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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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Friday, February 02, 2007

South African company to produce biomass pellets for exports to Europe

The Coega Industrial Development Zone (IDZ) in Port Elizabeth, South Africa, has announced it has secured 70 million Rand (€7.5/US$9.75 million) to invest in a biomass pellet production project. Eastern Cape Biomass Fuel Pellets will create some 100 jobs during the construction of the plant, which is currently underway, and an additional 3000 jobs for poor rural communities who will help supply the biomass. The company's aim is to supply 10000MT per month of the biofuel pellets to European countries including Scandinavian countries who already have a large domestic forest and wood products industry.

A total of 285 plants globally produce a combined four million tons of biomass pellets per year that are burned either in large power stations in combination with coal, separately in often smaller but more efficient combined heat-and-power plants or in small stoves by individual consumers. The plant in South Africa will be the largest among 285 manufacturers of the renewable fuel product globally. The 120 000 tons per year it aims to produce, are equivalent to roughly 50,000 tons or 350,000 barrels of oil.

Global bioenergy trade
According to a recent EuroBarometer, the use of solid biofuels for power and heat generation is rising rapidly in the EU, with a total consumption of 58.7 million tons of oil equivalent in 2005, a marked increase over previous years (earlier post).

The fact that Eastern Cape Biomass Fuel Pellets will export the fuels over such a long distance, proves the viability of a scenario we have been describing here at the Biopact: that of a large-scale, global trade in bioenergy products, whereby the South profits from its competitive advantages to produce biofuels. Such large-scale bioenergy trade is feasible and can tap into a huge energy potential (earlier post), but most key players in this new industry agree that there is a need for clear sustainability criteria (earlier post). Europe is already building logistical infrastructures to accomodate this new market (earlier post):
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CEO Willie Claassen said 60 direct jobs and about 3 000 indirect jobs “in backward linkages to the Eastern Cape rural areas will be created”. “We are dealing extensively with Amathole District Municipality to secure services for the conversion of raw material, Wild wattle for use in industrial operation,” said Claassen.

The plant will produce biofuel pellets from a diversity of biomass sources:
  • forest residues, sawmill waste, and alien vegetation from the Eastern Cape and part of the Southern Cape
  • scrap wood from the government Working For Water Programme
  • an alien species of tree, called the 'wild wattle', which is usually found in waterways and used by the biofuel industry to make fuel pellets
Claasen said that about 3 000 rural dwellers will supply the industry with the wattle.

Enviro Freight Service, will employ 40 people to move the material between the sources of supply, the factory and the harbour. “Biomass Fuel Pellets has already secured off-take agreements with the Nordic countries to where the product will be transported,” said Claassen.

Production is scheduled to start in July this year with the first export expected in October. The Coega IDZ was chosen as the location for the plant because of the coastal position and the fact that the Eastern Cape is a source of the raw materials that are used to produce the pellets.

Shared ownership by the poor
‘The aspect of creating jobs where they are most needed and the opportunity to design and build a plant from scratch without the constraints of legacy also counted in favour of the Coega IDZ,” said Claassen.

The Eastern Cape Bio Fuel Pellets has set aside 5% of the ownership of its workers and another 5% for rural communities that will provide raw materials. The Industrial development Corporation (IDC) has 10% equity with 30% still under negotiation with black economic empowerment partnership.

Spokesperson for the Coega Development Corporation (CDC) Vuyelwa Qinga-Vika said it was on the right track and would achieve its target of signing 10 investors within the current financial year. She said the Biomass project was the fourth investor to be announced by the CDC after Cerebos, Dynamic Commodities, and Alcan in 2006.


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