Coco diesel promotion: Detailed study necessary

By P.G. Punchihewa
(Former Executive Director - Asian and Pacific Coconut Community, Jakarta and
former Secretary,
Ministry of Coconut Industries)

Since the oil crisis in 1973, the continuing escalation of the price of crude oil in the international market has spurred the world to look for alternate sources of energy, such as solar, wind, water and biomass. The use of vegetable oils too as a source of renewable energy has drawn the increasing attention of scientists. Experiments and studies have been conducted with varying success in a number of countries in the use of different types of vegetable oils as alternate fuel. Sri Lanka too has evinced interest in producing bio diesel from coconut oil as indicated in a recent article in The Sunday Times FT by Dr.Jayantha Gunathileke, Chairman Coconut Cultivation Board.

According to ‘Sri Lanka Coconut Statistics 2004’ the production of coconuts and export of coconut kernel products has stagnated over the years

This breakthrough product Coconut Diesel is branded as Coco Diesel.

Production cost of bio diesel depends mainly on two factors. They are raw material cost and the processing technology. As for the raw material, various countries try to overcome it by using oil with an excess of production capacity, product surpluses and declining prices. For instance bio diesel producers are interested in using soybean oil in US, while rapeseed oil and sunflower oil are used in the EU.

The world production of vegetable oils which averaged 18.2 million metric tons for the period 1961-67 saw a tremendous growth during the succeeding four decades reaching 109.29 million mt by 2004/05.

The two big players in the production and export of vegetable oils in the world are palm oil and soya oil. Between the two, palm oil is the leader. Palm oil is expected to be the most important source of oils and fats within the next 25 years. Palm oil will occupy about 25% of total consumption of oils and fats to become the largest consumed oil in the world.

Now let us have a look at the world and Sri Lankan production of coconut and coconut oil. The world production of coconut oil was estimated to decline by nearly 500,000 tons over a period of five years - 2000/01 to 2004/05.

However the Philippines continues to maintain higher production and export levels among the major coconut producing countries on an annual average of about 1.600000 mt and 1.100000 mt, respectively. In the Philippines one factor conducive to higher exports is the low domestic consumption which is as low as 30 nuts per capita. At this level of production it is prudent to the Philippines to divert a part of its production as coco bio diesel which could also help to stabilize international prices of lauric oils. At present about 60,000 tonnes of coconut oil per year according to Dr. Gunathileke is being converted to coco bio diesel in the Philippines.

Dr. Gunathileke however points out that in the Philippines the price of coco diesel is 3% more than that of normal diesel. Perhaps in small Pacific island countries like the Marshal Islands which are located in the heart of the Pacific Ocean, coco diesel could be cheaper than fossil diesel owing to the very high freight costs incurred in importing diesel. (Marshal Islands with a population of 56,000 people has 8000 ha of coconut producing 25.5 million nuts annually and exported 1300 mt of coconut oil in 2004.)

As far as Sri Lanka is concerned according to ‘Sri Lanka Coconut Statistics 2004’ the production of coconuts and export of coconut kernel products has stagnated over the years.

While the production of coconuts in 1986 had been 3.0 billion nuts, since then it was only once that the country has surpassed this mark. Production had declined as low as 1.9 billion nuts in 1988. Consequently the volume of exports have declined from 1.1 billion nut equivalent in1986 to 579 million nut equivalent in 2004, with coconut oil exports declining from 85347 metric tons to 2095 metric tons during the same period. Consequently the import of substitutes has increased dramatically. The total import of oils and fats for the year 2004 was a staggering 163,402 mt compared to 20,516 metric tons in 1986. Bulk of the imports amounting to 81,585 mt was palm oil. Imports also included 3200 mt of coconut oil.

It is the import of substitutes which depress the producer price of coconuts and support the export of desiccated coconut. (Readers will notice that overall Sri Lanka has imported more coconut oil than what is exported!)

Things are not going to change drastically in the near future.

A publication of the Department of Census and Statistics, based on the 2002 Agricultural Census reveals that “aggregate extent under coconut crop at national level has declined by about 5% during the period from 1982 – 2002.” Meanwhile with the increase in population the consumption of coconut continues to go up. It is estimated that the aggregate number of nuts consumed per capita is around 127 per year and the population of Sri Lanka is to increase to 21.5 million in 2015 from 18.9 in 2000.

According to recent newspaper reports the manufacture of coco diesel would be undertaken by the B.C.C in a joint venture with a Malaysian company.

The company is already in the manufacture of bio diesel using palm oil. In 1995, Malaysia reported 20 Mercedes –Benz vehicles with a modified piston, each had driven 100000 kilometers with crude palm oil as fuel. Malaysia also had run 30 buses for 300,000 kilometers each in a test of methyl ester base fuel. With an assurance of ample supplies of palm oil by now Malaysia would have perfected the technology.

The writer recalls that as far back as 1978 a Malaysian company had discussions with the then Ministry of Coconut Industries and the B.C.C to set up a plant to manufacture fatty alcohols and wanted the B.C.C to assure an annual supply of 25000 tons of coconut oil. As the B.C.C could not guarantee this volume, the deal fell through.

Coconut continues to be an important item in the Sri Lankan diet and provides the daily requirement of nutrients particularly of the low income groups.

Out of the daily requirement 15% of calories, 5% protein and 70% fat are derived from coconut.

In the current situation of the coconut industry, diverting a part of its production to coco diesel will have to be at the expense of the desiccated exports and domestic consumption. If this is to be avoided the overall production and productivity of coconut will have to be increased by several fold. However this cannot be achieved overnight.

Before the country embarks on the manufacture of coco diesel the viability of the project needs to be studied from all aspects, most of all from the supply situation, its effect on the domestic consumption and the availability of the relevant technology.