Storage / Handling
Used Cooking Oil
Biodiesel in India
- Oil Marketing Companies are going to buy BioDiesel at Rs. 51 per liter.
- BioDiesel will be produced in 100 plants all over country.
News spread like wildfire in print and social media. But nothing was mentioned how it will be achived. Currently oil marketing companies are ready to buy Biodiesel. Their conditions are
- Minimum supply should be 10 tons in tanker.
- It should be as per IS Stanadard, IS 15607 : 2005.
- It should be delivered to their depots.
Most of the 100 plants, that will be set up all over country, will find it difficult to fulfil these conditions. Quantity of UCO they will be able to procure will be another question.
If BioDiesel is bought at Rs. 51 per liter, prices of UCO, Acid oil, Palm Stearin, Animal Tallow will shoot to Rs. 41 per liter. It will benefit the parties collecting oil, and not BioDiesel Manufacturers. The raw material price rise will also put small scale cottage soap industry to shut its shops (Production of soap in India is 800,000 tons per year).
To produce BioDiesel as per Indian Stanadard, IS 15607 : 2005 (or European Standard), you need to install Ultrasonic or Shock Wave generator. Also you need to use Centrifual Separators for better separation. These two equipments are very expensive and cost almost same as all other equipments together. Installing these is not viable for plants having capacity less than 30,000 liters per day, however US Standard ASTM D-6751, can be achived without these two costly equipments.
Another hazard for small plants is, control of Methanol Storage. If not controlled properly, it may find its way to illicit liquor and deaths of poor people.
Currently Biodiesel sold in India as blended product, by BioDiesel Pumps may not contain any BioDiesel or Diesel. It may not contain any Bio product and / or any petroleum diesel. It may be a blend only with a number of petroleum products.
India is a diesel-deficit nation and demand has far outstriped supply. India's diesel production will not be able to keep pace with the rapidly growing demand. With rising crude oil prices, it will have heavy tool on our Import / Export Trade. Government's pricing policy allows State owned Oil companies to decide prices of Diesel. Diesel price is comparable to petrol. Diesel demand in the country is growing at an annual rate of 8%. At this rate India will need a brand new 9 Million Tons per year refinery every year. The automobile industry has estimates that the share of diesel cars, in overall car sales had crossed the 40% mark in past. It is now declining due to comparable price of Diesel. The price of fuels is now going to be in line with price of crude oil. Hence the Petrol and Diesel prices are now in line with international price levels, which makes BioDiesel economically attractive.
First Indian BioDiesel Policy was announced on 23rd Dec 2009. BioDiesel Policy gives a rough guideline, which was actually proposed many years back. Main stumbling blocks are still not resolved. There are no Figures or Financial commitments. Some of the points are:
The Minimum Purchase Price (MPP) for BioDiesel by the Oil Marketing Companies (OMCs) will be linked to the prevailing retail diesel price.
Financial incentives, including subsidies and grants for BioDiesel, may be considered based on merits for new and second generation feed stocks, (Used Cooking Oil and Acid Oil), advanced technologies (Acid or Enzymatic Esterification) and conversion processes for BioDiesel, and production units of BioDiesel, based on new and second generation feed stocks.
Biodiesel now has "Goods and Services Tax" (GST) of 5%. No other Central taxes and duties are proposed to be levied on BioDiesel and bio-ethanol except GST.
New Diesel Cars are Hitting the Road Everyday.
India's biodiesel processing capacity is estimated at 600,000 tons per year. The government owned Oil Marketing companies had floated tenders again and again to buy millions of liters of BioDiesel. However there are few interested suppliers. They prefer to sell directly to consumers or export, rather than selling to oil marketing companies in India. Now biodiesel manufacturers can sell as 100% Biodiesel or can blend with diesel to sell as 20% Biodiesel and 80% Diesel.
BioDiesel in India was virtually a non-starter in past. There are many reasons for that. The Main Reasons are non-availability of used vegetable oil, very strict Indian Biodiesel Standard (IS 15607 : 2005) and Government's Policies. Tenders for BioDiesel are likely to Fail again and again, due to
- Non Availability of Oil
In India edible oils are in short supply, and country has to import up to 40% of edible oil requirements (imports are now partly offset by Bumper Crop of Soy). Hence prices of edible oils are higher than that of Petroleum Diesel. Due to this, these edible oils not viable and hence use of non-edible oils was suggested for BioDiesel manufacture. Palm Stearine imported from Malaysia or Indonesia is a good source of raw material for biodiesel. Animal tallow is also available in large quantities. Acid oil is mostly favoured by soap industry.
Even though the consumption of Edible oils in India is high, the availability of used cooking oil is very small. Most of the oil is used to extract spices in oil (Tadka), for cooking of vegetables or for preparation of Currys. It can not be recovered. Cooking oil used by bulk users, as Frying oil, is used till the end.
Indian Culture uses vegetable oil lamps for lighting in homes and in temples (like candles in other cultures). When prices of edible oil shot up, some people turned to a bit cheaper non-edible oils. The requirement of this sector is more than 15 million tons (BioKerosine). Since non edible oil seeds can be collected and crushed, using hand operated expellers, in a small scale in far flung villages, the use of non-edible oils for lamps is picking up very fast. This is the best way of use for millions of Rural Indians. This is depriving BioDiesel industry its supply of oil.
All over the world Edible oils are used for manufacture of BioDiesel. These are Rape seed oil in Europe, Soy oil in Americas and Palm oil in South East Asia. Rape seed and soy are grown for its de-oiled meal as cattle feed and oil is not important. Hence these oils were in excess in past, and had to be disposed off at lower prices. Hence initially these edible oils were a viable raw material for BioDiesel manufacture and a lot of manufacturing units came up in US and Europe, based on these oils. Now excess oil is commited, and fresh sources need to be developed.
Collection of non-edible oil seeds is a manual operation, and for large BioDiesel plant collection is a logistical nightmare. These non-edible oil seeds are collected in 2 to 3 months, when these are ripe, and need to store to run a biodiesel plant through the year. This puts a financial load on biodiesel manufacturers. In a day, a person can collect up to 80 kilograms of seeds, which can produce 20 to 23 liters of oil. The collection is done for 3 months, once every year. For a 100 tons per day (8 million gallons per year) BioDiesel plant, you need 15,000 people to collect the seeds. Collecting and organizing such a large part time manpower is a challenge.
The price of Seeds of Jatropha is very high. At this price, the manufacturing cost of BioDiesel is more than the price of Petroleum Diesel at pump. Prices of non-edible oil seeds are down now and oil is viable as a substitute for kerosine.
Most of the edible oils that are used currently for manufacture of BioDiesel, are Stable (do not get rancid or do not dissoclate to form free fatty acids). These do not decompose much on storage. Hence these are preferred for Trans-Esterification Process. Non-Edible oils are not that stable, and need a lot of pre-treatment adding to the cost of manufacture of BioDiesel. Rice Bran oil with upto 50% free fatty acids can be used as lamp oil, or for manufacture of soap.
The use of lamp oil is increasing rapidly in India, as there is no reliable electrical power supply in rural areas. Soon people will face shortage of these oils for lighting purposes.
Cottage Washing soap industry can use vegetable oils with high free fatty acid contents (Acid Oils). Since prices of edible oils have doubled, many soap manufacturers in unorganized sector are using these Acid Oils as these are a bit cheaper. Large quantity of Rice Bran oil is not recovered, as it has high free fatty acid content. However, it can be extracted by solvent extraction process, for use as a raw material for manufacture of soap.
There are billions of other trees (Karanj, Mahua, Neem), all over India, with oil bearing seeds. Traditionally Karanj (Pongamia Pinatta) is planted along the Highways, Railways and Canals to stop erosion of soil. Petrol Pump owners along the highways, buy these oils, pack them in 1 liter bottles and sell as fuel additive. Neem (Azadirachta Indica) is planted everywhere for purification of air. Mahua (Madhuca Indica) and Sal (Shorea robusta) grow wildly in Forests. Collection and Processing mechanism for these seeds is not yet fully developed. Hence most of these seeds lie on the ground (and ultimately get converted into BioFertilizer).
- Government's Policies
Under "Make in India" policy, imports of BioDiesel and Used Cooking Oil are Restricted, which has created constraints on supply of main Raw Material (1,050 liters of Fresh Cooking Oil, Used Cooking Oil or Acid Oil is required for manufacture of 1,000 liters of BioDiesel). When Refined Cooking Oil is produced, some oil is rejected, which is called "Acid Oil". This and Animal Tallow are only local raw materials available in India, for manufacture of BioDiesel. Acid Oil produced is around 5 to 7% of Refined Cooking Oil. Acid oil contains 5 to 10% or more of Free Fatty Acids.
Oil companies had declared their own BioDiesel Purchase Policy. These companies initially offered a price which was less than the manufacturing cost of BioDiesel.
In past only Oil companies had mandate to mix BioDiesel with Diesel and sell it. (Now anybody can mix BioDiesel with Diesel and sell it).