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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, November 13, 2006

Poland threatens to veto EU-Russia energy pact

The longterm viability of the biofuels future depends on a great variety of factors. One of the more important ones is the security of fossil energy supplies. If the energy security brought by oil and gas comes under threat, the political will to promote and invest in renewable biofuels will become stronger. Bioenergy and biofuels - produced locally or imported from the global South - offer a strategy to diversify the portfolio of energy sources, thereby enhancing the security of supplies.

This is why we track energy security issues in the EU. The longterm picture doesn't look good, with increasing tensions over the Union's energy relationship with Russia. The Russian Federation accounts for some 44% of EU gas imports (25% of total consumption) and is the EU's single largest external supplier of oil, standing at 30% of total imports (27% of total consumption). These shares are expected to grow as the EU's North Sea reserves decline.

But with Russia gradually becoming a 'petropolitist' state that doesn't hesitate to use its energy resources as a political weapon (earlier post), it is no surprise to hear that pipeline politics once again dominate EU-Russia relations 10 days before a major energy summit between the two blocks, as Poland threatens to veto the renewal of a 1997 energy agreement with the Kremlin.

EU foreign ministers meeting in Brussels on 13 November will discuss building closer economic ties with Russia but their efforts could face a veto from Warsaw, which wants a tougher line taken with Moscow over energy. A ten-year old Partnership and Cooperation Agreement (PCA) [*.pdf] is being re-negotiated as the EU and Russia prepare to meet for a 24 November summit in Helsinki.

Failure to reach an agreement on the Energy Charter Treaty, which Russia seems to have definitely refused to ratify, has prompted the EU to seek incorporating the Charter's principles into the broader PCA. The principles include granting mutual access to energy markets and minimum guarantees for energy investments and transit.

But Wozniak insists that Russia signs the Transit Protocol of the Energy Charter, which is the most controversial part for Moscow. "We feel very unsafe in terms of energy supplies," Polish Economy Minister Piotr Wozniak told reporters on 10 November:
:: :: :: :: :: :: :: :: ::

On a visit to Moscow on 30 October, Energy Commissioner Andris Piebalgs tried to find common ground. "We understand that the Russian Federation needs the predictability and certainty brought by the EU market as well as the huge new investments that European companies can bring," Piebalgs said. "The EU, on the other hand, needs the transparency and certainty that those investments will be made."

"There is a need for a level playing field in terms of market access and access to infrastructure, including non-discriminatory third-party access to pipelines in both Russia and the EU," Piebalgs added.

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Scientists cautious about CO2 burial under sea, compare problem to that of nuclear waste

Plans to bury greenhouse gases under the sea should only be an emergency solution and guarantees must be sought that deposits are safely contained for thousands of years, German scientists say, comparing the time-scales needed to envision sequestration of the climate threatening waste-product to those of nuclear waste.

Presenting a report at a major U.N. climate meeting, the German Advisory Council on Global Change (WGBU) said storage of carbon dioxide under the seabed should only be used while developing better options to fight global warming.

"It is these superior options that particularly require political support, innovation and the employment of scarce resources," it said in the report. "Storing CO2 under the sea floor can only be an emergency solution for a transitional period," WGBU said.

"Permits for such measures should only be granted if they meet strict criteria ...(on) technical safety and above all the permanence of storage and its low environmental impact."

Earlier, American scientists carried out an actual carbon sequestration experiment and injected CO2 into a depleted oil field. They observed that the gas caused the minerals underground to dissolve, raising fresh doubts about carbon capture and storage technologies as a viable solution to global warming (earlier post).

The world's only commercial gas platform separating CO2 and reinjecting it under the seabed is operated in the North Sea by Norway's oil and gas group Statoil. Other projects are under way in nations including Canada and Algeria:
:: :: :: :: :: :: :: :: ::

Statoil's Sleipner platform has buried about one million tons of CO2 a year since 1996 in the Utsira reservoir, some 1,000 meters (3,280 ft) below the seabed. The carbon dioxide-free gas is piped to Norway and Europe for sale.

Statoil, Norway's biggest firm, has said it would like to be paid to bury CO2 produced by heavy industry in European countries that want to cut their emissions of greenhouse gases.

But WBGU said only part of the CO2 stored under the sea should be counted as prevented emissions when drawing up international climate policy.

"This is necessary in order to take the risk of leakage into account. Specific liability rules also need to be established," it said.

Presenting the report, WBGU scientist Stefan Rahmstorf said the retention period for CO2 such deposits should be at least 10,000 years. "We are talking in time frames almost like those of nuclear waste," Rahmstorf said.

Statoil says there have been no sign of leaks from Sleipner -- and that natural gas has stayed below ground for millions of years.

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China's growing thirst for biodiesel

Biodiesel generally takes a backseat to ethanol in China (earlier post), but it apparently had show-stealing allure at the 2006 World Biofuels Symposium in Beijing. With a keen eye on the renewable fuel’s proliferation in Europe and the United States, the world’s fastest-growing economic power wants to go big with biodiesel — if it can overcome some serious feedstock constraints.

Although ethanol is the most high-profile renewable transportation fuel in China, the nation is one of the biggest diesel users in the world, consuming approximately 60 million to how it should look: 70 million tons (16.5 billion to 19 billion gallons) per year. Production of biodiesel, however, has not yet caught up with the country’s appetite for diesel. In 2004, China produced only 60,000 tons (16 million gallons) of biodiesel, which is less than 1 percent of the country’s total diesel production in the previous year. The gap between fuel production and consumption is growing, and any country in this situation has a serious energy security dilemma and must diversify its energy supplies.

Feedstock constraints
The Chinese government is encouraging — if not pushing — the production and use of biofuels in order to meet its mounting transportation fuel needs. Its ethanol ambitions are taking flight, but a lack of available plant oils is hindering the proliferation of biodiesel. China doesn’t have enough arable land resources available to produce the crops commonly used to produce biodiesel: soybeans, rapeseed, palm and castor beans, for example.

In fact, China is already the world’s number one importer of vegetable oil, according to Zongbao Zhao, a professor at China’s Dalian Institute of Chemical Physics. Despite this fact, China is making advances:
:: :: :: :: :: :: :: :: ::

Last year, the country increased biodiesel production to somewhere between 100,000 and 200,000 metric tons (30 million and 60 million gallons); under current biofuels development policies, the country is expected to increase its biodiesel production to 2 million tons per year (540 MMgy) by 2010. The federal government of China is expected to release a new implementation plan for the biofuels component of its 2006-’10 planning period by the end the year.

With vegetable oils in tight supply, 80 percent of China’s biodiesel is currently made from recycled waste oil from restaurants. Mark Soutter, an analyst for BBI International and an attendee of the 2006 WBS, recalls speaking with a Chinese citizen at the conference who owns and operates a small biodiesel production facility in southern China that uses duck fat as its principal feedstock. Duck fat is easy to obtain and has a low value as a recycled fat because it tends to have an undesireable flavor, Soutter explains.

The country also has successfully used human sewage as a biodiesel feedstock. "China has made some pretty major advances in terms of recycling human sewage into biodiesel," explaining that metro buses have been powered with a fuel derived from the unsavory raw material.

Innovative bioconversion technologies
According to Zhao, the key to China’s biodiesel industry lies with the use of innovative triacylglycerol resources. Zhao and his biomass conversion team have begun looking at the use of microbial oil in place of vegetable oils or animal fats for biodiesel production. In addition, the Huazhong University of Science and Technology is researching the use of lipases—enzymes that catalyze, or initiate, the hydrolysis of monoglycerides, diglycerides and triglycerides to glycerol and fatty acids—to make biodiesel.

Like the work Zhao is undertaking, other novel biodiesel production technologies emerging in China are still in the research and development stages. Thurmond says few, if any, novel processes have been ramped up to commercial scale. “Since it’s such a new market for biodiesel, finding the kind of data that can be useful for forecasts was very difficult, but putting together the argument for the use of biofuels was not,” he says.

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UNCTAD's workshop on jatropha projects kicks off in Accra

Quicknote bioenergy events
The United Nations Conference on Trade and Development (UNCTAD) and the EcoWas Bank for Investment and Development (EBID), which promotes investments in West Africa, are holding a three-day workshop on financing and the socio-economics of jatropha projects with special emphasis on how these fit into the Kyoto Protocol's Clean Development Mechanism (CDM).

The meeting will take place from November 13 to 14 in Accra, Ghana. A field trip to biofuel plantations is planned for the 15th. Its main objectives are:
  • to experience and exchange strategies on innovative financing like structured finance and the CDM, which contribute to the promotion of investments that can support rural development of the whole region, and thus contribute to the realization of the Millennium Development Goals;
  • to streamline all successful initiatives;
  • to identify the role of stakeholders in the development of the biofuel supply chain;
  • to consolidate strategies and adopt a regional approach for the promotion and development of biofuels in Africa.
The workshop has not been publicized and participants join on invitation only. We want to share some of the presentations though, to show our readers the wide range of topics involved in financing and getting jatropha projects off the ground:
:: :: :: :: :: :: :: :: :: ::

- Dr. Victor Agyeman (Director of National Plantations Development Centre, Ghana) speaks about "National Afforestation/Reforestation programme in Ghana and
how it can benefit from the CDM of the Kyoto Protocol"

- Mr. Rajan Paradkar (General Manager ARMACO Consultants, India), makes a presentation on "Biofuels and perspectives for Africa, Learning from the Indian experience and the fast growing biofuels industry in India."

- Onua Amoah (CEO of Anuanom Industrial Bio Products Limited Ghana): "JATROPHA: a catalyst for economic Growth and development in Africa."

- Herr Reinhard Henning (Bagani, Germany), Jatropha as a Tool to Combat Climate Change and Poverty Reduction.

Mr Henning is a bit of a symbol for the 'jatropha community'. Already in the late 1980s he started doing research and implemented projects in West Africa. He has meanwhile become the authority in the field. Mr Henning operates the best Jatropha information resource on the web, with an active and busy forum. Check it out here.

- Mr. Edjare Kerkwijk (Chief Financial Officer/Head Office Asia, BioX Group B.V. Malaysia), "Boosting the chances of success of Jatropha projects: how to secure revenue from carbon credits."

- Mr. William Kojo Agyemang-Bonsu (National Climate Change Coordinator, Environmental Protection Agency, Ghana) "CDM and its Application - from Afforestation & Reforestation, to all stages of the value chain bio diesel production."

- Mr. M.P. Singh, Earthizenz, and Mrs. Geetika Kalha, (Gen. Sec. Village Life Improvement Foundation) "Boosting the chances of success of jatropha and biodiesel
projects while securing revenue from carbon credits: Village empowered project"

- Dr. John K.ofi Agyekumhene (CEO, National Microfinance & Small Loans Office, Ghana), "Supporting the development of Jatropha Farms with Micro finance for job creation, reduction in rural urban drift and wealth creation."

- Mr. T.B. Tall (Director of Policy, ECOWAS BANK, Lome – Togo) "Financing opportunities for the development of Jatropha - Applying structured finance approaches on the back of expected future payment flow."

- Onua Amoah (CEO of Anuanom Industrial Bio Products Limited, Ghana) "Jatropha project in Ghana (How to restore vegetation and the ecosystem along major man made lakes and ways to raise finance)

- P Krishnan Mohandas (Director, Jason Impex Pvt. Ltd, India), "Financing Jatropha Curcas Plantations up to Bio-Fuel Production: Roles of Buyers."

Other topics include:
"Financial tools to promote the development of Jatropha plantations and biofuels."

"Senegal Programme for the Development of Jatropha and biodiesel"

"Mali Programme for the Development of Jatropha Plant and biodiesel, with emphasis on CDM."

"The role of local banks in financing Jatropha and biofuel projects: how to structure finance based on future payment flows."

As the presentations come on-line, we will report back on them.

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Germany's Suedzucker makes massive investment in Chile's biofuels

German company Südzucker, Europe's largest ethanol producer with over 50 sugar factories, announced it is in the process of signing an agreement with the Chilean government to develop biofuels in the Latin American country.

CropEnergies, a subsidiary of Südzucker, opened the Orafti inulin plant earlier this year in Chile. The plant extracts the soluble fiber inulin from chicory for use in foods. The company is now looking to expand its operations in Chile, developing both biodiesel and bioethanol from wheat and sugar beet.

Südzucker’s investment, which is expected to be big, will help President Michelle Bachelet deliver on her election promise to diversify and expand Chile’s energy sources. Bachelet pledged that 15 percent of the nation’s energy should come from alternative, renewable sources by 2010.
“The production space is available. We can increase our current production of 300,000 hectares of wheat to 700,000 hectares.” - Álvaro Rojas, Minister of Agriculture.
Before starting operations in Chile, CropEnergies will have to meet regulatory standards set by the government. In turn, Chile’s government will have to guarantee feedstock supplies, which involves increasing the amount of arable land used for the production of the energy crops.
:: :: :: :: :: :: :: :: :: ::

Based in Zeitz, Germany, CropEnergies operates Europe’s largest bioethanol plant. The company’s predicted turnover for 2006 is US$160 million, which translates into 210,000 cubic meters of bioethanol. Currently using wheat and barley as base products, the company will start production from sugar in 2007.

“With biofuels we can reduce the surplus of agricultural products in Europe,” said CropEneries vicepresident Lutz Guderjahn. “We can ensure work for farmers, comply with environmental law and be less dependent on foreign fuel.”

While Germany is the world’s largest producer of biodiesel with 65 percent of the market, Brazil and the U.S. dominate production of bioethanol with 45 and 44 percent of the market, respectively. In Brazil, all fuels are 25 percent ethanol by law, making it a global leader in the search for eco-friendly energy. Chile could soon look forward to following its lead.

Pressure from soaring oil prices and growing environmental constraints such as global warming are creating momentum for a major international switch from fossil fuels to renewable bioenergy fuels derived from sugar cane or sunflower seeds, according to an April report by the United Nations Food and Agriculture Organization (FAO).

“The gradual move away from oil has begun. Over the next 15 to 20 years we may see biofuels providing a full 25 per cent of the world’s energy needs,” said Alexander Müller, the new Assistant Director-General for the FAO’s Sustainable Development Department.

FAO’s interest in bio-energy stems from the positive impact which energy crops are expected to have on rural economies and the opportunity offered countries to diversify their energy sources.

“At the very least it could mean a new lease of life for commodities such as sugar, whose international prices have plummeted,” noted FAO’s Senior Energy Coordinator Gustavo Best.

Global warming and the Kyoto Protocol’s curbs on emissions of carbon dioxide and other greenhouse gasses are among the many pressures pushing for the shift from fossil fuels.

“Oil at more than 70 dollars a barrel makes bio-energy potentially more competitive,” Müller said. “Also, in the last decade global environmental concerns and energy consumption patterns have built up pressure to introduce more renewable energy into national energy plans and to reduce reliance on fossil fuels.”

FAO has highlighted Brazil as an example for the rest of the world. Latin America’s largest country is the world’s biggest producer of bio-ethanol and one million Brazilian cars already run on fuel made from sugar cane, with most new cars powered by “flex fuel” engines. Introduced three years ago they use either gasoline or bioethanol, or any mix of the two.

Europe lags well behind Brazil in bio-ethanol production and consumption, but the European Union (EU) has set itself the target of increasing the share of bio-fuels in transport to eight percent by 2015. However, if oil prices stay high, things could move even faster, FAO noted.

Europe is already the world’s largest producer of bio-diesel, now made from rapeseed, soy or sunflower seeds.

“The beauty of bioenergy is that production can be tailored to local environments and energy needs,” Mr. Best said. “Where there’s land, where there’re farmers, where there’s interest, bioenergy may be the best option. And if we add some sound analysis and good business models, we will get that option right.”

Best stressed that FAO was focusing on the likely benefits for small farmers. One hazard is that large-scale promotion of bio-energy relying on intensive cash-crop monocultures could see the sector dominated by a few agro-energy giants, without any significant gains for small farmers.

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