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Guatemala’s Biofuels Success

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A Guatemalan entrepreneur makes fuel from native plant. The new crop also helps check soil erosion.

BY DANIEL DROSDOFF
IDBAmerica 

When petroleum prices shot up in 2001, setting off alarms around the world, Ricardo Asturias saw an opportunity.

An entrepreneur with an extensive background in agroindustry and the petroleum business, Asturias, 55, immediately understood that very high world oil prices made alternative fuels more attractive to consumers. That meant producing biofuels — which are derived from organic matter instead of oil — might finally be profitable.

The fuel he had in mind would be produced from vegetable oil derived from the nonedible fruit of a small tree called the piñon that flourishes in Guatemala. Known scientifically as Jatropha curcas, the piñon is commonly used in Guatemala for fencing (it contains a chemical that repels cattle) but it had little other use until now. In other countries piñon is known as the “physic nut” of the “purging nut,” and it is used for medicinal purposes and the manufacture of soaps and candles.

Asturias knew that experiments with different varieties of piñon as a renewable energy source were underway around the world. He learned that India already produces substantial amounts of Jatropha as a biofuel, and he was aware that public transportation vehicles in Seattle and other U.S. cities were using biodiesel fuel derived from soybeans and other vegetable products.

FROM IDEA TO REALITY

Asturias’ challenge was to convert his idea into a profitable venture. For that he needed help. He got it in the form of a US$5,000 grant to prepare a project design from Guatemala’s Program to Support Technological Innovation, which is run by the National Council of Science and Technology (CONCYT, for its name in Spanish). He obtained another CONCYT grant for $7,500 to design a biodiesel factory. Then he received a $54,000 grant from Guatemala’s Competitive Fund for the Development of Agricultural and Food Technology (AGROCYT) to test the genetic makeup and production capabilities of different varieties of Jatropha, and still another grant for $110,000 from Finland to acquire land for Jatropha production and genetic testing.

After he and a group of associates invested an additional US$1.5 million, his company, Octagón, built a factory operated by seven employees that is producing 600 gallons of biodiesel fuel a day in an industrial zone 33 kilometers south of the capital. At another site in a rural area of Retalhuleu, a city 190 kilometers southwest of the capital, he is carrying out experiments with 50 varieties of Jatropha to find the best ones for production.

“The Jatropha from the Cape Verde Islands is the best,” he says. “It is productive, and the tree is low in height, making it easier to harvest the fruit.” Asturias also employs scientists to test the quality of the biodiesel fuel produced by his factory and the effectiveness of different production procedures, such as mixing, heating and purifying the oil. Initially he heated the vegetable oil with solar energy before processing it into biodiesel fuel. Now he is using geothermal steam, available from the volcanic activity in the ground underneath the factory.

Asturias sells the biodiesel fuel to different buyers who are mainly interested in testing its potential for different kinds of engines. He predicts the factory will turn a profit within a year when it can produce fuel on a much larger scale. The agroindustrial operation he is developing, which consists of both Jatropha production and the factory, needs a larger investment and four years to become profitable, he estimates. His big concern now is acquiring enough land, mainly through leasing, to grow significant amounts of Jatropha and finance the initial investments to get agricultural production started on a large scale. He estimates that he needs to raise another $10 million altogether.

ENVIRONMENTAL AWARD

The environmental commission of the Secretariat of Central American Integration awarded Asturias a prize for environmental innovation for his work with the piñon. Asturias says he realized the plant had potential after he studied an imported species of Jatropha as a consultant for the Inter-American Institute of Agricultural Cooperation. “We were surprised to find out that this was the same plant as the piñon, which we had known about all our lives in Guatemala,” he says.

Asturias is confident that the piñon and other renewable sources of energy “will result in an agricultural revolution in our countries.” He says the piñon is a noncontaminating fuel source that also prevents erosion and deforestation. High petroleum prices and growing scarcity of hydrocarbons will “make biodiesel very profitable,” he adds.

The IDB supports renewable energy and environmental projects throughout Latin America and the Caribbean, as well as the transfer of new technologies to the private sector, both urban and rural, for the development of small and medium-sized enterprises. In 1999 the Bank approved a US$10.7 million loan to CONCYT to strengthen Guatemala’s system of technological innovation and help transfer technology to small businesses. During the prior year the IDB supported AGROCYT with $12.5 million in financing that was part of a $33 million loan package to the Ministry of Agriculture to strengthen the competitiveness of the food and agriculture sector.

Republished with permission from IDBAmerica, the magazine of the Inter-American Development Bank.

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