Ethanol price hike stalls biofuel bus plan

KSRTC buses leaving from Kempegowda bus station.

By Apoorva Sripathi

BANGALORE (Sept. 13)—The Karnataka State Road Transport Corporation planned to increase the fleet of biofuel buses from 1,500 to 5,000 by the end of last year, but the high cost of ethanol has stalled the project.

These buses run on 7.7 percent ethanol blended with diesel. At present 2,000 buses run in 21 locations.

P.S. Anand Rao, environment officer at the KSRTC, said: “This project was started in 2008. We called for a tender in 2009.”

Rao pointed out that when the project started, the wholesale price of ethanol was Rs.19.48 per liter and the retail price was Rs. 21.51 per liter, including taxes, but the retail price jumped to Rs. 34 per liter in 2010.

“The price of a liter of diesel is Rs. 42. The additive used to blend ethanol and diesel costs Rs. 200 per liter and we add 5 percent of it,” he said.

The cost of the blend is more than the cost of diesel, and so the scheme is not economical. The project has been shelved until ethanol prices drop.

Production remains on small scale

The Karnataka State Biofuel Development Board promotes the use of crops including pongamia, jathropa, and mahua to make biofuel as well as sugarcane and cassava.

Basavaraj, technical officer and personal secretary to the chairman of KSBDB, said, “KSRTC has no difficulty in using blended fuel or biofuel to run buses—it is the production rate that is posing a difficulty.”

“Biofuels are seed-based and are processed for other applications such as bases for paints, which is a huge market,” he said. “Therefore, there is no individual capacity to produce that level of biofuel.”

Basavaraj also said that there is a need to grow more trees that are processed for biofuel on wasteland. Earlier, 20 percent of trees the forest department planted were earmarked for biofuel, but this figure has increased to 60 percent.
“KSRTC is ready to buy the biofuel at Rs.1 less than the market price; it all depends on the producer,” Basavaraj said. While the basic price of biofuel is Rs.16 per liter, the market price of diesel and biofuel is in the same range at Rs. 45-47 per liter.

The price of seed procurement is Rs. 12-14, but middlemen take Rs. 6 as their share.

“The middlemen involved, need to be eliminated else the sales of biofuel will not be profitable and less number of people will come forward to produce it,” Basavaraj said.

KSRTC eyes 2,500 biofuel buses

Rao had a different story to tell. When The SoftCopy pointed out to him that KSBDB also produces biofuel, he said the state body did not produce certain varieties of biofuel.

“We had to get it from Hyderabad and Mumbai,” Rao said. “There were extreme differences between the two. The fuel from Mumbai was of bad quality, so we canceled it.”

KSRTC procures biodiesel from a Peenya-based company called Eco Green. The corporation has placed an order for 2,000 liters.

“The Doddaballapur area uses this for its buses—50 in number. We will be extending this to five more depots. We plan to increase [the number of biofuel buses] to 2,500,” Rao said.

He declined to say by when this number would be achieved.

Santosh P. Nargund, a civil activist who followed the investigation closely said, “The government is trying to delay the report from being made public.”

In his opinion, the government will delay releasing the report “until everyone forgets about it.” Bringing in the CID to investigate the deaths at the colony is just another delaying tactic, according to Nargund.

The investigating officer at the CID was unavailable for a comment.

A year after the deaths, an official report has been written, but the families of the dead have yet to read it.