Jamaica Biofuels Report - Ministry of Energy

All countries with commercial biodiesel subsidize it one way or another, e.g., throughlower excise taxes or mandatory use. Based on Brazilian experience, the cost of smallscaleproduction of castor beans, for example, containing 48% oil, is US $0.50 per Kilo($1.00 per Kilo of oil), which amounts to $3.40 per gallon, or roughly twice the cost ofcrude oil.Large-scale mechanized production of castor or jatropha could be less costly, but itmight also displace sugarcane. As a large-scale field crop, soy might be a betteralternative, since it has food as well as energy value, although it too could compete withcane for land. Another solution would be higher oil-yielding palm trees, which would notcompete with cane for land and could possibly provide solid fuel for off-season sugarmill operation.Adequacy of land for biodiesel depends on the crops involved. Ongoing field trials willdetermine the conditions under which castor and jatropha can be cultivated, but othercrops should also be considered as well, including oil palm, provided disease resistantcultivars can be identified.While B5 blending has been discussed as a biodiesel market outlet, Jamaica’s diesel fuelconsumption is much greater in stationary engines than in automotive engines, andbiodiesel could be introduced with fewer institutional and technical complexities forelectric generation than for vehicles. Truck and bus fleets represent another applicationthat would not require an island-wide blending program.Although E10 has been established as the national fuel formulation, publiccommunication efforts will still be needed as Jamaica builds production capacity,especially in rural communities likely to be affected by new farming practices,construction activities, and changing labor markets. Education and awarenesscampaigns can serve both to elicit stakeholder concerns early enough to accommodatethem, and to lessen resistance to implementation when it occurs.Biofuels production is capital intensive, so the Ministry of Finance has an important roleto play in creating a positive financial framework for investments to occur. Thisframework should reflect the economic merits of supporting domestic production,including job creation, rural development, etc. compared to welfare costs and spendingforeign currency to import liquid fuels.5