<body> -------------------
Contact Us       Consulting       Projects       Our Goals       About Us
home » Archive »
Nature Blog Network

    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.

Creative Commons License

Tuesday, February 20, 2007

Steel price inflates cost of first South African bioethanol plant

Given oil prices of around US$60 per barrel, biofuels have become competitive and, depending on the feedstocks used, some of the green fuels are even considerably cheaper to produce. This explains the feverish and huge investments in the sector. Announcements of the construction of new ethanol and biodiesel plants have almost become a daily affair.

But rising energy prices impact all major industrial sectors, including the energy-intensive steel industry. And to build a biofuel factory, you need lots of this material. South Africa's first major commercial maize ethanol plant which is being built by Ethanol Africa (earlier post), is experiencing the effects of this trend: the price of steel has inflated the construction costs of the Bothaville factory by 25 percent to almost 1 billion Rand (€106.7/US$140.2 million), a shareholder says.

This interesting detail reveals how the production costs of biofuels are ultimately linked to the price of fossil fuels. Because all the inputs needed to make biofuels (such as fertilisers, harvesting and processing equipment and indeed the factories themselves which are made largely from steel), have relied on oil, coal or natural gas as their primary energy source, somewhere during their manufacturing stage. Some have said that this is a weakness of the biofuels industry: they will always depend on fossil fuels as the primary energy in a chain of production.

But green energy advocates of course know that this does not have to be the case. And of all industries, precisely the steel industry proves the point: instead of using costly coal, oil and natural gas to make steel, it has now become commercially interesting to use biofuels instead. In short, you use biofuels to make the steel needed to build a biofuel production plant (or a steel manufacturing plant for that matter...). An EU funded project is taking the idea serious and is looking at 90 million hectares of land in Africa and Latin America to grow biomass crops that will be used as the primary energy source for the production of green steel. The rationale is not merely to reduce greenhouse gases from the energy-intensive steel industry. The rationale has become purely economic: tropical biomass is cheaper than coal and oil (earlier post):
:: :: :: :: :: :: :: :: ::

Moreover, to debunk the argument of those who say biofuels are always dependent on fossil fuels further, the obvious must be stated: the increases in the initial construction costs of the bioethanol plant are obviously one-off costs only. The return on the investment may occur a bit later because of the increased initial costs, but the difference will barely be noticeable. This is why the 25% cost increase has not deterred investors from proceeding with Ethanol Africa's scheme to roll out eight similar ethanol plants in the South Africa's maize belt.

Philip Bouwer, a director of Sterling Waterford and a 50 percent shareholder in Ethanol Africa, said yesterday that in an attempt to cap costs, the firm was re-evaluating its execution approach to the project. Ethanol Africa was considering transferring risk to a managing contractor instead of assuming all the risk itself.

The plant's higher costs were due to rises in steel prices and not contractor quotes, Bouwer said. Assuming an across-the-board cost increase of 25 percent, Ethanol Africa's eight plants will now cost 8.75 billion Rand, up from 7 billion Rand.

Ethanol Africa and Sterling Waterford denied reports implying that construction in Bothaville had stopped due to funding problems. The reports said the firm was assessing its funding options. According to Bouwer, Ethanol Africa was at a "very sensitive stage of negotiations" with strategic investors. Agreement was due by the end of the month.

Martin Jooste, a project manager for Ethanol Africa's roll-out, said the break in construction at the Bothaville plant was because of expected changes to the execution structure, and a decision on whether to opt for dry or wet milling.


Post a Comment

Links to this post:

Create a Link

<< Home