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    Italy's Enel is to invest around €400 mln in carbon capture and storage and is looking now for a suitable site to store CO2 underground. Enel's vision of coal's future is one in which coal is used to produce power, to produce ash and gypsum as a by-product for cement, hydrogen as a by-product of coal gasification and CO2 which is stored underground. Carbon capture and storage techniques can be applied to biomass and biofuels, resulting in carbon-negative energy. Reuters - October 22, 2007.

    Gate Petroleum Co. is planning to build a 55 million-gallon liquid biofuels terminal in Jacksonville, Florida. The terminal is expected to cost $90 million and will be the first in the state designed primarily for biofuels. It will receive and ship ethanol and biodiesel via rail, ship and truck and provide storage for Gate and for third parties. The biofuels terminal is set to open in 2010. Florida Times-Union - October 19, 2007.

    China Holdings Inc., through its controlled subsidiary China Power Inc., signed a development contract with the HeBei Province local government for the rights to develop and construct 50 MW of biomass renewable energy projects utilizing straw. The projects have a total expected annual power generating capacity of 400 million kWh and expected annual revenues of approximately US$33.3 million. Total investment in the projects is approximately US$77.2 million, 35 percent in cash and 65 percent from China-based bank loans with preferred interest rates with government policy protection for the biomass renewable energy projects. Full production is expected in about two years. China Holdings - October 18, 2007.

    Canadian Bionenergy Corporation, supplier of biodiesel in Canada, has announced an agreement with Renewable Energy Group, Inc. to partner in the construction of a biodiesel production facility near Edmonton, Alberta. The company broke ground yesterday on the construction of the facility with an expected capacity of 225 million litres (60 million gallons) per year of biodiesel. Together, the companies also intend to forge a strategic marketing alliance to better serve the North American marketplace by supplying biodiesel blends and industrial methyl esters. Canadian Bioenergy - October 17, 2007.

    Leading experts in organic solar cells say the field is being damaged by questionable reports about ever bigger efficiency claims, leading the community into an endless and dangerous tendency to outbid the last report. In reality these solar cells still show low efficiencies that will need to improve significantly before they become a success. To counter the hype, scientists call on the community to press for independent verification of claimed efficiencies. Biopact sees a similar trend in the field of biofuels from algae, in which press releases containing unrealistic yield projections and 'breakthroughs' are released almost monthly. Eurekalert - October 16, 2007.

    The Colorado Wood Utilization and Marketing Program at Colorado State University received a $65,000 grant from the U.S. Forest Service to expand the use of woody biomass throughout Colorado. The purpose of the U.S. Department of Agriculture grant program is to provide financial assistance to state foresters to accelerate the adoption of woody biomass as an alternative energy source. Colorado State University - October 12, 2007.

    Indian company Naturol Bioenergy Limited announced that it will soon start production from its biodiesel facility at Kakinada, in the state of Andhra Pradesh. The facility has an annual production capacity of 100,000 tons of biodiesel and 10,000 tons of pharmaceutical grade glycerin. The primary feedstock is crude palm oil, but the facility was designed to accomodate a variety of vegetable oil feedstocks. Biofuel Review - October 11, 2007.

    Brazil's state energy company Petrobras says it will ship 9 million liters of ethanol to European clients next month in its first shipment via the northeastern port of Suape. Petrobras buys the biofuel from a pool of sugar cane processing plants in the state of Pernambuco, where the port is also located. Reuters - October 11, 2007.

    Dynamotive Energy Systems Corporation, a leader in biomass-to-biofuel technology, announces that it has completed a $10.5 million equity financing with Quercus Trust, an environmentally oriented fund, and several other private investors. Ardour Capital Inc. of New York served as financial advisor in the transaction. Business Wire - October 10, 2007.

    Cuban livestock farmers are buying distillers dried grains (DDG), the main byproduct of corn based ethanol, from biofuel producers in the U.S. During a trade mission of Iowan officials to Cuba, trade officials there said the communist state will double its purchases of the dried grains this year. DesMoines Register - October 9, 2007.

    Brasil Ecodiesel, the leading Brazilian biodiesel producer company, recorded an increase of 57.7% in sales in the third quarter of the current year, in comparison with the previous three months. Sales volume stood at 53,000 cubic metres from August until September, against 34,000 cubic metres of the biofuel between April and June. The company is also concluding negotiations to export between 1,000 to 2,000 tonnes of glycerine per month to the Asian market. ANBA - October 4, 2007.

    PolyOne Corporation, the US supplier of specialised polymer materials, has opened a new colour concentrates manufacturing plant in Kutno, Poland. Located in central Poland, the new plant will produce colour products in the first instance, although the company says the facility can be expanded to handle other products. In March, the Ohio-based firm launched a range of of liquid colourants for use in bioplastics in biodegradable applications. The concentrates are European food contact compliant and can be used in polylactic acid (PLA) or starch-based blends. Plastics & Rubber Weekly - October 2, 2007.

    A turbo-charged, spray-guided direct-injection engine running on pure ethanol (E100) can achieve very high specific output, and shows “significant potential for aggressive engine downsizing for a dedicated or dual-fuel solution”, according to engineers at Orbital Corporation. GreenCarCongress - October 2, 2007.

    UK-based NiTech Solutions receives £800,000 in private funding to commercialize a cost-saving industrial mixing system, dubbed the Continuous Oscillatory Baffled Reactor (COBR), which can lower costs by 50 per cent and reduce process time by as much as 90 per cent during the manufacture of a range of commodities including chemicals, drugs and biofuels. Scotsman - October 2, 2007.

    A group of Spanish investors is building a new bioethanol plant in the western region of Extremadura that should be producing fuel from maize in 2009. Alcoholes Biocarburantes de Extremadura (Albiex) has already started work on the site near Badajoz and expects to spend €42/$59 million on the plant in the next two years. It will produce 110 million litres a year of bioethanol and 87 million kg of grain byproduct that can be used for animal feed. Europapress - September 28, 2007.

    Portuguese fuel company Prio SA and UK based FCL Biofuels have joined forces to launch the Portuguese consumer biodiesel brand, PrioBio, in the UK. PrioBio is scheduled to be available in the UK from 1st November. By the end of this year (2007), says FCL Biofuel, the partnership’s two biodiesel refineries will have a total capacity of 200,000 tonnes which will is set to grow to 400,000 tonnes by the end of 2010. Biofuel Review - September 27, 2007.

    According to Tarja Halonen, the Finnish president, one third of the value of all of Finland's exports consists of environmentally friendly technologies. Finland has invested in climate and energy technologies, particularly in combined heat and power production from biomass, bioenergy and wind power, the president said at the UN secretary-general's high-level event on climate change. Newroom Finland - September 25, 2007.

    Spanish engineering and energy company Abengoa says it had suspended bioethanol production at the biggest of its three Spanish plants because it was unprofitable. It cited high grain prices and uncertainty about the national market for ethanol. Earlier this year, the plant, located in Salamanca, ceased production for similar reasons. To Biopact this is yet another indication that biofuel production in the EU/US does not make sense and must be relocated to the Global South, where the biofuel can be produced competitively and sustainably, without relying on food crops. Reuters - September 24, 2007.

    The Midlands Consortium, comprised of the universities of Birmingham, Loughborough and Nottingham, is chosen to host Britain's new Energy Technologies Institute, a £1 billion national organisation which will aim to develop cleaner energies. University of Nottingham - September 21, 2007.

    The EGGER group, one of the leading European manufacturers of chipboard, MDF and OSB boards has begun work on installing a 50MW biomass boiler for its production site in Rion. The new furnace will recycle 60,000 tonnes of offcuts to be used in the new combined heat and power (CHP) station as an ecological fuel. The facility will reduce consumption of natural gas by 75%. IHB Network - September 21, 2007.

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Wednesday, October 24, 2007

FAO launches $3.7 million bioenergy study in developing world: biofuels can make countries food secure

As oil prices soar and biofuel production becomes more attractive, especially to poor countries, the UN's Food and Agriculture Organisation (FAO) is leading an effort to study the potential for poor farmers to participate in the sector. The three-year US$3.7 million project will help policy-makers assess the potential effects of bioenergy production on food security and land-use in developing countries. Three case studies will be investigated: Tanzania, Peru and Thailand.

Biofuel production to earn revenue could go 'hand-in-hand' with efforts to make countries food secure says Andre Croppenstedt, an economist with the Agricultural Development Economics Division of the UN Food and Agriculture Organisation (FAO).

Many organisations think biofuels offer a historic opportunity for farmers in Africa to diversify their crops, gain more income and thus boost food security and social development. Croppenstedt explains why this is so:
Biofuel production need not compete with food production. If biofuel demand generates increased incomes for farm households, and this in turn is invested in raising productivity of all farm activities, including food production.

Assuming that households typically do not only grow one or the other, then biofuels could provide a stimulus to agricultural productivity, perhaps similar to the experience of cotton farmers in some Sahelian countries.
African countries have a large sustainable bioenergy potential. Projections by scientists working for the International Energy Agency's Bioenergy Task 40 estimate its upper limit to be between 317 and 410 Exajoules of energy by 2050 (earlier post and here). The projections show the potential left after meeting all food, fiber and fodder requirements of rapidly growing populations and in a 'no deforestation' scenario. This explicitly sustainable potential is roughly equivalent to the world's total current fossil fuel consumption (coal, oil and gas), which stands at around 400 Ej.

In short, in theory the African continent can supply domestic and world markets with renewable bioenergy and fuels. But in order to tap this potential in a sustainable manner and to ensure that local populations benefit, good planning and strong policy frameworks are required. The FAO's study aims to help design these policy measures.

'Devastating' oil prices
Biofuels are a must for developing countries because the alternative - sticking to using oil products - is set to damage their economies. According to the FAO, recent oil price increases have had 'devastating' effects on many of the world's poor countries: of the 50 poorest, 38 are net importers of petroleum and 25 import all their petroleum requirements; some now spend up to six times as much on fuel as they do on health, while others spend double the amount allocated to poverty reduction on fuels, according to a report titled 'Sustainable Bioenergy: A Framework for Decision Makers', released earlier by the UN.

Last year 13 African countries formed the Pan-African Non-Petroleum Producers Association, formed to mitigate the effects of these catastrophic oil prices. The goal of the association is to develop a biofuels industry in the continent as an alternative (earlier post). Many of these poor countries lie in tropical zones where relatively low-cost and highly productive biofuel crops already grow and can be expanded:
:: :: :: :: :: :: :: :: :: :: ::

"The gradual move from oil has begun," says Alexander Muller, Assistant Director-General of Sustainable Development at the FAO. "Over the next 15 to 20 years we may see biofuels providing a full 25 percent of the world's energy needs." While the move is good for reducing greenhouse emissions, soaring oil prices have encouraged most countries to go green by switching to greater use of biofuels.

Global production of biofuels has doubled in the last five years and will likely double again in the next four, according to the UN framework. Among the countries that have enacted new pro-biofuel policies in recent years are Argentina, Australia, Canada, China, Colombia, Ecuador, India, Indonesia, Malawi, Malaysia, Mexico, Mozambique, the Philippines, Senegal, South Africa, Thailand and Zambia.

On the other hand, the demand for biofuels is already having an impact on the prices of the world's two leading agricultural biofuel feedstocks: maize and sugar. For sugar the increase is good news, because most of it is produced in developing countries like Brazil and India, as well as in Africa. Millions of farmers there have suffered under low prices for years, and the slight increase in the sugar price is welcomed. Moreover, for poor sugar producers, biofuels offer a major chance to survive the EU's Sugar Reform. But for maize, the situation looks different: the commodity is produced mainly in the U.S. and receives large subsidies with the result that poor farmers in the South cannot compete. The shift to subsidized ethanol enhances this effect and results in more corn flowing to biofuel production.

For this reason, organisations, including the Global Bioenergy Partnership (earlier post) have called on the U.S. and the E.U. to remove both biofuels subsidies and trade barriers. This would result in imports of biofuels from developing countries and reduce pressures on maize.

The FAO project will also analyse the land-use effects of bioenergy production. "In the absence of comprehensive analyses and policies, commercial production of biofuels may target high-quality lands - due to better profit margins and high soil requirements of first-generation crops - such that biofuels, as the 'next big cash crop', will be grown on the best lands, leaving cereals and subsistence crops to the low-quality lands," the UN earlier noted.

This is one aspect the FAO project intends to monitor while it tries to mainstream food-security concerns as countries develop bioenergy policies. The Bioenergy and Food Security project has begun assessments in three countries: Tanzania in Africa, Peru in South America and Thailand in Southeast Asia.

Croppenstedt, who was involved in the assessment in Tanzania, said the priority at the moment was to ensure that any rural land acquired for biofuel production had not previously been used for growing food crops. "Obviously, it is key to get it right at this stage, that is, to make sure farmers are not left landless."

The Tanzanian government was concerned that sugar plantations should not displace or make subsistence farmers landless, and farmers who aimed to supply a biofuel feedstock should not monocrop, Croppenstedt said. He added:
From what we have heard it would seem that some plantations use unused land, or rather, previous plantation land that has since been abandoned.
At this stage all the investors the FAO had spoken to in Tanzania were keen not to comprise food security, and wanted to "promote intercropping or to advise setting aside only part of the land for biofuel feedstock production. Investors stressed that sustainability would imply easier access to land and finance in the future, implying that they had an incentive to get it right."

Land acquisition is a complicated process in Tanzania and could delay biofuel production. "Most land in Tanzania is either owned by the villages or is designated as national land; land designated as national land is more easily leased," says Croppenstedt.

"As I understand, the palm oil plantation would take 10 to 15 years before it is fully operational; the jatropha plantation is going to be planted in stages, and only if yields are high enough will they go ahead, and this should take 5 to 10 years before becoming fully operational; the sugar cane plantation we learned about plans to be fully operational by 2010," he said.

One of the investors planned to outsource biofuel crop production. "This type of approach will create jobs and allow smallholders to join the biofuel market," Croppenstedt said.

Rural development
Many African leaders have been inspired by the success of another developing country, Brazil, which started making biofuel 30 years ago and is now the world's largest producer of bioethanol: about 1.5 million Brazilian farmers are involved in growing sugar cane for fuel.

A barrel of bioethanol is currently half the price of a barrel of oil, according to the FAO, and a million Brazilian cars run on fuel made from sugar cane. This is a cost saving that many countries - developing and developed - would like to emulate.

"As in Brazil, African countries should also develop a domestic market for biodiesel," said Croppenstedt. Biofuel could also be used for small-scale rural electrification. "In Tanzania there are efforts being made to introduce generators that use SVO [straight vegetable oil] in rural areas. The feedstock is jatropha."

The generators, promoted by TaTEDO, a non-governmental development organisation, can provide power for machinery, recharge batteries and bring electricity to village shops, and to households for some hours at night. "The communities have passed by-laws to guarantee the supply of jatropha seed for the generators [run by a selected/trusted 'entrepreneur' and supervised by a community 'bioenergy' council]," said Croppenstedt.

"Although we do not know enough about jatropha, some of the agronomists we talked to say it does well being intercropped with beans," he added. "At the moment farmers seem to grow the plant in hedges."

Competition with the West
Even though African countries have a very large sustainable biofuel potential "there is much slack in terms of productivity in African agriculture - little irrigation, very limited use of fertiliser - and hence there must be much scope for improvements in productivity," Croppenstedt commented.

But the stumbling block is infrastructure development. "Transaction costs are typically very high in African countries, and this is a hurdle for both biofuel development and stimulating food production," he added. "How will they compete with biofuel prices elsewhere in the world?"

The US and Europe are already offering subsidies to benefit domestic farmers producing biofuel crops and have also imposed import tariffs to protect them. "This has led to the strange irony of virtually unimpeded trade in oil, while trade in biofuels is greatly restricted," the UN framework document pointed out.

Most agricultural experts agree that opening international markets to biofuel would accelerate investment and ensure that production occurred in locations where costs were lower, such as poor countries in Central America and sub-Saharan Africa.

Picture: palm oil is one of the most promising first-generation biofuel crops for Africa. Credit: FAO.

IRIN: Food to eat or to run your car? - October 23, 2007.

Biopact: IEA report: bioenergy can meet 20 to 50% of world's future energy demand - September 12, 2007

Biopact: A look at Africa's biofuels potential - July 30, 2006


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