The Hindu Business Line : What ails jatropha?

The ever-growing global demand for fossil fuels and the concomitant rise in prices have triggered an urgent search for ecologically sustainable alternative energy sources. Biodiesel from vegetable oils has emerged as a viable alternative, particularly non-edible vegetable oils among the developing economies.

The wonder crop

Jatropha curcas produces oil-bearing seeds within six months of planting and can last over 30 years without replacement. Its seeds contain 30 per cent or more oil, which can be easily expelled and extracted. The crude oil lends itself to transesterification and the resulting product is blendable with petroleum diesel in all proportions to produce biodiesel.

Besides reducing the consumption of fossil diesel and the resultant savings on its import, the use of biodiesel also ensures significant reduction of pollution from the burnt exhaust fumes from traditional diesel engines. Large-scale cultivation of new plantations of jatropha for biodiesel would qualify for carbon credits under the Kyoto Protocol. However, the reasons for the current lackadaisical approach to benefiting from jatropha are not far to seek. Principal among them is the lack of a clear governmental policy in promoting jatropha and biodiesel. Cultivation of the crop should be encouraged by making available vast tracts of government wasteland to serious and committed corporate entities. Subsidies to mitigate the low yields in the initial three years would be an incentive to take up cultivation of this crop on marginal land, which in turn would rejuvenate the soil, rendering them available for raising commercial crops.

The flip side

On the flip side, jatropha takes upwards of three years to yield commercially significant harvests. Being a new crop, it is grown in a limited area. Farmers are unwilling to take up jatropha cultivation, as there are no major biodiesel processing units; biodiesel units will come up only when adequate jatropha seeds are available for crushing. It is important to encourage investors to install biodiesel plants with multiple feedstock options that employ imported crude palm oil (CPO) for the first few years. Concurrently, farmers must be provided adequate incentives to take up jatropha cultivation through buy-back guarantees by the oil processors and other government subsidies.

CPO imported from Indonesia and Malaysia is viable for biodiesel production only if the government drops the huge import duty levied on it based on end-use. Another alternative is to permit the import of other types of palm oil that have high content of free fatty acids, which relegate them as vegetable oil not fit for edible purposes at nil import duty, for biodiesel production. Though these measures are imperative only in the short term, they are nonetheless critical if local jatropha-based biodiesel is to take-off in the country.

Taxes on the transesterified oil used for blending into diesel need clear enunciation by the Government. Likewise, a more attractive price for the transesterified oil above the current offer of Rs 25 per litre, commensurate with the price of diesel that it helps replace, would go a long way in encouraging more investments in this greenfield area.

(The author has been involved in agri-business for over 25 years. Feedback may be sent to greenthumb@vsnl.com)

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