Bio Diesel Sector - Future Prospects

The importance of Bio-fuel (bio-diesel & ethanol) is increasing rapidly with growing anxiety over crude oil supply and fast climatic changes. Bio-diesel is an environment friendly fuel prepared from edible and non-edible vegetable oils.

Blending of Bio-diesel with petro-diesel has tremendous positive social, ecological and economic impact on the society. If India wants to become a Developed Nation by 2020, as envisaged by former President, Dr. A P J Abdul Kalam, we need to become self sufficient in the energy sector.

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Global Energy Scenario:
Petroleum products constitute a major source of energy needs of the world. Energy is one of the major inputs for the economic development of any country. According to conventional wisdom, the world is likely to run out of petroleum in the near future. Besides, current patterns of energy production and use have negative impact on the environment. At the same time, there is a need, especially in developing countries, for higher levels of energy supply and use for economic development. This has generated renewed interest in bio-fuels.

Rudolph Diesel (1858-1913) had famously said, “The use of vegetable oils for engine fuel may seem insignificant today. But such oils may become in course of time as important as petroleum and coal tar products of the present time” -.Needless to say, his words have come true.

Indian Prospects:
Oil constitutes over 35% of the primary energy consumption in India. It is expected that this would rise both in terms of absolute amount and proportion. The International Energy Outlook (IEO) has projected that India will consume over 5 million barrels of oil a day by 2030; more than double its current consumption. In the light of the above, Government of India is expected to announce its National Bio-fuel policy soon. The policy is expected to lay special emphasis on bio-diesel as diesel constitutes a major portion of our petroleum consumption.

Bio-diesel can be manufactured from both edible & non-edible oilseeds through trans-esterification. However the demand for edible oil exceeds supply, therefore Government has decided to use non-edible oilseeds as bio-diesel feedstock. Jatropha and Karanj have been found to be most suitable crops in the Indian conditions. India plans to replace around 5% of its current 40 million tonnes of annual diesel consumption with bio-diesel within five years.

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This has opened an era of opportunity for entrepreneurs and corporates. The Planning Commission has suggested that, corporates should be given tax cuts to adopt contract farming of Jatropha and Karanj in private wastelands. It has further recommended that Jatropha and Karanj cultivation should be covered under NREGA.

Thus we can safely presume Bio-diesel sector has a bright future.