c03f76aac57376a29dae89cdf394d64d.ppt
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Role of Bio-Diesel in the growing energy demand scenario in India FEBRUARY 1 & 2, 2008, FICCI, NEW DELHI CLIMATE CHANGE & BIO-DIESEL 2008
INDIA WILL BECOME THIRD LARGEST ECONOMY IN THE WORLD BY 2030 AND HAVE THE FASTEST GROWTH RATE India has a robust future growth position GDP in trillion US$ FY 2030 (E) FY 2005 (E) US 11. 7 CAGR Percent US 2. 2 Japan China 8. 2 Germany India 9. 0 China Japan 1. 2 India Germany Source: World Development Indicators; Goldman Sachs, Dreaming with the BRICs: The path to 2050; IEA; UBS estimates 1. 1 1
INDIA IS EXPECTED TO BE THE WORLD’S FOURTH LARGEST CONSUMER OF ENERGY BY 2020 Potential to be fourth largest energy consumer by 2020 Oil consumption likely to substantially increase by 2020 Million tonnes of oil equivalent, 2020 forecast oil consumption in mtpa US China Russia India Japan Canada Germany US China Japan India Russia Brazil Germany Source: IEA; BP Statistical Review of World Energy 2004; Project BRICS-Relative attractiveness of downstream markets 2
INDIA WILL HOWEVER NEED TO RELY HEAVILY ON CRUDE IMPORTS TO SATISFY THE DEMAND FOR OIL Million tonnes per year (mtpa) 225 182 152 113 124 Net import Production 2000 % imported 71% 2005 2010 E 2015 E 2020 E 73% 71% 79% 82% • Strong demand growth expected in next 10 -15 years • Flat domestic production far from sufficient to cover demand • Import to make up over 80% of demand by 2020 Source: FACTS 06 Fall; BP; Energy. Files; Wood Mackenzie 3
BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN THIS SCENARIO Drivers for biodiesel adoption Supply security through reduction in crude imports Description • Bio-diesel can reduce crude imports by 5% in 2015 and 10% in 2020 (assuming a 10 % blending mandate and 20% blending mandate in 2015 and 2020 respectively) • Bio-diesel value chain can create up to 9 million jobs in rural Rural empowerment Low environmental impact areas as early as 2015 • Bio-diesel production process is eligible for carbon credits (CERs) under Kyoto Protocol’s Clean Development Mechanism (CDM) scheme. • Bio-diesel is less polluting and eco-friendly than conventional fossil fuels 4
BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN REDUCING CRUDE IMPORTS Million tonnes per year (mtpa) 225 182 152 113 124 Bio-Diesel substitution Net import 7 18 Production 2000 % imported 2005 2010 E 2015 E 2020 E 71% 73% 71% 75% 76% Reduction in crude imports by 5% by 2015 and 10% in 2020 (assuming a 10 % blending mandate and 20% blending mandate in 2015 and 2020 respectively) can be achieved through Bio-Diesel Source: FACTS 06 Fall; BP; Energy. Files; Wood Mackenzie 5
BIO-DIESEL HAS SIGNIFICANT ENVIRONMENTAL BENEFITS Emissions are lower compared to conventional diesel Units in per cent 20% blending of Bio-Diesel • Total unburned Hydrocarbons -30% • Carbon monoxide -20% • Particulate matter -22% • NO 2 -+2% • Sulphates -20% • PAH (Polycyclic aromatic hydrocarbons) -20% • Nitrated PAH -50% • Ozone Potential of Speciated -10% • Plant prevents • soil erosion helps in nutrient replenishment of soil Leaves, flowers and barks can be used for medicinal purposes HC 6
BPCL’S EFFORTS IN THE BIO-DIESEL CHAIN Phase 1 (till 2007) Phase 2 (2008 -09) Phase 3 (2009 -2015) • Partnerships with State • Initial commercial efforts • Pilot efforts in Jatropha Key initiatives cultivation in BPCL owned tracts of land across the country • Over 600 acres brought under Jatropha cultivation. for entering in the Bio. Diesel Value Chain in collaboration with State Governments and other partners • 100, 000 -200, 000 acres to be brought under Jatropha cultivation Governments with high activity in Jatropha and Pongamia cultivation for large scale commercial play in the Bio-Diesel Value Chain • Over 1 million acres to be brought under Jatropha cultivation to produce 1 million tonnes of Bio-Diesel by 2014 -15 7
A FULLY INTEGRATED PLAY IS REQUIRED FOR SUCCESS IN BIO-DIESEL Bio-Diesel Value Chain : Business Model Jatropha farming Seed collection, oil extraction and esterification 1 Farming + Production + Marketing Integrated play 2 Production + Marketing Rationale • The rural community in India are lacking in perception to raise suitable crops upon waste and barren lands. • Union Govt. through NREGS is keen to uplift the standards of such farmers by encouraging them to take up the Jatropha Cultivation Activity. • Such Programmes can be effectively 3 Marketing implemented under the P 3 model (Private, Public, Panchayat ) with the active involvement of established Companies in diversified areas. Blending and Marketing 8
BIO-DIESEL VALUE CHAIN : KEY ACTIVITIES § Identification / Allocation of waste / fallow Land in large chunks for Jatropha Cultivation by Local Panchayat / Collector / State Government. § Cultivation of Hybrid High Yield Jatropha in a phased manner @ few lakh acres per year. § Fruit / Seed produce Collection network. § Setting up of Oil extraction plants / Solvent extraction plants. § Setting up of Trans-esterification Plants. § Distribution & Logistics, Blending & Marketing of Bio-Diesel. 9
OPERATION MODEL : BIO-DIESEL BUSINESS Samplings developed in nursery Jatropha cultivation Seed cake 70% Glycerol 10% Transesterification Bio-Diesel 30% Installations /Depots Seeds (100%) Farmers 3 -4 year growing period (20 -25 year life) Oil extraction Storage Cost of operations + 10% of chemicals Marketing through ROs Revenue from carbon credits 10
BENEFITS v Generation of Employment / Self Employment to Lacs of families of farmers v Huge area of waste land to be converted into productive use v Industrialization through investment of huge capital outlay in the State running into few thousand crores v Alleviation of poverty in rural areas v Soil and Water conservation v Breaking the cycle of drought 11
BENEFITS-CONTD. . v Afforestation v Reduction of air pollution v Reduction of green house gases & Global warming mitigation v Curbing rural migration v Energy Security and Revenue generation to concerned State v Self Reliance of energy needs v Foreign Exchange Savings for the Country v Rural economy improvement 12
SUPPORT FROM GOVERNMENT § Classification of Jatropha crop under Agriculture / Horticulture / Forest Depts. § Single Window facilitation through Bio-Energy Mission Cell or Renewable Energy Dept. created by various State Govts. in co-ordinating with all its concerned Departments at State / District level & upto Village Panchayat level for smooth implementation of the entire Bio-Diesel Value Chain and to ensure strong bond between Village Panchayat and Entrepreneurs, starting from land identification to collection of fruits from the allocated fields. § Assistance for identification and leasing on Long Term and or allocation of Suitable land for establishment of Nurseries Demonstration Units Training Centres R&D Centres Seed collection Centres Expelling Units Trans-esterification Plants 13
SUPPORT FROM GOVERNMENT - CONTD. . § To extend the Transport Subsidy Scheme to facilitate the execution of this Project to the farmers as well as the Entrepreneurs. § To render support in terms of waiving state level taxation in the best possible manner. § To provide applicable subsides to the small industries in establishment of Oil Expellers and Solvent Extraction Units § To render power tariff waivers for the expelling Units, S. E. Units and Trans esterification Units. § The non-edible oilseeds cannot be marketed / used / consumed directly without a complex transesterification refining process. Therefore, the respective State Govts. may issue an Executive Order to exempt this transaction from the purview of the State Mandi Act, thus facilitate procurement of the non-edible oilseeds from the farmers directly by the Entrepreneurs. 14
SUPPORT FROM GOVERNMENT-CONTD. . § Assist the Entrepreneurs in bringing awareness and Farmers mobilization for Jatropha cultivation, including development of village youths by bringing orientation and perception regarding the plantation activity. § Ensuring implementation of Government’s Employment Guarantee Scheme and all other relevant schemes to support farmers for Jatropha cultivation. § Convergence of various development schemes of State and Union Government for the benefit of this activity. § Entrepreneurs to be involved in the restructuring of the existing Advisory Body formed by various State Govts. for implementation of Bio-Diesel Value Chain in the respective States. § Facilitates formulation of Policies for Jatropha crop Insurance and also involve Banking Institutions to arrange soft loan to farmers. 15
THANK YOU ! 16
BACK - UP 17
POTENTIAL RURAL IMPACT ON INCOME AND JOBS CAN BE HIGH 2015 substitution Land under level* cultivation Per cent Rural economic impact Multiplier (Rs crore) effect Million Acre Total Rural impact Income Jobs Rs crore Million 5 3. 8 -5 (3 -4. 5%)** 3, 375*** 2 6750 4. 5 10 7. 5 -10 (9 -11%)** 6, 750*** 2 13500 9 20 15 -20 (18 -21%)** 13, 500*** 2 27, 000 18 Maximum blending without any engine modification *Fossil diesel demand 75 million metric tonnes ** Percentage of 35 -40 million hectares of wasteland that can be used for plantations ***Based on ~Rs. 5 -6 per kg of seeds contracts signed by blenders with farmers 18
3 ENABLING INTERVENTIONS ARE REQUIRED TO MAKE BIO-DIESEL A THRIVING INDUSTRY IN INDIA 1 National Board for development and execution of fuel policy – Policy on blending proportion of Bio-Diesel – Approach to creating “Bio-Diesel fund” to manage against crude fluctuations – Models of possible tri-partite contracts between farmers/villagers, the government, and the private producers (processors/blenders) that could be adopted to make significant acreage of Government owned wastelands for cultivation 2 Public private partnership involving State Governments – On R&D on seed productivity-Create a dedicated Bio-fuel seed resource at Department of Bio-technology – Certification of seed quality and other farming standards – Ensure close involvement of Panchayats to gain farmer confidence 3 Farmer insurance and financing and purchase guarantees – Coordinate policies to finance marginal farmers for wasteland cultivation *Source: Interviews, press searches 19
FURTHER, INDIA CAN CATER TO THE GLOBAL BIO-DIESEL DEMAND TO EARN SIGNIFICANT FOREIGN EXCHANGE Bio-diesel demand India’s share Tonnes million Per cent EU (2010 -11) Domestic 1 Japan 8 -93 20 -30 3 -4 100 2 -3 0 4 Required supply Implied forex inflows/savings Million tonnes Rs crore 1. 5 -3 3 -4 0 1. Based on 5% blending at a diesel demand of 65 -70 MMT 2. Based on Rs 18 sale price per litre 3. Net of EU internal production 4. Early indications are that Japan is likely to tie-up with Brazil for bio fuels 3, 500 -7, 0002 7, 000 -9, 500* Rs. 13, 00017, 000 crore foreign exchange opportunity 0 20
OIL WILL CONTINUE TO BE A KEY SOURCE OF ENERGY EVEN IN 2020 Primary energy consumption by fuel Quadrillion BTU 1 40. 4 Solid waste & biomass 34. 1 Nuclear, hydro 2 & renewables 29. 1 22. 2 Total 24. 0 Oil 3 Natural Gas Oil will contribute to at least 25% of total energy supplies even in 2020 Solid Fuel 4 2002 2005 2010 2015 2020 11 quadmillion BTU = 2. 61 BSCFD of gas equivalent 2 Hydro includes geothermal renewables include solar, wind and tide, wave and ocean energy 3 Oil consumption includes international marine bunkers 4 Solid fuel consumption and imports include net imports of coke Source: DRI-WEFA World Energy Service forecasts 21
JATROPHA PLANTATION : COST BREAK-UP : WORKING SHEET- I Employment generation and costs for Jatropha plantation (in Rs. per hectare) S. No. Item 1 Site preparation i. e. cleaning and levelling of field - 10 MD 2 Alignment and staking - 5 MD 3 COST (Rs. ) 1 st 2 nd Employment in person days Year 3 rd 1 st 2 nd 3 rd 1000 - - 10 - - 500 - - 5 - Digging of pits (2500 Nos. ) of 30 Cm 3 size @ 50 pits per MD - 50 MD 5000 - - 50 - - 4 Cost of FYM (including carriage) 2 Kg. per pits during 1 st year (2 MT) 1 Kg. per pit during second year onwards @Rs. 500/MT 2500 1250 - - 5 Cost of fertilizer @ Rs. 6 per kg (50 gm. Per plant during 1 st year and 25 gm from 2 nd year onward) and 2 MD for each application. 950 575 2 2 2 6 Mixing of FYM, insecticides fertilizers and refilling of pits @ 100 pits per MD 2500 25 25 25 7 Cost of plants (including carriage) 2500 Nos. during first year and 500 Nos. of plants during second year for replanting @ Rs. 2. 5 per plant 6250 1250 - - 8 Planting and replanting cost 100 plants per MD for 1 st Year @ 25 MD and 5 MD in 2 nd Year, respectively 2500 - 25 5 - 9 Irrigation - 3 irrigation during 1 st and one irrigation during 2 nd year @ Rs. 600/- per irrigation 1800 600 - 5 2 - 10 Weeding and soil working 10 MD x 1 time for 1 st year & 10 MD X 3 times for 2 nd years 1000 3000 - 10 30 - 11 Plant protection measure - 1 - - Sub total: Contingency (approx. 5% of the above) 300 - 24300 9675 4325 133 64 27 1215 483. 75 216. 25 7 4 2 Grand Total: 25515 10158. 75 4541. 25 140 68 29 Per acre cost (GRAND TOTAL / 2. 5) 10206 4063. 5 1816. 5 Say 10200 4060 1850 Total for 1 st Year & 2 nd Year Total for 1 st Year to 3 rd Year 14260 16110 22
BIO-FUEL PLANTATION & PROJECT COST PROJECTIONS Sr. No. 1 Particulars Unit price (Rs. ) Ist yr. 2007 -08 2 nd yr. 2008 -09 3 rd yr. 2009 -10 4 th yr. 2010 -11 AMOUNT TO BE PAID TO FARMERS ON PER ACRE BASIS FOR PLANTATION / UPBRINGING FROM GOVT. SCHEMES 16110 1 lakh 2 lakhs 1 lakh 10 lakh acres 161. 1 322. 2 161. 1 1611 Land Area to be planted during the year (in acres) - 5 th yr. 2011 -12 6 th yr. 2012 -13 Remarks 2 Total Plantation Cost year-wise to be funded by State Govt. from various ongoing schemes such as NREGS etc. (Rs. in crores) 23
JATROPHA COST OF CULTIVATION PER ACRE IN NORMAL SOILS : SHEET - II Sr. No. Unit price (Rs. ) Ist yr. 2 nd yr. 3 rd yr. 4 th yr. 5 th yr. 6 th yr. 7 th yr. 8 th yr. onwards 1 Planting material 1000 plants/acre Causality replacement Land Clearing Pit preparation & Transplanting Manures & Fertilizers Weeding and Soil working Watering etc (The per Acre cost breakup under 11 subheads as per planning commissions format submitted separately in Sheet no. I) 11150 3850 1900 - - - 2 Pruning 200 200 250 250 250 3 Particulars Harvesting - - - 300 500 500 500 11350 4050 2400 750 750 750 Total cost of cultivation * Total cost of cultivation for Jatropha in Normal soils for the first three years including Pruning / Harvesting is @ Rs. 17800/- per acre ** Additional Cost to be incurred for Plantation in the first year on ** Sodic Soils is Rs. 4000. 00 ** Rocky Soils is Rs. 3950. 00 24
SODIC & ROCKY SOIL TREATMENT SODIC SOILS: For making Sodic Soils suitable for the cultivation of Jatropha curcas Gypsum has to be added for amending the soil. Gypsum should be added @ 10 tons/acre. For that in addition to the cost of cultivation of Jatropha in Normal soils Rs. 4000. 00 per acre has to be incurred additionally to improve the soil condition. ROCKY SOILS: For making Rocky Soils suitable for the cultivation of Jatropha curcas in addition to the cost of cultivation of normal soils extra cost @ Rs 3950/- per acre has to be incurred for the pit preparation and soil mixture. 25
REVENUE EARNINGS TO THE FARMERS: SHEET - III Sr. No. Unit price (Rs. ) Particulars Ist yr. REVENUE TO THE FARMER FROM ONE ACRE JATROPHA PLANTATION 1 Benefit through NREGS In Rs. 2 Yield (Kg. ) 3 Crop value in Rs. 6/kg seed - Total in Rs. Yearly Earning to Farmers on per acre cultivation * 3 rd yr. 4 th yr. - 2 nd yr. 7064 2664 5 th yr. 6 th yr. 7 th yr. 8 th yr. onwards - - - 1600 - - 500 1000 2000 3000 - 3000 6000 12000 18000 7064 2664 4600 6000 12000 18000 7064 2664 4600 5250 11250 17250 - 17250 The earning to the farmer in first 3 years is considered from NREGS based on only labour component works out to Rs. 11328/-. i. e. the computation of benefits through NGER excludes items 4, 5 & 7 given in Sheet I. 26
** If the cost of plantation material / manure etc. as well as labour cost is reimbursed, to the farmers under NREGS / Other schemes the in the first three years, and thereafter the earning to the farmer is based on crop yield, then the farmers earning is estimated at Rs 11, 350/- in the first year and Rs. 4050/- in the second year, Rs. 4900/- in the third year, Rs 5250 in the fourth year, Rs 11250/- in the fifth year, with a regular income of Rs. 17250/- per acre / per annum from sixth year onwards as under. Rupees Per Year Per Acre 1 Yearly Earning to Farmers on per acre cultivation if the total labour and material cost is reimbursed to the farmers for the first 3 years 2 Earning from the Crop Yield excluding the cost of Pruning / Harvesting TOTAL : 1 1 3 5 0 2 4 0 0 - - - 2 5 0 0 1 4 0 5 2 5 0 1 1 2 5 0 1 7 2 5 0 1 1 4 5 State Governments 1 4 kindly consider reimbursement of cost of sapling material and labour, by suitably Yearly Earning may 1 7 7 7 0 9 2 extending their existing schemes for Jatropha Cultivation for first three years of Rs. 11350/- + 4050 + 2400 = to Farmers on 3 2 2 5 0 5 per acre 5 5 5 Rs. 17800/-, first Rs. 10, 000/- from NREGS & Rs. 7, 800/- from Horticulture / Other Schemes currently operating in 0 0 0 cultivation 0 0 0 the State for Mango / Guava and other Agricultural / Horticultural items. 27
c03f76aac57376a29dae89cdf394d64d.ppt