High costs, uncertain yield, less availability of wasteland are some of the reasons that have compelled Indian Oil Corporation (IOC) to review its biofuel business strategy.
At present, there is a question mark over the commercial viability of large-scale jatropha projects unless high-yielding planting material and financial support (Government incentives) are made available, say industry observers.
Jatropha is an environment-friendly oilseed plant that is used to produce bio-diesel.
“The ground reality was different than what was expected. We are now reviewing how to proceedin the business,” Mr A.M.K. Sinha, Director, Planning & Business Development, IOC, said.
However, the company is committed to its ongoing jatropha plantation projects in Madhya Pradesh, Chhattisgarh, and Uttar Pradesh, he told Business Line . A review of the Madhya Pradesh projects will be done at the end of 2013-14, while operations of the UP project will be reviewed soon. For the Chhattisgarh project, the investments planned for three years starting 2011-12 is about Rs 16 crore (investments till March 31, 2011 estimated over Rs 8 crore), the Madhya Pradesh project had an investment plan of approximately Rs 1.5 crore (Rs 1.6 crore till March 31, 2011), and Uttar Pradesh about Rs 12.5 crore (Rs 0.2 crore till March 31, 2011).
On the challenges before the company, Mr Sinha said, “Access to land is a big challenge for such projects. As we started on the projects, we found that availability of wasteland is much lower than recorded.”
The next challenge was uncertain yield, he said, adding “we are now in talks with a US-based company, which has developed a high-yield variety of seeds. The company is also planning field trials of pongamia pinnata.”
Mr Sinha said apart from team and skill building, enhanced learning on jatropha curcas plantation with a low-cost model is being done.