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, including cargoof of both crude oil and petroleum products, rose 9 per cent lastfinancial year to $ 80.3 billion. This was a result of a seven percent rise involumes and a three percent increase in the average crude price.
Imports of crudeoil soared by more than five percent to 213 metric tonne (MT) and the crude oilimport expenditure increased by more than nine percent to $70 billion lastfiscal 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 about 249 million metrictonnes (MMT) of crude and petroleum products during 2016-2017,is equivalent to aseven percent growth over 232 MT imported in previous fiscal year.The Indian basket of crude consists of thefollowing composition- 71 per cent of Oman and Dubai grades and 29 per cent ofdated Brent ,according to data published by Petroleum Planning and AnalysisCell (PPAC) which is the oil ministry’s technical division.According to data available on PPAC, production ofpetroleum products – 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 utilization of petroleum product registered afive percent increase to 194 MMT. The nation’s self-reliance in petroleumproducts decreased from 22 percent in 2013-2014 to 18 percent in 2016-2017 becauseof the twin factors of strong consumption growth as well as dwindling domesticproduction.Import dependency of India on foreign crude greweven more to 82 percent in 2016-2017 from 81 percent a year ago. Importdependence stood at 77.6 percent in 2013-2014. (2)RATIONALE BEHIND BIOENERGY USE India’senergy security favours the adoption of 20% diesel blending with Jatropha biodiesel(B20) as current import reliance of crude stands on 80%.
According to thePlanning Commission (2003), as much as 13.4 million hectares of waste land inIndia can be used for Jatropha plantations. The initiative by the Indian governmentto promote the plantations of Jatropha saplings under National Rural EmploymentGuarantee Scheme (NREGS) is a sincere move towards integrating cultivation ofJatropha and energy production. In India, researchers have observed thatJatropha biodiesel and its blends with diesel can be used in existing dieselengines without any modifications (Banapurmath et al. 2008; Sahoo and Das 2009;Sahoo et al. 2009; Kumar et al. 2012a). In the longer run, the economicsustainability of Jatropha biodiesel will definitely prove to be the best betfor India as far as the economic viability of biodiesel with respect to dieselis concerned (Kumar et al.
2008c). With rapid increase in population inAsia, arable land area is decreasing and it is already only 0.1 hectare perperson, on average, in several densely populated countries, which means that itcannot be used for biofuel plantations. Establishing biofuel plantations likeJatropha on degraded soils can be a win-win strategy provided that these soilsare adequately restored and specific problems (e.g., nutrient and waterimbalance, loss of top soil, shallow rooting depth, drought stress,salinization, compaction, crusting) alleviated. Considering households, theaverage energy requirements per capita is 20% less in rural areas compared tourban areas (Pachauri 2004). It is obvious that a significant rise in energyconsumption is expected from the improvement of living condition standards andpopulation increase (Parikh and Lior 2009).
Rural bioenergy is still thepredominant form of energy used by people in India. Thus, meeting incomegeneration and irrigation management through renewable sources provide a largepotential for sustainable development. In rural areas, particularly in remotelocations, the distribution of energy generated from fossil fuels can bedifficult and expensive. Renewable energy can facilitate economic and socialdevelopment in communities if projects of sustainable development areintelligently designed and carefully executed with local inputs andcooperation. In poor areas, the renewable energy projects would absorb asignificant part of participants’ small incomes. Investigations in thisdirection have been based on the following concepts namely: renewable energysources can be replenished in a short period of time and it is clean, i.e., itproduces lower or negligible levels of greenhouse gases and other pollutantswhen compared with the conventional energy sources they replace (Demirbas andDemirbas 2007).
One of the major synergic effects on the economic return of astate investment in biodiesel would be the availability of facilities for powergeneration in close proximity to the area of biomass production. Suchstructural investments can result in manifold increase in employmentopportunities.190 man days of employment in the first year and 114 man days inthe second year per hectare for poor people living in rural areas may prove tobe a potential source of income generation.
Considering the average man daysfor first and second year for 150 days employability in a year, Jatrophacultivation on 13.4 million hectares of wasteland will result in 300 days/yearemployment for roughly 6.5 million people through social schemes of Governmentof India, such as the National Rural Employment Guarantee Schemes (NREGS) forpeople of rural areas. Because of the uneven distribution of wealth and thelarge population size, India is passing through social unrest in many parts ofthe country leading to large scale violence in many forms.
The creation anddevelopment of such local opportunities in poor rural areas would also help inrelaxing social unrest due to poverty. (3)BIODIESELINITIATIVES IN INDIA Indiatook initiatives on biofuels nearly a decade ago to reduce its dependence onoil imports and improve energy security. A 5% ethanol blending pilot programwas started in 2001 and a National Mission on Biodiesel was developed in 2003to achieve 20% biodiesel blends by 2011–2012. Like various other nations aroundthe world, India has endured setbacks in its biofuel program due to supplyshortages, sharp fluctuations in oil prices and global concerns over foodsecurity. Its National Policy on Biofuels, adopted in December 2009, proposed anon-mandatory blending target of 20% for both biodiesel and ethanol by 2017.The formulation of the National Mission on Biodiesel in 2003 was the first stepfor developing biodiesel program in India. The program called for mandatory 20%biodiesel blending by 2011–2012, with jatropha curcas as the primary feedstock.Jatropha, a small shrub that grows on degraded land and produces nonedibleoilseeds, can be used to manufacture biodiesel.
Among the 400 nonedible oilseedcrops found in India, jatropha was selected for the program because of its highoil content (40% by weight) and low gestation period (23 years) compared withother oilseed crops (GOI 2003). To meet the 20% blending target, the recommendationwas to cultivate jatropha on 17.4 million hectares (ha) of underused anddegraded lands. The biodiesel program was to be implemented in two phases: aresearch and demonstration phase from 2003 to 2007 (Phase I) and animplementation phase from 2007 to 2012 (Phase II). The main goals of Phase Iwere to cultivate 400,000 hectares of land, establish a research network of 42public universities, and achieve a 5% blending target. Under Phase II, a 20%blending target would be achieved by 2011–2012. To support the program, theMinistry of Petroleum and Natural Gas ratified the National Biodiesel PurchasePolicy and set a price of Rs25.
00 per liter, subject to periodic review,effective 1 November 2006. The ministry designated 20 oil marketing companies(OMCs) in 12 states as purchase centers. The buyback program remains in effect,but the purchase price was raised to Rs26.50 per liter in October 2008.Although the biodiesel blending targets were not codified, interest in jatrophaaccelerated after the introduction of the National Mission on Biodiesel.
Indiawas the world’s leading jatropha cultivator in 2008, controlling about 45%(407,000 ha) of the global cultivation area (about 900,000 ha) in 2008. Morerecent estimates show an increase cultivation area in India to 900,000 ha in2011. Further, the 11th Five-Year Plan recommended a blending target of 5%biodiesel by the end of 2012, a significant reduction from the 20% targetproposed under the National Mission on Biodiesel. In September 2008, theMinistry of New and Renewable Energy resumed discussions on biodiesel andissued a draft National Biofuels Policy. The policy proposes the establishmentof a national registry of feedstock availability to help monitor productionpotential and set blending targets.
The Ministry of New and Renewable Energy istasked with implementing the policy. Two new committees—the National BiofuelCoordination Committee under the prime minister, and the Biofuel SteeringCommittee under the cabinet secretary—have been formed to coordinate andimplement the policy. (4)POTENTIAL ECONOMICBENEFITS Theeconomics of Jatropha plantation cost per hectare, per plant and the cost perJatropha plant Rs. 6.
00 under rainfed condition as shown in Table 1. Table 1: Economics of 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 Theeconomics of Jatropha oil extraction from Central Institute of AgriculturalEngineering (CIAE) mini oil expeller as shown in Table 2Table 2: Economics of 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 willhave to be pro-active to interest the farmers in planting Jatropha. But, thereturns can be expected to be extremely fulfilling with our rural communitiesbecoming self-sufficient.
Moreover, the savings can be directed to theeducation sector, even for research purposes alone so that continuous ways tomake biodiesel more efficient are investigated to reap more benefits in thefuture. (6)REFERENCES1. C. Sasikumar, K. Balamurugan, S.
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