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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.

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Sunday, July 30, 2006

Indonesia's biofuels program seen as a way to alleviate poverty

We reported earlier that biofuels superpower Indonesia recently launched a bioenergy crash program with planned investments of up to €17.5 billion (US$ 22 billion) by 2010. In a statement made today, the Indonesian government stresses that it will pursue this development explicitly within a framework of poverty alleviation.
Major institutions like the EU, the UN's FAO, the World Bank and environmental institutes like the SEI have often pointed to bioenergy projects as a way to lift farming communities out of poverty. The potential for social and economic development of the rural poor is there. And indeed, several governments are now radically implementing large-scale biofuels programs with exactly such a perspective in mind (amongst them the governments of Argentina and Brazil).

Millions of farmers in the developing world are already involved in cultivating crops that could serve as the energy feedstocks of the future. In Indonesia, bioenergy crops like coconut, rubber and cassava are predominantly cultivated by smallholders. And even though two-thirds of the country's vast palm oil industry (a real GDP booster) is dominated nowadays by large estates, it still hosts an estimated 1 million smallholders (that is roughly an equal amount of families) [see graph].

That is why Alhilal Hamdi, the newly installed chairman of Indonesia's national biofuel promotion committee, recently said: "The promotion of biofuel could help develop what we call the social economy". The policy, he said, was part of the government's triple-track strategy of promoting biofuel, which was intended to promote growth and employment, and reduce poverty. According to figures from the Central Statistics Agency (BPS), the number of poor people in Indonesia stood at some 50 million last year. But many analysts say that the true number accounts for almost 60 percent of the total Indonesian population of 220 million. They note that the government's decision to raise fuel prices by an average of 120 percent last year had particularly impacted on the number of people living in poverty.

Various efforts, ranging from specially designed pro-poor programs to promoting foreign investment, have long been pursued by the government with a view to reducing the incidence of poverty. But their results to date leave a lot to be desired. This time around, however, the government is confident that the new biofuel-promotion policy will provide an effective tool for tackling the poverty problem. By the year 2010, the government hopes that the biofuel industry will employ a total of 3.6 million people in biofuel processing plants, and in castor oil, palm oil, cassava and sugar cane plantations covering some 6-million hectares across the archipelago:
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Mines and Energy Minister Purnomo Yusgiantoro has said that it is expected that Indonesia can produce 720,000 kiloliters (kl) of biofuel per year on average between 2005 and 2010, 1.5 million kl per year over the five years after that up to 2015, and 4.7 million kl per year over the following ten years up to 2025.

By the year 2010, he said, the country would be able to substitute some 10 percent of its oil-based fuels with the environmentally friendly biofuel, which emits zero carbon dioxide. Research and Technology Minister Kusmayanto Kadiman said that there were 60 different types of plants that could be used to produce biofuels. All 60 plants can be easily grown across the archipelago. Some of them are already widely cultivated. Others, like castor oil, are as yet not so common.

Biofuels consist of biodiesel, bioethanol, bio-oil and biogas. Bio-diesel serves as an alternative to oil-based diesel, bio-ethanol can replace gasoline, bio-oil can substitute for kerosene, and bio-gas can serve as an alternative to kerosene. These can all be produced from liquid waste; poultry droppings; and plants such as corn, grains, rice and sunflowers.

Analysts have long advocated the idea of developing alternative fuels as a way of promoting the social economy and thereby reducing poverty.

They argue that ordinary people in rural areas can become involved in biofuel production with only small amounts of capital.

For example, Alhilal says that an investment of only Rp 3 million is required for every hectare planted with castor oil, which starts bearing fruit after six months.

Castor oil is the easiest one to grow of all the plants, and bears fruit all year round. Having many strains and two genera -- Jatropha curcass and ricinus -- the castor oil plant can be easily grown on all kinds of land across Indonesia.

Castor-oil growers can process their castor-oil harvests into bio-diesel using their own small-scale processing machines.

Private firm PT Tracon Industri manufactures portable machines with production capacities ranging from five kilograms to 50 kilograms per hour.

If farmers were to purchase the five-kilogram-capacity machines, which cost less than ten million rupiah each, they could process their produce and then sell the oil to either state power utility PLN or state oil and gas firm Pertamina.

Alhilal said that the government would also guarantee that PLN and Pertamina would buy the biofuel from the micro-businesses. "We're also designing fiscal incentives, including tax holidays, for people who want to enter the biofuel business," he said.

Minister of Research and Technology Kusmayanto Kadiman told members of the House of Representatives on Monday that the government would tightly and equitably regulate the biofuel industry.

With this promise in mind, he said the government hoped that many people would be encouraged to set up businesses in the sector, which would help generate economic growth, create new jobs and reduce poverty.

However, such hopes could easily come to naught if the government fails to deliver on all the promises it has made to the public. As Minister Kusmayanto warns: "If this fails, then it will be very difficult to motivate the general public to continue developing the biofuel industry."


Australian Centre for International Agricultural Research: Contract farming in Indonesia: Smallholders and agribusiness working together. An interesting study analysing how the parties that are often seen as enemies can create mutually beneficial relationships. Full study, here [*.pdf].

Jakarta Post: Promoting biofuel as a way of alleviate poverty, Juli 31, 2006.


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