What Is the Future of Bio-diesel in India?
by Bharat Jhunjhunwala (The Free Press Journal) Recently, Union Minister for Road Transport and Highways Nitin Gadkari inaugurated India’s first refinery plant in Pune that will produce fuel oil from rice and wheat straw, cotton stalk, cane trash and corn cobs.
The preferred raw material for biofuel in India is Jatropa. This crop is often cultivated in degraded lands but requires irrigation to produce the seeds that carry the oil. Gadkari has already done excellent work in producing power from municipal sewage and solid waste. It appears he wants to repeat that performance with biofuels. But there is a fundamental difference between biofuel crops like Jatropa and municipal sewage. Municipal sewage is a “waste” product. We have to spend money to treat it before reusing or discharging it in the rivers. On the other hand, biofuels are produced from agricultural wastes like wheat straw which have alternative uses like cattle feed; or crops like Jatropa that lay claim on our scarce land and water resources that can be used to produce grasses and forests.
Jatropa can grow on degraded lands. It produces a poisonous seed that yields biodiesel.
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One policy hurdle is that as per our current laws the producer cannot sell biodiesel directly to the consumers. The producer has to sell the biodiesel to the oil companies, who blend it with petroleum and sell in the market. Reportedly two biodiesel plants in Kolkata have closed down, the Calcutta Tram Company and Kolkata Police stopped buying this fuel directly from the producers. Manufacturers can produce biodiesel at a lower cost than the sale price of diesel but they are not able to do this because of the intermediation of the oil companies. The oil companies have to pay taxes on the biodiesel blended with diesel, which makes it uneconomic to produce. The Government must exempt biodiesel from these taxes. READ MORE
