BIODIESEL AND CORPORATE SECTOR

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BIO-DIESEL AND CORPORATE SECTOR

• MADHUSUDAN

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Why Bio-Diesel?

• Provide Energy security and reduces dependence on
  imported fossil fuel
• Reduces foreign exchange outgo
• Generate new employment potential to rural masses
• Maintain Ecological balance and increases green
  cover
• Prepare us for petroleum less world

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Magnitude of the scheme

• India consumes 35 Million MT of diesel pa
• 10.00 Million Ha of wasteland required for
  matching bio-diesel production
• Rs.200,000 crores investment required in phased
  manner
• Rs.50,000 Crores of Foreign exchange can be saved
  every year

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Benefits from the scheme

• 35 Million MT of Bio-diesel
• 100 Million MT of Seed cake as bio-fertilizer.
• 100 Million MT of Bio-mass sufficient for 1500 MW
  power generation and bio-fertilizer
• Provide employment to 10 million rural population

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Where can we start?

• Step-I
• From the existing Honge trees, 90,000 MT seeds
  can be collected.
• By streamlining the collection and processing
  22500 MT of oil can be extracted.
• Straight Vegetable oil can power the pump sets of
  the farmers in the rural India immediately.

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Where can we start?

• Step-2
• 5 mixing in fossil diesel requires 1.75 Million
  MT of Bio-diesel
• 500,000 Hectares and an investment of Rs.10,000
  Crores is required during the next 5 years.
• This can save Rs.2625 Crores per annum of foreign
  exchange.
• Progressively Bio-diesel content can be increased
  for mixing.

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Alternatives- for implementation

• The Non-edible oil plantation in large scale is
  possible only by involving
• Landless, unemployed /Partly employed Village
  Population
• Farmers with own land
• Corporate sectors

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Problems in the proposal

• Vast land requirement at nominal cost
• Mobilization of huge investment
• Long gestation period of 5-7 years
• Integration with fossil fuel supplies
• Efficient collection of seeds, extraction of oil,
  processing and delivering Bio-diesel to oil
  companies for mixing.

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Comparison of alternatives
Possible
Difficult
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Comparison of alternatives
Possible
Difficult
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Comparison of alternatives
Possible
Difficult
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Entry barriers to Corporate sector

• Availability of vast land
• Long gestation period
• High risk exposure
• Returns not commensurate with risk

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What Corporate sector wants?

• Allow corporate forming for Bio-Diesel
• Allocation of wasteland to corporate sector in
  blocks of 500 Hectares on long term lease
• Subsidy on the Bio-Diesel Projects
• Concessional Interest rate on term loans
• Longer moratorium on term loans

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What Corporate sector wants?

• Income tax exemption for 15 years on the profits
• 100 Tax exemption on investment in Bio-diesel
  projects
• Sales tax and Excise duty exemption on the fuel
  for ten years.
• Ministry of Non-conventional Energy sources as
  single coordinating Government agency.
• Support from Petroleum Oil companies.

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Conclusion 1

• Large scale Non-edible seed plantations can
  provide energy security to the country
• Saves foreign exchange
• Provide employment to rural masses
• This scheme can be taken up on a war footing in
  the long term interest of the country.

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Conclusion 2

• Start propagating the concept with village
  population to supplement their income with the
  existing tree population
• Create infrastructure facilities for oil
  extraction, bio-mass utilization and
  commercialization from existing trees

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Conclusion 3

• Government should share risk with Corporate
  sector in the larger interest of the country.
• Incentives and concessions should be provided to
  improve the viability of the Bio-diesel projects.
  
• Once Corporate sector is in the picture it will
  evolve strategies to run the Bio-Diesel projects
  successfully.

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Conclusion 4

• New technologies will come to this sector
• Agriculture the back bone of India and Energy the
  back bone of Industry will converge at one place
  and bring prosperity to India.