The Economic Viability of Jatropha Biodiesel in Nepal

34 Pages Posted: 20 Apr 2016

See all articles by Govinda R. Timilsina

Govinda R. Timilsina

World Bank - Development Research Group (DECRG)

Ujjal Tiwari

Forum for Rural Welfare and Agricultural Reform for Development (FORWARD Nepal)

Date Written: June 8, 2015

Abstract

Nepal depends entirely on imports for meeting its demand for petroleum products, which account for the largest share in total import volume. Diesel is the main petroleum product consumed in the country and accounts for 38 percent of the total national CO2 emissions from fuel consumption. There is a general perception that the country would economically benefit if part of imported diesel is substituted with domestically produced jatropha-based biodiesel. This study finds that the economics of jatropha-based biodiesel depend on several factors, such as diesel price, yield of jatropha seeds per hectare, and availability of markets for production byproducts, such as glycerol and jatropha cake. Under the scenarios considered, jatropha biodiesel is unlikely to be economically competitive in Nepal unless seed yields per hectare are implausibly large and high returns can be obtained from byproduct markets that do not yet exist. In the absence of byproduct markets, even earnings from a carbon credit do not help jatropha biodiesel to compete with diesel unless the credit value exceeds US$50/tCO2 (which is well above current values) and jatropha seed yield is at or above the midrange of the scenarios considered. Declines in diesel prices from the levels observed in 2009?13 only compound the economic competitiveness issue.

Keywords: Climate Change Mitigation and Green House Gases, Renewable Energy, Rural and Renewable Energy

Suggested Citation

Timilsina, Govinda R. and Tiwari, Ujjal, The Economic Viability of Jatropha Biodiesel in Nepal (June 8, 2015). World Bank Policy Research Working Paper No. 7295. Available at SSRN: https://ssrn.com/abstract=2616066

Govinda R. Timilsina (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
MSN3-311
Washington, DC 20433
United States

Ujjal Tiwari

Forum for Rural Welfare and Agricultural Reform for Development (FORWARD Nepal) ( email )

P.O.Box: 11 (Bhp.)
Bharatpur-2, Kshetrapur
Chitwan
Nepal

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