2012

Sustainable Energy Authority

11/6/2012
SUSTAINABLE BIOFUEL
FOR SRI LANAKA
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Table of Contents
INTRODUCTION ....................................................................................................................................... 2
BIO-FUEL AS AN ALTERNATIVE ................................................................................................................ 4
Profitability of Biofuel ......................................................................................................................... 5
The use of byproducts......................................................................................................................... 5
RESEARCHES ON BIOFUEL IN SRI LANKA ................................................................................................. 6
Bio-ethanol .......................................................................................................................................... 6
Bio-Diesel ............................................................................................................................................ 7
Jatropha .......................................................................................................................................... 7
Biodiesel from waste-oil ................................................................................................................. 8
Biofuel from Algae .......................................................................................................................... 8
GOVERNMENT INVOLVEMENT IN THE PAST......................................................................................... 10
CURRENT SITUATION IN SRI LANKA ...................................................................................................... 11
QUALITY ASSURANCE ............................................................................................................................ 12
THE RECOMMENDATIONS OF THE INTER- MINISTERIAL WORKING COMMITTEE (2010) .................... 14
THE ENVIRONMENTAL TRADEOFFS ...................................................................................................... 15
GOVERNMENT INCENTIVES AND SUPPORT FOR BIOFUEL .................................................................... 15
STAKE OF SUSTAINABLE ENERGY AUTHORITY IN THE BIOFUEL SECTOR .............................................. 16










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INTRODUCTION
The whole world is shifting towards sustainable energy sources as the fossil fuels are
diminishing rapidly. There are many alternate renewable energy sources such as the solar,
hydro, bio-mass, geo-thermal, tidal, bio-fuel, etc. Several compelling issues drive a national
effort to develop and improve technology to make bio-fuels. Our dependence on petroleum
for fueling the transportation sector threatens our energy security, affecting our
environment, and weakening the economy. Developing the technology to produce and use
bio-fuels will create an alternative fuel option for transportation. This will positively impact
these issues and establish safe, clean, sustainable alternatives for petroleum.
According to Sri Lanka Sustainable Energy Authority Energy balance 2007, the total primary
energy requirement of the country is met with biomass (47.4%), hydropower (9.5%) and
imported petroleum (43.0%). The total amount of electricity generated during 2007 was
9,901 GWh out of which 60% was from oil burning thermal power plants while the balance
40% was almost entirely from hydropower. According to the fig 01 the petroleum products
import demand (2062 thousand metric tons) in 2010 is highest in transportation sector
representing 57% percentage from the total demand. The petroleum products demand
increment percentage from the previous year is 11.5%.


This mainly points out that the vehicle usage in our country is rising exponentially. The
annual vehicle registration increases very fast. In year 2010 total vehicle registration is
nearly 7 million where as in 2009 around 6 million. Therefore demand for petroleum
increases day by day. The entire energy requirement of the transport sector was met
through liquid petroleum.
2062.645
(57.4%)
1070.043
(29.8%)
89.581 (2.4%)
367.42578
(10.2%)
Petrolium Products Import demand (Thousand
Metric tonnes) for the year 2010
Transport
Power
generation
Industrial and
Estate sector
Household+Co
mmercial+LPG
Users
Fig 01
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The expert prediction is that the majority of the worlds oil fields will reach maximum
petroleum extraction capacity by 2020 reaching the state of peak oil. After reaching that
state a reduction in pressure causes the rate of production to enter a state of terminal
decline. Meanwhile it is said that the crude oil resources also will reduce by 2050. But this
will be worse than the worst oil crisis that occurred during 1973 and 1979.
The adverse outcome of the oil crisis is inflation of the oil prices. With the increasing
petroleum prices, the country is facing many challenges to keep its retail energy prices at a
range affordable to its consumers. The current oil market is driven by strong demand-side
factors. These factors include robust economic growth and rising oil demand from rapidly
growing middle-income economies, where consumers are demanding a higher standard of
living and exhibiting big appetites for energy.
To overcome these challenges in the long run the key is to use the indigenous resources and
efficient use of energy. However, up to now, Sri Lanka has been only using the petroleum
fuels for energy. Now the escalating petroleum prices have prompted to examine the
feasibility of using sources such as coal and Liquefied Natural Gas (LGN) to replace
petroleum.

In addition to the feasibility studies, very recently the new energy supply technology such as
the bio-fuels and hydrogen has emerged as alternatives to the conventional technologies.
Compared to the fairly high bio-fuel production in the world, Sri Lanka is still facing
limitations in technology at present, but the sustainable energy focus holds a better future
for the country.


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Petrol Auto Diesel Super Diesel
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BIO-FUEL AS AN ALTERNATIVE
The looming energy crisis and climate change at the forefront of everyones minds, there
has never been a better time for alternative energy solutions to shine. Aside from
renewable energies like solar, hydro and wind, a significant amount of research has gone
into finding liquid bio-fuels. In addition to being portable, liquid bio-fuels have high energy
density and are clean burning.
There has been a diverse range of experiments on bio-fuel with varying degrees of success.
The researches were based on edible crops such as soya bean, sugar cane, and oil palm, the
cellulosic biomass of poplar trees, switch grass and toxic shrubs like jatropha. Even the
micro-organisms that make up pond foam and microalgae were part of the research.
Types of bio-fuels,
1. Ethanol the most widely used. Ethanol is an alcohol, and most is made using a
process similar to brewing beer, in which starch crops are fermented into ethanol,
which is then distilled into its final form. Ethanol made from cellulosic biomass
material, instead of traditional starch crops is called the bio-ethanol. Ethanol can be
used in its pure form, as a blend with gasoline or as a fuel for fuel cells.

2. Methanol an alcohol utilised as a transportation fuel. Presently this is being
produced using natural gas, through a two-step thermo-chemical process. The
biomass is gasified to produce hydrogen and carbon-monoxide, then they are
reacted to produce methanol. This can be used in its pure form as a feedstock for the
gasoline additive methyl tertiary butyl ether (MTBE) or as fuel for fuel cells.

3. Biodiesel a renewable diesel fuel substitute. This is made by chemically combining
any natural oil or fat with an alcohol (usually methanol). Many vegetable oils, animal
fats and recycled cooking greases can be transformed into biodiesel; this method is
not the only one, there are various other ways too.
Biodiesel can be used in the pure form or as a diesel additive. Its typically used as a
fuel additive in 20% blends (B20) with petroleum diesel in compression ignition
(diesel) engine. Other blend levels depend on the cost and the desired benefits.

4. Bio-crude similar to petroleum crude. This is produced by biomass using a fast
pyrolysis process. And formed when the biomass derived oil vapours are condensed.
Catalytic cracking then converts bio-crude into transportation fuels.

5. Methane major component of the compressed natural gas which could alternate
the transportation fuel. This can be produced from biomass by a biochemical process
called anaerobic digestion.

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Profitability of Biofuel
This is decided by the availability of low cost feedstock. Feedstock costs are the most
significant cost of biofuel production. Usually it is more than 30% of the total cost. The
percentage varies according to the feedstock used to produce ethanol or biodiesel. In
addition to that nearly 20% of the biofuel operating cost will be due to the energy
component.

The use of byproducts
The profitability of the biofuel plant is also measured by the sale or productive use of
byproducts.
Dried distillers grain (DDG), a byproduct of corn ethanol production is used as a
protein-rich livestock feed additive. This can add as much as 10-15 percent to
ethanol producers incomes.
Carbon dioxide, usually released into the atmosphere, is captured by some ethanol
plants and sold for use in the food and beverage sector.
Bagasse, the fibrous material left over from pressing sugarcane, can be burned to
provide heat for distillation and electricity to power machinery or sold to local
utilities.
Glycerin, a byproduct of biodiesel production, has a wide number of pharmaceutical,
food-processing, and feed applications.













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RESEARCHES ON BIOFUEL IN SRI LANKA

There has been a significant amount of research work carried out on biofuel with varying
degrees of successes. This will lead the country on the track of development in technology
and providing with options to alternate the petroleum fuels which is escalating in price on a
regular basis. The petroleum importing cost in the year 2010 was US$ 3.10 billion which rose
to US$ 4.63 billion the next year, a record in the countrys history. An alternative is essential
to overcome this situation.
Bio-ethanol
The leading biofuel production could be that of producing ethanol. Ethanol is a substitute of
petrol; this can be used as a miscible with petrol as we are in the early stages of
substitution. There are countries such as Brazil which is using bio-ethanol as a complete
substitute, but most of the North American and European countries are using 5% - 85% of
ethanol mixed with petrol.
The possible raw material base for ethanol production is quite wide ranging from sucrose-
containing feedstock, starchy materials to lignocelluloses biomass. Raw material containing
sugar, starch or cellulose can be fermented and distilled into ethanol. The feedstock could
be from cassava, sweet sorghum, corn, potatoes, wood, waste papers, wheat, brewery
waste, molasses and many other agricultural products and food wastes.
Sri Lanka has a very high potential for ethanol production using sugarcane as a raw material.
Since there are sustainably operating sugar industries in the country, its easier to practically
implement the biofuel production. The Pelwatte sugar industries ltd and the Sevanagala
sugar industries ltd produce substantial amount of sugar per annum. The ethanol
production can be processed in parallel to the sugar production.
Ethanol can be produced using the sugar molasses which is one of the important byproducts
from the sugar factory. Molasses or treacle is thick syrup extracted from the processing of
the sugarcane into sugar. The quality of the molasses depends on the maturity of the sugar
cane the amount of sugar extracted and the method of extraction. The sugar industries in
the country are known for their quality the molasses produced. This could effortlessly
facilitate the production of ethanol.
The molasses is not a consumer item, as it is a byproduct of the food crop the government
policy is not infringed by this process. Also the commodity prices are not going to be
affected by the production of bio-ethanol. However initiating the ethanol production will
encourage the farmers to expand their sugarcane farms while stimulating the country, from
the state of importing sugar to exporting it.
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The land area used for sugar cane cultivation currently is approximately 15,000 hectares,
and this could be expanded further up to 40,000 hectares. This could be a good way of using
the lands for the benefit of development.
The bio-ethanol from sugar molasses has a higher potential in the present context than
producing ethanol from any other feedstock. As there is already around 12 million liters of
alcohol production per annum at Pelwatte and Sevanagala sugar factories, initiating the
blending with petrol is not very intricate.
The present sugar cane production is 700,000mt per annum, 4.5% of the sugarcane quantity
produces the molasses which is used in the making of alcohol. The ethanol produced using
this molasses is still not used as a biofuel miscible with petrol. Also the Pelwatte factory
claims to be operating under capacity, overcoming these shortcomings will easily improve
the bio-ethanol sector in the country.

Bio-Diesel
The consumption of diesel is greater than that of petrol and fuels. Biodiesel is the ideal
alternate for diesel. A clean burning fuel and could be completely producible with
renewable resources. The possible biofuel crops considered for biodiesel are not used for
food. This will not be a concern regarding the commodity prices.
The bio-diesel is made by chemically reacting lipids with a primary alcohol producing fatty
acid esters. These fuels contain no petroleum (fossil) but can be blended at any level of
petroleum diesel to create a biodiesel blend. Usually methanol, primary alcohol is used to
react with the lipids such as the vegetable oils, animal fats, etc.
The source material for the biodiesel production has passed three generations, from the
edible crops to non-edible crops and now finally to the algae based feedstock.
The following raw materials are used to produce the lipids that are reacted with the primary
alcohol. They are jatropha, neem, oil palm, rubber, coconut, pongamia, algae. All of these
raw materials can be processed in different ways to extract oil from them. All of these raw
materials have a good potential to be used up for biodiesel in Sri Lanka. In addition to these
raw materials there are also the used products such as the cooking oils, waste coffee
grounds, etc. that could be used as the lipids.

Jatropha
The jatropha plant is an economically viable biofuel crop when growing in arid and marginal
lands. But compared to other countries globally, we do not have much arid land which is
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bare, since most lands are occupied for growing economic crops, replacing other crops with
jatropha plantation in monoculture is not economically viable.
The common perspective of the economic unviability of the plantation could be overcome
by planting them combined with other suitable species comprising the agricultural, herbal
components resulting in the ecological viability as well as the economic profitability.
Practical Action, a NGO, with some of the technical universities conducted a research and
implemented the biodiesel from jatropha practically in a village by running tractors, water
pumps and etc. The project was decided to be carried on as a community project but was
not sustained due to several reasons.
The biodiesel production could be well implemented at the national level once the
plantation is successfully executed. And a continuous overlook is provided by a governing
body.

Biodiesel from waste-oil
The potential for the biodiesel from waste oil is another sector that could be easily executed
by collecting waste oil from restaurants, fast food outlets and neighborhood diners. As a
country with a well-developed tourism industry there are quite a number of restaurants
with waste oil at disposal every day. By using this relatively inexpensive feedstock the cost
of production can be reduced.
In accordance to a research result approximately 20,000 litres of fuel could be produced per
day using the waste oil from the diners. This is a satisfying method of biofuel production as
it does not affect the edible food or the commodity prices since its from the waste, also a
good way to save the environment from the pollution of waste oils.
The sustainable energy authority has received a proposal on a biodiesel project for Sri
Lanka, which details out on producing biodiesel using the waste oil from restaurants and
palm nut oil. The waste oil is used in the process to reduce the cost of production of the
biodiesel. The CHRISTOMBU is currently considering its establishment for the advancement
of this project in Sri Lanka. They will operate to facilitate the production of biofuel by
collecting waste oil from the restaurants and manufacturing fuel.

Biofuel from Algae
Algae are tiny biological factories that use photosynthesis to transform carbon dioxide and
sunlight into energy so efficiently that they can double their weight several times a day. As
part of the photosynthesis process algae produce oil and can generate 15 times more oil per
acre than other plants used for biofuels, such as corn and switch grass. Algae can grow in
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salt water, freshwater or even contaminated water, at sea or in ponds, and on land not
suitable for food production.
On top of those advantages, algae at least in theory should grow even better when fed
extra carbon dioxide (the main greenhouse gas) and organic material like sewage. If so,
algae could produce biofuel while cleaning up other problems.
Sri Lanka requires a kick-start in the biofuel industry as in already has the required resources
and sufficient researches to implement the process to practice.
The private sector shows more interest in looking for alternative solutions for the fuel crisis
at present. Holcim (pvt) Ltd, a cement and related product manufacturing company has
made agreements with the Algae Tec of Australia, for the production of biofuel from algae
using there technology. A pilot project will be carried out to check the feasibility and endure
it depending on the success of the project.
The future in this sector for our country depends on the government support for the
development of algae plants. The Australian technology doesnt require the destruction of
any crops or plantation as they use containers for the algae plantation. This technology will
benefit us a lot since diesel is one of the major component in our fuel imports.















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GOVERNMENT INVOLVEMENT IN THE PAST

According to LankaNewspapers on 6
th
July 2008,

The Sri Lankan government has taken steps to accelerate the cultivation of Sugarcane in a
bid to save billions of rupees from the country`s annual fuel bill. Accordingly the Ministry of
Supplementary Crops Development and the Sugarcane Research Institute have come out
with a plan to cultivate sugarcane in the Badulla, Ampara and Moneragala districts where
vast areas of land is available.

It is also reported that a land area exceeding 40,000 hectares is available in Anuradhapura
District for the cultivation of Sugarcane. Sugarcane can be used as a bio-fuel alternative to
gasoline. Most bio-fuel is currently in the form of ethanol generated from corn grain or
sugarcane.

Sri Lanka imports around 500,000 Metric tons of sugar per year at a cost of Rs. 20
billion. The country produces 10 per cent of its annual requirement of sugar which is around
550,000 metric ton. Around 15,000 hectares of sugarcane are cultivated in Pelwatte and
Sevanagala. By promoting sugarcane cultivation more ethanol could be produced to
increase blending with petrol up to 5 per cent.

Bagasse, a byproduct of the sugarcane industry can be used to generate electricity and
manufacture organic fertilizer.













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CURRENT SITUATION IN SRI LANKA

The Ministry of Petroleum and Petroleum Resources Development has released guidelines
to be implemented for the formulation and usage of biofuel in Sri Lanka. The Ministry of
Science & Technology has appointed an inter-ministerial committee to look into promotion
of biofuel. A road map for biofuel has been developed by the Sri Lanka Sustainable Energy
Authority and a community based fuel plantation and processing project by Practical Action
is in place. It is known that there is much interest in biofuel among companies in the private
sector.
The biofuel research project have been conducted by the Universities of Peradeniya and
Ruhuna and backed by the Practical Action organization is to produce biodiesel to run small
tractors, water pumps and to generate electricity in the villages. Even though the pilot
project turned out to be successful, it was not continued further due to various reasons.
The Sri Lankan economy mostly relies exclusively on crude oil imports and any biofuel
production in the island will help alleviate the crippling addiction to oil. In addition to the
expansion of the biofuel industry this will also boosts up the agricultural industry which is
sliding down due to the current market conditions.














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QUALITY ASSURANCE
The biofuel industry will not be a success without proper quality control on biofuel
produced. This will be an important factor when considering the blending with the
petroleum fuels. The assurance of the quality control information facilities should be
certifies by acceptable government authority such as Sri Lanka standards institute,
industries technology institute, institute of chemistry, etc.
The biofuel producers should be accredited by the enforcement authority in order to ensure
the quality assurance, quality management system and analogous quality production
standards. Also this gives them the permission to produce and sell biofuels.
Blending
The blending shall be undertaken by the Petroleum marketing companies and this shall be
introduced into the market in three steps,
1. As an additive blended in centralised locations
- Having both biofuel blends and conventional fuels in the retail outlets.
- Making biofuel mandatory for government vehicles or special captive fleets.
- Mandatory biofuels for all the vehicles.
2. Moving centralised blending into higher biofuel blends
3. Blending done at pump level or centrally.

The important factor is to take all possible preventive measures to avoid water
contamination especially in handling and storing bio-ethanol.
Also special care should be taken to limit the maximum blend in biodiesel to be 20%,
because higher combination may affect the diesel engine.









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IMPLEMENTING THE USE OF BIOFUEL
The inter-ministerial working committee on implementing biofuel use discussed on the
usage of imported petroleum fuel in transportation which is nearly 50% of the total import
and the benefits of biofuels in the national level. From the environmental point of view the
pollution of the atmosphere could be reduced using the biofuel usage. There are quite a
number of available options for the developments of biofuel. Utilizing the biofuel options
skillfully could save the country nearly US$170 million in foreign exchange and the reduction
in GHG emission, reducing the global warming potential.
Cost of the biofuel usage
Assuming a 25% incentive is needed to produce biofuels commercially, the amount of
money required for such an incentive is as follows,
For the replacement of 10% petrol used in the transport sector:
Annual consumption of petrol : 700,000,000 litres/year
10% of above: 70,000,000 litres/year
CIF value of 1 litre of petrol: Rs.60/litre
25% incentive: Rs.1,050,000,000 / year

Annual consumption of diesel: 1,600,000,000 litres/year
10% of above: 160,000,000 litres/year
CIF value of 1 litre of diesel: Rs.65/litre
25% incentive: Rs.2,600,000,000/year

Total incentive requirement for substitution of both petrol and diesel at 10% in the
transport sector is Rs.3, 650,000,000/year
The above predictions were calculated based on the consumption and prices on the year
2009.
The amount of money requirement for the future,
Year Contribution as percentage of current
consumption
Amount of money required
(Rs.)
2010 1% 365,000,000
2011 2% 730,000,000
2012 4% 1,460,000,000
2013 6% 2,190,000,000
2014 8% 2,920,000,000
2015 10% 3,650,000,000


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THE RECOMMENDATIONS OF THE INTER- MINISTERIAL WORKING
COMMITTEE (2010)
1. The target share of biofuels in the transport sector should be 10% of total transport
fuel by the year 2015.
2. All biofuels produced in the country for transport application shall confirm to
guidelines specified by the ministry of petroleum and petroleum resources
development.
3. CPC should be encouraged to purchase all locally manufactured biofuels which
confirm to the standards and to blend them appropriately and market them through
the normal channels for commercial use.
4. The prices payable for the biofuel manufactured in Sri Lanka consists of payment to
the producer by CPC, based on the equivalent CIF price of respective petroleum
fuel. And the government incentive calculated using the cost.

















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THE ENVIRONMENTAL TRADEOFFS

A key interest in developing or expanding biofuel production and use is the environmental
benefits, including the potential to reduce emissions, such as greenhouse gases (GHG). An
estimated 25 percent of manmade global carbon dioxide (CO2) emissions, a leading GHG,
come from road transport. Global road transport has grown rapidly over the past 40 years
and is projected to continue to increase, especially in middle-income countries experiencing
rapid economic growth, middle-class expansion, and urbanization.

Both biofuels and gasoline give off CO
2
, when burned. Biofuels are theoretically carbon
neutral, releasing CO
2
recently absorbed from the atmosphere by the crops used to produce
them. Gasoline and other fossil fuels add to the CO
2
supply in the atmosphere by giving off
CO
2
absorbed and trapped in plant material millions of years ago.

The advantage of biofuels is less clear in a life-cycle analysis that examines not just
combustion, but the production and processing of the feedstock into fuel. Most studies
indicate that the net energy balance of biofuels is positive (energy output is greater than
energy input), but estimates vary widely. Net balances are small for corn ethanol and more
significant for biodiesel from soybeans and ethanol from sugarcane and from cellulose. The
biofuel with the highest net energy balance reduces GHG the most when compared with
that for gasoline.



GOVERNMENT INCENTIVES AND SUPPORT FOR BIOFUEL
The stakeholders of the biofuel industry are going to be benefited by the incentives given by
the government. There will be concessions in the tax rates for the imports on feedstock and
exemption of VAT sale of feedstock.
In addition to that the pricing formulae could be decided to support the developments in
the biofuel sector and the enforcement authority will determine a mandatory quantity of
biofuel for purchase through the Department of treasury to be used in the government fleet
of vehicles.



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STAKE OF SUSTAINABLE ENERGY AUTHORITY IN THE BIOFUEL SECTOR
Sustainable energy authority of Sri Lanka (SEA) is responsible for most of the biofuel related
activities. The SAARC seminar on biofuel in 2008 was organized and successfully executed by
the SEA.
A major role was played by SEA in the formulation of the guidelines for the policy on
biofuels and the preparation of standards and regulations on the biofuels for Sri Lanka.
SEA is also a tec member in the preparation of the international criteria for the biofuel
energy, ISO 13065
A road map on the biofuel sources is almost towards the completion level.
In addition to all of these any biofuel related production need to be registered for energy
permit here and can be processed further only after the approval by the director general.