Warning on bio-fuels

Business Standard / New Delhi January 24, 2007



The ethanol-doped petrol and plant-based bio-diesel programme seems
to have run into a bad patch even before it got going in any real
sense. The recent slide in international crude prices has adversely
affected the economics of using some of these green fuels. The worst
affected is the economic viability of bio-diesel, derived from
plants like Jatropha (Ratanjyot), Pongamia (Karanj) and others, as
their production costs work out to be higher than the current prices
of diesel. This is not to take away from the genuine need to search
for alternatives to non-renewable and environment-unfriendly fossil
fuels, especially in an economy that has poor endowments when it
comes to fossil fuels, but the available options need to be
evaluated with care and assessed for their financial viability. It
goes without saying that blending petrol with ethanol, priced
between Rs 21.50 and Rs 23 per kilolitre, was amply justified when
crude prices hovered above $60 a barrel. But that is no longer the
case. As a result, the oil-marketing companies are now jittery about
participating in the mandatory bio-fuel admixing programme?and who
can blame them!

On the supply side, too, the situation is different for ethanol and
bio-diesel producers. While the sugar industry, where heavy
investments have been made in putting substantial ethanol production
capacity in place, may not find it difficult to find alternative
buyers for their produce because of varied industrial uses and the
substantial demand for alcohol, the real problem would be for the
bio-diesel companies, whose output could go abegging. This scenario
calls for a fresh look at the country?s bio-fuel policy. While the
emphasis on ethanol production as part of the sugar industry?s by-
product initiatives may not be misplaced, the enthusiasm for raising
bio-fuel plantations is debatable. In fact, sugarcane cultivation
for the sole purpose of ethanol production, as has been suggested by
some, is not a sound proposition under Indian conditions, though it
may be all right for Brazil, which is the world?s leading bio-fuel-
consuming country. Unlike Brazil, India has neither abundant
agricultural land nor a climate tailor-made for the cost-effective
and ecologically safe production of a water-guzzling crop like
sugarcane. Even in Brazil, ethanol admixing has to be directly or
tacitly subsidised when the prices of crude oil are low. Where
Jatropha and other bio-fuel plantations are concerned, these would
necessarily be competing with other food and commercial crops for
land, water and cash and kind inputs.

What may not have been realised when the drumbeats began on the
subject a year or so ago, is that not enough research effort has
gone into evolving low-cost technologies for the cultivation and oil
extraction from these plants. The move to introduce Jatropha in
Haryana flopped as the young seedlings could not withstand the state?
s severe winter. This apart, one of the studies sponsored by the
Planning Commission is reported to have cautioned that large-scale
Jatropha plantations could encroach on animal habitats and lead to
drinking water scarcity. Pongamia, too, poses the risk of
overwhelming other vegetation in agro-forestry because it tends to
spread laterally to adjoining areas. Besides, there are concerns
about the disposal of the by-products of plant-based bio-fuel
production as many of these may not have other applications or
commercial demand. Therefore, it may be advisable for the government
to revisit such issues and consider the totality of the situation
before committing huge investments in bio-fuel plantations on
millions of hectares.
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Comments: Biodiesel can be prepared successfully by waste plants
i.e. weeds. There is no need for plantation of indigenous trees like
Karanj. Even present population can help to meet demand. In
Chhattisgarh recently 'biodiesel from waste' project started. They
are using plastic waste to make biodiesel. There is no need for
large scale plantation specially of exotic species. Unfortunately such
suggestions are reaching through media to planners when planners have already
wasted millions for this plant. It is wastage of public's money. But planners
can stop this project at this moment also. 'Subah ka bhoola shaam ko laut aiye
to usay bhoola nahi kahate'.