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    U.S. oil prices and Brent crude rocketed to all-time highs again on a record-low dollar, tensions in the Middle East and worries over energy supply shortages ahead of the northern hemisphere's winter. Now even wealthy countries like South Korea are warning that the record prices will damage economic growth. In the developing world, the situation is outright catastrophic. Korea Times - October 26, 2007.

    Ethablog's Henrique Oliveira, a young Brazilian biofuels business expert, is back online. From April to September 2007, he traveled around Brazil comparing the Brazilian and American biofuels markets. In August he was joined by Tom MacDonald, senior alcohol fuels specialist with the California Energy Commission. Henrique reports about his trip with a series of photo essays. EthaBlog - October 24, 2007.

    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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Thursday, October 25, 2007

UN Special Rapporteur on the Right to Food to call for a 5-year moratorium on first generation liquid biofuels

Tonight Jean Ziegler, the UN special rapporteur on the right to food, will present his annual report to the General Assembly in New York. In it, he will call for a 5-year moratorium on the production of liquid biofuels made from food crops such as corn, wheat, palm oil and rapeseed. A UN special rapporteur is an independent expert, who does not receive any financial compensation for his or her work.

Over the past month, Biopact has been corresponding with Mr Ziegler's staff to discuss some of the findings contained in the report, which is now publicly available, here [*.pdf; note: if the link doesn't work, check under 'annual reports' on this page and click the document with the code: A/62/289]. We agree with most of the rapporteur's heavy criticisms of first-generation biofuels, especially when it comes to fuels made from crops on which populations in the developing world depend (corn, wheat, palm oil).

But we do hope he also includes several of the theoretical points made throughout the last year by a myriad of organisations who see major chances for the poor to get out of poverty by participating in the biofuels market. These perspectives were not included in the report. We think they are important. Some leading organisations, including the UN's very own FAO, the UNCTAD, the UNIDO as well as the WorldWatch Institute, have said biofuels could help end global hunger(previous post, here and here). But this will require a major overhaul of trade rules, an active effort to engage small farmers and poor rural communities in the sector, and a rethink of the massive biofuel subsidies paid to wealthy farmers in the EU and the US (say the IEA, the OECD, the Global Bioenergy Partnership, alongside a host of other major think tanks and renowned experts).

Moreover, high oil prices can be truly catastrophic for poor countries, and are actually killing people: according to the UN's latest inter-agency report on biofuels, some of the least developed countries are already forced to spend 6 times as much on imported oil than on health care, with obvious tragic consequences for those who need this most basic of services. Biofuels could make an end to this disaster.

Many poor countries have a very large potential to produce sustainable biofuels that do not impact food security negatively. On the contrary, in a free biofuels market, these countries would stand to benefit massively from their comparative advantages which would allow them to boost incomes with which to strengthen their food security (earlier post and here). But again, to make this happen, trade reform and an end to subsidies in the EU/US are a minimal requirement. The Biopact has also called for a more courageous EU foreign aid policy aimed at helping developing countries tap their large biofuels potential, via tech transfers, agricultural expertise and investments in infrastructure.

For the rest, we strongly agree with Mr Ziegler's entire argumentation:
  • as long as such trade and market related reform measures and tech transfer efforts are not in place
  • as long as social and environmental sustainability criteria for biofuels are not agreed on
  • as long as more efficient second-generation biofuel production processes that allow us to use any type of biomass instead of food crops are not available
  • and as long as it is not entirely clear whether biofuels are pushing up food prices (the UN and the EU think they don't, but most other analysts think they do play a role)
then the precautionary principle should come into effect. Hence, a temporary moratorium on first-generation biofuels made from food on which the poor depend is entirely legitimate.

Sadly, we feel the rapporteur's call will not have any major effect on the rush towards food-based biofuels. The subsidies and protectionist measures in the US and the EU are large and strong enough, and oil prices high enough, to make first-generation fuels commercially attractive and to continue the massive investments into the sector. Moral imperatives do not make much of an impression on those who profit from the current situation.

In any case, we will keep you posted on the rapporteur's presentation, which can be viewed live over at the UN Webcast [entry ends here].
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rufus said...

I love it; after accounting for the distillers grains produced we devoted about 8.8 million acres of cattle feed (that's what field corn is, you know) to ethanol production. This comes out to slightly less than 10% of our total corn (er, cattle feed) acreage. This leaves about 81 million acres of cattle feed (corn,) which is about 5% more cattle feed than we grew last year.

Well, anyway, this isn't acceptable.

BUT, it IS Acceptable to take that land out of cattle feed production, and devote it to "Switch Grass," because Switch Grass isn't cattle feed.

Makes "perfect" sense, to me. :0

2:45 AM  
Jonas said...

Better would be to scrap the billions of corn/rapeseed/wheat subsidies in the EU/US, scrap the billions of ethanol/biodiesel subsidies in the EU/US, scrap the billions worth of non-tariff trade barriers in the EU/US, scrap the billions worth of import tariffs in the EU/US.

Then, the world could turn to normal. I'm not a free market afficionado, but in this case I am.

In this case, developing countries with a huge potential to produce food, could finally begin to do so.

It's really a scandal that some of these countries import corn from the US, while they should be exporting food.

Cheers, Jonas

3:30 AM  
rufus said...

Jonas, I don't know about Europe; but, the days of corn, soybean, and wheat subsidies in the U.S. are basically ended. Our price supports on those commodities were set at about break-even levels, and those prices are probably gone, forever.

This SHOULD bode well for third-world farmers (if they can utilize lower-cost biofuels in their own farming.) A lot will depend on the respective governments in those countries.

There IS a natural brake on the amount of corn that will be used for biofuels. That "brake" is, of course, the price of corn in relation to the price of "other" feedstocks (biomass, etc.)

I, also, expect some sort of legislation that will, either directly, or indirectly, limit the amount of corn used.

Jonas, we have, almost certainly, passed "peak" oil. A lot of these concerns are probably going to appear relatively minor in a few years. We will, I think, gaze back, longingly, at the days when we were concerned that some "marginal" land might be put to 1/3 cattle feed, 1/3 CO2, and 1/3 ethanol.

4:46 AM  
Ron Steenblik said...

The link you provided to Mr. Zielgler's report doesn't work. This one does:


By the way, Jonas is right.

9:42 AM  
Ron Steenblik said...

Disregard the previous link. This one will bring readers to the report directly. Click here (PDF warning).

9:49 AM  
Biopact team said...

Ron, the last link you gave doesn't work either. There is a problem with hotlinking.

To access the report, go to this page:


On that page, check the report titled "Report of the Special Rapporteur to the General Assembly" which has the following code: A/62/289

Hope this works.


12:30 PM  
rufus said...

Hi Ron;

BTW, Rufus is "Right," too. :)

7:30 PM  

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