PrintBP and D1 Oils are forming a joint venture called D1-BP Fuel Crops 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 -to make more sustainable biodiesel feedstock available on a larger scale.
Under the terms of the agreement, BP and D1 Oils will invest around $160 million over the next five years with D1 Oils' share of the investment cost being partly funded by the inclusion of their 172,000 hectares of existing plantations in India, Southern Africa and South East Asia. BP will have exclusive access to the elite jatropha seedlings produced through D1 Oils' plant science program.
"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," said Iain Conn, chief executive officer of BP's 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."
The 50/50 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.
"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 per hectare."
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.
"This is a transforming event for D1. BP's 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," said Elliott Mannis, chief executive officer of D1 Oils. "It shows we have come a long way. BP's proven logistical, managerial and financial support will enable a significant enhancement and acceleration of the scope and pace of jatropha planting."
"Once all the planned plantations are established, the JV is expected to become the world's largest commercial producer of jatropha feedstock, producing up to 2 million tonnes of jatropha oil a year," says BP's Phil New. "As this hardy crop can be grown on land not currently used for agricultural production, it can make a significant impact on employment in rural areas of developing countries where planting takes place, a benefit which fits well with BP's aspiration to pursue relationships which are mutually advantageous."
Founded in 2002, UK based D1 Oils plc has been listed on the Alternative Investment Market (AIM) since October 2004.
D1 Oils plc is a UK-based global producer of biodiesel, building a global supply chain and network that is sustainable and delivers value from 'earth-to-engine'. Its operations cover agronomy, refining and tradin
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