Mumbai: Tata Chemicals Ltd, the country’s leading manufacturer of inorganic chemicals, is actively exploring opportunities to enter the commercially promising biofuels business.
The company plans to foray into biodiesel production and is already in talks for securing the required raw material from several leading plantation groups that are engaged in growing jatropha and pongamia plants on a commercial scale, according to company executives who did not want to be named. Jatropha curcas and Pongamia pinnata are the two biofuel-rich plant species currently grown in the country on a commercial scale by several organized and unorganized players.
Tata Chemicals is understood to have already developed relevant technologies for biodiesel extraction and refining, or transesterification as the process is called.
The executives said Tata Chemicals might soon set up a biodiesel transesterification unit in the country. The planned investment in the project could not be ascertained. “The company is exploring various new business opportunities. But nothing has been finalized since the evaluation processes are still on,” said a company spokesman.
Interestingly, another Tata Group company, Tata Motors—the country’s largest integrated automobile manufacturer—has been working on a biodiesel programme in collaboration with Indian Oil Corp. to run its buses on a biodiesel blend which would be much cheaper than diesel.
Biodiesel, one of the growing areas in natural fuel, has been attracting a lot of interest as the government has said 10-15% of diesel sold can be blended with biofuels. Diesel is sold at Rs32.83 a litre in Mumbai while blended biodiesel is priced at Rs25 a litre.
The jatropha sector could get a fresh boost as the Union Budget has proposed total exemption of excise on biodiesel. But with the cost of production of biodiesel much higher than the price that oil marketing companies are currently willing to pay, the elimination of excise alone is unlikely to be a major breakthrough.
The energy information administration in the US estimates that global demand for biodiesel will be at least 6.5 million gallons in 2010 based on the potential fleet demand to comply with the respective energy-policy legislations of various countries.