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    A new Agency to manage Britain's commitment to biofuels was established today by Transport Secretary Ruth Kelly. The Renewable Fuels Agency will be responsible for the day to day running of the Renewable Transport Fuels Obligation, coming into force in April next year. By 2010, the Obligation will mean that 5% of all the fuels sold in the UK should come from biofuels, which could save 2.6m to 3m tonnes of carbon dioxide a year. eGov Monitor - November 5, 2007.

    Prices for prompt loading South African coal cargoes reached a new record last week with a trade at $85.00 a tonne free-on-board (FOB) for a February cargo. Strong Indian demand and tight supply has pushed South African prices up to record levels from around $47.00 at the beginning of the year. European DES/CIF ARA coal prices have remained fairly stable over the past few days, having traded up to a record $130.00 a tonne DES ARA late last week. Fair value is probably just below $130.00 a tonne, traders said. At this price, some forms of biomass become directly competitive with coal. Reuters Africa - November 4, 2007.

    The government of India's Harayana state has decided to promote biomass power projects based on gasification in a move to help rural communities replace costly diesel and furnace oil. The news was announced during a meeting of the Haryana Renewable Energy Development Agency (HAREDA). Six pilot plants have demonstrated the efficiency and practicability of small-scale biomass gasification. Capital subsidies will now be made available to similar projects at the rate of Rs 2.5 lakh (€4400) per 100 KW for electrical applications and Rs 2 lakh (€3500) per 300 KW for thermal applications. New Kerala - November 1, 2007.

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Monday, November 05, 2007

Biofuel producer leaves Australia for U.S.

Booming demand from China and India is the major factor responsible for the increase in food and commodity prices. An Australian biofuel producer is experiencing this first-hand and has decided to shut down its operations in Perth and Adelaide because the price of its main feedstock, tallow, has increased too much on Asian demand.

Perth-based Australian Renewable Fuels (ARF) blamed the shut-in of its two plants with a combined capacity of 44 million litres on rising prices of tallow: the raw material increased from A$600 (US$552) per tonne to A$900 (US$828) per tonne in the last six months as a result of burgeoning demand from China. "As a consequence, production of biodiesel from [the two plants] has become uneconomic, with no indication of material improvement in feedstock prices in the immediate future," ARF said in the statement issued to the Australian Stock Exchange.

The company is moving to the United States in search for more favourable market conditions because lack of government support is another factor that made production in Australia uneconomic.

ARF's Chairman Max Ger also lashed out at the Australian government and opposition for paying lip service to the woes of biodiesel producers. Ger told the Australian press the government had granted the company more than A$7 million (US$6.4 million) two years ago to build the plant in Adelaide, but subsequent changes to the Fuel Tax Act made it 'virtually impossible' to sell biofuel because incentives for users had almost dried up.

A legislative change last year made it impossible for users of biodiesel and mineral diesel blends to claim the A$0.36 (US$0.33) a litre tax rebate. "The federal government made it impossible for us to sell biodiesel to anybody but the oil majors," Ger said. However, oil companies, with the exception of Caltex, were indifferent, or 'mildly hostile' to biodiesel users, who relied on the oil majors to develop distribution networks, he added:
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With ARF losing money on every litre sold, Ger said the closures of the Picton (Perth) and Largs Bay (Adelaide) operations were needed to preserve cash. The two plants, which cost ARF A$47 million (US$43 million) to build, are now under care and maintenance pending a review by adviser, Macquarie Bank. ARF is now moving on to focus on the development of opportunities in the United States' biodiesel market, particularly in New Mexico. ARF deems the market conditions in the United States as more favourable, with a biodiesel mandate backing the demand and the presence of a more diverse range of feedstock as well as export prohibitions on tallow mitigating cost pressures.

ARF's move to cut its operations in Australia comes a week after former federal opposition leader, John Hewson resigned as the chairman of Australia-based Natural Fuel, which has been hit by rising costs and delays in the construction of a major plant in Singapore. Last month, AgriEnergy dropped plans to build a A$100 million (US$92 million) ethanol plant near Swan Hill, in favour of focusing on its advanced biodiesel plant at Beatrice, Neb., in the United States.

The Age: Clean fuel company shuts works, sack workers - November 5, 2007.

Energy Current: Biofuel producer leaves Australia for U.S. - November 5, 2007.


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