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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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Monday, September 25, 2006

Villepin calls for 'Europatriotic' energy policy

On a visit to Berlin, French Prime Minister Dominique de Villepin defended the merger between Suez and Gas de France (GDF) as being positive for European energy independence and proposed the development of a genuine European energy diplomacy. The Franco-German locomotive is moving towards the establishment of a Common Energy Policy, away from either pure free market mechanisms or strictly national policies. Energy has become of utmost geopolitical importance once again, and there is a growing will to craft a united policy to make the EU stronger on the global energy scene.

Even though de Villepin does not dwell on EU strategies and policies on renewables, it is clear that he presents a broad political vision, a paradigm shift. Obviously bioenergy and renewables would fall under this vision too. We strongly favor this 'Europatriotic' supra-national approach. Once a common European energy policy is in place, it will be easier to work with the developing world on bioenergy, instead of sticking to mere bilateral agreements and cooperation efforts. Development Commissioner Louis Michel has earlier hinted at this fusion of policy fields on an EU level -- tying bioenergy production in the developing world to CAP and trade reform to EU development aid.

Speaking at the prestigious Bertelsmann Foundation, Dominique de Villepin outlined his vision of a European energy policy based on "three pillars":
  • A European energy diplomacy led by a special representative so that Europe "speaks with one voice" on the international scene;
  • The "convergence of national energy policies" in terms of production, investment, transport and storage of energy - the ITER nuclear fusion project being a prime example of such co-operation, and;
  • The co-ordination of strategic oil and gas reserves to prevent market speculation.
In Berlin, the French prime minister defended the proposed merger between Suez and GDF as reinforcing Europe's independence towards Russian gas imports - a project that would also fit with Villepin's new motto of "European economic patriotism". Energy mergers, he said, should be "the result of a deliberate industrial policy that is approved by all parties, with due respect to the cultures of each enterprise and each country". Villepin then guarded against reckless liberalisation of EU energy markets:
:: :: :: :: :: :: ::

"Let us not give in to the mechanical workings of supply and demand, let us not expose ourselves any further to the tensions of the world," he said.

The French PM will be conveying the same message to Commission President José Manuel Barroso when he visits Brussels today (25 September). The Commission announced that it will issue its final decision on the proposed Suez-GDF merger before 17 November.

More information:

Directorate-General for Energy and Transport: The European Union Green Paper on Energy - A European Strategy for Sustainable, Competitive and Secure Energy (website).

Prime Ministerial website: L’énergie et la culture au cœur de l’Europe - Sept. 22, 2006.

Libération: Energie: Villepin pour une vision européenne - Sept. 22, 2006.

Le Figaro: Villepin veut un «patriotisme économique européen» - actualized Sept. 23, 2006.

AP/Nouvel Observateur: Villepin plaide pour une "diplomatie énergétique européenne" - Sept. 22, 2006.

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Humble jatropha shrub fuels India's first green trains

India is home to the world's largest railway network. Its trains transport millions of people each day to work and from the countryside to the cities. In a revolutionary first that promises to solve India's energy problems and radically reduce its fuel bills along with its pollution levels, two Indian railway trains are now running on a home-grown mix of diesel and jatropha biodiesel, the biofuel extracted from the seeds of the Jatropha curcas shrub.

For India, the green fuel could be the transport fuel of the future, with the present beset with woes of global energy shortages and rising fuel prices.

Chief minister of the central Indian state of Chhattisgarh, Raman Singh, who has set upon the task of growing jatropha with a missionary zeal, is the driving force behind the green train project. Ealier he launched a massive jatropha planting campaign that resulted in 3 million seedlings being planted in a single day.

The South East Central Railway (SECR), the highest profit-making zone of Indian Railways, is already running two narrow gauge trains in Chhattisgarh using the biofuel. The trains travel 300 km a day, to and from the state capital Raipur to Rajim (about 120 km in total), and from Raipur to Dhamtari (about 180 km).

"The railways have been mixing up to five percent jatropha biofuel with traditional diesel since July 22 for two trains -- the Raipur-Rajim and Raipur-Dhamtari. The experiment is proving to be a great success, and engines are working smoother and jerk free," said a triumphant Ajay Kumar Jaiswal, SECR's Raipur Railway division spokesperson.

"After a periodical review of three to six months, the railways will increase the quantum of biofuel mix with diesel and will seriously consider for using it on long-distance trains to save huge expenditure on imported diesel". India Railways spends an annual €34.8/US$43.6 million on diesel fuel.

India Railways is using 30 percent of its total land, about 5,000 hectares, for jatropha plantations. This year, 600,000 shrubs have been planted and another 700,000 more are on the anvil. This is being done all across northern India, including in Jammu and Kashmir, Punjab, Haryana, Uttar Pradesh and Delhi. And in a particularly big way in Chhattisgarh.

"We are determined to go in for mass plantations of jatropha and encourage farmers to adopt its cultivation for commercial use. I strongly believe that Chhattisgarh alone can make India an energy secure country through biofuels, by 2015,' Raman Singh said. Chhattisgarh has announced that it would plant 160 million saplings this financial year. It plans to take up an exhaustive programme on a million hectares of fallow land by 2012:
:: :: :: :: :: :: :: ::

In fact, on Sep 4 this year, thousands of volunteers in the state planted about two million jatropha saplings in just 11 hours to find a place in the Limca Book of Records - a move that also motivated people towards the plant that is such a rich source of bio-fuel.

The state government has asked New Delhi to unveil a national bio-diesel policy to help it become totally bio-fuel self-reliant state by year 2015.

It claims the bio-fuel rich plants have the potential to help India get over its annual requirement of 124 million metric tonnes of petroleum products, of which around 72 percent is met through imports at a cost of over Rs.1.5 trillion.

The arithmetic works to everybody's favour.

Bio diesel produces 80 percent less carbon dioxide and 100 percent less sulphur dioxide emissions and provides 90 percent reduction in cancer risks. It can be used alone or mixed in any ratio with mineral oil diesel fuel.

"One hectare of jatropha plantation yields on an average two tonnes of bio-diesel," said Chhattisgarh Biofuel Development Authority (CBDA) executive director S.K. Shukla.

"We are fortunate to have ample renewable resources, which can replace imported oil, strengthening the economy of the nation and also making it more self-reliant," he added.

The Chhattisgarh government, which has installed a bio-fuel plant in Raipur is currently producing 3,000 litres of jatropha bio-fuel a day and has announced steps to install bigger production units in other districts for public supply and larger commercial use.

"Bio diesel is an alternative fuel that can be used in diesel engines and provides power similar to conventional diesel fuel. The final product, bio diesel fuel, when used directly in a diesel engine will burn up to 75 percent cleaner then mineral oil diesel fuel," said C.R. Hazra, vice chancellor of the Indira Gandhi Agriculture University, Raipur.

"It is the most valuable form of renewable energy that can be used directly in any existing, unmodified diesel engine. Bio diesel fuel can be produced from oilseed plants such as jatropha curcas."

Acknowledging that it could be fuel of the future, the Indian government has launched the National Mission on Bio-Diesel with a view to finding cheap and renewable liquid fuel. Its report submitted in 2003 identified jatropha as the ideal oilseed to extract the oil for converting it into bio-diesel.

The government has given out Rs.490 million ($10 million) to nine states for raising jatropha seedlings in the nurseries, say officials.

The government has also announced the use of ethanol-blended petrol across India from November 1 even while tying up with Brazil, a world leader in the use of ethanol, for greater development and production of the alternative fuel in the country.

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Uganda makes ethanol blending compulsory

Lorries with sugar cane, Uganda. The country's thriving sugar industry has a lot of room to expand. In theory, Uganda could leapfrog towards energy independence through biofuels.

The East African. Uganda will soon make it compulsory for oil companies to blend petroleum with a variety of biofuels (ethanol or biodiesel) as the country tries to beat rising oil prices by reducing dependence on petroleum, a senior government official has said.

The Ugandan Ministry of Energy says it has completed development of a policy on a renewable energy that will make in compulsory for oil companies to fossil diesel and gasoline with climate neutral fuels. Energy Minister Daudi Migereko says the policy [no documents yet], which covers ethanol, biodiesel, biomass, wind and solar, is essentially ready and will require oil companies to blend petroleum with ethanol to a maximum ratio of 20 per cent.

In 2005, Uganda produced some 1.6 million tonnes of sugarcane (FAOStat), giving the country's sugar industry a large potential for the production of ethanol, with much room to expand. But oil companies have been reluctant to blend the green fuel with petroleum, arguing that the majority of motor engines in the country not optimised to burn on ethanol and will suffer corrosion. With oil prices currently at an unprecedented peak, the government is taking a keener interest in fuel alternatives.

"The ratios for biofuel are still being worked out, but given the rate at which oil prices are rising and the fact that the cost of ethanol and biofuels are now lower, it is in our interest to diversify the energy mix in order to reduce dependence," said Mr Migereko.

He said oil companies’ misgivings notwithstanding, the government would be firm in giving direction on the issue. "As a country, we have limited supply of foreign exchange, so there is no more justification for sticking to a product that is becoming increasingly expensive," he said.

Uganda on average consumes a combined volume of 840 million litres of refined diesel and petrol annually, meaning the country pays a higher price for fuel than either Kenya or Tanzania, who import crude oil and refine it locally:
:: :: :: :: :: :: :: :: ::

Industry players who spoke to the The EastAfrican said they had not been consulted over the proposed policy but warned that factors surrounding the supply side of ethanol needed careful study since the local sugar industry lacked the capacity to supply adequate quantities. This could make blending uneconomical as a result of high ethanol prices and could also distort food production.

Without a stable source, there is a danger that food prices could skyrocket as energy competes with nutritional needs from source crops, the industry warned.

Uganda produces less than 200,000 metric tonnes of sugar annually and it is not known how much ethanol the sugar industry is capable of producing if demand rises. At current production figures, at least 10.6 million litres of ethanol would be required every month to meet the ministry’s target of 20 per cent blending.

Oil companies also point out that while Brazil has a long tradition of ethanol production, the country has a large sugar industry and a local automobile industry that produces vehicles adapted to ethanol use.

"Technically it has been done but the problem here would be in finding derivatives to add. One also needs to find out what has to be done to engines to run on blended fuels and what impact these have on engine life, one player said.

Mr Migereko cast doubt on arguments that ethanol could reduce engine life, arguing that countries that are using ethanol-blended fuel buy vehicles from the same production lines that supply Ugandan vehicles. "Ordinary people are already ahead of us because in the rural areas, motorists are already blending petrol with locally distilled liquors, he said.

The policy will come into force as soon as the ministry has completed financial provisions to support the Department for Renewable Energy. The department will be responsible for monitoring and putting together the expertise to address technical issues.

"All those issues have cost implications that must be budgeted for, but given the urgency of the matter, this may not wait for the next financial year, said Mr Migereko.

The Ministry’s policy comes on the back of a number of ongoing initiatives by the private sector to produce bio-fuel.

Edible oil and personal care products manufacturer Mukwano Group recently said that studies into the production of bio-fuel and electricity generation from renewable sources by the company were at an advanced stage.

Chief executive Hassan Rizvi last week told The EastAfrican, that the company would roll out its renewable energy programme in two months.

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Noble Group may invest in ethanol projects in Brazil as biofuels market globalises

The biofuels market is becoming a truly global one as countries move away from relying on petroleum from instable regions and switch to ethanol, biodiesel and biomass. Hong Kong-based Noble Group Ltd., which accounts for 10 percent of all ethanol exports from Brazil, is one of the major players in the market and may start investing in production plants in the South American nation to benefit from this forecast rising global demand.

"We want to position ourselves as a significant player in the global ethanol market", Hong Kong-based Noble's Chief Operating Officer Ricardo Leiman said. "The big opportunity in Brazilian ethanol is not only its domestic market but all these global markets."

Brazil, the world's biggest producer of sugar and ethanol, said last month prices of the fuel rose 20 percent in the past year. Investors including Bill Gates, Richard Branson, George Soros and Vinod Khosla are pouring millions of dollars into biofuel companies on optimism that demand for alternative fuels will gain.

"Demand for ethanol will only be higher with many countries trying to move away from fossil fuels produced in unstable regions," said Roger Groebli, head of equity research at ABN Amro Bank NV in Singapore, who personally holds shares in Noble. "I believe the vision of Noble, and I think in the medium-to-long term this is a very solid strategy to get market share."

Tropical commodities
Noble wants to grab a larger share of trade in materials such as iron ore, sugar, corn and cocoa as economic growth in Asia, led by China, stokes demand for commodities. China's economy expanded 11.3 percent in the second quarter, the fastest rate in more than a decade. Ethanol is made from corn or sugar and is blended with gasoline. Grain-based ethanol and other alternative fuel sources have the potential to supplant U.S. gasoline needs during the next 25 years, venture capitalist Khosla said Sept. 21. His fund, Khosla Ventures, invests in corn-based ethanol plant construction.

Countries in Asia will look to biofuels to improve local farmers' livelihood, reduce pollution and oil imports, said Noble's Leiman. China and India both have started producing and using fuel-grade ethanol on limited scale, while Japan and South Korea may follow suit, he said:

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

Noble will have agreements with suppliers in the U.S. to market 1 billion gallons of ethanol a year by 2008 if all planned plants get financing, he said. It's also a market maker for the ethanol contract traded on Chicago Board of Trade.

$1 Trillion
The world needs to spend $1 trillion a year developing alternative fuels, starting 20 years before the peak in conventional oil production, in order to mitigate fuel shortages, a U.S. Energy Department study this month showed. Brazil plans to begin operating 12 new sugar and ethanol mills this year and 17 new mills in 2007, Agriculture Minister Luis Carlos Guedes Pinto said last month.

Demand for biofuels has been aided by surging crude oil prices, which rose to a record $78.40 a barrel on July 14. Still, U.S. average ethanol prices last sank below $2 a gallon for the first time since January as gasoline futures dropped amid abundant supplies of the motor fuel. Sugar prices have fallen by 16 percent this year in New York.

Valuation of ethanol projects in Brazil has ``stabilized'' after the recent fall in ethanol and sugar prices, so ``if we find right projects and right partner, we will most likely do a transaction,'' Leiman said.

Crude Decline
The decline in crude oil prices hasn't dampened Noble's optimism for ethanol, Leiman said. ``We still like ethanol. We are long-term investors so price fluctuation in the short-term doesn't really make too much of a difference to us.''

Seasonal factors including the end of the driving season in the U.S. led to lower gasoline prices, Leiman said.

U.S. ethanol companies are expanding distilleries or building new plants after refiners this year switched to making gasoline for use with the fuel instead of methyl tertiary butyl ether, or MTBE, following changes in fuel rules in last year's energy bill.

Ethanol demand in U.S. will reach 16.6 million tons this year ``independent of oil and gasoline prices,'' Noble's Leiman said.

Global ethanol demand will grow by 51 percent to 54.5 million tons by 2010, in which U.S. will remain the world's biggest consumer at 26.6 million tons a year, Leiman said.

Brazil will continue to be the world's major low-cost ethanol producer and exporter while Asia's demand will grow to 7.5 million tons by 2010. It's using less than 2 million tons.

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Honda to mass produce flex-fuel vehicles as part of biofuel initiative

A few days ago, Honda announced that it had achieved a breakthrough in cellulosic ethanol production (earlier post) and today the same company reveals that it has developed a new flexible fuel vehicle (FFV) system that enables gasoline engine-based power plants to operate on either 100% ethanol or a wide range of ethanol-gasoline fuel mixtures.

Up to now, variations in the ratio of ethanol-to-gasoline have affected low-temperature startup performance, and caused variations in air-fuel ratio and engine output. This has made it a challenge to maintain stable dynamic performance, fuel economy and emissions levels. The new Honda system adapts to different ethanol-to-gasoline ratios by estimating the concentration of ethanol in the ethanol-gasoline mix in the fuel tank based on measurements of exhaust gas concentration in the vehicle's exhaust system. This provides the flexibility to adapt to ethanol-to-gasoline ratios of between 20% and 100%, while achieving outstanding fuel economy and dynamic performance on a par with a 100% gasoline-powered vehicle. In addition, a cold-start system utilizing a secondary fuel tank ensures reliable starts even at low ambient temperatures.

Bioethanol, as used in Brazil and other countries, is made from plant sources such as sugar cane. Because plants absorb CO2 via photosynthesis, the amount of CO2 released into the atmosphere from burning bioethanol fuel does not increase atmospheric CO2. This makes bioethanol fuel an effective means to combat global warming as well as an alternative to petroleum. In late 2006, Honda plans to begin sales of its FFVs in Brazil, where bioethanol has gained in popularity.

The development of this flex-fuel system is part of Honda's efforts to tap into the biofuels opportunity and of its committment to help mitigate dangerous climate change:
:: :: :: :: :: :: :: :: ::

Honda calls the development of the system "a key element of its global initiative to reduce CO2 emissions". The new engine technology will be introduced in its three areas of production - power products (generators, snow blowers and so on), motorcycles and of course cars.

The car development involves three next-generation engines and one fuel cell vehicle. The last of these is the latest version of the FCX Concept, which was first displayed at the 2005 Tokyo Show. Using a new, high-efficiency fuel cell stack, it is said to be the precursor of a new FC vehicle due to be marketed on a limited basis in the US and Japan in three years' time.

In the much shorter term - later this year, in fact - Honda plans to start production of a new vehicle which can run either on 100% bioethanol or on various mixtures of that fuel and petrol. The car will go on sale first of all in Brazil, where bioethanol use is widespread.

Within the next three years, Honda also intends to introduce new petrol and diesel engines. The petrol one uses the latest developments in VTEC valve lift and timing control to achieve "a world-leading level of performance and a 13% improvement in fuel efficiency".

The main point about the new diesel it will reduce the emission of nitrogen oxides to the level currently achieved by petrol engines. An NOx catalytic convertor will, according to Honda's own calculations, mean that the engine meets the stringent EPA Tier II Bin 5 legislation created in the US, where cars fitted with the unit are expected to go on sale by 2009.

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US company to build US$143million biodiesel plant in Panama

Quicknote bioenergy business
Houston-based Texas BioDiesel expects to begin initial works in the next two months on a 379 thousand ton (100 million gallon) a year biodiesel plant in Panama, company president and CEO John Autrey told BNamericas.

The €112/US$143 million plant will use palm oil, mustard seed and other vegetable oil products supplied by local farming cooperatives such as the Cooperativa Empresa Productora de Palma de Aceite de Chiriquí.

Initial works entail building an extraction facility, while the plant itself is due to begin operating mid-2007, said Autrey, adding the plant will most likely be built at Puerto Armuelles in Chiriquí province. Texas BioDiesel will transport oil from the extraction facility to its Houston biodiesel plant until the Panama plant starts operations, he said. Private banks and the US Export-Import Bank (Ex-Im) are helping finance the project.

This project will be the company's first in Latin America, although talks are underway in other countries such as Argentina, Bolivia and Brazil to install plants, Autrey said [entry ends here].
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Japan's committment to flex-fuel vehicles boost to Philippines biofuel industry

Japan's announcement that it will encourage its vehicle manufacturers to produce more flex-fuel vehicles is expected to boost the development and use of biofuels in the Philippines, a country plagued by industry intrigues and political struggles between oil lobbies, parliamentarians, farmer unions, academia and auto manufacturers, which is delaying the adoption of a clear biofuels policy (earlier post). During bilateral talks at the recently concluded ASEAN-EU Meeting (ASEM), Japan's Prime Minister Junichiro Koizumi informed Philippine President Macapagal-Arroyo that he wanted to encourage Japanese vehicle manufacturers to go into flex-fuel vehicle production, as Japan looked to expand its own fuel choices (Japan is set to import a massive quantity of ethanol from Brazil). This committment might be the catalyst to get the Philippines' biofuels industry going.

Japanese auto makers supply most of the vehicles in the Philippines. This is why Philippine Energy Secretary Raphael Lotilla concludes that Japan's thrust simply pushes efforts to promote the use of biofuels: "Vehicles are an important pillar in the government's biofuels program," Lotilla said. "The inherent limitation on blends that can be used in vehicles will hinder the popularization of biofuels use." If Japanese vehicle manufacturers would produce flex-fuel vehicles that could be sold in the country, this would greatly help push biofuels use, he said.

Flex-fuel vehicles, first developed and used on a massive scale in Brazil, have single tanks, fuel systems and engines. The vehicles are designed to run on both unleaded gasoline and alcohol fuel, usually ethanol, in any mixture:
:: :: :: :: :: :: :: :: ::

American firm Ford Motor Co. created flex-fuel technology in the mid-1980s. Ford, General Motors and Daimler-Chrysler all have flex-fuel vehicles.


Japanese vehicle manufacturers favor hybrid vehicles, which run on gasoline and electricity.

The Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) has expressed concern over the use of biofuels, claiming that 40 percent of the vehicles in the country are not fit for biofuels.

The group said carbureted vehicles were not compatible with biofuels as their open loop systems could not adjust to changes in the oxygen content of the fuel, resulting in higher emissions.

Campi further said that around two to five million cars currently plying the country's roads have carbureted engines and would not be compatible with biofuels.

But local ethanol and biodiesel proponents, including a vehicle expert, had all refuted these claims. They said that biofuels are compatible with both carbureter and fuel-injection engines.

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Palm biofuel survives low crude oil prices - official

Biodiesel projects will not be hit by the fall in crude oil prices as investors feel the current dip is temporary and prices will bounce back, a senior Indonesian trade official said on Monday. "Even if crude oil prices go down for a while, people believe after one or two years they will again go up," said Derom Bangun, executive chairman of the Indonesian Palm Oil Producers Association.

With current stocks, palm oil biodiesel can be produced at a cost of US$60-65 per barrel, analysts say, and used to run cars, power plants and factories. Crude oil prices touched a record-high of US$78.40 a barrel in July, but have since fallen to around US$60.

"Developments in biodiesel will continue and investments on new plants will not be hampered," Bangun said at the weekend on the sidelines of an edible oil conference:
:: :: :: :: :: :: :: :: ::

"It is not the government but private investors who will decide when and where to build biodiesel plants."

The world's top palm oil producers, Malaysia and Indonesia, have each decided to set aside 6 million tonnes a year of the commodity as feedstock for production of biofuels and biodiesel, nearly 40 percent of their crude palm oil production.

Palm oil is traditionally used in foods and cosmetics, but rising biofuel demand has sent palm oil prices soaring 12 percent this year.

However, Malaysian crude palm oil futures plunged by more than 3 percent by midday on Monday to their lowest levels in more than two months, pushed lower by a decline in the prices of crude oil and soyoil.

Biofuels are plant-based fuels, and include ethanol, which is made from sugar or grains and added to gasoline, and biodiesel, which is produced using oilseeds or palm oil.

Biofuel plants are spreading around the world as countries look at ways to cut dependence on imported oil, curb greenhouse gas emissions and boost local agriculture.

Bangun said Indonesia expected six new bio-diesel plants to be in operation by 2007, and about 500,000 tonnes of bio-diesel to be produced from three of these plants by early next year.

He estimated about 600,000 tonnes of palm oil would be used for bio-diesel production in Indonesia in 2007.

Indonesia expects about 15 million tonnes of palm oil output in 2006, of which about 11.3 million tonnes are likely to be exported and the remaining used domestically.

Bangun told the conference that growing demand for biodiesel would support palm oil prices and were likely to drive them higher in the fourth quarter of 2006 and early part of 2007.

He said during the next 12 months crude palm oil prices would be fluctuating in the range of $510 to $550 per tonne, cost and freight Rotterdam basis, with an average of $530 per tonne.

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India launches project with UNDPgef and German bank to remove barriers to biomass use

India's bioenergy strategy in the making is ambitious, but a recent senate committee identified many barriers to actually implementing the strategies aimed at making use of the impressive biomass resources of the country. In order to overcome these barriers, the country's Ministry of Non-Conventional Energy Sources (MNES) has signed a US$39.15 million project with the UNDP Global Environment Fund (UNDPgef) and German banking and investment group KFW aimed at getting biomass projects up and running in a much quicker way.

The project aims at removing barriers in the following chains and operational aspects of biomass power projects:
  • ensuring the sustained supply of raw biomass; developing smooth logistical chains between dedicated biomass producers, household and municipal waste biomass producers and the local power plant
  • technology upgrading of biomass power systems
  • sustained supply of and investment in best quality farming, processing and transport equipment and facilities
  • development of standards for biomass energy projects
At present biomass power projects in India amount to a mere 1,000 MW combined capacity, but the country's biomass energy resources have an estimated potential of about 19,000 MW that is ready to be exploited relatively quickly, while co-generation power projects have a potential of about 5,000 MW:
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The project document was signed by Shri Sunil Khatri, Joint Secretary, MNES and Ms Maxine Olson, Resident Representative of UNDP, in New Delhi in the presence of Shri V. Subramanian, Secretary, MNES and Mr. Hass, Country Manager, KFW. The three-year project would be financed by UNDPGEF (US$5.65 million) and co-financed by MNES (US $5.24 million). KFW of Germany would leverage finances of the order of US$24.82 million. The financial institutions/private entities who join the project would contribute an amount of US$3.44 million.

This project is expected to contribute to exploiting the tremendous potential for setting up power projects based on biomass and co-generation, providing solutions to smoothening the supply of raw materials, introducting appropriate technologies and making sure best quality farming, processing and transport facilities are established.
Typically, biomass energy projects are relatively small, decentralised and scattered over the sub-continent, in contrast with big fossil fuel or nuclear plants. This is why the development of standards for such plants becomes important. Biomass and cogeneration power projects deliver green energy which helps fighting climate change. They also provide a vast employment opportunity to rural and semi-rural areas besides contributing to the country's overall energy security as energy demand increases rapidly.

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