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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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Saturday, September 23, 2006

Biofuels: green energy or grim reaper?

The BBC News website has an interesting page of opinion articles on environmental issues called 'The Green Room'. This week's text deals with biofuels and expresses the opinion of Jeffrey A McNeely, who is chief scientist of IUCN, the World Conservation Union, based in Switzerland. There is also a 'have your say section', where you can leave your comments and read other people's opinions on the discussion text. We reproduce the text here, and add our own comments to it in italics.

Jeffrey A McNeely: Biofuels could end up damaging the natural world rather than saving it from global warming, argues Jeff McNeely in the Green Room. Better policies, better science and genetic modification, he says, can all contribute to a greener biofuels revolution.

With soaring oil prices, and debates raging on how to reduce carbon emissions to slow climate change, many are looking to biofuels as a renewable and clean source of energy. The European Union recently has issued a directive calling for biofuels to meet 5.75% of transportation fuel needs by 2010. Germany and France have announced they intend to meet the target well before the deadline; California intends going still further. This is a classic "good news-bad news" story.

Of course we all want greater energy security, and helping achieve the goals (however weak) of the Kyoto Protocol is surely a good thing. However, biofuels - made by producing ethanol, an alcohol fuel made from maize, sugar cane, or other plant matter - may be a penny wise but pound foolish way of doing so. Consider the following:

Food prices are already increasing. With just 10% of the world's sugar harvest being converted to ethanol, the price of sugar has doubled; the price of palm oil has increased 15% over the past year, with a further 25% gain expected next year.

Biopact: Simplistic economics. Energy prices have just as low a demand elasticity as food prices. Both are crucial to a household's expenditure. So food prices may rise because of ethanol and biodiesel, but because of ethanol and biodiesel energy prices stay stable, which is just as important (a roughly equal demand elasticity). Would you prefer to have stable food prices but skyrocketing energy prices? The result on the micro-financial health of the household would be exactly the same.

Rising palm and sugar prices happen to be good news for the millions of smallholder sugar and palm oil producers. It is bad news for consumers. This is how the law of supply and demand works. The only option is to increase the acreage of these crops, which is what is happening, obviously. The threat of food prices spiralling out of control is unfounded, says the FAO, which has recently observed no real effect on overal consumer prices for foodstuffs in the South.

McNeely: the grain required to fill the petrol tank of a Range Rover with ethanol is sufficient to feed one person per year. Assuming the petrol tank is refilled every two weeks, the amount of grain required would feed a hungry African village for a year

Biopact: This is true, but again overly reductionist. The food problems in Africa have to do with a lack of investment in land, people, infrastructure, agriculture and basic tools and inputs such as machinery, pesticides and fertilizers. We think that investing in biofuels will be a catalyst to bring these other investments in food security and agricultural production along. Of all regions on the planet, Africa has the largest potential to produce biofuels without endangering food security. The problem is the lack of the investments in infrastructure and basic agricultural inputs. Biofuels will bring them, and they will bring wealth to the rural masses in the South. This wealth will in turn lift people out of poverty and strengthen their livelihoods.
We would go so far as to say that not investing in producing biofuels in the South is a way of keeping the status quo alive (i.e. food insecurity, lack of investment, poverty).

McNeely: Much of the fuel that Europeans use will be imported from Brazil, where the Amazon is being burned to plant more sugar and soybeans, and Southeast Asia, where oil palm plantations are destroying the rainforest habitat of orangutans and many other species. Species are dying for our driving.

Biopact: This is correct, but again, highly simplistic. Both the sugar and palm oil industries provide hundreds of thousands of families in the tropics with a living. Denying them their opportunity to sell to Europe is denying them to live. If Europe does not want to deny these people their existence, then it should consider offering them an alternative. And it will be a costly one, because each hectare in the tropics supports one person's life. Let's make a shortcut and say that one hectare of oil palms brings in around €1100/US$1500 per year to a smallholder. If Europe and America want to forbid these smallholders to live from what they're doing, then they should compensate them - with around €1100/US$1500 per hectare. This will obviously be a very costly affair.

When Europeans and Americans cut down their forests in the 18th, 19th and 20th centuries, with a vigor unique in history, then nobody was standing by to tell them they should stop doing so. This deforestation was crucial to Europe and America's development. The same is happening now in the tropics. Luckily, there is now an alternative: in order to compensate the farmers for not planting tropical crops, there is a mechanism called 'compensated reduction'. The question is: are European and American consumers willing to put up the money? If they do, then everything is allright. If they don't, they must reconsider their own view on the matter, their own economic history and take into account the fact that millions depend on agriculture in the South.

Alternatively, many energy crops can be grown far away from rainforests and they can even contribute to such important issues as fighting desertification, erosion, soil depletion and food insecurity. We are talking about such crops as cassava, sorghum or jatropha, to name but a few.

McNeely: If ethanol is imported from the US, it will likely come from maize, which uses fossil fuels at every stage in the production process, from cultivation using fertilisers and tractors to processing and transportation. Growing maize appears to use 30% more energy than the finished fuel produces, and leaves eroded soils and polluted waters behind

Biopact: There is a lot of debate about the energy balance of ethanol derived from corn. Corn is not a good biofuel crop, because it yields a very low amount of fermentable starch. But most scientific energy balance studies point to a positive balance (of 1.2 to 1.5 to 1). Only one, very controversial study, shows a negative energy balance.

We agree though that from an environmental perspective, it would be better to produce biofuels from tropical crops only. They have a very high positive energy balance (sugar cane 8:1, oil palm 12:1, cassava 4:1). This ultimately means that you use far less land to produce an amount of energy. The temperate climates of Europe and North America are not suited for first generation liquid biofuel feedstock production. Only the tropics and subtropics are.

McNeely: Meeting the EU 5.75% target would require, according to one authoritative study, a quarter of the EU's arable land

Biopact: Meeting the EU 5.75% target, if 'outsourced' to the tropics and subtropics where energy crops have far higher yields, would require a mere tenth of the EU's arable land (comparatively speaking). The south simply has the competitive advantage because crops there yield much more usable biomass than crops in more temperate regions. It is obvious that the EU would better import biofuels from the South, because there they damage the environment less (require much less land), and they bring social sustainability and prosperity to millions of the world's poorest.

:: :: :: :: :: :: :: :: ::

Using ethanol rather than petrol reduces total emissions of carbon dioxide by only about 13% because of the pollution caused by the production process, and because ethanol gets only about 70% of the mileage of petrol

Biopact: This is only true for ethanol made from corn, a crop not suited for ethanol production because of its low yield and low energy balance. If real bioenergy crops are used, with a high positive energy balance, then the reductions are many times higher.

McNeely: Little wonder that many are calling biofuels "deforestation diesel", the opposite of the environmentally friendly fuel that all are seeking.

Biopact: This is an offense to the thousands trying to grow jatropha in the semi-desert, or cassava and sorghum on drylands. It is sad to hear a 'scientist' replicate this message. Mr Jeffrey A McNeely knows that there are many 'anti-deforestation' energy crops. And if he doesn't, he is not well informed and can barely be called a scientist. Mr McNeely is first and foremost a conservationist; it seems like he is siding with fundamentalists here, for a while. We demand scientific integrity and a bit of respect for people who take sustainability serious.

Jatropha in the semi-desert: 'deforestation diesel'?

McNeely: With so much farmland already taking the form of monoculture, with all that implies for wildlife, do we really want to create more diversity-stripped desert?

Biopact: No we don't, but are Western consumers willing to give up 25% of their wealth to prevent this from happening? No they aren't. So Mr Jeffrey A McNeely should first convince his own Western consumers, for who he appears to be speaking, that they should stop being hypocritical. They must make the first move; they have built their entire industrialized, highly developed societies on deforesting their continents and on monocropping. They should give the example by (1) turning back to sustainability and (2) compensating the millions of farmers in the South, who are merely copying their Western counterparts because they see that it is they way to prosper. So until they do, we should not even discuss the matter.

McNeely: So what is to be done? The first step is to increase our understanding of how nature works to produce energy. Amazingly, scientists do not yet have a full understanding of the workings of photosynthesis, the process by which plants use solar energy to absorb carbon dioxide and build carbohydrates.

Biotechnology, its reputation sullied by public protests over GM foods, may make important contributions. According to the science journal Nature, recombinant technology is already available that could enhance ethanol yield, reduce environmental damage from feedstock, and improve bioprocessing efficiency at the refinery.

The Swiss biotech firm Syngenta is developing a genetically engineered maize that can help convert itself into ethanol by growing a particular enzyme.

Others are designing trees that have less lignin, the strength-giving substance that enables them to stand upright, but makes it more difficult to convert the tree's cellulose into ethanol.

Biopact: We agree, biotechnology is the way ahead. But in the meantime, we would want the EU and the US to stop barring the millions of farmers from the South from their markets. They are keeping them in poverty. Biotechnology will reach these farmers last, while in fact, they can already produce energy competitively, so they should be granted the opportunity of selling it now. By the time the improved crops reach them, their lives will have changed -- if the EU/US were to allow them onto their markets, that is.

McNeely: Some environmentalists are worried that these altered trees will cross-breed with wild trees, resulting in a drooping forest rather than one that stands tall and produces useful timber and wildlife habitat.

In the longer run, biotech promises to help convert wood chips, farm wastes, and willow trees into bioethanol more cheaply and cleanly, thereby helping meet energy needs while also improving its public image.

Biopact: We agree, there is a lot of potential in so-called 'second' and 'third generation' biofuels. But they will not be able to compete with 'first generation' biofuels from the tropics. Cellulosic ethanol will not be more economic than sugar cane ethanol or than palm oil biodiesel.

So we must resolve this question: if a farmer in the South can make a living by offering biofuels that are far less costly than highly advanced biofuels in the North - what do we do?

McNeely: But that is not nearly enough; bioenergy is too important to be left in the hands of the private sector. Many of the social and environmental benefits of bioenergy are not priced in the market, so the public sector needs to step in to ensure these benefits are delivered.

Biopact: This is why our small organisation exists. We would demand a clear definition of social sustainability and benefits, though. And we want to weigh them off against environmental criteria.

McNeely: An easy immediate step would be to mandate improved fuel efficiency for all forms of transport, beginning with the private automobile. A 20% increase in fuel-efficiency standards is feasible using current technology, and would save far more energy than Europe's biomass could produce.

Biopact: We are obviously in favor of increased efficiency and we think the West has a responsibility to invest (or help to invest) in the development of highly efficient energy technologies adapted to conditions in the South. After all, it is in the global south that the future of climate change and energy demand is being created. Between today and 2030, 80% of all new demand for energy will have come from the South, and so will car sales.

McNeely: Governments also need to provide leadership in the form of economic incentives to minimise competition between food and fuel crops, and ensure that water, high-quality agricultural land, and biodiversity are not sacrificed on the altar of our convenience.

Biopact: We think the people in the South should determine this. After all, it's their land, their water, their biodiversity and their future. Europeans and Americans should be more humble and listen to what nations in the South want.

If nations in the South think it is in their interest to expand their sugar cane hectarages, for social or economic reasons, then that's their business first, and our business only later. Who are we to tell them what to do? Obviously, if protecting the environment is in our mutual interest -- which is of course the case -- then we should find ways to do so in a socially sustainable way. (E.g. via a 'compensated reduction' mechanism).

We are strongly in favor of international and multilateral cooperation on global issues. But only insofar as they are balanced and take into account the wishes and needs of non-Western nations. The recent virulent attacks on the United Nations, made by the more than 100 developing countries united in the Non-Aligned Movement, do not come as a surprise. These nations are tired of being dictated by the West how they should behave.

We think a lot of the 'environmentalist' arguments made in the West are deeply ethnocentric, and not universally shared by the rest of the world. So it is time the West, and in particular NGO's like the World Conservation Union, should think of whether they really deserve the label 'World' -- to us, they do not represent the interests of the non-Western world. Instead, they are objective allies of a neo-imperial world order (yes, the word 'neo-imperial' is being used again -- we refer to the joint declaration of the more than 100 developing countries united in the NAM as it was issued at the 14th Non-Aligned Movement Summit, held recently in Havana).

McNeely: Calculations of energy return on investment need to include environmental impacts on soil, water, climate change, and ecosystem services.

Biopact: True, and they also need to include social and economic opportunity costs. Merely limiting the calculation to environmental impacts is too easy. Farmers in the South want to live too.

McNeely: The bottom line is that biofuels can contribute to energy and environmental goals only as part of an overall strategy that includes energy conservation, a diversity of sustainable energy sources, greater efficiency in production and transport, and careful management of ethanol production.

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