Bio-fuel Market - India June 2009

Executive Summary Bio-fuels industry in India is at nascent stage and comprises of Ethanol (made from Sugarcane - molasses) Bio-diesel ( made from Jatropha seeds) Ethanol production was XX bn lites in 20-- while bio-diesel production was merely YY tonnes Production cost of ethanol from molasses is INR A per litre and bio-diesel from jatropha is INR B-C per litre SAMPLE Company W is the major player in India with about a% market share Other major players include Company X,Y and Z Indian oil majors, and big corporate houses are foraying into the bio-fuel industry to cash on the untapped potential New entrants include Company A, B,C and D Government is taking various initiatives to promote bio-fuel sector and reduce India’s dependence on oil imports National policy on ethanol and bio-diesel, 100% FDI and exemption of excise tax will boost the bio-fuel sector Industry Overview Drivers & Challenges Policies & Initiatives Competition Drivers: Increasing energy demand and rise in oil prices National Bio Fuel Policy Support from automobile manufacturers Challenges: Raw material supply constraints Food vs. fuel Cost competitiveness

Bio-fuels industry in India is at nascent stage and comprises of

Ethanol (made from Sugarcane - molasses)

Bio-diesel ( made from Jatropha seeds)

Ethanol production was XX bn lites in 20-- while bio-diesel production was merely YY tonnes

Production cost of ethanol from molasses is INR A per litre and bio-diesel from jatropha is INR B-C per litre

Company W is the major player in India with about a% market share

Other major players include Company X,Y and Z

Indian oil majors, and big corporate houses are foraying into the bio-fuel industry to cash on the untapped potential

New entrants include Company A, B,C and D

Government is taking various initiatives to promote bio-fuel sector and reduce India’s dependence on oil imports

National policy on ethanol and bio-diesel, 100% FDI and exemption of excise tax will boost the bio-fuel sector

Drivers:

Increasing energy demand and rise in oil prices

National Bio Fuel Policy

Support from automobile manufacturers

Challenges:

Raw material supply constraints

Food vs. fuel

Cost competitiveness

Industry Overview Drivers & Challenges Government Policies & Initiatives Competition Investments Key Developments

Industry Overview

Drivers & Challenges

Government Policies & Initiatives

Competition

Investments

Key Developments

Indian bio-fuel market is at nascent stage but expected to grow significantly in coming years Development of bio-fuels is yet at a nascent stage in India but is being actively pursued to reduce India’s dependence on oil imports With x% of crude oil requirement being met through imports, the government is promoting use of bio-fuels Bio-fuels primarily comprise of: Ethanol (made from sugarcane - molasses) Bio-diesel (made from Jatropha seeds) Bio-fuels has significant growth potential in India due to government initiatives, mechanisms to expand production capacity and minimize price fluctuations of key raw materials SAMPLE Production distribution of bio-fuels Industry Overview Source: c% 20-- - -- W Ethanol consumption >d% 20-- - -- X Bio-diesel production >b% 20-- - -- V Ethanol production a% 20-- - -- U Ethanol production CAGR Period Market Category

Development of bio-fuels is yet at a nascent stage in India but is being actively pursued to reduce India’s dependence on oil imports

With x% of crude oil requirement being met through imports, the government is promoting use of bio-fuels

Bio-fuels primarily comprise of:

Ethanol (made from sugarcane - molasses)

Bio-diesel (made from Jatropha seeds)

Bio-fuels has significant growth potential in India due to government initiatives, mechanisms to expand production capacity and minimize price fluctuations of key raw materials

Drivers & Challenges Drivers Increasing energy demand and rising oil prices National Bio-fuel policy Support from automobile manufacturers Raw material supply constraints Challenges Food vs. Fuel Lack of Cost Competitiveness

Ethanol and bio-diesel policies, 100% FDI and exemption of excise tax will boost bio-fuel sector Government approved National Policy on Bio-fuel aiming a% blending of bio-fuels with petrol and diesel by 20-- in all states except Jammu and Kashmir, the north-east and the island territories By the year 20--, the Planning Commission aims to plant jatropha in X mn hectares of land. This will meet the requirement of b% blend of bio-diesel with petro-diesel Ethanol Policy Bio-diesel Policy Source: 100% Foreign Direct Investment (FDI) in new and renewable energy is allowed in India, provided bio-fuels are based solely on non-food feed-stocks to be raised on degraded or wastelands 100% FDI The central government has exempted bio-diesel from central excise tax and is contemplating on bringing bio-diesel and ethanol under the ambit of 'declared goods’ Exemption of central excise tax Policies favouring Bio-fuel growth

Government approved National Policy on Bio-fuel aiming a% blending of bio-fuels with petrol and diesel by 20-- in all states except Jammu and Kashmir, the north-east and the island territories

By the year 20--, the Planning Commission aims to plant jatropha in X mn hectares of land. This will meet the requirement of b% blend of bio-diesel with petro-diesel

100% Foreign Direct Investment (FDI) in new and renewable energy is allowed in India, provided bio-fuels are based solely on non-food feed-stocks to be raised on degraded or wastelands

The central government has exempted bio-diesel from central excise tax and is contemplating on bringing bio-diesel and ethanol under the ambit of 'declared goods’

Company W is the major player; many small and big firms, are showing interest in setting up bio-fuel production plants The bio-fuel industry is at a nascent stage and hence it offers huge untapped potential for existing and upcoming players Government initiatives and policies to promote the industry have encouraged new players to enter the market More than a companies (including state owned oil companies and b) have shown interest in the production of bio-diesel Praj Industries is the major player in India with more than v% of the market share Other Major Players: Company W Company X Company Y Company Z New entrants: Company U Company V SAMPLE Domestic Bio-fuel Producers Source: Going forward the bio-fuel industry is expected to have more competition and big players Market Share A Company W B Company X C Company Y D Company Z INR mn Revenues of major players (2007-08) b% Others Company W a%

The bio-fuel industry is at a nascent stage and hence it offers huge untapped potential for existing and upcoming players

Government initiatives and policies to promote the industry have encouraged new players to enter the market

More than a companies (including state owned oil companies and b) have shown interest in the production of bio-diesel

Praj Industries is the major player in India with more than v% of the market share

Other Major Players:

Company W

Company X

Company Y

Company Z

New entrants:

Company U

Company V

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