1. Role of bio-diesel in the growing energy demand scenario in India

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 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

8. 7 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 biodiesel 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%

9. 8 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 biofuel seed resource at Department of Biotechnology –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

10. 9 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 (2007-09) Phase 3 (2009-2015) Over 500 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

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13. 12 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

14. 13 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