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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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Tuesday, November 14, 2006

Global forest products industry key to combating climate change and energy insecurity - FAO

The global forest products industry can play a significant role in combating climate change and energy insecurity by optimizing the use of raw materials, increasing efficiency, producing wood-based bioenergy and expanding into bio-refinery products.

This is the conclusion of the recently held International Seminar on Energy and Forest Products Industry, organised by the FAO's Forestry Department in Rome, in which intergovernmental and private sector organisations of the global forest product industry joined forces. Participants stressed that well integrated and carefully balanced energy and forest policies around the globe set the stage for these developments. Governments, industry, institutions and society at large each have a role to play and should work together.

The forest products industry is a major consumer of energy, using 6 percent of total industrial energy use in 2003. But the industry also produces energy, as well as other by-products that can be used for energy generation: biofuels such as solid biomass (wood chips, pellets, briquettes, fibres and residues from the forest products industry - for green electricity generation) or feedstocks for the production of liquid fuels (wood as feedstock for thermochemical or biochemical biomass-to-liquids conversion processes, resulting in renewable and CO2-neutral fuels such as pyrolysis oil or synthetic wood-based biodiesel).

The forest products industry is the only sector that already generates approximately 50 percent of its own energy needs, the majority from renewable carbon-neutral biomass. Energy costs, energy supply and climate change are amongst the core issues impacting on the future of the forest products industry.
The forest products industry can be part of the solution for climate change if committed to technological changes and energy efficiency. It has the exceptional ability to become a net supplier of a range of energy products and it could, in combination with carbon capture and storage, become an important actor in removing carbon dioxide from the atmosphere. - Neil Hirst, Director of Energy Technology of the International Energy Agency (IEA)
Wulf Killmann, Director of Forest Products and Economics at FAO, said that this potential needs to be tapped. "Governments have a key role to play in encouraging industries to use cleaner and more efficient energy technologies and in promoting bio-energy."

The experts came to these conclusions on the basis of a series of highly interesting presentations by a variety of scientists, international institutions, industry players and NGO's:
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The presentations covered a wide range of topics, from (EU) policies and industry efforts on increasing the efficiency of the paper and pulp industry to interesting scenario work on the forestry-based bioenergy sector.

Amongst the latter we find:

Energy Technology Perspectives Scenarios & Strategies to 2050 [*.pdf], Neil Hirst, Energy Technology and R&D Office International Energy Agency
Review of global bioenergy scenarios [*.pdf], W.E. Mabee and J.N. Saddler (Forest Products Biotechnology at UBC)
Forest biorefining and implications forfuture wood energy scenarios [*.pdf], W.E. Mabee, J.N. Saddler, Forest Products Biotechnology at UBC

Understandably, social and environmental sustainability issues ranked high on the conference's agenda as well. Presentations on the tension between sustainability and economic viability included:
The sustainable Forest products industry, carbon and climate change [*.pdf], Mikael Hannus, Stora Enso, World Business Council for Sustainable Development
Wood waste for energy: Lessons learnt from tropical regions [*.pdf], Paul Vantomme, International Tropical Timber Organization (ITTO)
Economic and environmental implications of woodfuel production and competition with other uses [*.pdf], Bernard deGalembert, CEPI
Nature conservation concerns linked to the development of the bioenergy sector –WWF's perspective [*.pdf], László Máthé, Forest and bioenergy officer WWF

Bioenergy's role in the fight against climate change was highlighted in the following presentations:
Greenhouse gas and carbon profile of the global forest products industry [*.pdf], Reid Miner, NCASI - Dr. John Perez-Garcia, University of Washington
Voluntary Efforts against Global Warming and Benchmarks [*.pdf], Hiraku Nihei, Managing Director, Japan Paper Association
Benchmarking Energy Use and GHG Emissions [*.pdf], Tom Roser, Forest Products Association of Canada (FPAC)

Several case-studies from Europe and Japan on the use of wood-based bioenergy were presented as well , as were industry-specific topics on pulp and paper manufacturing and larger economic studies on biofuels, bioenergy, climate change and energy.

Teresa Presas, Chair of the International Council of Forest and Paper Associations (ICFPA) concluded for her sector that "wood and paper products are uniquely renewable and recyclable products that help reducing greenhouse gas emissions by absorbing carbon dioxide from the atmosphere". The industry is committed to innovative energy solutions that meet the challenge of climate change, increase efficiency, reduce reliance on fossil fuel and expand the use of renewable energy sources. The industry believes that fibre from sustainable managed forests makes a positive contribution to the world's future energy supply.

"To achieve this", Presas said, "the industry needs enabling policies that support research and innovation, promote demonstration projects and improve the investment climate, specifically in this sector. Moreover there needs to be a level playing field between energy and non-energy uses of wood, considering that all this has to take place within the boundaries of sustainable forest management."

The World Wide Fund for Nature (WWF) would be glad to see the global forest product industry taking a stronger role in the energy and climate change mitigation field, but also sets some requirements. "WWF considers that sustainable bioenergy has to be part of the global strategy to reduce greenhouse gas emissions, among other measures aiming to reduce the ecological footprint. Credible certification of bioenergy feedstocks with a focus on social and environmental issues - including greenhouse gas calculations - and land use planning are part of the solution to ensure the sustainability of development", said Duncan Pollard, Director of the WWF Forests for Life Programme.

The seminar was jointly organised by the Food and Agriculture Organization of the United Nations (FAO), the International Energy Agency (IEA) and the International Council of Forest and Paper Associations (ICFPA), in collaboration with the UN Economic Commission for Europe (UNECE), the International Tropical Timber Organisation (ITTO) and the World Business Council for Sustainable Development (WBCSD).

During the meeting, ICFPA, FAO, IEA and WWF agreed to continue working together to apply the unique potential of the forest products sector to mitigating climate change and increasing energy security. The IEA will prepare report back to the G8 with an analysis as part of the Gleneagles Summit Plan of Action and ICFPA will take forward its global CEO leadership statement on energy and climate change in June 2007 in Shanghai.

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Brazilian government works to re-classify ethanol as a global fuel commodity

The development of an export-oriented biofuels and bioenergy industry in the Global South offers a chance to lift millions of people out of poverty and to achieve social and economic development in the poorest countries. A precondition for this to succeed, is that importing countries (US/EU/Japan) lower their unfair trade barriers and subsidies.

Earlier we reported that competitive ethanol made in the developing world is facing all kinds of trade barriers and has to compete with biofuels made in the North that can only surive because of massive subsidies and protectionist measures. Corn-based ethanol or soy-based biodiesel made in the US -- uncompetitive biofuels with a very low energy balance and with virtually no potential to reduce GHG emissions -- would never survive without the hundreds of subsidies they receive today. A recent report by the Global Subsidies Initiative showed that these subsidies for uncompetitive biofuels ('lobby-fuels') cost US taxpayers billions each year (earlier post).

When it comes to unfair trade barriers, the US imposes a lofty 54-cent-per-gallon duty on direct ethanol imports, as well as a 2.5% ad valorum tariff. The EU, expected to be Brazil's top purchaser of ethanol next year, imposes a tariff of €10.2 per every 100 liters for denatured alcohol, and a tariff of €19.2 per 100 liters for undenatured alcohol.

Nobel-prize winning economist Joseph Stiglitz uses precisely this example to show how the West is failing to make a credible case when it comes to building a more fair and balanced world trade regime; the West is blocking a commodity that can bring economic prosperity to millions in the South, Stiglitz argues (earlier post). So biofuels are a crux when it comes to the creation of a new global trade arena. Some people have even gone so far as to suggest that negotiations on the role of biofuels in international trade might be the key to revive the deadlocked WTO Doha Development Round (earlier post). Finally, the chief of the International Energy Agency, Claude Mandil, likewise thinks that the EU and the US must get serious and import biofuels from the South, where their production actually makes sense (earlier post).

Currently, there is a lot of debate on how biofuels should be classified in the future and on what kind of products they really are under the current global trade rules. Are the green fuels and their feedstocks agricultural, industrial or environmental goods? Or a combination of both that warrants a new form of classification? And what kind of mechanisms and negotiation strategies are there to limit importers to impose protectionist measures? A report by the International Food & Agricultural Trade Policy Council (IPC) on international biofuels trade issues -- WTO Disciplines and Biofuels: Opportunities and Constraints in the Creation of a Global Marketplace [*pdf] -- addresses precisely these questions and offers some pointers as to the effects of different forms of classification (earlier post).

Now the Brazilian government itself is getting involved in the debate. Hoping to lower global trade barriers on ethanol, it has set its sights on re-classifying the renewable fuel in the international trade arena as a fuel commodity rather than an agricultural commodity, a spokesman at Brazil's Foreign Ministry confirms:
:: :: :: :: :: :: :: :: :: :: ::

"There have been a series of consultations and discussions in the government about this, and it's in our internal plan," said the spokesman in a phone interview with Dow Jones Newswires. "But it's premature to talk about a schedule for when this might happen." The country's Agricultural, Mines & Energy, Chief of Staff, and Trade ministries are also involved in this discussion, he added.

Brazil - the world's top ethanol exporter as well as its lowest-cost producer - would benefit immensely from lowered trade tariffs on the biofuel. However, the country's ethanol is subject to high import duties in several key trading partners, due in part to a formidable system of tariffs already imposed on agricultural products.

If ethanol were considered an energy commodity, then it could receive the same treatment as petroleum, said Celso Amorim, the country's Foreign Trade Minister last month.

"No one, if it's not for fiscal reasons, and this occurs in few cases, places a tariff on petroleum imports, because that would penalize the whole productive process of the country," he added.

The office of Brazil's Chief of Staff is also a supporter of re-classifying ethanol under the fuel category, according to a report in local business daily Gazeta Mercantil published Monday.

The U.S., the top buyer of Brazilian ethanol this year, imposes a lofty 54-cent-per-gallon duty on direct ethanol imports, as well as a 2.5% ad valorum tariff.

The E.U., expected to be Brazil's top purchaser of ethanol next year, imposes a tariff of 10.2 euros per every 100 liters for denatured alcohol, and a tariff of EUR19.2 per 100 liters for undenatured alcohol. Both types of alcohol can be used for biofuel production.

In the first half of this year, a new bureau of energy was created within the Foreign Ministry to direct Brazil's energy strategies in both the bilateral and multilateral arenas, added the Foreign Ministry spokesman.

Brazil is the world's leading sugar producer and exporter. It is also the world's No. 2 ethanol producer after the U.S.

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Ghana's VP supports African biofuels fund

Ghana's Vice-President Alhaji Alui Mahama has pledged the government's support to efforts and initiatives aimed at creating a regional fund for the development and use of biofuels in place of fossil fuel in Africa.

In a speech read on his behalf by Professor Dominic Fobih, Minister of Lands, Forestry and Mines, at the opening of a two-day 'Regional Workshop on Financing Biofuels and Jathropha Plantation Projects with Special Emphasis on Clean Development Mechanisms' (earlier post), Vice-President Mahama noted that the dependence on fossil energy had burdened the economies of developing countries in Africa, while most of the continent's alternative energy resources remained unexploited. Indeed, a strong body of economic evidence shows the sensitivity of developing country economies to increased energy prices. In order to tackle this burden, 15 African countries recently united to form a "Green OPEC" of sorts, the PANPP (Pays Africains Non-Producteurs de Pétrole) aimed at joining forces for the development of a continent-wide biofuels industry to reduce their dependence on fossil fuels (earlier post).

Maham said even though Africa had a great potential (earlier post) and was well endowed with natural energy resources, investments on the continent for the development of renewable biofuels are still very small and need to be upped quickly. This is where the Biopact wants to be of assistance, by promoting the continent's potential in Europe.

The workshop in Accra is being organized by the United Nations Conference for Trade and Development (UNCTAD) and sponsored by the ECOWAS Bank for Investment and Development (EBID). The workshop would culminate in the creation of a fund for investment into the expansion of jathropha plantations and the development of biofuels in West African states:
:: :: :: :: :: :: :: :: :: ::

Alhaji Aliu said jathropha plantations and their resultant bio energy development would go a long way to reduce the tax burdens that came with fossil fuel importation and consumption in African economies.

"Bio diesel extracted from jathropha could be used in running stationary engines like corn mills, irrigation pumps and cottage industries - the use of biodiesel in houses would reduce harmful carbon emissions that could cause respiratory problems," he said.

In a speech read for Mr Ernest Debrah, Minister of Food and Agriculture, he noted that jathropha oils had an advantage over vegetable oil in terms of health and besides bio-fuels from jathropha would give African economies greater independence from the shocks of constantly fluctuating international crude oil prices.

Mr Abraham Dwumaa Odoom, Deputy Minister of Local Government, said large acreages of jathropha plantation could impact on climate change in a positive way and moreover bio fuel from jathropha would ease the burden on Ghana's hydro and thermal energy sources.

The workshop would streamline all successful initiatives, identify the role of stakeholders in development of the bio-fuel supply chain and consolidate strategies and adopt a regional approach for the promotion and development of bio-fuel in Africa.

Excerpts from a research by the Netherlands-based Fuels from Agriculture in Communal Technology (FACT) Foundation made available to the Ghana News Agency indicated that jathropha plantations had been identified as a major bio-fuel alternative for West African economies.

The research stated that to date, Brazil and Malaysia were world leaders in the cultivation of jathropha, which had several additional benefits, including cure for constipation (seeds) and malaria (leaves), healing for wounds (latex or sap).

It said the jathropha plant, besides being a major source of bio-fuel when processed, also served as an effective form of hedges around gardens, farms and fields to protect crops against roaming animals, as a wind and water shield and to reduce erosion.

The report also noted that an investment into jathropha plantation, especially in Africa promised to reduce unemployment among women because the oil from the seeds was also good for soap making.

"Although Malaysia and Brazil are the biggest investor destinations for the cultivation, production and processing of jathropha, investors will select the African region if production cost in West Africa is lower," the research said.

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Carbon Positive launches major forestry and biofuel project in China

Carbon Positive - a company that develops sustainable agro-forestry and bio-energy projects in non-industrialised countries - announced today that it has secured 266,000 hectares of land in China for reforestation and biofuel crops in Honghe state, Yunnan province, and planting has already begun at the sites.

More than 6,660 hectares of native timber species will be in the ground by the end of February 2007. 2,000 hectares of Jatropha, used for making biodiesel, have also already been planted. Intercropping experiments involving biofuel crops and food crops have been carried out (e.g. jatropha and groundnuts - picture: Pingbian county, one of the degraded land bases that will be reforested for bioenergy). Plans for larger scale planting in 2007 are under development, and the project will be submitted for approval under Kyoto Protocol’s Clean Development Mechanism (CDM).

Research and development is the focus of 2006 and 2007 plantings. Many areas will be addressed, including the suitability of crops for biodiesel production, optimising timber and crop outputs, and maximising carbon credit flows under the CDM.

Carbon Positive is working with Chinese and international partners in the venture. The partnerships bring together experience and relationships in China with Carbon Positive’s ability to manage large-scale agro-forestry projects.

“The venture is very well placed, as Yunnan province offers high growth conditions while China itself has enormous and growing demand for timber and bioenergy,” said Jon Anwyl, chief executive of Carbon Positive:
:: :: :: :: :: :: :: :: :: :: ::

More than half of China’s demand for timber is currently met by imports from countries that lack sound forest management controls. According to WWF China’s wood market, trade and environment 2003 report, China is one of the major destinations for wood that may be illegally harvested or traded.

A native species to China, Nepalese alder, has been chosen for initial planting for its extremely good environmental benefits, local commercial value and short rotation period. Other high-value, short-rotation species will be added in 2007. Production from the Jatropha trees will contribute to China’s current five-year plan to lift the production of biofuel as a substitute for coal.

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Green Star Products signs contract with De Beers to build 90 biodiesel reactors in South Africa

Green Star Products announced that it has signed an agreement with De Beers Fuel Limited of South Africa to build 90 biodiesel reactors.

Each of the biodiesel reactors will be capable of producing 37.8 million liters (10 million gallons) of biodiesel each year for a total production capacity of 3.4 billion liters (900 million gallons) per year when operating at full capacity, which is 4 times greater than the entire U.S. output in 2006.

The 2-ton reactors (picture) will be built by GSPI at their Glenns Ferry Facility in Idaho and delivered over the next 18 months. The first reactor was shipped November 8, 2006 by airfreight to South Africa:
:: :: :: :: :: :: :: :: ::

Mr. Joseph LaStella, President of GSPI, stated that, "Mr. Frik de Beer, President of De Beers Fuel Limited, an industry visionary has successfully assembled an impressive array of Global Warming Reduction Technologies from all over the World, which brings South Africa closer to a totally sustainable society.”

Mr. de Beer’s business model also includes a franchising strategy, developed by associate, Hendy Schoonbee, for independent operators to participate in his plan and has already received financial commitments to build 90 biodiesel plants each at 10-million gallons per year capacity. This said franchising strategy is a first in the world.

Mr. LaStella further stated, “The De Beers biodiesel plant, located in Naboomspruit, approximately 2½ hours from Johannesburg, is currently in operation and will include some very unique features with modifications to upgrade technology. These are:

1) GSPI reactors, which process raw materials into biodiesel in minutes, (versus one to two hours for the rest of the industry) will transform the De Beers plant into a State-of-the-Art Continuous Flow Process to increase efficiency and reduce operating costs.

2) The marriage of the two biodiesel production technologies will allow plants to be constructed at a fraction of the present industry costs and can be built in record time.”

Mr. LaStella further stated, “GSPI has declined many offers to sell its reactors and biodiesel plant technology over these past 10 months waiting for the right Joint Venture opportunity.”

The De Beers' opportunity offers GSPI many advantages such as:

1) Immediate expansion on a grand scale - 90 reactors in 18 months.

2) Intellectual property security of GSPI reactors through franchise licensing.

3) Royalty stream payments to GSPI for each reactor.

4) Further expansion beyond 18 months.

5) R & D opportunities for both companies

Presently, the De Beers plant is now operating at 10,000,000 gallons per year on sunflower seed oil as feedstock and has contracted for additional feedstock for additional plants.

However, the company thinks the final answer for biodiesel feedstock will not be oil crops - it will be algae. For example, soybean produces only 48 gallons of oil per acre per year, canola produces 140 gallons per acre and algae can produce well over 10,000 gallons per acre. This figure has been verified in actual algae field production tests by the US Department of Energy in an 18 year Algae Study Program from 1978 – 1996.

The economics of large-scale algae biofuels
The study the company refers to also concluded that large-scale production of biodiesel from algae is only feasible in open ponds because closed reactors reactors are extremely expensive. The only alternative is open ponds. But field trials in such ponds showed that yields dramatically decline, because CO2 and nutrient feeding is less optimal and algae cultures become unstable. Under these circumstances, yields dropped to levels below those of many ordinary biofuel crops. Open pond systems were deemed economically unfeasible.

The economics of algae biofuel production might change a bit because of the carbon-credits it can generate. It is not clear how big the impact of carbon credits will be on the overall economics of the technology.

Algae consume CO2, a major global warming gas. After consumption of the CO2 the algae produces oil (for biodiesel manufacturing) and oxygen. Therefore, the process of using algae creates renewable, sustainable biofuel and reduces global warming gases to better the environment.

Mr. de Beer has entered into an agreement with Greenfuel Technologies Corporation, and has purchased and removed the MIT bioreactor from Cambridge, Massachusetts and transported it to South Africa. It has been reassembled on the biodiesel plant site in Naboomspruit, South Africa and is now awaiting the arrival of the algae to be inoculated to start production. At the Naboomspruit site construction will soon be underway at the rail spur for a crushing plant to process oil from the planting of sunflowers throughout the region. Mr. de Beer also supports, along with the development of the algae growth technology, the local farming industry that will benefit with the planting of thousands of acres of sunflowers and other feedstock’s for oils to be processed into biodiesel fuel.

Most of the 90 franchised biodiesel plants are located close to electric power plants as well as other CO2 emitters, to utilize their stack emissions (CO2) to feed the algae farms when they switch over feedstock from oil seed crops to algae.

The franchising plan reduces the initial cost of the biodiesel plant significantly for participants. Franchises will only be paying in the range of 10 cents per installed gallon (depending on location and logistics), while the rest of the industry is paying $0.70 to $1.50 per installed gallon – based on National Biodiesel Board’s Chief Engineer, Steve Howell’s survey report published in Render Magazine - February 2005 issue (see www.rendermagazine.com for complete article).

South Africa has huge potential to sell “carbon credits” to European Industries under the European Union (EU) international carbon dioxide emissions trading and market mechanism of the Kyoto Protocol. This protocol comes into force February 16, 2005 and aims to reduce the emission of greenhouse gases linked to global warming according to the source (Reuters). As a developing country, South Africa’s companies and industries have no set Kyoto targets for emission reductions. Under the Clean Development Mechanism (CDM), as long as South Africa can demonstrate they have reduced their own emissions under an approved and verified project, they can sell carbon credits to European companies that exceed their caps through the World Bank.

The De Beers Ltd. franchised plants will be eligible for carbon credits under this CDM program as they come online.

It remains to be seen whether algae biofuel production is economically feasible. There have been several trial projects, but none of them have been scaled up. The US Aquatic Species Program which researched this technology in the 1970s, 80s and 90s concluded that the technology works in closed reactors, but that these are too expensive to be applied on a large scale. Open ponds -- much cheaper -- resulted in disappointing yields, and kept the process economically unviable as well.

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Global forest cover increasing; poverty main cause of deforestation - study

In a major study, scientists have found that global forest cover is increasing, contrary to what many people think. They also confirm convincingly that poverty is the main cause of deforestation and that increasing prosperity results in a net gain in tree cover. This is important news for Biopact, as it tells us that the development of a biofuels and bioenergy industry in the South can be a unique strategy for both fighting poverty and deforestation in the developing world (see below).

A new technique for measuring the state of the world's forests shows the future may not be as bad as previously feared. An international team of researchers, led by Helsinki University's professor Pekka Kaupi, say its Forest Identity study suggests the world could be approaching a "turning point" from deforestation.

The study measures timber volumes, biomass and captured carbon - not just land areas covered by trees. The findings are being published in the US journal Proceedings of the National Academy of Sciences as an open access article (abstract and full article *.pdf).
Previously, the focus was almost exclusively on the size of a forest area. Now, we have included other components, including biomass and the amount of carbon stored. The trend is better than previously thought. We see prospects for an end to deforestation; we do not make a forecast but it is possible. - Professor Kauppi, from the University of Helsinki.
Kaupi says data from the Forest Identity methodology offered a more sophisticated view than previous studies. He said this approach offered a better understanding of the natural resource: "When we look at changes in both area covered and biomass, we can get a more complete picture of the ecosystems." When the technique was applied to data from the UN Food and Agriculture Organisation's (FAO) Global Forest Resources Assessment report, the researchers found that forest stocks had actually expanded over the past 15 years in 22 of the world's 50 most forested nations. They also showed increases in biomass and carbon storage capacity in about half of the 50 countries.

Deforestation strongly correlated to poverty
The data also show that reforestation and deforestation are strongly correlated to prosperity and poverty. Active reforestation efforts started in Europe nearly 100 years ago already. Europe could regenerate its forests, because its agricultural productivity had increased considerably. Economic prosperity led Europe to invest in intensifications in agriculture; high yields and high land producitivity were the result, ultimately leading to much lower pressures on forests. Good agricultural techniques and high productivity meant that less forests had to be converted into farmland. Ultimately, so much prosperity was generated, that active reforestation efforts could begin to be implemented. In China and the US, similar developments and efforts came about much later, but these countries' forest cover has been growing steadily too for several decades.

Not surprisingly, the study reveals that forest area and biomass are still in decline in Brazil and Indonesia, home to some of the world's most important rainforests. The report shows a correlation between a nation's economic growth and "forest transition", in other words, a shift from deforestation to net gains in tree cover. The researchers found that when Gross Domestic Product (GDP) per capita reached $4,600 (£2,400), many nations experienced forest transition and saw an increase in forestry growing stock (volume of useable timber). Professor Kauppi says no nation intentionally destroyed forests, people did it out of necessity:

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"Rural populations, which are poor and growing, have to convert new land to agriculture and subsistence farming," he observed. "So the pressures on the forests ease if people have other job sources. We are not saying that people, because they are wealthier, do not destroy forests but it is a sign that societies have good law enforcement and rural policies."

But there was a risk that a misleading picture was being created by rich nations importing raw timber or wood-based products from poorer nations, rather than destroying their own woodlands. "This is a serious problem," Professor Kauppi said. "It is called 'leakage' or 'exporting ecological impacts' and it exists, unfortunately." But he emphasised that, overall, international trade was not bad: "If agricultural production takes place in highly productive regions, then land elsewhere can be protected or saved."

He hoped the Forest Identity formula would be used as a tool to help governments and policymakers to formulate effective strategies. "For example, you can set goals by analysing the changes in forest area and forest density and then make projections of alternative futures. "You cannot change things overnight. Making promises and goals that are unrealistic is bad; you have to set demanding, yet achievable aims."

Professor Kauppi said he was hopeful for the long-term future of the planet's forests, but warned that appropriate action was essential. "Critically, it is about how people live in rural areas in developing nations," he concluded. "Can their living conditions be improved? If they can, then there is reason to be optimistic."

What this means for biofuels and bioenergy
The study strengthens the case for the development of a biofuels and bioenergy industry in the poorest countries of the Global South, we think. (Let us take an intuitive approach here; the case should be studied more thoroughly by economists and researchers in development economics).

Providing jobs to the rural poor and raising the incomes of subsistence farmers is the priority in efforts to stop deforestation. A well developed biofuels industry is probably the single best opportunity to achieve these aims. As we have showed many times, biofuels production brings jobs to the rural poor.

More importantly, though, in order to increase prosperity in a country, the economic basics, the material infrastructure, has to be favorable. There is a large body of economic evidence which suggests that cheap and abundantly available energy is a sine qua non for economic development.
It is one of the single most important factors for growth. The West has been able to build its entire "modernity" (which equates in this case with an end to deforestation, evidenced by Europe) on the availabilty of cheap petroleum.

Now rising energy prices are a great threat to the economic development of countries in the South. With the ere of cheap oil gone, the risk exists that the global South will no longer develop as fast as would have been possible during the petroleum era. If economic growth slows down and poverty levels increase, forests are the first victims (this is a well-established fact, reconfirmed by the new study). Moreover, development economics have convincingly shown that economic decline or stagnation results in increased population growth rates; that is: the poorer the country, the higher the fertility rate, the more children a women get. More people means more mouths to feed (which equates to more land needed to grow crops) and more biomass needed for energy (in the South this means: more fuelwood, and deforestation). A negative spiral of poverty sets in.

Moreover, poverty greatly affects agricultural productivity. The poorer a country, the lower its land productivity, the greater the pressures on forests.

Economic growth reverses all of these trends. Economic prosperity brings demographic changes that are crucial to the sustainability of our planet: the wealthier a country, the lower its population growth rates. The lower population growth, the lower the pressures on the environment. More prosperity allows investments in intensifications and productivity increases in agriculture. This in turn means less forest has to be converted into farmland. Ultimately this chain of consequences generates a level of prosperity that sets in motion the transition away from deforestation to reforestation.

In this sense, the development of a modern biofuels and bioenergy industry offers a way out for the countries who face rising energy prices and the threats to their economic development which result from this. With biofuels, they can reduce their dependence on costly oil (which prevents economic growth). Many of the poorest countries can even become bioenergy exporters, supplying feedstocks to an international market where prices for the commidity are increasing rapidly.

The income this industry potentially generates -- both on the level of States as well as on the level of individual rural households -- increases chance for economic growth and so ultimately decreases the pressures on fragile ecosystems like rainforests. Put differently, if developing countries do not find a way out of their dependence on ever more expensive energy, their forest ecosystems stand to suffer much more in the future.

No doubt, this is a very complex issue, and our simplistic sketch above will have to be nuanced. But we think there is a growing body of evidence which hints at the fact that the development of a biofuels industry might well be a precondition for efforts to increase the level of prosperity in the Global South. It may ultimately reduce deforestation rates in that part of the world.

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