The Indian Biodiesel Opportunity

Market Potential Understanding & Technical Feasibility Analysis

From the BioBiz Consulting Division of EAI

EAI’s BioBiz division offers specialized market understanding and technical feasibility assistance for companies keen on benefitting from the opportunity that the Indian biodiesel market offers.

About the Indian Biodiesel Business Opportunity

Biodiesel is an effective replacement for petrol-based diesel. Biodiesel is a net carbon zero fuel, while diesel is a positive emitter of CO2. Biodiesel thus has become increasingly attractive as a replacement for all applications where diesel is used – the bulk of which is in transport and in back-up power generation.

Who Will Benefit from India’s Biodiesel Business Opportunity?

Entrepreneurs keen on entering an attractive business opportunity that is also environment friendly and sustainable will find this opportunity productive and valuable.

This opportunity could be of specific interest to the following companies:

  • Businesses already operating in the fuels sector – oil and gas companies, distributors, retailers
  • Businesses that have a considerable current retail network (large dealers, distributors of consumer products, for instance)
  • Businesses that are in sectors with access to vegetable oil or animal fat – vegetable oil companies, meat processing companies, commercial units that use large amounts of cooking oil
  • Businesses in the chemicals and petrochemicals industries
  • Other companies that can invest reasonable amounts in a production set up and distribution network for a biodiesel refinery

Why is this Opportunity Attractive?

  • Diesel is polluting. The emissions coming out from the use of diesel contains both the global warming CO2 as well as health hazards such as SOx, lead etc.
  • Biodiesel, a complete substitute for diesel also emits CO2, but is net carbon neutral as the biomass from which the biodiesel was obtained captured the same amount of CO2 during its growth phase. Biodiesel also has very low amounts of other pollutants such as SOx and lead compared to petro diesel.
  • India uses massive amounts of diesel every year – almost 80 million tons (about $90 billion, or over Rs. 6 lac crores of annual business!) – for transport, back-up power generation and more. With its environmental effects as well as increasing price, diesel is becoming an increasingly unattractive product. Consequently, biodiesel is becoming increasingly attractive.
  • With a large addressable market of almost $100 billion, there’s hence a significant interest among businesses, end users and government for the production and use of biodiesel. This hence constitutes an attractive business opportunity.

Interested in taking consulting assistance from EAI’s BioBiz team for the biodiesel business opportunity?

Send an email to consult@eai.in with the subject Biodiesel. We will get in touch with quickly. Thank you.

How Can BioBiz Consulting help you in this Opportunity?

EAI’s BioBiz consulting division has a dedicated focus on biomass based business opportunities. For the biodiesel business opportunity, our team can assist you on the following:

  • Market potential analysis
    • Current market size, growth and estimates for future growth
  • Analysis of Attractive Market Segments
    • Detailed analysis of growth potential in the key end use segments such as transport and back-up power, as well as emerging niches within and outside these segments
  • Supply and demand analysis
  • Competitor analysis
    • Current competition
    • Emerging competition

Detailed analysis of raw materials / feedstock

  • Virgin Edible Vegetable Oil (might be infeasible owing to a number of factors)
  • Virgin Non-edible Vegetable Oil such as Jatropha Oil
  • Used Vegetable Oil / Cooking Oil
  • Animal Fat
  • Other sources
  • Drivers for biodiesel use – and what these drivers mean for an investor
  • Constraints for growth – and what the key levers are to overcome these constraints
  • Current market structure and its dynamics – characteristics of incumbents, supplier and buyer bargaining power, price elasticity for the various buyer segments…
  • Government policies and regulations on biodiesel production and sales and how these can influence the growth of the market
  • Financial and non-financial incentives/support for biodiesel production and supply
  • Detailed inputs on taxes – for both raw materials and end products
  • Analysis of current logistics and distribution channels
  • Analysis of other related marketing strategies being pursued by current suppliers
  • Detailed inputs on costs
    • Project costs - capital and other starting costs
    • Operational costs – conversion costs
    • Cost of finance
  • Inputs and insights on profit margins of the incumbents
    • Past and current data for profit margins, for various segments
    • Estimates for future profit margins
  • Financial viability analysis
    • Scenario and sensitivity analysis
  • Production processes and technologies used
    • Technology for upstream production – vegetable oil extraction and refining
    • Technology and machinery for downstream production – Pre-processing of animal fats or vegetable oil and transesterification
  • nfrastructure and supporting facilities required for setting up a plant
  • Suppliers of technology and machinery for the various stages

Interested in taking consulting assistance from EAI’s BioBiz team for the biodiesel business opportunity?

Send an email to consult@eai.in with the subject Biodiesel. We will get in touch with quickly. Thank you.

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