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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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Sunday, November 05, 2006

Journal "Energy for Sustainable Development" focuses on international bioenergy trade

The International Energy Initiative, a non-profit working on (renewable) energy in developing countries publishes a journal called "Energy for Sustainable Development". Its latest issue is entirely devoted to sustainable international bioenergy trade and development. The articles are the result of the International Energy Agency's Bioenergy Task 29 (Socio-Economic Drivers in Implementing Bioenergy Projects) and Bioenergy Task 40 (Sustainable International Bioenergy Trade) research groups.

Several interesting general overviews of the emerging market for international biofuels trade are presented, amongst them Frank Rosillo-Calle and Arnaldo Walter's "Global market for bioethanol: historical trends and future prospects" [*.pdf] and Bengt Hillring and Miguel Trossero's "International wood-fuel trade – an overview" [*.pdf]. Both texts delve deep into the economics, the social aspects and the sustainability of producing biofuels and shipping them across the planet like commodities.

Of more interest to us are two case-studies from Africa, which we will review: Francis X. Johnson and Emmanuel Matsika's "Bio-energy trade and regional development: the case of bio-ethanol in southern Africa" [*.pdf] and Bothwell Batidzirai, Andre P.C. Faaij and Edward Smeets' "Biomass and bioenergy supply from Mozambique".

Mozambique: a bioenergy superpower
After the disastrous years of civil war and Afrosocialism, Mozambique has experienced a small economic miracle since the end of the 1990s. The country enjoys a stable political situation, an open investment climate, support from the international community, and considerable agricultural potential, investments in which are only beginning to be made.

Mozambique has several resources which make it an interesting bioenergy producer: suitable agroclimatic and agro-ecological conditions for a range of energy crops; abundant arable land resources, and a largely rural population (amongst the poorest of the world) craving for employment and increased incomes.

The authors, leading experts on assessing the bioenergy potential on a global scale, write:
Modern biofuels are a promising long-term renewable energy source which has potential to address both environmental impacts and security concerns posed by current dependence on fossil fuels. Energy crops represent the largest potential source of bioenergy feedstocks but land availability is a crucial precondition for this. On the basis of global bioenergy production potential assessments, Mozambique was identified as one of the promising biomass production regions in tropical Africa.
According to these assessments, Mozambique has a capacity to produce up to 6.7 Exajoules (all energy values for fuels in HHV) of bioenergy annually with moderate introduction of agricultural technology and using strict sustainability criteria (i.e. protecting forests and meeting growing food demand - we cannot stress this fact strongly enough, given the at times too general and uninformed ideas of some organisations that bioenergy and biofuels threaten forests and food security always and everywhere). The sustainability criteria used by the authors are those drawn up by the Dutch government - the only government in the world to have actually established such criteria for imported biofuels and biomass (earlier post)

6.7 Exajoules per year is a whole lot of energy, equalling around 1 billion barrels of oil per year or 3 million barrels per day (1 barrel = 6.1 GJ). And it can produce this, each year, every year, without major depletion - unlike oil producers whose wells are drying up... Let's take the comparison further: with 3 million barrels per day, Mozambique would be OPEC's third most productive member, after Saudi Arabia and Iran... In short, it is not too far-fetched to call the country a 'Bioenergy Superpower':
:: :: :: :: :: :: :: :: :: ::

Essential for realising this potential though is rationalisation in agriculture and livestock-raising, and potential increases of up to 7 times current productivities. But these can be achieved with moderate technology introduction. Efficient logistics are also essential to ensure competitive biomass supply to the international market. But this requires investments, capital, which is not constrained by technical or agroclimatic barriers; one just has to take the risk of making the investment.

Competitive with fossil fuels
Using six regions of Mozambique as potential sites of biomass production, the study analysed and compared the cost and energy use of supplying biopellets, pyrolysis oil and Fischer-Tropsch (FT) fuels to the international market.

Production costs of eucalyptus vary from 0.6 to 1.15 Euro/GJ for biomass productivities ranging between 7 and 25 tonnes of dry matter/hectare/year for arid to productive regions. Using Rotterdam harbour as an international destination for biofuels, the lowest delivered biofuel costs are 2.6 Euro/GJ for pellets, 3.2 Euro/GJ for pyrolysis oil and 6.8 Euro/GJ for FT fuels produced via circulating fluidised bed gasification (all originating from Sofala province). Lower costs are achieved for early conversion to pellets and pyrolysis close to biomass plantation sites, in contrast with FT fuels, for which costs are lower with centralised production.

Comparison of the three biofuels using FT fuel as a reference (by further conversion of pellets and pyrolysis oil to FT fuels via entrained flow gasification) shows that it is more attractive to densify into and distribute pellets and pyrolysis oil early in the supply chain. FT fuels derived from pellets and pyrolysis oil result in lower fuel costs of 4.5 and 4.8 Euro/GJ respectively. Where biomass feedstock is not limited, large-scale conversion (GWth,in) directly to FT fuels using entrained flow gasification may result in much lower fuel cost.

The current oil price (based on the OPEC basket price of for nov. 2, which stood at US$54.25pb), is €7/GJ (at today's conversion rate). In short, several biofuel production paths in Mozambique are already quite competitive with oil at today's prices.

South-Africa: ethanol faces challenges

In their paper, Francis X. Johnson and Emmanuel Matsika, analyse the prospects for international bio-energy trade within the context of regional integration and sustainable development in the region of southern Africa, focusing on the particular case of bio-ethanol made from sugar cane and sweet sorghum. A number of options are considered for expanded production of and trade in bio-ethanol as a transport fuel for blending with petrol.

The implications for alternative development paths and regional cooperation strategies are discussed and compared. Transportation costs appear to be small compared to production costs, although the higher cost of shipment by land implies a need for regional coordination strategies. The availability of suitable feedstocks in the region would have to increase significantly in order to achieve economies of scale. There appear to be valuable opportunities for creating new export markets, although international cooperation will be needed for reducing import tariffs and addressing non-tariff trade barriers as well as promoting technology transfer and capacity-building.

The latter point is of particular interest to us, as we are staunch advocates of lowering trade barriers to biofuel and bioenergy commodities made in the South. Given that investments in bioenergy and the creation of a global market for biofuels offer room for synergies between the goals of poverty alleviation, rural development and energy security in the developing world, more and more non-trade related international organisations will recognize the importance of new trade rules for this market. It is interesting to see that several major stakeholders are already beginning to think along these lines (amongst them Joseph Stiglitz, John Mathews and even Ted Turner, who thinks the collapsed Doha trade round can be revived by taking biofuels as the key to break the deadlock.)


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