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Pricing model for biodiesel feedstock: A case study of Chhattisgarh in India

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  • Pohit, Sanjib
  • Biswas, Pradip Kumar
  • Kumar, Rajesh
  • Goswami, Anandajit

Abstract

Following the global trend, India declared its biofuel policy in which biodiesel, primarily from jatropha, would meet 20% of the diesel demand beginning with 2011-2012. To promote biofuel, Indian government has announced biodiesel purchase price as well as compulsory blending ratio. But, these measures have not worked to create large scale biodiesel production in India. With this backdrop, this paper highlights about the importance of a sound pricing policy focusing on the entire value chain of biodiesel production. The analysis is based on field level data from Chhattisgarh, the leading state in the production of jatropha. Such a sound pricing policy has to deal with the prices of feedstock, by-products and final product like biodiesel. It would also have to reflect on the business model of production of biodiesel. The simulation exercises in our model shows that the business returns from the production of biodiesel and the minimum support price (MSP) of the feedstock for biodiesel (i.e. jatropha seeds in this case) are sensitive to various parameters like seed yields, technological efficiency, by product and petro-diesel prices. An effective price policy framework has to consider all these factors to create a platform for sustainable biodiesel production in India.

Suggested Citation

  • Pohit, Sanjib & Biswas, Pradip Kumar & Kumar, Rajesh & Goswami, Anandajit, 2010. "Pricing model for biodiesel feedstock: A case study of Chhattisgarh in India," Energy Policy, Elsevier, vol. 38(11), pages 7487-7496, November.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:7487-7496
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    Citations

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    Cited by:

    1. Kumar Biswas, Pradip & Pohit, Sanjib, 2013. "What ails India's biodiesel programme?," Energy Policy, Elsevier, vol. 52(C), pages 789-796.
    2. Biswas, Pradip & Verma, Jyotiprakash & Pohit, Sanjib, 2018. "India’s Biodiesel Programme: A Pathway for Sustainable Entrepreneurship, Employment Generation and Inclusiveness," MPRA Paper 94719, University Library of Munich, Germany.
    3. Amrita Ganguly & Koushik Das, 2017. "Multi-sectoral Analysis of Foreign Investment and Trade Liberalization in India: A CGE Modelling Approach," Global Business Review, International Management Institute, vol. 18(5), pages 1345-1372, October.
    4. Sudip Das, 2018. "Achievements and misses of the Indian national policy on biofuels 2009," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(2), pages 5-30.
    5. Tirkey, Jeewan Vachan & Kumar, Ajeet & Singh, Deepak Kumar, 2022. "Energy consumption, greenhouse gas emissions and economic feasibility studies of biodiesel production from Mahua (Madhuca longifolia) in India," Energy, Elsevier, vol. 249(C).

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    Keywords

    Pricing NPV IRR;

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