Over the past year or so I have been covering the green industry to understand it better. Over the course, it became apparent that the biggest stories are about the people behind these initiatives.
In the course of being in this industry and writing on the blog I have come across some interesting people who are trying to make it big in this industry in their own way. In order to tell their story, I have decided to conduct an interview with them. The idea is to understand the stories at a more personal and knowledgable level.
I have no specific publishing schedule, but would try to do about 3 interviews a month.
Our guest today is Sreenivas Ghatty. Sreenivas is the founder and CEO of Tree Oils India. With all the interest in Biofuels Sreenivas believes that there is a great future for using them as an alternate fuel of choice.
Thank you Sreenivas for agreeing to this interview. Can you please tell our readers about yourself?
Thank you for giving me this opportunity. I have a Masters in Agriculture and was a corporate banker in India and Dubai for 18 years until I entered the Biodiesel industry in 2003. I live in Melbourne with my wife and two daughters and keep travelling to India and other countries regularly.What is your company about?
Tree Oils India Limited was established in 2003 to produce Biodiesel from non-edible oils. Please visit our web site (www.treeoilsindia.com) to learn more about this company. Bear with me if some of the information is obsolete as the contents have not been updated during the last five years. As non-edible feedstocks were not available in sufficient quantities and at reasonable pricen at the time, we started with plantation activity. As there were no tested varities of these tree species and knowledge of agronomy was limited, we started an R&D farm to begin with. So, as of now, we are a technical-know-how company, trying to develop non-edible oil-bearing trees such as Pongamia, Jatropha etc.
Why BioFuels?
With peak oil approaching faster, alternative energy sources need to be developed. Biofuels are the cheapest and the most sustainable alternative and they can be produced and consumed locally by many people in small quantities. Alongside, there are also benefits to economy and environment.
With peak oil approaching faster, alternative energy sources need to be developed. Biofuels are the cheapest and the most sustainable alternative and they can be produced and consumed locally by many people in small quantities. Alongside, there are also benefits to economy and environment.
What has been your personal experience in this area?
I have been involved in this activity for more than five years. The industry is nascent, the technology is evolving and there are issues in pricing, incetives, feedstocks and marketing. If one has right perspective, is flexible and has holding capacity, the long term prospects are good. My personal experience has been the transformation from a prospective Biodiesel producer to a Biodiesel plantation technical know-how consultant. I hope to realise my dream of producing Biodiesel in the near future.
I have been involved in this activity for more than five years. The industry is nascent, the technology is evolving and there are issues in pricing, incetives, feedstocks and marketing. If one has right perspective, is flexible and has holding capacity, the long term prospects are good. My personal experience has been the transformation from a prospective Biodiesel producer to a Biodiesel plantation technical know-how consultant. I hope to realise my dream of producing Biodiesel in the near future.
What are the current projects in Australia, India and rest of the world?
Biodiesel manufacturing units are being established all over the world, including Australia and India. Some of them are being closed mainly due to high cost of feedstocks. Biodiesel plantations with species like Jatropha and Pongamia are being establsihed by the present and future Biodiesel Manufacturing and Feedstock Management companies on their own and through contract farming. All these projects are still in their initial stages. It may take another five years for sizeable commercial plantations to appear on the horizon thus increasing supply of feedstock and reducing the price thereon.
What are the types of bio fuels and what are you concentrating on? What is the process of making Biodiesel?
Biofuels are predominantly Ethanol (blended with Petrol) and Biodiesel (blended with Diesel.) My focus has been on Biodiesel. The process of making Biodiesel is evolving and there are new developments in the process as well as the technology. Predominantly, it is the transesterification of fatty acids with methanol in the presence of a catalyst to produce methyl ester (Biodiesel) and glycerol.
What are the major sources (feed stocks) for creating biodiesel?
The existing sources are palm, canola, soybean and coconut oils, used cooking oil and tallow, along with the sources that are being developed are non-edible oils from trees such as Jatropha, Pongamia, Moringa etc. Also, a decent amount of work is being done on Algae.
A brief look at the economics of biofuels.
Economic production of Biodiesel with the existing feedstocks is not possible without tax incentives, subsidies by the government and carbon credits. This activity can be independently viable only after the feedstock prices substantially come down and the crude oil price remains above USD100 per barrel.
What could be the price of fuel using these feed stocks?
Under the circumstances, it cannot be less than $2 per litre.
What are the challenges facing you in starting something in Australia?
The risk appetite of investors is low and government support is meagre. To put it simply, we are yet get out of investing in suburban properties supported by negative gearing in this country. However, with the signing of the Kyoto Protocol, there could be several positive developments.
What are the areas where we can concentrate these plantations in?
The marginal areas other than forests with lower rainfall and poor soils could be used so that there is no competition with agriculture and food production. Such areas are available in all the states.
Why are the top biofuels companies in Australia not doing well?
They are suffering from higher cost of feedstocks coupled with the lack of support from oil companies and inadequate incentives on the government’s part.
Bio fuels has been suggested to have increase the cost of food around the world. There are other issues regarding forest clearing in South East Asia. Will your solution work against the food stocks and the rise in prices of food?
My approach of using non-edible oils produced by hard trees that are grown in non-agricultural non-forest lands offers a solution to the issues related to competition with food production and deforestation.
There have been reports in the last few months on the life cycle emissions of bio fuels. What is your opinion on that and how does it compare with fossil fuels?
There have been subsequent reports that have established that the life-cycle emissions of biofuels are less than those of fossil fuels. However, if feedstocks from perrenial trees are used, the life-cycle emissions are definitely low.
Lets take an example to make it easier to understand. How can we start a viable bio diesel plant in South Australia? For example, what are the areas for plantation? What kind of expertise is required? The gestation periods?
In the northern parts of South Australia, farmers can form a co-operative society that would set up a small plant to produce biodiesel to meet their requirements. If each farmer plants oil-bearing trees in about 20% of their holding, that would take care of the feedstock requirements of the plant. These plants would also provide supplementary income to the farmers, especially during times of drought. Depending upon the species, the gestation period could vary – between 6 and 10 years.
What are the funding options available? If farmers can grow these areas North of the Goyder line, wouldn’t this provide a new potential similar to the wheat boom in the Flinder Ranges in the 19th century?
The funding for such ventures could come from farmers’ equity, grants by the government, investment by superannuation funds, and loans from banks.
Is Community based funding a good model to look at?
Community based funding is not only desirable, but also sustainable.
If an investor is ready, what is the ROI that you can guarantee and what is the project life?
In the absence of tested data, it would be difficult to guarantee returns. However, the ROI on such projects is estimated to be between 20 – 35% over a period of 30 years.
Where do you see this going in the medium term?
The existing problems would continue for a few more years, but the industry would stabilize in the next 5 years.
What are the challenges you have faced till now?
Till now, I have faced two challenges – procurement of land and funding.
If our readers want more information regarding this, what are the avenues available? How can you be contacted?
Interested readers can Google Biodiesel, Pongamia and Jatropha. However, most of the information available on the internet is hypothetical and unreliable. I can be contacted at gs@treeoilsindia.com.
Hi Vas, having been researching pongamia, I agree there is a lot of differing opinions from experts ranging from 1litre of oil to 40 litres of oil per tree. This makes it extremely difficult to estimate a likely ROI as these experts are adamant they are correct!. Brian Greenwood Qld.
With the Fossil Fuels depleting exponentially and the environemental threats involved with the possibility of increased dependence on electricity produced through nuclear route, to make up for the loss of fossil reserves, there is a DIRE and URGENT need to evolve green fuels, that could be produced and consumed locally all over the world. All of us must extend our support to such peolpe involved dedicatedly for this purpose, surfing through these unchartered waters for a better tomorrow.
Out spoken and very transparent. What is happening in Biofuels and realties are talked. Fantastic!!
This is most comprehensive interview I have read of Biofuels recently. The issues in Biofuels production were brought out very lucidly and discussed threadbare. The sector need to be addressed by all the agencies viz. Govt., Public, NGOs Consultants and policy initiatives to be taken to make the ecology sustainable. The problems are many and challenging, hence the efforts needed also be systematic and planned. I agree with the views of Mr. Srinivas that we have to work on marginal/ problem lands under Contract Farm,ing process to address the problem and also make raising of biofuels remunerative to farmers.
I appreciate the confidence that Mr. Sreenivas has on this wonderful option that humans have to reduce the burden on oil which, will surely get exhausted sooner. Biofuels have not only an excellent opportunity in the automobile industry but even for the power sector.
Suhit,
Thanks for bringing us this inverview and I will look forward for more interviews in this field.
Though investors want to invest in Green fuels, I belive that ROI will be a major factor that helps them to make the investment decision. Unless research is driven towards producing seeds that can create trees that consumes lesser water and produce more oil per tree; investors will shy away from investing and farmers will shy away from cultivating. In the short term, certainly Govt. subsidies should support the feedstock production, but in the long term the product will be sustainable only by producing more oil per tree.
Mr Ghatty Sreenivas ji, I am very much impressed with your article and wish we could do something in Dubai as well and carry on with your Dream-Project. It is more profound then I felt and the need for alternative fuel would definately be everybody’s agenda! Keep me informed fm time to time-tks and good luck
As far as food cost increasing as a result of biofuel production increasing, food cost will also go up with fossil fuel cost going up. Looks like it will cost more! One way, the cost goes off the chart, the other, it is high but stable and sustainable. Not much choice here. Full ahead biofuels!
Hi Vas, having been researching pongamia, I agree there is a lot of differing opinions from experts ranging from 1litre of oil to 40 litres of oil per tree. This makes it extremely difficult to estimate a likely ROI as these experts are adamant they are correct!. Brian Greenwood Qld.
Further to the above…has anyone done a frequency distribution, for number of trees vs litres of oil? Probably the usual variability. Everything else being equal, select the best trees then do another fd.
Thanks for giving the opportunity to know the reality about the bio-diesel and the lack of government involvement in this matter. I guess the governments are more of talking the issue and spending all the available funds in getting things advertised, analysed and researching continuously on paper. Not a step closer to see a drop of oil. I am glad at least Mr Vas is getting closer to reality with his plantation.
I agree with Mr.Srinivas that now there are diffent opinion on biofuels. with the 15 years of my experience in Research in biofuel crops I am sure that Yield in Jatropha and Pongamia pinnata can be maximised and stabilized if a suitable technology is adopted. If proper land, varieties and technology is applied the ROI will be 30-35 for above 15 years. If it with Hybrids of jatropha that we have in hand now will make it more remunarative venture.Those who foresee the best business venture it is the best option.
Paramathma.M. Professor and Nodao Officer, Centre of Excellence in Biofuels, AEC &RI, Tamil Nadu Agricultural University, Coimbatore.India.
Dear Suhit,
I am delighted to see many positive and encouraging responses. Amidst all the uncertainities and ambiguities, such support is well apreciated. All the credit goes to you. However, I am not sure as to how many of them get translated into business ventures to promote sutainable livelihoods through biodiesel plantations and energy crops.
Coming to the issue of yields and returns, lot of research is going on different parts of the world and it would take few more years for the clear picture to emerge. You would agree with me that there is a big gap between small trial plantations and large scale commercial plantations. Unfortunately, we can not wait for the trilas to comepleted to establish large plantations in view of the growing demand for these feedstocks.
There are also issues related biodiversity, ecological balance, water requirements, pests and diseases that are being resolved. One has to remember that the plantation locations are different and it would take time to evolve location specific plantation material and agronomy.
The differences in yields could be attributed to the agro climatic conditions, plantation material used and agronomic practices adopted. Having seen these plants growing from seed to the stage when they are yielding seeds, I would only suggest to adopt very conservative, diversified and integrated approach at minimum cost so that no one is put to loss in this grand experiment.
Regards
Sreenivas
I am with Sreenivas of the opinion that Industry is in its Nascent stage. The yield from Jatropha & Pongamia is increasing with age. We need to wait for another 4 to 5 years before we can commit any ROI.
Biofuel R&D should have been started in the beginning of this century when oil prices had started going up. Now hovering around $100 a barrel, and the two most populous countries — China and india — guzzling up oil like never before, every government, particularly in the Third World, should open its eyes to the prospect of reaping rich benefits from alternative sources of energy such as biofuel. Even if there is no immediate return on investment, in the long run, such initiatives would help farmers and the governments in many ways.
First, non-edible oil plants help in the conservation of depletable natural resources. Secondly, an abundant cultivation of these plants in arid, semi-arid and desert lands check desertification. Thirdly, they give farmers an extra income.
As Sreenivas rightly pointed out in his interview, the fillip to cultivate biofuel plants should come from governments in the form of land, saplings and awareness campaigns. Non-government green organisations can complement governmental efforts.
What’s more important is governments should not look at such projects from a short term perspective but with a long-term view. Even if a small percentage of biofuel is used by consumers the savings would be enormous.
Meanwhile, what the green fuel industry needs is more research and international cooperation.
Mr, Srinivas is right in his views. He has been experimenting with tree oils in India for quiet some time now. I only hope he breaks even someday. It is impossible to get into growing of Oil bearing fruits and berries, unless the govt comes out with a clean and a precise Bio Fuel policies, especially the growing part and its minimal support price. Unless this is in order and reasonably profitable for the farmer, nothing else up the value chain could be set up. Good luck Mr. Srinivas.
I fully agree with Mr.G Sreenivas, who expressed his views very clearly and the interview is highly informative with down to earth frankness. I feel that Bio fuels are a reality and it is the duty of all right thinking people to support and propagate in whatever little way they can, to save the Mother Earth and to maintain and sustain the equilibrium in the Environment.We should not always look at the ROI in terms of money it generates but our humble contribution to wards harmonious and peaceful living of future generations is also one of our moral responsibilities.Thanks for the wonderful interview.
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