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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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Friday, June 02, 2006

High Level Group proposes urgent actions to promote a competitive and sustainable European energy system

The BioPact closely monitors the EU's energy policy developments, to see where it is taking our bioenergy and biofuels future. Today, the High Level Group (HLG) on Competitiveness, Energy and the Environment has adopted its first report, including a number of concrete recommendations to address pressing issues, such as: the improvement and implementation of EU regulatory energy framework, cost-effective inputs for energy intensive industries, energy efficiency, the functioning and the review of the EU Emissions Trading Scheme (ETS).

Composed of high level stakeholders, the HLG looks at ways to foster consistency between policy and legislative initiatives and to contribute to creating a more stable, predictable and competitive regulatory framework (see IP/06/244 and IP/06/226). The Commission considers that only a comprehensive approach to all parts of the energy chain and to the three objectives of security of energy supply, environment and competitiveness can lead to lasting success as put forward in its recent energy Green Paper. The recommendations of the HLG will help to achieve this goal.

The main conclusions of the first HLG report are:

1. Functioning of EU electricity and gas markets

The HLG calls for making full use of competition instrument to ensure a more competitive environment for electricity and gas supply. Member States are called upon to improve in a timely fashion the implementation of the current regulatory framework with a specific focus on unbundling provisions and the removal of regulated tariffs distorting competition. Member States should also enhance the role and independence of national regulatory authorities. Co-ordination among national transmission system operators (TSOs) should be improved, the interoperability of gas systems harmonised and the time needed to authorise investments be shortened.

2. Cost-effective and predictable prices for energy intensive industries

Public authorities should evaluate current initiatives relative to pooled generation, long term contracts and partnerships. The Commission should provide guidance on the compatibility of long term downstream supply contracts and competition law.

3. Energy efficiency and conservation

Since there still is a significant potential for improving energy efficiency, the HLG recommends that a list of priorities for energy efficiency measures be established. The High Level Group considers that a new sense of urgency is needed to fully tap the cost-effective energy efficiency potential. There is a need to have a better assessment of the payback time of investments. Take-up of Energy services should be promoted and energy using products should be subject to dynamically improving efficiency standards. The HLG recommends also making full use of the Eco-design Directive (e.g. minimum energy efficiency requirements for all energy using products, as well as further development of combined Heat and Power, and district heating.

4. EU emissions trading scheme (ETS)

The group confirmed its preference for a well-functioning ETS as a central instrument for reducing greenhouse gases. To ensure that the EU has a cost-effective instrument at its disposal for contributing to the fight against climate change, the HLG proposes to improve the current system by taking action in three stages. This instrument should, therefore, give efficient incentives for investment in low carbon technologies, have limited impact on the competitiveness of energy intensive industries competing on global markets and should be an attractive “docking station” for schemes in other big emitting countries after 2012.

To further improve the functioning of the ETS, the HLG recommends the full and urgent implementation of current EU legislation regarding the liberalisation of electricity and gas markets.

In the coming weeks the national allocation plans of Member States for the 2008-12 period should be assessed to make maximum use of the experience gained from the first trading period.

In the short term before the end of 2006 the EU ETS should give a stronger signal towards encouraging low carbon investment, and providing a level playing field. Ways to reduce the administrative burden for small installations to monitor and report emissions should be explored. Cost-effective solutions to providing information on actual emissions to ensure market transparency should be explored, as well.

The HLG recommends the general review of the ETS should take place in the broader context of international action against climate change. It calls to bring forward the international climate change policy framework post-2012, so as to ensure more long term certainty and transparency in future emission reduction efforts. The HLG recommends also intensifying discussions with big emitters and identifying how the EU ETS can be linked with compatible system emerging in other countries.


At its today’s meeting the HLG has also set up two ad hoc groups to analyse barriers and drivers for investment in innovative energy technologies and long term energy future for the EU.

The future work of the High Level Group will focus on a more strategic reflection on future energy policies for Europe. The objective will be to draw up recommendations on how policy options can be developed to enable a sustainable, low carbon, and competitive energy system which also contributes to strengthening the competitiveness of the European economy and which promotes energy security of supply post-2010.

The full HLG report and more information can be found here.

Europa Rapid Press Release.

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France tests first flex-fuel cars in biofuel push

Brazil's flex-fuel fever needs no introduction. Its successful use of the cars that allow drivers to choose between different fuels has opened the eyes of many other countries. Amongst them, France. On Thursday it launched its first tests of so-called flex-fuel cars that can run on ethanol or conventional fuel in its latest push to promote wider use of renewable energy.

The Marne regional government in eastern France has a special permit to test the ethanol-based E85 fuel, and use it to run a fleet of seven Ford flex-fuel cars for a year.

E85 is currently not authorized in France, but government approval is expected by early next year and the fuel should be widely available by 2010.

"Our goal is simple: we want cars on the market by the end of the decade that can be driven equally on petrol or biofuels," Industry Minister Francois Loos said.

"Biofuels are one way of improving our energy independence, ensuring the protection of the environment and providing new markets for French agriculture," he said at the launch of the tests in Marne.

E85 is 85 percent ethanol, a biofuel derived from sugar beet or cereals. France's biofuel production is mainly biodiesel, largely made from rapeseed and then blended with conventional diesel. Some 75 percent of French cars run on diesel and this share is expected to grow in the coming years.

Brazil, the world's top sugar and ethanol producer, and Sweden have taken the lead in the flex-fuel car sector and only Ford and Saab offer such models for the French market.

But Loos said he hoped French car makers would offer similar models on the market. Renault has said it would make half of its cars flex-fuel models from mid-2009, the industry ministry noted in a press release.


Loos has encouraged French oil companies to supply the low volatility petrol needed to incorporate pure ethanol directly into fuels before the end of 2006. However, the oil industry has been slow in producing such fuels.

"This experiment shows to those who still have doubts that it's possible to have cars running on ethanol, and not just in Brazil and Sweden," Loos said.

Instead of low volatility petrol, oil companies in France produce a type of ethanol-derived ether known as ETBE (ethyl tertiary butyl ether) which is then mixed with conventional fuel.

Siplec, a top French petrol distributor, has by-passed the oil majors by importing low volatility fuel from other European countries to become the first in the country to sell petrol mixed with a five percent pure ethanol content.

Siplec will supply the Marne authorities with the E85 fuel needed to run the flex-fuel cars.

"This experimental project...marks the beginning of a post-oil France and a France of tomorrow," Loos said.


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Total says Europe must do more to back biodiesel - endorsement of the Biopact

Energy giant Total says Europe will have to import biodiesel feedstocks in the future. This is a silent endorsement of our Biopact. Just in from Reuters:

Europe needs to take additional steps to bolster biodiesel production rather than focus on ethanol in a bid to support its farmers, says oil major Total.

This would run parallel with efforts by oil refiners to raise European diesel production capacity to meet ever increasing demand for the motor fuel.

Ethanol by contrast is a blending component for gasoline, which is already oversupplied in Europe and is exported in large volumes to the U.S. and other overseas markets.

"We don't need ethanol," Jacques Blondy, head of agricultural development at Total told Reuters on the sidelines of a Brussels refining conference organized by Hart Energy. "Even the production in Europe we don't need; the major question for the European Union is biodiesel."

"The European market definitely is, and for a long time will be, a diesel market," he said.

Biofuels are split between biodiesel, largely made from oil seeds such as rapeseed and blended with diesel, and ethanol, made from sugar beet or cereals such as wheat and then blended with gasoline.

Europe is structurally short of diesel and meets its shortfall with imports mainly from Russia and the Middle East.

At the same time, the region produces a surplus of gasoline that it exports mainly to the U.S., but also to other major consuming nations like Nigeria and Iran.

"The European Commission is paying a lot of time on ethanol questions," Blondy said. "So far, the policies have been agricultural driven. It has to recognise that if you want to make business with biofuel, the objective of the Commission is not only to be a way to replace the CAP."

The EU's Common Agricultural Policy provides farmers with subsidies that have led to overproduction of cereals such as wheat.


In the UK, one of the few countries in the EU where gasoline is cheaper than diesel, supermarket group Morrisons began selling motor fuel with 85-percent ethanol content in March.

The move coincided with the first customer deliveries of a General Motors Corp. car able to run on either petrol or 85 percent ethanol.

But outside the UK, opportunities in Europe for ethanol-based motor fuels are less clear.

Diesel-powered car sales accounted for almost half Europe's car market at the end of last year, while diesel was forecast to overtake petrol this year as the primary fuel for new passenger vehicles.

Rising diesel demand is forecast to increase Europe's deficit of the product over at least the coming 10 years, boosting the region's need to import.

"Today, it would be a very big change (to switch to gasoline), because more than half of the private customers are running diesel," Blondy said.

Rather, the EU should unify its regulatory system - instead of the current 25 different systems in 25 countries - and guarantee sufficient feedstock supplies for biodiesel production.

"We'd much prefer to have local production, but if there is not enough, we cannot afford to have disruptions," Blondy said. "If we commit to something, we need to do it fully. We need to have security of supply."

The EU wants biofuels to make up 5.75 percent of transport fuels by 2010, though the target is non-binding.

It plans to introduce further stricter targets in a renewable energy roadmap it expects to complete by the end of this year, said Luc Werring, head of the new energies unit at the EC's Directorate-General for Energy and Transport.

"We want to make enforcement of the directive a little more binding," Werring said. "Not obligatory, but more obligatory."

Europe lacks sufficient rapeseed capacity to meet even the 5.75-percent biofuel target, Blondy said.

"If you cover France with rapeseed, which is not achievable for economic reasons, you can only produce two-thirds of the diesel you need," he said. "Probably, we need to import."

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