Nov 30 2010
The Biodiesel Association of India proclaimed that the 2,300-crore, 1.2-million capacity biodiesel blending proposal is stopped due to problems such as high prices of raw materials, trading and state governments’ double taxation.
The Ministry of Non-Renewable Energy had designed the draft of the biofuel policy of the nation and received the clearance from the union cabinet in December 2009. The policy has planned for a tentative target of 20% blending of biofuels such as, bioethanol and biodiesel by 2017. The blending of ethanol has occurred from 2006 to 2009 and recommenced from November 2010. However, the initiative for the blending of biodiesel was never taken off.
The government of India was concentrating on the use of jatropha as indigenous feedstock. Companies such as Ruchi, Indian Oil and Reliance Industries have started jatropha plantation, which will be harvested in the coming two-three years. However, the market for jatropha is not yet developed and the government has dropped the National Biodiesel Mission for jatropha research and plantation.
Director of Ruchi Biofuels, Akhilesh Sarraf, commented that the company could not manufacture and trade at the price of Rs. 26.50 per liter as prices of raw materials such as palm acid oil is high. The government should design an efficient pricing policy to overcome the difficulty, he added. The price of palm acid oil has increased from Rs. 25 to more than Rs. 40 per liter, which makes the production of biodiesel unviable. Moreover, West Bengal and Andhra Pradesh state governments are imposing VAT on biodiesel, which equals that of on diesel. Ruchi Soya runs a 10,000-ton biodiesel output plant in Kakinada. Similarly, Emami Group, which runs a Rs.150-crore, 100,000-ton capacity biodiesel plant in Haldia, had started marketing biodiesel to Calcutta Tramways in the beginning of 2009. However, the petroleum ministry’s circular to the government of West Bengal had demanded the state government’ guarantee in the sale of biodiesel and eventually the marketing of biodiesel was halted.
Source: http://www.bdai.org.in