10-09-2014, 09:54 AM
SCOPE OF BIODIESEL IN INDIA
SCOPE OF BIODIESEL.pdf (Size: 122.23 KB / Downloads: 313)
ABSTRACT
Biodiesel is a hot topic internationally as well as in India. Since the beginning of the 2000s,
the Government of India and, to a greater extent, various state governments have promoted
the production and consumption of biodiesel. Proponents of biodiesel point to the potential of
oilseeds as a substitute for fossil fuels, underlining their ability to reduce India’s energy
dependency and bring down greenhouse gas emissions. They also highlight opportunities for
greening the countryside and creating rural employment and income. This report shows that
biodiesel production in India is a special case which has much more positive development
effects than biodiesel production elsewhere. India is different because there is far-reaching
consensus there that biodiesel production will only be promoted on the basis of non-edible oil
seeds on marginal lands. Hence the risks of driving up prices for edible oil or crowding out
food production are relatively low. In addition, cultivating tree-borne oilseeds on degraded
lands stabilizes soils and creates carbon sinks, and production requires low inputs, which
serves to further improve the carbon balance. Even within India, however, the development
effects of the biodiesel industry vary greatly, depending on how the value chain is organized.
INTRODUCTION
This study identifies no less than 13 different ways of organizing the value chain, ranging
from cultivation on large plantations to contract farming arrangements, farm-based
production for rural electrification, and social forestry projects. Between these different types
of value chains, there are marked differences in terms of income generation, participation and
empowerment, food security, natural resources management and climate change, and
economic sustainability.
BIODIESEL IN THE GLOBAL CONTEXT
From 1971 to 2005, the world’s final consumption of oil rose from about 2000 million
tonnes/year to almost 3500 million tonnes/year. correspondingly, the price for crude oil on
the world market went up from 20 US$/barrel in the 1990s to over 145 US$/barrel in July
2008. Although prices fell below 100 US$/barrel again in October, when this study was
finalized, most analysts expect higher oil prices in the long term. In view of rising prices and
the environmental – and primarily climate-change – concerns that result from increased
global energy consumption, countries all over the world have launched biofuel programmes
to develop alternatives to conventional fuels. While the share of biofuels in overall global
fuel consumption was still marginal in 2006 (less than 1 %), the growth rate of biofuel
production is enormous. Between 2000 and 2005, worldwide production of bioethanol rose
by 95 % and biodiesel output even grew by 295 %. 1 Bioethanol and biodiesel need to be
distinguished when we speak of liquid biofuels.2 Bioethanol is derived from starch and sugar,
making maize and sugar cane – or the waste products produced during their processing – the
most important feedstock used for its production. In contrast, biodiesel is obtained from any
kind of vegetable oil like rapeseed, soybean, palm or sunflower oil, for example. With 28.3
billion litres, global production of ethanol is about six times as high as biodiesel production
and therefore more relevant on the global scale. Demand for biofuel is rising especially due to
mandatory blending requirements adopted by large energy consumer countries.
BIODIESEL IN INDIA
The Indian biodiesel sector is different from biofuel activities in many other countries of the
world because it is based on the use of non-edible oils derived from oil-bearing trees that can
grow on less fertile land. This renders it more positive because risks of food crop replacement
can be avoided, many small farmers and landless cultivators can generate additional income
and the plants can serve for greening barren lands.Tilman Altenburg et al. 18 German
Development Institute This study focuses exclusively on biodiesel programmes in India.
While the country is already the world’s 7th largest ethanol producer, with an annual
production of 200 million litres of ethanol (Worldwatch Institute 2007, 6), biodiesel
production started only a few years ago. The following chapter portrays the biodiesel sector.
Chapter 3.1 first describes the biodiesel value chain in India, laying special emphasis on the
feedstock and – resulting from this – the type of land needed for production
Cultivation
SVO, the raw material for biodiesel, can be extracted from many different plants. Seeds of
certain plants (e.g. rapeseed, soya, sunflowers) have a high oil content and are, in some
countries, used for biodiesel production. In India, SVO is derived almost exclusively from
oil-bearing trees. Several tree species can be selected for biodiesel production. More than 300
different species of oil-bearing trees exist in India. All of them are naturally growing wild
species that have not yet been cultivated and harvested systematically for oil production on a
larger scale.4 Some of the seeds have been traditionally collected by poor people for lighting.
In small quantities, TBOs are used for commercial purposes in the paint, lubricant and soap
industries. According to the National Oilseeds and Vegetable Oils Development Board of the
Indian Ministry of Agriculture (NOVOD s.a.[d]) there are about ten species with economic
potential for biodiesel production, including Jatropha curcas, Pongamia pinnata, Simarouba
glauca,5 Azadirachta indica (Neem) and Madhuca indica (Mahua). Proponents of biodiesel in
India focus almost exclusively on Jatropha and to a lesser extent on Pongamia. Other species
have not received much attention.
Processing
Once the fruits have been harvested, the first step in processing is extracting the oil. Only the
seed of the fruit contains oil, so it is necessary first to separate the seed from the fruit hull.
The seed itself also consists of a shell and a kernel. Before the oil is expelled, it is more
efficient to remove the seed shell from the kernel in order to improve the extracted SVO. If
this is not done, sediments of the shell will remain in the SVO. After hulling, the kernels are
ground. There are two methods of extracting the oil from the ground kernels. First, the
kernels can be pressed, using hand-powered pressing machines or mechanized equipment.
When small-scale hand-powered pressing machines are used, only around 60 % of the total
extractable oil can be expelled. More mechanized expellers such as animal-powered so-called
ghanis can expel about 75 % of the oil content. Further advanced pressing machinery can
obtain up to 90 % of the 6 Other relevant categories of wastelands with potentials for the
cultivation of oil-bearing trees include 37,000 km² of land without scrub, 16,000 km² of
shallow/moderately gullied or ravenous land and 9,000 km² of land with slight or moderate
saline or alkaline values (MoRD 2005, 12; Shankar 2006, 94). Tilman Altenburg et al.
extractable oil. Second, the more efficient way to expel the oil from the kernel is to use a
chemical solvent that can extract almost 100 % of the oil (Jongschaap et al. 2007). This
requires a highly sophisticated industrial oil extraction process, since the solvent needs to be
handled with care and also must be removed from the oil after processing. The two methods,
pressing and solvent extraction, can also be combined. The second step in processing is the
transformation of SVO into biodiesel
BIODIESEL POLICIES IN INDIA
The following chapter gives an overview of Indian biodiesel policies at the central and state
level. We use the term “biodiesel policies” in a broad sense, including comprehensive policy
initiatives that are explicitly framed as ‘biodiesel policy’ as well as programmes that are of a
general nature but may be used to promote biodiesel, such as afforestation and rural
employment programmes
Rationale for policy intervention
As the previous chapters have shown, biodiesel bears strong potentials – but also risks – with
regard to India’s simultaneous challenges of energy security, climate change mitigation, and
rural development. Despite its potentials, a biodiesel market has not yet fully developed in
India. This is due to a series of market failures. Biodiesel cannot yet compete with fossil
fuels, as the prices of the latter do not reflect the negative environmental externalities which
they cause. If these costs were internalised, biodiesel would be more competitive as it causes
far lower environmental costs. At the same time, positive externalities of R&D efforts in
biodiesel and of processes of self-discovery cannot be fully appropriated by investors and
farmers
Provision of agricultural extension services:
Different state departments have extensive administrative setups for service provision. The
Department of Agriculture in Chhattisgarh, for example, currently has 650 posts for
Agriculture Development Officers operating at district level and 3375 posts for Rural
Agricultural Extension Officers, operating at block level. Apart assessing the input
requirements of farmers and communicating the numbers to the district level, the latter are
mainly involved in providing extension services free of cost to farmers. One officer is
responsible for 800 to 1000 farmers