D1 Oils plc announced today
that they are to form 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.
This joint venture is a further milestone in our strategy to develop
real avenues to contribute to global energy supplies in ways that are sustainable
and progressive, says Iain Conn, chief executive officer of BPs
refining and marketing business. In the transportation sector, increased
blending of biocomponents offers one of the few real options for progress. Our
announcement earlier this week of a planned world scale bioethanol plant in
Hull, alongside a biobutanol demonstration plant, brings widespread availability
of biocomponents for gasoline closer to reality, and this joint venture will
enable similar progress on biodiesel.
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 programme.
As jatropha can be grown on land of lesser agricultural value with lower
irrigation requirements than many plants, it is an excellent biodiesel feedstock,
said Phil New, head of BP Biofuels. 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
The joint venture will focus on jatropha cultivation in South East Asia, Southern
Africa, Central and South America and India. It is anticipated 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.
This is a transforming event for D1. BPs decision to join us in
this new venture is a significant endorsement of our strategy to develop jatropha
as a global raw material for the production of sustainable biodiesel,
says Elliott Mannis, chief executive officer of D1 Oils. It shows we have
come a long way. BPs proven logistical, managerial and financial support
will enable a significant enhancement and acceleration of the scope and pace
of jatropha planting.
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 worlds largest commercial producer of jatropha
feedstock, producing up to 2 million tonnes of jatropha oil a year, says
BPs Phil New. As this hardy crop can be grown on a wide range of
land types, it can make a significant impact on employment in rural areas of
developing countries where planting takes place, a benefit which fits well with
BPs aspiration to pursue relationships which are mutually advantageous.