Green Fuels commits to Indian biodiesel joint venture

UK biodiesel equipment supplier Green Fuels and Indian used cooking oil (UCO) collector Aris Bioenergy aim to set up a biodiesel refining joint venture in India following an initial deal agreed earlier this week.

Planning is under way to build the partnership's first 20 t/d capacity biorefinery in an industrial zone between Mumbai and Pune, although a detailed timeline is unclear. The firms plan to set up 20 small-scale plants across the country and save 1mn t of CO2 emissions by 2025, said Green Fuels chief executive James Hygate.

The joint venture is currently bidding to supply biodiesel from the planned biorefinery and its future plants to India's three state-controlled refiners and marketers IOC, Bharat Petroleum and Hindustan Petroleum. They will accept expressions of interest (EOIs) until 9 November under their 11th tender for buying biodiesel produced from UCO methyl ester (Ucome).

The Indian marketers up until 10 September had received 37 EOIs for setting up 60 plants with around 1,147 t/d of total biodiesel output capacity, according to India's oil ministry. They have issued Ucome tenders nearly every month since August 2019, targeting mainly independent entrepreneurs with no minimum or maximum output volume restrictions on plants.

India is aspiring to achieve a 5pc biodiesel blending ratio by 2030 under its national biofuel policy implemented in 2018, which will require 7.3mn t/yr of the biofuel, according to the US Department of Agriculture (USDA). But it estimated blend rates below 0.18pc in 2019, blaming limited feedstock availability, an underdeveloped domestic supply chain and restrictions on imports for the low ratio. Support from the Indian marketers is also insufficient to encourage commercial production scale-up, the USDA said.

State-controlled marketers guarantee a Ucome offtake price of 52.70 rupees/l ($809/t) ex-works from October 2020-September 2021, Rs54.50/l from October 2021-September 2022 and a price based on resultant escalation factors of the consumer price index for the subsequent two years, according to their most recent tender notice. The oil companies will then review the price formula after five years from the release of the first EOI.

By Lauren Moffitt