Is Bio Diesel the Alternate Fuel - Vol 2

Implications on World Economy

Pledges made by countries to slash carbon emissions are deeply inadequate to take them down to safe levels by 2030 and put the brakes on global warming.

The world's major emitter's numbers show that global emissions could reach about 57-59 billion tons of carbon dioxide equivalent (GtCO2e) by 2030.

The emissions must fall to 32-44 GtCO2e by 2030 for a 50-66 per cent chance of reaching the goal of limiting average global warming to two degrees Celsius over Pre-Industrial levels.

Goals of United States, EU and China, placed them on target for a joint output of 20.9-22.3 GtCO2e in 2030. That puts the rest of the world have to emit no more than about 23 GtCO2e. Yet current and planned policies point to a level of 35GtCO2e. Implying, a significant probability of global warming of more than 2 degrees

"An alternate to reduce pollution is Bio diesel

Bio Diesel have negligible or no carbon emission at all. Carbon Dioxide Emission by burning traditional diesel fuel accounts to 22.32 pounds/gallon (2.68 kg/liter), whereas Bio Diesel produces almost 0.13 kg/liter which can be reabsorbed by Nature. Except American nations all other countries are using low carbon emission bio diesel whereas USA and Canada are using the bio diesel which is emitting nearly the same amount of CO2 in the atmosphere, which diesel fuel emits, making their effort of Green Earth a 'Flaw'.

Bio Diesel can help developed nations to become self-sufficient in energy production. Asia accounts to 33.6% of World's fuel consumption followed by North America accounts to 24.6% and Europe accounts to 21.3% of world's fuel consumption. Most of the countries in North America and Europe are developed and have a high consumption of fuels.

Bio Diesel production will easily reduce dependency of nations in traditional fuels and generates revenue from their local markets. If world's nations substitute diesel to bio diesel, phenomenon is going to cost only major crude oil producing nations specially Middle East, USA, Canada, Venezuela and other African nations. Most of the European nations can achieve large current account surplus and will become imparable to match any other country.

Implications on India's Economy

India in 2010, launched first Bio-Diesel train in the country. With a blend of 10% Bio Diesel, this train will reduce the emission by 8-12% on a longer run. Country is converting all of its railway network to Bio Fuels and will increase dependency on renewable fuels in future. As per current government policies, India will start producing Bio Diesel in a massive quantity from 2016, with a goal to tap 2% of the diesel consumption till 2017 and 5% till 2020.

Currently Bio Diesel prices in India ranges from IN 32-38, whereas Diesel costs IN 58.87. Local population is thriving for cheap and best fuels and Bio Diesel apart from being pollution emanating is also cheaper than normal fuel.

India have all the resources necessary to produce bio fuels. Vast arable land, high manpower, cheap labour and cheap agriculture production will help the country to produce enough bio diesel which can fulfill its local demands easily.

India imported 171729 (1,000 MT) of Crude oil in FY 2011-12 which valued at IN 6.7 Lakh Crore (US$ 10.55 billion) which accounts to 25-28% of total imports of the country. If India, converts 5% of its diesel consumption to Bio Diesel, Crude imports can be reduced 4.6-4.8%, which helps the country to save US$ 422 Million and can reduce Current Account Deficit by 1.8% YoY. This change will also lead to strengthening of the currency by 3-4% YoY. A decline in US Dollar against Indian Rupee will make Indian exports competitive and exports also might decline by 0.2-0.5%.

India can thus use this money in other sectors and also gets a leverage to buy arms and machinery at a much cheaper cost which will further improve Indian Rupee Purchasing Power Parity.