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Logo of Phnom Penh Post newspaper Phnom Penh Post - Biofuel boom over the horizon

Biofuel boom over the horizon

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A man inspects a jatropha curcas field planted for the bushes’ oily nuts, which are becoming an increasingly popular source of biodiesel. Foreign and local companies are eyeing Cambodia’s vast swathes of agricultural land for biofuel production, with the hardy jatropha shrub at the top of the list of alternatives to crude oil.

From London to Los Angeles, the post-modern zeitgeist has gone green. It's now cool to be conscious of your carbon footprint and swap your gas-guzzling SUV for a Toyota Pirus hybrid.

But when the price of crude oil hits record highs over $135 a barrel, the idea of growing your own fuel is appealing for economic as well as environmental reasons - especially if you have vast swathes of arable land, a reservoir of cheap labor and a pressing need to boost the agricultural sector's contribution to GDP.

So fasten your seatbelts: Biodiesel is coming to Cambodia.

"This is going to change everything," said David Granger, director of Biodiesel Cambodia, a private company working to promote biofuel use in Cambodia.

Cambodia's government has been championing biofuels - specifically jatropha - for more than eight years now. Officials cite potential benefits ranging from insulating Cambodia from the vagaries of the international oil market to providing rural populations with cheap, environmentally friendly electricity and a new cash crop which could bolster the agricultural sectors contribution to GDP.

"The time is right for biodiesel in Cambodia," said Sat Samy, minister in charge of alternative energy.

"When we first started looking into jatropha eight years ago biodiesel cost more than regular diesel but now that is not the case at all."

Biodiesel Cambodia sells their fuel for 85 US cents a liter - significantly less than the 5,000 riels ($1.25) that a liter of regular diesel now costs at the pumps.

"When we started, diesel was only 70 cents a liter. We've gotten much more competitive," Granger said.

The humble jatropha curcas plant is well-known in rural Cambodia. A cottage industry has long existed converting the oil harvested from hedgerows into soap and other products.

According to biofuel experts, Cambodia's soil and climate provide ideal conditions for the commercial cultivation of jatropha. And the government is waiting with open arms.

"Renewable energy has the full support of the government and the Prime Minister," said Samy. "This is for our future: protect the environment and give electricity to the next generation of Cambodians."

A global focus

Cambodia has already caught the attention of major international biofuel companies.

Brian Morgan, marketing and communications manager for D1-BP Fuel Crops, a London-based biofuel company, said they were "actively looking at potential development opportunities in Cambodia." The company currently has extensive operations in India, the Philippines, Thailand, Malaysia and Indonesia.

"We have identified Cambodia as an area of interest for our business, predominately because its soil and climate conditions are ideal for cultivating jatropha," Morgan said.

"We also believe that access to suitable land - i.e. that currently remains idle or is of less arable value - makes this a good potential choice for future investment."

D1-BP Fuel Crops is confident that biofuels will be a growth market as many governments are actively formulating plans around sustainable biofuel. 

"The cultivation of jatropha will be an attractive proposition to developing countries ‘to grow their own fuel' and, as a world leader in the commercial planting of jatropha, D1-BP Fuel Crops are well placed to build relationships with governments and industry customers to build a sustainable future in biofuels," Morgan said.    

         

Many European countries now have biofuel mandates - when the government stipulates that a certain percentage of diesel sold at the pump must come from renewable sources - and the Kingdom's regional neighbors such as Thailand and South Korea have recently followed suit, meaning both global and regional demand for biodiesel is only going to increase. 

"Korea has 5.0 percent at the moment and that is going up to 20 percent over the next few years and Thailand is on a 2.0 percent mandate," said Granger.

"They have to find a large land mass with low-priced labor. There are a huge number of investors trying to get it right - to find the right land and the right deal." 

The disadvantage for developed countries now is that they lack land mass and a cheap workforce.

Ethics of production left up to private sector

TRACEY SHELTON

Sat Samy: “Renewable energy has the full support of the government and the Prime Minister.”

Cambodia currently has no plans for a biofuel mandate as the government is still researching the potential problems with such a policy.

And while Biodiesel Cambodia is already operating in the Kingdom, albeit still in the early "awareness-raising" stage with a number of pilot projects underway, the company is not yet licensed to market their product commercially.

But it is already selling biodiesel - made from recycled cooking oil since what few jatropha seeds the Kingdom currently produces are being used to grow more of the plant - to a select band of supporters including the British Embassy.

Globally, biofuels have come under fire for their impact on food crops, with critics arguing that turning fertile farmland over to fuel rather than food production will only cause problems, particularly in the context of spiraling global commodities prices.

The government says it will not allow jatropha to be planted in the Kingdom's rice paddies and it is exercising caution in the awarding of concessions for biofuels, according to Samy.

But with no government regulations currently in place in Cambodia, whether these guidelines will be observed "comes down to the company and their ethics," Granger said.

"We are ethical so we do it our way - cutting down rainforests to grow jatropha is not really what you want to be doing," he said. "We don't want to use land that could be used to grow food crops. It comes down to the company ethos. There is plenty of suitable land available."

D1-BP Fuel Crops say that sustainable development is a key part of its business model, and says that "as the jatropha that we cultivate is on land that is either idle or of lesser arable value, then we don't believe that this competes with land used for food crops."

Yet critics argue that to be economical, jatropha must be produced in volume and those who stand to profit most are the processors, retailers and middlemen.

Moreover, they say, jatropha is toxic to livestock, weedy and not a good species to use in agro forestry systems.

Although the plant may look promising to biofuel companies as a tree for marginal lands, without added nutrients and moisture only marginal yields can be expected.

"There are valid concerns [but] ethically and effectively done it has the potential to change the face of Cambodia," said Granger.

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