Jatropha Targets - India on track

ET reports that the cost of Jatropha-based bio-diesel in India has gone below the cost of regular diesel.

This is great news. In the past Indian Railways would pay as much as Rs 70-80 for a litre of bio-diesel to meet its trial requirements. For a pilot in 2003, BEST and HPCL paid as much as Rs 78 per litre to Lubzoil India Ltd for 20,000 litres. Now with the price of jatropha seeds down to Rs 5 a kilo, from Rs 30 a kilo earlier, bio-diesel cost has come down to just Rs 24 a litre.

Regular diesel vehicles can run on diesel blended with upto 20% of bio-diesel. Vehicles on slightly modified engines can run on 100% bio-diesel too.

Now India uses about 45 million tonnes of diesel every year. So with 20% bio-diesel, which the government will likely mandate as a target under the National Biodiesel Policy in August, about 9 million tonnes of bio-diesel produced within India will mean an India bio-diesel industry as big as Rs 250 billion, or $6 billion. That is only about 7 years away. But is that just another number for the future that is thrown at us?

There are already indications of huge commitments from corporates in India. For example a single Mohan Breweries-D1 Oils JV in Tamil Nadu is into contracting farmers for Jatropha production, and is already working on an immediate aim of 120,000 tonnes of jatropha oil annually. This could go up to 300,000 tonnes based on the plantations targets for this year alone. In Mysore, Labland Biotech is in a deal with D1 Oils to procure upto 50,000 tonnes of jatropha oil a year, from contract manufacturing farmers.

There are other names too. Among the earliest big adopters is likely to be the Indian Railways. Then there are oil PSU's like HPCL and MNC's like Diamler Chrysler.