Greater Government Involvement Needed To Improve Feedstock Production In The Indian Biofuels Market

Business Wire, Sept 26, 2007

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c69476) has announced the addition of the new Frost & Sullivan Report "Strategic Analysis of the Indian Biofuels Market" to their offering

This Frost & Sullivan research service titled Strategic Analysis of the Indian Biofuels Market provides an overview of the current and future markets for biodiesels in India. It also provides feedstock analysis, market drivers, restraints, and future strategies for the industry. In this research, Frost & Sullivan's expert analysts thoroughly examine the biodiesel and bioethanol markets.

Greater Government Involvement Needed to Improve Feedstock Production in the Indian Biofuels Market

Held back by the lack of large-scale availability of feedstock, the Indian biodiesel market trails its global counterparts by a long way. 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. 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. Overall, the Government and industry have to show greater initiatives toward the Jatropha program to help biodiesel manufacturers save costs. Meanwhile, in the bioethanol sector, further research is necessary to aid in the development of alternate feedstock and improvement in production efficiency.

Biofuels Ride High on the Demand from the Indian Transport Sector

A strong economy, rising incomes, and a vibrant market have given a huge boost to the transport sector in India, which is the fastest growing energy-consuming sector in the country. This sector's energy demand is expected to grow by 6 to 8 percent per annum during the 11th five-year plan period (2007-2012). With more than 80 percent of passengers and 60 percent of freight being transported by road, it is obvious that the dependence of personal modes of transport, such cars and two-wheelers, has increased drastically. "The automotive vehicle population is growing by 12 to 15 percent per annum and this will, in turn, impact the transport sector's energy demand," says the analyst of this research. "Diesel and gasoline (petrol) contribute to 98 percent of the energy consumed in the transport sector."

India's crude oil and petroleum products supplies are largely import-dependant. With oil import expenditure increasing by more than six times in the last 25 years due to escalation in global demand and prices, biofuels are likely to be pressed into service. This alternate form of fuel will be critical in reducing the dependence on fossil fuels, achieving greater energy security, and reducing noxious emissions. "The Government is currently implementing an ethanol-blending program, while it is also considering initiatives in the form of mandates for biodiesel," notes the analyst. "Due to these mandates, the rising population, and the growing energy demand from the transport sector, biofuels will be assured of a significant market in India."

For more information, visit http://www.researchandmarkets.com/reports/c69476