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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, July 12, 2006

G8 to announce biofuels plan for the developing world

The long-awaited G8 Summit of industrialised nations [BBC in-depth] [official website] being hosted by Russia later this week will announce a major plan for the creation of a biofuels industry in the developing world - Brazil's national news agency, the Agencia Estado, tells us.
This year's G8 Summit, focusing on energy among other issues, has invited key leaders from some of the most important developing countries as observers, including China's President Hu Jintau, Indian PM Manmohan Singh, Brazilian President Lula da Silva, and Thabo Mkebi, South African president. The heads of the UN's energy agencies (IEA and IAEA) will attend the summit as well.

The idea comes from President Lula and President Chirac, who recently signed a bioenergy cooperation agreement which focuses on helping the poor South to become a biofuels production zone (earlier post). Chancellor Merkel whose country hosted a Brazil-Germany Bioenergy Summit last week, favors the idea as well.
And PM Tony Blair, whose G8 Summit last year focused on Africa's development but which failed to live up to its promises according to critics, is now joining the push for this new deal.

In principle, we are cautious about anything that is announced at G8 Summits, especially when they deal with development issues. Because in the past, those promises and plans often have proved to be nothing more than marketing stunts (see the Gleneagles Summit about Africa). But the fact that such a plan is announced at least indicates that the option of helping the South become a bioenergy production zone, is being taken seriously by "world leaders". Moreover, the presence at the Summit of the five observers from the developing world makes the idea more credible.

Details will no doubt be coming in when the G8 Summit starts, and we will be closely monitoring these developments. Check back soon for more news from the G8 Summit.
[Entry ends here.]

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Biodiesel to boost Malaysian palm oil prices - the dilemma of a janus-faced crop

Recently Malaysia's government stopped issueing new biodiesel production permits because demand for those permits was overwhelming. Today, a Malaysian top industry official added that Malaysian palm oil prices are likely to range between 1,600 Malaysian ringgit (RM) and RM1,700 a tonne in 2007, up from RM1,450 now, driven by growing demand for biofuels. The output of palm oil in Malaysia, the world's largest producer, is likely to rise to around 15.5 million tonnes this year from 14.9 million tonnes a year ago, said Sabri Ahmad, chairman of trade body the Malaysian Palm Oil Association.

This is obviously good news for the thousands of small-holder families who cultivate the crop, and for Malaysia's "palm GDP". But the picture is not that simple. As many other energy crops, palm oil has become a janus-faced crop, playing on two markets at the same time - the food and the fuel market. Demand for palm oil from the food industry is only increasing by 1.5% per year, whereas the demand from the biofuels industry is rising at a much faster pace. The biofuels fever results in plantation holders expanding their hectarage and planting new trees. The risk of over-production is real.

So what if petroleum prices were to decline? First generation biodiesel made from palm oil is profitable as long as oil costs more than US$55 per barrel. But suppose the price of oil goes below this threshold, then the amount of palm oil released on the market could never be taken in by the food industry. The result would be a palm oil crash, with devastating consequences for many people, as 50% of palm oil is produced by small farmers, and 15% of Malaysia's entire workforce depends on the industry.

That's why, despite all the upbeat news about palm oil as the biofuels feedstock par excellence, it remains a risky crop. Nobody can predict the price of oil. If it stays high, thousands of farming families in the developing world will rapidly see their living standards increase. If it suddenly crashes, the social consequences would be devastating for palm oil farmers.

Let's leave the word to Sabri Ahmad, though:

"The production up to second half has not been so good, but in the second half we are seeing good crop recovery." He said Malaysia's biodiesel production of around 200,000 to 250,000 tonnes in 2006 would be friendly for prices in the second half of the year. "Moving into 2007, there will be a big surge in the new capacity for biodiesel," Sabri told Reuters in an interview. "We are looking at 1.5 million tonnes of biodiesel in 2007." He said 10 biodiesel plants were under construction and 10 more had ordered machinery to set up the facilities. "In about 12 months' time 20 should be in production."

As countries from Europe to Asia seek ways to cut dependence on imported oil, curb greenhouse gas emissions and boost local agriculture, biofuel plants are sprouting at a dizzying pace.

Biofuels are plant-based fuels, either ethanol made from sugar or grains, which can be added to gasoline and biodiesel derived from oilseeds or palm oil and added to diesel.

Hunger for palm oil-based biofuel is so fierce it has prompted Malaysia to stop licensing new producers while the industry works out how to divide up the raw material between the food and energy sectors.

Malaysia's edible oil industry says the government has already approved 32 manufacturing licences for units estimated to produce around three million tonnes of biodiesel a year, from a total of 87 applications received.

The official, who also heads the country's palm oil giant Gloden Hope Plantations Bhd, said the company was expected to post strong earnings in the year to June 2007, fuelled by higher palm oil prices.

"If we look at 2006/07, the future is bright," Sabri said, adding that every increase of 100 ringgit in the price of crude palm oil would bring the company an additional profit of RM70 million.

Golden Hope this month started the country's first commercial biodiesel plant having an annual capacity of around 35,000 tonnes. "It has just started in July and shipments will start in August."

The company is setting up three more biodiesel plants, two in Malaysia and one in Holland, which are all expected to start in 2008. Sabri said the combined capacity of the company's biodiesel plants is 390,000 tonnes. - Reuters

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