The correct answer is Both 1 and 2. ​Key Points Pongamia Pinnata - It is a source of bio-diesel Oil extracted from the Pongamia Pinnata seeds is the best substitute for kerosene for lighting lamps in rural areas. The oil extracted has yet not used on a commercial level, but due to an increase in awareness and growth in research, Pongamia can be developed as an alternative source of fuel that can replace diesel from the market. The oil extracted is commonly known as 'Karanja oil'. Pongamia Pinnata is adaptable to arid zones, hence grows naturally in most of the arid regions of India. Hence statement 1 is correct. Reasons for using Pongamia Pinnata as a source of bio-diesel: It has a good nitrogen-fixing ability. The plant has the ability to grow in waterlogged, saline, and alkaline soil, wasteland and can withstand harsh agro climates. Pongamia Pinnata seeds contain 30% - 40% oil and little amount of free fatty acids. Monounsaturated and polyunsaturated fatty acids accounted for approx. 63% and 23%, respectively, of the seed oil and Oleic acid, is the major fatty acid found in the P. Pinnata seeds. Hence statement 2 is correct. Important Points Biofuel: Biofuel - It is a low-carbon fuel that is produced from biomass rather than the natural process of fuel production from fossils. Energy crops used in biofuel production are - Jatropha, Pongamia, wheat, corn, sugarcane, etc. Biofuel is in great demand these days because it burns cleaner than fossil fuels, and releases fewer pollutants and greenhouse gases, such as carbon dioxide, into the atmosphere. Biofuel is categorized into two types - Bio-alcohol and Bio-diesel. Bio-diesel - vegetable oils and animal fats are treated with alcohol and converted to biodiesel. ​Additional Information Pongamia Pinnata is widely preferred for preventing soil erosion. Root, bark, leaves, sap, flowers, oil of P. Pinnata also have medicinal properties. The oil is known for the treatment of rheumatism and skin diseases in humans.