EASINGSTRAIN ON THE INDIAN ECONOMY THROUGH BIODIESELUtkarshGautam and Raghvendra GautamDepartmentof Mechanical EngineeringDelhiTechnological University,DelhiAbstract: Indian economy hasregistered an unprecedented growth since 1992 and its energy demands continueto grow with India and Japan vying for the position of third biggest energyconsumer after Unites States of America and China. But with most of theseenergy requirements being fulfilled by fossil fuels and India not possessingany significant resources of crude oil, around 80% of the needed petroleum isimported which drains the nation of much needed foreign exchange. So, a programmeto develop indigenous energy resources to meet our needs has to be developedand biodiesel can be the answer to India’s problem with the central governmentalso recognizing this. (1)INDIAN IMPORT BILL OF PETROLEUM Overall petroleum import bill of India, which includesshipments of both crude oil and petroleum products, rose 9 per centlast financial year to $ 80.3 billion due to seven percent rise in volumes anda three percent increase in the average crude price.
Crude oil imports rose bymore than five percent to 213 metric tonne (MT) and the crude oil import billincreased by more than nine percent to $70 billion last fiscal as compared to$64 billion recorded in 2015-2016.Increase in India’s petroleum products by volumewas 22 percent last fiscal year to 36 MT from 29.5 MT in 2015-2016.
Altogether, the country imported around 249 million metrictonnes (MMT) of crude and petroleum products during 2016-2017,which equals aseven percent growth over 232 MT imported in previous fiscal year.The Indian basket of crude consists of the followingcomposition- 71 per cent of Oman and Dubai grades and 29 per cent of datedBrent ,according to data published by Petroleum Planning and Analysis Cell(PPAC) which is the oil ministry’s technical division.According to data available on PPAC, petroleumproduct production – including petrol, diesel and LPG from indigenous crudefell one percent to 34.7 million tonne (MT) last fiscal year from 35.
2 MT in2015-2016, while the country’s consumption of petroleum product increased byfive percent to 194 MMT. The country’s self-sufficiency in petroleum productsdeclined from 22 percent in 2013-2014 to 18 percent in 2016-2017 due to strongconsumption growth and declining domestic production.India’s import dependency on crude furtherincreased marginally to 82 percent in 2016-2017 from 81 percent a year ago.Import dependence stood at 77.6 percent in 2013-2014. On petroleum products’exports front, India’s shipments grew seven per cent to 65 MT last fiscal. TheOil Marketing Companies accounted for 20 per cent of the exports volume.(2)RATIONALE BEHIND BIOENERGY USE .
With anapproximate import dependency of 80%, energy security favours the adoption of20% diesel blending with Jatropha biodiesel (B20). According to the PlanningCommission (2003), 13.4 million hectares of waste land in India can be used forJatropha plantations. The Indian government’s initiative to promote theplantations of Jatropha saplings under National Rural Employment GuaranteeScheme (NREGS) is a sincere move towards the integration of Jatropha to energyproduction.
In India, researchers have observed that Jatropha biodiesel and itsblends with diesel can be used in existing diesel engines without anymodifications (Banapurmath et al. 2008; Sahoo and Das 2009; Sahoo et al. 2009;Kumar et al. 2012a). In the longer run, the economic sustainability of Jatrophabiodiesel will definitely prove to be the best bet for India as far as theeconomic viability of biodiesel with respect to diesel is concerned (Kumar etal. 2008c). With rapid increase in population in Asia, arable land areais decreasing and it is already only 0.1 hectare per person, on average, inseveral densely populated countries, which means that it cannot be used forbiofuel plantations.
Establishing biofuel plantations like Jatropha on degradedsoils can be a win-win strategy provided that these soils are adequatelyrestored and specific problems (e.g., nutrient and water imbalance, loss of topsoil, shallow rooting depth, drought stress, salinization, compaction,crusting) alleviated. Considering households, the average energy requirementsper capita is 20% less in rural areas compared to urban areas (Pachauri 2004).
It is obvious that a significant rise in energy consumption is expected fromthe improvement of living condition standards and population increase (Parikhand Lior 2009). Rural bioenergy is still the predominant form of energy used bypeople in India. Thus, meeting income generation and irrigation managementthrough renewable sources provide a large potential for sustainabledevelopment. In rural areas, particularly in remote locations, the distributionof energy generated from fossil fuels can be difficult and expensive. Renewableenergy can facilitate economic and social development in communities ifprojects of sustainable development are intelligently designed and carefullyexecuted with local inputs and cooperation. In poor areas, the renewable energyprojects would absorb a significant part of participants’ small incomes.Investigations in this direction have been based on the following conceptsnamely: renewable energy sources can be replenished in a short period of timeand it is clean, i.e.
, it produces lower or negligible levels of greenhousegases and other pollutants when compared with the conventional energy sourcesthey replace (Demirbas and Demirbas 2007). One of the major synergic effects onthe economic return of a state investment in biodiesel would be theavailability of facilities for power generation in close proximity to the areaof biomass production. Such structural investments can result in manifoldincrease in employment opportunities.190 man days of employment in the firstyear and 114 man days in the second year per hectare for poor people living inrural areas may prove to be a potential source of income generation.Considering the average man days for first and second year for 150 daysemployability in a year, Jatropha cultivation on 13.
4 million hectares ofwasteland will result in 300 days/year employment for roughly 6.5 millionpeople through social schemes of Government of India, such as the NationalRural Employment Guarantee Schemes (NREGS) for people of rural areas. Becauseof the uneven distribution of wealth and the large population size, India ispassing through social unrest in many parts of the country leading to largescale violence in many forms. The creation and development of such localopportunities in poor rural areas would also help in relaxing social unrest dueto poverty. (3)BIODIESELINITIATIVES IN INDIA Indiatook initiatives on biofuels nearly a decade ago to reduce its dependence onoil imports and improve energy security. The country began a 5% ethanolblending pilot program in 2001 and formulated a National Mission on Biodieselin 2003 to achieve 20% biodiesel blends by 2011–2012.1 Like many othercountries around the world, India has endured setbacks in its biofuel programcaused by supply shortages, sharp fluctuations in oil prices, and globalconcerns over food security.
Its National Policy on Biofuels, adopted inDecember 2009, proposes a non-mandatory blending target of 20% for bothbiodiesel and ethanol by 2017 (GOI 2009). The formulation of the NationalMission on Biodiesel in 2003 was the first step for developing biodieselprogram in India. The program called for mandatory 20% biodiesel blending by2011–2012, with jatropha curcas as the primary feedstock. Jatropha, a smallshrub that grows on degraded land and produces nonedible oilseeds, can be usedto manufacture biodiesel. Among the 400 nonedible oilseed crops found in India,jatropha was selected for the program because of its high oil content (40% byweight) and low gestation period (23 years) compared with other oilseed crops(GOI 2003).
To meet the 20% blending target, the recommendation was tocultivate jatropha on 17.4 million hectares (ha) of underused and degradedlands. The biodiesel program was to be implemented in two phases: a researchand demonstration phase from 2003 to 2007 (Phase I) and an implementation phasefrom 2007 to 2012 (Phase II). The main goals of Phase I were to cultivate400,000 ha of land, establish a research network of 42 public universities, andachieve a 5% blending target. Under Phase II, a 20% blending target would beachieved by 2011–2012. To support the program, the Ministry of Petroleum andNatural Gas ratified the National Biodiesel Purchase Policy and set a price ofRs25.00 per liter, subject to periodic review, effective 1 November 2006 (GOI2006).
The ministry designated 20 oil marketing companies (OMCs) in 12 statesas purchase centers. The buyback program remains in effect, but the purchaseprice was raised to Rs26.50 per liter in October 2008. Although the biodieselblending targets were not codified, interest in jatropha accelerated after theintroduction of the National Mission on Biodiesel.
India was the world’s leadingjatropha cultivator in 2008, controlling about 45% (407,000 ha) of the globalcultivation area (about 900,000 ha) in 2008. More recent estimates show anincrease cultivation area in India to 900,000 ha in 2011. Further, the 11thFive-Year Plan recommended a blending target of 5% biodiesel by the end of2012, a significant reduction from the 20% target proposed under the NationalMission on Biodiesel. In September 2008, the Ministry of New and RenewableEnergy resumed discussions on biodiesel and issued a draft National BiofuelsPolicy. The policy proposes the establishment of a national registry offeedstock availability to help monitor production potential and set blendingtargets. The Ministry of New and Renewable Energy is tasked with implementingthe policy. Two new committees—the National Biofuel Coordination Committeeunder the prime minister, and the Biofuel Steering Committee under the cabinetsecretary—have been formed to coordinate and implement the policy. (4)POTENTIAL ECONOMICBENEFITS Economicsof Jatropha plantation Description Cost (Rs) Site preparation –10 MD 500 Alignment and staking-5MD 400 Digging of pits (2500 Nos.
) 3500 Cost of FYM (2 kg per pits) 2000 Cost of fertilizer at Rs 6 per kg (50 gm per plant) 800 Mixing of FYM, insecticides and refilling pits at 100 per pit 1000 Planting and replanting cost 100 plants per MD 2000 Irrigation- 3 irrigation 1500 Wedding and soil working 1000 Plant protection measure 300 Sub total 13000 Contingencies at 10% 1300 Total 14300 Cost per plant 5.75 Economicsof jatropha oil extraction Description Nos. Rate Rs (A)Fixed cost a) Machine cost: 1 i) Power operated cleaner cum grader having capacity 150 kg/h 1 10000 10000 ii) Dehuller with 1 Hp motor having about 100 kg/h capacity 1 10000 10000 iii) Flanking unit 1 40000 40000 v) Oil filter press 1 15000 15000 v) Weighing scale, 100 kg capacity 1 10000 10000 vi) Pretreatment of seed 1 10000 10000 vii) Oil expeller 1 100000 100000 Total 195000 viii) Housing, furniture 5% 9750 Total 204750 ix) Salvage 10% 20475 Total 184275 Total per month 18427.5 (B) Labor cost: i) Skilled operator 1 4000 4000 ii) Helper 2 2000 4000 Total per month 8000 c) Electricity cost per month: 16000 Total Fixed cost (a+b+c) 42427.5 B) Variable cost a) Seed cost 30000 kg Rs,6/kg 180000 b) Miscellaneous 1% 184.27 c) Interest 2% 368.55 Total Variable cost (a+b+c) 180552.
82 Total cost (A+B) 222980.325 (C) Material cost i) Oil cake per month 18000 2/kg 36000 ii) Hull per month 4500 1/kg 4500 Total 40500 D) Total less byproduct cost (A+B)-C 182480.325 Oil cost per kg (D/seed weight) 25.34 Assumptions: Capacity of the oil expeller was 100kg/h of Jatropha , Power requirement 20 horsepower motor, Operation per day 12hour, Production of oil cake 60 kg, oil 24 kg, hull 15 kg, 1 kg waste, Saleprice of oil cake Rs 2/kg, and hull Rs 1/kg Further treatment of Jatropha oilinto biodiesel by single stage transesterification process by using KOH andethanol carries some more costs like a processing machine with a capacity of200L/day of Rs. 50,000 and all the variable costs like catalysts, electricity, laborand machine maintenance coming out to be about Rs. 8000.
Therefore, the total investment forthe plantation for producing biodiesel per hectare comes out to be = Rs.2,54,780.325 (14,300+1,82,480.325+58,000)Now, this amount is equivalent to4005 USD. 1 hectare of biodiesel cultivationyields about 7 tonnes of seeds per year. The oil pressed from 4 kg of seeds isneeded to make 1 litre of biodiesel which puts the yearly yield to about 1750litres.
1 barrel of crude oil is about 159 litres in volume ,so one hectare ofJatropha plantation can produce about 11 barrels of biodieselThe amount of biodiesel that can be generatedform one hectare comes out to be around 1750 litres which is roughly around 11barrels. Currently,in India about 142 million hectares of land is under agriculture. It will bereasonable to assume that farmers will like to put a hedge around 30 millionhectares of their fields for protection of their crops. It will amount to 3.0million hectares (notional) of Jatropha curcas plantation. Using Jatropha as a fencing plant only,3 millionhectares can potentially produce 33 million barrels of biodiesel per year.After this start, plantation to rehabilitate 13.
5 million hectares wastelandscan also be carried out further providing impetus to indigenous biodieselproduction. India’s imports of crude oil in December 2016 were 4038000 per daywhich makes our recent consumption to about 1.5 billion barrels per year. So, fromthe above figures it can be seen that by planting Jatropha as hedge only, wecan start the process effectively to reduce our dependence on imported energyresources. If the possibility to explore plantation of Jatropha on wastelandsis explored, then the potential production can touch 150 million barrels a yearwhich is more than sufficient to cover the energy needs of rural areaseffectively and to cover the existing blending targets.
Now,coming to the economic factors, we currently spend about $70 billion inimporting crude oil. The initial investment costs as seen is about $4000 perhectare in case of Jatropha plantations. 3 million hectares of land can be plantedwith Jatropha just as a hedge around the food crops on cultivable land withoutany special measures in India and good yields can be obtained in a short timeas well as the plantation land would be fertile. The total investment requiredfor this measure would be around $12 billion to sow, extract oil from the cropand then process it into biodiesel which would give a yield of approximately 33million oil barrels per year. With plans to rehabilitate wastelands throughJatropha, various corporates can be attracted to make this investment whichwould also result in the creation of jobs in the processing plants in the ruralareas itself.
With the creation of jobs in the rural areas, more citizens canbe brought into the taxpayers’ bracket, thus increasing government’s revenue. (5)CONCLUSION Biodieselcan be effectively explored as a means to alleviate economic distress faced byIndia by the import of crude oil. India’s energy demand is set to increasesharply in the future which makes this measure more necessary. PlantingJatropha as a hedge to various food crops can be good way to ensure that theyields are high from the first year itself.
The investment required tokickstart biodiesel production is surely substantial and the government will have to be pro-active tointerest the farmers in planting Jatropha. But, the returns can be expected tobe extremely fulfilling with our rural communities becoming self-sufficient.Moreover, the savings can be directed to the education sector, even forresearch purposes alone so that continuous ways to make biodiesel moreefficient are investigated to reap more benefits in the future.
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