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Jatoil: Biodiesel potential limited only by land area
Added 512 days ago - PYRMONT, AUSTRALIA: The potential market for biodiesel is only limited by the available land for growing feedstocks, given its lower production cost than mineral petroleum, according to a top executive of an Australia-based jatropha oil venture.
Citing a Goldman Sachs estimate, Jatoil Ltd. Executive Chairman Dr. Mike Taverner said crude jatropha oil (CJO) feedstock costs about US$350 a tonne to produce, placing CJO on par with about US$55 for a barrel of crude mineral.
Since biodiesel is a substitute for diesel and its cost structure is lower than mineral petroleum, the potential biodiesel market is only limited by the ability [of governments and private enterprises] to put land under cultivation, Taverner said in an e-mail to EnergyCurrent.
Jatoil first established a joint venture with GreenEnergy Biofuels in May to grow jatropha in Vietnam. Vietnam has some 5 million hectares (12 million acres) of marginal land suitable for jatropha. At a recent conference, the local government unveiled plans to plant jatropha on 300,000 hectares (741,316 acres) of land over the next three to five years. GreenEnergy Vietnam (GEV) expects to put under plantation at least 50,000 hectares (123,553 acres) of jatropha during the same period, according to Taverner.
Planting is in progress in eight provinces at 12 different locations that have proven expansion potential for jatropha, with the first established plot now about 12 months old. Seeds harvested are used for planting and oil drawn from pilot stations used for testing at GEV's biodiesel facility in Ho Chi Minh. The yield from the test stations is about two tonnes (2.2 tons) per hectare based on current modelling, according to Taverner.
GEV plans to build new facilities closer to the plantations in the future. By 2013, GEV expects to produce significant volumes of biodiesel in Vietnam when the local diesel market is expected to reach US$9.3 billion, according to Taverner.
Jatropha is touted as one of the promising second generation feedstocks amid growing concerns over the use of food crops in biofuel production. In September, the European Union voted to pass a reduced target of five per cent biofuel use for 2015, with 20 per cent coming from new alternatives that "do not compete with food production."
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