Title: Role of biodiesel in the growing energy demand scenario in India
1Role of bio-diesel in the growing energy demand
scenario in India
July 14, 2007
2INDIA WILL BECOME THE THIRD LARGEST ECONOMY IN
THE WORLD BY 2030 AND HAVE THE FASTEST GROWTH RATE
2.7
India has a robust future growth position
GDP in trillion US
CAGR Percent
FY 2030 (E)
FY 2005 (E)
11.7
US
US
2.2
8.2
Japan
China
9.0
Germany
India
1.2
China
Japan
1.1
India
Germany
Source World Development Indicators Goldman
Sachs, Dreaming with the BRICs The path to 2050
IEA UBS estimates
3INDIA IS EXPECTED TO BE THE WORLDS FOURTH
LARGEST CONSUMER OF ENERGY BY 2020
Oil consumption likely to substantially increase
by 2020
2020 forecast oil consumption in mtpa
US
China
India
Russia
Japan
Brazil
Germany
Source IEA BP Statistical Review of World
Energy 2004 Project BRICS-Relative
attractiveness of downstream markets
4INDIA WILL HOWEVER NEED TO RELY HEAVILY ON CRUDE
IMPORTS TO SATISFY THE DEMAND FOR OIL
1
Million tonnes per year (mtpa)
225
182
152
124
113
Net import
Production
2000
2020E
2005
2015E
2010E
imported
- 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 EnergyFiles Wood
Mackenzie
513.2
BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN THIS
SCENARIO
Drivers for bio-diesel adoption
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)
Supply security through reduction in crude
imports
Rural empowerment
- Bio-diesel value chain can create up to 9 million
jobs in rural areas as early as 2015
Low environmental impact
- Bio-diesel production process is eligible for
carbon credits (CERs) under Kyoto Protocols
Clean Development Mechanism (CDM) scheme. - Bio-diesel is less polluting and eco-friendly
than conventional fossil fuels
6BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN REDUCING
CRUDE IMPORTS
1
Million tonnes per year (mtpa)
225
182
152
124
113
Bio-diesel substitution
Net import
18
7
Production
2000
2015E
2005
2010E
2020E
imported
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 EnergyFiles Wood
Mackenzie
7POTENTIAL RURAL IMPACT ON INCOME AND JOBS CAN BE
HIGH
Land under cultivation
2015 substitution level
Rural economic impact (Rs crore)
Multiplier effect
Total Rural impact
Million Acre
Per cent
Income
Jobs
Rs crore
Million
5
(3-4.5)
2
6750
3,375
4.5
3.8-5
7.5-10
10
(9-11)
2
9
6,750
13500
15-20
20
(18-21)
2
18
13,500
27,000
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
8BIO-DIESEL HAS SIGNIFICANT ENVIRONMENTAL BENEFITS
Emissions are lower compared to conventional
diesel
Units in per cent
20 blending of biodiesel
- Total unburned Hydrocarbons
-30
-20
- Plant prevents soil erosion helps in nutrient
replenishment of soil - Leaves, flowers and barks can be used for
medicinal purposes
-22
-2
-20
- PAH (Polycyclic aromatic hydrocarbons)
-20
-50
- Ozone Potential of Speciated HC
-10
93 ENABLING INTERVENTIONS ARE REQUIRED TO MAKE
BIO-DIESELA THRIVING INDUSTRY IN INDIA
0.05
- 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 - Public private partnership involving State
governments - On RD on seed productivity-Create a dedicated
biofuel seed resource at Department of
Biotechnology - Certification of seed quality and other farming
standards - Ensure close involvement of Panchayats to gain
farmer confidence - Farmer insurance and financing and purchase
guarantees - Coordinate policies to finance marginal farmers
for wasteland cultivation
Source Interviews, press searches
10BPCLS EFFORTS IN THE BIO-DIESEL CHAIN
Phase 3(2009-2015)
Phase 2 (2007-09)
Phase 1(till 2007)
- Partnerships with State Governments with high
activity in Jatropha and Pongamia cultivation for
large scale commercial play in the bio-diesel
value chain
- Initial commercial efforts for entering in the
bio-diesel value chain in collaboration with
State governments and other partners
- Pilot efforts in Jatropha cultivation in BPCL
owned tracts of land across the country
- Over 500 acres brought under Jatropha
cultivation.
- Over 1 million acres to be brought under Jatropha
cultivation to produce 1 million tonnes of
bio-diesel by 2014-15
- 100,000-200,000 acres to be brought under
Jatropha cultivation
11THANK YOU
12BACKUP
13FURTHER, INDIA CAN CATER TO THE GLOBAL BIO-DIESEL
DEMAND TO EARN SIGNIFICANT FOREIGN EXCHANGE
Indias share
Required supply
Bio-diesel demand
Implied forex inflows/savings
Tonnes million
Rs crore
Per cent
Million tonnes
20-30
1.5-3
8-93
Rs.13,000-17,000 crore foreign exchange
opportunity
100
3-4
3-4
0 4
0
2-3
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 ?
14OIL WILL CONTINUE TO BE A KEY SOURCE OF ENERGY
EVEN IN 2020
Primary energy consumption by fuel Quadrillion
BTU1
1 1 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