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    Indian bioprocess engineering firm Praj wins €11/US$14.5 million contract for the construction of the wheat and beet based bio-ethanol plant for Biowanze SA in Belgium, a subsidiary of CropEnergies AG (a Sudzucker Group Company). The plant has an ethanol production capacity of 300,000 tons per year. IndiaPRWire - March 15, 2007.

    Shimadzu Scientific Instruments announced the availability of its new white paper, “Overview of Biofuels and the Analytical Processes Used in their Manufacture.” The paper is available for free download at the company’s website. The paper offers an overview of the rapidly expanding global biofuel market with specific focus on ethanol and biodiesel used in auto transportation. It provides context for these products within the fuel market and explains raw materials and manufacturing. Most important, the paper describes the analytical processes and equipment used for QA testing of raw materials, in-process materials, and end products. BusinessWire - March 15, 2007.

    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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Thursday, March 15, 2007

Brazilian biofuels update

We continue our weekly update on what's happening in Brazil's bioenergy market. Two important stories dominated the headlines, namely the signing of Brazil's ethanol pact with the U.S., and the speed with which a Brazilian agricultural office in Ghana is building South-South cooperation and tech transfer links with African countries. We covered both stories earlier (here and here).

This week saw news about the biofuels mandate in Brazil, about ambitious export goals and trade with Japan, and about a massive €181/US$240 million investment by foreign investors into a Brazilian sugar and ethanol joint-venture that will be building 4 new facilities with a total crushing capacity of 20 million tons per year.

Boosting the ethanol mandate

In Brazil itself, the government is looking at boosting the ethanol mandate to 25%, up from 23% today.

Angelo Bressan, head of the Agriculture Ministry's sugarcane and biofuels department, expects the change to be implemented by May, when Brazil's ethanol mills will be running at full capacity.

Brazil's sugarcane farmers are expected to harvest a record crop this year. Ethanol output may rise to as much as 20 billion liters (5 billion gallons) from about 18 billion liters in the previous crop, Bressan told reporters in Sao Paulo.

Use of the biofuel in Brazil may rise to as much as 15 billion liters this year, from about 14 billion liters last year, he said. The amount may jump to 30 billion liters as early as 2013, Bressan said.

Tripling ethanol exports

Brazil's Agriculture Minister Luis Carlos Guedes Pinto said the country plans to almost triple ethanol exports in the next seven years and will need investments of about €10.1/US$13.4 billion to boost output.

Brazil plans to more than double production of ethanol to 35 billion liters, Guedes said via a translator in an interview with Bloomberg News in Tokyo. Exports may account for as much as 10 billion liters, he said.

According to the minister, President Luiz Inacio Lula da Silva's government is boosting exports of biofuels not only to help the nation expand crops output but also to discourage poor farmers from migrating to cities

Guedes added that Brazil expects to build 89 new ethanol production plants in the next seven years. The nation's sugar cane output may rise to 627 million tons from 427 million tons as a consequence:
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Ethanol for Japan

Japan, under pressure to set out decisive measures and cut emissions of greenhouse gases, will expand use of environmentally friendly fuel and has signed import agreements with Brazil.

In a meeting with Japanese business leaders in Brasilia on March 7, the same minister, Louis Carlos Guedes Pinto, said that the South American nation can ensure supply to Japan should the Asian country mandate gasoline containing 3 percent of the biofuel.

Nippon Oil Corp., Japan's biggest oil refiner, and domestic rivals plan next month to start test-sales of gasoline blended with ethyl tertiary butyl ether, a fuel additive made from crop- produced ethanol and the chemical isobutylene.

Brazil needs to sign medium- and long-term supply contracts with Japan, in order for the South American nation to export ethanol to the Asian country, Guedes said. Before starting exports of the fuel, an ethanol plant project requires a three- year lead time to grow sugarcane for the new plant.

Guedes stressed Japan and Brazil should cooperate and help Southeast Asian countries embark on projects to produce ethanol for automotive fuel, and diversify supply sources of the biofuel in the global market.

Prime Minister Shinzo Abe's government plans to boost the country's ethanol use to 500,000 kiloliters (3.1 million barrels) in 2010, as part of efforts to achieve an emissions reductions target set under the Kyoto Protocol. Under the accord, Japan pledged to cut greenhouse gases 6 percent by 2012 from 1990 levels to help combat climate change.

In fiscal year ended March 31, 2006, Japan emitted 8.1 percent more greenhouse gases including carbon dioxide than it did in 1990, according to the environment ministry.

Guedes then made a three-day visit to Tokyo and met with executives of Itochu Corp., Japan's fourth-largest trading company, to exchange views on ethanol businesses, he said at a press conference after the interview with Bloomberg News, without elaborating.

Itochu and Indonesian partner PT Molindo Raya may start producing ethanol from two proposed plants in the Southeast Asian nation in the second half of next year. The plants in Lampung at the northern tip of Sumatra and Pacitan in East Java province will start production in the third and fourth quarters of 2008, Alhilal Hamdi, head of a government team promoting biofuel, said by telephone yesterday.

Itochu will complete a feasibility study to build ethanol plants in Indonesia and Thailand by the year-end before deciding to go ahead with the projects, spokesman Masahide Kitagawa said on March 12.

Guedes is due to leave Tokyo today, and heads for Jakarta to hold a seminar on biofuel, he said. Earlier this week, the minister had a meeting with Japan's Agriculture Minister Toshikatsu Matsuoka and discussed issues related to bioethanol and livestock trade.

Group invests US$240 million
Private equity firm Carlyle Group and a group of investors agreed on Wednesday to invest €181/US$240 million in a Brazilian ethanol and sugar producer, betting on growing demand for biofuels.

The group, led by Carlyle and private equity firm Riverstone Holdings LLC, will put the funds into Companhia Nacional de Acucar e Alcool (CNAA), a joint venture between sugar and ethanol producer Santa Elisa and Global Foods holding.

Global Foods said in a statement that the Carlyle /Riverstone Renewable Energy Infrastructure Fund pledged $187 million of the total funding. Funding was coordinated by the Dutch ING Bank.

CNAA plans to build at least four sugar and ethanol mills in Minas Gerais and Goias states in Brazil's center-south, Brazil's main sugar-cane producing region. Total cane crushing capacity will be 20 million tonnes a year from 120,000 hectares of plantations.

"It is CNAA's intention to take Santa Elisa's strength as an industry pioneer for the past 70 years to the newer cane-growing areas of Brazil where efficiency gains are still available...," Allan Kahane, a co-founder of Global Foods, said in the statement.

Kahane, a Brazilian, said that CNAA would be supported by Crystalsev, one of Brazil's biggest sugar and ethanol distributors in which Santa Elisa is the main shareholder.

Santa Elisa, controlled by the Biaggi family, owns three mills and was the first to produce fuel ethanol in Brazil in 1975. It is in merger talks with Companhia Vale do Rosario, which was the target of a recent takeover bid by Brazil largest sugar and ethanol producer Cosan.

Global Foods specialises in global preferential trade access for sugar and ethanol.

The Carlyle Group manages $54 billion and Riverstone, a New York-based $8.1 billion, including $800 million in its renewable energy infrastructure fund.


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