Biodiesel (or Bioenergy) is the name for a variety of ester-based fuels (fatty esters) generally defined as the monoalkyl esters made from non edible oils such as Pongamia or Jatropha or Neem or Simaruoba oil, or sometimes from animal fats through a simple transesterification process. This renewable source is as efficient as petroleum diesel in powering unmodified diesel engine.
Despite precise written sources, the concept of using vegetable oil as an engine fuel likely dates when Rudolf Diesel (1858-1913) developed the first engine to run on peanut oil, as he demonstrated at the World Exhibition in Paris in 1900. Unfortunately, R. Diesel died 1913 before his vision of a vegetable oil powered engine was fully realized.
Rudolf Diesel firmly believed the utilization of a biomass fuel to be the real future of his engine. He wanted to provide farmers the opportunity to produce their own fuel. In 1911, he said “The diesel engine can be fed with vegetable oils and would help considerably in the development of agriculture of the countries which use it”.
After R. Diesel’s findings the petroleum industry was rapidly developing and produced a cheap by-product “diesel fuel” powering a modified “diesel-engine”. Thus, clean vegetable oil was forgotten as a renewable source of power.
Agricultural growth lags far behind growth in manufacturing and services, reflecting lack of investment and low productivity in the sector. Three quarters of India’s poor people live in rural areas, and their prospects to overcome poverty are dim if agriculture remains decoupled from India’s current economic boom. Second, India needs energy.
From 1990/91 to 2006/07, India’s oil imports increased dramatically from 21 to 111 million tonnes. As economic growth continues to be strong and international energy prices quickly rise, the country’s foreign exchange expenditures for oil imports are skyrocketing. Biodiesel could stimulate agricultural development and create employment and income for many of the rural poor. At the same time, it may satisfy a significant part of the country’s fuel demand, increasing India’s energy security and saving foreign exchange. Shifting to biodiesel could also reduce greenhouse gas emissions and urban air pollution. And finally, as oil-bearing trees can be grown in semiarid regions, there is a potential to rehabilitate degraded lands, which are abundant in India.
At the same time, biodiesel production has recently come under heavy criticism for two reasons. First, critics claim that fertile agricultural lands will be diverted to cultivation of fuel crops at the expense of food production. Food scarcity and rising prices would especially hit the poor. Second, it has been shown that biodiesel production in some countries in fact increase greenhouse gas emissions, because forests are cleared for their cultivation and high energy inputs are used to produce some of the fuel crops. However, the biodiesel sector is in an early stage in India. Although a significant number of plantations and some processing plants have been set up in recent years, the first full yields are yet to come. Little is therefore known about the economics of biodiesel from TBOs, and it is still uncertain whether production will ever become economically viable. Likewise, it is not yet clear what its socio-economic and environmental impacts will be, e.g. how much additional employment will be created and how big the undesired side-effects will be. Furthermore, little is known about how the different stages of the bio-diesel value chain should be organised in order to achieve the best socio-economic and environmental outcome, and which policies are most appropriate to achieve this.
The Government of India approved a National Policy on Bioenergys in September 2008, setting an indicative target to rise blending of biodiesel with diesel to 20 % by 2017 and scrapping taxes and duties on biodiesel. Moreover, well funded government programmes for rural development are already used to subsidise the establishment of biodiesel plantations on a large scale throughout India. While the federal policy has only recently been approved, several state governments took the lead and established their own Bioenergy policies, each setting its own priorities and employing particular policy mixes.