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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, November 08, 2006

World's largest biodiesel plant to be built in Singapore: capacity 36,000bpd, palm oil feedstock

Australia's Natural Fuel broke ground on Wednesday for a biodiesel plant in Singapore that it said would become the world's biggest such facility, with the firm planning to list in Sydney by the end of the year. The firm is investing US$130 million in the project, one of a series of plants in Australia and the United States, said Richard Selwood, managing director and chief executive officer of Natural Fuel.

The first phase of the plant will come on stream by the end of next year and will produce about 600,000 tonnes of biodiesel, he said. A second and third phase would raise output to 1.8 million tonnes of biodiesel per year (roughly 36,000 barrels of oil equivalent).

"Singapore, with its strategic location, excellent logistics and experience in the petrochemical industry can play a pivotal role as a regional hub for the biofuel industry," he said at the ground-breaking ceremony on Singapore's Jurong Island.

He declined to give exact details on where it would sell the biodiesel, but highlighted countries like Japan, Korea, Taiwan, the U.S. West Coast and Europe. Malaysian and Indonesian palm oil will be the base feedstock for its biodiesel plant in Singapore, but other vegetable oils such as soya and canola will supplement supply.

Unsustainable feedstock
Naively, the firm thinks it will be able to produce biodiesel that "meets British and American standards", as Selwood said, allaying analysts' fears that Western nations' specifications may scupper the high export hopes of southeast Asian producers. "We use German technology to produce our biodiesel, same in Australia," he added.

Of course, using German technology and Anglo-American standards on a clearly unsustainable feedstock doesn't make much sense:
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European Union MP's and environmental organisations are already calling for a ban on palm oil biofuels, and rightly so (earlier post). Natural Fuel's and similar biodiesel plants will spur the expansion of palm oil hectarages, probably the world's most environmentally destructive practise. Not only are pristine rainforests burned down with the result that some of humanity's last remaining hotspots of biodiversity are annihilated, but this deforestation also contributes significantly to dangerous climate change.

Already there are clear signs that the EU - the largest biodiesel consumer - will close its market for this 'deforestation diesel'. The Dutch government, the only government so far that has established provisional sustainability criteria for biofuels, calls palm biodiesel unsustainable. More governments will follow.

There is plenty of choice for using non-destructive energy crops as feedstocks for biofuels: from tree and grass-species to agricultural waste or dedicated crops such as sorghum, cassava or jatropha. Most of these energy crops thrive outside forest areas. The technical potential for sustainable biofuel production - that is, explicitly avoiding deforestation and taking into account rising food demands - remains huge at 1500 Exajoules (roughly 7 times the total amount of oil consumed today on the planet) (see earlier post).

Choosing palm oil is the easiest way, but over the medium to longterm it might be an unwise investment.

Natural Fuel has contracted ConAgra Food Inc. as a main source to secure feedstocks but has other contracts and joint ventures with food suppliers, he said. To further raise money, the firm will be listed on the Australian Stock Exchange (ASX) in December and was expected to be valued at A$112 million ($86.2 million), he said.

The Australian company will begin its first biodiesel production in Darwin, Australia this month. It has plans to start building two other biodiesel plants, one in Houston, Texas and another in Port Botany, Sydney, by 2007.

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IEA report warns of global energy crises, urges investments in renewables

The International Energy Agency's latest World Energy Outlook shows a series of grim predictions for the world's longterm energy security. If radical investments in increased efficiency, biofuels and other renewables are not made now, the world will be experiencing one crisis after another.

Using different scenarios, the report explores what may happen if governments don't act to cut dependence on fossil fuels. The "Business As Usual" scenario would be "dirty, insecure and expensive". It is based on the following projections:

  • Global demand will swell 53% by 2030 to 116 million bpd, sending crude oil prices to more than US$100, and without proper investments even to US$130 a barrel
  • Severe supply disruptions and resulting price shocks will be common
  • Nearly three-quarters of the increased demand will come from China, India and other developing countries who take 70% of the increase for their account
  • Global carbon dioxide emissions would jump 55 per cent from today's level if current trends continue; China is seen overtaking the U.S. as the world's biggest emitter of CO{-2} before 2010, earlier than previously expected. The magnitude of the effects of global climate change would be amplified.
But the IEA indicates that it is not too late for new government policies to create an alternative energy future which is clean, clever and competitive. "In response, urgent government action is required," the agency's executive director Claude Mandil said at the report's launch in London. "The key word is urgent."

Huge investment effort needed
Underinvestment in new energy supply is a looming risk. To meet demand, the world will need a cumulative investment in energy supply infrastructure of more than US$20-trillion (two times the entire size of the EU or US's GDP) over the next quarter century - much more than was previously estimated.

To meet the world’s thirst for oil, US$4,3 trillion will need to be invested in oilfields and refineries by 2030 and it is far from certain that this will happen. Resource nationalism, the trend of countries such as Venezuela and Russia to seek more cash and control from companies that work their oil and gas fields, is among the factors that may restrain investment.

But supposing the investments are made, then the clean, green, "Alternative Policy Scenario", in which biofuels play an important role, looks as follows:
  • Global energy demand could be reduced by 10 per cent in 2030, limiting oil demand to 103 million bpd; improved efficiency of energy use contributes most to the energy savings
  • Global carbon dioxide emissions would be cut by 16 per cent in the same time frame.
  • Increased use of nuclear power and renewables also help reduce fossil fuel demand and emissions.
  • Improved security, environmental protection and economic efficiency would result from the investments.
The role of biofuels and biomass
Of all the renewables, biomass and biofuels will play the most important role. Hydroenergy will contribute significantly, while solar, wind and geothermal have a minor effect. Suitable for use in the world's transport sector, biofuels will make the most significant contribution with output growing as much as 9% a year to a total of 7% of all transport fuels by 2030 under the "Alternative" scenario. The IEA sees Europe overtaking Brazil as the world's second-largest consuming region by the end of the current decade and may even surpass the US as the world's largest consumer and producer of biofuel by 2030:
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Global farm land devoted to biofuel production to an area equivalent to all of Asia-Pacific’s members in the Organization for Economic Cooperation and Development, the IEA said in its World Energy Outlook 2006 report released on Tuesday.

"About 14 million hectares of land are now used for production of biofuels, equal to about 1% of the world’s currently available land," IEA said. "This has to rises to 2% in the reference scenario and 3.5% in the Alternative Policy Scenario."

The "Reference Scenario" assumes the absence of government action. In that case, the IEA projects biofuels will account for 4% of global road-fuel demand by 2030 and the amount of land needed for ethanol production will exceed the size of France and Spain.

The US, the EU and Brazil will account for the "bulk of the increase and remain the leading producers of biofuels," IEA said. "The share of biofuels in transport-fuel use remains far and away the highest in Brazil—the world’s lowest-cost producer of ethanol," it said.

There is less scope for reducing costs for biodiesel, according to IEA, which forecast costs will fall to just over 30 cents a liter from 50 cents in the US and to 40 from 60 cents in Europe. As so-called second-generation biofuels are developed, production costs "might eventually fall as low as $40 or $50 a barrel, making them competitive with conventional gasoline and diesel without subsidy," the agency said.

The Outlook also highlights the often underestimated energy needs for poor people in the developing countries. Traditional fuels such as wood and charcoal are widely used for cooking and heating in developing countries. This has serious negative implications for the environment and health – 1.6 million deaths per year are attributed to indoor air pollution by the World Health Organization. The chapter begins by underlining the seriousness of these problems and then provides qualitative and quantitative analysis of potential solutions. How many people use biomass for domestic cooking and heating in the world today? What trends would we see without policy intervention? How many people need to switch to sustainable biomass use or modern fuels in order to achieve the Millennium Development Goals? Finally, how much will it cost? With this last question in mind we consider innovative financing mechanisms and the chapter concludes by outlining implications for policy. The work will have input from WHO, UNFAO, UNEP, UNDP and others.

According to Mandil, nuclear energy has to be a part of the energy mix if we want to reach a long-term sustainable future," Mandil said in an interview in London. European countries are considering expanding nuclear power in order to meet goals to reduce carbon dioxide emissions, which contribute to global warming. But "nuclear is a difficult topic," he added, "a problem of public acceptance, history, psychology and politics."

China and coal
China, expected to rely increasingly on coal to satisfy energy demand for its growing economy, will overtake the U.S. in 2009 as the biggest emitter of carbon dioxide, the report said.

Coal produces more global warming gases than other energy forms because of its high carbon content. Efforts by European Union nations to limit emissions through a trading regime may be undermined unless other nations, and big coal users the U.S. and China, adopt similar policies.

Coal use is now accelerating, particularly in China and India, as power producers turn away from expensive natural gas, agency Chief Economist Fatih Birol said.

"Any future architecture on climate change will need China on board or it will be ineffective," Mandil said. China and India are "aware of their global responsibilities," he said, adding that western nations need "to convince them" that alternative policies can be adopted without sacrificing economic growth.

The agency was formed in 1974 to coordinate energy policy among the largest industrialized consuming nations in the wake of an Arab oil embargo that left long lines at U.S. gas stations. The report was partly a response to calls from leaders of the Group of Eight at meetings this year and last for advice on alternative energy strategies.

More information:
The IEA's World Energy Outlook website.

IEA: The World Energy Outlook 2006 Maps Out a Cleaner, Cleverer and More Competitive Energy Future - Nov. 7, 2006

Bloomberg: Bigger role for biofuels in transport - Nov. 8, 2006

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Philippine government allocates biofuel funds

Quicknote bioenergy policies
Earlier we reported about the Sino-Philippine cooperation on ethanol and the island state's new legislation on biofuels that was recently approved. Philippine President Gloria Macapagal Arroyo today announced that within this framework, the government is allocating a first series of funds worth 1 billion pesos (€15.7/US$ 20 mio) aimed at achieving energy independence through biofuels. The country currently produces only 14,500 bpd itself, making up its fuel needs by importing 340,000bpd. Biofuels investments are aimed at breaking this oil dependence, which is a heavy burden on the developing country.

The funds are allocated via the state-owned Philippine National Oil Company - Alternative Fuels Corporation (PNOC-AFC) and the National Development Company (NDC) who each contribute and manage half.

Cabinet secretary Ricardo Saludo sketches some aspects of program:
  • investments go into land for marginalized landless farmers, the poorest of the country, who will benefit from the opportunity to grow sugar cane, cassava, maize, soybean and jatropha - biofuel feedstocks.
  • in coordination with the Philippine Forest Council, a special effort will be made on cultivating 'tuba tuba' (a local jatropha variant), that thrives well on degraded land and can reduce erosion and desertification; the projected hectarage of the crop under a first financing round is 700,000 hectares, aimed at supplying oil to a 1 million tonne (50,000 bpd) biodiesel refinery to be operated by the PNOC-AFC
  • the bulk of the biofuel plantations will be located in Mindanao, the country's poorest province, where refineries with a capacity of 60,000 to 240,000 tonnes will be built at the center of growing areas with a hectarage of 30,000 to 120,000 hectares respectively
  • a biofuels terminal and port will be built at an as yet undisclosed location
A 107-hectare experimental tuba-tuba plantation in Magsaysay (Nueva Ecija) managed by the Philippine Forest Council sheds some light on the economics of growing jatropha: even though seed oil yields from current plants are lower than the literature generally assumes (28% instead of 45%), over a period of 10 years a jatropha plantation brings a return of 35 to 40%, and an average income of 38,000 to 40,000 pesos (€596-627/ US$761-801). For the many farmers in Mindanao who earn less than one dollar per day, managing a few hectares of energy crops would thus mean a considerable boost to their income [entry ends here].
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