Biodiesel industry faces coronavirus heat as meat exports drop sharply

Bio-diesel units in India are facing the heat of the coronavirus disease (Covid-19) outbreak, as Asian and West Asian countries have stopped importing buffalo and goat meat, leading to a drop in animal tallow production, a key raw material of biodiesel.

Tallow is a rendered form of beef or mutton fat, used as a feedstock by the bio-diesel industry in winter. “Animal fat or tallow is used by a majority of manufacturing units as other sources like palm oil are costly. The problem is that animal fat is a by-product of the meat industry. After the outbreak of Covid-19, meat exports declined and our plants started running at around 30-40 per cent capacity since December,” said Shiva Vig, director, BioD Energy, a Haryana-based bio-diesel manufacturer.

Problems compounded after China started a clampdown of illegal imports through stricter border controls beginning in December, which was pegged at $2 billion annually.

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This is because, ever since the outbreak of foot-and-mouth disease in 2001, Beijing had banned direct import of buffalo meat from India, which meant that the meat made its way to China through other countries. “Around 60 per cent of overall meat exports continued through other countries like Vietnam, Malaysia and Indonesia. Hence, after Covid-19 outbreak in December, my company was facing a loss of over Rs 5 lakh per month. With complete lockdown, this has increased,” said Muhammad Gulzar, owner of Al Suhail, a major animal fat supplier in North India.

According to a data available with Agricultural and Processed Food Products Export Development Authority (APEDA), out of total meat export worth of Rs 25,168.33 crore in 2018-19, Rs 11,914.49 crore was to Vietnam, Rs 2,574.63 crore to Malaysia and Rs 2,266.99 crore to Indonesia.

“Our capacity utilisation is only 25 per cent and we are facing a loss of Rs 25-30 lakh for last four months. The lockdown is leading to a loss of over Rs 3 crore per month. Meat production has dropped as orders from Asian and middle-eastern countries have stopped since January, leading to a drop in availability of tallow too,” said Sarthak Soni, director of Jaipur-based Rajputana Biodiesel. Soni added that there are around 40-50 retail outlets in Rajasthan that sell bio-diesel, and unless the government considers it essential as a clean fuel, Covid-19 might completely destroy the industry.

“Our industry is the most affected because of Covid-19. We are in talks with member units and buyers to start of production immediately after the lockdown ends,” said Sandeep Chaturvedi, president of Biodiesel Association of India (BDAI).