Biofuels from Marginal lands:
Some insights for India
Deepak Rajagopal
Energy and Resources Group, UC Berkeley
Outline
1. Agricultural context for Biofuel in India
2. Comparison of major biofuel crops
3. Implications for welfare analysis
•
•
•
Opportunity cost of marginal land
Distributional aspects
Electricity or Transportation fuel?
4. Conclusion
Agricultural Context for biofuel
Vast differences in comparison with US/Europe/Brazil
•
Food security
•
barely self sufficient (considered an important policy goal)
•
•
Climate
•
•
Dependent on seasonal monsoon rains (less than 30% irrigated)
Size of land holding
•
•
•
dry and semi-arid tropical (at least where low cost land exists)
Water and Irrigation
•
•
High income elasticity, population growth, plateau-ing yield
small and fragmented with mean land holding < 1 hectare
subsistence farming
Energy needs
•
•
60% of rural homes have no electricity connection
90% of rural homes have no cooking gas
Land allocation for agricultural crops
Sorghum, Millet, Maize and Cotton comprise about 21% of India’s
cultivated land
Land Allocation to Prinicpal Crops as % of Net Cultivated Area (167 Mil. hect.)
% Agri. Area allocated
30%
27%
25%
20%
16%
15%
10%
6%
6%
5%
5%
4%
4%
4%
4%
4%
2%
0%
ce
Ri
at
he
W
m
hu
g
r
So
t
i ll e
M
n
tto
o
C
ze
ai
M
G
m
ra
G
ut
dn
n
u
ro
d
ee
s
pe
Ra
&
rd
ta
us
M
an
be
a
y
So
ne
ca
r
ga
Su
Source: Government of India, Ministry of Agriculture
These lands offer opportunities for sweet sorghum to produce biofuel
without impacting food
Mean profit for various crops
Mean returns in Rs/hec during 1995-97 for major crops across major growing states in India
35,000
30,000
1996-97
Rs/hec
25,000
1995-96
20,000
15,000
10,000
5,000
0
-5,000
Sugarcane
Wheat
Rapeseed & Soybean
Mustard
Rice
Groundnut
Cotton
Sorghum
Millet
Maize
Source: Cost of Cultivation of Prinicpal Crops in India Survey, 2000, Govt. of India, Ministry of Agriculture
Semi-arid tropics
Climatic regions receiving low annual rainfall (250-500 mm or 10-20 in)
Semi arid zone in
south central and south India
Source: Millienium Ecosystem Assessment 2005, Chapter 22
• Rain-fed areas, which were largely unaffected by Green Revolution,
offer the most growth for an additional unit of investment compared to
fertile and irrigated areas [Fan and Hazell, IFPRI 1999]
Targets for Biofuel
•
16 billion litres biodiesel by 2011-12
•
•
about ~ 20% of anticipated diesel demand
expected to require about 11 million hectares of land
devoted to Jatropha curcas (about 8 % of cultivated
land today)
•
•
•
in reality more land is need since assumed yield is high
targeted lands are degraded forests, waste and
marginal lands
target not adopted by parliament unlike US or EU
Source: Planning Commission Report 2003, Government of India
Marginal land
Agricultural land is marginal due to several reasons
•
Biophysical
•
•
•
•
•
•
Water scarcity
Soil fertility
Drainage
Slope
Poor management practices
Distance from market
Several constraints can be overcome using investments in
•
modern technology like drip irrigation, fertilizers and micro
nutrients, improved crop varieties etc.
•
credit
•
better management practices
Comparison of oil seed crops
Oil seed
crops
Coconut
Oil palm
Groundnut
Rapeseed
Castor
Sunflower
Soybean
Jatropha*
Pongamia*
Rainfall Rainfall
mm/yr
mm/yr
(high)
(low)
1200
600
2500
1800
500
400
450
350
650
500
750
600
700
450
300
150
300
150
Average
Crop
yield kgs
per
hectare
7800
20000
1015
830
1100
540
1105
2000
5000
Oil
content
as % of
seed
weight
60%
25%
50%
40%
45%
40%
18%
30%
30%
Average
Useful
oil yield Oil yield
in kg per per mm Time to full life
(years)
of water maturity
hectare
5 to 10 years 50
5.56
5000
10 to 12 years 25
2.33
5000
100 to 120 daysna
1.13
508
120 to 150 daysna
0.83
332
150 to 280 daysna
0.86
495
100 to 120 daysna
0.32
216
100 to 150 daysna
0.35
199
3 to 4 years 20
2.67
600
6 to 8 years 25
6.67
1500
Indian
acreage
(million
hectares)
1.86
insig.
7.2
6.6
0.8
2.3
7.2
insig.
insig.
* - estimates that are typically cited, na - data not available or not applicable
Jatropha - Low water, high water productivity, moderate yield and is
non-edible
• Perennial crop, requires 3 to 4 years to mature
• has not been grown commercially before
Simple cash flow analysis for hypothetical
Jatropha farm on wasteland with no irrigation
Seed production
Year
Trees per hectare
Seed production per tree
Sale price of seed
Seed production per hectare
Gross annual income from seeds
Cost of Plantation
Cost per seedling
Yearly maintenance cost per hec
Harvest cost per tree
Total yearly cost
Net income
Discount rate
Rate of inflation
NPV
IRR
All amounts in Indian Rupees
1
1660
0
6
0
0
2
1660
0.1
6.2
166
1036
3
1660
0.4
6.5
664
4309
4
1660
0.6
6.7
996
6722
5
1660
0.8
7.0
1328
9321
4
6
0
16600
-16600
12%
4%
30,998
25.6%
0
2.0
0.1
3527
-2491
0
0.60
0.5
1858
2451
0
0.62
0.8
2380
4342
0
0.65
1.1
2942
6380
IRR based on point estimates is 25.6%
Carbon and other externalities not monetized
No land cost assumed
…
…
30
1660
0.8
18.7
1328
24849
0
1.73
3.0
7842
17008
Waste (Marginal) land use
Survey results indicate the importance of wastelands which
are mostly common lands to rural households
Percentage of households reporting use of wastelands
Material
collected from
common lands
Fuelwood
Fodder
Roofing material
Timber
Fruits
Bamboo/ cane
Other leaves
% surveyed
households
reporting
collection
66%
34%
29%
19%
25%
20%
37%
Household's
landholding
Landless
< 0.2 hec
0.2 to 0.5 hec
0.5 to 1 hec
> 1 hec
% of
households
reporting
collection
60%
30%
30%
37%
33%
% of
households
reporting
sale
1%
1%
1%
1%
0%
Source: National Sample Survey Organization 1999 as reported in Gundimeda 2005
Jatropha plantations do not provide fuelwood or fodder and so
they may be opposed by poor – requiring fencing and guarding
which would increase cost
Wastelands have alternative economically viable
options for regeneration
Review of 18 afforestation projects under taken on degraded
common lands shows high IRR (intercept = 25.9)
Source: Balooni 2003
Sensitivity of NPV to land rent and oilseed price
Output Price (Rs/kg)
Land rent
(Rs/hect)
3000
6000
10000
14000
5
-ve
-ve
-ve
-ve
-ve
-ve
Crops grown at
6
7
8 these rents
2000
14000
25000 Coarse cereals
Edible oil seeds
-ve
-ve
18000
46000 Rice/wheat
-ve
2000 Sugarcane
• Jatropha not viable on sugarcane land
• Viable on land growing rice or wheat at higher output prices
• Viable on very low quality land
• Medium quality land seems “no cars land”
Electricity or Transportation fuel?
2. LCA studies generally compare biodiesel with diesel
•
If marginal capacity addition is coal then using biodiesel to
offset coal power may have higher carbon benefit than
offsetting diesel
•
IPCC emission factor for coal = 96 g CO2 per MJ
for diesel = 74 g CO2 per MJ
=> Additional offset = 22 g CO2 per MJ
Note: this is per MJ of fuel combusted, so will be different when we
consider energy delivered
•
Need to also look at social and economic net benefits of
household electricity access versus transportation
Distributional implications
For projects on common lands, need to compare the increase in
surplus from labor with decrease in surplus from losing
access to fuelwood and fodder
- may worsen energy poverty in rural areas
Adoption in private farms likely to be confined to large farmers
•
early evidence from State of Maharashtra (Prayas 2005)
•
barriers to small farms
•
•
•
subsistence needs
long growth phase
risk and uncertainty
•
•
•
lack of familiarity with cultivation practices
market
Economies of scale
Sweet sorghum for ethanol
Rainfall Rainfall
Ethanol
mm/yr
mm/yr
feedstock
(low)
(high)
Sugarcane
1500
2500
Wheat
450
650
Sorghum
450
650
Maize
500
800
Sweet Sorghum
450
650
Sugar beet
550
750
Bagasse*
na
na
Crop yield
(tonnes
per
hectare)
70
2.6
1.8
1.8
40
100
18.9
Ethanol
conversion
efficiency
(litre/ton)
70
340
390
360
70
110
280
Gasoline
equivalent
ethanol yield
(litre/hec)
3300
600
450
450
1900
7370
3550
Ethanol
yield per
mm of
water
1.65
1.09
0.82
0.69
3.45
11.34
na
Indian
Growing acreage
season
(million
(months) hectares)
10- 12 months
3.6
4-5 months
26.5
4-5 months
9.4
4-5 months
6.3
4-5 months
insig.
5-6 months
insig.
na
na
* - estimates that are typically cited, na - data not available or not applicable
Sweet sorghum a variant of grain sorghum has
- Low water demand, high water productivity, high yield
- yields grain and fuel
Grain sorghum is already grown on 10 million hectares mostly by
small farmers in semi-arid areas under rainfed conditions
(Sugar beet, switchgrass and Miscanthus are not viable in semi-arid tropics)
Sweet sorghum and Jatropha
Characteristic
Sweet sorghum
Jatropha Curcas
Mean rainfall
requirement mm/year
450 to 650 mm
150 to 300 mm
Fuel yield per hectare
lit/hectare
1900
600
Fuel yield per mm rain
lit/mm rain
0.82
2.6
Length of growing
season
4-5 months
3-4 years
Current acreage
nil*
nil
grain, bagasse,
Co-products
fodder
fertilizer
* but sorghum is grown on about 10 million hectares in India
Electricity or Transportation fuel?
Calculation comparing approximate land for biodiesel and electricity
a
b
c
d
e
f
g
h
I
j
k
L
Number of households per village (assumed)
Electricity demand per household in watts (assumed)
Number of hours of supply per day (assumed)
Energy supplied per household per day (=b*c)
Total energy supplied to village per year (=d*a*365/1000)
Specific fuel consumption of diesel generator (assumed)*
Oil required to generate electricity for one year for one
Oil yield per hectare from Jatropha (observed today)
Total amount of land required to produce the oil required
Total number of village households in India (assumed)
% of households with no electricity access (assumed)
Number of unelectrified households (=j*k)
Total land required to electrify all rural homes in India
m (=L*I/a)
n Annual consumption of diesel in India (assumed)
Total land required to meet 20% of diesel demand
o (=n*0.2/h)
100
100
8
800
30000
300
9
0.6
15
150,000,000
60%
90,000,000
hours
watt hours
kwh/year
grams/kwh
tonnes/year
kgs/hectare
hectares
13 million hectares
52 million tonnes
17 million hectares
Electricity or Transportation fuel?
1. All rural homes can be provided electricity
with less land than required to meet 20% of
diesel demand
•
But diesel demand growing at 5% per annum
 Increasingly more land will be required unless
yield increases at that rate too, which is unlikely
Conclusion
1. Jatropha on marginal land with low inputs will not
affect food and water
•
crop survives harsh conditions but yield is affected
2. Two different diffusion strategies to exploit
economies of scale
1. Sweet sorghum on household farms for ethanol
2. Jatropha on industrial scale with modern inputs on
marginal land for biodiesel but will have to impact on
current uses
3. Use of biodiesel for local electricity may encourage
people to cooperate in use of common land
4. Finally, extension is happening ahead of R&D
Acknowledgements
Prof. David Zilberman
Prof. Alex Farrell
Prof. Dan Kammen
Prof. Udipi Shrinivasa
Energy and Resources Group
EBI
Sorghum plot at Los Banos, Philippines
Land for Industry
Singur – 400 hectares of agricultural land
in the State of Bengal was allotted to
Tata Motors Group for setting up a
car factory
•
Led to massive protests, hunger
strikes, etc.
•
Land acquisition declared as illegal
by the court
Nandigram – 5000 hectares of agricultural
allotted to Indonesian Conglomerate
for setting up a Special Export
Processing Zone
•
Led to massive protests, police firing
resulted in the death of 14 villagers
•
Led to major review of SEZ policy