1. Role of Bio-Diesel in the growing energy demand scenario in India FEBRUARY 1 & 2, 2008, FICCI, NEW DELHI CLIMATE CHANGE & BIO-DIESEL 2008

2. 1 INDIA WILL BECOME THE THIRD LARGEST ECONOMY IN THE WORLD BY 2030 AND HAVE THE FASTEST GROWTH RATE Source:World Development Indicators; Goldman Sachs, Dreaming with the BRICs: The path to 2050; IEA; UBS estimates GDP in trillion US$ 11.7US Japan Germany China India FY 2005 (E) US China India Japan Germany FY 2030 (E) CAGR Percent 2.2 8.2 9.0 1.2 1.1 India has a robust future growth position

3. 2 Source: IEA; BP Statistical Review of World Energy 2004; Project BRICS-Relative attractiveness of downstream markets INDIA IS EXPECTED TO BE THE WORLD’S FOURTH LARGEST CONSUMER OF ENERGY BY 2020 Oil consumption likely to substantially increase by 2020 2020 forecast oil consumption in mtpa USChinaIndiaRussiaJapanBrazilGermany Potential to be fourth largest energy consumer by 2020 Million tonnes of oil equivalent, 2020 USChinaIndiaJapanRussiaCanadaGermany

4. 3 Million tonnes per year (mtpa) INDIA WILL HOWEVER NEED TO RELY HEAVILY ON CRUDE IMPORTS TO SATISFY THE DEMAND FOR OIL Strong demand growth expected in next 10-15 years Flat domestic production far from sufficient to cover demand Import to make up over 80% of demand by 2020 Source:FACTS 06 Fall; BP; EnergyFiles; Wood Mackenzie 113 2000 225 2020E 124 2005 182 2015E 152 2010E Net import Production % imported 71%73%71%79%82%

5. 4 BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN THIS SCENARIO Description Bio-diesel can reduce crude imports by 5% in 2015 and 10% in 2020 (assuming a 10 % blending mandate and 20% blending mandate in 2015 and 2020 respectively) Rural empowerment Drivers for bio- diesel adoption Supply security through reduction in crude imports Bio-diesel value chain can create up to 9 million jobs in rural areas as early as 2015 Low environmental impact Bio-diesel production process is eligible for carbon credits (CERs) under Kyoto Protocol’s Clean Development Mechanism (CDM) scheme. Bio-diesel is less polluting and eco-friendly than conventional fossil fuels

6. 5 Million tonnes per year (mtpa) BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN REDUCING CRUDE IMPORTS Reduction in crude imports by 5% by 2015 and 10% in 2020 (assuming a 10 % blending mandate and 20% blending mandate in 2015 and 2020 respectively) can be achieved through Bio-Diesel Source:FACTS 06 Fall; BP; EnergyFiles; Wood Mackenzie Net import Production % imported Bio-Diesel substitution 113 2000 18 124 182 2015E2005 7 152 2010E 225 2020E 71%73%71%75%76%

7. 6 BIO-DIESEL HAS SIGNIFICANT ENVIRONMENTAL BENEFITS Emissions are lower compared to conventional diesel Units in per cent Plant prevents soil erosion helps in nutrient replenishment of soil Leaves, flowers and barks can be used for medicinal purposes 20% blending of Bio-Diesel Total unburned Hydrocarbons-30% Carbon monoxide-20% Particulate matter-22% NO 2 -+2% Sulphates-20% PAH (Polycyclic aromatic hydrocarbons)-20% Ozone Potential of Speciated HC -10% Nitrated PAH-50%

8. 7 BPCL’S EFFORTS IN THE BIO-DIESEL CHAIN Key initiatives Pilot efforts in Jatropha cultivation in BPCL owned tracts of land across the country Phase 1 (till 2007) Phase 2 (2008-09) Phase 3 (2009-2015) Over 600 acres brought under Jatropha cultivation. Initial commercial efforts for entering in the Bio- Diesel Value Chain in collaboration with State Governments and other partners Partnerships with State Governments with high activity in Jatropha and Pongamia cultivation for large scale commercial play in the Bio-Diesel Value Chain Over 1 million acres to be brought under Jatropha cultivation to produce 1 million tonnes of Bio-Diesel by 2014-15 100,000-200,000 acres to be brought under Jatropha cultivation

9. 8 A FULLY INTEGRATED PLAY IS REQUIRED FOR SUCCESS IN BIO-DIESEL Rationale Bio-Diesel Value Chain : Business Model Jatropha farming Seed collection, oil extraction and esterification Blending and Marketing Marketing Production Farming Marketing + + Production Marketing + 1 2 3 Integrated play The rural community in India are lacking in perception to raise suitable crops upon waste and barren lands. Union Govt. through NREGS is keen to uplift the standards of such farmers by encouraging them to take up the Jatropha Cultivation Activity. Such Programmes can be effectively implemented under the P3 model (Private, Public, Panchayat ) with the active involvement of established Companies in diversified areas.

10. 9 BIO-DIESEL VALUE CHAIN : KEY ACTIVITIES  Identification / Allocation of waste / fallow Land in large chunks for Jatropha Cultivation by Local Panchayat / Collector / State Government.  Cultivation of Hybrid High Yield Jatropha in a phased manner @ few lakh acres per year.  Fruit / Seed produce Collection network.  Setting up of Oil extraction plants / Solvent extraction plants.  Setting up of Trans-esterification Plants.  Distribution & Logistics, Blending & Marketing of Bio-Diesel.

11. 10 OPERATION MODEL : BIO-DIESEL BUSINESS Samplings developed in nursery Farmers Jatropha cultivation 3-4 year growing period (20-25 year life) Oil extraction Trans- esterification Storage Bio-Diesel 30% Marketing through ROs Seed cake 70% Glycerol 10% Installations /Depots Seeds (100%) Cost of operations + 10% of chemicals Revenue from carbon credits

12. 11 BENEFITS  Generation of Employment / Self Employment to Lacs of families of farmers  Huge area of waste land to be converted into productive use  Industrialization through investment of huge capital outlay in the State running into few thousand crores  Alleviation of poverty in rural areas  Soil and Water conservation  Breaking the cycle of drought

13. 12  Afforestation  Reduction of air pollution  Reduction of green house gases & Global warming mitigation  Curbing rural migration  Energy Security and Revenue generation to concerned State  Self Reliance of energy needs  Foreign Exchange Savings for the Country  Rural economy improvement BENEFITS-CONTD..

14. 13 SUPPORT FROM GOVERNMENT  Classification of Jatropha crop under Agriculture / Horticulture / Forest Depts.  Single Window facilitation through Bio-Energy Mission Cell or Renewable Energy Dept. created by various State Govts. in co-ordinating with all its concerned Departments at State / District level & upto Village Panchayat level for smooth implementation of the entire Bio-Diesel Value Chain and to ensure strong bond between Village Panchayat and Entrepreneurs, starting from land identification to collection of fruits from the allocated fields.  Assistance for identification and leasing on Long Term and or allocation of Suitable land for establishment of Nurseries Demonstration Units Training Centres R&D Centres Seed collection Centres Expelling Units Trans-esterification Plants

15. 14 SUPPORT FROM GOVERNMENT - CONTD..  To extend the Transport Subsidy Scheme to facilitate the execution of this Project to the farmers as well as the Entrepreneurs.  To render support in terms of waiving state level taxation in the best possible manner.  To provide applicable subsides to the small industries in establishment of Oil Expellers and Solvent Extraction Units  To render power tariff waivers for the expelling Units, S.E. Units and Trans- esterification Units.  The non-edible oilseeds cannot be marketed / used / consumed directly without a complex transesterification refining process. Therefore, the respective State Govts. may issue an Executive Order to exempt this transaction from the purview of the State Mandi Act, thus facilitate procurement of the non-edible oilseeds from the farmers directly by the Entrepreneurs.

16. 15 SUPPORT FROM GOVERNMENT-CONTD..  Assist the Entrepreneurs in bringing awareness and Farmers mobilization for Jatropha cultivation, including development of village youths by bringing orientation and perception regarding the plantation activity.  Ensuring implementation of Government’s Employment Guarantee Scheme and all other relevant schemes to support farmers for Jatropha cultivation.  Convergence of various development schemes of State and Union Government for the benefit of this activity.  Entrepreneurs to be involved in the restructuring of the existing Advisory Body formed by various State Govts. for implementation of Bio-Diesel Value Chain in the respective States.  Facilitates formulation of Policies for Jatropha crop Insurance and also involve Banking Institutions to arrange soft loan to farmers.

17. 16 THANK YOU !

18. 17 BACK - UP

19. 18 POTENTIAL RURAL IMPACT ON INCOME AND JOBS CAN BE HIGH Land under cultivation Million Acre 2015 substitution level* Per cent Rural economic impact (Rs crore) Multiplier effect Total Rural impact IncomeJobs Rs croreMillion 7.5-10 10(9-11%)**29 15-2020(18-21%)**218 Maximum blending without any engine modification *Fossil diesel demand 75 million metric tonnes ** Percentage of 35-40 million hectares of wasteland that can be used for plantations ***Based on ~Rs.5-6 per kg of seeds contracts signed by blenders with farmers 3.8-5 5(3-4.5%)**2 6,750*** 13,500*** 13500 27,000 6750 3,375*** 4.5

20. 19 3 ENABLING INTERVENTIONS ARE REQUIRED TO MAKE BIO-DIESEL A THRIVING INDUSTRY IN INDIA National Board for development and execution of fuel policy –Policy on blending proportion of Bio-Diesel –Approach to creating “Bio-Diesel fund” to manage against crude fluctuations –Models of possible tri-partite contracts between farmers/villagers, the government, and the private producers (processors/blenders) that could be adopted to make significant acreage of Government owned wastelands for cultivation Public private partnership involving State Governments –On R&D on seed productivity-Create a dedicated Bio-fuel seed resource at Department of Bio-technology –Certification of seed quality and other farming standards –Ensure close involvement of Panchayats to gain farmer confidence Farmer insurance and financing and purchase guarantees – Coordinate policies to finance marginal farmers for wasteland cultivation *Source: Interviews, press searches 2 1 3

21. 20 FURTHER, INDIA CAN CATER TO THE GLOBAL BIO-DIESEL DEMAND TO EARN SIGNIFICANT FOREIGN EXCHANGE 1.Based on 5% blending at a diesel demand of 65-70 MMT 2.Based on Rs 18 sale price per litre 3.Net of EU internal production 4. Early indications are that Japan is likely to tie-up with Brazil for bio fuels  India’s share Required supply Bio-diesel demand Tonnes million Implied forex inflows/savings Rs crore EU (2010-11) 20-301.5-38-9 3 Per cent Domestic 1 1003-4 3,500-7,000 2 7,000-9,500* Japan 0 4 02-30 Rs.13,000- 17,000 crore foreign exchange opportunity Million tonnes

22. 21 OIL WILL CONTINUE TO BE A KEY SOURCE OF ENERGY EVEN IN 2020 Primary energy consumption by fuel Quadrillion BTU1 11 quadmillion BTU = 2.61 BSCFD of gas equivalent 2Hydro includes geothermal renewables include solar, wind and tide, wave and ocean energy 3Oil consumption includes international marine bunkers 4Solid fuel consumption and imports include net imports of coke Source:DRI-WEFA World Energy Service forecasts Natural Gas Nuclear, hydro 2 & renewables Solid waste & biomass Solid Fuel 4 Oil 3 Total 22.2 24.0 29.1 34.1 40.4 20022005201020152020 Oil will contribute to at least 25% of total energy supplies even in 2020

23. 22 JATROPHA PLANTATION : COST BREAK-UP : WORKING SHEET- I Employment generation and costs for Jatropha plantation (in Rs. per hectare) S. No.Item COST (Rs.)Employment in person days Year 1st2nd3rd1st2nd3rd 1Site preparation i.e. cleaning and levelling of field - 10 MD1000 --10 - - 2Alignment and staking - 5 MD500 --5 - 3Digging of pits (2500 Nos.) of 30 Cm3 size @ 50 pits per MD - 50 MD5000 --50 - - 4 Cost of FYM (including carriage) 2 Kg. per pits during 1st year (2 MT) 1 Kg. per pit during second year onwards @Rs.500/MT 25001250 -- 5 Cost of fertilizer @ Rs.6 per kg (50 gm. Per plant during 1st year and 25 gm from 2nd year onward) and 2 MD for each application.950575 222 6 Mixing of FYM, insecticides fertilizers and refilling of pits @ 100 pits per MD 25 MD 2500 25 7 Cost of plants (including carriage) 2500 Nos. during first year and 500 Nos. of plants during second year for replanting @ Rs.2.5 per plant62501250---- 8 Planting and replanting cost 100 plants per MD for 1st Year @ 25 MD and 5 MD in 2nd Year, respectively 2500500-255- 9 Irrigation - 3 irrigation during 1st and one irrigation during 2nd year @ Rs.600/- per irrigation1800600-52- 10 Weeding and soil working 10 MD x 1 time for 1st year & 10 MD X 3 times for 2nd years 10003000-1030- 11Plant protection measure300 --1 -- Sub total: 24300967543251336427 Contingency (approx. 5% of the above)1215483.75216.25742 Grand Total: 2551510158.754541.251406829 Per acre cost (GRAND TOTAL / 2.5) 102064063.51816.5 Say1020040601850 Total for 1st Year & 2nd Year14260 Total for 1st Year to 3rd Year16110

24. 23 BIO-FUEL PLANTATION & PROJECT COST PROJECTIONS Sr. No.Particulars Unit price (Rs.) Ist yr. 2007-08 2nd yr. 2008-09 3rd yr. 2009-10 4th yr. 2010-11 5th yr. 2011-12 6th yr. 2012-13Remarks AMOUNT TO BE PAID TO FARMERS ON PER ACRE BASIS FOR PLANTATION / UPBRINGING FROM GOVT. SCHEMES16110 1 Land Area to be planted during the year (in acres)-1 lakh2 lakhs 1 lakh 10 lakh acres 2 Total Plantation Cost year-wise to be funded by State Govt. from various ongoing schemes such as NREGS etc. (Rs. in crores)161.1322.2 161.11611

25. 24 JATROPHA COST OF CULTIVATION PER ACRE IN NORMAL SOILS : SHEET - II Sr. No. ParticularsUnit price (Rs.)Ist yr.2nd yr. 3rd yr. 4th yr. 5 th yr. 6 th yr. 7 th yr. 8th yr. onwards 1Planting material 1000 plants/acre Causality replacement Land Clearing Pit preparation & Transplanting Manures & Fertilizers Weeding and Soil working Watering etc (The per Acre cost breakup under 11 subheads as per planning commissions format submitted separately in Sheet no. I) 1115038501900----- 2Pruning 200 250 3Harvesting-- -300500 Total cost of cultivation1135040502400750 * Total cost of cultivation for Jatropha in Normal soils for the first three years including Pruning / Harvesting is @ Rs.17800/- per acre ** Additional Cost to be incurred for Plantation in the first year on ** Sodic Soils is Rs. 4000.00 ** Rocky Soils is Rs.3950.00

26. 25 SODIC & ROCKY SOIL TREATMENT SODIC SOILS: For making Sodic Soils suitable for the cultivation of Jatropha curcas Gypsum has to be added for amending the soil. Gypsum should be added @ 10 tons/acre. For that in addition to the cost of cultivation of Jatropha in Normal soils Rs.4000.00 per acre has to be incurred additionally to improve the soil condition. ROCKY SOILS: For making Rocky Soils suitable for the cultivation of Jatropha curcas in addition to the cost of cultivation of normal soils extra cost @ Rs 3950/- per acre has to be incurred for the pit preparation and soil mixture.

27. 26 REVENUE EARNINGS TO THE FARMERS: SHEET - III Sr. No.Particulars Unit price (Rs.) Ist yr. 2nd yr. 3rd yr. 4th yr. 5 th yr. 6 th yr. 7 th yr. 8th yr. onwards REVENUE TO THE FARMER FROM ONE ACRE JATROPHA PLANTATION 1 Benefit through NREGS In Rs. 706426641600----- 2Yield (Kg.) --500100020003000 3Crop value in Rs.Rs.6/kg seed--300060001200018000 Total in Rs. 70642664460060001200018000 Yearly Earning to Farmers on per acre cultivation70642664460052501125017250 * The earning to the farmer in first 3 years is considered from NREGS based on only labour component works out to Rs. 11328/-.i.e. the computation of benefits through NGER excludes items 4, 5 & 7 given in Sheet I.

28. 27 ** If the cost of plantation material / manure etc. as well as labour cost is reimbursed, to the farmers under NREGS / Other schemes the in the first three years, and thereafter the earning to the farmer is based on crop yield, then the farmers earning is estimated at Rs 11,350/- in the first year and Rs.4050/- in the second year, Rs.4900/- in the third year, Rs 5250 in the fourth year, Rs 11250/- in the fifth year, with a regular income of Rs.17250/- per acre / per annum from sixth year onwards as under. Rupees Per Year Per Acre 1 Yearly Earning to Farmers on per acre cultivation if the total labour and material cost is reimbursed to the farmers for the first 3 years 1135040502400----- 2 Earning from the Crop Yield excluding the cost of Pruning / Harvesting 250052501125017250 TOTAL : Yearly Earning to Farmers on per acre cultivation 113504050490052501125017250 State Governments may kindly consider reimbursement of cost of sapling material and labour, by suitably extending their existing schemes for Jatropha Cultivation for first three years of Rs.11350/- + 4050 + 2400 = Rs.17800/-, first Rs.10,000/- from NREGS & Rs.7,800/- from Horticulture / Other Schemes currently operating in the State for Mango / Guava and other Agricultural / Horticultural items.