Jatropha Curcas and Bio-diesel Development in Madagascar

Outline• Definition of bio-diesel

• Agricultural techniques and plantations of Jatropha Curcas

• Oil extraction and bio-diesel production

• Markets and prices

• Bio-diesel development models

• Legal and regulatory framework

• Economic and environmental impacts

• Conclusions and recommendations

What is BIO-DIESEL?

• Bio-diesel is diesel produced from vegetal oil

• The process is a well known technique called «Trans-esterification». It is now profitable because of high prices of fossil oil.

• Bio-diesel can totally replace fossil diesel, or can be mixed with it.

• Vegetal oil from the seeds of Jatropha Curcas is among the best source of bio-diesel.

Why Jatropha Curcas?

• Shrubs (2 to 5 meters) growing on poor soils, in dry to humid areas

• Low cost, easy to grow, perennial plant (40 years).

• First harvest after 18 months• Produces cheap, but toxic,

vegetal oil: no need of subsidies to produce bio-diesel

• Farmers can make $200 to 250$/ha/year on marginal lands

• No competition with food or cash crops

Madagascar

Pictures of Jatropha Curcas

TECHNIQUE OF PLANTINGSeeds

NURSERY

Transplantation

Pruning-Weeding

Harvest

Drying -Sorting

Packaging-Storage

Young plant in pot

PLANTATIONHole digging

Direct sowing in pot

3kg/ha seeds Cost of nursery:

$60/ha

2500 plants/haCost of plantation:

$70/ha

Yield: At least 5T/ha

Harvest : Feb to August

PROCEDE D’EXTRACTION

Graines

Décortiquage-Broyage

Chauffage

Trituration-Pression

Filtration

RAFFINAGE

BIODIESEL

Huile brute

Vapeur d’eau-humidification

Tourteau

OIL EXTRACTION – PRODUCTION OF BIODIESEL

Yield: 30%

Seeds

Crushing

HeatingSteam

Expelling

Seed cake Crude oil

RefineryUsed as

Fertilizer or Charcoal

D1Oils plc• UK company, listed on the London Stock Exchange; among the

world leaders in bio-diesel processing and production.• Works in the UK, Southern Africa/Madagascar, India,

Asia/Pacific and Australia/New Zealand.• Has developed a small refinery, to produce bio-diesel from

Jatropha oil that meets high quality European norms. Capacity: 8000 T/year of bio-diesel.

By-Products from Seed Cake

• Organic fertilizer with high content in Nitrogen (5%). See results of tests on rice below.

• Jatropha briquettes could be used as substitute to charcoal: early stage of research

•Biomass for electricity production.

0

1

2

3

4

5

6

T0 T1=0,5 T2=1 T3=2 T4=3

Dose de tourteau (t/ha)

Ren

dem

ent d

e pa

ddy

(t/ha

)

Rendement SRIRendement SRA

Crude Oil Market

Rural Communities: (soaps, lights). Limited impacts. Domestic soap industry: raw material, often blended

with palm oil. Larger market but problem of toxicity.

Bio-diesel Markets

• Domestic market: mandatory incorporation in fossil diesel (5% in Madagascar in 2010). This is a $15/20 million market

• International Market: An European Union directive recommends that 5.75% of all diesel consumed in Europe must come from vegetal source by 2010 . This represents a market of more than $40 billion, with heavy subsidies by European Union to bio-diesel producers. In India, 20% of the diesel market will be bio-diesel in 2020.

Prices of Fossil Oil and Bio-diesel• Assumption: Prices of bio-diesel are equal to prices of imported fossil diesel that vary depending on prices of fossil oil/barrel.

• Bio-diesel producers will buy crude Jatropha oil from farmers at a price which is approximately $200 less than the bio-diesel price.

Linkages between prices of fossil oil, fossil diesel/bio-diesel and crude Jatropha oil

Price of fossil oil/barrel

55 60 65 70 75 80

Price of bio-diesel = fossil diesel C&F

Madagascar/T

569 621 672 724 776 828

Price of crude Jatropha oil/T

350 400 450 500 550 600

Bio-diesel development ModelOutgrower Scheme

Farmers• Associations of small farmers

• Big farmers

• Private firms

Bio-diesel refiners

• For instance, the local branch of D1Oils plc.

Plantation - Extraction Refining into Biodiesel

• Provide Technical assistance

• Give seeds, plastic pots

• Fund nurseries

• Purchase crude Jatropha oil

• Grow Jatropha.

• Extract crude oil

• Follow instruction of D1

Contracts

Crude oil

Bio-diesel Development ModelOutgrower scheme

Nurseries

Plantations

Villages

M:model farm

Expellers

Refineries

Crude Jatropha oil

M

Bio-diesel Development ModelOutgrower Scheme

Challenges

• Securing land tenure.• Signing mutually profitable contracts with farmers• Financing farmer plantations.• Identifying and financing appropriate post harvest

technology (Expellers).• Setting up an efficient logistical network.

Bio-diesel Development ModelIntegrated Industrial project

• Plantations and infrastructure: $2 million for 5,000 ha.

• Industrial seed crushing unit (150 T/day): $1,5 million

• Bio-diesel refinery (8,000T/year): $4 million

• Organic fertilizer mixing and bagging plant (15,000 T/year): $200,000

• Total investments: about $8 million.

• Conditions: secured land tenure, mandatory incorporation of bio-diesel, appropriate harbor and logistical facilities, partnership with bio-diesel refiner

• Bio-fuel definition:

• Fuel from biomass (animal or vegetal origin)

Ex: Bio-diesel, bio-ethanol

• Role of Government:

• Encourage production of bio-diesel

• Determine level and starting date for mandatory incorporation in fossil diesel

• Establish quality standards and monitor competitiveness

• Provide fiscal and custom incentives for bio-diesel processors/refiners: tax holiday for 5 years, duty free import of equipment and inputs, exemption of VAT and environmental tax.

Legal and Regulatory Framework

Impacts of bio-diesel

Economic impacts– Additional income for farmers – Job creation: 250 men/day/ha– Foreign currency gains– Can attract large investments

Environmental impacts– Reduction of air pollution

• Green fuel: reduction of carbon emission• Jatropha trees absorb CO2

– Renewable resource– Soil protection, erosion control

Conclusions: How to Promote Bio-diesel

• Design and implement a broad sensitization campaign

• Train farmers and disseminate best cultural practices

• Identify best extraction technology and equipment

• Help establish productive linkages between farmers and bio-diesel producers.

• Promote research to valorize Jatropha cake as an alternative to charcoal and/or as a fertilizer.

• Work with the Government and all stakeholders to develop a conducive legal and regulatory framework

• Identify, attract and assist foreign producers/refiners of bio-diesel

WINNER support to Jatropha development

– WINNER will provide financing and technical assistance for Jatropha plantation and processing, working with farmer associations and private enterprises.

– We will be assisted by D1-BP Fuel Crops Limited, which has 220,000 ha of Jatropha curcas under cultivation in South East Asia, Africa and India.

– D1 Oils has developed a global research programme on 300 J. curcas cultivars with a Jatropha breeding station in Cape Verde and development centres in Zambia, Swaziland, India, Thailand and Indonesia.

– WINNER Interventions: Planning and evaluation phase; Cultivar improvement ; Agronomy research (nursery trials, inter-cropping, pruning, fertilization); Out-grower management systems (extension manuals, training of extension officers, etc,); dissemination of appropriate processing technology (expellers).

–

Costs of Energy in Haiti in 2003 Sources National

Consum.(MT)

% Price/T.(US $)

Value(KUS $/T)

%

Fuelwood 401,355 36 100 40,135.5 9

Charcoal 207,000 18 300 62,100.0 14

Gasoline 118,650 10 1,050 124,582.5 27

Kerosene 76,220 7 750 57,165.0 13

Diesel 321,300 29 523.6 168,232.7 37

Haiti Diesel Price Structure

Price category Cost (US$)

Price at terminal 1.9900

Fees 0.2036

Taxes 0.1809

Company margin 0.4008

Transport Cost 0.0542

Total 2.8295

Main data on Biodiesel for Haiti In Metric Tons and US Dollars

• Diesel imports (2006 estimations): about 350,000 T or 100 million gallons.

• Domestic market (2006): around $220 million • Proposed biodiesel alternative: BP20 (20%

biodiesel). • Biodiesel needed: 70.000 T or approximately 20

million gallons• Rough industrial investment (based on D1 Oils

data): around $35 million• Jatropha plantations : between 100,000 and 70,000

ha. • Cost of plantation: approximately $100/ha (cuttings)

to $300/ha (seedlings): At least $10 million• Cost of oil expellers for farmer cooperatives: about

280 units x $5,000: $1,4 million.  

Next Steps

• Clearly define goals in terms of market share.

• Develop a business plan based on above goals

• Set up a Haitian company and put in place a good organization

• Start plantations during next rainy season