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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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Tuesday, August 01, 2006

Green cars in the developing world?

Flex fuel cars: first developed in Brazil, ready to be used in the third world?

Anyone who has ever visited an African port like Abidjan, Port Harcourt, Libreville or Maputo, remembers the huge ships full of second-hand cars waiting at the docks. The old Mercedeses, Peugeots, Volkswagens and Renaults, often dirty diesels, come from Europe and they're sold on a vibrant market where local creativity and ingenuity turn them into working vehicles that some African families can afford. (For an anthropological study on this fascinating market, see "Cotonou's klondike : a sociological analysis of entrepreneurship in the Euro-West African second-hand car trade" [*.pdf], by economic anthropologist Jan Joost Beuving). In many developing countries, the used-car market is many times bigger than the market for new cars.

But how about introducing top-notch high-tech green hybrids and flex-fuel cars in the developing world? Green cars cost more, so why try to sell them in emerging nations? The answer is simple: because the market is huge, and so are the consequences of inaction. Moreover, many of the developing nations in question have a competitive advantage, envied by the industrialized countries: they are potential biofuel superpowers that can produce enough liquid fuels to power their nations. In fact, some of these countries have the potential to "leapfrog" and become entirely energy independent. This competitive advantage (and the considerable savings derived from it) can be coupled to introducing green cars. Leapfrogging not only works when it comes to energy, it also works in the field of sustainability.

While many consumers, investors, scientists, and environmental activists have focused on the importance of building hybrid cars for the European and American market, it is in the emerging markets that the need and the potential for hybrids, flex-fuel cars and other clean air technology may be even greater. In a comprehensive article, Business Week makes the case:
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Over the past decade emerging markets such as India, Latin America, and China have seen the numbers of cars on the road increase exponentially. Reports published by the Chinese National Bureau of Statistics show that in just half that time the number of private cars in the country has nearly tripled, from 6.25 million to 17 million.

According to J.D. Power and Associates, Indians bought 1.2 million cars last year, and that figure is expected to rise nearly 10% annually over the next half decade. The growing population of cars in these countries is not without a concurrent environmental impact. A 2005 European Space Agency satellite study reports that pollutants in the sky over China have doubled in the past decade.

FIRST VENTURE. Yet to hold down costs, some cars sold in these price-sensitive markets are available without basic safety features like airbags and anti-lock brakes. Given the fact that in the U.S. hybrid cars cost thousands of dollars more than their internal-combustion cousins, it is unlikely that many new car buyers in the Third World would today be able to spend the extra money for a hybrid car.

These rapidly growing markets represent lucrative opportunities for auto makers. Despite the huge gap between the cost of hybrid technology and disposable incomes, some auto companies are beginning to establish pilot hybrid sales programs. In January, Honda (HMC) began selling a hybrid version of its popular Civic in one of the world's most polluted cities, Mexico City.

That made Mexico the first Latin American country in which hybrids are available. Honda hopes to sell 450 vehicles there, a tiny number, but a start. In the first six months of 2006, Honda sold 15,755 of the same model in the U.S.

MODEST GOALS. Honda executives were not available for comment for this story, but in an e-mail exchange the company said its hybrid cars will have to come down in price before they become widely adopted in the U.S. or elsewhere. "In about three years, Honda will introduce a hybrid that is less expensive. This hybrid will be introduced on a global basis, with expected annual sales worldwide of 200,000 units," according to a company spokesperson.

Toyota (TM), meanwhile, expects to sell 3,000 of its Prius hybrid cars in China this year. But these goals remain extremely modest compared to overall sales growth. In the first six months of 2006, Toyota sold 48,156 of the same model in the U.S.

Michael Walsh, a MacArthur Fellow and independent transportation consultant based in Arlington, Va., says that even though auto makers have been introducing relatively advanced pollution-control technologies, they still can't keep pace with rapid demand growth. The high cost of cleaner technologies has meant a focus on fuel solutions by industry and government officials.

FUELED BY SUGAR. Take the case of Brazil. Billions in subsidies and almost 30 years of work are expected to pay off when Brazil attains energy independence later this year. The country is the world leader in alternative fuel technology. About 20% of its transport fuel market comes from ethanol, compared to just 1% worldwide.

Brazil's favorable climate and abundance of land make it the perfect candidate to grow the sugarcane that is used to produce ethanol. Even though gasoline gets more mileage per gallon, Brazilian ethanol is cheaper per mile. Sugarcane-based fuel is three times more efficient than the corn ethanol made in the U.S., and it's easier to grow and process.

Ethanol's success means that drivers in Brazil no longer need to bet on which fuel type will be cheaper, but instead can switch between ethanol and gasoline or a combination of the two. More than 75% of new vehicles sold in the country are such flex-fuel models. And last month, Volkswagen Brazil announced that it was halting production of gasoline-only cars, becoming the first auto manufacturer to switch to an entirely flex-fuel lineup.

MORE BETTER CARS. Development experts say China, India, and countries in Southeast Asia and Africa could all try to follow Brazil's example of sugarcane-based fuel. But because state-owned oil companies and governments in developing countries keep gas prices and taxes low, they are nowhere close to Brazil in tapping that potential.

Lee Schipper, Director of Research for EMBARQ, the World Resources Institute Center for Sustainable Transport, says Chinese and Indian efforts are resulting in dramatically reduced emissions, approaching standards of European and U.S. cars. But environmental concerns still loom. "The bad news is cities in China and India will be crawling with cars, but at least they will be good cars," he says. That is, cars with more modern carburetors, fuel-injection, and catalytic converters.

Though mid-term solutions remain works in progress, both in the U.S. and developing markets, some industry insiders say the best hopes for cutting back on gas guzzlers lie in translating the lessons learned in one region to another.

IDEAS TAKE TIME. Brent Dewar, GM's (GM) vice-president of field sales, service, and parts, has been working on alternative fuel initiatives inside the company since the late 1970s. He's become an evangelist of sorts and formed a small cabal of enthusiasts that promotes new technologies. "We form the trim tab," he says referring to the comparatively small piece of a plane's rudder that allows it to make large turns.

Dewar, who was involved in developing alternative fuel efforts in Canada as well as GM's offerings in Brazil, says "The key is slowing everybody down just a little. You have to be able to make people understand." Those who've worked with Dewar say his experiences in Brazil during the mid-'90s, when the country was bringing its ethanol strategy online, has helped influence GM's ethanol offerings in the U.S.

Like others both inside and outside of the automotive industry, Dewar admits that much progress remains to be made in both alternative fuels and hybrid technology. He adds, "In the end, it takes time to make a big idea." But, until one overarching idea catches on, gains in the developing world will likely continue to be products of individual markets and their varying constraints, both economic and technological.

Business Week: Hybrids in the Third World?


henriqueoliveira said...

Very interesting article. I have made the comments below on the BioConversion , but I believe they are equally relevant here, so please allow me to repeat them.

I insist that what proponents of biofuels have now is a problem of perception.

First of all, we have to recognize that biofuels cannot succed if the U.S. isn't involved. Once we agree on that, we can decide where and how to change perceptions.

In advertising, we commonly refer to AIDA (Awareness, Information, Desire, Action). First, a consumer is made aware of the product; then information is given to him; next, we create the desire to act; and finally, we bring about action (such as buying something or voting for someone).

The biofuels industry has ridden roughshod over the awareness phase of the process and is now busying itself with information, as if a more plentiful supply of facts will make people act more quickly.

It won't. We still have to give more attention to the "awareness" phase, as I underscore in my own blog. People are still worried that biofuels will only take them a couple of blocks in a miniature car. That is what is really keeping everything else held up.

Why is awareness at that level? Well, people are AWARE that Brazil uses ethanol - but, they think, Brazil (a developing country) probably uses it to fuel old miniature jalopies; people are AWARE that ethanol can be made from corn - but, they reason, that probably has more to do with the politics of pork and the sway the Midwest holds over the current administration.

Most importantly, people hear several conflicting opinions on the feasibility of biofuels, which may mean that biofuels are just a sham, a pipedream, or a fantasy spun by tree-huggers.

How do we undo these perceptions? Luckily, we have the example of Brazil to proffer. The effectiveness of doing so is underscored by the picture that illustrates this article, which shows President Lula driving a car that runs on ethanol, gasohol, and natural gas.

But we can't go on doing as we have done so far: (1) Look! Brazil makes ethanol and they're energy-sufficient! (2) Let's make ethanol from corn!

This makes absolutely no sense and opens the way for criticism of ethanol's potential as a fuel.

Giving more information to American consumers won't change the picture - infinite information generates infinite confusion.

A hard look at the world's only biofuels success story (Brazil) has the potential to do that. Let's take that a little bit more seriously.

Let's also get Madison Avenue involved.

Advertising people have an uncanny ability to synthesize complex situations into simple ideas. For starters, they could tell us how to escape the trap set up by the corn lobby, which has lumped together corn, ethanol, and national security. (For proof that Madison Avenue had a hand in this, look no further than GM's "Live Green, Go Yellow" campaign).

Once the perceptions start to change, everything else follows. So I propose engaging in less talk about BTU's, joules, watts, etc., etc. - and sharpening the awareness that people already have of Brazil.

It will make everything else a whole lot easier for proponents of biofuels, whatever your favorite horse in this race is.

2:34 AM  

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