Bio-fuel has great export scope : study

Written by ASHOK B SHARMA | New Delhi, Aug 15 : | Updated: Aug 17 2007, 02:56am hrs
If India can produce sufficient bio-fuel it can avail of the opportunity for exports to the European markets at a premium price said a study conducted by a multinational consultancy and market research firm, Frost & Sullivan India Ltd

The study said that the EU directive for 5.75% mandatory blending of auto-fuel would create a demand for about 12 million tonne bio-diesel in 2010. This demand may not be met as there would be a shortage of about 5.35 million tonne of raw material for production of bio-diesel and hence there may be an opportunity for export of bio-diesel to Europe.

Pointing to the growing consumption and possible shortage of bio-diesel in US, the study said that that exports to that country may not be possible in view of the likely protectionist measures. The American Soybean Association has already called for imported bio-diesel to be exempted from federal tax benefits, it said.

Though India bio-diesel market is still at a nascent stage, not only typical agribusiness companies but a number of new players including energy companies, fuel and energy traders, private equity investors, automotive companies and financial investors are taking equity shares in various bio-fuels ventures across the world in order to tap the rapidly growing bio-fuel market, the study said

The Frost & Sullivan study also advocated raising bio-fuel production particularly from low cost effective Jatropha plantation in marginal and wastelands. India has the potential to produce enough bio-fuels not only for meeting its domestic auto-fuel blending programme, but also for exports, it said. It also cautioned that if India does not avail of this present opportunity in the times to come Malaysian and Indonesian palm oil based bio-diesel would dominate India market.