The Hindu Business Line : Tapping plant power

WITH crude oil prices soaring and the movement for cleaner environment gathering pace, the world is looking at renewable sources of energy more seriously than ever before. Economies are now keen to secure energy independence by reducing carbon emissions from fossil fuels, while optimising the use of renewable, plant/crop-based sources of energy.

Recent developments in biofuel are helping change the global energy scenario, albeit slowly. Bio-ethanol and bio-diesel have emerged as two common biofuels. While bio-ethanol is a petrol additive, bio-diesel is a diesel alternative. Policies encouraging the use of biofuels made from grain, vegetable oil or biomass to replace part of the fossil fuels used in the transport sector are gaining importance.

Three goals

The initiatives generally target at least three goals: (1) to prevent environmental degradation by using cleaner fuel; (2) to reduce dependence on imported, finite fossil fuel supplies, by partially replacing them with renewable, possibly domestic, sources; and (3) to provide demand for crops to support producer incomes and rural economies.

Larger supplies of domestic fuels may also improve some countries' balance of payments situation.

Amid the current climate of concern over terrorism and the uncertainty over the stability of some oil-producing regions, the biofuel discussion has taken a national security dimension for some countries.

Energy experts are convinced that biofuel production under current technology and prices is somewhat costly vis-à-vis fossil fuel "at the pumps". Therefore, governments have chosen to encourage production through various mechanisms. These include direct subsidies, excise tax exemptions, automobile emission and fuel standards (regulations) and government purchasing requirements.

Commodity market impact

Without doubt, increases in biofuel production will have an impact on commodity markets. For example, wider ethanol use to replace petrol may generate greater demand for cereals or other crops, while substitution of diesel by bio-diesel will likely raise the demand for vegetable oils. For instance, the world consumes every day an estimated 82-83 million barrels of crude mineral oil and about 2.5 million barrels of vegetable oil. A 3 per cent blend can completely absorb all the world's vegetable oil.

Converting grain into ethanol also yields by-products that can substitute for feed inputs, that is, for feed-grains or oilseed meals.

In India, policymakers have been discussing the promotion of biofuels. Until two years ago, the move to use ethanol from molasses or sugarcane juice occupied the Government's attention. However, not much headway was made in commercialising the idea. There were gaps in cooperation among cane crushers, petroleum companies, petrol pumps and consumers. While the technical feasibility was established, no one was sure about consumer response. Also, the question of subsidy — quantum, beneficiaries and relative share — was unresolved. Issues such as non-uniform sales tax among States came in the way.

Worse, in 2003, sugarcane output in the country declined drastically due to weather aberrations in the major producing regions of Maharashtra and Uttar Pradesh. The story was repeated in 2004. From being an exporter of surplus sugar, Indian ran into a deficit and became an importer of raw sugar. Enthusiasm to promote bio-ethanol all but evaporated.

The Government has also been talking about promoting jatropha (Jatropha curcas, or Ratanjyot, in local parlance) a hardy plant that grows in the semi-arid tropics. The plant produces oil-bearing seeds from which 25-30 per cent oil can be extracted. Jatropha oil can be blended with diesel to make bio-diesel.

The cultivation of this plant can be taken up on a large scale in several parts of the country. Contract farming is the ideal method to promote this renewable source of oil. Brazil uses high levels of ethanol (22-24 per cent) in automobile fuel.

The use of vegetable oil in the European Union (mainly rapeseed oil) has been rising at 30 per cent a year. Last year, the EU used 2.5 million tonnes of vegetable oil. In the US, ethanol from corn (maize) and soyabean oil are used as additives.

What is the future?

Will India succeed in using renewable sources of energy on a significant scale any time soon? Seems unlikely on current reckoning.

Plants such as jatropha and pongamia (Pongamia pinnata) have a gestation period of three to five years to start yielding fruits or seeds from which oil can be extracted.

In sugarcane, there is a cyclical pattern (two-three years of high output followed by one-two years of decline) in cane production.

This has to be broken, and assured production is necessary. More important, serious policy initiatives are necessary to promote cultivation (protection of growers' interest), processing (protection of investment in processing facilities), marketing (petroleum companies and petrol pumps must fall in line), and consumption (quality standardisation, pricing).

While the Centre has to decide on subsidies and operationalise contract farming, the State governments must go all out to support the venture. Importantly, we need to produce genuine surpluses.

The Indian Railways owns large tracts of land across the country. These can be exploited by cultivating plants such as jatropha and pongamia, and even castor-seed. Castor oil can be used for the production of biodiesel after appropriate processing (transesterification). Currently, we export about two lakh tonnes of castor oil.

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