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    Malaysian palm oil company Kim Loong Resources Bhd has secured European energy trading group Vitol as buyer for all its carbon credits from its planned biogas plant in Kota Tinggi. The biogas facility generates methane from palm oil mill effluent, a waste product. The project is expected to generate over RM2 million (€423,000/US$579,000) of earnings annually. The methane capture and power generation project was registered and approved by the Clean Development Mechanism. The Edge Daily - July 31, 2007.

    GreenHunter Energy, Inc. announces that its wholly-owned subsidiary, GreenHunter BioFuels, Inc., located in Houston, Texas has successfully acquired Air Emission Permits from TCEQ (Texas Commission of Environmental Quality) under TCEQ's Permit by Rule (PBR) programs. These permits open the way for construction of a 105 million gallon per year (mgy) biodiesel facility including a separate but related methanol distillation facility. PRNewswire - July 30, 2007.

    Together with Chemical & Engineering News' Stephen K. Ritter, the journal Environmental Science & Technology sent Erika D. Engelhaupt to Brazil from where she wrote daily dispatches of news and observations about biofuels research. In particular she focuses on a bioenerrgy research partnership between the American Chemical Society, the Brazilian Chemical Society, and the Brazilian Agricultural Research Corporation (EMBRAPA). Check out her blog. Dipatches from Brazil - July 28, 2007.

    Consultation is under way on a £50 million (€74/US$101million) renewable energy plant planned for the South Wales Valleys. Anglo-Dutch company Express Power plans to build a wood-fuelled biomass plant on Rassau Industrial Estate in Blaenau Gwent. The plant will generate an annual 160,000 MWh (Mega Watt hours) of green electricity for Wales from forestry, recycled wood and wood derivatives. ICWales - July 27, 2007.

    The price of New York crude leapt to 77.24 dollar a barrel on Thursday, marking the highest level since August 9, 2006, as keen global demand and tight supplies fuelled speculative buying, traders said. On Wednesday, the US government had revealed that inventories of American crude fell by 1.1 million barrels last week. France24 - July 26, 2007.

    Arriva, one of Europe's largest transport groups is trialling B20 biodiesel for the first time on 75 of its buses. The company is aiming to reduce total carbon emissions by around 14 per cent by using biodiesel as a 20 per cent blend (predominantly be a mixture of sustainable soya products, along with used cooking oil and tallow). The 75 buses in the innovative trial will carry around 130,000 passengers every week. Minimal engineering changes will be required to the fleet as part of the scheme. Arriva - July 26, 2007.

    Marathon Oil Corporation announces that it has completed two more projects adding biodiesel blended fuel at its Robinson and Champaign terminals in Illinois. The terminals now feature in-line ratio blending in order to provide soy-based B-2 (two percent biodiesel) and B-11 (eleven percent biodiesel). Marathon Oil - July 25, 2007.

    Norway-based renewable energy firm Global Green One has agreed to set up a € 101.6 million bioethanol plant in Békéscsaba (southeast Hungary), with more facilities planned for Kalocsa, Szombathely and Kõszeg, the latter of which was already a target for a €25 million plant in May this year. The Békéscsaba plant would process 200,000 tonnes of maize per year, employing around 100 people. The logistics part of the facility would also create 100 jobs. The company expects the factory to generate €65 million in revenues each year. Portfolio - July 25, 2007.

    A Canadian firm, Buchanan Renewable Energies, is to begin an investment into Liberia's biomass industry that will grow to US$20 million in October and offer 300 jobs by end of the year. The company will start shipping 90 major pieces of equipment to Liberia by the end of August. Daily Observer (Monrovia) - July 24, 2007.

    KNM Process Systems Sdn Bhd, has secured a RM122 million (€26/$36m) order to build a biodiesel plant in Pahang, Malaysia, for Mission Biofuels Sdn Bhd, a subsidiary of Australian biofuels company Mission Biofuels Ltd. The plant will have a biodiesel output of 750 tonnes per day and glycerine output of 82 tonnes per day. Malaysia Business Times - July 24, 2007.

    AlgoDyne Ethanol Energy Inc. confirms that its retail partner, Canadian Green Fuels, has entered into an agreement with Cansource BioFuels to open a new biodiesel production facility in Mayerthorpe Alberta. The deal will see the construction and development of a community based, integrated crushing and biodiesel facility to process 10 million litres of ASTM certified canola based biodiesel which will be scaled up to produce 40million litres by 2010. BusinessWire - July 23, 2007.

    The Center for Management Technology announces the second Biomass-to-Liquids Technology conference will take place in Vienna this year, from 12 to 13 September. The current state of BTL-technologies will be presented and discussed. Biomass-to-Liquids conversion pathways are seen by many as promising avenues into the world of second generation biofuels that relies on the use of a broad variety of possible biomass feedstocks. CMT - July 23, 2007.

    Gulf Ethanol Corporation, a Houston-based energy company, announced today that it has initiated negotiations with representatives of government and industry in Uruguay. Discussions, coordinated by the U.S. Department of Commerce, centered on the synergy between Gulf Ethanol's interest in exploiting the potential of sorghum as a non-food fuel stock for ethanol production and the ideal conditions for growing the crop in Uruguay. The company criticizes the use of food crops like corn for ethanol in the U.S. and is seeking alternatives. Yahoo Press Release - July 20, 2007.

    Dutch company Capella Capital N.V. announces its investment in BiogasPark N.V. and acquires a 20 % stake upon the foundation of the company. The remaining shares are held by the management and strategic investors. BiogasPark N.V. will invest in the field of renewable energy and primarily focuses on financing, purchasing and the maintenance of biogas plant facilities. Ad Hoc News - July 20, 2007.

    Bioenergy company Mascoma Corp. is to build the world's first commercial scale cellulosic ethanol plant in Michigan where it will collaborate with Michigan State University. The $100 million plant will rely on the biochemical, enzymatic process that breaks down biomass to convert it to sugars. One of the factors that attracted Mascoma to Michigan was the recent $50 million federal grant MSU received to study biofuels in June. MSU will help in areas such as pretreatment technology for cellulosic ethanol production and energy crops that can be utilized by the plant. The State News - July 20, 2007.

    PetroChina, one of China's biggest oil companies, aims to invest RMB 300 million (€28.7/US$39.6m) in biofuel production development plans. A special fund is also going to be jointly set up by PetroChina and the Ministry of Forestry to reduce carbon emissions. Two thirds of the total investment will be channeled into forestry and biofuel projects in the provinces of Sichuan, Yunnan and Hebei, the remainder goes to creating a China Green Carbon Foundation, jointly managed by PetroChina and the State Forestry Administration. China Knowledge - July 19, 2007.

    Netherlands-based oil, gas, power and chemical industries service group Bateman Litwin N.V. announces it has signed an agreement to acquire Delta-T Corporation, a leading US-based bioethanol technology provider, with a fast growing engineering, procurement and construction division for a total consideration of US$45 million in cash and 11.8 million new ordinary shares in Bateman Litwin. Bateman Litwin - July 18, 2007.

    TexCom, Inc. announced today that it has signed a letter of intent to acquire Biodiesel International Corp. (BIC), and is developing a plan to build an integrated oilseed crushing and biodiesel production facility in Paraguay. The facility, as it is currently contemplated, would process 2,000 metric tons of oil seeds per day, yielding approximately 136,000 metric tons (approximately 39 Million Gallons) of biodiesel and 560,000 metric tons of soy meal pellets per year. Initial feedstock will consist mainly of soybeans that are grown in the immediate area of the proposed production plant in the Provinces of Itapua and Alto Parana. MarketWire - July 18, 2007.

    Spanish power company Elecnor announced that it will build Spain's biggest biodiesel production plant for €70 million (US$96.48 million). The plant, in the port of Gijon in northern Spain, will be ready in 22 months and will produce up to 500,000 tonnes of biodiesel a year from vegetable oil. The plant will be one of the world's biggest. Spain has decided to impose mandatory blending of biofuels with conventional fossil fuels as part of European Union efforts to curb greenhouse gas emissions. Elecnor [*Spanish] - July 18, 2007.

    The University of North Dakota Energy & Environmental Research Center (EERC) conducted a feasibility study to determine the most economical solutions to provide biomass energy to the isolated Chugachmiut Tribal Community in the village of Port Graham, Alaska, located on the Kenai Peninsula about 180 miles southwest of Anchorage. The village is only accessible by air or water, making traditional fossil fuel sources expensive to deliver and alternative forms of energy difficult to implement. The case study based on decentralised bioenergy offers interesting parallels to what would be needed to provide energy to the developing world's huge population that lives in similarly isolated conditions. EERC - July 18, 2007.

    According to a basic market report by Global Industries Inc., world biodiesel sales are expected to exceed 4.7 billion gallons (17.8 billion liters) by 2010. Though Europe, with a share estimated at 84.16% in 2006, constitutes the largest market, and will continue to do so for the coming years, major growth is expected to emanate from the United States. The automobile applications market for biodiesel, with an estimated share of 55.73% in 2006 constitutes the largest as well as the fastest growing end use application. Other applications independently analyzed include the Mining Applications market and the Marine Applications market. PRWeb - July 18, 2007.

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Tuesday, July 31, 2007

South Africa threads carefully with biofuels: sector must benefit smallholders

South Africa is threading carefully towards a biofueled future. More thorough policy work and consultation are underway to ensure that the sector benefits smallholders first and that regulation is based on a realistic assessment of South Africa's (relatively small) technical potential. The country's Science and Technology Minister, Mosibudi Mangena, said legislation will not be finalized by the end of this year.

The idea that biofuels may serve as an engine of rural development combinded with the prospect of 'peak oil' have made the case for biofuels all the stronger though. South Africa now has one of the most ambitious proposed targets, wanting 75 percent of its renewable energy needs by 2013 covered by biofuels as it seeks to create new markets for its ailing agricultural sector.

Meanwhile, the debate over whether to promote sugarcane over maize as ethanol feedstock continues. And importantly, it has become apparent that South Africa is unlikely to introduce subsidies to support biofuel producers. The country's farming sector underwent a massive cut in state subsidies in the post-apartheid era which is why subsidizing biofuels producers would spark an outcry from farmers.

Mangena was speaking at the 26th annual International Society of Sugarcane Technologists' congress in Durban. The minister said that the contribution of carbon emissions from the combustion of fossil fuels and the fact that global demand for crude oil was consistently outstripping its supply meant that alternative supplies for the world's fuel needs would have to be found.

Small farmers first
The government has suggested that the biofuels industry would be considered as a market for subsistence farmers who would produce feedstock to produce bioethanol. Mangena acknowledged, however, that South Africa is a water-stressed country and the use of valuable land for fuel feedstock production would have to be carefully weighed against food security.

The biofuels industry in South Africa currently remains small, although the country exports about 45% of its sugar crop, which is a potential source of ethol. The South African sugar industry produces roughly 2.5 million tons of sugar a year:
:: :: :: :: :: :: :: :: :: ::

Until now, the government's focus in agricultural development was largely on transformation through agrarian reform. In this the sugar industry had contributed widely by helping to establishing communities of small growers. However, Mangena was not yet able to comment on the degree of support the government was considering providing to emerging and subsistence farmers for the production of biofuel feedstock. He said various stakeholders from the departments of minerals and energy, agriculture and land affairs, and from environment and tourism were still making inputs. The parliamentary subcommittees on biofuels were expected to report by the end of the year.

Peak oil
Earlier in the congress, which is being held under the auspices of the South African Sugar Association, biologist and biofuel entrepreneur Paul Zorner said that recent year-on-year demand for crude oil had been growing at 2,2% against a historical demand of 1,6%. The demand for transport fuel was expected to be 50% greater by 2030 that what it was today:

Zorner quoted Jeffrey Currie of U.S. financial services consultancy Goldman Sachs as saying that a price of $95 a barrel of crude was likely this year, unless the Opec oil cartel unexpectedly lifted production. 'Oil production is past its peak, though', said Zorner.

Apart from fuel prices, the economic viability of a biofuels industry would depend on the cost and availability of raw feedstock, government regulation and the efficiency of conversion technology. Zorner said that at an oil price of $40 a barrel (a price not seen for years), biofuel market penetration of 10% could be expected. At $50 a barrel the penetration of 30% could be expected. "However, a price of more than $60 a barrel for the next three decades is likely."

Zorner said the U.S., which was by far the world's biggest fuel consumer, had passed legislation last month that would see the use of ethanol for transport fuel increase sevenfold. That would increase world consumption of ethanol three times.

Maize versus sugarcane
Mangena said officials had started to question the wisdom of using maize as a major source for renewable energy. Land officials offered biofuels as part of a rescue plan for maize farmers two years ago when a surplus maize harvest pushed prices to four-year lows. But since then, prices have picked up and for the second consecutive season, South Africa faces a poor maize harvest, raising fears of food security, Mangena said.

Zorner added that biofuel produced from maize provided no carbon dioxide mitigation relative to that of petrol. However, cellulosic and sugar-cane based ethanol reduced carbon dioxide emissions 80% relative to petrol.

The debate about whether SA should favour maize-ethanol production over sugar-ethanol production was not settled, Mangena said. Maize ethanol was considered as an option because of its accessibility to small and subsistence farmers.

Ethanol has been presented as one of several alternative fuels that would reduce the world's carbon emissions, which are largely deemed responsible for global warming and an expected climate change.

Zorner proposed the production of sugar cane for its biomass qualities, rather than for sugar, to produce ethanol from cellulose. This would require a high level of technology, using enzymes to break down cellulose.

He said that in biomass production, sugar cane was the most productive crop on the planet which, through indirect fermentation using enzymes produced by termites, for example, could be converted into energy. Zorner said the technology to transform biomass into fuel existed and that it was about six to eight years away from commercial viability.

Although none of the economic models Zorner developed for this production process depended on subsidies, it would require "heavy global investment" to drive innovation. The biggest hurdle was financing the initial large refineries, he said.

Subsidies unlikely
South Africa's biofuels programme may become a lifeline for the struggling farming sector, but Mangena said that it is unlikely that subsidies will be introduced.

The Southern African Biofuels Association says it needs between 2 billion rand and five billion rand a year from the government to get a capital intensive industry off the ground. Mangena said lending support to the renewable energy industry might spark an outcry from farmers, whose fortunes have waned after a massive cut in state subsidies in post-apartheid South Africa.
My suspicion is government will not give support but will give guidance as to what is desirable and what is not desirable. [...] In the South African environment there are all sorts of factors to be considered. For example... the farming community has been asking for subsidies for quite a while now and you know there are no subsidies. - Mosibudi Mangena, Science and Technology Minister
The minister's statements square with broader free-market economic policies that have taken hold under President Thabo Mbeki, who has also made a tight fiscus the hallmark of his rule since 1999.

Picture: sugar cane fields in Kwazulu Natal.

All Africa: Government Seeking Biofuels Clarity - Mangena - July 31, 2007.

Reuters: S.Africa biofuel subsidy unlikely, says minister - July 30, 2007.


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