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    Côte d'Ivoire's agriculture minister Amadou Gon has visited the biofuels section of the Salon de l'Agriculture in Paris, one of the largest fairs of its kind. According to his communication office, the minister is looking into drafting a plan for the introduction of biofuels in the West African country. AllAfrica [*French] - March 13, 2007.

    Biofuels and bioenergy producers in Ireland, a country which just recently passed bioenergy legislation, are allocated excise relief for imported biomass. Unison Ireland (subscription req'd). - March 13, 2007.

    EDF Energies Nouvelles, a subsidiary of energy giant Electricité de France, has announced a move into biofuels, by sealing a preliminary agreement with Alcofinance SA of Belgium. Upon completion of a reserved issue of shares for €23 million, EDF Energies Nouvelles will own 25% of a newly formed company housing Belgium-based Alcofinance's ethanol production and distribution activities. Alcofinance's projects are located in the Ghent Bioenergy Valley. BusinessWire - March 13, 2007.

    Fuel Tech, Inc., today announced a demonstration order for its 'Targeted In-Furnace Injection' program, part of a set of technologies aimed at controlling slagging, fouling, corrosion, opacity and acid plume problems in utility scale boilers. The order was placed by an electric generating facility located in Italy, and will be conducted on two biomass units burning a combination of wood chips and olive husks. BusinessWire - March 9, 2007.

    At a biofuels conference ahead of the EU's Summit on energy and climate change, Total's chief of agricultural affairs says building environmentally friendly 'flexible-fuel' cars only cost an additional €200 (US$263) a vehicle and that, overall, ethanol is cheaper than gasoline. MarketWatch - March 8, 2007.

    During a session of Kazakhstan's republican party congress, President Nursultan Nazarbayev announced plans to construct two large ethanol plants with the aim to produce biofuels for exports to Europe. Company 'KazAgro' and the 'akimats' (administrative units) of grain-growing regions will be charged to develop biodiesel, bioethanol and bioproducts. KazInform - March 6, 2007.

    Saab will introduce its BioPower flex-fuel options to its entire 9-3 range, including Sport Sedan, SportCombi and Convertible bodystyles, at the Geneva auto show. GreenCarCongress - March 2, 2007.

    British oil giant BP plans to invest around US$50 million in Indonesia's biofuel industry, using jatropha oil as feedstock. BP will build biofuel plants with an annual capacity of 350,000 tons for which it will need to set up jatropha curcas plantations covering 100,000 hectares of land, to guarantee supply of feedstock, an official said. Antara [*cache] - March 2, 2007.

    The government of Taiwan has decided to increase the acreage dedicated to biofuel crops -- soybean, rape, sunflower, and sweet potato -- from 1,721 hectares in 2006 to 4,550 hectares this year, the Council of Agriculture said. China Post - March 2, 2007.

    Kinder Morgan Energy Partners has announced plans to invest up to €76/US$100 million to expand its terminal facilities to help serve the growing biodiesel market. KMP has entered into long-term agreements with Green Earth Fuels, LLC to build up to 1.3 million barrels of tankage that will handle approximately 8 million barrels of biodiesel production at KMP's terminals on the Houston Ship Channel, the Port of New Orleans and in New York Harbor. PRNewswire - March 1, 2007.

    A project to build a 130 million euro ($172 million) plant to produce 200,000 cubic metres of bioethanol annually was announced by three German groups on Tuesday. The plant will consume about 600,000 tonnes of wheat annually and when operational in the first half of 2009 should provide about a third of Germany's estimated bioethanol requirements. Reuters - Feb. 27, 2007.

    Taiwan's Ministry of Economic Affairs has announced that government vehicles in Taipei City will begin using E3 fuel, composed of 97% gasoline and 3% ethanol, on a trial basis in 2007. Automotive World - Feb. 27, 2007.

    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.

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Friday, December 22, 2006

Ethanol boosts farmland prices in the US

Erupting demand for corn to make ethanol boosted the average price of cropland in Iowa to a record US$3,204 per acre (US$7917 per hectare) in 2006, according to Iowa State University's annual farmland value survey released Tuesday (webcast).

The price (and abundance) of farmland is one of the factors that makes investing in the biofuels industry in the global South so interesting. Compared with land markets in the EU or the US, farmland there is exceptionally competitive. Drawing on our earlier overview of land values in Africa, we recall that prices per hectare in for example Mozambique and Tanzania are estimated to be below US$100 per hectare (earlier post). In the new global energy system that is developing, biomass and land are strategic resources. Just like in the pre-fossil fuel era, control over land once again becomes a key driver of the economy. In this respect, the global South has a strategic advantage over the North.

In Iowa, farmland prices have hit record highs four years in a row. The average price of an acre of land there increased $290, up 10 percent from last year (click map). For the first time since 1941, when Iowa State began the survey, the average price of an acre of Iowa farmland topped $3,000. The higher price of corn and expectations that farmers will plant fewer soybean acres next year led to the rapid run-up in corn and soybean prices during harvest, an extremely unusual occurrence.
We've seen a tremendous spike in corn and soybean prices in the last six weeks, and that has been translated into land prices. I can't remember when it jumped so fast. This is a whole new world we are looking at. We're moving from an era of government farm program payments being the supporter of the land market and moving into the era of ethanol being the supporter. - Michael Duffy, Iowa State Extension economist
One of the effects of the higher land values is that land rental rates also are increasing. That will make it harder for beginning American farmers, who tend to be less financially able to pay higher rental rates:
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"I'm very concerned about what we are seeing for rents," Duffy said. "Gaining access to land is becoming even more difficult for beginning farmers." The record price put the state's 32.6 million acres of farmland at a worth of about $105 billion.

"That's important because it means the overall worth of Iowa farmland owners has increased and their purchasing power has increased," Duffy said. "Iowa is an agricultural state and we should recognize that changes in land values have an impact on the state's economy."

Duffy said for the first time in years, the land survey showed the number of existing farmers buying farmland increased and the number of nonfarmer investors declined.

That's another indication that farmers are becoming more aggressive buyers because of higher crop prices and expectations that ethanol has moved farming into a new era, Duffy said.

Outside investors might have backed away from the farmland market because of potentially higher returns from the stock market and a feeling farmland prices have peaked as an investment, Duffy said.

"Farmers don't buy land as an investment," he said. "They buy land for its value as an asset. There's a different motivation there."

Duffy said the survey showed that farmland prices increased in all of Iowa's 99 counties and exceeded $4,000 an acre in seven counties. Prices topped $1,400 an acre in every county for the first time since Iowa State began conducting the survey in 1941.

More information:
Iowa State University Extension Service: 2006 Iowa Land Value Survey
Iowa State University: Iowa Farmland Value at Record Level for Fourth Year in a Row - Dec. 19, 2006.
Biopact: Land Prices in Africa - Sept. 15, 2006

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China to save 100 million tonnes of coal by boosting biomass for power

China's rapid economic development has been almost entirely fuelled by coal. The country has enough reserves and supplies to allow it to continue to grow its economy. But China's coal industry is under pressure, not only because it is based on old, unsafe mines (which are being closed), but more importantly because the fuel is turning the People's Republic rapidly into the world's biggest polluter. If China continues to burn coal at its current pace, all climate change mitigation efforts by all other industrialised countries combined, would be in vain.

Between 75% and 80% of China's electricity is generated by burning coal. Another 20% comes from large-scale hydropower projects, with most of the rest coming from nuclear stations. In 2006, China consumed some 2.1 billion tons of the dirty fuel. Predictions that assume a 'business-as-usual' scenario suggest that total energy demands will rise to the equivalent of 3.5 billion tons of coal per year by 2020 - which would be a true disaster.

For this reason, finding ways to reduce coal consumption is a top priority for the Chinese government. To achieve this, two major and obvious paths are being investigated: increasing the efficiency of power plants, and substituting coal with cleaner alternatives.

It is within this context that the Chinese government is seriously investing in biomass R&D and in getting green power plants operational as fast as possible. Earlier this week, the country's first self-developed 100% straw-burning power generation project has begun pilot operation in Suqian, in east China's Jiangsu Province, according to the China Energy Conservation Investment Corporation (CECIC). The 248 million yuan (€24/US$31 million) project is expected to burn between 170,000 and 200,000 tons of rice and wheat straw and will generate 132 million Kwh of electricity per year, says Yang Xincheng, general manager of CECIC.

Each year in China, around 140 million tons of straw and crop stalks are burned in the open air on farmers' fields or on nearby highways. The energy contained in this enormous amount of agricultural residues not only goes to waste, the burning biomass also releases vast amounts of carbon dioxide into the atmosphere. By substituting coal with this biomass that is otherwise burned, China can reduce CO2 emissions two times.

By making full use of the resource, China can save the equivalent of 100 million tons of coal, Yang says:
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In the future, dedicated, non-food energy crops might be planted to supply more biomass. The Chinese government has approved the construction of over 30 biomass power plants so far. Some are already being built, others will begin construction soon.

Foreign investments and scientific assistance is focused on biomass projects as well. A consortium of European research institutes, united in the China-EU Bioenergy project, recently announced that it is going to help China with co-firing biomass in coal plants. According to the project leader, precisely because China's economy is growing so fast and because its energy challenges are so great, the country offers enormous possibilities for bioenergy to make a major contribution to improving the global environment.

China-EU Bioenergy will share the results with the European co-firing industry and help companies form technology partnerships with Chinese power stations (earlier post).

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British fund to invest in Brazilian ethanol

Finally, a smart form of investing. Instead of pouring money into uncompetitive, low yielding, low GHG-mitigating biofuels based on crops grown in temperate climates (such as corn or rapeseed), the British fund Clean Energy Brazil (CEB), which raised 100 million pounds this week on the London Stock Exchange, is going to invest directly into Brazil's thriving ethanol industry. The CEB will focus on making Brazilian cane sugar and ethanol mills more efficient, under the motto: "local leadership, international markets, developed world governance". The adage hints at a trend that might define the bioenergy industry of the future: research and local technologies developed by experts from the South find investments from funds from the North, with the aim of creating a global commodity market from which both benefit.

Brazilian ethanol is the world's most efficient, climate friendly, and cheapest biofuel. The energy balance of the green fuel currently varies between 8 and 10 to 1, meaning that for each unit of (fossil) energy you put into planting, harvesting, and processing the crops, you get between 8 and 10 times more energy in return (earlier post). The energy balance of "lobby fuels", such as US corn ethanol, is lower than 1.5. Some even say it's negative.

Brazilian farmers, sugar processors and ethanol producers underwent a rapid learning curve, which lowered the production costs for ethanol by 75% over 25 years (earlier post). But industry analysts and agronomists think this trend is far from over: Brazilian ethanol can become even more efficient and double or even triple its output per hectare, as both processing technologies progress and biotechnological advancements are made (earlier post).

It is within this context that the CEB fund will invest in the world's most competitive biofuel industry:
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Temple Capital Partners along with British consultants Czarnikow, Brazil's Agrop consultants and investment bank Numis Corporation will make up the management of CEB, says CEB Board President Antonio Monteiro de Castro.

"One of the differences is that the know-how of Temple ... will support the companies that will use investments to improve their results," said De Castro, a Brazilian living in London.

CEB is the latest foreign interest to enter Brazil's booming cane-based ethanol industry as the world's search for alternative energy continues in the face of stubbornly high international oil prices.

The company raised 100 million pounds after it opened 100 percent of its capital with an initial public offer on the Alternative Investment Market on Monday. CEB will invest in upgrading existing mills and in new projects in Brazil's cane-rich center-south.

CEB's goal is for its investments to reach an annual crushing capacity of 30 million tonnes by 2012.

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Schmack starts feeding purified biogas into the natural gas grid

Today sees the start of operations at the Pliening biogas plant, one of the largest of its kind in Germany. Following the official approval by inspectors, the facility located near Munich will start feeding refined biogas into the German natural gas grid [*German] on an industrial scale. The project was realised jointly by Schmack Biogas AG, the world's leading biogas plant designer, and planning firm Renewable Energy Systems. Financing has been provided by the Aufwind Schmack Gruppe. E.ON Bayern will be the offtaker of the gas. The €9.8 (US$12.9) million investment marks the completion of the first reference project for feeding biogas into the German grid.

Ulrich Schmack, member of the Managing Board of Schmack Biogas AG, earlier provoked controversy in Germany when he said that locally produced biogas could substitute all Russian natural gas imports by 2030. He said so as a high representative for renewable energies to the German government (earlier post).

On the unique Pliening project, Schmack comments: 'Particularly where large biogas plants are concerned, the future lies in feeding gas into the grid, thereby substituting expensive natural gas imports. This is also reflected in the strong interest in such plants shown by major energy providers and local utilities. We produce biogas from locally available resources and convert it into electrical energy and heat where this can be done most efficiently, particularly through effective recovery of waste heat, which results in optimum energy utilisation.'

Europe's developments on the biogas front go further than using it as a source for the generation of electricity and heat. More and more countries are starting to use the green gas as an automotive fuel (compressed biogas, CBG, used like CNG). The capacity to feed biogas into the grid takes this future sustainable and green mobility paradigm a step further (earlier post, see also Sweden's ambitious biogas project).

The Pliening project's great strategic importance derives from the fact that it represents the first-ever industrial facility capable of refining biogas to natural gas standards within economic parameters. In contrast to normal biogas, which usually has a methane content between 40 and 60 percent, the purified and refined biogas has a methane content of 96 percent, thereby meeting natural gas standards:
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The purification and refining technology is provided by CarboTech Engineering GmbH. Recently acquired by Schmack, this Essen-based company has developed a proprietary gas purification and refining process which is considered to be the industry-leading technology.

Feeding biogas into the natural gas grid - the potential
According to estimates by the Fachverband Biogas e.V. industry association, biogas could substitute as much as 20% of Germany's natural gas consumption. In 2006, the association declared: 'The purification of biogas to natural gas standards and its distribution in the form of biomethane through the existing grid will be key processes driving the biogas technology'. Feeding biogas into the grid allows its full potential to be realised - both in terms of efficiency and local availability. In both regards, biogas enjoys clear advantages over most other renewable energies.

The amendment of the German Energy Industry Act opens the natural gas grids to third-party feeders, which could potentially usher in a development similar to the one seen in the electricity market following the opening of the power grids mandated by the Renewable Energy Sources Act (EEG). Biogas networks are already in place in Scandinavia and in Switzerland. Austria's first pilot plant for feeding biogas into the grid was started up in 2005; this facility was built by Schmack which remains in charge of the technological management.

The Biogas plant in Pliening near Munich produces some 3.9 million cubic metres (137.7 million cf) of biomethane per year, which is equivalent to the annual natural gas consumption of 1,300 4-person households.

Schmack Biogas has so far installed some 160 plants of different sizes with a nominal electrical output of roughly 36 MW. The company's activities focus on the German market. Apart from Germany, Schmack Biogas is currently also interested in the Italian, Dutch and US markets. Schmack Biogas AG has been listed in Deutsche Börse's Official Market / Prime Standard since May 24, 2006.

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The bioeconomy at work: UK finances development of biodegradable plastics for car components

Over the past few years, a lot of effort has gone into the development of efficient, environmently friendly car engines and propulsion technologies. But, as we said earlier, a car itself is still largely made up of products that require a lot of energy to make. These structural components can't be recycled nor do they biodegrade.

To counter this and open the era of oil free, cradle-to-cradle design, the UK announced a research program for the development of super-strong, light-weight plastics made from plant products, which harmlessly biodegrade at the end of their lives. The country's Department of Trade and Industry (DTI) is providing £278,000 (€414,000/US$546,000) funding towards the £777,000 (€1.1/US$1.5 million) "Combine" ("Commingled Biomaterials from Nature") project to develop plastics durable enough for car doors and boat hulls, which are light-weight, but environmentally friendly, led by bio-plastic developer, NetComposites.
Normal plastics have a half-life of thousands of years. The plastics being created in this project will be strong and lightweight, but will be made from plants, which means they'll eventually and be composted into harmless plant products. Lots of hard work has been done to create greener engines for cars, this takes us the next step by creating environmentally friendly plastics for cars and boats. - UK Minister for Science and Innovation, Malcolm Wicks
The project aims to create a new generation of bioplastics combined with natural fibres. Currently, natural fibres are only available as short fibres for injection moulding or as random mats for compression moulding, neither of which offer sufficient strength or stiffness for structural components. Natural fibre yarns are normally twisted which makes impregnation with viscous thermoplastic resins difficult.

In the 2 1/2 year project, hemp and flax fibres will be processed, spun into continuous filaments and woven into high performance fabrics. These will be combined with bio-plastics such as PLA (polylactic acid, made from starches and sugars) and moulded into parts through vacuum bag moulding and compression moulding. Surface treatments will be used to enhance the bonding of the fibres to the resin. Joining and finishing techniques will be developed for the materials and environmental degradation, compostability and recyclability will be assessed:
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Gordon Bishop, Managing Director of NetComposites said: "The Combine project aims to develop high performance plant-derived plastics for structural parts like car doors by using innovative combinations of natural fibres and bio-plastics. It also aims to create products which are biodegradable, for the first time creating structural materials and products from renewable resources."

NetComposites is also leading a second consortium, called FuturePlas, to develop the next generation of stronger, light-weight recyclable plastics, using high-strength plastic fibres inside plastic products. This 2 1/2 year,
£715,000 project will manufacture and test an industrial safety helmet and prototype a car front-end, as lighter bodies for cars increase performance, while reducing fuel consumption. This is also being part funded with a
Technology Programme grant from the DTI of £316,000.

A spin-off company, Aptiform, has already been created to supply components from these new types of plastic materials.

Picture: field of blooming flax plants.

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