INDIA TOWARDS BIGGEST BIODIESEL MARKET

New Delhi, 14 October 2006

NEW DELHI, October 15 (INFA): India is fast moving towards becoming the biggest national biodiesel market in the world by 2015, according to an authoritative estimate.

In a bid to meet the goal, the Government of India has proposed a national biodiesel blend of 20 per cent by 2020.  With more than 60 million of land lying idle across the country, it is an ideal market for selling and producing biodiesel.

While the wind power has taken the world by ‘storm’ the advent of biodiesel into the world’s renewables market is a slow, but steady climb.  Concern over global warming and the depletion of our fossil fuels is steering the nation across the globe to mandate the introduction of biofuels, particularly biodiesel. 

In addition, volatile fuel prices are also encouraging its use.  Even though biodiesel represents less than 2 per cent of the total diesel market at the moment, the worldwide market volume is estimated at about $4 billion in 2007 and more than $10 billion in 2010.  Green Energy delves into the growth patterns and prospects of biodiesel the world over.

Biodiesel is Europe’s dominant alternative fuel.  Under the 2003 EU Biofuels Directive, a 2 per cent share of the energy content of all petrol and diesel for transport must come from renewable sources, including biodiesel and biothanol. This must rise to 6 per cent by the end of 2010.

All diesel sold in France is already blended with 2 per cent biodiesel, while more than 1900 biodiesel retail pumps offer biodiesel (one every 17 km) in Germany. 

Due to high subsidies and strong environmental legislations, the bulk of the market is in Europe, with a volume of almost $3 billion.

Asia currently consumes over 2 billion tonnes of oil per year, with demand expected to double by 2025.   Transport fuel would make up a significant portion of this growth. Asia produces many vegetable oils including coconut and palm which are ideal as biodiesel feedstock.  Jatropha has great potential in the region.

Rising costs of oil imports is affecting the need for switching over to alternate transport fuel to power economic development in Africa.  Biodiesel from jatropha has significant potential as the plant can grow well in this region.

Biodiesel production is now at record levels in the US due to recent tax incentives. Biodiesel is on sale at over 350 retail filling stations and is also used by over 500 major fleets. The Renewable Fuels Standard (RFS) commits fuel suppliers to expand the domestic fuel inventory with renewable fuel blends: primarily ethanol and biodiesel.

It sets a national minimum usage requirement of 4 billion gallons per year in 2006, rapidly increasing to 7.5 billion gallons per year by 2012. Although ethanol will provide a larger percentage of the RFS mandate, production of biodiesel will need to accelerate, to meet the growing market requirements.

With growth being driven through mandated biodiesel blends and fiscal incentives, meeting targets will depend on feedstock availability and investment in production capacity. 

Strong legislative backing and multiple benefits offered by biofuels offer tremendous scope for market expansion. Besides, lack of technology barriers or the need for specialist equipment for handling gives biodiesel a distinct advantage over other alternative fuels.---INFA