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    Fuel prices increased three times in Mozambique this year due to high import costs. For this reason, the country is looking into biofuels as an alternative. Mozambique's ministries of agriculture and energy presented a study showing that more than five million hectares of land can be used sustainably in the production of crops that would produce biodiesel fuels. The first phase of a biofuel implementation plan was also presented, identifying the provinces of Inhambane, Zambezia, Nampula and Cabo Delgado as the first to benefit. News24 (Capetown) - July 12, 2007.

    The Malaysian Oleochemical Manufacturers Group (MOMG) has urged the government for incentives and grants to companies to encourage the development of new uses and applications for glycerine, the most important byproduct of biodiesel. Global production of glycerine is currently about one million tonnes. For every 10 tonnes of oil processed into biodiesel, one tonne of glycerine emerges as a by-product. Bernama - July 12, 2007.

    BioDiesel International AG has acquired 70 per cent of the shares in Lignosol, a Salzburg based company that is making promising progress in Biomass-to-Liquids conversion techniques. The purchase price is in the single-digit million Euro range. ACN - July 10, 2007.

    Gay & Robinson Inc. and Pacific West Energy LLC announced today a partnership to develop an ethanol plant in Hawaii based on sugarcane feedstocks. The plant's capacity is around 12 million gallons (45 million liters) per year. The partnership called Gay & Robinson Ag-Energy LLC, will also ensure the continuation of the Gay & Robinson agricultural enterprise, one of the oldest in Hawaii. Approximately 230 jobs will be preserved, and a large area of West Kauai will be maintained in sustainable agriculture. Business Wire - July 10, 2007.

    Water for Asian Cities (WAC), part of UN-Habitat, is extending partial financial support for the construction of several biogas plants across the Kathmandu valley and develop them as models for municipal waste management. The first biogas plants will be built in Khokna, Godavari, Kalimati, Patan, Tribhuvan University premises, Amrit Science College premises and Thimi. The Himalayan Times - July 09, 2007.

    EnviTec Biogas's planned initial public offering has roused 'enormous' interest among investors and the shares have been oversubscribed, according to sources. EnviTec has set the IPO price range at €42-52 a share, with the subscription period running until Wednesday. EnviTec last year generated sales of €100.7 million, with earnings before interest and tax of €18.5 million. Forbes - July 09, 2007.

    AthenaWeb, the EU's science media portal, is online with new functionalities and expanded video libraries. Check it out for video summaries of the latest European research activities in the fields of energy, the environment, renewables, biotech and much more. AthenaWeb - July 04, 2007.

    Biopact was invited to attend a European Union high-level meeting on international biofuels trade, to take place on Thursday and Friday in Brussels. Leaders from China, India, Africa and Brazil will discuss the opportunities and challenges arising in the emerging global biofuels sector. EU Commissioners for external relations, trade, energy, development & humanitarian aid as well as the directors of international organisations like the IEA, the FAO and the IFPRI will be present. Civil society and environmental NGOs complete the panorama of participants. Check back for exclusive stories from Friday onwards. Biopact - July 04, 2007.

    China's state-owned grain group COFCO says Beijing has stopped approving new fuel ethanol projects regardless of the raw materials, which has put a brake on its plan to build a sweet potato-based plant in Hebei. The Standard (Hong Kong) - July 03, 2007.

    Blue Diamond Ventures and the University of Texas A&M have formed a biofuels research alliance. The University will assist Blue Diamond with the production and conversion of non-food crops for manufacturing second-generation biofuels. MarketWire - July 03, 2007.

    African Union leaders are to discuss the idea of a single pan-African government, on the second day of their summit in Accra, Ghana. Libya's Colonel Muammar Gaddafi is championing the idea, but many African leaders are wary of the proposal. BBC - July 02, 2007.

    Triple Point Technology, a supplier of cross-industry software platforms for the supply, trading, marketing and movement of commodities, announced today the release and general availability of Commodity XL for Biofuels™. The software platform is engineered to address the rapidly escalating global market for renewable energy fuels and their feedstocks. Business Wire - July 02, 2007.

    Latin America's largest construction and engineering firm, Constructora Norberto Odebrecht SA, announced plans to invest some US$2.6 billion (€1.9 billion) to get into Brazil's booming ethanol business. It aims to reach a crushing capacity of 30 million to 40 million metric tons (33 million to 44 million tons) of cane per harvest over the next eight years. More soon. International Herald Tribune - June 30, 2007.

    QuestAir Technologies announces it has received an order valued at US$2.85 million for an M-3100 system to upgrade biogas created from organic waste to pipeline quality methane. QuestAir's multi-unit M-3100 system was purchased by Phase 3 Developments & Investments, LLC of Ohio, a developer of renewable energy projects in the agricultural sector. The plant is expected to be fully operational in the spring of 2008. Market Wire - June 30, 2007.

    Siemens Energy & Automation, Inc. and the U.S. National Corn-to-Ethanol Research Center (NCERC) today announced a partnership to speed the growth of alternative fuel technology. The 10-year agreement between the center and Siemens represents transfers of equipment, software and on-site simulation training. The NCERC facilitates the commercialization of new technologies for producing ethanol more effectively and plays a key role in the Bio-Fuels Industry for Workforce Training to assist in the growing need for qualified personnel to operate and manage bio-fuel refineries across the country. Business Wire - June 29, 2007.

    A paper published in the latest issue of the Journal of the American Ceramic Society proposes a new method of producing hydrogen for portable fuel cells that can work steadily for 10-20 times the length of equivalently sized Lithium-ion batteries. Zhen-Yan Deng, lead author, found that modified aluminum powder can be used to react with water to produce hydrogen at room temperature and under normal atmospheric pressure. The result is a cost-efficient method for powering fuel cells that can be used in portable applications and hybrid vehicles. More soon. Blackwell Publishing - June 29, 2007.

    An NGO called Grains publishes a report that highlights some of the potentially negative effects associated with the global biofuels sector. The findings are a bit one-sided because based uniquely on negative news stories. Moreover, the report does not show much of a long-term vision on the world's energy crisis, climate change, North-South relations, and the unique role biofuels can play in addressing these issues. Grain - June 29, 2007.

    Researchers at the Universidad de Tarapacá in Arica plan to grow Jatropha curcas in the arid north of Chile. The trial in the desert, is carried out to test the drought-tolerance of the biodiesel crop, and to see whether it can utilize the desert's scarce water resources which contain high amounts of salt minerals and boron, lethal to other crops. Santiago Times - June 28, 2007.

    India and Thailand sign a Memorandum of Understanding (MoU) that envisages cooperation through joint research and development and exchange of information in areas of renewable sources of energy like, biogas, solar-thermal, small hydro, wind and biomass energy. Daily India - June 28, 2007.

    Portucel - Empresa Produtora de Pasta e Papel SA said it plans to install biomass plants with an expected production capacity of 200,000 megawatt hours per year at its paper factories in Setubal and Cacia. The European Commission gave the green light for state aid totaling €46.5 million, contributing to Portucel's plans to extend and modernise its plants. Forbes - June 28, 2007.

    Petro-Canada and GreenField Ethanol have inked a long-term deal that makes Petro-Canada the exclusive purchaser of all ethanol produced at GreenField Ethanol's new facility in Varennes, Quebec. The ethanol will be blended with gasoline destined for Petro-Canada retail sites in the Greater Montreal Area. Petro-Canada - June 27, 2007.

    According to a study by the Korean Energy Economics Institute, biodiesel produced in Korea will become cheaper than light crude oil from 2011 onwards (678 won/liter versus 717.2 won/liter). The study "Prospects on the Economic Feasibility of Biodiesel and Improving the Support System", advises to keep biodiesel tax-free until 2010, after which it can compete with oil. Dong-A Ilbo - June 27, 2007.

    Kreido Biofuels announced today that it has entered into a marketing and distribution agreement with Eco-Energy, an energy and chemical marketing and trading company. Eco-Energy will purchase Kreido Biofuels’ biodiesel output from Wilmington, North Carolina, and Argo, Illinois, for a minimum of 3 years at current commercial market prices, as well as provide Kreido transportation and logistics services. Business Wire - June 27, 2007.

    Beijing Tiandi Riyue Biomass Technology Corp. Ltd. has started construction on its new fuel ethanol project in the county of Naiman in Inner Mongolia Autonomous Region's Chifeng City, the company's president told Interfax today. Interfax China - June 26, 2007.

    W2 Energy Inc. announces it will begin development of biobutanol from biomass. The biofuel will be manufactured from syngas derived from non-food biomass and waste products using the company's plasma reactor system. Market Wire - June 26, 2007.

    Finland based Metso Corporation, a global engineering firm has received an order worth €60 million to supply two biomass-fired power boilers to Portugal's EDP Producao - Bioeléctrica, S.A. The first boiler (83 MWth) will be installed at Celbi’s Figueira da Foz pulp mill and the second boiler (35 MWth) at Caima’s pulp mill near the city of Constância. Both power plants will mainly use biomass, like eucalyptus bark and forest residues, as fuel to produce together approximately 40 MWe electricity to the national grid. Both boilers utilize bubbling fluidized bed technology. Metso Corporation - June 26, 2007.

    Canada's New Government is investing more than $416,000 in three southern Alberta projects to help the emerging biofuels industry. The communities of Lethbridge, Drumheller and Coalhurst will benefit from the projects. Through the Biofuels Opportunities for Producers Initiative (BOPI), the three firms will receive funding to prepare feasibility studies and business plans to study the suitability of biofuels production according to location and needs in the industry. MarketWire - June 26, 2007.

    U.S. Energy Secretary Samuel Bodman is expected to announce today that Michigan State and other universities have been selected to share $375 million in federal funding to develop new bioenergy centers for research on cellulosic ethanol and biomass plants. More info soon. Detroit Free Press - June 26, 2007.

    A Kerala based NGO has won an Ashden Award for installing biogas plants in the state to convert organic waste into a clean and renewable source of energy at the household level. Former US vice president Al Gore gave away the award - cash prize of 30,000 pounds - to Biotech chief A. Saji at a ceremony in London on Friday. New Kerala - June 25, 2007.

    AltraBiofuels, a California-based producer of renewable biofuels, announced that it has secured an additional US$165.5 million of debt financing for the construction and completion of two plants located in Coshocton, Ohio and Cloverdale, Indiana. The Coshocton plant's capacity is anticipated to reach 60million gallons/year while the Cloverdale plant is expected to reach 100 million gallons/year. Business Wire - June 23, 2007.

    Brazil and the Dominican Republic have inked a biofuel cooperation agreement aimed at alleviating poverty and creating economic opportunity. The agreement initially focuses on the production of biodiesel in the Dominican Republic. Dominican Today - June 21, 2007.

    Malaysian company Ecofuture Bhd makes renewable products from palm oil residues such as empty fruit bunches and fibers (more here). It expects the revenue contribution of these products to grow by 10% this year, due to growing overseas demand, says executive chairman Jang Lim Kuang. 95% of the group's export earnings come from these products which include natural oil palm fibre strands and biodegradable mulching and soil erosion geotextile mats. Bernama - June 20, 2007.

    Argent Energy, a British producer of waste-oil based biodiesel, announced its intention to seek a listing on London's AIM via a placing of new and existing ordinary shares with institutional investors. Argent plans to use the proceeds to construct the first phase of its proposed 150,000 tonnes (170 million litres) plant at Ellesmere Port, near Chester, and to develop further plans for a 75,000 tonnes (85 million litres) plant in New Zealand. Argent Energy - June 20, 2007.

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Thursday, July 12, 2007

NREL: Brazilian ethanol does not harm the Amazon

U.S. energy officials speaking at the side-lines of an US-Brazil summit in Brasilia, clearly speak out against some common misconceptions and false information on biofuels produced in the South: Brazil's ethanol production is not devastating the Amazon rain forest or hiking food prices. And there is a large potential to expand, without impacting either food or fiber supplies or forests. Dan Arvizu, director of the U.S. Department of Energy's National Renewable Energy Laboratory (NREL):
There is a huge misconception internationally that in Brazil, we're cutting down the rain forest to (make) fuels, which is not true. Done responsibly (ethanol production) does not have to (compete) with food or impact the environment
Cultivating sugar cane in the rain forest's tropical climate makes no business sense, says Gregory Manuel, International Energy Coordinator at the U.S. State Department:
Economics don't drive ethanol production in the rain forest. Yield rates in very wet environments are roughly half that in temperate environments.
Importantly, in Arvizu's assessment:
We think at least 25-30 percent of current (global) gasoline consumption could be replaced by biofuels using today's technologies without impacting food or fiber.
By the time such a large quantity is reached, second-generation conversion technologies will probably be in place allowing for a bigger share - one that remains fundamentally sustainable.

All this is of course not new. According to leading scientists who work for the International Energy Agency sugar cane based ethanol is largely environmentally sustainable (earlier post and here). The crop grows 1000 miles South of the Amazon. The scientific community knows that this is true for a whole range of other tropical and subtropical sugar and starch crops that explicitly do not grow in rainforest environments: from cassava and sorghum, to jatropha or sweet potatoes.

So why are these misconceptions still around? They are being pushed by powerful lobbies who want to protect their own interests, against biofuels produced in the South:
:: :: :: :: :: :: :: :: :: :: :: ::

The 'President of the Poor', Luiz Inácio Lula da Silva, recently concluded his historic mission in Europe, where he convinced the Union of the fact that biofuels production in the South can be both sustainable and benefit the poor.

At the landmark International Conference on Biofuels, the European Union finally showed support for this vision, and signalled its intentions to import biofuels from the developing world. This idea of a global 'biopact' is what we have been working towards too. It holds the promise of a win-win strategy: biofuel production in the South can become a lever for large scale poverty alleviation, the fuels in question reduce greenhouse gases far more than those made in the temperate climes of the North, and consumers in the West will pay far less for biofuels.

EU Trade Commissioner Peter Mandelson signalled that he will not support biofuels in Europe as a way to subsidize wealthy farmers there. And the Swedish Trade Minister, Sven Tolgfors even went so far as to call for the removal of all trade barriers for imported biofuels. Indeed, Lula's work in Europe has resulted in a radical change in thinking, away from 'resource nationalism' to a vision of global solidarity, that puts biofuels on the agenda as a tool for a more equitable form of economic development.

An alliance of lobbies was not pleased to hear this vision being presented and has launched a viscious campaign to discredit biofuels from the South.

(1) Not surprisingly, European farmers and biofuel producers were furious after the Conference. They fear their huge subsidies and the protectionist barriers that make it possible for them to grow fuels, will be removed.

(2) Likewise, segments of the petroleum lobby try to discredit biofuels from the South because they pose a real threat to their business. Sub-Saharan Africa and Latin America alone can produce more biofuels than all of OPEC's output (earlier post).

(3) Strangely enough, some environmentalists and NGOs are siding with oil lobby and the subsidised EU farmers. These NGOs fear biofuels produced in the South may damage the environment, - a fair concern. But they have been spreading some questionable and simplistic information that damages their case. If implemented incorrectly, green fuels can indeed have environmental consequences. But if done right and monitored by sustainability criteria, they offer a major chance to mitigate climate change and alleviate poverty.

Some NGOs make the strategic mistake of taking Brazil as an example of how these fuels pose a threat to environment, in particular the Amazon rain forest. Or they try to play the 'food versus fuel' card in a way that makes no scientific sense: biofuels per se do not increase food prices, high oil prices do and biofuels made from crops like corn. When biofuels are sourced from the South, where they are made at a third of the costs of EU/US fuels and from non-food crops, then biofuels make food even relatively cheaper (that's a no brainer, with oil at US$75 and ethanol at US$35 per barrel).

Brazil has done its best to respond to all the criticisms, and with factual information it has convinced some key players: the scientific community, most of the trade negotiators in Europe and the U.S., and NGOs who see biofuels as a chance for massive poverty alleviation in the South. We have done our bit to get the facts out too.

But when it comes to the Amazon rainforest, it seems like there needs to be some more convincing, because some lobbies keep pushing false information and abuse this powerful symbol of biodiversity to protect their own interests (the lobbies do so at the risk of becoming irrelevant in the debate).

The simple fact is that sugarcane, from which ethanol is made in Brazil, does not grow in the Amazon.

It does not grow there for agro-technical reasons. It makes no agronomic, economic or technical sense to grow it there. The crop was introduced 450 years ago by the Portuguese, and since then, there have been no intrusions into the rainforest. In fact, sugarcane grows 1000 miles South of the forest (map, click to enlarge). There is neither a direct, nor an indirect land-use change pressure coming from the cane.

In Europe and the United States biofuel production costs far more than in Brazil and is highly subsidized. Fuels produced there would not survive in a liberalised biofuels market. The wealthy subsidised farmers know this, and want to protect their business against less costly imported biofuels. For this reason, they try to discredit tropical biofuels.

In Brasilia, the NREL chief said production growth must be monitored carefully to avoid unwanted consequences. But he added that the current global market for ethanol was still far from what could be produced sustainably.

And indeed, at the International Conference on Biofuels, it was largely agreed that sustainability criteria have to be developed for internationally traded biofuels. But such criteria should be based on facts, and not on the wishes of the oil, environmentalist, or European biofuel lobbies.

When the anti-biofuel lobbies like the oil industry and the NGOs, or the Euro-American biofuel producers who fear imports, keep spreading false information, they risk making themselves irrelevant in the sustainability debate on green fuels.

Reuters: U.S. officials: Brazil ethanol doesn't harm Amazon - July 11, 2007.

Biopact: Brazilian ethanol is sustainable and has a very positive energy balance - IEA report - October 08, 2006

Biopact: Nature sets the record straight on Brazilian ethanol - December 09, 2006


Nathanael Greene said...

I've made the mistake of assuming that sugar cane was directly causing deforestation in Brazil and been corrected on that, but my understanding is that the situation is more complicated. I've been told that there is the potential for cane to displace cattle and for the cattle to move into the forests. Any truth to that?

In any case, this ripple effect dynamic is definitely a threat to forests if we don't develop international agreements that protect our forests and put a financial value on keeping them standing. Of course as you've written, Brazil is among the tropical countries moving forward in this regard.

11:48 PM  
Biopact team said...

Well, in fact it's just the other way around. Brazil has a policy of incentivising cattle ranchers to give their degraded pastures over to sugarcane or reforestation, and to refrain from allowing cattle to graze in the open.

This has resulted in several million hectares being handed back.

According to the Brazilians, between 120 and 200 million hectares of pasture will eventually go back to forest and fuel production.

We reported about this new policy, here:

Brazilian legislation to offer incentives for conversion of degraded pastures into biofuel plantations

Brazil demonstrating that reducing tropical deforestation is possible while expanding biofuels.

Partly because of these policies, Brazil reduced deforestation rates by up to 50% over the past years, while rapidly expanding the biofuel hectarages.

Finally, the BBC has this:
New trees to reclaim Amazon lands. A Brazilian state intends to make cattle ranchers reforest land which they have cleared for grazing.

But mind you, the indirect pressures and land-use change dynamics which you point to, will obviously have to be taken up into sustainability analyses and criteria for biofuels.

12:18 AM  
David B. Benson said...

Well done. What is the situation in Southeast Asia? I am under the impression that oil palms are directly displacing tropical rain forests, but based on this article, I have to wonder about the reliability of the news sources and media...

12:43 AM  
Jonas said...

David, nah, in South East Asia, there is a direct link between deforestation and palm oil.

Most often, (illegal) logging companies first 'prepare' the terrain, after which the destroyed land is taken over by the palm oil barons. This is an old alliance.

For palm oil, the only hope is moderation in the expansion of hectarages, and massive investments in replanting existing plantations with high yield cultivars.

The problem remains, though: who are we to deny Indonesians or Malaysians the right to deforest? If we want to stop this, we should compensate them. As long as we don't, and we keep buying the millions of tonnes of palm oil products each year, then we should keep our silence.

It's for us to act first.

2:09 AM  

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