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    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.

    Analysts fear that record oil prices will fuel general inflation in Kenya, particularly hitting the poorest hard. They call for the development of new policies and strategies to cope with sustained high oil prices. Such policies include alternative fuels like biofuels, conservation measures, and more investments in oil and gas exploration. The poor in Kenya are hit hardest by the sharp increase, because they spend most of their budget on fuel and transport. Furthermore, in oil intensive economies like Kenya, high oil prices push up prices for food and most other basic goods. All Africa - September 20, 2007.

    Finland's Metso Power has won an order to supply Kalmar Energi Värme AB with a biomass-fired power boiler for the company’s new combined heat and power plant in Kalmar on the east coast of Sweden. Start-up for the plant is scheduled for the end of 2009. The value of the order is approximately EUR 55 million. The power boiler (90 MWth) will utilize bubbling fluidized bed technology and will burn biomass replacing old district heating boilers and reducing the consumption of oil. The delivery will also include a flue gas condensing system to increase plant's district heat production. Metso Corporation - September 19, 2007.

    Jo-Carroll Energy announced today its plan to build an 80 megawatt, biomass-fueled, renewable energy center in Illinois. The US$ 140 million plant will be fueled by various types of renewable biomass, such as clean waste wood, corn stover and switchgrass. Jo-Carroll Energy - September 18, 2007.

    Beihai Gofar Marine Biological Industry Co Ltd, in China's southern region of Guangxi, plans to build a 100,000 tonne-per-year fuel ethanol plant using cassava as feedstock. The Shanghai-listed company plans to raise about 560 million yuan ($74.5 million) in a share placement to finance the project and boost its cash flow. Reuters - September 18, 2007.

    The oil-dependent island state of Fiji has requested US company Avalor Capital, LLC, to invest in biodiesel and ethanol. The Fiji government has urged the company to move its $250million 'Fiji Biofuels Project' forward at the earliest possible date. Fiji Live - September 18, 2007.

    The Bowen Group, one of Ireland's biggest construction groups has announced a strategic move into the biomass energy sector. It is planning a €25 million investment over the next five years to fund up to 100 projects that will create electricity from biomass. Its ambition is to install up to 135 megawatts of biomass-fuelled heat from local forestry sources, which is equal to 50 million litres or about €25m worth of imported oil. Irish Examiner - September 16, 2007.

    According to Dr Niphon Poapongsakorn, dean of Economics at Thammasat University in Thailand, cassava-based ethanol is competitive when oil is above $40 per barrel. Thailand is the world's largest producer and exporter of cassava for industrial use. Bangkok Post - September 14, 2007.

    German biogas and biodiesel developer BKN BioKraftstoff Nord AG has generated gross proceeds totaling €5.5 million as part of its capital increase from authorized capital. Ad Hoc News - September 13, 2007.

    NewGen Technologies, Inc. announced that it and Titan Global Holdings, Inc. completed a definitive Biofuels Supply Agreement which will become effective upon Titan’s acquisition of Appalachian Oil Company. Given APPCO’s current distribution of over 225 million gallons of fuel products per year, the initial expected ethanol supply to APPCO should exceed 1 million gallons a month. Charlotte dBusinessNews - September 13, 2007.

    Oil prices reach record highs as the U.S. Energy Information Agency releases a report that showed crude oil inventories fell by more than seven million barrels last week. The rise comes despite a decision by the international oil cartel, OPEC, to raise its output quota by 500,000 barrels. Reuters - September 12, 2007.

    OPEC decided today to increase the volume of crude supplied to the market by Member Countries (excluding Angola and Iraq) by 500,000 b/d, effective 1 November 2007. The decision comes after oil reached near record-highs and after Saudi Aramco announced that last year's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent. OPEC - September 11, 2007.

    GreenField Ethanol and Monsanto Canada launch the 'Gro-ethanol' program which invites Ontario's farmers to grow corn seed containing Monsanto traits, specifically for the ethanol market. The corn hybrids eligible for the program include Monsanto traits that produce higher yielding corn for ethanol production. MarketWire - September 11, 2007.

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Thursday, October 04, 2007

IISD report challenges EU biofuel subsidies, calls for end to tariff

A new report gives yet another boost to the idea of a Biopact, which consists of wealthy countries in the North importing efficient and sustainable bioenergy and biofuels made in the South, as a way of creating a new trade relationship in which development, poverty alleviation and energy security take center stage. In order for such a pact to succeed, trade reform is needed and subsidy schemes in the EU and the US must be changed.

The European Union's support for biofuels may not be the most cost-effective way for the 27-country bloc to tackle climate change, the new study concludes. Its lead author argues that the EU better import sustainable biofuels made in poor countries like Brazil, because they are highly energy efficient, reduce greenhouse gas emissions far more and are highly competitive compared to biofuels made in the EU. The same researchers, working for the Global Subsidies Initiative (GSI), earlier analysed biofuel subsidies and their trade distorting effects in the US and came to similar conclusions (previous post).

Last year EU governments spent at least €3.7 billion ($5.2 billion) on subsidising biofuel production. Such support is likely to grow in the coming years because the Union has set a strategy of raising the quantity of road fuel generated from biofuels from its present level of 2 percent to 10 percent by 2010.

But the International Institute for Sustainable Development (IISD) in Geneva has queried if allocating large amounts of public funds to EU biofuels is desirable. In a study titled Biofuels At What Cost? Government Support for Ethanol and Biodiesel in the European Union [*.pdf] it calculates that the cost of using ethanol from sugar beet to avoid emitting one tonne of carbon dioxide (CO2) - the main gas blamed for climate change - ranges from slightly less than €600 to €800 ($760 to $1,000).

Producing biofuels from crops grown in the EU is generally an energy-intensive business, which in itself makes use of considerable quantities of fossil fuels. As a result, the study says, the overall saving of fossil fuels brought by biofuels may be low, and introducing carbon or pollution taxes may prove more effective.

Generally, biofuels made from high-sugar crops such as sugar cane or high yielding oil crops like palm oil can contribute to higher savings on fossil fuels than those made from oilseeds or grains. More than 90 percent of the 6 million tonnes of biofuels produced in the EU during 2006 was made from rapeseed oil.

Ron Steeblik from the GSI urged the Union to eliminate tariffs on imported ethanol, a fuel made from sugar. Ethanol with an alcohol content of 80 percent is subject to a tariff of 19.20 euros (27 dollars) per 100 litres. 'Denatured' alcohol, which has a lower content, is taxed at just over half that level.
These taxes are inimical to poor countries like Brazil. This is contrary to the EU's general policy of trying to reduce tariffs. It is far higher than any tariff on industrial goods and is an old-fashioned instrument for protecting agriculture.

Import tariffs on ethanol from Brazil, one of the most efficient producers of biofuels, reduce the amount of sales that can be made by a developing country. The EU's policy is incoherent. If biofuels are so good, why is it taxing them so heavily at the border?
- Ron Steenblik, lead author, Global Subsidies Initiative
The EU executive, the European Commission, is expected to propose a new law setting down the criteria for supporting biofuels by the end of this year:
:: :: :: :: :: :: :: :: :: :: ::

Officials are examining how to prevent support for biofuels in cases where their production involves the emission of more greenhouse gases than would eventually be saved by using them instead of pure fossil fuels.

However, there are some who support biofuel subsidies. Lena Ek, a Swedish Liberal member of the European Parliament (MEP), said that "biofuels will be there as part of the solution" to global warming. She asked, therefore, if subsidising them is "really a bad thing."

Ethanol has proven economically beneficial to Brazil, she added. "Brazil has got out of the fossil economy," she noted. "Last year it paid off the debt it owed to the World Bank."

Swedish conservative MEP Anders Wijkman said: "We need subsidies if we want new energy in the market place. But the question is how do we lock ourselves into a production scheme that is really feasible. The logical question is how to ensure the end result really eliminates carbon dioxide."

A European Commission official said that there is a "serious misunderstanding" about the factors motivating biofuels policy in the Union. One widely held view, he said, is that the principal objective is to support the income of crop farmers. "It has nothing to do with that," the official said.

The real issue for the Union, according to the official, is having a "policy in place" to meet an increased demand for biofuels.

But Ron Steeblik said that high subsidies for biofuels "could potentially create a lot of instability for other markets, including the agriculture market."

His colleague at the Global Subsidies Initiative David Runnalls said that the EU should beware of aping the support system for biofuels in the U.S. He argued that it is preferable to support research into biofuels, as has been done in Canada, than to link support for them to the level of production, the method favoured in Washington.

In some parts of America, he said, subsidies account for 2.40 dollars of the price of a three-dollar gallon of biodiesel.

"There is a potentially distorting effect of biofuels wrongly applied in the wrong place and the wrong time," said Runnalls. "We are not opposed to subsidies. What we are opposed to is governments spending them in an ill-advised fashion."

IISD: International Institute for Sustainable Development's Global Subsidies Initiative releases Biofuels – At What Cost? Government support for ethanol and biodiesel in selected OECD countries - October 3, 2007.

Global Subsidies Initiative: Biofuels At What Cost? Government Support for Ethanol and Biodiesel in the European Union [*.pdf] - October 3, 2007?

Biopact: Subsidies for uncompetitive U.S. biofuels cost taxpayers billions - report - October 26, 2006


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