The Mint reports that (reg.), Reliance Industries, the largest private sector company in India (based on Market capitalization), is launching its bio-diesel plant in my home state of Andhra Pradesh in South India through its subsidiary Reliance Petroleum.

RIL has ambitious plans for the biofuels business and is cultivating Jatropha, a plant that can yield high quality biodiesel, in a 200 acre plot at Kakinada in Andhra Pradesh. “The company will set up a pilot project at Kakinada this year and once economies of scale are ensured, it will start working on a full-fledged transesterification unit,” said a senior RIL executive who did not wish to be identified.

A recent report of the Energy Information Administration (EIA), an international agency that tracks the energy sector, estimates the demand for biodiesel at 25 million litres in 2010 and 28 million litres in 2020. EIA also says that depending on biodiesel’s potential as a lubricity additive, something that is added to fuels to optimise the functioning of the engine, could reach as much as 1.8 billion litres in 2010 and 2.4 billion litres in 2020.

Last year, Andhra Pradesh set up a separate department to oversee the cultivation of Jatropha and other plants that are sources of biofuel on 7,28,000 hectares of wasteland. According to documents detailing Andhra Pradesh’s biodiesel plans, a Jatropha seed contains 27-31% extractable oil and a plantation of around 1,00,000 hectares can yield 2,50,000-3,00,000 tonnes of crude Jatropha oil a year, or roughly, $100 million in revenue.