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    Heathrow Airport has won approval to plan for the construction of a new 'green terminal', the buildings of which will be powered, heated and cooled by biomass. The new terminal, Heathrow East, should be completed in time for the 2012 London Olympics. The new buildings form part of operator BAA's £6.2bn 10-year investment programme to upgrade Heathrow. Transport Briefing - June 1, 2007.

    A new algae-biofuel company called LiveFuels Inc. secures US$10 million in series A financing. LiveFuels is a privately-backed company working towards the goal of creating commercially competitive biocrude oil from algae by 2010. PRNewswire - June 1, 2007.

    Covanta Holding Corp., a developer and operator of large-scale renewable energy projects, has agreed to purchase two biomass energy facilities and a biomass energy fuel management business from The AES Corp. According to the companies, the facilities are located in California's Central Valley and will add 75 MW to Covanta's portfolio of renewable energy plants. Alternative Energy Retailer - May 31, 2007.

    Two members of Iowa’s congressional delegation are proposing a study designed to increase the availability of ethanol across the country. Rep. Leonard Boswell, D-Ia., held a news conference Tuesday to announce that he has introduced a bill in the U.S. House, asking for a US$2 million study of the feasibility of transporting ethanol by pipeline. Sen. Tom Harkin, D-Ia., has introduced a similar bill in the Senate. Des Moines Register - May 30, 2007.

    A new market study by Frost & Sullivan Green Energy shows that the renewables industry in the EU is expanding at an extraordinary rate. Today biofuels and other renewables represent about 2.1 per cent of the EU's gross domestic product and account for 3.5 million jobs. The study forecasts that revenues from renewables in the world's largest economy are set to double, triple or increase even more over the next few years. Engineer Live - May 29, 2007.

    A project to evaluate barley’s potential in Canada’s rapidly evolving biofuels industry has received funding of $262,000 from the Biofuels Opportunities for Producers Initiative (BOPI). Western Barley Growers Association [*.pdf] - May 27, 2007.

    PNOC-Alternative Fuels Corporation (PNOC-AFC), the biofuel unit of Philippine National Oil Company, is planning to undertake an initial public offering next year or in 2009 so it can have its own cash and no longer rely on its parent for funding of biofuels projects. Manila Bulletin - May 27, 2007.

    TMO Renewables Limited, a producer of ethanol from biomass, has licensed the ERGO bioinformatics software developed and maintained by Integrated Genomics. TMO will utilize the genome analysis tools for gene annotation, metabolic reconstruction and enzyme data-mining as well as comparative genomics. The platform will enable the company to further understand and exploit its thermophilic strains used for the conversion of biomass into fuel. CheckBiotech - May 25, 2007.

    Melbourne-based Plantic Technologies Ltd., a company that makes biodegradable plastics from plants, said 20 million pounds (€29/US$39 million) it raised by selling shares on London's AIM will help pay for its first production line in Europe. Plantic Technologies [*.pdf] - May 25, 2007.

    Shell Hydrogen LLC and Virent Energy Systems have announced a five-year joint development agreement to develop further and commercialize Virent's BioForming technology platform for the production of hydrogen from biomass. Virent Energy Systems [*.pdf] - May 24, 2007.

    Spanish energy and engineering group Abengoa will spend more than €1 billion (US$1.35 billion) over the next three years to boost its bioethanol production, Chairman Javier Salgado said on Tuesday. The firm is studying building four new plants in Europe and another four in the United States. Reuters - May 23, 2007.

    According to The Nikkei, Toyota is about to introduce flex-fuel cars in Brazil, at a time when 8 out of 10 new cars sold in the country are already flex fuel. Brazilians prefer ethanol because it is about half the price of gasoline. Forbes - May 22, 2007.

    Virgin Trains is conducting biodiesel tests with one of its diesel engines and will be running a Voyager train on a 20 percent biodiesel blend in the summer. Virgin Trains Media Room - May 22, 2007.

    Australian mining and earthmoving contractor Piacentini & Son will use biodiesel from South Perth's Australian Renewable Fuels across its entire fleet, with plans to purchase up to 8 million litres from the company in the next 12 months. Tests with B20 began in October 2006 and Piacentinis reports very positive results for economy, power and maintenance. Western Australia Business News - May 22, 2007.

    Malaysia's Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui announces he will head a delegation to the EU in June, "to counter European anti-palm oil activists on their own home ground". The South East Asian palm oil industry is seen by many European civil society organisations and policy makers as unsustainable and responsible for heavy deforestation. Malaysia Star - May 20, 2007.

    Paraguay and Brazil kick off a top-level seminar on biofuels, cooperation on which they see as 'strategic' from an energy security perspective. 'Biocombustiveis Paraguai-Brasil: Integração, Produção e Oportunidade de Negócios' is a top-level meeting bringing together the leaders of both countries as well as energy and agricultural experts. The aim is to internationalise the biofuels industry and to use it as a tool to strengthen regional integration and South-South cooperation. PanoramaBrasil [*Portuguese] - May 19, 2007.

    Portugal's Galp Energia SGPS and Petrobras SA have signed a memorandum of understanding to set up a biofuels joint venture. The joint venture will undertake technical and financial feasibility studies to set up a plant in Brazil to export biofuels to Portugal. Forbes - May 19, 2007.

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Friday, June 01, 2007

Sweden looks to Indonesia for green fuels

An ambitious goal to halve Sweden's dependence on fossil fuels by 2020 has prompted it to actively seek out countries that can meet its rising demand for biofuels - an increasingly viable fuel alternative to pricey crude oil. Sweden already imports 75% of its ethanol from Brazil (earlier post). Now it is looking for biodiesel supplies from the South.

Indonesia is primed to benefit, as the tropical archipelago can be one of the leading contenders to meet Sweden's need for green fuel for motor vehicles, Swedish Minister for Foreign Trade Sten Tolgfors said during a tour of the country. The minister also called for the removal of trade barriers for biofuels.

The island state has launched a massive bioenergy plan, which it wants to use as a lever to revitalise its agricultural sector and increase its energy security. The country plans to inject a total of US$ 12.4 billion into the sector over the coming 3 years (overview), and so hopes to generate some 2.5 million jobs (earlier post). So far US$1.42 billion has been invested, with more than 67 projects for the production of liquid biofuels signed so far, and with 114 biomass power plants under construction across the archipelago (earlier post). More than 11 biodiesel plants are under construction. A considerable amount of the output is destined for exports.

Currently, in Sweden, biofuel accounts for 3% of the fuel used in motor vehicles, with ethanol from Brazil accounting for most of that. But the government aims to soon have cars and buses in the Scandinavian nation running on palm oil and jatropha curcas oil based biodiesel from Indonesia. Sweden also aims to decrease its use of fossil fuels in motor vehicles to 50% of current usage by 2020, to safeguard depleting global fossil fuel supplies and help stem climate change by lowering the country's carbon dioxide emissions.

Tolgfors, who was in Indonesia for a three-day visit to discuss trade relations between the two countries, said Sweden's demand for biofuel can only increase as its government has adopted aggressive measures to encourage the use of environmentally-friendly flex-fuel and biodiesel-capable cars. Sales of such cars now account for 13.5% of all newly registered vehicles in the country.

Jatropha investment
Along with palm oil, Sweden is also looking at other feedstocks to produce biofuel. Swedish company Scanoil is already in the process of acquiring vast tracts of land in Indonesia to grow jatropha. The investment, which is estimated in the millions, could be the single largest Swedish investment in Indonesia, according to Swedish officials:
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Increased investment in biofuels and the feedstock used to make it are a direct result of already soaring biofuels sales in the country.

Norway's Statoil, a company that produces E85 biofuel - containing 85% ethanol and 15% gasoline - and sells it through 170 of its service stations in Sweden, reported sales growth of 270% on year to 19.5 million liters in 2006 (earlier post).

Environmental and social concerns
Such strong sales figures reflect the results of an aggressive biofuel promotion program the Swedish government has launched in recent years.

The government offers owners of biofuel-powered vehicles special benefits such as lower excise duties, free parking spaces and exemption from city congestion charges.
In 2006, a total of 36,700 vehicles, or 13.5% of all newly registered vehicles in Sweden, were fitted with engines specially designed to run on biofuel, a 156% increase in biofuel-powered vehicle sales from 2005.

But growing biofuel demand presents its own risks that must be managed to ensure Sweden's emissions improvements don't take a heavy toll on the nations that produce its biofuel.

Tolgfors expressed concerns over the environmental and social repercussions associated with growing global demand for biofuel.

Indonesia and neighbor Malaysia together produce around 83% of the world's palm oil, and soaring demand for palm oil-based biofuel has fueled charges of excessive deforestation in the two countries to make way for palm oil plantations.
In Indonesia alone, environmental groups estimate that tens of millions of people derive their livelihood from the country's forests, which also provide a home for many rare plant and animal species.

Due in part to plantation expansion, Indonesia's forests are disappearing at an estimated 2.8 million hectares a year, one of the world's highest deforestation rates - and increasing demand for biofuel feedstocks could increase that rate.
Tolgfors raised such concerns Sunday during a meeting with Indonesia's Trade Minister, Mari Elka Pangestu, saying biofuel's potential environmental risks have to be addressed to prevent a backlash from consumers in the future.

"There needs to be a process of quality control that ensures each step, from the planting of trees, right up to biofuel production, has been carried out with minimal destruction to the environment," said Tolgfors. "Consumers want to be assured that the environmentally-friendly product they bought is indeed environmentally-friendly or they are likely to not buy it in future."

International coordination needed
Tolgfors also touched on how increased demand for biofuels has raised prices of certain staples, such as cooking oil in Indonesia. He said more dialogue is needed on an international level to address such issues.

At an annual OECD ministerial meeting in Paris two weeks ago, Tolgfors called for the creation of a world market for biofuels, and for the dissemination of better knowledge of the challenges facing biofuel trade.

"The goal (of the world market) should be to standardize, if not, lower tariffs on biofuel across countries, and this should eventually lead to a free market for biofuel," he elaborated.

Ending EU farm subsidies
In a related development Sweden on Tuesday urged the European Union to scrap farm subsidies in future reforms of the bloc's agricultural policy. Such subsidies distort global biofuel markets.

Export subsidies and production quotas should be eliminated in the long term to make European agricultural production more market-oriented, the government said in a letter to the European Commission. The EU should continue, however, to promote biodiversity and rural development, the center-right government said.

Agricultural spending accounts for about 40 percent of the EU's budget. Handouts to farmers will not change until at least 2009, when the long-term budget will be reviewed by member states.

France, the top recipient of EU farm subsidies, has been hesitant to consider cuts to agriculture payments until after 2013.


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