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    South Korea plans to invest 20 billion won (€14.8/$21.8 million) by 2010 on securing technologies to develop synthetic fuels from biomass, coal and natural gas, as well as biobutanol. 29 private companies, research institutes and universities will join this first stage of the "next-generation clean energy development project" led by South Korea's Ministry of Commerce, Industry and Energy. Korea Times - November 19, 2007.

    OPEC leaders began a summit today with Venezuelan President Hugo Chavez issuing a chilling warning that crude prices could double to US$200 from their already-record level if the United States attacked Iran or Venezuela. He urged assembled leaders from the OPEC, meeting for only the third time in the cartel's 47-year history, to club together for geopolitical reasons. But the cartel is split between an 'anti-US' block including Venezuela, Iran, and soon to return ex-member Ecuador, and a 'neutral' group comprising most Gulf States. France24 - November 17, 2007.

    The article "Biofuels: What a Biopact between North and South could achieve" published in the scientific journal Energy Policy (Volume 35, Issue 7, 1 July 2007, Pages 3550-3570) ranks number 1 in the 'Top 25 hottest articles'. The article was written by professor John A. Mathews, Macquarie University (Sydney, Autralia), and presents a case for a win-win bioenergy relationship between the industrialised and the developing world. Mathews holds the Chair of Strategic Management at the university, and is a leading expert in the analysis of the evolution and emergence of disruptive technologies and their global strategic management. ScienceDirect - November 16, 2007.

    Timber products company China Grand Forestry Resources Group announced that it would acquire Yunnan Shenyu New Energy, a biofuels research group, for €560/$822 million. Yunnan Shenyu New Energy has developed an entire industrial biofuel production chain, from a fully active energy crop seedling nursery to a biorefinery. Cleantech - November 16, 2007.

    Northern European countries launch the Nordic Bioenergy Project - "Opportunities and consequences of an expanding bio energy market in the Nordic countries" - with the aim to help coordinate bioenergy activities in the Nordic countries and improve the visibility of existing and future Nordic solutions in the complex field of bioenergy, energy security, competing uses of resources and land, regional development and environmental impacts. A wealth of data, analyses and cases will be presented on a new website - Nordic Energy - along with announcements of workshops during the duration of project. Nordic Energy - November 14, 2007.

    Global Partners has announced that it is planning to increase its refined products and biofuels storage capacity in Providence, Rhode Island by 474,000 barrels. The partnership has entered into agreements with New England Petroleum Terminal, at a deepwater marine terminal located at the Port of Providence. PRInside - November 14, 2007.

    The Intergovernmental Panel on Climate Change (IPCC) kicks off the meeting in Valencia, Spain, which will result in the production of the Synthesis Report on climate change. The report will summarize the core findings of the three volumes published earlier by the separate working groups. IPCC - November 12, 2007.

    Biopact's Laurens Rademakers is interviewed by Mongabay on the risks of large-scale bioenergy with carbon storage (BECS) proposals. Even though Biopact remains positive about BECS, because it offers one of the few safe systems to mitigate climate change in a drastic way, care must be take to avoid negative impacts on tropical forests. Mongabay - November 10, 2007.

    According to the latest annual ranking produced by The Scientist, Belgium is the world's best country for academic research, followed by the U.S. and Canada. Belgium's top position is especially relevant for plant, biology, biotechnology and bioenergy research, as these are amongst the science fields on which it scores best. The Scientist - November 8, 2007.

    Mascoma Corporation, a cellulosic ethanol company, today announced the acquisition of Celsys BioFuels, Inc. Celsys BioFuels was formed in 2006 to commercialize cellulosic ethanol production technology developed in the Laboratory of Renewable Resources Engineering at Purdue University. The Celsys technology is based on proprietary pretreatment processes for multiple biomass feedstocks, including corn fiber and distiller grains. The technology was developed by Dr. Michael Ladisch, an internationally known leader in the field of renewable fuels and cellulosic biofuels. He will be taking a two-year leave of absence from Purdue University to join Mascoma as the company’s Chief Technology Officer. Business Wire - November 7, 2007.

    Bemis Company, Inc. announced today that it will partner with Plantic Technologies Limited, an Australian company specializing in starch-based biopolymers, to develop and sell renewably resourced flexible films using patented Plantic technology. Bemis - November 7, 2007.

    Hungary's Kalocsa Hõerõmû Kft is to build a HUF 40 billion (€158.2 million) straw-fired biomass power plant with a maximum capacity of 49.9 megawatts near Kalocsa in southern Hungary. Portfolio Hungary - November 7, 2007.

    Canada's Gemini Corporation has received approval to proceed into the detailed engineering, fabrication and construction phases of a biogas cogeneration facility located in the Lethbridge, Alberta area, the first of its kind whereby biogas production is enhanced through the use of Thermal Hydrolysis technology, a high temperature, high pressure process for the safe destruction of SRM material from the beef industry. The technology enables a facility to redirect waste material, previously shipped to landfills, into a valuable feedstock for the generation of electricity and thermal energy. This eliminates the release of methane into the environment and the resultant solids are approved for use as a land amendment rather than re-entering the waste stream. In addition, it enhances the biogas production process by more than 25%. Market Wire - November 7, 2007.

    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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Tuesday, November 20, 2007

France's ethanol sector would collapse if subsidies are cut - highlights case for a Biopact

France's nascent ethanol sector could collapse if the French government goes ahead with plans to slash subsidies key to the survival of the sector, a top industry official said. This is obvious and good news to those who advocate a more rational biofuel market - one in which countries in the South are allowed access to Northern markets to supply biofuels that are far more efficient, do not require subsidies and bring social and rural development.

According to the Global Subsidies Initiative, there is no reason as to why wealthy farmers in the EU and the US should receive massive subsidies for the production of inefficient biofuels that do not really reduce greenhouse gas emissions (previous post), while developing countries could tap their large land and agro-climatic resources to produce much better fuels. This would allow millions of poor farmers to enter a new market that offers, in the words of the UN's Food & Agriculture Organisation's director, a 'historic opportunity' for poverty alleviation.

EU farmers should be not be allowed to keep their colleagues in the developing world in poverty and wreck a chance to mitigate climate change. The case for an alternative situation - a win-win 'Biopact' between the North and the South - is therefor supported by all major think tanks that have studied the biofuels future (the Global Bioenergy Partnership, FAO, the IEA, the OECD, the WorldWatch Institute, the UNIDO, and many others).

Ethanol currently makes up just under a third of French biofuel production. The rest comes from biodiesel, mainly derived from crops like rapeseed. The French ethanol sector is heavily reliant on subsidies in the form of a lower TIPP fuel tax, that makes the fuel competitive with gasoline at fuel pumps. Ethanol currently benefits from a €0.33 per litre discount when sold at petrol pumps, but that amount could soon be halved, said other industry sources.

Alain Jeanroy, co-ordinator of France's ethanol industry group, the talks on upping the TIPP tax are well advanced in the framework of inter-ministerial discussions and are causing great concern.

The lower TIPP fuel tax is just one of the many subsidies and protection measures French farmers enjoy. From the EU they receive subsidies for each hectare of land they devote to growing energy crops. Moreover, they are protected by steep import tariffs on ethanol. Ethanol with an alcohol content of 80 percent is subject to a tariff of €19.20 (27 dollars) per 100 litres. 'Denatured' alcohol, which has a lower content, is taxed at just over half that level (previous post).
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In a recent working paper on the impact of biofuels written for discussion by the 'OECD Roundtable on Sustainable Development' (no immediate relation with the OECD), two analysts urged governments in industrialised countries to cut their subsidies for the sector. They called for a liberalisation of the market, which will allow more efficient and competitive producers, mostly found in the poor countries of the South, to supply biofuels to world markets (previous post).

According to analysts, the French government is now considering a cut in the TIFF tax. However, no one from the relevant ministries was immediately available to comment.

"When taking into account commitments taken with industrial investments of close to 1 billion euros and the recent start-up of production units, we would not understand (such a move)," Jeanroy said. France produced 235,000 tonnes of ethanol and 631,000 tonnes of biodiesel in 2006, the French farm ministry said.

France decided to go beyond the EU target and incorporate 5.75 percent of alternative fuels by end-2008, seven percent by end-2010 and 10 percent by end-2015.

According to the latest 'Biofuels Country Attractiveness Index' published by Ernst & Young, France ranked 4th overall for biofuels, and 5th for ethanol, partly due to the strong subsidies and protectionist measures. If some of these are removed, the French ethanol sector will find it extremely difficult to compete with more efficient biofuels produced in the South (previous post).

Guardian: INTERVIEW: Subsidy cuts would wreck French ethanol sector - November 19, 2007.

Biopact: FAO chief calls for a 'Biopact' between the North and the South - August 15, 2007

Biopact: GBEP calls for a Biopact: US/EU must open markets for biofuels from the South - November 13, 2007

Biopact: IISD report challenges EU biofuel subsidies, calls for end to tariff - October 04, 2007

Biopact: Paper warns against subsidies for inefficient biofuels in the North, calls for liberalisation of market - major boost to idea of 'Biopact' - September 11, 2007

Biopact: US tops Biofuels Country Attractiveness Indices for Q2 2007 - September 18, 2007


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