Risk management for jatropha curcas based biodiesel industry of Panzhihua Prefecture in Southwest China

Abstract

As one of the most important regions selected for jatropha biodiesel industry in Southwest China, Panzhihua has received very high and optimistic expectations. However, current situation suggests that jatropha in Panzhihua has not changed local energy scenario and the industry has been threatened by many risks. Moreover, the study of risk management on jatropha biodiesel industry is largely absent. Therefore, this study applies the idea of risk management to jatropha biodiesel industry in Panzhihua, covering complete procedures with respect to risk identification, risk assessment, risk response and risk monitoring. By risk identification, this study reveals 14 key risks which have critical influences upon this industry. The risk assessment determines the risks which are ranked as the first status to take risk response: risks of low seed yield, insect pests and diseases, poor implementation for the plans set for establishing jatropha biodiesel refining capacity, low profitability for jatropha biodiesel production, no local gas station selling jatropha biodiesel, low comparative price of biodiesel versus diesel, insufficient subsidy for farmers to conduct cultivation, insufficient subsidy for conducting biodiesel production. Accordingly, the measures for risk reduction have been given. It is a very long way to cover before the jatropha biodiesel to be realized in Panzhihua. The urgent tasks for the local governments in Panzhihua are just to maintain but adjust their ambitious plans, enhance the demonstration effects of industrial projects at an appropriate and economic scale.