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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 27, 2006

Brazil biofuel investors not worried about falling oil prices

Malaysia's biofuels industry recently said palm biodiesel investments are not threatened by falling oil prices because the longterm outlook for biofuels based on tropical crops is very positive. Today, biofuels investors working in Brazil say more or less the same thing.

Oil prices having been testing new lows all week, and Nymex crude oil prices had fallen below $61 per barrel in Tuesday afternoon trade. "Oil is a big player in the entire world push for biofuels. It's the benchmark," says David DeWind, one of the lead investors in Brasil Eco Energia, a new biofuel company forming in Brazil.

"But you have to look at the global situation. You have increases in population, you have increases in energy consumption and even if they discover an oil field off the coast of the Gulf of Mexico, you're looking at years before that oil comes on line. It' years before you have fuel cells. And even when you have that, biofuels will still be big because of global warming concerns and that is not going to go away" he adds.

DeWind, two Brazilian businessmen and a couple of U.S. funds are involved in the 600-million-real ($273.9 million) investment to create Brasil Eco Energia. Their goal is to build the world's largest biodiesel plant, capable of producing 835 million liters of biofuel annually. The current largest biodiesel plant currently produces over 500 million liters and is located on the Poland-Germany border:

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Biodiesel is a mix of biofuel, usually from a vegetable oil stock, with traditional diesel oil. Brasil Eco Energia will use soybeans as its feed stock, with purchases of 3.5 million metric tons of soybeans expected annually.

One of the investors - Jose Americo Ribeiro dos Santos - is a Brazilian business owner of Latin America's largest grain storage facility, capable of storing 405,000 tons of grains. By 2008, that storage house will be full of soybeans, waiting to feed a massive biodiesel and soy crushing plant in Sumare, Sao Paulo. Construction begins in the first quarter of 2007, with the facility fully operational by 2008, the year Brazil mandates a 2% mix of biofuel in all diesel fuel, DeWind said.

"All of our fund investors are stable funds. None of this is hot money. A lot of the companies and investors that are talking about building biodiesel plants and ethanol plants will fall by the wayside because many of them won't have the serious money to continue," he said.

The Brazil biodiesel market will consume some 800 million liters just to meet the 2% mix rule. That mix could increase to 5% by 2010, according to government estimates.
DeWind says that demand from the local market will grow mostly because Brazil burns two and a half times more diesel than ethanol, currently Brazil's No. 1 renewable fuel source. Brazil's energy giant, Petroleo Brasileiro (PBR), or Petrobras, says Brazil imports about 30% of the diesel it consumes, adding to overhead costs in the country's agricultural sector.

Demand for cheaper diesel is what led Brazil to adopt the diesel mixture in the first place. Moreover, Petrobras is creating its own diesel mixture called H-Bio, to meet projected demand. Archer Daniels Midland (ADM) is also planning to build a biodiesel plant in Mato Grosso, which will produce all of its fuel from soybeans.

"ADM's plant isn't going to be as big as ours. That they are coming here, too, is just a validation of the size of this market. Everybody knows that reducing carbon dioxide emissions is important and no one believes oil prices are going to fall to where they were two years ago," DeWind said, adding he suspects international oil prices to be between $55 and $60.

"OPEC has that as their floor price. They now know that the world economy can handle prices even higher without coming undone, so I think they will keep those prices as their benchmark. Thirty-five dollars per barrel is no longer in the cards," DeWind said.

"The long term trends are in favor of biodiesel," DeWind said.

Brazil's agro-energy market has taken off following the success of its sugarcane ethanol market. According to industry estimates, some 75% of new car sales in August were flex fuel cars that are powered on both ethanol and traditional gasoline, even though ethanol prices have risen this year and made gasoline more attractive at the pump.

DeWind said the company is currently discussing long-term biodiesel supply contracts with distributors. Brasil Eco Energia is a privately held company. DeWind owns Brasil Bio Energia, a eucalpytus and reforestation company serving the paper and pulp industry, located in Piaui state in northern Brazil.


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