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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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Wednesday, July 05, 2006

Palm oil, a GDP booster

Palm oil is considered by some to be one of the most environmentally destructive crops. This is so because it also happens to be one of the most profitable ones.
And with the advent of biofuels such as ethanol and biodiesel, palm oil is in the spotlight more than ever. This for the obvious reason that of all commonly cultivated energy crops, Elaeis guineensis gives the highest possible and usable biomass yield (oil for biodiesel, cellulosic biomass for ethanol and solid residues for co-firing).
The palm presents a fascinating history of the clash between economic development and environmental conservation. And now that the crop promises to become a leading green fuel feedstock, this history is far from over. Let's have a quick look at some palm oil economics.

The single crop can literally lift a developing country out of poverty - all by itself. The most famous example of this is of course Malaysia, the world's largest palm oil producer. In the early years after independence from Britain, the country was still very much an underdeveloped, poor nation, with per capita incomes of less than US$ 400 per year (in 2005 dollar terms). In four short decades, Malaysia has become one of the strongest Asian economies, with continuous "Asian Tiger" growth, and a current per capita GDP of over US$ 11,000. GDP incomes grew 31% in the sixties, and and amazing 358% in the seventies led primarily by export-oriented industries. Palm oil contributed in a major way to this success.

The crop became the center-piece of agricultural reforms included in the so-called Second Malaysia Plan (1971-1975), which turned the country into an export driven economy. Palm oil production was increased massively as the result of the vast program (graph 2).

Amazingly, by 1984, the African oil palm had become Malaysia's second biggest export earner, after petroleum. And it continues to hold that place. Whereas in most countries, agriculture gradually takes on a less important role as an economy develops, for Malaysia this is not the case. On the contrary, the plantation crop's share of Malaysia's GDP continues to grow (graph 1). Today, it brings export earnings worth US$ 6.2 billion, only trailing crude oil exports. But compared to crude oil, palm plantations create considerably more jobs, currently employing around 14% of Malaysia's entire workforce. Around half of all palm oil is still produced by smallholders, that is by individual farming families. In short, the Malaysian economy and society as a whole benefits immensely from the African palm.

Given these numbers, it is not difficult to understand that many developing countries are looking into replicating Malaysia's success story. With Peak Oil around the corner, and continuously rising energy prices, the temptation to massively use one's land to cultivate the energy crop is strong. Obviously, environmental and social problems associated with the crop cannot be swept from the table. And understandably, Europe and the US are preparing to "label" and put tariffs on palm oil, trying to block it from entering their markets as a major energy crop. They use environmentalist and labor-related arguments to do so, but there are more basal reasons underneath (the US and EU's agro-lobbies know they cannot compete against tropical energy crops). We feel that the economic logic will prevail, and that new and rapidly expanding economies (India, China) may become the main importers - and they will not ask the sensitive questions raised by the West. After all, these new economies absolutely want to get their hands on as many energy resources as they can, because their appetite for energy is insatiable, and crucial for their own growth.
For producers, the dilemma remains, though: palm oil can boost the GDP of a country and lift millions out of poverty, but at the same time such a monoculture may cause an ecological disaster that in the long-run may be equally costly. This story is surely to be continued.



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