India pins biofuel hope on jatropha, output to rise

A woman clears wild grass near a jatropha plant in Malegaon, 260 km northeast of Mumbai in this October 9, 2006 file photo. India is forecast to produce 2 million tonnes of biodiesel by 2012 as it aggressively plants wild jatropha oilseed to meet growing hunger for energy, a senior industry official said on Thursday.

KUALA LUMPUR (Reuters) - India is forecast to produce 2 million tonnes of biodiesel by 2012 as it aggressively plants wild jatropha oilseed to meet growing hunger for energy, a senior industry official said on Thursday.

The nation has identified 64 million hectares of wasteland that can be planted with jatropha, a non-edible oilseed which grows even on arid land in most warm climates and needs little care.

"India has 64 million hectares of wasteland and we asked the government to just provide 20 percent of the wasteland for planting jatropha," said Rajiv Gulati, vice president of Biodiesel Association of India.

In anticipation of the rapidly evolving biofuels market, dozens of private firms are contracting villagers to grow the hardy, oil-rich plant in their mostly barren plots of land. But now several corporates, farmer groups and cooperatives were taking the plunge as states were allocating wasteland for oilseed cultivation, Gulati said.

"Some state governments have already started giving land to interested parties, but it comes with conditions," Gulati told Reuters in an interview.

"Some of the conditions include growing jatropha plantations within a set time frame."

TO REPLACE DIESEL

India plans to replace around five percent of its current 40 million tonnes of annual diesel consumption with jatropha biodiesel within about five years.

Jatropha is seen as a good bet for India if it wants to cut back on oil imports that account for 70 percent of its needs.

Gulati said India has planted jatropha on some 2 million hectares in the last three years but oil production will only start by 2012.

"Two million hectares planted, but you will not see a single kilogram of seeds today," he said on the sidelines of an industry meeting in the Malaysian capital.

"The seeds are harvested and used for planting more trees, we have vast area that needs to be covered."

He said three biodiesel plants with a combined capacity of about 300,000 tonnes have started in India but many firms were delaying projects in absence of feedstock.

"Initially, they were supposed to use palm oil but seeing the high prices, a lot of the plants have slowed down construction," said Gulati, who runs a biodiesel unit in the northern state of Haryana.

"By the time jatropha production starts we expect the capacity to go up to 2 million tonnes."

Experts say Jatropha, a tough bush with oil-bearing fruit, has plenty of small scale potential but needs more research before it can be grown on a large scale.

Cultivated on a small scale, jatropha can provide oil to power a generator to pump irrigation water and it has an advantage over other energy crops like palm or soyoil as it is not edible and so using the oilseed as fuel does not compete with food uses.

But jatropha is a labour-intensive crop as fruits on the same bush mature at different stages so they cannot be picked by a machine.

And Gulati said that is an issue even in India with billion-plus people.

"Labour is an issue, manual agriculture is very expensive. There is migration from the countryside, so there is scarcity of labour."