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Agenda
Introduction to Bio-fuels
Biodiesel
Manufacturing biodiesel using Jatropha Oil
Suggested Jatropha Based Value Chain
Farmers’ View on Jatropha Plantation
Financials
Conclusion
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Bio-fuel- A Ray of Hope Bio-Fuel •
• • •
Oil provides energy to 95% transportation and continues to grow. Biofuels are renewable liquid fuels coming from biological raw material and have been proved to be good substitutes for oil in the transportation sector. Types of Bio-Fuel: Ethanol and Biodiesel Solution to many problems: environmental problems, energy security, reducing imports, rural employment and improving agricultural economy
Projected demand for petrol & diesel, and biofuels requirements (India)
Year 20062007 20112012 20162017
Ethanol blending requirement Biodiesel blending requirement (in metric tons) (in metric tons) Petrol Diesel demand @ 5 per @ 10 per @ 20 per demand @ 5 per @ 10 per @ 20 per cent cent cent Mt Mt cent cent cent
10.07
0.5
1.01
2.01
52.32
2.62
5.23
10.46
12.85
0.64
1.29
2.57
66.91
3.35
6.69
13.38
16.4
0.82
1.64
3.28
83.58
4.18
8.36
16.72
Biodiesel
Ethanol • • • • •
Raw material used for producing ethanol varies from sugar, cereals, sugar beet to molasses in India Brazil: ethanol as 100 % fuel in about 20 per cent of vehicles, 25% blend with gasoline in the rest of the vehicles USA and Australia use 10 % ethanol-gasoline blends whereas in Sweden 5% blend is used India: Use of 5% ethanol- gasoline blend is already approved by BIS and is in progressive state of implementation in the country. Three classes of vegetative sources (raw materials) can be used: · starch as grain, corn and tubers like cassava · sugar plants (sugar beet or sugar cane) · cellulose plants (general tree and biomass)
• • • • •
Biodiesel is made from virgin or used vegetable oils (both edible & nonedible) and animal fats through trans-esterification Use of biodiesel results in substantial reduction of un-burnt hydrocarbons, carbon monoxide and particulate matters It has almost no sulphur, no aromatics and has about 10 % built in oxygen, which helps it to burn fully. Its higher cetane number improves the combustion Raw materials: Sunflower and rapeseed in Europe, soyabean in USA, palm oil in Thailand, Frying oil and Animal fats in Ireland India: It is proposed to use non-edible oil for making biodiesel 3
Biodiesel: Advantages and Comparison with Diesel Usage
Energy Independence Reducing Trade Deficit
Economic Growth
Cleaner Air
Less Global Warming
• Can be used in any existing, unmodified diesel engine Fuel Property • Can be used alone or mixed in any ratio with mineral oil diesel fuel. The preferred ratio if mixture ranges between 5 and 20% (B5 - B20) Fuel Standard • Extends the live of diesel engines Fuel composition • With the rising costs of oil, for a majority of countries depending on the Lower Heating Value (Btu/gal) import of oil, it has now become a matter of ‘when’ instead of ‘if’ Kin. Viscosity, @ 40 8C • Reducing the oil imports will help us reduce our imports cost. This Specific Gravity kg/l @ 60 8F money can be used towards other important initiatives like health, Density, lb/gal @ 15 8C education and other services in our country Water, ppm by wt. • At the community level, farmers that produce dedicated energy crops can grow their incomes and grow their own supply of affordable and Carbon (wt.%) Hydrogen (wt.%) reliable energy • At the national level, biofuels will generate new industries, new Oxygen, by dif. wt.% technologies, new jobs and new markets Sulfur (wt.%) • Produce fewer emissions of carbon monoxide, particulates, and toxic Boiling Point (8C) chemicals that cause smog, aggravate respiratory and heart disease Flash Point (8C) • Produces 80% less carbon dioxide and 100% less sulphur dioxide Cloud Point (8C) emissions. It provides a 90% reduction in cancer risks Pour Point (8C) • Biofuels contain carbon that was taken out of the atmosphere by plants Cetane Number and trees as they grew. Studies show that biodiesel reduces CO2 Stoichiometric Air/Fuel Ratio emissions to a considerable extent and in some cases all most nearly to (w/w) zero BOCLE Scuff (g) • Biodiesel is also biodegradable
Diesel
Biodiesel
ASTM D975 ASTM PS 121
1,31,295
C12-C22 FAME 1,17,093
1.3–4.1
1.9–6.0
0.85
0.88
7.079
7.328
161
0.05% max
87
77
13
12
0
11
.05 max
0.0 - 0.0024
188-343
182-338
60-80
100-170
-15 to 5
-3 to 12
-35 to -15
-15 to 10
40-55
48-65
15
13.8
C10-C21 HC
3,600
>7,000 4
Biodiesel: Sources Vegetable Oils
Percentage Oil in Non-Edible Oil Seeds
• Soybeans, Rapeseed, Ground Nut, Sunflower, Coconut, Cotton Seed, Sorghum, Barley, Rice, Oat, etc
Species Non-edible Oil
Animal Fats
Other Sources
• Almond, Andiroba, Camelina, Cumaro, Jojoba Oil, Jatropha curcas, Mahua, Karanja, Castor, Palm, Rubber, Sesame, etc.
• Lard, Tallow, Poultry Fat, Fish Oil
• Bacteria, Algae, Fungi, Micro Algae, Tarpenes, Latexes, Cooking Oil (Yellow Grease) etc Jatropha
• • •
Jatropha curcas plant shows promise for use • as an oil crop for biodiesel It is non-edible and can grow in areas of low rainfall (250 mm per year minimum, 9001,200 mm optimal) and is drought resistant • Valued for crop protection, prevents wind/water erosion, is not browsed by animals, will reach maximum productivity by • year three, and has a 50 year life-span
Oil Fraction %
Castor
40-50
Jatropha
50-60
Karanja
30-40
Mahua
35-40
Linseed
35-45
Karanja Pongamia pinnata or karanja is a native of the Western Ghats and is chiefly found along the banks of streams and rivers or near the sea on beaches and tidal forests Grows in dry places, hardy tree that mines water for its needs from 10 metre depths without competing with other crops From year-5, the plant is expected to give economic yields and it may continue through to its life of 100 years
*Reasons for choosing Jatropha
Castor •
• •
Castor seed is the source of castor oil, which has a wide variety of uses. The seeds contain between 40% and 50% oil that is rich in triglycerides, mainly ricinolein Castor is indigenous to the south-eastern Mediterranean Basin, Eastern Africa, and India, but is widespread throughout tropical regions In arid and semi-arid regions the actual growing season to first harvest is about 170 days 5
Biodiesel: Manufacturing using Jatropha Oil In India, there is a presence of large junk of degraded forest land and un-utilised public land, field boundaries and fallow lands of farmers where non-edible oil-seeds can be grown. Of the variety of non-edible oil producing species, based on extensive scientific study, Jatropha curcas has been found to be very suitable for biodiesel production
Land Type Under stocked forests Protective hedge around agricultural fields Agro- forestry Fallow Lands Land related programmes of Ministry of Rural Development Public lands -railway tracks, roads, canals, etc TOTAL
Area Potential for Jatropha (Mha) Plantation (Mha) 31.0 142.0 11.45 24.0
197.0
3.0 3.0 2.0 2.4 2.0 1.0 13.4
Advantages of Jatropha • The oil yield per hectare for Jatropha is among the highest for tree-borne oil seeds. The seed production ranges from about 0.4 tons per hectare per year to over 12 t/ha. There are reports of oil yields as high as 50 per cent from the seed. Typically, the seed production would be 3.75 t/ha, with an oil yield of 30-35 per cent, giving a net oil yield of about 1.2 t/ha • It can be grown in areas of low rainfall (200 mm per year), on low fertility, marginal, degraded, fallow and waste lands. Canals, roads railway tracks, borders of farmers’ fields as a boundary fence/hedge in arid areas and even alkaline soils are appropriate for the crop • Jatropha is easily established in nurseries, grows relatively quickly and is hardy • Jatropha seeds are easy to collect as they are ready to be plucked before the rainy season and as the plants are not very tall • Jatropha is not browsed by animals • Being rich in nitrogen, the seed cake is an excellent source of plant nutrients 6
Biodiesel: Suggested Jatropha Based Value Chain Step 1: Cultivation of Jatropha
Cultivation Nursery
Farming Models
• Contract Farming • In this mode, along with buy-back arrangement, Mahindra can provide inputs, technical guidance and other extension services to the farmers during the initial years of establishment • The contracts can be reached either at a predecided price for the seeds or just with the understanding that the company will purchase the seeds at the prevailing market price
Biodiesel processing plant Govt/Private
Biofuel Board
Seedlings
• Estate Farming • In this mode, Mahindra can cultivate jatropha in either their own land or community land leased-in from the local panchayats. The company employs the local villagers to cultivate the crop and the right to harvest rests with either the company or is shared with the panchayats
Marketing
Processing
Private Traders
Oil Extraction
Intermediaries
Beneficiaries
By Product: Oil cake
Straight Vegetable Oil Plantation By Product: Glycerol Transesterification
Owned wasteland
Community wasteland
Forest Land
Harvesting and hulling of fruits
DRDO
Seeds
Railways
Biodiesel
Distributors
By-products: Leaves, latex, wood Transport companies Home Consumption Oil marketing Companies
7 Local use in fuel etc.
Biodiesel: Suggested Jatropha Based Value Chain Step 2: Collection of Seeds
Cultivation Nursery
• The farm-produced jatropha seeds take different routes to reach the processing plants. Mahindra can collect the seeds from the following agents. • Mahindra corporate agents who will collect seeds directly from the farmers in contract with us • Collect seeds from trees grown lands taken on lease • Local traders who collect the seeds from other farmers not in our contract • Government agents who collect seeds on behalf of Government Biofuel Boards
Biodiesel processing plant Govt/Private
Biofuel Board
Seedlings
Seed Marketing
Marketing
Processing
Private Traders
Oil Extraction
Intermediaries
Beneficiaries
By Product: Oil cake
Straight Vegetable Oil Plantation By Product: Glycerol Transesterification
Owned wasteland
Community wasteland
Forest Land
Harvesting and hulling of fruits
DRDO
Seeds
Railways
Biodiesel
Distributors
By-products: Leaves, latex, wood Transport companies Home Consumption Oil marketing Companies
Local use in fuel etc.
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Biodiesel: Suggested Jatropha Based Value Chain Step 3: Seed Processing and Biodiesel Production
Transesterification Process Requirements • • •
The most economical process for biodiesel manufacture is transesterification of Jatropha oil by an alcohol, usually methanol. Common catalyst is an alkali such as potassium hydroxide Methanol is preferred over ethanol because the costlier anhydrous ethanol is required instead of the readily available 95 per cent ethanol 9
Biodiesel: Suggested Jatropha Based Value Chain Step 4: Biodiesel Distribution
As of now, the consumers of biodiesel in the country include Defence Research and Development Organization (DRDO), some private companies, etc.
Public sector oil marketing companies (OMCs) like Hindustan Petroleum (HP), Bharat Petroleum (BP), IOC and ONGC are in the process of setting up an extensive network of biofuel distribution chain connecting various processing industries and retail outlets across the country
Several state transport corporations like Andhra Pradesh State Road Transport Corporation (APSRTC), Navi Mumbai Municipal Transport Corporation (NMMTC), Uttar Pradesh State Road Transport Corporation (UPSRTC), Calcutta Tramways Company Ltd, etc. have also started blending biodiesel with HSD in their fleet of buses
The Indian Railways, have started using 5 per cent blend of biodiesel in narrow gauge engines. A separate body ‘Indian Railways Organization for Alternate Fuels’ (IROAF) instituted under the Indian Railways is building networks with potential biodiesel suppliers
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Farmers’ view on Jatropha Plantation Drivers for Jatropha Plantation
Barriers for Jatropha Plantation
Future income possibilities
• Expectations on future economic yield and incomes from Jatropha plantations
Economic
• No or insufficient income from the plantation, Problem to acquire labour at a reasonable price
Survives without maintenance
• The plantations have survived without maintenance and are even yielding in some cases
Ecological
• Plantations affected by pests or diseases, No or insufficient yield
Knowledge
• Insufficient knowledge of plantation maintenance and usage of Jatropha, Lack of interest for continuation of cultivation
Effect on other plants
• Positive effects on other plants when intercropping
Demonstration
• Demonstration of the performance of Jatropha
Implementation
• Promises made by initiators or other actors in the initial stages of plantation have not been kept 11
How Mahindra can Help the Farmers… Crop Care: Mahindra can provide insecticides, fungicides, herbicides, nutrients and plant growth promoters to contribute to better harvests
MahindraShubhLabh Services Fresh produce services: Mahindra can effectively use this service in its contract farming & engage with the farmers throughout the production cycle to disseminate information on growing techniques MahindraInsurance & Rural Housing Finance
Farmers
MahindraFinancial Services
MahindraFarm Equipment Division
Seed Distribution: Mahindra can help the farmers by providing them seeds/saplings of jatropha plant at a competitive rate
Financial service: Mahindra can provide special financial service to farmers for purchasing agri-vehicles at less interest rates and increase its sales in the rural areas. It can also provide finance to farmers for buying farm equipment for cultivating jatropha
Insurance: It can increase the sales of insurance in the rural areas as people become more aware of the benefits of the insurance plans & their income rises
Financials of setting up a Biodiesel Production Plant Initial outlay Estimated cost of setting up 10 tonne per 8-10crore day plant
This includes installation and commissioning of: • • • • • • •
Trans esterification plant esterification plant Glycerin refining plant Laboratory Crude oil extraction crude oil refining Waste treatment plant
Govt. of India has already declared Biodiesel Purchase Policy wherein any biodiesel producer can supply biodiesel @ Rs.34/- per litre to public sector petroleum companies.
COST OF PRODUCTION OF BIODIESEL INPUTS Jatropha seeds Unskilled labor Managerial labor istrative labor Chemicals Used Methanol sodium hydroxide Electricity Interest on Fixed capital Depreciation on machinery Depreciation on other assets Freight and other incidentals Total cost (A) Revenue from byproducts Glycerol Oil cake Total Revenue(B) Net cost incurred (A)-(B) Recovery of biodiesel/tonne of jatropha seeds Net cost/Kg of biodiesel
QUANTITY VALUE(Rs) 65000 10 tonnes/day 720 6 human days 600 1 human day 1600 4 human days 600 litres 21 Kg 250 Units at 10% at 10% at 4%
6600 540 2500 6800 1700 2740 6500 95300
467 Kg 6750 Kg
10274 33750 44024 51276
273 Kg
18.78 13
Conclusion Producing biodiesel form non-edible oil is the solution to many problems: environmental problems, energy security, reducing imports and improving agricultural economy
Investment in biodiesel is an investment in local communities. Biodiesel creates green-collar jobs.
A socially responsible Mahindra can enter the business of biodiesel production to make green fuel available for the automobile industry in India
In this holistic approach, Mahindra can include farmers to setup a value chain around biodiesel production
Mahindra can also enhance its customer base by providing its services to the newly empowered farmers of jatropha plantation
This initiative will enable both the rural population and Mahindra to ‘Rise’ 14
References • • • • • • • • • • • • •
http://www.energy-daily.com/reports/The_Current_Biofuel_Market_In_India_999.html http://unctad.org/en/Docs/ditcted20066_en.pdf http://planningcommission.nic.in/reports/genrep/cmtt_bio.pdf http://www.demec.ufmg.br/disciplinas/eng032-BL/artigo.pdf http://www.treeoilsindia.com/products.htm http://www.pcra-biofuels.org/biodiesel.htm http://www.svlele.com/indexb.htm http://www.cbdacg.com/faq.htm http://www.indianrailways.gov.in/railwayboard/s/tenders/pdf/Cori_1_IROAF_230310.pdf http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_New%20Delhi_India_6-20-2012.pdf http://www.fao.org/docrep/012/i1219e/i1219e.pdf http://publications.lib.chalmers.se/records/fulltext/136377.pdf http://ageconsearch.umn.edu/bitstream/96913/2/1-P-Shinoj.pdf
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Thank You 16