Mumbai-based firm plans to invest at least Rs 350 crore on project in Orissa.

30/01/2009 (Cleanteach Forum) - Mumbai-based Mission Biofuel India has asked for government approval to build the country's first biodiesel refinery in the eastern coast state of Orissa, by the Bay of Bengal.

Mission said it would spend Rs 350 crore ($71.6 million) on the first phase of the project. It is expected to use oil from the seeds of the jatropha plant.

Company officials are scouting the region for waste lands to use for the project, including areas around the ports at Paradip and Dhamra. Jatropha is already being grown in western parts of Orissa, including Bolangir.

Orissa is one of the poorest states of India, and company officials said a refinery could help farmers.

Mission officials presented the plan to state government officials yesterday.

In September, India’s cabinet approved a national policy on biofuels, mandating a 20 percent blend in gasoline and diesel by 2017. The policy requires bioethanol and biodiesel derived from non-edible sources and be grown on non-farming land.

India's new rules call for the elimination of tax and duties on biodiesel and the establishment of a minimum price for oil seeds used for biodiesel to encourage growers. India also plans to give preference to homegrown biodiesels, mandating they come from non-edible oil seeds and be grown on waste, degraded or marginal lands. Biodiesel crops will not be allowed to grow on fertile, irrigated land, and the government plans to ban the import of free fatty acids, such as palm oil (see India, EU affirm new biofuels).