The Hindu Business Line : Several unaddressed issues — Pricing, availability of jatropha oil

Jatropha cultivation at a wind farm near Udumalpet... Special incentive schemes and subsidy programmes are needed if the Government's bio-diesel policy is to work.

THE Government has taken a big step forward in implementing its bio-fuel plans, by asking the public sector oil companies to buy jatropha oil from the producers at Rs 25 a litre.

While this is a significant decision, there has been no comment or observation from the Government on several other aspects of the bio-fuel industry that call for urgent attention.

Before it is mixed with diesel, the raw jatropha vegetable oil has to be transesterified. The process of transesterification involves the production of glycerine as a co-product; 250 kg of glycerine is produced for every 1000 kg of transesterified oil.

The demand for glycerine in India is only around 50,000 tonnes per annum and the large production of transesterified oil would lead to a substantial production of glycerine. There is no way to sell thissurplus glycerine, which is already produced in adequate quantity, within the country.

In view of the huge capacity creation for bio-diesel in Europe and North America in recent times, glycerine is already posing a disposal problem elsewhere in the world.

There is an urgent need to develop new applications for glycerine. The government is silent on this issue and one hopes it is aware of this problem. It is possible to develop applications for glycerine, as in the manufacture of of certain products now made by the petroleum-based route.

But unless appropriate technology development efforts are initiated quickly, a solution cannot be found. A dynamic government initiative to work on glycerine-based research is vital to take the biodiesel programme forward.

The Government has also not explained the basis for fixing the price at Rs 25 per litre. Jatropha oil is produced from jatropha seeds and the farmers need to get at least Rs 4 per kg of jatropha seed to make the cultivating the plant worthwhile.

It is possible to produce transesterified oil at below Rs 25 per litre only if the price of the seed is less than Rs 2 per kg. At this price, jatropha cultivation would be a losing proposition for the farmers.

The cake produced after extracting oil from jatropha seed cannot be used as cattle-feed, as in other parts of the world where vegetable oil for biodiesel production is produced from edible crops such as rape seed and soya. Jatropha is a non-edible crop and the seeds are toxic.

The sale realisation for the cake is very important for optimising the cost of production of jatropha oil. As of now, there is no plan for use of the jatropha seed cake that is the residue after oil extraction.

One possible solution is to use the cake as biomass for production of power. But no worthwhile pilot plant studies have so far been made to assess the process parameters and the economics of operations for the biomass unit.

The economic and viable capacity for a plant producing transesterified oil from jatropha vegetable oil is 30,000 tonnes per annum, which would call for the investment of several crores of rupees. The transesterification project is a medium- or large-scale industry, not a small-scale operation.

While a number of large transesterification plants, of one million tonnes per annum, are operational abroad, none of them is based on jatropha oil but on crops such as soya or rapeseed.

Therefore, it must be realised that there is no commercial experience anywhere in the world in operating large-scale transesterification plants based on jatropha.

While the Government has announced the price of oil, where is the source for immediate supply in great volumes, when large-scale transesterification plants are yet to be built in the country?

The net result of this situation could be the import of huge volumes of transesterified oil in the coming years, which would leave the Indian jatropha industry hapless.

The Government has to ensure that the domestic industries are supported and benefited, and that the farmers are protected, when it implements the biodiesel policy.

This may call for special incentive schemes and subsidy programmes, But so far, there is no indication that the government has applied its mind towards such requirements.

(The author, a chemical engineer, is Director, Nandini Consultancy Centre, Chennai.)

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