Producers of biodiesel, banned from selling the fuel as a transport fuel, are looking to enter long-term supply arrangements with telecom tower operators, who use diesel gensets for power backup purposes. India has more than 20 biodiesel producers with a combined capacity of 1 million tonnes a year, said Sandeep Chaturvedi, president of the Biodiesel Association of India.

They have invested a total of about Rs1,200 crore on building capacity and brought 700,000 ha under cultivation of jatropha, a key feedstock for biofuels. But production for the year ended 31 March was only about 80,000 tonnes, sold almost entirely to commercial establishments that use gensets. The fall followed a petroleum ministry directive in March 2009 asking state governments to ensure that biodiesel is not sold as transport fuel directly to consumers. Many firms suspended or scaled down production due to the ban.

Biodiesel is considered a clean alternative to fuels such as petrol and diesel as it biodegrades fast, results in lower emissions and is made of renewable resources such as vegetable oil, animal fat or jatropha. Producers received a boost earlier this year when the West Bengal Pollution Control Board, or WBPCB, directed all telecom towers in the state to use at least 30% biodiesel in their generators from March. But the directive has been put on hold for four months as producers cannot guarantee regular supplies, said Biswajit Mukherjee, spokesperson for WBPCB. “Also, some gensets may need some modification to use biodiesel,” Mukherjee said. Emami Biotech Ltd, a subsidiary of consumer goods company Emami Ltd, has started trial supplies to one telecom operator in West Bengal and is in talks with two more, said Swapan Kumar Mondal, a director at the firm. “In 15 days, we expect to start supplying to more telecom tower companies.”

There are at least 26,000 telecom towers in the state, each consuming about 20 litres of diesel a day, said Mondal. Emami Biotech is also looking to supply biodiesel to towers in neighbouring Bihar, Jharkhand and Orissa. The firm produces 500 tonnes of biodiesel a month, while it has capacity to produce up to 300 tonnes a day. Emami uses the same production facility to refine vegetable oil to recover fixed costs, said Aditya V. Agarwal, a director at Emami Biotech.

Besides being environment-friendly, biodiesel could be a cheaper alternative for telecom tower operators as well. “Even after considering cost of delivery, biodiesel could cost 50-75 paise (per litre) less than petrodiesel,” Mondal said. “And biodiesel should generate almost the same amount of energy as petrodiesel does.” Quippo-Wireless Tata Tele Info Services Ltd, or Quippo-WTTIL, one of the biggest telecom tower operators, said it welcomed WBPCB’s directive on using biodiesel compulsorily, but wanted producers to guarantee regular supply.

“The use of biofuel...will have a positive impact on the environment and benefit companies with reduced energy charges,” a spokesperson for Quippo said in an email. Chaturvedi said distributing biodiesel to the towers may not be easy. “Because retail sale of biodiesel is prohibited, district authorities in many states have seized trucks carrying biodiesel even though the fuel was intended for sale to genset users only,” he said.