BP and D1 Oils plc are forming a 50/50 joint venture, to be called D1-BP Fuel Crops Limited, to accelerate the planting of Jatropha curcas—a drought-resistant, inedible oilseed bearing tree which does not compete with food crops for good agricultural land or adversely impact the rainforest—in order to make more sustainable biodiesel feedstock available on a larger scale.
Under the terms of the agreement, BP and D1 Oils intend to invest around $160 million over the next five years. D1 Oils will contribute into the joint venture their 172,000 hectares of existing plantations in India, Southern Africa and South East Asia and the joint venture will have exclusive access to the elite jatropha seedlings produced through D1 Oils’ plant science program.
As jatropha can be grown on land of lesser agricultural value with lower irrigation requirements than many plants, it is an excellent biodiesel feedstock. D1 Oils’ progress in identifying the most productive varieties of jatropha means that the joint venture will have access to seeds which can substantially increase jatropha oil production per hectare.—Phil New, head of BP Biofuels
The joint venture will focus on jatropha cultivation in South East Asia, Southern Africa, Central and South America and India. The partners estimate that some one million hectares will be planted over the next four years, with an estimated 300,000 hectares per year thereafter. Investments will be made through directly managed plantations on owned or leased land, which will also provide employment for local communities, and through contract farming and seed purchase agreements.
Jatropha oil produced from the plantations will be used to meet both local biodiesel requirements and for export to markets such as Europe, where domestic feedstock produced from rapeseed and waste oil is unlikely to be sufficient to meet anticipated regulatory led demand for biodiesel of around 11 million tonnes a year from 2010.
Once all the planned plantations are established, the joint venture is expected to become the world’s largest commercial producer of jatropha feedstock, producing up to 2 million tonnes of jatropha oil a year, according to New.
D1 Oils plc is a UK-based global producer of biodiesel. Its operations cover agronomy, refining and trading and includes pioneering the science, planting and production of inedible vegetable oils. D1 Oils also design, build, own, operate and market biodiesel refineries and source, transport and trade seeds and seedlings, seedcake, crude vegetable oils and biodiesel. (Earlier post.)
Earlier this week, BP announced that it was partnering with DuPont and ABF to build a $400M bioethanol and biobutanol plant in the UK. (Earlier post.)