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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, September 13, 2006

Biofuels in Afghanistan to combat opium farming?

Quicknote bioenergy economics
The QanDo Blog raises an interesting question: citing a Michael Yon aticle at NRO on opium production in Afghanistan, Greg Polliwitz has what seems to be a "good idea":
Why not send a little cash toward Afghanistan to allow them to develop an ethanol industry? Farmers in Afghanistan are growing opium because it pays the most. This is one instance where throwing money at the problem will solve it. Pay the Afghan farmers more for a different crop.
We're already paying our US farmers to grow crops for ethanol production, why not pay the Afghan farmers as well? Additionally, we could cut any duties on imported ethanol from Afghanistan and make it instantly competitive with US producers. There are two potential hurdles I can think of: 1. Will ethanol-producing crops — e.g., switchgrass and sugarcane — grow in Afghanistan? 2. Can those crops be competitive with opium for the Afghan farmers? (bear in mind, there would be a much lower risk premium).
QanDo Blog replies: "I have no idea whether it's ultimately plausible, but that's a fascinating suggestion, and potentially helpful in the war on terrorism."

We have given this a minute's thought a few years ago (see Poppydiesel Blog) and rapidly came to the conclusion that the idea will never work, unless, as is suggested, we pump a lot of money into subsidies for Afghan farmers and keep doing so for decades. Let's have a look at opium farming economics: according to the United Nations Office on Drugs and Crime, which carries out opium cultivation surveys on a regular basis, for each hectare of opium poppy, an Afghan farmer makes around US$138 per kilo of raw opium (farmgate price for dry opium). An average hectare yields 39 kilos. This comes down to an average of US$ 5382 per hectare. [UNODC:Summary Findings of Opium Trends in Afghanistan, 2005 - *pdf].

It's one of the world's most profitable crops. Moreover, since the US invasion of Afghanistan, opium production has been increasing rapidly and prices have been steadily rising. Afghanistan is now a total narco-state, more than ever. Poppy cultivation in Afghanistan is expected to soar by 59% this year, after it already soared more than 160% the previous year. [BBCNews: UN warns of soaring Afghan opium - sept. 2, 2006.] Around 2.3 million Afghans (356,000 households) are involved in poppy cultivation. It's their only way of making a living. Moreover, a huge logistical chain consisting of dealers, traders, truckers and traffickers depends on it, involving several hundred thousand extra people.

Now let's look at energy crops suitable for Afghanistan: wheat, alkaloid-free non-narcotic opium (which was developed recently and which would make the best seed oil crop for biodiesel) and potatoes (a good ethanol feedstock). Sorghum might be feasible as well.

Wheat: The average world market price (i.e. not the farmgate price) for wheat is around US$ 150 per ton. In 2005, Afghanistan's average yield for wheat was a low 1.3 tons per hectare (compare to the US: 2.8 tons, or Belgium: 8.2 tons).
Were the average opium farmer to switch to wheat for ethanol, without subsidies he would make US$195 per hectare. So you would have to hand out US$5187 per hectare to make up for the loss.

Non-alkaloid opium seeds
: Fetches around US$600 per ton in India. Yields around 2 tons per hectare.
Were the average opium farmer to switch to non-alkaloid poppy for biodiesel, without subsidies he would make US$1200 per hectare. So you would have to hand out US$4181 per hectare to make up for the loss.

Potato: The average world market price for potato is around US$180 per ton. In 2005, Afghanistan's potato fields yielded an average of 16.7 tons per hectare (compare to the US: 43.4 tons). Were the average opium farmer to switch to non-alkaloid poppy for biodiesel, without subsidies he would make US$3006 per hectare. So you would have to hand out US$2367 per hectare to make up for the loss.
Now if you want to replace the entire poppy hectarage in Afghanistan (104,000 hectares), you would face a bill of between US$ 247 million and US$ 539 million per year. Each year. You would also have to spend a few hundred million on extension services and into getting Afghan energy farmers to increase yields. Let's say you spend US$600 million per year on the program. Is that feasible? It might be. How much has the "war on terror" cost so far? Several billions. The war in Iraq reportedly cost a trillion US dollars. That would give you several decades to subsidise Afghan farmers... Afghanistan would cease to be a narco-state. On the other hand, the American war economy thrives on wars and occupations. The US military-industrial complex employs millions of American citizens. It can't live without war. So ultimately, you have to make a choice between reducing the trillion dollar American military-industrial complex's massive war profits, and the Afghan farmer. Which American politician would dare to speak in such terms? Not many.

But concretely, alternative livelihoods projects are extremely difficult to implement in Afghanistan, because of these cruel economics of opium. Moreover, many farmers are directly controlled by local Big Men and drug lords, and they would never consider disobeying them. Their lives are at risk. Opium might be good business for them, but not because they freely choose to engage it in. They have to, to survive and to obey their warlord. The only real way to stop Afghanistan's deadly and sad fate is to tell European and American heroin addicts that they are not only killing themselves but many others as well. Better still, invest in creating inclusive societies where people do not feel the need to become drug addicts [entry ends here].
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Anonymous said...

Sorry but these ideas to grow biofuel crops in Afghanistan are totally unfeasible. The one single scarcest resource for Afghan agriculture is water. The country is basically a desert with high mountains from where the snow produces rivers in springtime. Water is so scarce that it can only be used to grow foodcrops; and a few trees, for fuel and timber. And then still wheat has to be imported. So to export wheat in the form of biofuel makes no sense at all.

10:02 AM  

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