Lack of availability of feedstock has proved to be stumbling block for the growth of Indian bio-diesel market. It is likely to take a while for biodiesel to be established as an effective biofuel, since Jatropha plantations in the country are still in the initial stages of development, said Frost & Sullivan in its report on ?Strategic Analysis of the Indian Biofuels Industry?.
Three to four years and many plantations later, the country may have the feedstock necessary for the large-scale production of Jatropha oil for use in biodiesel. The absence of a clear government policy on Jatropha oil production has inhibited several biofuel manufacturers from entering this market. Hence, Indian manufacturers are considering importing palm oil to produce biodiesel.
The better-developed Indian bioethanol market is also grappling with similar availability issues, as ethanol is primarily manufactured from molasses?a by-product of sugar. Since sugarcane production is cyclical, the availability and cost of production of bioethanol will vary depending on sugarcane crop yields.India?s ethanol-blending program could not be implemented during 2003-2004 due to a low sugarcane output and the second phase of this program was announced in September 2006 only after a recovery in sugarcane production, the report pointed out.