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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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Saturday, July 22, 2006

South East Asian plantation stocks surge on biofuel news

Plantation stocks topped Bursa Malaysia's gainers list yesterday, buoyed by the announcement on Thursday of a joint initiative by the Malaysian and Indonesian governments to set aside six million tonnes of crude palm oil (CPO) annually for biodiesel (120,500 barrels per day). Previously, we reported that palm oil is a true GDP-booster for both Malaysia and Indonesia, the oil being the second biggest export earner for both countries, and that in 2005 the 'Plantation Index' outperformed all other indexes, including the tech and oil indexes.

The biofuels committment pushes this trend up even further. The rising prices of CPO, which breached RM1,500 (€321/$407) per tonne after stagnating at RM1,400 (€300/$380) in the first six months of this year, have also led to expectation of potentially higher earnings for plantation companies by year-end. Plantation players generally welcomed both governments' initiative to allocate six million tonnes, or 40% of their total annual production, for biofuel and biodiesel production effective this year.

Malaysia's CPO production is estimated at 15 million tonnes this year, with new annual capacity of about 600,000 tonnes. The country's palm oil stockpile stands at 1.6 million tonnes:
:: :: :: :: :: :: :: :: ::

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said on Thursday that Malaysia and Indonesia, the world's biggest CPO producers, had agreed to set aside 40% their CPO production annually for biodiesel.

Golden Hope Plantations Bhd chief executive Datuk Sabri Ahmad said the government-to-government biodiesel initiative was a good strategy for (CPO) price stabilisation.

“However, I believe many players would like to see the implementation undertaken in stages,” he said.

Former Malaysian Palm Oil Association chief executive M.R. Chandran said the initiative would boost CPO prices in the short term. “There was even market talk that a lot of companies are now revising their feedstock prices to between RM1,600 and RM1,700 per tonne from RM1,500 to RM1,600 previously,” he added.

There is, however, still no indication of the actual number of biodiesel players commencing operations by next year.

“If there are only 10 players starting next year, I believe Malaysia's current production and stockpile (without the allocation) can easily cater to the required 500,000 to one million tonnes of CPO for biodiesel production,” he added.

Chandran said the allocation would be more workable once Malaysia had more biodiesel players, possibly by 2010.

“It would be a challenge if all the 98 applications for biodiesel plants using nine million tonnes of CPO feedstock were approved by the government.''

Carotech Bhd managing director David Ho said CPO supply was still “more than sufficient and easily accessible”, at least for now.

He said Carotech's biodiesel plant was on track to produce an estimated 100,000 tonnes of biodiesel by the middle of next year, adding that the capacity for biodiesel was part of the supply equation.

Kulim (M) Bhd chief operating officer Zulkifli Ibrahim said the group's plantation division would be able to provide a steady supply of CPO for its two biodiesel plants, – in Tanjung Langsat, Johor and Jurong, Singapore –which would have a combined capacity of 200,000 tonnes when they commence operation next year.

Meanwhile, an Avenue Securities analyst said at current production levels, the stockpile might not be enough to meet the government's 40% output commitment to biodiesel.

He said the imbalance could drive up CPO price to RM1,800 per tonne, which would make biodiesel production unfeasible.

There is also the question of what takes priority – food or energy.

Mayban Securities Ridzham Zaidi Razuan said assuming that Malaysia and Indonesia contributed equally, the allocation would be three million tonnes per country.

He said as Malaysia's present inventory stood at about 1.6 million tonnes, the country would have to double output to meet its commitment, which would then cause prices to go up.

“The strong surge in CPO futures trading was a knee-jerk reaction, but prices are likely to stabilise,” he said.

CPO futures prices reached the highest in more than two years in early trade yesterday.

An analyst at a local brokerage asked whether the CPO committed would be supplied at a fixed price or according to market price, and also how the government planned to meet it.

He said companies would only go into a long-term sale programme when there was abundant stockpile but “currently we have a restricted supply situation.”

The Star.


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