demand, and not supply is the issue in biodiesel

http://www.indiatodaygroup.com/btoday/20051106/trends4.html

BUSINESS TODAY, 6 Nov 2005

Agreed that biodiesel is the need of the hour. But the Union Petroleum Minister Mani Shankar Aiyar's diktat to public sector oil companies to start buying biodiesel to blend with their regular diesel (in a 5:95 ratio) has left them in a bind. "Even if we were to blend only 5 per cent of biodiesel, we will need more than 20 lakh tonnes per annum," says a senior executive in an oil company. India has an installed biodiesel capacity of 50 tonnes a day. But Leena Mehendale, Joint Secretary, Petroleum Ministry and Executive Director of Petroleum Conservation Research Association, says that demand, and not supply is the issue. "Once the oil companies start buying (biodiesel) on a regular basis, the capacities will be increased," she says. Quality is another issue. If biodiesel were to be sourced from disparate sources around the country, monitoring and ensuring quality will be near impossible. "Oil companies will have to install the equipment to check the standard of supplies," says Mehendale. There's hope for the biodiesel advocates yet. There's a lot of global interest in the sector. The UK's d1 Oils, for instance, plans to set up an 8,000-tonnes-a-year biodiesel refinery near Chennai by next year.