World’s first bamboo ethanol plant in Assam aims to bring 30,000 farmers in sourcing net
The Assam Bio Ethanol Pvt Ltd (ABEPL) is targeting to join hands with more than 30,000 farmers over the next three years to source bamboo for the world’s only second-generation bioethanol plant, a senior official said. The Rs 4,930-crore plant, with an installed production capacity of 49,000 million tonnes per annum (MTPA), was inaugurated by Prime Minister Narendra Modi in September last year, and is presently undergoing stabilisation with limited raw material resources. “Presently, we are going through the start-up phase. Within around next week, we should be able to stabilise the plant. Thereafter, we will go for full-scale production,” ABEPL Chief Executive Officer Rupjyoti Hazarika told PTI in an interview. Located at Numaligarh in Assam’s Golaghat district, the unit is the only commercial second-generation bioethanol plant in the world using bamboo as the raw material. All other first-generation ethanol plants use food crops such as sugarcane or maize as biomass. Besides ethanol, the plant will also annually produce 19,000 tonnes of furfural, 11,000 tonnes of acetic acid, 32,000 tonnes of liquid CO2 and 25 MW of green power. “During the trial run, we produced fuel-grade ethanol with 99.7 per cent purity. The normal range is to have a 99.5 per cent purity level,” he said. To fully achieve the installed ethanol output, the 43-acre plant will require five lakh MTPA of green bamboo as raw material. The CEO said that to achieve its targeted raw material sourcing, 12,500 hectares of bamboo plantation will be required, using 60 lakh saplings over the next three years. “We have so far registered over 4,200 farmers for sourcing bamboo. We are targeting more than 30,000 farmers across a 300-km radius sourcing zone over the next three years,” he added. He said that the company has so far transferred Rs 2.4 crore to farmers’ accounts for sourcing bamboo without involving any middleman. “We have set a target to source bamboo from a 300-km radius of the plant. We will take green bamboo from 16 districts in Assam, four in Arunachal Pradesh, five in Nagaland and one in Meghalaya,” Hazarika said. Presently, bamboo cultivation is taking place on 300 hectares of land with the already registered farmers, he added. “We have freely distributed one lakh saplings, the majority of which are for institutional players like tea gardens,” Hazarika said. With the government allowing five per cent of tea garden land for non-tea purposes, many owners have expressed willingness to use their land for bamboo cultivation, he added. “We are identifying non-crop land and not encouraging farmers to convert agricultural land for bamboo cultivation. We are looking for barren and unused land for bamboo cultivation,” he said. Hazarika also said that when the company sources bamboo from 12,500 hectares of land, ABEPL will become a carbon neutral entity. For producing ethanol, bamboo is chopped into small chips of 25 mm each. Although there are many varieties of bamboo available in the Northeast, no specific type is required for the fuel’s production. “We have identified 24 chipping units across four districts in the first phase. Of those, we have signed agreements with eight and four have already started supplying bamboo chips,” the CEO said. He said that at the full-scale operation, ABEPL will be the largest consumer of bamboo in the Northeast. The world’s first second-generation bio-ethanol plant is a ‘zero-waste’ facility, which will utilise all parts of the bamboo and is estimated to give a Rs 200-crore boost to the rural economy in the state. The ABEPL is a joint venture company promoted by state-run Numaligarh Refinery Ltd (NRL), and Finland-based Fortum 3 BV and Chempolis Oy.
Oil Bears Are Dangerously Underestimating Geopolitical Risk
For decades, oil prices could swing wildly on even the distant prospect of war in the Middle East. With U.S. shale, that changed, leading many to assume that anything short of an oil blockade in the Strait of Hormuz will leave oil markets cold—and such a blockade is highly unlikely. This, however, is a false sense of security. Geopolitics can still flip the script on oil bears. The most recent oil price rally was prompted by the threat of a military escalation between the United States and Iran. Interestingly, the oil blockade that the United States imposed on Venezuela earlier this year failed to really move benchmarks in any consistent way. A war with Iran, on the other hand, has pushed Brent crude past $67 per barrel and WTI to over $62. Rystad Energy recently published five possible scenarios about U.S.-Iranian relations, with the best-case one involving productive talks leading to a new nuclear deal that the U.S. would force on Tehran, per the consultancy, and that would lead to an increase in Iran’s oil production. This is obviously a bearish scenario – but the other four are increasingly bullish. They range from limited U.S. strikes on Iranian nuclear facilities and possibly oil infrastructure to wide-ranging strikes, the death of the country’s Supreme Leader, and civil unrest ensuing after the collapse of the government. Interestingly, Rystad Energy does not see a huge price increase potential for crude oil in any of its scenarios. In the worst-case ones, the consultancy sees oil jumping by $10 to $15 per barrel as Iran’s production suffers from the aftermath of adverse events. Some, however, note that if the war spreads across the Middle East, prices could top $100. A Bloomberg article looked at such a scenario recently, with the authors noting that the price shock would be the result of Iran closing the Strait of Hormuz, albeit for a brief period. Even though brief, such a disruption would affect 20% of global oil supply, the authors noted, leading to a potential price jump of as much as 80%, based on historical data. Still, the effect on oil prices from this worst-case scenario would be limited—because the world, at least according to the authors, does not need as much oil as it did decades ago. The reason for this is energy efficiency, with the authors pointing out that “In the US, the amount of oil needed to produce one unit of GDP has fallen by about a quarter since 2011.” However, on a global scale, crude oil remains the top primary energy source, which means a price shock would cause pain—although not as much pain as it might have caused 20 years ago, for instance, thanks to inflation. “Inflation means $100 oil today buys fewer goods and services than $100 oil a decade or two ago,” Dina Esfandiary and Ziad Daoud wrote. This is hardly any consolation for those who, with Brent at over $100, would be able to afford even fewer goods and services. However, such a major disruption is the least likely scenario for the U.S.-Iranian conflict. Just this weekend, Reuters reported that Iran wanted to make a deal with the U.S., citing a senior Tehran official as suggesting the Iranian side was willing to make concessions in order to strike a deal and get sanctions lifted. Needless to say, that would be highly bearish for oil prices because it would likely lead to an expansion in Iran’s oil production. But in case the two fail to agree on a deal, the potential for escalation remains active—and the prospect of a deal is also distant, despite this latest signal from Tehran. Indeed, last week saw oil prices make gains on reports that the U.S. was building a substantial military presence in the Persian Gulf, signaling it was prepared for an extended conflict with Iran—and that extended conflict significantly raises the risk of oil infrastructure getting targeted and disrupting Iran’s production of crude, currently at some 3.2 million barrels daily. The extended conflict scenario also increases the risk of other Middle Eastern oil producers getting drawn into the fighting as targets for strikes, facing potential disruption to their oil infrastructure. Yet events from last year suggest that no one in the Middle East really wants oil prices to go through the roof. Higher is better up to a point, and while oil demand is among the least elastic in the world, it still responds to price shocks. Some analysts point to China’s oil storage spree as grounds for arguing there will be no oil price shock. China is the world’s largest importer of crude, it is the biggest buyer of Iranian crude, and it has been buying more oil than it has been refining for over a year—and building new storage to keep doing the same. China, in other words, is insulating itself against just such price shocks. The rest of the world, however, doesn’t really have China’s capacity to insulate itself. For the rest of the world—and for China, too—a geopolitical price shock would be painful.
India Records Lowest-Ever Price for Green Hydrogen in Tender
India has recorded the country’s lowest-ever bid for the supply of green hydrogen, according to Renewable Energy Minister Pralhad Joshi. The bid of 279 rupees ($3.08) per kilogram was to supply 10,000 tons of green hydrogen a year to Numaligarh Refinery Ltd., majority owned by state-run Oil India Ltd., in the northeastern state of Assam. Nine bidders participated in the tender.
Russian oil exports to China hit new high in February as India pulls back
China’s Russian oil imports are set to climb for a third straight month to a new record high in February as independent refiners snapped up deeply discounted cargoes after India slashed purchases, according to traders and ship-tracking data. Russian crude shipments are estimated to amount to 2.07 million barrels per day for February deliveries into China, surpassing January’s estimated rate of 1.7 million bpd, an early assessment by Vortexa Analytics shows. Kpler’s provisional data showed February imports at 2.083 million bpd, up from 1.718 million bpd in January. China has since November replaced India as Moscow’s top client for seaborne shipments as Western sanctions over the war in Ukraine and pressure to clinch a trade deal with the US forced New Delhi to scale back Russian oil imports to a two-year low in December. Russian crude imports are estimated to fall further to 1.159 million bpd in February, Kpler data showed. That has depressed Russian oil prices to a discount of $9 to $11 a barrel below benchmark ICE Brent for January/February deliveries to China, the lowest in years for Urals, a grade loaded from European ports that has typically landed in India due to shorter voyages versus China. Urals as well as other export grades such as Sokol and Varandey piled onto regular shipments of Russia’s flagship ESPO blend exported from the Far East port of Kozmino located closer to China, creating strong competition versus rival supplies from Iran.
Oil demand to touch new high in FY27 on rising use of key fuels
India’s consumption of refined petroleum fuels and products is expected to hit another fresh high in the upcoming financial year — 2026-27 (FY27) — on the back of steady growth in energy use across various sectors of the economy, as per latest government estimates. According to projections by the Petroleum Planning & Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas (MoPNG), the country’s consumption of petroleum products — seen a proxy for crude oil demand — in FY27 is seen rising 2.8% over the revised estimate for FY26 to 250.8 million tonnes. The consumption growth is expected to be led by fuels and products like petrol, aviation turbine fuel (ATF), liquefied petroleum gas (LPG), diesel, and naphtha. India’s petroleum consumption has been rising to reach a new high with each passing year, with the exception of two years when demand was hit because of the COVID pandemic. The revised estimate for the current fiscal — 244 million tonnes — is slated to be the highest-ever petroleum product consumption level so far, but will likely be topped in the next financial year.