Second Generation Biofuels in India – Relevance and Status

Narasimhan SanthanamEnergy Alternatives India

(EAI)

About EAI

• Leading Indian renewable energy business intelligence, market strategy consulting firm

• Work on all primary renewable energy sectors – solar, wind, bio-fuels / biomass, waste-to-energy and small hydro

• Work on market research, entry and diversification strategy, economic and financial modeling and pre-feasibility analysis

• Team comprises professionals from IITs and IIMs, with renewable energy, industry research and economics backgrounds

• Based out of Chennai, India• More at www.eai.in

Contents

• Biofuels• Biofuels in India• Second Generation Biofuels in India• Cellulosic Ethanol• Jatropha Biodiesel• Opportunities for India• Benefits for India• Second Gen Biofuels – Current

Status• The Road Ahead

Introduction to Biofuels

Biofuels

1st generation

1st generation

2nd generation

2nd generation

3rd generation

CornCaneMaize

SwitchgrassCellulosicGasification

PalmSoybeansRapeseed

JatrophaGasification

Algae

Ethanol Biodiesel

Biofuels in India

• Mainly uses first generation feedstocks

• Ethanol - Sugarcane molasses

• Biodiesel - Rapeseed and other edible oils for biodiesel

Govt Incentives and Plans

Specific mandates and incentives for biofuels

– 20% biofuels by 2017 (National Policy on Biofuels, 2008)

– Mandatory 5% blending for ethanol and biodiesel (Nov 2009)

– Government agreed on a price of 34 rupees per liter of petrol for biodiesel purchase by oil companies (Nov 2009)

– Incentives for Jatropha cultivation (IREDA…)

Inspite of Mandates & Incentives…

• Fuel Ethanol - 60 million gallons in India vs. 15 billion gal worldwide in 2008 (0.4%)

• Biodiesel - 10 million gallons vs. 3 billion gallons in 2008 (0.3%)

• Less than 0.5% of total transportation fuel in India uses biofuels

• It can be inferred that India’s performance in biofuels has been very poor

Possible Solution

Second Generation Biofuels

Why Second Gen Biofuels Could Be the Solution

First Gen Second Gen

Food vs. Fuel Non food biomass

Needs arable land Can grow on marginal lands

Not scalable Vast range of biomass makes it scalable

Low yields and viability Higher yields; more viable

Second Generation Biofuels in India

2nd Gen Ethanol - Cellulosic Ethanol

• Made from cellulosic biomass• Examples of cellulosic biomass – corn stover,

switchgrass, crop residues.• Scalability is high, but so is current cost of

production• High cost owing to need for pretreatment• In late pilot stage, not yet commercialized

2nd Gen Ethanol - Cellulosic Ethanol

Cellulosic Ethanol Potential in India

• India produces about 440 million tons of crop residues annually; this translates to about 130 million T of ethanol per annum

• India has 63 million ha waste land; translates to about maximum potential of over 500 million T of cellulosic ethanol per annum.This is equivalent to 350 tons of petroleum.

• India’s total crude oil import is about 110 MT per annum

Cellulosic Ethanol Status

• Been primarily a North American phenomenon

• Relatively new to India

• Mostly in R&D stage, only a few pilot projects

Cellulosic Ethanol – Prospects & Problems

Prospects Problems

Effective utilization of waste biomass

Technology not yet commercial

Could take care of all India’s gasoline substitute needs

High costs of production

Some process routes highly scalable

Lack of R&D in India

2nd Gen Biodiesel - Jatropha Biodiesel

• First plantations started in the early part of this decade

• India was the first country to grow it on large scale

• Plantations now in other parts of Asia and Africa.

• No large scale Jatropha biodiesel production yet

2nd Gen Biodiesel - Jatropha Biodiesel

Source: http://www.rrbconference.com/bestanden/downloads/125.pdf

Jatropha Biodiesel Growth in India

Year Area under cultivation (mill ha)

CAGR

2008 0.5

2010 1.2 55%

2015 1.9 10%

Jatropha Biodiesel in India - Prospects & Problems

Prospects Problems

Significantly reduce our fossil fuel dependency

Much lower yields than expected

Utilize marginal lands Lack of expert knowledge across entire value chain

Generate rural employment

Not reliable enough for farmers to invest in it

Opportunities for India in Second Gen Biofuels

Opportunities for– Oil companies– Farmers– Agri R&D companies– Equipment manufacturers– Vegetable oil companies– Sugar mills and distilleries

Opportunities for India in Second Gen BF

Opportunities for– Logistics Companies

• Biomass to fuels requires significant transportation and material handling

– Local employment opportunities• The investment in the ethanol

industry per job created is $11,000, which is significantly less than the $220,000 per job in the petroleum field.

Benefits for India from Second Gen Biofuels

• Lower fuel import bill

• Less dependence on Middle East for oil

• More environmentally sustainable transport fuels

• Higher rural employment

India’s Current Status in Second Gen Biofuels

• Second Gen biofuels yet to make any impact in India

• Reasons:– Govt not enforcing mandates and not

enough incentives– Low investments by govt and private

sector– Little R&D

The Road Ahead

• Set up apex bodies that can act co-ordinate national level activities – equivalent of National Biodiesel Board for the US

• Invest significantly in R&D for both Jatropha and Cellulosic Ethanol

• Sponsor grants and other funding to accelerate research and pilot plant projects in second gen biofuels

Second Generation Biofuels Can Provide a Solution to India’s

Transport Fuel Woes, But Only If Government and Industry Take Proactive Measures and Make

Significant Investments

Thank You