In 2003 India launched a National Mission on Biofuels. Its main strategy has been to promote Jatropha curcas; a perennial shrub that bears non-edible oil seeds that can be used to produce biodiesel with the aim of achieving a target of 20% blending of biodiesel by 2012. This thesis recommends a framework that will enable people to implement Biodiesel Production System in Karnataka State, India, and possibility replicate it in other developing countries. Detailed combinations of Life Cycle Assessment with Technical and Cost-benefit Analysis have been developed to assess the suitability of individual oilseed crops for large scale cultivation from energy, environmental and socio-economic perspectives. The ways in which biodiesel are produced with the impacts on energy balance, GHG emissions and costs have been evaluated. All large scale agricultural and small-scale agricultural scenarios produced negative NPV per life cycle. A key common feature from all the results is that in conditions of an established market, the price of Jatropha oilseeds, as a final product of agricultural enterprise, has a strong influence on price of Jatropha SVO, the main raw material for biodiesel production. As such, it will require strong and direct government‟s intervention to both agricultural and industrial phases of this chain, to keep them in business. For large scale agricultural scenarios demonstrate the following options to make NPV of the feedstock production positive: a) raise Jatropha oilseed price in 1.91-2.08 times, b) impose government‟s subsidies on working capital at least 41.55-69.85% large, or c) impose government‟s subsidies on CAPEX at least 27.25-28.81% large. For small-scale agricultural scenarios sensitivity analysis produces the following options: a) to raise Jatropha oilseed price in 1.92-2.38 times, or b) to impose government‟s subsidies on working capital at least 41.5-51.0% large.
The results of this work do not show a way in which subsidies could be removed. In deciding whether to support this technology, the public support for early stage commercialization investment might be considered as illustrated in the “Stern Review: The Economics of Climate Change” (2006) by experience curves. For all large scale and small-scale agricultural scenarios, the correlation results demonstrate that price of oilseeds, the Jatropha oilseed yields, the labour cost coefficient, and subsidies on working capital (Private Capital) are all significantly correlated with NPV and NPV/GHG avoided ratio. For both large scale and small-scale production scenarios, only the price of Jatropha oil significantly correlated with NPV and NPV/GHG avoided ratio. Cost-effectiveness analysis demonstrates a very high GHG avoided (GBP/tCO2eq) costs for all scenarios compared to the current market price of Certified Emissions Reduction (CER). To make average costs of GHG avoided comparable with current CER price, the price of Jatropha oilseeds should be reduced by 0.91-1.99 times in Irrigated and by 1.22-1.91 times for Rainfed scenarios. However, in this case, the effect on economics of Jatropha oilseeds cultivation (agricultural scenarios) will be disastrous. To show the potential savings, the energy use and GHG emissions for each Model have been compared with the Well-to-Tank (WTT) energy and GHG emissions for diesel (basic scenario). Some Models actually save more fossil energy than is contained in the produced biodiesel as a result of the large energy savings attached to electricity production and other by-products utilization. The GHG savings has a pattern which is clearly corresponding with the energy one. The emissions from farming, especially excessive N2O emissions, are responsible for significant fraction of total GHG emissions. All Rainfed scenarios demonstrate much better energy and GHG emissions performance than Irrigated scenarios. Unfortunately, considerable benefits of energy and GHG savings produced by small-scale in comparison to large-scale Jatropha cultivation have been challenged by the negative results of the Cost-benefit analysis for the same Models.