Wednesday, July 29, 2009

Another major Jatropha project suffers setback

By Emmanuel K. Dogbevi

Another Jatropha biofuel project initiated by D1 Oils Plc has suffered a jolt as a major investor pulls out.

Reports reaching from the US say, Europe’s second largest oil company BP Plc intends to exit its Jatropha biofuel project with D1 Oils Plc. BP, according to the reports is exiting the Jatropha project to focus on ethanol production in Brazil and the US and also to advance biobutanol development.

As a result of BP’s withdrawal, D1 agreed to acquire its 50% interest in their joint venture D1-BP Fuel Crops Ltd. venture which was set up in June 2007 to develop Jatropha. Jatropha is a drought-resistant tree whose seeds contain oil that can be used in biodiesel production.

The deal came to an end when the two companies failed to get a third investor for the project. The two began talking about dissolving the venture this year and bringing planting and plant-science operations under D1’s control.

BP and D1 had planned to plant 1 million hectares of Jatropha over four years, of which 220,000 hectares had been planted by April.

BP Alternative Energy earmarked $8 billion for the project investment in the decade through 2015. BP, which expects biofuels to account for 11 percent to 19 percent of the world’s transport-fuel market by 2030, supplied about 10 percent of global biofuels last year, according to company estimates.

London-based D1 however said it would be able to maintain the business at lower cost until market conditions allowed the injection of new capital.

This is the second time D1’s investments in Jatropha to produce biofuels has not gone well.

An ambitious Jatropha project in India involving 22 agribusiness colleges failed to yield projected targets, leading to disappointments and disillusionment.

The argument has been made that Jatropha would grow on wasteland or marginal land, but Indian researcher, Dr Suman Jha who worked on the D1 project disagrees. He says, “this is not a wasteland crop. It needs fertiliser, water and good management. Yes, it grows on wasteland, but it doesn’t give you any yield.”

D1 Oils planted about 257,000 hectares of Jatropha, mainly in India but it was unsuccessful and the company was compelled to move far too early.

For instance in 2006 D1 aimed to produce 2.7 tonnes of oil per hectare from areas planted with its new E1 variety, and 1.7 tonnes of oil from normal seed. That is equivalent to about 8 tonnes and 5 tonnes of seed per hectare respectively, or 3.5kg and 2kg a plant. But according to Pradip Bhar, who runs the company’s D1 Williamson Magor Bio Fuel joint venture in India’s north east, admits he has yet to achieve a fraction of that.

“Hitting 500g is the challenge,” he says. “Mortality is quite high. But if we can reach 500g in two years’ time, after that the bush will continue to grow. Our expectation is that after the fourth year we will hit 1kg. The 1.5kg mark we haven’t touched as yet.”

There has been consensus that the Indian experiment had been unsuccessful.

Meanwhile, in Ghana some biofuels companies who have announced investments in Jatropha to produce biofuels have been making projections that are yet to be seen.

Gold Star Farms Ltd. claims it intends to cultivate five million acres of land to plant Jatropha for the production of biofuels for export.

One of the company’s executives, Mr. Jack Holden has said that it has commitments from farmers to grow the crop on approximately five million acres of land in Ghana.

The company, he added, plans to begin producing biodiesel at its facility in Nkawkaw, in the Eastern region of Ghana, in 2009. It is July 2009, and it is not yet known if the company has produced its first litre of biofuel from Jatropha.

Another biodiesel company, Green Fuels Biodiesel which revived silos abandoned in Ghana for 43 years for its operations recently said it is investing in the multi-million cedi project to produce biodiesel from Jatropha seeds later in the year.

The Managing Director of Green Fuels, Mr. Joseph Karam, told the Daily Graphic newspaper that the initiative would contribute significantly towards reducing the importation of biodiesel and grease into the country.

According to him, “there is the potential to produce quality biodiesel from Jatropha, instead of spending huge sums of money to import these products, we can produce them here.”

He said 500,000 litres of biodiesel would be produced a day for the local market.

There is certainly a potential for Jatropha as a biodiesel source, but why it is recording failures rather than successes needs to be critically looked into.

There is need for sober reflections and investments in R&D to determine the full potentials of Jatropha as a viable, cost-effective and efficient non-food crop for biofuels.


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