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    At the 148th Meeting of the OPEC Conference, the oil exporting cartel decided to leave its production level unchanged, sending crude prices spiralling to new records (above $104). OPEC "observed that the market is well-supplied, with current commercial oil stocks standing above their five-year average. The Conference further noted, with concern, that the current price environment does not reflect market fundamentals, as crude oil prices are being strongly influenced by the weakness in the US dollar, rising inflation and significant flow of funds into the commodities market." OPEC - March 5, 2008.

    Kyushu University (Japan) is establishing what it says will be the world’s first graduate program in hydrogen energy technologies. The new master’s program for hydrogen engineering is to be offered at the university’s new Ito campus in Fukuoka Prefecture. Lectures will cover such topics as hydrogen energy and developing the fuel cells needed to convert hydrogen into heat or electricity. Of all the renewable pathways to produce hydrogen, bio-hydrogen based on the gasification of biomass is by far both the most efficient, cost-effective and cleanest. Fuel Cell Works - March 3, 2008.

    An entrepreneur in Ivory Coast has developed a project to establish a network of Miscanthus giganteus farms aimed at producing biomass for use in power generation. In a first phase, the goal is to grow the crop on 200 hectares, after which expansion will start. The project is in an advanced stage, but the entrepreneur still seeks partners and investors. The plantation is to be located in an agro-ecological zone qualified as highly suitable for the grass species. Contact us - March 3, 2008.

    A 7.1MW biomass power plant to be built on the Haiwaiian island of Kaua‘i has received approval from the local Planning Commission. The plant, owned and operated by Green Energy Hawaii, will use albizia trees, a hardy species that grows in poor soil on rainfall alone. The renewable power plant will meet 10 percent of the island's energy needs. Kauai World - February 27, 2008.

    Tasmania's first specialty biodiesel plant has been approved, to start operating as early as July. The Macquarie Oil Company will spend half a million dollars on a specially designed facility in Cressy, in Tasmania's Northern Midlands. The plant will produce more than five million litres of fuel each year for the transport and marine industries. A unique blend of feed stock, including poppy seed, is expected to make it more viable than most operations. ABC Rural - February 25, 2008.

    The 16th European Biomass Conference & Exhibition - From Research to Industry and Markets - will be held from 2nd to 6th June 2008, at the Convention and Exhibition Centre of FeriaValencia, Spain. Early bird fee registration ends 18th April 2008. European Biomass Conference & Exhibition - February 22, 2008.

    'Obesity Facts' – a new multidisciplinary journal for research and therapy published by Karger – was launched today as the official journal of the European Association for the Study of Obesity. The journal publishes articles covering all aspects of obesity, in particular epidemiology, etiology and pathogenesis, treatment, and the prevention of adiposity. As obesity is related to many disease processes, the journal is also dedicated to all topics pertaining to comorbidity and covers psychological and sociocultural aspects as well as influences of nutrition and exercise on body weight. Obesity is one of the world's most pressing health issues, expected to affect 700 million people by 2015. AlphaGalileo - February 21, 2008.

    A bioethanol plant with a capacity of 150 thousand tons per annum is to be constructed in Kuybishev, in the Novosibirsk region. Construction is to begin in 2009 with investments into the project estimated at €200 million. A 'wet' method of production will be used to make, in addition to bioethanol, gluten, fodder yeast and carbon dioxide for industrial use. The complex was developed by the Solev consulting company. FIS: Siberia - February 19, 2008.

    Sarnia-Lambton lands a $15million federal grant for biofuel innovation at the Western Ontario Research and Development Park. The funds come on top of a $10 million provincial grant. The "Bioindustrial Innovation Centre" project competed successfully against 110 other proposals for new research money. London Free Press - February 18, 2008.

    An organisation that has established a large Pongamia pinnata plantation on barren land owned by small & marginal farmers in Andhra Pradesh, India is looking for a biogas and CHP consultant to help research the use of de-oiled cake for the production of biogas. The organisation plans to set up a biogas plant of 20,000 cubic meter capacity and wants to use it for power generation. Contact us - February 15, 2008.

    The Andersons, Inc. and Marathon Oil Corporation today jointly announced ethanol production has begun at their 110-million gallon ethanol plant located in Greenville, Ohio. Along with the 110 million gallons of ethanol, the plant annually will produce 350,000 tons of distillers dried grains, an animal feed ingredient. Marathon Oil - February 14, 2008.

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Saturday, April 28, 2007

Dutch propose biofuels sustainability criteria: NGOs sceptical, developing world says 'green imperialism'

The Netherlands is going to import large quantities of biomass from the South and recognizes that green fuels offer an opportunity for sustainable development. In order to prevent the occurence of possible negative effects on the environment and the communities in biomass producing countries, a Dutch commission has been working on the development of sustainability criteria for biofuels during the past year.

The 'Cramer Commission' recently released its final report [*.pdf/Dutch] with recommendations to the government. Drawing on the report, the Dutch ministers for international aid and for the environment conclude that bioenergy and biofuels for exports, if produced sustainably, offer major chances for development in the South [*Dutch]. Environmentalist and development organisations in the Netherlands think the criteria and the certification mechanisms are not stringent enough. Whereas developing countries for their part call the report and the work by the NGOs an exercise in 'green imperialism'. Clearly, the issue of sustainability criteria evokes a wide range of responses from different stakeholders.

The 'Cramer Criteria' were written in consultation with a consortium of Dutch organisations, including oil major Shell and multinational Unilever, who both oppose the introduction of biofuels, for obvious reasons. Environment Minister Jacqueline Cramer received the report which recommended stringent criteria for the use of biomass materials such as grains, sugar and cellulose, increasingly used to generate power and produce biofuel. The report proposes that Dutch companies who import these feedstocks must prove, via a certifiable track and trace system, that the products comply with the following criteria (for the period between 2007-2010) (some comments by Biopact in italics):
  • 'CO2 balance of the biofuel': the balance is calculated across the entire chain (field to fuel tank/power plant, including CO2 released during transport from the South to the Netherlands). For biofuels used for electricity production, a minimal CO2 reduction of 50% must be obtained; for liquid biofuels a minimal reduction of 30% (this means that Dutch companies cannot import ethanol made from corn as it is currently produced in, for example, the US; nor biodiesel made from rapeseed as it is currently produced in, for example, Canada and China; both these fuels have a CO2 balance that does not meet the 30% reduction target; ironically, none of the biofuels produced domestically in the Netherlands achieve a 30% reduction, but the Cramer Criteria only deal with imported biofuels)
  • 'Food security': there should be no local food scarcity in the location from which the biomass is sourced, nor scarcity of energy, medicines and building materials because of biomass production (this causality criterium - that scarcity of one of these goods was caused because of biomass production - will be extremely difficult to prove, because it requires an entire analysis of the local economy and its trade flows)
  • 'Nature and biodiversity': biomass importing companies must report on the effects of biomass production on biodiversity; there should be no impacts on 'valuable' protected nature reserves and conservation areas (countries in the developing world regularly change the status of protected areas to exploit them economically; it is of course their sovereign right to do so, but the question is: are the Dutch criteria applicable to areas the Dutch themselves consider to be 'valuable' or do they apply to such areas as they are defined by the host country or by international organisations?)
  • 'Welfare and wellbeing': biomass importers must report on the social effects of the biomass they source or produce in the host country; basic local rights must be respected (it will be very difficult to measure social effects of welfare and wellbeing; in principle, it is possible to imagine a scenario in which biomass production has immediate and perceived negative effects on the welfare and wellbeing because of the way it is produced, but increased incomes for local people may negate these and result in positive longterm effects, such as less poverty, better social services, higher incomes; the temporality of these effects is a major problem (they occur only a long time after a project is initiated); moreover, taxes paid to governments by biomass producing companies are invested in the welfare of the people of the country as a whole, making it extremely difficult to measure these macro-economic impacts)
  • 'Labor': labor conditions conform to local laws, workers must have the right to organise themselves in a union (these are standard ILO criteria to which all companies doing business in the South should adhere)
  • 'Environmental care': biomass producing companies must abide by all local environmental laws with regard to pollution, noise, odor and emissions control and fertiliser management ("compliance with US GMO laws" was removed from the final text because it would have implied that genetically modified bioenergy crops are allowed)
  • 'Soil quality and nutrient balances': all biomass producers must comply with local regulations dealing with the preservation of soil quality; moreover, they may not contribute to soil erosion and must even improve the quality of soils (these criteria are more stringent that those applied to agriculture in the EU or the US)
  • 'Water quality' : all biomass producers must comply with local laws regarding water quality
From the year 2010 onwards, some of the criteria will be sharpened. Similar efforts to craft a set of social and environmental sustainability rules for biofuels were recently proposed by researchers from the University of California, Berkeley (earlier post). Meanwhile, in Brazil, a "Social Fuel Seal" has already become law, guaranteeing that biodiesel is produced in a way that benefits poor farmers and their families (see our in-depth look at this system).

Developing world's position: 'Green imperialism'
Some in the developing world describe a system of criteria imposed by the West as an exercise in 'green imperialism', and say the rules constitute yet another series of non-tariff barriers to trade that may be disputed at the World Trade Organisation. Dutch Minister for international aid and development Bert Koenders has recognised this fact and says he is working towards creating a negotiation framework with developing countries.

According to countries in the South, the wealthy North -- whose industrialisation was entirely based on the use of abundant and cheap but polluting fossil fuels which they burned for over two centuries and on a model that has resulted in total deforestation (96% in the US/90% in Europe) and the use of a heavily subsidised agronomic production model that relies on the mass use of fertilizers and pesticides -- is now imposing rules on poor countries telling them they cannot deforest nor use their resources to grow fuels that can compete with fossil fuels the reserves of which were entirely used up by the West. Moreover, both the EU and the US already subsidize their own farmers in what is arguably one of the world's biggest injustices, keeping millions of farmers in the developing world in poverty; in this context, the imposition of import criteria on a product for which producers in the South have a natural competitive advantage is perceived as yet another injustice of major proportions:
:: :: :: :: :: :: :: :: :: ::

For this reason, developing nations feel their economic strategies are once again being dictated by the West. Many countries in the South have a large biofuel export potential from which they could derive considerable export revenues, but they have expressed fears that countries in the North will use 'sustainability criteria' as a weapon to negate this opportunity. Imposing criteria on the poor countries without compensating them for the additional costs brought by these criteria will not make much of an impression (earlier post).

Biopact would however advise developing countries with a large biofuel potential to look at such criteria as a tool that may work in their favor. They can retain their sovereignty over the development path they wish to embrace, but can finally force the West to put its money where its mouth is. Deforestation allowed wealthy countries to industrialize rapidly. Added to this is their use of enormous quantities of fossil fuels, which have caused global warming and threaten the viability of the planet. Obviously, developing countries want to grow economically and industrialize too, just like the rich nations; if the West wants to ensure that this development is not based on its own mistakes (mass-deforestation, massive use of fossil fuels), then it should simply pay the South to embrace a more sustainable model. If it doesn't, the West has no legitimacy whatsoever and developing countries have a strong case to bring before the courts, proving that the sustainability criteria imposed on them are non-tarrif barriers to trade and hence to development. Alternativelty, they can sell their biofuels to rapidly developing countries like China, who do not impose such criteria.

In short, the burden of the sustainability model the West wants to see implemented in poor countries (but never applied to itself), is not on the South, it is entirely on consumers and governments in the North, whose economies were founded on mass-deforestation and the mass-use of climate destructive fuels.

Complicating the picture is the fact that reserves of the handiest of all energy sources - petroleum - is depleting rapidly ('Peak Oil'). This results in ever rising oil prices. Developing countries can not benefit from the same cheap and abundant energy source that has allowed the West to become what it is today, namely a highly mobile, highly industrialised region that dominates global trade. Biofuels offer a chance to use liquid fuels, which are so crucial to economic growth, even if oil production is declining. But in order to off-set this missed opportunity, the West has the historic obligation to help countries in the South to make the transition towards new fuels (such as biofuels). If the rich countries want to see this transition happening in a sustainable way, they should, once again, bring up the funds. This much is obvious. Biofuels are not interesting per se because they can be green, they are interesting in the first place because they can compete with costly oil - the vast bulk of which was used up by the West for its development when the resource was still cheap and abundant.

There can be only one conclusion: ensuring that biofuels are produced sustainably is crucial to all of us, in order to conserve the few remaining virgin ecosystems that still exist on this planet. But the ones who should bring up the funds needed to do so are obviously not the countries in the South, who have a sovereign right to develop and to industrialise according to the development path of their choice, but the rich countries in the North.

We therefor urge the Dutch government and the stakeholders in the Netherlands who helped prepare the Cramer Report, to give a clear signal to developing countries with a large biofuels potential, indicating that they will help carry the burden of high fossil fuel prices and that they will massively compensate these countries to slow-down deforestation. If such a signal is not given, developing countries are right in calling the Cramer Report an exercise in 'green imperialism'.

It is very difficult to estimate the scale of the funds needed to successfully implement such compensation mechanisms (also known as 'avoided deforestation'/'compensated reduction' in the case of tropical forests) and to offset the burden of costly fossil fuels. However, there is a considerable body of historic evidence showing the effects of cheap and abundant oil on the capacity of an economy to grow, as well as economic evidence showing how deforestation in the US and Europe fuelled their development. The International Energy Agency as well as most international economic think tanks should be able to calculate how much the North should pay to the South in order for it to refrain from using 'unsustainably' produced, but cheap and abundant biofuels, which are the sole alternative to rapidly depleting oil. The amount will obviously be in the trillions of dollars, because the burden is historic: the West has been using climate destructive but cheap fossil liquid fuels for over 100 years. The world has consumed roughly 1 trillion barrels of oil to date, the vast bulk of it by the West.

The question is: will consumers and governments in the North be prepared to give up a considerable amount of their wealth to fuel development in the South? Given past and failed promises by the West (like the promise to spend 0.7% of its GDP on international aid), the picture does not look good.

The Dutch government's position: chances for poor countries to develop
During the release of the final report, Dutch Ministers Cramer (environment) and Koenders (international aid) stated that biomass and bioenergy offers chances to improve the environment in the developing world and for poor countries to grow economically by exporting green fuels.

Both ministers will now start to craft policies that include the recommendations of the commission. Cramer wants to negotiate rules with companies and wants to get a law passed by 2008 forcing biomass importing companies to report via a standard procedure to see whether they implement the criteria. She also wants to help with the creation of an international certification system.

Minister Koenders wants to start a dialogue with developing countries that stand to benefit from bioenergy production, in particular when it comes to poverty alleviation. On the one hand, biomass and biofuels offer a chance to strengthen local energy security, while on the other, biofuel exports can bring huge revenues, certainly in this era of ever rising oil prices. Bioenergy industries in the South also offer a unique opportunity to bring employment and diversification of production amongst the vast rural masses.

Koenders stresses that biofuels criteria should not become a non-tariff barrier to trade and that it should not negate the opportunity for the South to export. He therefor wants to engage in a dialogue with the governments of developing countries and with local stakeholders. He also wants to encourage private companies to invest in the development of bioenergy production chains in which smallholders can play a role.

Dutch NGO position
The Dutch NGOs for their part think the Cramer Criteria are a good first step, but want to impose much more stringent rules, without any realistic compensation mechanism for the poor countries who stand to suffer from the lost opportunity of exporting less sustainably produced fuels.

In practise, the NGO also say, it will be difficult to track the origin of biofuel feedstocks because they can go through a series of trading steps. Moreover, even if a biofuel feedstock is produced sustainably on a particular plantation, pressures on land can result in unsustainable production elsewhere. These interactions are very difficult to monitor.

Furthermore, the non-governmental organisations stress that biofuels should not be looked at as the single source of energy to build a post-oil future on. Even though biofuels are the most competitive of all renewable energy sources, investments into wind and solar energy should also be made.

According to the Dutch NGOs, liquid biofuels are not the most optimal use of biomass. Combustion is more efficient. Biomass should better be used to generate electricity that can be used to power electric cars. Scientifically speaking this is correct, but it is a naive view from an economic and environmental point of view. Battery electric cars have their own environmental burden that should be taken into account (disposal of waste batteries, mining minerals for batteries, etc...), and the costs of full electric cars are still prohibitive. A mass-transition to electric cars would suck up funds that could otherwise be invested in, for example, a mechanism to avoid deforestation in the South, which will continue unabated if the West does not intervene.

Finally, the NGOs stress that energy savings and 'negawatts' should be the top priority in the fight against climate change, and not the investment in renewables per se.

Strangely enough, these same organisations do not mention the major advantage of biofuels, namely their capacity to be used in radical carbon-negative energy systems, such as 'Bio-Energy and Carbon Storage' (BECS), preferrably used in combination with biogas (earlier post). Contrary to solar or wind power, such systems can effectively take our historic CO2 emissions out of the atmosphere and take us back to pre-industrial levels by mid-century. Besides negawatts, BECS systems are the most effective weapon in the fight against climate change.

More information:
The Cramer Report, Projectgroep Duurzame productie van biomassa: Criteria voor duurzame biomassa productie Eindrapport van de projectgroep “Duurzame productie van biomassa” [*.pdf/Dutch], July 2006

Final Report: Toetsingskader voor duurzame biomassa - Eindrapport van de projectgroep “Duurzame productie van biomassa” [*.pdf/Dutch], April 2006

Joint Statement by Dutch NGOs on the Cramer Report: Opiniestatement Toetsingskader voor duurzaam geproduceerde biomassa (Cramer Criteria) [*.pdf/Dutch], s.d., April 2007.

Joint Statement by the Ministry of Foreign Affairs and the VROM (Ministry for the Environment): "Cramer en Koenders biomassa kans voor milieu en ontwikkelingslanden" [*Dutch] - April 27, 2007.


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