foreign exchange on crude oil import, year after year.

Petroleum Ministry has already announced 'Biodiesel Purchase Policy' in October, 2005, under which the biodiesel produced with BIS specifications would be purchased by the public sector oil companies.

Twenty different locations all over the country have been earmarked and notified for this purpose, Mr Deora said adding that the number of locations would be increased as the production of biodiesel in the country increases.

''We need to grow more and more biofuel crops such as jatropha and karanj,'' he said adding that the available wasteland could be tapped effectively for plantation of oil bearing trees.

UNI