from the ground Up

by Jessica Cheam, The Straits Times, December 9 2008

Country pushes jatropha cultivation for biofuel market

MAW TIN (Myanmar): A green, leafy shrub has taken root in Myanmar, proving to be a keen rival to the country’s padi fields.
With a greyish-brown bark, large hairy leaves and poisonous fruit, the plant is far from a food crop yet it is cultivated throughout Myanmar, sometimes even in window boxes in flats.
Jatropha curcas, to give it its official name, has emerged as a wonder plant of sorts and tipped to be a key feedstock in the global biofuels industry. Myanmar – with the help of some Singapore firms – is betting big on it.
In 2006, the country’s ruling junta went on a jatropha drive, directing that all states and divisions plant 500,000 acres (203,000 ha) within three years, with the aim of eventually reaching seven million acres.
The main motivation is to reduce the millions of precious foreign exchange reserves Myanmar spends on fuel imports.
Myanmar produces about six million barrels of crude oil annually but it is not enough to meet domestic demand, forcing it to spend more than US$200 million (S$302 million) a year on diesel and crude oil imports.
Jatropha, which can grow in hardy conditions, is seen as a saviour, thanks to its high oil yield compared with other feedstocks. It can be used in diesel engines and emits less carbon emissions.
The plant’s oil yield is said to be 2,000 litres per ha, against rapeseed’s 1,200 litres and soybean’s 600 litres.
Palm oil yields a higher 4,500 litres per ha but is viewed as less sustainable as it is a food crop and competes for arable land, at times leading to deforestation.
In terms of breakeven costs of biofuels with crude oil prices, Goldman Sachs Commodities Research says jatropha is by far the most efficient biofuel at US$50 per barrel. It trumps other traditional feedstocks such as palm oil (US$149) rapeseed (US$190) and soybean (US$144).
Commercialisation of jatropha biofuel can also earn Myanmar extra income, as global demand for renewable energy rises.
Many farmers see the plant as a path to a better standard of living. Ms Thin Thin Khing, 29, who has worked on a jatropha plantation for more than a year, earns about US$45 a month – more than the national average monthly wage of US$30.
Still, the picture is not all rosy.
The junta’s biofuel drive has attracted criticism from non-government organisations like the Ethnic Community Development Forum (ECDF), which reports that the military rulers have confiscated land and used forced labourin some locations.
The drive to plant jatropha has not considered different climatic conditions across Myanmar and the country does not have the capacity to refine jatropha oil into biodiesel, said the ECDF.
This is where the private sector could have an impact, particularly Singapore-listed Yoma Strategic Holdings.
Its plantation resources unit manages and runs a 100,000- acre plantation called Maw Tin Estate with local partner Myanmar Agri-Tech (MAGT).
Last month, MAGT signed a memorandum of understanding with Korean firm Enertech, part- funded by Posco Venture Capital, which is part of the South Korean steelmaker Posco Group.
They have agreed to cooperate on a biodiesel refinery, which might just complete the picture for Myanmar’s biofuels market and kick start the industry.
Yoma chief executive Serge Pun told The Straits Times: “Despite what critics say, we feel that biofuels will continue to be one of the biggest industries in the 21st century.”
Myanmar is well-poised to ride this wave as it has both cheap land and abundant labour to make jatropha economically viable, he added.
And when this sunrise industry takes off, Myanmar and its farmers could find that their bet might just pay off.