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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, December 18, 2006

The bioeconomy at work: oil crisis boosts African sisal industry

Petroleum is the raw material for thousands of the products we use on a daily basis, from our children's toys to our favorite DVD's and our laptops. Higher oil prices means higher manufacturing costs for all these products. On top of this, scientists continuously find new evidence of how damaging to the environment the oil-based goodies really are. They don't degrade well or can't be recycled, which is why they must be burned which results in carbon dioxide emissions and toxic fumes. Or they poison our oceans and end up in the food chain, with unknown consequences for our own health (earlier post).

The bioeconomy offers a sane and environmentally friendly alternative. A large number of products from the petrochemical industry - from plastics and fuels to fertilisers and pesticides - have already found plant and bio-based alternatives (see our quick look at plant-based car parts and our overview of bioplastics and biopolymers). Considerable R&D efforts are underway to stimulate this bright green future, with some of the world's most brilliant scientists working in it.

But it doesn't always take top research to enter the bioeconomy. Sisal farmers in Tanzania are experiencing boom times simply because their product is now being preferred over the oil-based alternative on price grounds.

Industrial fibres
Sisal is a tropical crop that has been cultivated for centuries for its strong, durable fibres. From the 19th century onwards, the plant has spread out over the planet and today it is the second most important fibre crop, after cotton. Sisal yields industrial fibres used in the manufacture of ropes, yarns, geotextiles, luxury articles (such as designer furniture and carpets) and even in car parts. More and more it is being used to replace (cancerogenic) asbestos and fibreglass. Besides the fact that it is biodegradable, sisal's special properties make it attractive for many new applications and products (such as fire-resistant building materials).

In East Africa, the largest production zone, sisal is an estate crop, employing a considerable number of people (in Tanzania alone the industry generates 90,000 jobs). And farmers and plantation owners are now experiencing a boost, because more and more manufacturers are choosing sisal over petroleum-based synthetic fibres, such as nylon:
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J.J. Ngelime, a sisal consultant to Tanzania's Parastatal Sector Reform Commission (PSRC) is quoted by the Dar-Es-Salaam based Tanzania Daily as saying that "In recent months, demand for sisal products by foreign manufacturers has increased. For example, sisal has special use in the manufacturing of Mercedes Benz cars. More than 20kg of sisal products are needed in the manufacture of Mercedes Benz Class C car. In the USA, the manufacturers of lifting cables are now obliged by law to use sisal cores."

He added that "This is a great opportunity for sisal exporters from Tanzania, because sisal fibres from Tanzania have a competitive advantage over those from Mexico, Brazil or China".

The consultant did not give comparative prices because, he said, the situation on the world market was currently in favour of sisal exports from countries like Tanzania. Ngelime continues: "Nylon is a by-product of crude oil. The oil price is steadily increasing and moreover nylon is unfriendly to the environment because it does not decompose easily. The two reasons have led to increased demand for sisal products on the world market".

Tanzania's Minister for Agriculture, Food Security and Cooperatives, Mr Stephen Wassira, said over the weekend that new strategies to increase sisal output in the country are being studied. The government has reviewed its sisal policy in a bid to address issues that are impacting badly against the industry.

Originally there were about 82 sisal estates in Tanzania that were owned by the government, but many of those are being privatized. The leading investor in the country is Mohammed Enterprises Tanzania Limited (METL). The Managing Director of METL, Mr Mohammed Dewji, said his company is aware of the new opportunity available in the industry and is resolved to tap it.

As a result of his investments, Mr Dewji said, METL has become Tanzania's single largest sisal producer, contributing almost twenty per cent to the country's total sisal output. He said METL aims to increase output to 15,000 tonnes at full capacity.

Many tropical crops have different (traditional) purposes and often one single crop can be used for the prodution of both food, fodder, fuel and fibre - the four "F"'s. This makes them particularly interesting as feedstocks for the bioeconomy in its most primitive state. Sisal is no different.

Mr Dewji has understood this and says that his company "is also looking for opportunities to diversify the sisal business in the areas of sisal biogas and sisal pulp for the paper industry".

After all, the harvest and processing of sisal leaves, which contain the fibres, leaves a large amount of unused biomass residue behind. Roughly 5 percent of all harvested and processed biomass is currently converted into useful products. The other 95% make for a potential biofuel feedstock. With high energy prices, the idea of using sisal waste for bioenergy becomes attractive.

In the 1960s, Tanzania was the leading sisal producer in the world with an annual output of 230,000 tonnes. But in the 1970s production started to decline because of a fall in prices, cause by the massive introduction of synthetic, oil-based fibres. Current output in the country stands at 20,000 tonnes with annual revenues of US$17 million. The current target of the Tanzanian government is to increase the output to 50,000 tons by 2015.

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Rapeseed oil used as fuel causes extremely high cancer risk

Some less pleasant news is coming from the Berufsgenossen- schaftliches Forschungsinstitut für Arbeitsmedizin (BGFA) at the Ruhr-University of Bochum, Germany. Scientists at this institute of research for health protection at the workplace have found [*German] that the exhausts of rapeseed oil used as a fuel in internal combustion engines increases cancer risks 10-fold compared to the exhausts from regular diesel or biodiesel.

Rapeseed oil, or canola oil as it is known in leading producer Canada, is a widely used feedstock for the production of biodiesel. But the oil can be used in diesel engines in its pure, cold-pressed form too. More and more large transport firms are switching to using exactly this pure plant oil (PPO), because it is considerably cheaper than biodiesel. Especially in Germany, PPO is used extensively, mainly because a thriving industry developed over the years which converts diesel engines in a very efficient and affordable way to make them run on rapeseed oil.

In a first series of analyses, Dr Jürgen Bünger's research team compared the emissions from burning petroleum diesel, biodiesel and rapeseed PPO in a diesel engine, and their damaging effects on genetic material. These effects are an indirect indicator of the cancer-inducing potential of the toxic fumes. They noted that for both petro-diesel and biodiesel, the cancer-inducing potential was relatively low, whereas that of pure rapeseed oil was 10 times higher. At first, the scientists believed that the high viscosity of the plant oil was to blame for this dramatic result:
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To find out, they carried out similar tests on a type of rapeseed oil that was treated in such a way that its viscosity was lower. The results were surprising: the cancer potential of this type of oil was 30 times higher than that of diesel and biodiesel. "A completely unexpected result", says Dr Jürgen Bünger, "which proves that the viscosity of the oil can not be the determining factor". The scientists are now trying to find the precise causes of the large difference between rapeseed oil and its alternatives in a new project. Because the research is complex but important for public health, engineers, medical scientists and chemists from the BGFA, the University of Göttingen, the Bundesforschungsanstalt für Landwirtschaft (the German agency for agricultural research) and Coburg College have teamed up.

One thing is certain: the use of pure rapeseed oil as a transport fuel is a health hazard to all employees who drive such vehicles on a daily basis and who are exposed to the exhausts. Workplaces where diesel engines fueled by PPO are operated, and that are not well aerated, should be considered to be dangerous as well. In such places, workers are directly exposed to the cancerogenous fumes.

The researchers show that products carrying the 'bio'-label must be carefully screened on their health risks.

We might add that several other types of plant oil are being used in their pure form as a transport fuel and for electricity generation in diesel gensets, most notably jatropha oil. As far as we know, there has been no research into the potential cancer risks associated with the use of this fuel. Jatropha oil is mainly utilised in the developing world, albeit on a small scale.

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Scanning wood

Quicknote bioenergy science
Soon, men and mice won’t be the only beneficiaries of the diagnostic wonders of computerized tomography (CT). US Department of Energy officials say researchers at the Oak Ridge National Laboratory are developing ways to use a computer tomography machine originally designed to scan small laboratory animals to analyze wood, with potential applications in the pulp, paper and nascent bioenergy industries.

Oak Ridge National Laboratory researcher Justin Baba is working to develop analytical tools to determine parameters such as fiber length and arrangement, cell wall thickness and density from CT scans. Those scans could replace more destructive, chemical-dependant, methods of analyzing wood samples that currently compromise the information collection process.

For bioenergy, after some basic measurement standards are established, Baba says the scans will be able to show the cellulosic content of wood, which will help create a cellulose-based biofuel industry. Cellulose forms the primary cell wall of green plants, whereas the secondary wall contains both cellulose and lignin. In the form of wood, lignocellulose is thought to be the most abundant biopolymer on earth. Considerable research and funds are currently being invested in finding ways to convert this abundant material into liquid fuel, via an enzymatic breakdown process (Image: cellulose structure as seen through an electron microscope, credit: Nature) [Entry ends here].
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Going radically carbon-negative: biomass carbon sequestration

Everything the fossil fuel industry does, can and will be used against it. The scientific consensus is that climate change is quickly approaching a 'tipping point' after which there is no stopping it, with dire consequences for the entire planet. Currently existing greenhouse gas mitigation policies and instruments -- from Kyoto and the European carbon market to voluntary and techno-optimist schemes followed by individual US states -- probably do not suffice, unless they are radically strengthened today. With the stellar growth of new carbon and coal-intensive economies like India and China, who pump out enormous quantities of CO2 each year, the prospects do not look good.

Add the recent scientific findings that planting trees as a strategy to mitigate global warming is pointless, and things look even worse. In fact, the scientists warned that such 'feel good' strategies are dangerous, because planting trees outside the tropics could even exacerbate the situation and result in a net warming effect (earlier post and a good overview at the BBC). However, planting trees in the tropics works, because there they help the formation of clouds which reflect sunlight back into the atmosphere (the albedo effect), resulting in a global cooling effect.

Carbon sequestration
So even though current policies, techniques and investments aimed at reducing the amount of carbon that enters the atmosphere are good, they probably do not suffice. However, the fossil fuels industry for its part is working hard to develop technologies that may speed up things. Technologies are in the making to capture carbon dioxide from large point sources such as power plants and to store it away safely instead of releasing it into the atmosphere. Systems for the capturing of CO2 are already commercially available for large CO2 emitters. Storage of CO2, on the other hand, is a relatively untried concept and as yet no power plant operates with a full 'carbon capture and storage' (CCS) system (click to enlarge image).

But CCS technologies are receiving massive R&D funds and they do show a lot of promise. Applied to a modern conventional power plant, they could reduce CO2 emissions by approximately 80-90 % compared to a plant without CCS. Storage of the CO2 is envisaged either in deep geological formations, deep oceans, or in the form of mineral carbonates. Geological formations are currently considered the most promising, and these are estimated to have a storage capacity of at least 2000 Gigatonnes of CO2. The International Panel on Climate Change estimates that the economic potential of CCS could be between 10 % and 55% of the total carbon mitigation effort until year 2100.

The idea: going carbon negative with biofuels
The good thing is that these technologies, designed for fossil fuel plants, can in principle be applied to power plants that burn 100% biomass or biogas. Biomass is already being co-fired with coal in over 150 large plants, and some of those rely entirely on the green feedstock (earlier post). Similarly, large biogas power plants that are fuelled entirely by the green gas, made from dedicated energy crops, are being developed in Europe.

Now if CCS technologies were applied to power plants that are fuelled 100% by biomass or biogas, they would become radically carbon negative. Let us have a closer look at this idea:
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If CCS is applied to a coal or natural gas fired plant, the amount of CO2 pumped into the skies is reduced substantially. But there is still a net-contribution of some 10 to 20%. Impressive, but not enough. All the while, we are approaching the dangerous global warming tipping point. So we must become more radical. We not only have to reduce our emissions; if possible, we should get the excess amount of CO2 that is already present in the atmosphere, out.

In principle, there are no technical barriers to applying CCS technologies to biomass and biogas power plants. Such plants are basically of the same design as ordinary fossil fuel plants.

The difference is in the work done by the fuel that is being used. In 'CCS-biofuel plants' the biomass feedstock used would suck CO2 out of the atmosphere as it grows. When the biomass or biogas is then burned to generate power, we capture and store it. New biomass grown for energy sucks out more CO2 out of the air... and so the cycle would no longer be merely carbon-neutral, but drastically carbon-negative.

This might be one of the most effective and most widely applicable ways of speeding up carbon emission reduction efforts. Why stop at using CCS technologies to reduce the CO2 emissions of coal and natural gas-fired plants, when such plants can be adapted to burn carbon-neutral biofuels the CO2 of which can be sequestered?

Dedicated energy crops could be grown in the tropics in vast quantities, and the biomass exported to modern 'CCS-biofuel plants' in the industrialised and rapidly industrialising economies of this world. Alternatively, biogas can be locally produced from municipal, agricultural or industrial organic waste, or derived from dedicated energy crops (which can also be grown in the developing world).

Geo-engineering the planet
We stress the fact that the biomass to be used in such radically carbon negative systems should be grown in the tropics. It is there that these energy crops yield the greatest global warming reduction effect. In the tropics, energy crops not only store carbon dioxide, they also contribute significantly to the albedo effect.
If enough energy crops are planted, medium-rotation and cyclical harvesting schemes could be envisioned that make optimal use of the albedo effect. The energy crops would be grown not only to store carbon (that will later be sequestered via CCS technologies), they would also be grown to cool the planet by inducing the formation of clouds that reflect sunlight back into the atmosphere.

This is just a very rough, non-scientific idea, that would have to be checked for its merits. But one thing is certain, the sooner CCS-technologies become viable, the sooner we can go radically carbon negative with biomass. We should support the development of CCS technologies, not to free coal and gas of their climate destructive reputation, but because everything the fossil fuel industry does, can and will be used against it.

We think 'biomass carbon sequestration' based on energy crops grown in special zones around the equator, might be a safer and more feasible concept than some of the other 'geo-engineering' ideas that are out there. Because indeed, scientists have begun to think of ways to engineer ourselves out of disaster, if global warming were to reach the irreversible and dangerous tipping point so many are beginning to fear.

Some of their ideas are literally out of this world: shooting millions of tiny mirrors into space which would deflect sunlight and cool the planet; or seeding the oceans with iron particles, so that massive algae blooms would suck carbon out of the atmosphere and store it. More recently, an economist-inventor launched the idea that huge plastic pumps in the oceans could be used to pump up nutrient-rich water from the bottom, which algae would feed on. The algae would then be eaten by salps who excrete dense carbon pellets that sink to the bottom, thus putting atmospheric carbon away. However, the idea is unfeasible, because it would take a huge amount of petroleum to manufacture the vast number of plastic ocean pumps. Another idea is to simulate the effects of a volcanic mega-eruption by pumping sulphur into the atmosphere, which would result in a net cooling effect. These controversial ideas will only be considered more seriously if the disaster is clearly knocking on our door.

In the meantime, we need more realistic alternatives. Our idea of applying CCS-technologies to biomass and biogas-fired power plants may be one such concept.

No other renewable energy system can ever be so carbon-negative as the one we propose. Both wind, solar, nuclear, hydro, wave, tidal and geothermal are all carbon-neutral at best and most often slightly carbon-positive (because energy is used to mine, process and transport the resources used in the manufacture of these technologies, and also during their installation, maintenance and operation.)

Biopact team

Note: even though the above concept is really simple, we haven't found any good references so far to the idea of capturing and sequestring the CO2 emissions from biomass-fuelled power plants, the fuel of which is grown as part of a geo-engineering effort in the tropics. If you have, please let us know.

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Florida, Brazil, IDB launch the Interamerican Ethanol Commission

Jeb Bush, governor of the State of Florida and a staunch advocate of lifting the US tariff on imported ethanol, Roberto Rodrigues, president of Brazil's Superior Council of Agribusiness of FIESP and former Minister of Agriculture, and Luis Alberto Moreno, president of the Inter-American Development Bank (IDB), announced the initiation of the Interamerican Ethanol Commission (official website). Bush, Rodrigues and Moreno will serve as co-chairs of the commission which has as its mission to promote the usage of ethanol in the gasoline pools of the Americas.

'Biopact' for the Western Hemisphere
Bush, Rodrigues, and Moreno discussed the main objectives of the commission, which include:
  • promoting increased ethanol blended fuel use throughout the region;
  • promoting the integration of technical and scientific research efforts across the hemisphere related to the production and distribution of ethanol;
  • determining investment needs in both agriculture and infrastructure to enable a hemispheric wide market for ethanol blended fuel;
  • determining the economic and environmental implications of carbon credits produced by the project;
  • encouraging the development of environmentally sound ethanol operations;
  • recommending a set of actions in order to create an international market for ethanol.
The commission will educate governments and legislatures throughout the hemisphere on ethanol through a series of "road shows." In addition to disseminating information, generating media coverage, and promoting public discussion of the benefits of ethanol, these road shows will secure partnerships from local officials and interested groups in order to expand ethanol usage and production for export.

Former Minister Rodrigues spoke of Brazil's role as a global leader in ethanol technology, production and distribution, pointing out that the country produces approximately 4 billion gallons of ethanol annually.
Brazil's ethanol capacities and technology position the nation to provide leadership throughout the hemisphere. Now, with the partnership of the State of Florida and the establishment of a formal forum of cooperation through the commission, countries throughout the Americas will benefit from the expansion of ethanol usage and production. -- Roberto Rodrigues, president of Brazil's Superior Council of Agribusiness of FIESP
Brazil is Florida's top trading partner, with two-way trade totaling 10.9 billon U.S. dollars in 2005. Governor Bush emphasized the potential role the committee can play in contributing to decreasing U.S. dependence on imported oil by means of diversifying the United States' fuel economy. He stated, "Through this commission, Florida has a great opportunity to be on the forefront of promoting an energy policy that strengthens our national security, stimulates economic development, increases protection for our environment and promotes free trade within the hemisphere."

'Poverty alleviation'
President Moreno's participation in and support for the Interamerican Ethanol Commission reflects his perspective that the commission will serve to spur economic development and to alleviate poverty in the Latin American and Caribbean region.

The three leaders agreed that cooperation on renewable energy has the potential to serve as a uniting force in the Americas, contributing toward economic growth and a cleaner environment. All three alluded to the significant opportunities expanded ethanol production holds for sustainable development and job creation throughout the Western Hemisphere:
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The idea to form this commission grew out of a policy proposal Governor Bush submitted to Washington in April. His "Hemispheric Wide Approach to Ethanol," holds that the United States should adopt a bold initiative to pump 15 billion gallons of ethanol annually into the marketplace by 2015 ("15 by '15") -- nearly 10 percent of current national demand for gasoline and double the amount required by the Energy Policy Act of 2005.

The commission will serve to foster awareness of the benefits of renewable fuels in economies throughout the Americas and contribute toward a framework for a rationalized and viable regional marketplace in ethanol, promoting the policy guidance necessary to spur both foreign and domestic investment in renewable fuel production and infrastructure.

Rodrigues was joined by a distinguished Brazilian delegation that included Linneu Carlos da Costa Lima, Deputy Minister of Production and Agroenergy; Silvio Crestana, President of EMBRAPA; Eduardo de Carvalho, President of UNICA; Luis Custódio Cotta Martins, President of SINDAÇÚCAR - Minas Gerais; and Silas Oliva, Director of Petrobras.

Governor Bush was accompanied by several key board members and staff of Florida FTAA, including Ambassador Charles E. Cobb, Chairman of Florida FTAA; Brian C. Dean, Executive Director of Florida FTAA and the co-chairs of the Florida FTAA Ethanol Advocacy Committee: Jorge L. Arrizurieta, Chair, International Policy Group, Akerman Senterfitt; Dominique Virchaux, Managing Partner, Virchaux & Partners; and Mario Fernandez, President, COFE Properties, LLC.

President Moreno was joined by several key officials from the IDB, including senior staff of the bank's section for Alternative Sources of Energy. Additional attendees included corporate leaders, scientific experts, and other local government leaders.

In addition, the launch featured championship IndyCar driver Vitor Meira, senior IndyCar executives, including Vice President for League Development John Lewis, and the Indy Ethanol Show Car. IndyCar is leading motor-sports into a new era by adopting 100% ethanol as its fuel of choice for the 2007 racing season, which begins at Homestead-Miami Speedway on Saturday March 24. Both IndyCar and its racing partner the Ethanol Promotion and Information Council (EPIC) were honored at the launch with the 2007 Akerman Senterfitt Ethanol Innovator in Sports Award. According to IndyCar executives, "ethanol is less costly, better for the environment, and is a superior octane burner, actually increasing the speed and power the sport demands." Tom Slunecka, Executive Director of EPIC, commented that "the IndyCar Series choice of 100 percent fuel-grade ethanol...sends a message to consumers that performance and environmental responsibility go hand in hand when choosing ethanol-enriched fuel at the pump."

Brazil has been initiating a series of bilateral and multilateral exchanges with countries both in the North and in the Global South, aimed at creating a true commodity market for its ethanol. Such a market has the best chances of surviving when other producers emerge as genuine ethanol exporters. This is why Brazil has initiated technology transfers to Latin American and African countries (see our overview of biofuel agreements in the Global South, in which Brazil features prominently).

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EIA predicts oil price to range between US$50-60 to 2030 - good news for tropical biofuels

Quicknote bioenergy economics
In its latest outlook, the Energy Information Administration (EIA), the US Energy Department's body which makes medium and longterm price predictions for fossil fuels, says it expects the oil price for the coming decades to range between US$50 and US$60 per barrel to 2030. Coal remains relatively unchanged, whereas natural gas follows oil and stays high.

Since the US government relies on these numbers for its decisions on energy policies, they have an effect on potential investments in alternatives, such as bioenergy and biofuels.

These predictions must always be approached with caution. In the past, the EIA has been wrong more often than it has been right. It did not predict the record prices of the past years; when oil approached US$80pb, the EIA's previous predictions had shown a price below US$ 30!

Nothwithstanding the relative value of longterm fossil fuel price predictions, they do have an effect on economic decisions across the world. The bad news is that these high prices will continue to be a burden on the developing world. Economies there are very energy intensive, which means they suffer most under high energy prices.

The good news is that at US$50 some biofuels will easily survive, namely those made in the very Global South where it makes sense to produce and use them. These 'tropical biofuels' are made from feedstocks as diverse as sugarcane, cassava, sorghum, palm oil, grass and tree crops. In Brazil, sugarcane ethanol is currently produced at an oil equivalent barrel price of US$35, whereas biodiesel from oil palm is competitive at around US$ 50 per barrel of oil equivalent.

At the predicted price, first-generation transport biofuels produced in the US/EU require heavy subsidies without which they cannot compete. Biomass-to-liquids technologies are currently not competitive but are undergoing a rapid learning and cost reduction curve, which may lower prices in the medium term. Cellulosic ethanol made from biomass produced in temperate climates won't find it easy either to break even, unless major scientific breakthroughs are achieved in the short term. For other forms of bioenergy, such as biogas and solid biomass for power generation, it is more difficult to say where they stand. Their outlook is moderately influenced by carbon prices, which are expected to be traded on a world market (a US panel of experts recently urged the Bush administration to implement the creation of a carbon market). For the EU, some analysts see carbon prices skyrocket to €80 per ton within a few years, up from current historic lows of €6.70. If this is the case, biofuels used for power generation are set to benefit considerably over fossil fuels.

Finally, the EIA's predictions assume a business as usual scenario that does not take into account the possible peak of world oil production. Even though we do not engage in the Peak Oil debate per se, more and more analysts are convinced that this moment is about to arrive, somewhere in the next decade. If this were to be the case, oil prices would see an unstoppable and steep rise, strengthening the case for biofuels for good [entry ends here].
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