Seeds of Change on the New Frontier for Energy

AS AMERICA CALLS ON DEVELOPING NATIONS TO FIGHT CLIMATE CHANGE, INDIA’S FARMERS LAUNCH A GREEN REVOLUTION

Deep in remote, rural south India, 62-year old Deveraj stands proudly in a field of bushy green plants. In his sweatdrenched vest and ragged headscarf he looks the picture of an Indian subsistence farmer. But unlikely as it may seem, he is a frontline soldier in the country’s energy revolution.

The green bushes interspersed with sunflowers are no ordinary crop these are jatropha plants, a wild tropical hedgerow bush whose seeds, once crushed and refined, are a source of biodiesel fuel.

This is Tamil Nadu, India’s southernmost state and one of the most advanced in terms of green energy.

Its capital, Chennai, is the centre for car production, while the city of Coimbatore is famous for textiles, with 35 million people working in clothes manufacturing in the state.

Textile firms have grown rich and many own much of the land around Coimbatore, including large swathes of previously uncultivated scrub land.

But this vacant land has suddenly jumped in value as its potential for green energy projects has exploded.

Deveraj has been recruited to a jatropha development scheme by British company D1 Oils, one of the more advanced in its plans to exploit the crop.

Deveraj grows the plants on three acres on his farm.

D1 Oils, listed on London’s Aim market, was set up by the colourful former dotcom entrepreneur Karl Watkin. D1 has yet to make a profit and this year is expected to book losses of Pounds 15 million because of its research and development costs.

It does, however, have significant assets. It owns a refinery and diesel storage facilities in Middlesbrough and Merseyside.

Back in India, it has invested in plant breeding and testing facilities and an extractor service where the hard seeds are shelled, cooked and crushed into a crude diesel oil.

And despite the lack of profits, the company has a market value of Pounds 110 million. Some investors obviously have faith.

Sarju Singh, chairman and managing director of D1 Oils’ operations in India, has grand visions for his native country. ‘We think that up to 30 million hectares (116,000 square miles) of land could be used to cultivate jatropha,’ he says.

‘This is not just a green energy issue.

The government here has combined it with rural development.

‘About 70 per cent of people in villagesin India are in poverty and there can be jobs in cultivating and it can provide an additional income to farmers,’ says Singh, speaking from D1′s headquarters in Delhi.

Jairam Ramesh, India’s minister of state for commerce, is cautiously in favour of the green energy entrepreneurs. ‘The trend is for biodiesel, but I am not one of these starry-eyed people who thinks biodiesel is a panacea,’ he says.

As India’s economy grows, it is facing increasing calls to cut its carbon emissions, which could constrain its capacity to compete with the developed world or other emerging economies such as China, which has little compunction about building coal-fired power stations to fuel its expansion.

Under the 1997 Kyoto I greenhouse gas protocol, developing markets were not required to cut emissions.

But last week’s G8 summit, held in Germany, saw leading industrial countries ramp up the pressure on fastdevelopingnations, such as India, to reduce their carbon footprint.

America made India and China being included in future emission limits a condition of it agreeing to future carbon cuts.

Ramesh says: ‘India has to be careful about greenhouse gases. In Kyoto I we got away without emission reductions, but in Kyoto II, later this year, we may not have the same luxury.’ In Tamil Nadu, farmer Deveraj knows little about the Kyoto agreements, but he does know that jatropha could become a valuable part of his farming business.

‘After a season without rain in some of my fields, everything else stopped growing. The land was no use to me so I moved to jatropha,’ he says. His yearly crop he will earn him 7,500 rupees (Pounds 95). It is a tiny sum but for Deveraj it will boost his income by roughly ten per cent.

So far, jatropha may not be saving the planet, but it is beginning to improve the lot of some ordinary farmers.

Race for biodiesel ignites the food versus fuel debate THE rise of biofuels, once thought to be the preserve of green eccentrics, has rocked global financial markets and even sparked the ire of Opec, the organisation of oil producing countries.

Biofuels covers a range of products from biodiesels, produced from rape seed and palm oil, to ethanol.

In Brazil, most cars now run on ethanol, made from the country’s biggest agricultural product, sugar cane. But the growth in these fuels has sent food prices spiralling, as their use in biofuels creates a surge in demand.

Last week, palm oil prices hit a record high. Research from Goldman Sachs warned that global demand for biofuels will jump from ten billion gallons a year to 25 billion gallons by 2010.

Developing countries warn that demand for biofuels could end up taking food from the mouths of the poor.

‘It must not encroach on food production,’ Jairam Ramesh, minister of commerce in This is a key strength of the shrub jatropha. It is not a food crop and grows on land unsuitable for other crops.

The value of jatropha was spotted by the Japanese during the Second World War.

They used the oil squeezed from the almond-sized seeds to supplement aviation fuel.

Ultimately, believers in biodiesel believe it could be used as the sole fuel for some vehicles. D1 Oils has confidently sponsored a car, fuelled by jatropha diesel, which will run in the 2008 Le Mans 24 Hour race. But biofuels have also found enemies among the oilproducing countries.

Last week, Abdalla El-Badri, Libyan secretary-general of Opec, said food inflation was a reason biofuels would fail.

And he warned oil producers could cut output because of less demand for old-fashioned petrol, leading in the long run to higher oil prices. It could be a sound analysis, but to some it sounds like a threat from vested interests.

(c) 2007 Mail on Sunday; London (UK). Provided by ProQuest Information and Learning. All rights Reserved.