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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, July 07, 2006

OPEC member Indonesia announces biofuels crash program - 11 biodiesel plants

Recently, Indonesia's President Susilo Bambang Yudhoyono vaguely announced that he wishes to put the country on the road to a green energy future. On Monday, one part of that aim became concrete: Indonesia's Energy and Mineral Resources Minister Purnomo Yusgiantoro announced [*Indonesian] a crash program to build 11 biodiesel plants, with biodiesel production targets of 187 million liters next year and 1.3 billion liters by 2010.

Indonesia, an OPEC member with a population of 245 million, currently consumes around 41 billion liters of diesel and gasoline per year.

These targets are ambitious, to say the least. Even the U.S., which began developing biofuel much earlier than Indonesia, produced only about 280 million liters of biodiesel blends last year. American biofuel consumption, including ethanol, so far accounts for a mere 3 percent of the country's total fuel demand.

Purnomo himself admitted that the blueprint for biofuel development, which was discussed by President Susilo Bambang Yudhoyono and several Cabinet ministers in Magelang, Central Java, over the weekend, has yet to be finalized.

All agree that biofuel is the best alternative fuel source to help Indonesia reduce its fossil fuel consumption. Biofuels are renewable and based on such crops as castor-oil plants, oil palms, cassava and sugarcane, which can all be grown in the country. And, most importantly, biofuel production is highly labor intensive and this renewable fuel is cleaner burning.

However, the experiences of other countries such as Brazil, the U.S., Germany and China, which have developed biofuel industries much earlier than Indonesia, demonstrate that biofuel development should be part of a comprehensive energy diversification and conservation program. And as a nascent industry, biofuel production should be supported with tax breaks, subsidies and, at least initially, regulatory infrastructure to make the use of biofuel compulsory.

Hence, the blueprint on the development of the biofuel industry should contain clear directives on how the industry should be developed, what fiscal incentives and funding facilities will be granted, and what regulatory infrastructure will be established to push biofuel production and use.

Such clear directives are needed by investors considering taking the plunge into this young industry. Manufacturers of vehicles and farm equipment that will use biodiesel blends or ethanol also need to know the future direction of biofuel development, because they will have to make additional investments to modify their engines to make them biofuel compatible. Automobiles, for example, need to be fitted with flex-fuel engines so they can run on biodiesel or any ethanol-petrol blend.

Biofuel development also needs the support of an adequate pricing mechanism. It is not yet clear at what oil price biofuel is still competitive with fossil fuels, or how the different kinds of biofuels -- biodiesel, bioethanol, biogas -- will compete with each other.

Judging from the government's announcement earlier this week, biofuel development in the country will emphasize the production of biodiesel blends based on castor oil, apparently because there are large tracts of land suitable for castor-oil plantations.

An adequate market pricing mechanism is necessary to protect investors from the impact of highly volatile oil prices. Brazil, the world leader in biofuel development, started the production of ethanol based on sugarcane and the manufacture of cars fully adapted to run on pure ethanol in the mid-1970s, after global oil prices quadrupled. However, the industry virtually collapsed in the late 1980s when oil prices fell sharply and sugar prices rose markedly, making ethanol production much less commercially attractive. Brazil's ethanol industry only recovered after strong government intervention in the form of monetary measures and regulatory infrastructure.

Encouraging energy diversification through integrated energy planning and the increased use of renewable energy sources is clearly urgent for Indonesia. But this effort must be integrated into the country's overall energy conservation efforts.

The government has at its disposal a variety of instruments such as tax credits or subsidized or low-interest loans through which biofuel development and fuel conservation can be promoted. It also can take such fiscal measures as slapping higher luxury sales taxes on gasoline-guzzling cars or a progressive car registration tax on people who own more than one car to force fuel efficiency.

More information:

The Jakarta Post: "The Biofuel Era Has Arrived".

Indonesia's Ministry of Energy and Mining: "Tahun Ini Pemerintah Rencanakan Bangun 11 pabrik Biodiesel".

Indonesian Government Portal: "Cabinet discussed about bioenergy in Grabag".

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South Korea first Asian nation to introduce biodiesel

Quicknote biodiesel Asia
Starting this month, diesel vehicle drivers can buy fuel containing biodiesel. Korea is the first country in Asia to use the alternative fuel as part of government efforts to cope with high oil prices.

Industrialized nations have already adopted the alternative source of energy. Diesel fuel will include up to 5 percent of bio-diesel or processed fuel derived from biological sources. The biodegradable, non-toxic fuel can be readily used in diesel vehicles. The Commerce, Industry and Energy Ministry says the measure is a response to sky-rocketing oil prices and air pollution.

"The introduction of bio-diesel will diversify energy sources and reduce dependency on petroleum. It will also improve the environment, and works to our advantage when dealing with international conventions on climate change." Said Ahn Chul-shik, Energy Source Director of the Commerce, Industry and Energy Ministry.

Source: Chosun. [Entry ends here.]

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Thank you Mr Billionaire: Oil will hit well over $100 and stay high, says Rogers

Let's not get too cynical, but when another billionaire says "oil prices will soar to well over $100 a barrel and stay high as part of a sustained commodities bull run that has another 15 years to run", then this obviously strengthens our case. We can already see the poor African energy farmer rejoicing, as his crops bring in the cash. The advent of biofuels and green energy means a global redistribution of wealth - gradually, but steadily. Whereas the West was built on cheap and abundant petroleum, which it extracted through violence and with the help of dictators it put in place wherever there was a need - the green energy paradigm radically differs and promises to bring some form of social justice.

Billionaire U.S. investor Jim Rogers told Reuters some very remarkable things, which we welcome here at the BioPact.

"We're going to have high oil prices for a very long time. The surprise is going to be how high it goes," Rogers said.

Reiterating earlier comment oil prices would hit at least $100 a barrel, he said: "It will be much more than $100 before the bull market is over."

U.S. light sweet crude hit a new record of $75.40 a barrel on Wednesday and was trading at close to $75 on Thursday.

Rogers, a former investment partner of billionaire fund manager George Soros, has predicted the commodities bull run has at least 15 years to run.

"It's a major long-term bull market as far as I'm concerned," he said.

Aside from the bullish impact of tensions, described by Rogers as temporary, over Iran's nuclear ambitions and North Korea's missile tests, he said oil was drawing long-term support from the lack of large scale finds. Continued...

He did not know whether the Peak Oil theory that oil supplies are either at or very near their peak was correct.

But said: "If there is oil out there, you had better find it soon."


Apart from new supplies, a factor that could lower prices would be a widespread epidemic of bird flu spread between humans.

"If bird flu should break out, everything will go down and oil would go down to $40, but I would still urge people to buy oil. It would go down less than other things and it would be the first to go back up," said Rogers.

Rogers has set up the Rogers International Commodity Index (RICI) <.RICIX> for gaining access to the commodity markets.

In the first half of this year it outperformed its much bigger rivals the Goldman Sachs Commodity Index (GSCI) <.GTX> and the Dow Jones-AIG Commodity Index (DJ-AIGCI) <.DJAIGTR>.

While the RICI gained 9.7 percent in the first six months of this year, according to Reuters data, the GSCI rose 5.3 percent and the DJ-AIG gained 3.6 percent.

Rogers said he could not say exactly how much money was in the RICI, but it was at least $4 billion.

The commodity indexes, which analysts have estimated bring together a total of well over $80 billion, each comprise different combinations of commodities.

The GSCI and DJ-AIGIC adjust the weightings of various components depending on market performance, while the Rogers index maintains steady weightings, Rogers said.

"You need the same weightings every month," he argued.

Among those using the indexes are the mutual funds, which invest in groups of assets on behalf of individuals and institutions.

As an indication of how much room the commodities market, long regarded as a very risky, alternative investment, has to grow, Rogers said there were around 70,000 mutual funds for investing in stocks and bonds and less than 10 to invest in commodities.

"People have started to invest in commodities. It's a bull market and bull markets pick people up as they go higher and higher," he said.


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South East Asian nations well placed to tap into biofuel potentials - Shell

Southeast Asian countries are well-placed to tap into the biofuel potentials as they have rich biomass assets that can be turned into ethanol, biodiesel and solid biofuels, according to an expert on fuels technology, interviewed by Bernama. Malaysia, Thailand and the Philippines are already leading the development of alternative fuels, all of whom have either started introducing bio-components into their national fuel pool or have firm plans to do so, said Eric G. Holthusen, the Asia-Pacific fuels technology manager for Shell Global Solutions.

"These countries already have biofuel strategies as well. In the case of Malaysia, I think the country's biofuel policy sets out a good path... makes it much more predictable, and we see where it is going," Holthusen, who is based in Kuala Lumpur, told Bernama in an interview here. "Other countries in the region with their rich biomass assets seemed well placed to join this trend," he said.

Even though, as we have said before, in the long run, South East Asia has far less potential for bioenergy exports than Africa and Latin America, it does have resources that can substantially diminish its energy dependence on imported fuels. Particularly Malaysia, Indonesia and Papua New Guinea will be "biofuels superpowers", part of a kind of "Green Opec".

Holthusen was in Singapore to talk about "Bio and Synthetic Fuels: An Alternative for Sustainable Mobility" at a seminar organised by the Institute of Southeast Asian Studies (ISEAS) yesterday.

There is still a long way ahead, however, before much more advanced fuel technologies are available in the region, he said.

Newer technology will be able to produce what he called "third-generation" biofuels where just about any plants or parts of plant can be turned into liquid fuel (in contrast to "first generation" biofuels that are less sustainable.)

In Malaysia, the world's top palm oil producer, a total of 32 biofuel manufacturing licences have been approved, which could have been more if not for the government's decision to freeze the issuance of new licence.

Holthusen, however, shared the concern about the use of food crops to produce biofuels, and spoke of the need to move away from using food crops to produce fuels.

"But it is still very early days. For the next 10 years or so, maybe we have to use food crops for biofuels as well because the technology is not yet so well developed that we can use plant waste material straight away," he said.

He stressed, however, of the need to ensure that growth in cultivation of biomass for fuel does not cause damage to the ecosystem nor compete with food production.

"I see it rather as a transition. We use food crops in a transition phase, which might be acceptable because there is enough of them (in the region), and there is enough palm oil available," he said.

"But in the long run, we can use alternatives and newer technology that use plant waste and there is a lot of plant waste biomass in tropical countries... and you can use every plant you see and turn it into fuel," he added.

Holthusen said part of the technology is already available in Malaysia through Shell.

At its plant in Bintulu, Sarawak, Shell has already been producing liquid fuel from gas since a decade ago.

"Which is one of the steps (towards third-generation biofuel)... what you need is a plant that produces gas from biomass (so that the gas can be turned into liquid fuel such as diesel)," he said, adding that Shell will soon begin construction of a world-scale plant for synthetic fuel at the facility.

Looking ahead, Holthusen forsees Southeast East Asian countries playing an important role in the biofuel industry.

"There is big opportunity to grow crops... plants that can be turned into biofuels and there's a lot of experience in the palm oil industry and palm oil is a very well established crop which can be used to produce biofuel. Looking at all those aspects, I see that biofuels may play a big role in Southeast Asian economies," he said.

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Small island states and biofuels

Quicknote energy independence
We often refer to the energy situation in small island states, because they present a unique environment where major factors of global change collide and pose severe risks: climate change, energy (in)dependence, single sector economies based on energy intensive logistical chains (tourism with its air traffic, its demand for imported luxury goods,...), lack of natural resources requiring a careful balance between food and fuel needs...
An island can literally get cut off from the rest of the world or disappear alltogether (due to sea level rises) when one of those factors tips the island's fragile ecological balance. (Jared Diamond's latest book Collapse: How Societies Choose to Fail or Succeed offers ample illustrations of this.) But it can also radically change its course, and "leapfrog" by introducing new technologies that change its entire energy system into a post-fossil fuel , sustainable one. An example is Tuvalu's "Small is Beautiful" campaign, which involves a comprehensive bioenergy plan, aiming at total energy independence built on a local logic of "territorial intelligence".
It seems like others are now following in Tuvalu's steps. The Île Maurice (Mauritius), a paradisiacal pearl in the Indian Ocean, hosts one world's most unique marine ecosystems, but it gets polluted by diesel and gasoline from heavy boat traffic (tourists and locals alike use boats as their main transport and leisure means; and very polluting cruiseships do their bit.) Therefor the island is switching to locally produced biodiesel which is much less damaging to fragile marine life. To make things complete, Mauritius is also testing ethanol in a fleet of vehicles, part of the island's radical shift to locally produced fuels based on abundantly available sugar cane. Currently, Mauritius exports ethanol to Europe, where it is dehydrated and then re-imported by the island. Obviously, this step will now be eliminated. The island has enough biomass resources to replace all the fossil fuels it currently imports.

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