Bio-fuel bubble: India’s Jatropha woes

[anant1a]

Bio-fuel bubble: India’s Jatropha woes

The bio-fuel bubble built over the jatropha rage may not last long as the jatropha cultivation and production of bio-fuel from it is facing major hurdles now in India.

In-depth research into the field has shown that if the present trend continues, India’s bio-fuel plans may go haywire.

According to a Rabobank report, quoted widely by the media in India, lack of R&D, farmer-level support and questions over the commercial viability were enough reasons to dash the bio-fuel dream in India.

Report on the research paper said subsidising jatropha seed production as well as bio-diesel production during the initial period is a welcome step.

The current price of Rs 26.5 per litre for bio-fuel is too low to sustain the sector. That rate will not help the sector to produce the fuel and continue the trade with some profits.

According to reports, jatropha seeds cost Rs 10 per kg, the total cost of jatropha oil production works closer to Rs 40 per litre.

However, the jatropha seed cost is expected to drop to a more reasonable level of Rs 6-8 per kg. But that too may not help the industry as revenues derived from sale of by-products like glycerine is currently low and highly uncertain over the long-run.

Besides the pricing risk, the reports note that India currently lags behind other nations as regards to bio-diesel production due to a shortage of suitable feedstock like vegetable oils.

Even though there is huge potential for jatropha cultivation in India, the problems stems from the lack of
information about the extent of land unfit for food cultivation.

Similarly, there is huge difference in view as regards yield levels with some estimates indicating around 1,000 to 3,000 trees being grown per hectare with oil extraction levels being between 30-40%, though the report says it will be easy to assume that yield levels will be around 1,600 trees with oil extraction being 30%.