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    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.

    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 11, 2007

IPC urges EU/US to open markets for more efficient biofuels from the developing world - boost to 'Biopact'

Yet another major agriculture policy think tank has examined the effects of EU and US support for their own first-generation biofuels industries compared to more efficient alternatives from the South, and finds that the measures present major problems: domestic biofuels are not very energy efficient, they do not offer significant reductions in greenhouse gas emissions, they are not cost effective, they push up food prices and they are based on large amounts of subsidies and protectionist trade barriers.

The International Food & Agricultural Trade Policy Council (IPC) therefor urges both blocks to open their markets for biofuels from the developing world, where they can be produced far more efficiently, cost effectively and offer major opportunities for economic development and poverty alleviation. The IPC thus fully joins the case for a 'Biopact' - a vision now being supported by major energy policy think tanks, agriculture organisations and development economists.

The US and the EU are presently considering significant increases in their biofuels mandates in transportation fuel. IPC's report 'An Examination of U.S. and EU Government Support to Biofuels: Early Lessons' [*.pdf], finds that, in the absence of commercially viable second-generation biofuels, ambitious mandates coupled with high tariffs that serve to largely limit tax incentives to domestic producers risk a disproportionate focus on inefficient US and EU first-generation biofuels.

The report demonstrates that the lack of internationally agreed technical and sustainability standards, as well as a lack of clarity about international trade obligations, can increase this tendency. The report urges the U.S. and EU to adopt policies that serve to promote uses of biomass that are most energy-efficient and show the greatest promise of reducing greenhouse gas emissions, regardless of national origin.

The IPC's report says that, considering the comparative advantage of many developing countries in agriculture, increased US and EU openness to imports could provide economic growth opportunities for those countries with large production capacities. Developing countries can produce biofuels in a more efficient (table 1, click to enlarge) and more cost-effective (figure, click to enlarge) way.

Moreover, these biofuels reduce greenhouse gas emissions far more than fuels made from grains such as wheat and corn (figure 2, click to enlarge). What is more, both the EU and the US have limited land resources needed to expand production, whereas in the developing world there is vast unused potential.

To encourage the efficient production of biofuels from the most appropriate feedstocks, IPC’s report makes following recommendations and warnings:

EU and U.S. mandates, tax incentives, and tariffs:
  • In the absence of viable second-generation biofuels, incentives, tariffs, and standards that are structured primarily to promote domestic production of certain biofuels will retard the procurement and development of other more energy — and cost-efficient — biofuels.
  • Widening the access of imports to U.S. and EU domestic markets would help reduce upward pressure on commodity prices and lower the high costs of biofuels production, decreasing the risk of a backlash against government subsidies.
  • Clarifying how WTO rules apply to the biofuels sector can pave the way for less distorted government support policies.
:: :: :: :: :: :: :: :: :: :: :: ::

International standards are necessary to ensure that biofuels play a productive role in the push for renewable energy sources:
  • Global sustainability standards can point the way towards optimal biofuels and feedstocks. The reduction of greenhouse gases should be the top priority.
  • Without an international consensus on what constitutes sustainable biofuels production, environmental concerns can conveniently be used to cloak protectionist interests.
  • Without widespread agreement on feedstock-neutral quality specifications, divergent technical standards can also be used for protectionist purposes.
The United States and the EU should consider the impact of their biofuels support policies on developing countries:
  • Increased prices and new market opportunities will be welcome by developing countries with good production and export capacity. Rising food prices, however, hit net food importing developing countries especially hard.
  • Considering the comparative advantage of many developing countries in agriculture, increased U.S. and EU openness to imports could provide economic growth opportunities for those countries with large production capacities.
  • Other developing countries should be encouraged to explore the potential for domestic and small-scale biofuels production, which promises to be effective in the ongoing struggle for greater access to more sustainable energy sources and in the fight against poverty. As these countries do not have comparable means to subsidize their biofuels industry, the prospect of trade will facilitate investment.
  • For international sustainability criteria to be effective, they must truly be global and incorporate the interests and concerns of developing countries. Given the possibility that these standards may limit economic growth in developing countries, care must be taken to help developing countries comply.
The costs, energy efficiencies, and net energy balances of biofuels vary widely, depending on the type of feedstock and production process used. Since the utilization of biofuels by the transport sector in the United States and the EU relies on government incentives, these policies should promote those biofuels that have an economic and environmental comparative advantage.

The political reality, however, is that domestic interests, largely agricultural ones, expect to be the primary beneficiaries of generous incentives to achieve ambitious biofuel production targets. Policymakers are not shy about this. They promote biofuels not only for their energy and environmental benefits, but also for their role in strengthening the market for domestically produced agricultural feedstocks.

This IPC’s examination of U.S. and EU incentives and tariffs demonstrates a high level of protectionism on both sides. Ultimately, the objective of promoting domestic production may undermine efforts to rapidly develop the most efficient, sustainable energy resources, it concludes.

The International Food & Agricultural Trade Policy Council promotes a more open and equitable global food system by pursuing pragmatic trade and development policies in food and agriculture to meet the world's growing needs. IPC convenes influential policymakers, agribusiness executives, farm leaders, and academics from developed and developing countries to clarify complex issues, build consensus, and advocate policies to decision-makers.

Charlotte Hebebrand and Kara Laney, "An Examination of U.S. and EU Government Support to Biofuels: Early Lessons" [*.pdf], IPC Issue Brief 26, October 2007

IPC: U.S. and EU policies should expedite sustainable biofuels - October9, 2007.


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