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    Canadian forest products company Tembec announced that it has completed the acquisition of the assets of Chapleau Cogeneration Limited located in Chapleau, Ontario. The transaction includes a biomass fired boiler and steam turbine with an installed capacity of 7.2 megawatts. Consideration for the assets consists of a series of future annual payments to 2022, with a present value of approximately $1 million. Tembec - September 1, 2007.

    Innovative internet and cable/satellite channel CurrentTV is producing a documentary on Brazil's biofuel revolution. Biopact collegues and friends Marcelo Coelho (EthanolBrasil Blog), Henrique Oliveira (Ethablog) and Marcelo Alioti (E-Machine) provided consulting on the technical, economic, environmental and social aspects of Brazil's energy transformation. ProCana - August 31, 2007.

    Oil major BP Plc and Associated British Foods Plc won competition clearance from the European Commission on to build a plant to make transport fuel from wheat in Hull, northeast England. U.S. chemical company DuPont is also involved. Reuters UK - August 31, 2007.

    The government of the Indian state of Orissa announced its policy for biofuel production which includes a slew of incentives as well as measures to promote the establishment of energy plantations. The state aims to bring 600,000 hectares of barren and fallow land under Jatropha and Karanj. At least 2 million hectares degraded land are available in the State. The new policy's other objectives are to provide a platform for investors and entrepreneurs, market linkages and quality control measures. Newindpress - August 29, 2007.

    Brazil's state-run oil company Petrobras said today it expects to reach large scale cellulosic ethanol production in 2015, with the first plant entering operations as early as 2011. Lignocellulosic biomass is the most abundant biological material on the planet, making up the bulk of the structure of wood and plants. In a first phase, Petrobras intends to use bagasse as a feedstock. Reuters / MacauHub- August 29, 2007.

    Seattle based Propel Biofuels, is announcing a $4.75 million first round of capital from @Ventures and Nth Power. The money will be used to help Propel set up and manage biodiesel fueling stations. BusinessWire - August 29, 2007.

    BioEnergy International, a science and technology company committed to developing biorefineries to produce fuels and specialty chemicals from renewable resources, announced today the closing of a major US$61.6 million investment that will provide funding for the Company’s three strategic initiatives: generating secure cash flow from its conventional ethanol platform, product diversification through the introduction of novel biocatalysts for the manufacture of green chemicals and biopolymers and the integration of its cellulose technology. BusinessWire - August 28, 2007.

    German company Verbio Vereinigte BioEnergie, the biggest biofuels producer in Europe, says it is considering plans to invest up to €100/US$136.5 million in a biofuel production facility in Bulgaria. The company wants the new facility to be located close to a port and Bulgaria's city of Varna on the Black Sea is one of the options under consideration. If Verbio goes through with the plan, it would produce both biodiesel and bioethanol, making Bulgaria a major source of biofuels in southeastern Europe. Verbi currently produces around 700,000 tonnes of biofuels per year. Sofia News Agency - August 27, 2007.

    Czech brown-coal-fired power plant Elektrárna Tisová (ETI), a unit of the energy producer ČEZ, could co-fire up to 40,000 tons of biomass this year, the biggest amount in the company’s history, said Martin Sobotka, ČEZ spokesman for West Bohemia. ETI burned more than 19,000 tons of biomass in the first half of 2007. The company’s plan reckoned with biomass consumption of up to 35,000 tons a year. Czech Business Weekly - August 27, 2007.

    PetroSun, Incorporated announced recently that it has formed PetroSun BioFuels Mexico to establish algae-to-biofuel operations in the State of Sonora, Mexico. PetroSun BioFuels Mexico will enter into joint venture agreements to develop algae cultivation farms and extraction plants in Sonora and southern Arizona that will produce algal oil, algae biomass products and excess electricity for the Mexican and U.S. markets. MarketWire - August 27, 2007.

    China's Yunnan Province hopes to reach an annual output of 2 million tons (approx. 417 million gallons) of fuel ethanol by 2010, according to the province's fuel ethanol industry development plan released recently by the Yunnan Economic and Trade Commission, state media report. Interfax China - August 23, 2007.

    Seven companies have teamed up to create Kazakhstan's first Biofuel Association. Its aim is to integrate interested parties for creating favorable conditions to have the country’s biofuel industry developed. An initiator and coordinator of the Association is the National Holding KazAgro, the Agriculture Ministry’s press service informs. KazInform - August 23, 2007.

    Canadian forest products company Tembec today announced that it has completed the acquisition of the assets of Chapleau Cogeneration Limited located in Chapleau, Ontario. The transaction closed on August 15 and includes a biomass fired boiler and steam turbine with an installed capacity of 7.2 megawatts. Consideration for the assets consists of a series of future annual payments to 2022, with a present value of approximately $1 million. Newswire Canada - August 22, 2007.

    Taiwan's representative to Brazil, Chou Shu-yeh, is urging Taiwan's government and private enterprises to invest in Brazil's biomass energy sector. Chou was speaking at a workshop on global investment and trade opportunities in Taipei. RTi - August 22, 2007.

    An algae-to-biofuels startup by the name of Inventure Chemical has raised about $1.5 million to continue its development of a chemical process that turns algae into biodiesel and ethanol. One of the biggest backers of the company is Imperium Renewables, a biodiesel producer. Seattle Post Intelligencer - August 22, 2007.

    The government of India's Karnataka state has approved the blending of six million litres of ethanol with diesel for use as fuel in State Road Transport Corporation (KSRTC) vehicles. Automotive World - August 21, 2007.

    VeraSun Energy Corporation, one of America's largest ethanol producers, announced that it closed on its acquisition with ASAlliances Biofuels, LLC for three ethanol plants with a combined annual production capacity of approximately 330 million gallons (1.25 billion liters) per year. VeraSun - August 21, 2007.

    Fujitsu develops a biodegradable laptop chassis from corn-starch bioplastic. The material reduces carbon dioxide emissions by 15% compared to a chassis made from petroleum-based plastics. CNET Asia - August 20, 2007.

    India's Rana Sugars Ltd has decided to set up a new plant for producing ethanol in Uttar Pradesh with an estimated investment of €9 to 10.9 (US$12.2 to 14.7). The facility will have a capacity of 180,000 liters per year and will generate, besides ethanol, 26MW of carbon-neutral power from bagasse. Economic Times India - August 20, 2007.

    Prominent pro-democracy activists staged a rare protest in Myanmar's biggest city Sunday, marching against a massive recent fuel price hike. "We are staging this performance to reflect the hardship our people are facing due to the government's fuel price hike," said Min Ko Naing, a leader of the 88 Generation Students' Group. Myanmar's ruling military junta imposed a surprise 100 percent hike on fuel at state-owned gas stations on Wednesday. The move was followed by increases in bus fares and commodity prices. The Star - August 19, 2007.

    Canada's Cavendish Farms, one of the country's largest food processing companies is to build a biogas plant to recycle spent cooking oils, starch and sludge from its waste-water plant to fuel its potato processing operation. Use of the carbon-neutral biofuel will limit the amount of bunker C fuel oil currently in use by the company. The plant, expected to be ready for operation by next fall, has received a $14-million loan from the Province of Prince Edward Island. CBC - August 18, 2007.

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Monday, September 03, 2007

Towards a truce: environmentalists should use palm oil as a lever for conservation

The growing popularity of palm oil has been condemned by some conservationists from the West who see rainforest being given over to palms in Malaysia and Indonesia, with an appreciable loss in biodiversity. The push to plant more trees is easy to explain: palm oil is by far the most productive oil and energy crop and brings nearly instant profits to millions of small farmers and estates alike. Palm oil is one of the few sectors that bring social and economic development to poor communities in a straightforward way.

Palm oil producers for their part are fighting the conservationists, accusing the West of hypocrisy for criticizing their production while overlooking the fact that Europe and the US chopped down their own forests and destroyed biodiversity ages ago, a practise that allowed them to develop and modernise in the first place. Conservationists dictate poor countries how not to develop, but don't offer any credible alternative.

Attempts to create a compromise between the two camps have largely failed because of hard economics. The idea that 'avoided deforestation' or 'compensated reduction' could prevent new plantations from emerging is idealistic, because these schemes are 'top down' bureaucratic instruments. Palm oil brings cash to farmers directly, 'bottom up'. With rapidly growing demand from China and India, rising oil prices, the prospect of 'Peak Oil', and the advent of second-generation biofuel technologies, the crop is set to become even more attractive. With new technologies, palm oil not only delivers feedstock for biodiesel, but for cellulosic ethanol, biogas and solid biofuels (earlier post and here). Add new breeding and plant improvement initiatives that promise even larger yields (previous post), and the crop becomes virtually unavoidable.

Now a new paper in Nature thinks it has found a way to arrive at a truce. Lian Pin Koh and David Wilcove suggest the very high yield and high prices that make this crop so untameable could be turned to a biodiversity advantage. They propose that conservationists from the West buy small tracts of existing oil palm plantations, and use the revenue they generate to establish a network of privately owned nature reserves. Then at least they understand the economics of the sector and could push others towards more sustainable production.

According to the authors, a typical mature oil-palm plantation in Sabah, Malaysia, generates an annual net profit of roughly $2,000 per hectare. Based on the current price of $12,500 per hectare for existing oil palm-cultivated land, the capital investment could be recovered in just 6 years. After this initial period, a 5,000-hectare oil palm plantation could generate annual profits amounting to some $10 million, which could be used to acquire 1,800 hectares of forested land annually to be set aside as private nature reserves. New and more sustainable palm plantations can then be established on degraded land, which is feasible, but currently not preferred (more here).

Koh and Wilcove say the scheme would require collaboration between "large conservation donor groups to fund the initial investments and with local oil-palm companies for their expertise in running the plantations," but that the relationship could be a "win-win partnership... because NGOs would be able to protect forests using the oil palm revenue and the companies would be able to enhance their corporate image to satisfy environmentally-conscious consumers."

The authors think conservationist NGOs can participate in such joint ventures without losing their integrity if they go into it with the appropriate level of caution. Koh told Mongabay that there have been many examples of successful collaborations between environmental groups and industry leaders in the USA and elsewhere:
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However, he stressed that some green groups should remain well outside the partnership, serving as much-needed critical voices to pressure governments and oil palm companies to avoid further losses of pristine habitats.

Koh and Wilcove believe that the development of a premium market could help entice producers into working with conservationists.

"Because such oil-palm plantations would be motivated mainly by conservation objectives, they could provide the industry with leadership for the sustainable production of palm oil through environmentally-friendly management practices," they write. "This could also drive the development of a premium market for sustainable oil-palm products and thereby generate economic incentives for more palm-oil producers to adopt sustainable practices."

Koh and Wilcove appear to be optimistic that this price premium, as well as the "green" marketing benefits, can overcome the inherent conflict of interest between the two groups. After all, why would producers want to help set up direct competitors and fund opposition to oil palm expansion unless they were sure to get something tangible in return?

Lian Pin Koh, David S. Wilcove, "Cashing in palm oil for conservation", Nature 448, 993 - 994 (29 Aug 2007), DOI:10.1038/448993a

Mongabay: NGOs should use palm oil to drive conservation - August 29, 2007.

Biopact: Report: large scale imports and co-firing of palm oil products can be sustainable - August 26, 2007

Biopact: Synthetic Genomics and Asiatic Centre for Genome Technology to sequence oil palm genome - July 11, 2007.

Biopact: And the world's most productive ethanol crop is... oil palm - June 21, 2006


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