Biodiesel producers shed export dependency

Biodiesel producers, who were until recently completely dependent on the export market, are now able to sell a part of their produce to DG (Diesel generator) set users and large bus/truck fleet owners.

These DG sets are being run completely on biodiesel while fleet owners are blending 20 per cent biodiesel with diesel. The biodiesel is being sold at a price of Rs 34-35 a litre, cheaper by Rs 1 a litre on an average compared to the fossil diesel price.

Kakinada-based plant of Naturol Bioenergy is now selling 30 per cent of its produce in the domestic market while exporting the rest. The plant has a capacity to produce 100,000 tonnes of biodiesel annually.

“In future, we expect to sell half of our produce in the domestic market and we are targeting DG set users and large bus or truck fleet owners,” said D S Bhaskar, managing director of the company.

Fortunately, the demand from domestic market comes at a time when biodiesel exports are under pressure and realisation have declined by 50 per cent due to a crash in crude oil prices.

“We have started looking at the domestic market since there is a demand slowdown internationally as a result of weakening crude prices. However, the volume in domestic market is small and it would go up only when the government introduces mandatory blending,” said Srinivas Prasad Moturi, chairman and CEO of Cleancities Biodiesel, which has a 250,000 tonnes capacity.

Kolkata-based Emami Group is negotiating the price with the West Bengal State Transport Corporation, which is keen to blend 20 per cent biodiesel with diesel in their buses, according to Emami director Aditya Agarwal. The company has a 100,000 tonnes capacity biodiesel plant at Haldia.

The Union Cabinet approved the National Policy on Bio-fuel on September 12, aimed at raising blending of biofuels with petrol and diesel to 20 per cent by 2017.