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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 27, 2006

EPOBIO project shows how the bioeconomy will transform the future

Think for a moment about what you have done so far today - made a cup of tea, driven to work, sent an e-mail or text?

Each of those activities is dependent on oil, from fuel for transport to the plastic parts of your kettle, car, keyboard and mobile. Development of our high-impact consumer lifestyles is accelerating even as fossil fuel supplies are dwindling, and the environmental impact of their use becomes ever more apparent.

But plants, rather than fossil fuels, can provide our future energy, fuel and a whole range of renewable products. Today an international group of scientists working under the EPOBIO project has released its first series of reports on the endless possibilities of plants. EPOBIO -- "Economic Potential of Sustainable Resources, Bioproducts from Non-food Crops" -- is a major research initiative supported by the European European Commission under the Sixth RTD Framework Programme together with the United States Department of Agriculture.

The renewable revolution

Plants offer a sustainable tool to achieve the renewable revolution. They are 'green factories' using energy from sunlight to make biofuel, bioplastics and a range of other products cheaply and in large quantities. The reports, issued today by the EPOBIO project, present detailed analyses of how plant products and plants themselves can be used to replace products made using oil.
"Two key threats to society are our dependence on finite fossil fuels and climate change. Plants have the potential to provide us with everything now made using petroleum, creating a sustainable society for the future and addressing immediate concerns such as energy costs, security of supply and our impact on the environment." - EPOBIO co-ordinator Professor Dianna Bowles.
The project focuses on three ‘flagship’ areas - biopolymers, plant oils and the use of plant cell walls in biorefining. These areas have been identified as offering the greatest benefit to society which could be achieved in as little as 10-15 years time. The EPOBIO reports combine detailed scientific, technical, economic and environmental analyses of the potential of non-food crops to provide alternative sources of natural rubber, lubricants and industrial feedstocks.

1. Biopolymers, with a primary focus on the need for alternative sources of natural rubber (flagship report: Alternative sources of natural rubber - *.pdf):
  • natural rubber is a strategic commodity, irreplaceable by synthetic alternatives, for many of its applications, e.g. heavy duty tyres for SUVs, trucks and aeroplanes.
  • the incidence of allergic reactions to proteins in natural rubber (latex) is increasing. Natural rubber is used to make protective medical products, posing a potential risk to both patients and medical workers.
  • the rubber tree, Hevea brasiliensis, is at risk from a fungal disease which has already decimated large-scale rubber production in South America.
  • predictions of future shortages in supply.
:: :: :: :: :: :: :: :: :: :: :: ::

2. The potential of using plants as an energy supply (flagship report: Cell wall saccarification - *.pdf):

* biofuels, power, chemicals, materials and fibres can be all made from plants rather than oil in integrated processing systems called biorefineries.
* the use of plant material reduces greenhouse gas emissions while guaranteeing security of supply.
* the plant material and processing method needs to be optimised to increase yield and quality of the end products and reduce energy and chemical inputs.

3. The potential of producing lubricants from plants (flagship report: Production of wax esters in Crambe - *.pdf):

* plant oils have similar structures and properties to mineral oils and can be used in many of the applications now dependent on mineral oils.
* wax esters have excellent properties as lubricants but their use has previously been limited by the high cost of extraction from jojoba seeds.
* the low cost production of wax esters from the non-food oil crop Crambe abyssinica will provide a sustainable supply of lubricants to use in engine, transmission and hydraulic fluids.

The EPOBIO project involves a partnership between experts in plant science, environmental impact assessment, economic and social analysis and combines these strengths to identify the plant-based products which offer greatest benefit to society within the next 10-15 years.

EPOBIO stands for "realising the Economic POtential of sustainable resources - BIOproducts from Non-Food Crops." EPOBIO is an international project to realise the economic potential of plant-derived raw materials and establish the priorities for bioscience research in order to deliver bio-based products for the market place in 10-15 years. The EPOBIO project involves a consortium of 12 European and US partners and is led by the Centre for Novel Agricultural Products at the University of York, UK. The project is funded as part of the European Commission's Sixth Framework Programme, receiving just under £1million, with cooperation from the United States Department of Agriculture.

CNAP, the Centre for Novel Agricultural Products, is a research centre in the Department of Biology at the University of York and was established through a benefaction from the Garfield Weston Foundation and funding from UK Government. The Centre was awarded a Queen's Anniversary Prize for Higher and Further Education in 2006. The aim of CNAP's research is to realise the potential of plant- and microbial-based renewable resources through gene discovery to make products needed by society. CNAP research in plant and microbial sciences is supported by the UK Research Councils, particularly the Biotechnology and Biological Sciences Research Council (BBSRC), as well as the DTI and DEFRA, and funding from European and US organisations.

More information:

EPOBIO overview: Realising the Economic Potential of Sustainable Resources – Bioproducts from Non-food Crops
EPOBIO first reports release.
University of York: Plant potential in the pipeline - Nov. 23, 2006

Article continues

CIRAD beats major sugar cane pest

All renewable energy technologies carry their own specific risks and dangers. In the case of bioenergy and its feedstocks, most of those are related to agro-climatic factors (droughts, pests, plant diseases).

In a breakthrough [*.French], the Centre de coopération internationale en recherche agronomique pour le développement (CIRAD), a major research organisation focusing on agriculture in the South, and the South African Sugar Research Institute (SASRI), have succeeded in winning the fight against one such a risk, namely the African sugar-cane boring moth, a top enemy for phytopathologists.

Eldana saccharina, as the insect is known, is one of the most threatening pests to sugar cane production. With 20,4 million hectares under cultivation, sugar cane is a crop of global importance. Sugarcane is experiencing an unprecedented boom because of its use as an ethanol and biomass feedstock. Smallholders make up around 30% of world production, contributing some 145 million tonnes of sugar, 76% of which is derived from cane.

Sugar cane plantations are attacked by numerous pests, making them fragile, certainly for smallholders who often have limited means for professional integrated pest management. Most of the damages are caused by moths such as the African sugar-cane borer whose caterpillars eath away the cane stems and feed on the sugar and the green biomass. The economic losses are considerable: estimates from the island of Réunion have shown that infested plantations (where 90% of the canes are colonised and 20% perforated by larvae and caterpillars), may lose up to 30 tonnes of biomass per hectare.

Chemical and biological approaches failed
The success of the moth is due to the fact that its larvae and caterpillars live inside the stems and are thus protected against pesticide spraying. Biological approaches (using predators such as fungi or other insects) haven't shown encouraging results either. So the researchers at the CIRAD/SASRI looked at other options and they focused down on identifying the agronomic factors which limit the growth of the pest:
:: :: :: :: :: :: :: :: ::

During three years, from 2004 to 2006, both research organisations launched a vast program in South Africa, one of the world's leading producers. The approach was based on agro-ecological principles, and consisted of inducing water stress on the plant and of increasing the concentration of silica in the plant tissue.

The results of laboratory and greenhouse experiments are encouraging: the introduction of silica shows a great reduction in damages for all cane varieties, with or without water stress. For the very sensitive varieties that were placed under water stress, the damages were even lower, and comparable to pest-resistant sugar cane varieties.

The researchers now estimate that this silica based method may reduce 20 to 30% of the losses in sugar and biomass experienced by the most sensitive varieties. Moreover, the increased amount of silicium does not alter the strength of the stems. No major impacts on the quality of the sugar were observed either.

Silica, a wall against larvae
One hypothesis concerning the active role of soluble silica in the way the plant strengthens its defense system was brought forward: if placed under hyrdo-stress, the lack of water possibly induces modifications both in the concentration and structure of the silica inside the plant tissues. These modifications probably result in the creation of a kind of strong silica wall which the larvae find difficult to break down. However, this wall is produced without modifications to the overall strength of the tissue.

Another hypothesis comes down to the idea that the induced changes reinforce the natural defense mechanisms of the plant, be they of a chemical or physiological nature. These mechanisms still have to be analysed further, which is why CIRAD, in collaboration with the University of Kwazulu Natal have launched a project that will study the role of the silica inside the plant and on its defense system.

The first results of the new approach against the caterpillars and larvae are so promising that they may become the preferred pest-management method in the future. Especially in (South) Africa, there is great interest in the method because many soils on the continent (over 60% in South Africa) are silica-deficient. Moreover, this deficiency can often be found in combination with a lack of water, which increases the risk of infestations.

The researchers hope to take their work out of the laboratory and into the field in 2007, to develop a pest management method based on adding calcium silicate to the soils. After these trials, the method will be made available to agricultural organisations, cane producers associations and individual producers.

Article continues

IFPRI report: biofuels may lift people out of poverty, enhance food security

The International Food Policy Research Institute (IFPRI), the leading organisation analysing food security and related poverty on a global scale, has entered the biofuel debate with an interesting report. The document highlights the challenges and opportunities biofuels can bring to the Global South, and how their production might strengthen the food security of poor farmers and consumers in the developing world. Regular readers of the Biopact will notice that some of the findings in the essay match several points we have been trying to make. The IFPRI report comes at a time when some NGOs are launching appeals against the large-scale production of biofuels in the South. It also shows that the case of many of these NGOs is mired by generalisations that are not very useful in the debate (earlier post).

Food versus fuel
Building on earlier research, the report entitled "The Promises and Challenges of Biofuels for the Poor in Developing Countries" [*.pdf] zooms in on one of the least well understood issues, namely old the food versus fuel debate. Conventional wisdom has it that when crops are grown for fuel, they are not grown for food and so people might go hungry.

In reality, the future of biofuels in the context of world agriculture and the world energy sector is much more complex. Rather than aiming to "predict" such a future, the IFPRI researchers looked into a set of scenarios of alternative policies and their outcomes (using IFPRI's International Model for Policy Analysis of Agricultural Commodities and Trade [IMPACT]) to determine how a scenario of aggressive growth in biofuel production could affect food availability and consumption at global and regional levels. The scenario assumes very rapid growth in demand for bioethanol across all regions and for biodiesel in Europe, together with continued high oil prices and rapid breakthroughs in biofuel technology to support expansion of supply to meet the demand growth, but it holds projected productivity increases for yields at baseline projection levels. It considers major potential feedstock crops for bioethanol (maize, sugarcane, sugar beet, cassava, and wheat) and for biodiesel (various oilseeds plus soybean):
:: :: :: :: :: :: :: :: :: :: :: ::

In this "aggressive biofuel growth" scenario, biofuels account for 10 percent of transport fuel production by 2010, 15 percent by 2015, and 20 percent by 2020 throughout most of the world, except for adjustments in line with other projections for Brazil, the European Union, and the United States. (The projections for biodiesel were limited to Europe, because the EU-15 countries represent almost 90 percent of the world's production volume of biodiesel.)

The researchers also considered the case where second-generation cellulosic conversion technologies come on line for large-scale production by 2015. In this "cellulosic biofuel" scenario, they held the volume of biofuel feedstock demand constant starting in 2015, in order to represent the relaxation in the demand for food-based feedstock crops created by the rise of the new technologies that convert nonfood grasses and forest products. Crop productivity changes are still held to baseline, except for short-term, price-induced input use effects.

Finally, the researchers considered an aggressive biofuel growth scenario that includes, in addition to second-generation technologies, the effect of increased investments in crop technology that would lead to increased productivity over time, in order to better support the expansion of feedstock supply in response to growth in biofuel demand.

The first "aggressive biofuel growth" scenario for large-scale bioethanol and biodiesel production shows significant increases in world prices for the various feedstock crops used (see table). If cassava were to be used aggressively as a feedstock for bioethanol, cassava prices would rise significantly, causing sizable welfare losses to the major consumers of this crop in Sub-Saharan Africa. It should be noted that past experiments with cassava-based biofuels in Brazil were not promising.

The importance of cellulosic biofuel technologies is also shown in the table. If these technologies, which rely on by-products of food and feed production and feedstock produced on nonfood-producing marginal lands, become commercially viable and widely adopted in about a decade, the impact on markets and food systems could be significantly mitigated.

The third scenario illustrates the importance of crop technology innovation at the farm production level and shows a further softening of price impacts. This third scenario, in particular, shows how investments in the biofuel industry and the agricultural sector can be combined to produce a more favorable outcome, which can mitigate the consumer-level impacts. Moreover, this scenario seems the most plausible of the three, as neither national governments nor fuel producers would want to engage in a large-scale expansion of production without the necessary investments in place to ensure a reliable supply of feedstock material at a reasonable cost, both for producers and for consumers of food and feed commodities.

The results show a food-versus-fuel trade-off in cases where innovations and technology investments are largely absent and where trade and subsidies are flawed. The situation changes considerably when technological advances in biofuel and crop production are considered.

Adapted from Mark W. Rosegrant, Siwa Msangi, Timothy Sulser, and Rowena Valmonte-Santos, "Bioenergy and the Global Food Balance," brief in Bioenergy and Agriculture: Promises and Challenges, 2020 Focus 14 (Washington, D.C.: IFPRI, 2006). Mark W. Rosegrant is director of the Environment and Production Technology Division (EPTD) at IFPRI. Siwa Msangi is a postdoctoral fellow and Timothy Sulser and Rowena Valmonte-Santos are research analysts in EPTD at IFPRI.

Biofuels in the South, challenges and promises
In the past several years the changing world energy situation has generated intensive discussion about biofuels, much of it promising a source of environment-friendly energy that would also be a boon to the world's farmers. At the same time skeptics argue that biofuel production will threaten food supplies for the poor and fail to achieve the environmental benefits claimed. Based on the analyses below, we conclude that in order to make a difference in the lives of poor people as both energy producers and consumers, and to make strong environmental and economic contributions, biofuel technology needs further advancement, and investments and policies facilitating agricultural innovation and trade will have to be considered.

One reason that biofuels have achieved such a high place on the global agenda is that demand for energy is rising and is certain to continue to rise in the coming decades. Energy use is predicted to jump in many parts of the developing world, where use of marketed energy has been very low until now. Indeed, some 2 billion people still have little or no access to modern energy.

According to the U.S. Energy Information Administration's 2006 International Energy Outlook, global consumption of marketed energy is projected to rise by 71 percent between 2003 and 2030, from 421 quadrillion British thermal units (Btu) to 722 quadrillion Btu. Three-quarters of the increase will come from developing countries. In fact, the report projects that energy demand in the countries outside the Organization for Economic Cooperation and Development (OECD) will surpass that of the OECD countries in 2015. Much of the increase in demand in developing countries will come from Asia, including China and India, whose fast economic growth and enormous populations put them on track to become large energy consumers.

Given that energy demand is projected to keep rising, that oil supplies are constrained, and that instability in some major oil-producing countries shows no sign of abating, oil prices seem unlikely to fall much in the near future—if ever. With oil prices in 2006 between US$60 and US$70 a barrel and agricultural commodity prices increasing less than prices of other raw materials, biofuels have become competitive with petroleum in many developing countries' farm systems, even with today's technologies. The International Energy Agency projected that biofuels would be competitive with petroleum at petroleum prices of between US$60 and US$100 a barrel. That point has been reached, and markets seem to be internalizing expectations of unstable and perhaps rising future oil prices. The competitiveness of biofuels, however, depends heavily on the relative prices of oil and of agricultural feedstock for biofuels. When the demand for biofuels increases agricultural prices, the competitiveness of biofuels will start to decline, and recent price increases for cereals in 2006 may signal such a trend.

Biofuels include fuel sources that have been used for millennia, like fuelwood and charcoal, as well as newer sources like ethanol, biodiesel, and biogas. These new sources depend on natural vegetation, crops grown specifically for energy, or agricultural or other forms of wastes and residues. Processing makes these biofuels cleaner and more efficient than traditional forms of biofuel, and if they are produced in a way that reduces net carbon emissions, they could contribute to mitigating global climate change.

Ethanol, for instance, can be made from sugars (like sugar beets and sugarcane), grains (like maize and wheat), cellulose (grass or wood), and waste products (like crop waste or municipal waste). Up to 10 percent ethanol can be blended with gasoline and used in standard vehicles, whereas specially made flexible-fuel vehicles can use any proportion of ethanol and gasoline. Ethanol accounts for 40 percent of nondiesel fuel in Brazil, which produces nearly half the world's total production (16.5 billion liters of ethanol in 2005). Biodiesel, which can be blended with petroleum diesel, is made from oilseed crops, as well as from waste oils and greases. Biodiesel production is more land-intensive than ethanol production, and so far represents only a fraction of ethanol production. The European Union accounted for 89 percent of the world's biodiesel production in 2005.

Will Farmers Produce the Energy of the Future?
The growing potential of biofuels appears to create a substantial opportunity for the world's farmers. Can small-scale farmers and poor people in developing countries take advantage of this opportunity?

Energy crops could provide farmers with an important source of demand for their products. About 80 developing countries, for instance, grow and process sugarcane, a high-yielding crop in terms of photosynthesis efficiency that can also be used to produce ethanol. With international sugar prices moving generally downward until recently, partly owing to protectionist sugar policies in some OECD countries, sugarcane production for ethanol has become a more attractive option for developing-country farmers. Other energy crops include maize, soybeans, rapeseed, and oil palm, and many developing countries already grow or could grow these and other potential energy crops.

A modern biofuels industry could also provide developing-country farmers with a use for crop residues like stalks and leaves, which can be converted into ethanol or electricity. Emerging new technologies that convert cellulose to energy might lead to a much higher valuation of "residues," and may in fact make "residues" history in agriculture.

In some cases farmers can grow energy crops on degraded or marginal land not suitable for food production. An oil-bearing crop called Jatropha curcas, for example, produces a seed that can be converted into non-polluting biodiesel. The crop is of special interest because it grows in infertile soil, even in drought conditions, and animals do not graze on it. India has 60 million hectares of waste land, of which it is estimated that half might be used for Jatropha cultivation. The cost of producing biodiesel from Jatropha is just Rs. 20–25 (US$0.43–US$0.54) per liter. The Energy and Resources Institute (TERI) of India announced in February 2006 that it is undertaking a 10-year project, in conjunction with BP, to cultivate 8,000 hectares of wasteland with Jatropha and install the equipment necessary to produce 9 million liters of biodiesel a year. The project will include a complete analysis of the social and environmental impacts of the approach.

Because biofuel production is as labor intensive as agriculture, it may be a boon to rural areas with abundant labor. In Brazil, one study showed that in 1997 the ethanol sector employed about 1 million people. Thirty-five percent of these jobs were temporary harvesting jobs employing many poor migrant laborers from the Northeast, but 65 percent were permanent. Moreover, the number of jobs in manufacturing and other sectors in Brazil created indirectly by the ethanol sector was estimated at 300,000. Many of the jobs created are unskilled, and this situation offers an opportunity for increased income to poor rural people. And small farmers are not left out: some 60,000 small farmers produce about 30 percent of the sugarcane in Brazil (see Box 1 for more information on Brazil's experience with biofuels).

Will crop production for biofuels compete with and drive out food production, thereby increasing food insecurity? This question remains controversial. We conclude that energy crop production does not need to lead to increased food insecurity, for a couple of reasons. First, new ways of combining food production with energy production have been developed. Food crop residues like rice and wheat straw, maize husks, and sugarcane bagasse (a fibrous residue) can be converted into biogas, ethanol, and electricity. In other cases energy crops can be targeted to more marginal lands, while food crops can be grown on more favorable lands. In addition, farmers can rotate food and energy crops. Brazilian farmers are increasingly growing sugarcane in rotation with tomatoes, soya, peanuts, and other food crops. Finally, research can—and must—help enhance overall crop productivity, and this is a prime task for the Consultative Group on International Agricultural Research (CGIAR). (See Box 2 for scenarios of future food and fuel production.)

Second, it is now well understood that food insecurity is a result not simply of a lack of food availability, but poverty. Food-insecure people do not have the income to buy the food that is available. If increased production of biofuels can raise the incomes of small farmers and rural laborers in developing countries, it may in fact improve food security. Still, risks for food security remain, particularly if the biofuel sector is not well managed and if oil price instabilities drive food price instability. Destabilizing oil price fluctuations that translate into food price fluctuations may actually be more worrisome than long-term price effects, as the poor have little capacity to adjust in the short run. Opening up trade opportunities for biofuels can dampen price fluctuations. Thus the effects of biofuel expansion on food security depend heavily on policies related to technology and trade.

What Are the Challenges in Creating a Biofuel Industry That Benefits Small Farmers and Poor People?
The high demand for energy and the apparent enormous potential of biofuels are no guarantee that small farmers and poor people in developing countries will receive the benefits. Creating an industry that helps the neediest people improve their lives and livelihoods will require careful management at all levels. This management includes taking the necessary steps to develop a global market and trade regime with transparent standards for biofuels.

The high demand for energy and the apparent enormous potential of biofuels are no guarantee that small farmers and poor people in developing countries will receive the benefits. Creating an industry that helps the neediest people improve their lives and livelihoods will require careful management at all levels. This management includes taking the necessary steps to develop a global market and trade regime with transparent standards for biofuels.

One of the arguments in favor of biofuels is their potential to serve as an environmentally sustainable source of energy. That added social benefit might even justify some level of subsidy and regulation, given that these external benefits are not internalized by the markets. But several environmental aspects of biofuels require attention.

First, biofuels must be produced in a way that results in an output of energy greater than the amount of energy used to produce them—that is, they should have a highly positive energy balance. Maize ethanol, of which the United States is currently the largest producer, has been controversial because until recently it had a negative energy balance. In 2002, however, the U.S. Department of Agriculture stated that maize ethanol had achieved an energy output-input ratio of 1.34:1, thanks to more efficient cultivation and processing practices. Brazil's large ethanol industry based on sugarcane is well established as a net energy producer.

Second, biofuel production must be managed in a way that substantially reduces greenhouse gases compared with petroleum. Maize ethanol produced in the United States may reduce emissions by 10 to 30 percent compared with petroleum, whereas ethanol produced from sugar or cellulose could reduce them by 90 percent or even more. Farmers can contribute to greenhouse gas reductions by adopting cultivation practices that use less petroleum-based fertilizer and fuel and that sequester more carbon in the soil. The greatest potential for reducing greenhouse gases lies in successfully converting cellulosic and lignocellulosic feedstocks—derived from, for instance, trees, grasses, crop residues, and municipal waste—into ethanol. These feedstocks are, however, more difficult to process than starch or sugar crops. A major R&D effort is needed to develop cellulosic ethanol, which could contribute to a much greater expansion in biofuels without adverse consequences.

There are other challenges as well. Like any innovation, increased production of energy crops has the potential to exacerbate socioeconomic inequalities by concentrating benefits on the well-off. It can lead to deforestation, a loss of biodiversity, and excessive use of fertilizers and pesticides, thereby degrading the land and water that poor people depend on. Policymakers must take care to ensure that biofuel production is managed and regulated in a way that avoids these pitfalls. These risks are speculative at present. With improved access to finance and sound policies for support of cooperation and for contract security, most innovations in agriculture can be scale neutral. Under the assumptions of an aggressive biofuel growth scenario—which is not, it must be noted, a prediction—significant price increases for some food crops could emerge in the long run (135 percent for cassava, 76 percent for oilseeds, and 41 percent for maize by 2020) unless new technologies are developed that increase efficiency and productivity in crop production and biofuel processing (see Box 2). Without technologies to improve productivity, the prices changes would adversely affect poor, net-food-purchasing households and would probably exceed the possible income gains by many small farm households.

In addition, in many low-income developing countries, farmers are unaware of the opportunities presented by biofuel production and thus risk missing out on the potential benefits. Public-private partnerships could help raise awareness of these opportunities among farmers in low-income countries.

To develop a biofuels sector that is sustainable and pro-poor, actors at the international, national, and local levels have crucial roles to play. International institutions must help transfer knowledge and technology on developing an efficient and sustainable biofuels industry to poor countries. The international community must also create a level playing field for trade in biofuels. By subsidizing their domestic agriculture and their biofuels industries, the OECD countries are raising the price of grains and feedstock in their own countries and are distorting the opportunities for biofuel production and trade in developing countries. At the national level, policymakers must take steps to create a well-functioning market for biofuels, to promote investment in associated areas like flexible-fuel vehicles and fueling stations, and to regulate land use in line with socioeconomic and environmental goals. They must also provide farmers who wish to grow energy crops with the same kinds of support needed for other forms of agriculture, such as research and extension services, credit, and infrastructure. Finally, local institutions must participate in designing and managing projects to develop biofuels so that poor people and small farmers can gain benefits as both biofuel producers and consumers.

In response to concerns about energy supplies and prices, a number of countries have set standards or targets for biofuels use. The European Union has set a goal of 5.75 percent of motor fuel use from biofuels by 2010. The United States has mandated the use of 28.4 billion liters of biofuels for transportation by 2012. Brazil will require that all diesel contain 2 percent biodiesel by 2008 and 5 percent by 2013, and Thailand will require 10 percent ethanol in all gasoline starting in 2007. India mandates a 5 percent ethanol blend in nine states, and China is requiring a 10 percent ethanol blend in five provinces. Many other countries are taking similar steps.

As countries move to strengthen their energy security by increasing their use of biofuels, they should also work to ensure poor people's and small farmers' participation in the creation of a more sustainable global energy system. With sound technology and trade policies, win-win solutions—that is, positive outcomes for the poor as well as for energy efficiency—are possible with biofuels in developing countries.

The report was written by Joachim von Braun, director general of IFPRI, and R. K. Pachauri, director general of The Energy and Resources Institute (TERI) in New Delhi, India.

More information:

Joachim von Braun and R. K. Pachauri, The Promises and Challenges of Biofuels for the Poor in Developing Countries [*.pdf], IFPRI, 2006

Peter Hazell, and R. K. Pachauri (eds.). Bioenergy and Agriculture: Promises and Challenges - 2020 Vision Focus 14, IFPRI, 2006.

Biopact: A look at Africa's biofuels potential

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Eyes in the sky: European Space Agency to help fight against deforestation in developing countries

Every year 13 million hectares of rainforest - an area the size of Greece - are cut down releasing millions of tonnes of carbon emissions into the atmosphere. Sometimes, the forest go to make place for destructive biofuel crops such as oil palm and soya. Although tropical deforestation is the second leading cause of global greenhouse gas emissions, there are currently no provisions in the Kyoto Protocol compensating developing countries for limiting tropical deforestation. The European Space Agency (ESA) is now actively contributing to finding solutions to this global problem.

Avoiding deforestation was a hot topic at the two-week long meeting of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Nairobi, Kenya, from 6 to 17 November, with ESA's side event - "Reducing emissions from deforestation in developing countries: can it be measured?" drawing a standing-room-only crowd to hear how a combination of remote sensing and in-situ measurements can help policy makers come up with feasible compensation mechanisms (earlier post on the concept of 'compensated reduction').

The Kyoto Protocol's Clean Development Mechanism (CDM), which enables industrialised countries to offset their greenhouse gas emissions by investing in emission-reducing projects in developing countries, allows emission reduction credits for afforestation and reforestation but not for avoided deforestation. Avoided deforestation prevents greenhouse gases from entering the atmosphere and doing damage, so in principle it is considered a contribution to the reduction of green house gas emissions.

Carbon economics
'The Economics of Climate Change' report, also called the Stern review, compiled by Sir Nicholas Stern for the UK government and released on 30 October 2006, warns the concentration of greenhouse gases in the atmosphere could reach double its pre-industrial level as early as 2035, which would mean a global average temperature rise of over 2°C. The report also stresses that deforestation, which contributes 20 to 25 percent of global carbon dioxide emissions yearly, adds more to global emissions each year than the transport sector.

The Stern review commissioned research by the International Institute for Environment and Development (IIED) that states preventing carbon from deforestation from entering the atmosphere would be relatively cheap if landowners were compensated for not converting their forests to farmland. Currently, landowners can get greater returns from farming than from sustainable forest management. With rising fossil fuel prices and biofuels becoming global commodities, landowners are more tempted than ever to grow energy crops which fetch high prices (earlier post on the World Bank's proposal to create a market for 'forest carbon credits').

Brazil put forth a proposal at this year's UN climate conference calling for developed countries to provide financial incentives to developing countries that voluntarily reduce their emissions from avoiding deforestation. Papua New Guinea and Costa Rica raised the issue in 2005 at the UN climate conference in Montreal, Canada, when their governments, supported by Latin American and African countries, submitted a proposal for the consideration of reducing emissions from deforestation in developing countries (REDD) under the UNFCCC [see official document - *.pdf]:
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The proposal initiated a two-year process of evaluation beginning with negotiations with the Subsidiary Body for Scientific and Technological Advice (SBSTA), which counsels the Conference of Parties (COP) on climate matters. To this end, the UNFCCC secretariat held a workshop, in Rome, Italy, in August 2006 to explore the issue with involved parties, including ESA, and found that while methods for mapping deforestation from satellite images are well established, measuring forest degradation is more challenging and needs more investigations.

Forests and the carbon cycle
Forest plants and soils sequester carbon dioxide through photosynthesis. In just one year, an average tree inhales 12 kilograms of carbon dioxide and exhales enough oxygen for a family of four for a year, according to the UN. When forests are degraded or cleared, their stored carbon is released back into the atmosphere through respiration. In order to measure reduction of emissions from deforestation, it is necessary to detect changes in forest area and density and estimate resulting carbon stock changes, in comparison with a historical reference level or projection.

Eyes in the sky
At its side event, ESA detailed its new activities within the framework of GMES (Global Monitoring for Environment and Security) and the Forest Monitoring project that have been initiated in support of establishing a mechanism for compensating reduced deforestation. The agency explained it has an archive of Earth observation (EO) data dating back to 1990, and that it is preparing for future data provision through its new GMES Sentinel satellites.

Sentinel-2, a superspectral imaging mission for terrestrial applications that is armed with a land-monitoring sensor, will be very useful for monitoring reduced emissions from deforestation in developing countries. ESA's Olivier Arino, Head of Project Section, explained to the crowd that Sentinel-2 would provide continuity with data from the Landsat and Spot satellites and deliver systematic global coverage every five days with a resolution of 10 metres.

ESA also described the project set-up for two case studies in Bolivia and Cameroon, which are designed to help policy makers come up with feasible compensation mechanisms. Gisela Ulloa, Coordinator at the National Clean Development Office and lead negotiator in REDD for Bolivia and Joseph Armathé Amougou from the Ministère de l'Environnement et de la Protection de la Nature of Cameroon both spoke at the ESA side event explaining how the projects will address their country's needs.

The situation in Bolivia alone illustrates the economic payoffs of avoiding deforestation. The South American country lost an average of 270,200 hectares of forest between 2000 and 2005, according to the Food and Agriculture Organisation of the United Nations (FAO). FAO estimates each hectare of Bolivia forest stores an average of 67 metric tonnes of carbon in above-ground biomass, which is released into the atmosphere if cleared. Thus, Bolivia's annual deforestation rate of 270,000 hectares would produce at least 18 million tonnes of carbon emissions per year. Assuming a carbon market rate of €11, the recent price of carbon on the European carbon trading market, Bolivia's avoided deforestation would be equivalent to the value of €737 million per year.

In contrast, the Stern review estimates that if no action is taken the overall costs and risks of climate change will be equivalent to losing at least five percent of global GDP (gross domestic product) each year, now and forever. If a wider range of risks is taken into account, the estimates of damage could rise to 20 percent of global GDP or more, according to the review.

Speaking at ESA's side event, Bernard Schlamadinger of Joanneum Research and Thomas Häusler of GAF explained how changes in land-use and forest will be mapped from EO data, and how the areas of change will be linked to biomass measurements in the field in order to derive change in biomass. The biomass changes and other information including drivers of deforestation will be assimilated into a model to simulate future changes and predict the business-as-usual emissions. Comparing this in the future with new EO data and biomass measurements will give the reduction of the emissions.

In order to be able to do this now, the project would need to assume that we are now in year 2000 and use recent imagery as future data. The project would then consider different possible compensation mechanisms, different choices of definitions of deforestation and degradation, the wearing down of land, and compute what the consequences would be, in terms of compensation, for Bolivia and Cameroon.

Frédéric Achard from the European Commission's Joint Research Centre addressed the side event, saying: "While deforestation can reliably be measured by remote sensing, degradation is more challenging. Methods are available for estimation of biomass changes based on EO and ground measurements, but the level of precision depends on the availability of ground measurements."

Antonio Lumicisi from the Italian Ministry for the Environment, Land and Sea described services providing maps of change in forest and land use and derived biomass changes that are already provided operationally to a number of countries by the GMES Forest Monitoring consortium.

In his closing comments, ESA's Head of Exploitation and Services Division Mark Doherty encouraged side event attendees to express their specific satellite needs so that ESA and other space agencies, as well as industrial contractors, could incorporate these criteria into the designs of future satellites.

As decided at the COP 12 meeting in Nairobi, the UNFCCC will sponsor a second workshop before the next SBSTA session in May 2007 to continue the discussion on avoided deforestation. Results from ESA's Cameroon and Bolivia projects are planned to be presented at the next COP meeting in December 2007.

Photo: 30 May 2006 image of the Xingu River in Brazil was acquired by Envisat's Medium Resolution Imaging Spectrometer (MERIS). It clearly highlights the contrast between the rainforest and sprawling. Credit: ESA.

More information:

ESA and the EU: GMES ('Global Monitoring for Environment and Security')

ESA: GMES/GSE Forest Monitoring

ESA: overview of Earth Observers

ESA: As Montreal Conference considers deforestation issues, ESA presents space solution - 5 December 2005

UN Climate Change Conference - Nairobi, 2006

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WTO rules against EU on GMOs: towards genetically modified energy crops?

Under public pressure, from 1994 to 1999, the EU imposed a ban on imports of genetically modified organisms (GMOs). Soon after, from June 1999 to August 2003, it transformed the ban into a moratorium on GMOs it deemed to be 'unsafe' (see: Europe’s rules on GMOs and the WTO). In a third phase, from 2004 onwards it allowed some selected products in (such as canned GM corn and 'Round-up-Ready' soy), after they had been carefully screened. Highly critical consumers in the EU have always rejected GMOs in food products and continue to do so.

But a World Trade Organisation (WTO) panel, building on an earlier ruling by the international trade body, decided last week that the moratorium was illegal. The European market will have to be opened, to the benefit of exporters from North and South America (90% of GMOs remain cultivated in 4 countries : USA (55%), Argentina (19%), Brazil (10%), Canada (6%)).

Canola and GM energy crops
The ruling not only applies to food products, but to potential biofuel feedstocks as well. Especially the Canadian government applauds the decision, because it allows Canadian canola to find a huge new market. Canola is a trademarked, genetically modified cultivar of rapeseed (the word derives from 'Canadian oil - low acid'), from which rapeseed oil is obtained, a major biofuel feedstock used for the production of biodiesel.

In a press release, International Trade Minister David Emerson says "This ruling will enable Canadian producers to access European markets and effectively market their products." The Canadian government adds that European demand for oilseeds is growing because the EU is promoting green fuels such as biodiesel, which is made from methyl esters extracted from crops like canola.

While the government did not have an immediate assessment of the impact of the ruling, Emerson's press secretary, Jennifer Chiu, said exports of the genetically modified crop provide an indication of the impact of the ban. In 1994, before the ban, Canada exported $425 million of canola to the European Union. After the ban was imposed, exports fell to $1.5 million:
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The EU said it won't appeal the decision. That may be because it wants oilseeds for biodiesel, or because it argues that it changed its policy in 2004, when it allowed modified US canned corn to be sold. "As a result, most of the findings of the panel have become theoretical," EU trade negotiator Raimund Raith told the Associated Press. "There's no basis for claiming that the [EU] is maintaining the moratorium."

The EU initially imposed the ban because of fears about the impact of GMOs on people and the environment. Canada, the US and Argentina fought the move at the WTO, arguing that there was no scientific evidence to stop GMO imports.

Biodiesel is made through a chemical process called transesterification, which separates vegetable oil into methyl esters and glycerin, itself a useful product. Biodiesel, which burns more cleanly than petroleum products, can be used as a fuel by itself, or added to petroleum products.

Third generation biofuels
The question is whether this ruling opens the door to more GM biofuel crops in the future. In principle, many energy crops can be genetically altered and adapted to grow under specific climatic conditions, to resist certain pests and plant diseases or to yield more biomass.

In fact, in Europe there is considerable research into so-called "third generation" biofuels, which involves the creation of crops that are designed in such a way that they can yield specific products during a chosen bioconversion process.

For example, recently the genome of the common poplar was decoded, a first step en route to designer energy crops (earlier post). A biotech laboratory in Ghent, Belgium, which helped crack the genome, already produced a high-yield GM poplar which can be processed into paper and pulp products more easily. Third generation biofuels are just around the corner: by modifying the lignin structure of the woody biomass (the 'hard' parts of the tree), it can be triggered to decompose more easily, allowing for a more efficient conversion into liquid fuels.

In another development, there are some signs the US is trying to develop transgenic cassava which can be grown in the tropics and which will deliver a 'strategic reserve' of starch from which ethanol can be made (earlier post).

No matter how promising or dubious all this may sound, the classic questions on biosafety remain unchanged: the long term environmental effects of introducing such energy crops into the environment are unknown (there's a growing list of genetic contamination 'incidents'); there is no 'reversibility mechanism' in GM agriculture (once crops have been released into the environment, their spread cannot be contained and contamination can occur); and the longterm effects on animal/human consumption are unknown (even though this latter aspect is of lesser importance for energy crops).

The last word on GM energy crops certainly hasn't been said.

More information:

European Commission: Europe’s rules on GMOs and the WTO

Canadian Ministry of Foreign Affairs and International Trade: Canada Applauds WTO Ruling on Genetically Modified Organism Imports - November 22, 2006

Monitoring NGO: Genewatch UK.

Monitoring NGO: GMwatch.

Greenpeace and Genewatch's CM Contamination Register.

Institute for Science in Society (UK): GM Crops Irrelevant for Africa.

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