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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, August 16, 2006

Brazil to quadruple biodiesel output by 2008, aiming to reduce rural poverty

We all know Brazil as the world's leading ethanol producer, and as we reported earlier, the country has signed several bilateral and multilateral biofuel cooperation deals. Now Brazil is betting high on biodiesel as well. State oil company Petrobras recently developed an innovative biodiesel production process - dubbed 'H-Bio' (earlier post) - and today Le Monde reports that due to a law signed by the Lula government in 2004, the country is going to add 2% biodiesel to all regular diesel, starting in 2008. To get there, Brazil is going to to quadruple its current biodiesel output (200 million litres).

Along the way, the Brazilian government is experimenting with interesting approaches to growing biodiesel feedstocks, by involving the poor, the landless and small farmers. It is tying its biofuels programs to social development by creating cooperatives, by promoting family run energy farming, and by redistributing land and gradually solving the age-old problem of the landless (the socalled sem-terras). One of the reasons why biofuels in the developing world make so much sense is precisely because of the socio-economic benefits they can bring to the many small farmers who used to be dependent on single cash crops for which markets have often collapsed. Brazil is once again showing the way.

Finally, as a forward and outward looking nation, Brazil is ready to lead a South-South movement of biofuels producers, by helping developing countries in Central-Africa and Asia in establishing their biofuels industry. Brazil has the technical and scientific expertise, the economic and social experience, and, if necessary, the capital.

Lula's commitment
Biodiesel is most often associated with the largest producer, Europe, which uses rapeseed as its main feedstock, or with the US, where the fuel is predominantly based on soybeans - both crops are produced under intensive quasi-industrial conditions. But Brazil has the advantage of being a tropical country with a lot of land and of having a large population of small farmers, which makes it possible to build a biofuel industry based on smallholder plantations.

President Lula, who is campaigning for his second term (which he will probably secure easily) is a staunch advocate of this approach. One of his promises has been to solve the age-old problem of Brazil's rural poverty and of its tens of thousands of landless people. Biofuels might offer a way out. "I have always believed that biodiesel might solve the problem of small and landless farmers, I am certain that it is the fuel of the future", he says. He has vied to effectively implement the law any time soon now, because oil prices keep rising. 600 fuel stations accross the country already offer the biodiesel (some of which offer H-Bio), but the number will have to be augmented in a crash program if the government wants to achieve the 2008 target.

Lula's aim now is to strengthen the rural and land reforms that he initiated by tieing them to the biodiesel program - and to speed up both (for an introduction to Brazil's new rural policies, one of which involves a large rural credit program, please visit the Brasil em foco website which contains a good overview).

Collective approaches, social development
In one of Brazil's poorest regions, state oil company Petrobras has launched an innovative social project that involves 5000 families of small farmers and that is aimed at alleviating poverty, boosting incomes and strengthening food security - all through the same bioenergy program. And the farmers are enthusiastic: "The oil wells all people dream of owning grow here in our very own gardens, and what's more, they will never run dry!" says Livania Frizon of Canudos, the collectively run 'agro-village' situated near Ceara Mirim, some 100 kilometres away from Natal, the capital of Rio Grande do Norte state.

Next to the rows of papayas, banana trees and cassava shrubs, the farmers have planted several hectares of 'pinhao manso' (Jatropha curcas, also known as the physic nut). The pinhao originates from that semi-arid region and thrives well without the need for large fertilizer or water inputs. The nuts from the tree contain 38% of an oil suitable as a biodiesel feedstock. Petrobras has offered the villagers the seedlings which now have become 1200 thick bushes of 'pinhao manso'.

The 142 smallholder families of Palheiros III [project file, *.pdf], another rural community near Upanema (some 250 kilometres from Natal) received ricin grains (Ricinus communis, also known as castor beans - an excellent oil energy crop):

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Assis Gama, the president of Palheiros III (one of Petrobras's projects under its 'Zero Hunger Program'), is proud of the community's 300 hectare plantation. "This crop needs almost no work and after two years, one shrub allows for six harvests. The crop allows us to use marginal land that we don't use. It can be integrated with our fruit and legume cultures."

Ricin, which grows well on poor soils brings an additional income to those small farmers. Brasilia encourages them to make use of the land that was given to them under Lula's agricultural reforms, which provided smallholder farmers with credits aimed at promoting family run agriculture. "Our challenge is to organize the production of raw biomass, because soon the large biodiesel factory that is being built in Rio Grande do Norte will be operational. Each state in Brazil will have several such factories", says Ulisses Soares, a geologist with a long career at Petrobras.

Intensive research and innovative technologies
The site where the harvests of the small farmers are gathered is in an experimental phase. In the future, the aim is to create central hubs near biodiesel factories, where the rural families from the villages surrounding a hub, can bring their energy harvests after which they are taken up in a logistical chain that ends with the delivery of biodiesel. This first hub is located near the immense Guamaré refinery and is part of an innovative industrialisation process that resulted out of a €8 million investment by Petrobras. "Nobody has ever succeeded in producing biodiesel directly from mamona or other seeds. The only known production process is based on using straight vegetable oil as the basic feedstock," explains Mauro Silva, the engineer responsible for testing the new process. In this phase, which will last for 18 months, 100 tons of different oil seeds will be tested each month to find the most productive and appropriate crops. Obviously, the goal is to produce biodiesel in as competitive a way as possible.

"We are researching many different biofuel feedstocks adapted to equatorial regions, from enhanced ricin and pinhao manso to palm oil or bovine fat," notes Paulo Morelli, supervisor of the biodiesel programs at the ministry of agriculture in Brasilia. Even though Brazil does not want to become a 'biodiesel emirate', it is willing to share its research and its know-how with tropical countries and developing countries who stand to benefit from biodiesel. The country is preparing cooperation agreements with Angola, Thailand and India.

More information:

Le Monde: La fièvre du biodiesel s'est emparée du Brésil - August 12, 2006

Petrobras: 'social and environmental responsability' website - even though we are skeptics when it comes to large corporations and their standardised Social Corporate Responsability efforts, we think Petrobras stands out, partly because it is state-run and therefor resorts under the Lula government, known for its efforts to bring social justice to the country.

Background information on land reform and agrarian reform in Brazil: Land Research Action Network / Brazil.

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Malaysia opens second biofuels terminal

Last month, Malaysia's Sabah State government officially opened a first biofuels and palm oil processing hub called the 'Palm Oil Industrial Cluster' (POIC) in Malaysia's largest palm producing province, located on the island of Borneo (see earlier post). Today, Johor State opened a second bioterminal at the port of Tanjung Langsat. In total, Malaysia has granted 52 biodiesel production licences, amounting to a virtual production capacity of over five million tonnes per year (31 million barrels).

Prime Minister Datuk Seri Abdullah Ahmad Badawi who opened the biofuel hub with its 480ha industrial park sums up the advantages of the terminal:
  • the port's strategic location at the centre of Asia's main shipping lanes
  • the fact that the biofuels hub is located in Johor State, which is one of the largest palm producing regions in the country
  • the abundance of highly skilled and lower skilled labor
  • the existence of a well functioning logistical infrastructure
All these factors make the bioterminal at Tanjung Langsat a good candidate to become South-East Asia's main biofuels exporting zone. Moreover, the development of this hub means a boost to the local economy.

So far, the biofuel terminal has attracted a total investment of more than RM8.3 billion (€1.7billion/US$2.3 billion), including foreign direct investment, with the following companies having set up factories and facilities:
  • Carotino Sdn Bhd, a wholly-owned subsidiary of the J.C. Chang Group, has constructed the first fully functional biodiesel plant. Carotino is the first company in the world to have successfully commercialised the technology for the production of low pour point palm biodiesel that can be used in cold northern climates (Europe, North America). The plant's production potential is 60,000 tons of tropical biodiesel and 30,000 tons of 'winterised' biodiesel.
  • JCorp, which has invested a total of RM400 million (€84 million/US$109 million) of which RM160 million (€34 million/US$43 million) has been spent on port facilities, land development and other infrastructure support facilities. JCorp's subsidiary Kulim (M) Bhd is to build a biodiesel factory.
  • Tanjung Langsat Port Bhd which is constructing a petroleum refinery, which will have a capacity to store 100,000 tonnes of diesel at its initial stage.
  • A joint-venture between Felda-Johore Bulkers Sdn Bhd and JCorp, called Langsat Bulkers Sdn Bhd, will set-up a RM23 million (€4.9 million/US$6.2 million) tank to store biodiesel for the first of several phases of the project. The tank which was specially designed for handling cargo biodiesel has a capacity of 20,000 tons and will be constructed by a joint-venture firm between Kulim and German firm CremerOleo GmbH.
  • IOI Corp Bhd which is constructing a biodiesel plant - no news about the total investment or capacity.
  • Six foreign companies have shown interest in building biodiesel factories at the terminal.
  • The Malaysian Palm Oil Board, which is a strategic partner in the project and which is building a knowledge infrastructure around the bioterminal.
Meanwhile, a series of elements in the logistical, processing and infrastructural chain are speeding up their transition to biofuels cargo handling: storage facilities, byproduct processing, transmixing facilities, pipeline management, additional rail and road construction.

More information:
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OPEC president discusses ethanol, biofuels

Earlier we were shocked to learn that an OPEC researcher went so far as to 'fear' for the organisa- tion's long- term future now that biofuels are being taken seriously. And today, believe it or not, OPEC's very own president discussed Brazil's booming ethanol industry with the chief executive of Brazil's state-owned petroleum company. He will visit Brazilian factories that turn sugar cane into the fuel.

Edmund Daukoru, OPEC's president and Nigeria's oil minister, met with Sergio Gabrielli of Petrobras and the two discussed alternative energy and liquefied natural gas - which Brazil is interested in importing to reduce its dependance on gas from neighboring Bolivia amid demands by the Andean nation for higher prices.

Ironically, Daukoro heads a committee charged with pushing forward plans to use and produce ethanol in Nigeria (about which we reported earlier: here and here). Meanwhile, Brazil plans to export ethanol to Nigeria while helping the nation build its own ethanol industry. Daukoro is also scheduled to visit key ethanol production facilities in Brazil's Sao Paulo state, said Petroleo Brasileiro SA.

Brazil is a world leader in production and use of ethanol. Seven out of every 10 new cars sold in Brazil are "flex fuel" vehicles that can run on gasoline, ethanol or any combination of the two. Ethanol is available at virtually every gas station in Latin America's largest country.

So what to make of this strange event? Is OPEC as an organisation beginning to open its eyes to our green future? It is not unthinkable that petro-dollars will soon start to flow into green fuels and become 'bio-dollars'. Brown sheikhs becoming green sheikhs.... After all, oil producers are making record profits on high oil prices. And they have to invest this capital into something. Maybe they are beginning to think that biofuels are not that bad an idea after all, certainly not if 'peak oil' were to be upon us already. And if there is one organisation that knows more than any other whether 'peak oil' is here, then it sure is OPEC...

On the other hand, it might just as well the ambiguous position of the current OPEC president which has led to this strange event. After all, Mr Daukoro has to lead an organisation of fossil oil producers with one hand, while heading the energy ministry of a country that is investing massively in biofuels, with the other. Not an easy task. Anyhow, Mr Daukoro's visit to Brazil is clearly a recognition of that country's successful ethanol program - a recognition coming from the ultimate competitor.
[Entry ends here].
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