Support for ethanol, other biofuels strong in India

BBI International explores business opportunitiesin India for Western technology providers
By Jeff Graef & Angela Graf | May 01, 2002
BBI International has been exploring business opportunities in India for the ethanol industry. For the past twenty years, India has been exploring biofuels but only until recently has the nation been looking seriously at expanding the industry. The worsening air quality in many of India's cities has been drawing much attention from the government. In order to start mitigating air pollution, New Delhi began converting city busses and taxis to CNG. However, infrastructure to deliver CNG has not been able to keep up with demand. Long lines at the filling station have resulted. Despite these problems, air quality has improved and now many cities in India are considering a CNG program along with low sulfur diesel, ethanol and/or biodiesel to help solve air quality problems.

BBI to co-host international biofuels convention in India
Due to the increasing interest and support for biofuels in India, the Confederation of India Industries (CII) has invited BBI International to co-host an International Convention on "Biofuels: Driving India's Future," November 7-9, 2002, in New Delhi. The purpose of this conference is to address a long-term strategy and policy for biofuels production and use in India. BBI Director of Conferences-International Development Angela Graf traveled to India this spring to meet with CII and several representatives from the agricultural, distillery, and automotive industries to discuss the important issues that need to be addressed in order to establish a biofuels program.

In April, Jeff Graef, BBI's newest staff member, was invited to give a presentation on biofuels at BangaloreBio, a conference on biotechnology held in Bangalore, the Silicon Valley and emerging biotechnology center of India. While in India, Jeff met with engineers and businesses to gain an understanding of their views on upcoming developments in ethanol and biofuels production. Both of these trips by BBI made it clear that there is incredible interest for ethanol, ethanol-diesel and biodiesel development in the country.

5% sollution?
There several are challenges to overcome in the process. The mix of fuels and vehicles are different in India than in other parts of the world. More than 75% of India's motor vehicles are two and three wheelers. The inherent inefficiencies of these two-stroke engines mean that they contribute over 70% of the total hydrocarbon and 45% of the carbon monoxide emissions. Many of the larger Indian cities require catalytic converters for these vehicles. Trials of 5% ethanol/gasoline blends have been conducted and proved successful (e.g., low ethanol blends are compatible in engines). A 10% ethanol blend trial is now being conducted. Results are due to be released this September. Legislation is being considered by the Ministry of Petroleum & Natural Gas to mandate the use of 5% ethanol blends in eight of India's twenty-eight states. This law, if enacted, would create a significant market for ethanol. Ethanol- and bio-diesels also have high interest as India consumes almost seven times more diesel than gasoline.

India's Production Capacity
India currently produces about 300 million metric tons of sugar cane per year, which is processed in nearly 400 sugar cane factories and approximately 250-300 distilleries. Most of the distilleries are relatively small with a typical production capacity of around 300,000 liters per year of primarily beverage and industrial grade ethanol. The predominant feedstock for alcohol production is molasses - less than 10 use grains. The distilleries are running under capacity and could expand their operations to produce fuel-grade ethanol. Estimated production capacity is approximately 1.3 billion liters per year while the installed capacity is approximately 2.7 billion liters.

Expansion and Opportunities
Since few distilleries have the capability to produce anhydrous ethanol, the initial business opportunities in India will likely be to supply technologies to dehydrate ethanol. Eventually, as India's biofuels demand grows, there will be a need for state-of-the-art fuel ethanol production facilities. The future of this expansion will depend largely on India's political commitment to biofuels use. However, India's sugar industry and distillers industry are strongly in support of providing biofuels to India's growing transportation fuels market and providing a product that will help air quality, the nation's economy, and reduce dependency on foreign oil (India currently imports 70% of their fossil fuel demand).

Potential Exporter?
India is well positioned to supply biofuels to Europe and other countries developing a biofuels program. India is blessed with large expanses of agricultural lands and long growing seasons. In many regions, two crops of sugar cane are grown per year. As demand grows, India's distillation industry will become more interested in increasing plant production efficiency to compete more effectively in the world market. Oilseed crops are also common and could provide sufficient feedstocks for India to become a major producer of biodiesel. Furthermore, India also has extensive biomass resources for cellulose-ethanol production.