Demand for biofuels expected to rise 20%-30% annually

Rachel Kelly Channel NewsAsia 18 Feb 11;

SINGAPORE : This week, the European parliament voted for new rules that require lower emissions from commercial vehicles.

With governments globally continuing to set stiff targets for the use of "clean" energy, Biofuels Asia - a Singapore-based clean-energy company - is betting on Jatropha, a hardy plant that is a source of biodiesel.

One of the reasons Jatropha is gaining ground as a biodiesel alternative is that it can grow on tougher soil conditions.

Biofuels Asia said it expects demand for biofuels to increase between 20 and 30 per cent annually for the next decade. And it is rooting for Jatropha to tap that potential.

Richard Yong, CEO, Biofuels Asia, said: "The Europeans have come up with a renewable energy directive, which basically says by the year 2020, 20 per cent of their energy has to come from green and renewable sources such as biofuels. So we'll see the demand growing.

"Most varieties of Jatropha in the wild would produce 1.8 to 2 tonnes per hectare every year, but what we have done here is we have produced a plant that produces 5 tonnes of oil every year. And because of that, it makes the economics of biofuel very attractive.

"And in ... producing 5 tonnes of oil, you actually cleanse the atmosphere of about 10 tonnes of carbon dioxide, which is very good for the environment and it has effects on climate change as well."

Some analysts estimate that the 900,000 hectare of Jatropha planted globally could produce roughly 1.8 million tons of crude Jatropha oil every year.

To expand its operations, Biofuels Asia said it is in discussions to set up a 700 square kilometre plantation in China.

It is currently developing a 2,000 hectare plantation in Malaysia.

Mr Yong said: "There is a wholesale market for biodiesel - so we can either sell directly to the wholesale market or do long-term off-take contracts.

"So we are talking to Formosa group in Taiwan, ComfortDelGro in Singapore, and besides that we are also talking to the other big players like Neste which has just set up its biodiesel plant in Tuas. So we can actually sell to the wholesale market or we can do long-term off-take market."

As demand for alternatives such as biofuels continues to pick up, Biofuels Asia is expecting about 25 per cent growth in revenue for the next five years, and the company is planning to list in either Hong Kong, London or Singapore by the end of the year.

- CNA/al