Key Messages

India's diesel consumption is several times that of petrol In this article, we examine two options for meeting India's diesel demand: coal to liquids and bio-diesel Coal gasification, followed by Fischer-Tropsch (FT) synthesis offers an opportunity for large-scale production of diesel as proven by South Africa, and now being attempted by China and Qatar. India could consider this option given its large coal reserves. Four such plants consuming 60-76 million tonnes (mt) coal per annum can generate 12 mt of FT liquid, which is 20% of the expected diesel demand in 2011-12 .This would require an investment of about Rs 54,000-90,000 crores. FT synthesis is a proven technology, coal prices are relatively stable and land requirements are modest However, coal supply and transportation could be a concern and the process increases. India's CO2 emissions by about 80 mt. Oil-bearing plants such as jatropha, palm and sunflower can be cultivated on wastelands to produce bio-diesel .This option has several advantages: it can be integrated with the rural economy, almost CO2 neutral and a large employment generation potential .However, it is a mammoth undertaking requiring an investment of about Rs 45,000-58,000 crores. We also briefly discuss the potential of energy conservation using gasoline-hybrid cars, which can potentially increase fuel efficiency up to 200 miles per gallon.

Scoping technology options for India's oil security: Part II: Coal to liquids and bio-diesel