Salt Trading has launched a feasibility study on the production and sale of biodiesel in Nepal. At a time when the price of fuel is rising worldwide and with sharp growth in domestic fuel demand, the prospects are said to be good.

Biodiesel is produced from the seed of a plant called jatropha (below), and can be mixed with kerosene and diesel to produce biofuels. "Our calculation is that it will save Nepal billions annually in the fuel import bill," STC's P Mahaseth told us. A team of experts is in Nepal to advise the firm on the technical details of cultivating and refining the oil.

Diesel and petrol substitutes from vegetable oils have been tried in Brazil and other European countries, but are yet to take off in Asia. The most successful model is the gasohol made from sugarcane and sold in petrol stations in Mexico and Brazil.

Farmers in Nawalparasi and Rupendehi grow jatropha for medicinal purposes, but it could be promoted much more aggressively as a diesel substitute. Jatropha-based diesel has less sulphur and particulate emissions and comes from a renewable source.

The Indian state of Chhatisgarh is aggressively promoting jatropha and even the chief minister uses biodiesel. "Nepal has great potential, it can reduce its import bill and provide small farmers with income," says Satyandra Yadav of the Horticulture Produce Management Institute in India, who is advising STC.
STC aims to launch a pilot project for a jatropha plantation working with a farmers' cooperative.