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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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Thursday, August 24, 2006

BP's private CO2 offset scheme sets dangerous precedent

In a highly problematic move, BP has launched Target Neutral, a website where car drivers can offset the CO2 their cars produce. The idea is that a driver uses the website, www.targetneutral.com, to calculate their CO2 output and then makes a donation which funds projects which reduce CO2 output by an equivalent amount. The donation then goes into projects such as building a biomass power station in India, which uses agricultural waste and local crops, and which is carbon neutral. That way, the driver's CO2 emissions have been 'neutralised'.
The "Advisory Panel" - paid generously by BP - includes environmentalists who act in an individual capacity and who do not represent their organisations. This doesn't at all guarantee that the project is a not PR stunt, on the contrary.

The scheme sets a dangerous precedent and is highly problematic for several reasons:
  • First of all, there is no independent board of scientists -- 'independent' as in 'not being paid by the very company that draws on them' -- that assesses whether the projects in which BP will invest the donated money are indeed climate friendly and contribute to CO2 reductions. BP's initiative is a commercial replica of the existing Clean Development Mechanism, which is monitored by the United Nations. Under the CDM, projects are screened very thoroughly and objectively on their real CO2 reduction value and their environmental sustainability, by real independent experts who are not paid or appointed by a commercial firm. Moreover, these procedures and selections are publicly available, and in their turn monitored by watchdogs. BP's scheme completely lacks this most basic of requirements. There is no way for us to know how the projects have been selected. Companies on the receiving end in the developing world might approach the BP fund in ways that would never be allowed under the CMD selection process. Given that this is a private fund, there is no way for us to monitor the entire selection procedure. We'll simply have to 'believe' BP on its word.
  • Secondly, a private company's first aim is to make profits, and BP's private CO2 reduction plan is no different. Even though BP claims to make 'no profits' from the scheme, it is definitely a way of tieing consumers to the company, and moreover, a good PR campaign equals profits too.
  • Thirdly, the scheme effectively comes down to the privatisation of carbon-reduction strategies. We think these efforts should be first and foremost the privilege and duty of the state, precisely because only the state can set targets that apply to all citizens equally, and that are based on a democratic decision-making process and that exert authority. Private schemes launched by commercial entities erode the idea that that state should be the prime actor when it comes to the sensibilisation of citizens.
  • Finally, and more subtly, this privatisation immediately introduces a discourse of 'voluntarism' and consumerism into the CO2 reduction efforts. This way, the discourse changes from that of civic duties to that of mere consumers' choices (we read: "let's have lunch at McDonalds, go to the movies, and, oh yeah, let's reduce our CO2 emissions for a few months, just for fun"). Again we think climate change and greenhouse gas reduction strategies must be tackled in a more responsible, objective, and civic way, not in a voluntaristic and consumerist way.
  • We cannot shop our way out of climate change and into sustainability, as more and more people are beginning to understand.
From what we can tell right now, we think BP's scheme sets a dangerous precedent. Not enough is being done to combat dangerous climate change, but a privatisation and commercialisation of the effort is definitely a wrong way to approach the matter. The fight against climate change must be approached globally, and with a consensus between states who, if necessary, force their industries and citizens to reduce their carbon footprints - using the power of the state.
We object to the United States' refusal to ratify the Kyoto Protocol and their attempt to launch an alternative pact based on purely voluntaristic CO2 emission reduction efforts - which come down to allowing the emitting industries to decide for themselves how much and when they will reduce their emissions. To use a strong metaphhor: this is a bit like allowing a criminal to be his own judge and to decide for himself what his punishment should be. For the same reasons we object to private schemes that aim to make citizens more aware of their CO2 emissions and that aim to offer them a purely voluntaristic, consumerist pseudo-solution to do so.

Of course, this scheme comes on top of the already existing state-driven CO2 reduction efforts (at least for countries that have ratified the Kyoto Protocol). So one could say that not too much fuzz should be made about BP's private program. But it has to be seen in the context of the major struggle that is going on in the debate about how to tackle climate change. The struggle is between, on the one hand, those who want a global consensus between states and a multilateral mechanism to monitor the execution of the effort (the supporters of the Kyoto Protocol), and on the other hand those who want to commercialize and privatize the matter and who trust the good will and voluntarism of the CO2 emittors (this approach is supported by the United States).
Now given this context, BP's scheme is clearly on the side of the 'privatizers'. That is why we object to it.

BP could however solve these problems in a very straightforward manner, simply by subjecting the projects it wants to support to the UNFCCC's CDM panel, and await that expert body's verdict. Just like any other company that is creating clean development projects in the south.

This story is definitely to be continued.
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Natural rubber in the age of high oil prices: a plantation crop with a future

Here at the Biopact we think about ways to help people in the developing world to get access to basic energy services, to boost their food security and to enter a more global market where they get a fair price for the goods they offer. We are of the opinion that investments in biofuels, bioenergy and 'environmental services' in the tropics, made by those farmers, by governments or by socially responsible companies, are one way to achieve these aims. In an era of high energy prices, it makes economic sense to produce biofuels and feedstocks there where they yield most. But it also makes social sense to involve people who stand to benefit most, and who need need an economic impulse more than anyone else.

One topic that we haven't analysed yet, but that follows a similar logic, is that of the production of natural rubber - a major third world industry employing millions of poor people and small farmers in South-East Asia and Africa. In this introductory text, we have a look at some basic facts and numbers about the rubber industry and its Hevea plantations. In later articles we will analyse this sector and its potential more in-depth.

High oil prices, high natural rubber prices
The world's rubber needs stand at around 21 million tons per year. They are met through both natural and synthetic sources, each supplying roughly 50% of the market. Synthetic rubber requires petrochemicals as a feedstock for its manufacture, using roughly 3.5 times more oil than what is required for a rubber tree plantation. Given soaring oil prices, this dependence on oil has led to a dramatic price increase in synthetic rubber over the last few years. Not surprisingly, this has also fuelled an increased demand for natural rubber.

Rapidly growing economies like China and India are boosting global rubber demand, despite high oil prices. Projections show that this demand will increase by a steady 5.6% annually over the coming three years, and by roughly 40% over the next 10 years. Prices for natural rubber have already doubled over the past 18 months and increased by 300% since 2001 (for prices, see the International Rubber Study Group). Not surprisingly, small rubber farmers are optimistic again for the first time. Since nothing indicates that oil prices will be declining seriously anywhere soon, the optimism is well-founded. Rubber is a crop with a bright future.

Millions of families depend on rubber production
According to the International Rubber Research and Development Board, not less than 20 million people are directly dependent on rubber as their primary source of income. These farmers' Hevea smallholdings make up the bulk of rubber plantations. Smallholdings are typically less than 2 hectares in size. Until recently, most smallholders were unable to earn sufficient income to invest in higher yielding materials, or to adopt less labour intensive harvesting methods, which is why most of the rubber producing countries have adopted schemes to assist them to improve their practices and output.
But given record oil (and hence natural rubber) prices, and no indication that petroleum prices will decline soon, these smallholders now face a much brighter future. The estate sector (large, quasi-industrial plantations) makes up only a minor share of the natural rubber hectarage.
Most of the world's natural rubber is produced in South-East Asia, with Thailand (3 million tons), Indonesia (2.5 million tons) and Malaysia (1 million ton) supplying more than 60% of the market.

No rubber, no cars
Without the humble rubber tree and without the harvesters who wake up early in the morning each day to tap the tree, modern transport would be unthinkable. The 1 billion cars and trucks on this planet's roads are all dependent on them. Not only does natural rubber give vehicles their tires, it is also a key component in all essential vehicle systems. Rubber is used in the hoses, engine mounts, bushings and gaskets. The fuel-efficient radial tire requires a significant amount of natural rubber for added strength. Industrial and military tires are made from nearly 100% natural rubber for this very same reason.
While it is encouraging to note that rubber is one of the only materials used throughout the automotive industry that can be supplied from a renewable resource, it turns out there are some very significant problems to notice here:
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The millions of Hevea trees in Asia are all clones coming from only a handful of seeds originating from the Amazon, and descendents are taken as cuttings from these trees. A huge population of species supporting an extremely small genetic base causes any weaknesses to be greatly amplified. These rubber trees are all known to be very susceptible to the fungal disease known as leaf blight. If one were to become infected, the risk of it spreading is very high. A major outbreak leading to a pandemic and a major supply disruption, would have an immediate impact on global transport.

The rubber tree, a valuable bioenergy crop in itself
Despite these risks, the rubber tree is a plant that is being recognized more and more as an interesting bioenergy crop in itself. When a plantation's rubber yield starts to decline after some two decades, the wood from the trees can be used for a range of purposes. Until recently, rubberwood was considered to be a waste stream. Today it finds a purpose in construction, flooring, furniture (especially in Europe) and as a source of chipboard and pulp for papermaking.

But it has also become a source of energy. Depending on the site and management of the plantation, one hectare of rubber trees yields between 140 to 200 m3 per cycle, or between 84 and 120 tons of wood. On an annual basis (taking a life-cycle of 25 years for a plantation), this comes down to between 3.4 and 4.8 tons per year. (Compare this to wood energy crops that are considered to be major bioenergy feedstocks for the future: hybrid poplar yields around 5.4 tons per hectare, with top clones yielding as much as three times that amount; eucalyptus yields 10.5 tons and up.) Rubberwood has a higher heating value of around 18GJ/ton (bone-dry).

Given the fact that rubberwood is still considered to be a mere byproduct, the market and the potential for it as a biomass feedstock for combustion, pyrolysis or gasification looks promising. To give an idea of this potential, consider the following: in Thailand, the world's leading rubber producer, about 15 million tons of rubberwood become available each year, of which a mere 12% is processed into finished goods. That leaves 13.2 million tons of rubberwood, worth around 237 Petajoules of green energy.

This concludes our very rudimentary overview of the natural rubber industry and its potential. In the future we will analyse some topics more exhaustively, such as: the connections between petroleum prices and rubber, the social conditions under which smallholders work and how they can be improved and the potential for the integration of rubber production and bioenergy production.

More information:

IRRDB.net: The International Rubber Research and Development Board - basic information portal about the industry.

The International Rubber Study Group: in-depth information and statistics about the production, consumption and price of natural and synthetic rubbers.

FAO, 2000: Asia-Pacific Forestry Sector Outlook Study: The Utilization, processing and demand for Rubberwood as a source of wood supply

The Current Status of Biomass Utilization in Malaysia [*.pdf], which gives an interesting overview of the potential of rubberwood as a feedstock for bioenergy.

The Edge Daily: Rubber hard to find as China, India devour supply - August 2, 2006

Energy Bulletin: Rubber is critical, and vulnerable - April 16, 2005; a look at the (natural) rubber industry seen from the perspective of 'Peak Oil'.

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Major British energy firm considers using palm oil in power plants

Quicknote bioenergy economics
British energy firm npower has said it is considering running one of its oil-fired plants on palm oil. The group, owned by Germany's RWE, says it has tested the biofuel at Littlebrook, in Dartford, Kent, and is weighing up its commercial and technical viability.

A spokesman for npower stressed that no decisions had yet been made and environmental factors would be of paramount importance. As the fuel is carbon neutral, if used it would help reduce the country's CO2 emissions, he said. With the price of crude oil surging, energy suppliers have been looking at cheaper alternatives such as the increased use of biofuels.

"But we would need to be able to source from sustainable plantations," he added. "There's no point in doing something for environmental benefit at one end if it is detrimental to the environment at source." Many palm oil plantations are in areas of cleared rainforest in Indonesia and Malaysia, and threaten the habitat of endangered animals, such as the orangutan. Environmental groups have expressed concern that overuse of sustainable plantations could cause other palm oil customers to source from badly managed plantations.
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