My Eco Energy Ltd. (MEE) has announced the launch of Indizel, the first EuroVI emission compliant fuel.
Story by: Ashish Bhatia
With the transition to BSIV emission standards achieved, attention is now on the transition to BSVI emission standards in 2020. The announcement by Pune-based My Eco Energy Ltd. (MEE), that the Indizel fuel is BSVI emission compliant, comes as a surprise therefore. The reason is, there’s still two years for the 2020 deadline to be met. Established in 2011, MEE specialises in the manufacture of bio-diesel. It claims to have launched the first bio-diesel station at Lonikand, Pune, in 2014. It also claims that the bio-diesel it offers is made from renewable vegetable oils and feed-stock like palm stearin and palm fatty acid distillate. Called Indizel, the bio-diesel, according to Sachin Labde, Co-founder of My Eco Energy, is EuroVI emission compliant. Not exactly new, Indizel, for its manufacturer accounts for a new launch on the pretext of it being EuroVI emission compliant. The BSVI emission standard when it arrives in 2020 is expected to be quite similar to EuroVI.
Claimed to be capable of replacing conventional diesel altogether, Indizel, according to Labde, is blended from three bio-fuels available at Singapore. MEE has not applied for a patent however, said Labde. To do so, it will have to disclose the working details, which it does not want to. Claimed to drastically reduce harmful emissions that conventional diesel is criticised for, Indizel, expressed Labde, emits less carbon monoxide, particulate matter and unburned hydrocarbons. He explained, “Over conventional diesel that contains 500 ppm sulphur, Indizel contains less than 10 ppm sulphur.” Expected to help industries that consume diesel, Indizel according to Santosh Verma, the other Co-founder of My Eco Energy, will help to address pressing environmental concerns. “Not only is Indizel a better alternative to ordinary diesel, it is also economical and suitable since it can offer superior fuel efficiency.” Indizel is also claimed to offer a smoother ride due to its higher lubricity quotient. Meeting European (EN 590 Euro-6) and BIS (IS 1460) quality requirements, Indizel confirms to Petroleum diesel (HSD) EN590 standard according to Verma.
Pitching Indizel to retail investors across the country as EuroVI emission compliant fuel, and perhaps the only one at the moment, MEE has installed five demo pumps across states like Maharashtra, Rajasthan, Andhra Pradesh and Telangana said Labde. While interested retail investors can experience the difference, the company has invested Rs.250 crore into the venture. Targeting functional traders across industry segments to build a sustainable retail network, MEE aims to launch 50 pumps over the next three months. Claimed Labde that 600 retailers have signed-up. On offer, added Labde, are multi-functional fuel-station models. Manpower training, equipment and guidance will be the responsibility of MEE. Reminding of an asset-light business model employed by new-age cab and transport aggregators, MEE is aiming to carve out a five to 10 per cent market share of the overall diesel market in the next six-to-seven years. The company plans to open 4,000 fuel stations across India in the next four-to-five years. Explained Labde, that the fuel stations will account to different models such as ‘Urban’, ‘Semi-Urban’, ‘Highway’ and ‘Satellite’. They will be further classified as a stand alone business model, and as a shop-in-shop business model. Marketed such that the price of Indizel will make it the most favourable among the diesel varieties available as fuel, MEE, to the channel partner, will offer a storage tank (above ground and below ground), a fuel dispenser, stock (as per usage), a canopy set-up and required automation. The overall investment for a retailer is expected to be in the region of Rs.40 lakh.
MEE plans to price Indizel at two-rupees less than the price of conventional diesel. This makes it tricky to ascertain the revenue potential a retailer could look at given the fact, that the prices of diesel vary from state to state, and from time to time. Fuel pricing has been left out of the purview of GST as of current. From June 16, 2017, it has been announced that the prices of petrol and diesel will be reviewed every day. While the minister of road transport, Nitin Gadkari, has been urging people and industries to shift to greener ways of working, and use alternate fuels, Indizel as a bio-fuel could attract 18 per cent GST, making it costlier than conventional diesel. The Bio-diesel Association of India, in a statement has already made it clear that higher GST rates could adversely impact them. Having zeroed on three locations – Kolhapur, Noida and Vishakapatnam, Indizel, according to Labde, is out of the purview of the petroleum Act due to its high flash point. If the high flash point and competitive pricing will present Indizel with a strong advantage, MEE, in the face of stiff competition from the government owned mighty PSUs has a tough task of convincing motorists ad dealers to be a part, and sustain. Opportunities for MEE lie in sectors like Railways and State Transport Undertakings (STUs). They arise out of the premise that a government mandate requires conventional fuels to be blended with five to 10 per cent bio-fuels by 2018. Stated Verma, “Mandates like these could further boost the potential of our product, and increase the overall market size of bio-fuels. It would also help bio-fuels to attain a significant market share for companies like us.” MEE is looking at an early mover advantage. To take advantage, MEE should convince as well as assure its users of quality, consistency and cost.