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    The Royal Society of Chemistry has announced it will launch a new journal in summer 2008, Energy & Environmental Science, which will distinctly address both energy and environmental issues. In recognition of the importance of research in this subject, and the need for knowledge transfer between scientists throughout the world, from launch the RSC will make issues of Energy & Environmental Science available free of charge to readers via its website, for the first 18 months of publication. This journal will highlight the important role that the chemical sciences have in solving the energy problems we are facing today. It will link all aspects of energy and the environment by publishing research relating to energy conversion and storage, alternative fuel technologies, and environmental science. AlphaGalileo - December 10, 2007.

    Dutch researcher Bas Bougie has developed a laser system to investigate soot development in diesel engines. Small soot particles are not retained by a soot filter but are, however, more harmful than larger soot particles. Therefore, soot development needs to be tackled at the source. Laser Induced Incandescence is a technique that reveals exactly where soot is generated and can be used by project partners to develop cleaner diesel engines. Terry Meyer, an Iowa State University assistant professor of mechanical engineering, is using similar laser technology to develop advanced sensors capable of screening the combustion behavior and soot characteristics specifically of biofuels. Eurekalert - December 7, 2007.

    Lithuania's first dedicated biofuel terminal has started operating in Klaipeda port. At the end of November 2007, the stevedoring company Vakaru krova (VK) started activities to manage transshipments. The infrastructure of the biodiesel complex allows for storage of up to 4000 cubic meters of products. During the first year, the terminal plans to transship about 70.000 tonnes of methyl ether, after that the capacities of the terminal would be increased. Investments to the project totaled €2.3 million. Agrimarket - December 5, 2007.

    New Holland supports the use of B100 biodiesel in all equipment with New Holland-manufactured diesel engines, including electronic injection engines with common rail technology. Overall, nearly 80 percent of the tractor and equipment manufacturer's New Holland-branded products with diesel engines are now available to operate on B100 biodiesel. Tractor and equipment maker John Deere meanwhile clarified its position for customers that want to use biodiesel blends up to B20. Grainnet - December 5, 2007.

    According to Wetlands International, an NGO, the Kyoto Protocol as it currently stands does not take into account possible emissions from palm oil grown on a particular type of land found in Indonesia and Malaysia, namely peatlands. Mongabay - December 5, 2007.

    Malaysia's oil & gas giant Petronas considers entering the biofuels sector. Zamri Jusoh, senior manager of Petronas' petroleum development management unit told reporters "of course our focus is on oil and gas, but I think as we move into the future we cannot ignore the importance of biofuels." AFP - December 5, 2007.

    In just four months, the use of biodiesel in the transport sector has substantially improved air quality in Metro Manila, data from the Philippines Department of Environment and Natural Resources (DENR) showed. A blend of one percent coco-biodiesel is mandated by the Biofuels Act of 2007 which took effect last May. By 2009, it would be increased to two percent. Philippine Star - December 4, 2007.

    Kazakhstan will next year adopt laws to regulate its fledgling biofuel industry and plans to construct at least two more plants in the next 18 months to produce environmentally friendly fuel from crops, industry officials said. According to Akylbek Kurishbayev, vice-minister for agriculture, he Central Asian country has the potential to produce 300,000 tons a year of biodiesel and export half. Kazakhstan could also produce up to 1 billion liters of bioethanol, he said. "The potential is huge. If we use this potential wisely, we can become one of the world's top five producers of biofuels," Beisen Donenov, executive director of the Kazakhstan Biofuels Association, said on the sidelines of a grains forum. Reuters - November 30, 2007.

    SRI Consulting released a report on chemicals from biomass. The analysis highlights six major contributing sources of green and renewable chemicals: increasing production of biofuels will yield increasing amounts of biofuels by-products; partial decomposition of certain biomass fractions can yield organic chemicals or feedstocks for the manufacture of various chemicals; forestry has been and will continue to be a source of pine chemicals; evolving fermentation technology and new substrates will also produce an increasing number of chemicals. Chemical Online - November 27, 2007.

    German industrial conglomerate MAN AG plans to expand into renewable energies such as biofuels and solar power. Chief Executive Hakan Samuelsson said services unit Ferrostaal would lead the expansion. Reuters - November 24, 2007.

    Analysts think Vancouver-based Ballard Power Systems, which pumped hundreds of millions and decades of research into developing hydrogen fuel cells for cars, is going to sell its automotive division. Experts describe the development as "the death of the hydrogen highway". The problems with H2 fuel cell cars are manifold: hydrogen is a mere energy carrier and its production requires a primary energy input; production is expensive, as would be storage and distribution; finally, scaling fuel cells and storage tanks down to fit in cars remains a huge challenge. Meanwhile, critics have said that the primary energy for hydrogen can better be used for electricity and electric vehicles. On a well-to-wheel basis, the cleanest and most efficient way to produce hydrogen is via biomass, so the news is a set-back for the biohydrogen community. But then again, biomass can be used more efficiently as electricity for battery cars. Canada.com - November 21, 2007.

    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.

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Wednesday, December 12, 2007

Principle Capital raises $70 million for sugarcane ethanol plant in 'biofuel superpower' Mozambique

UK-based Fund manager Principle Capital Holdings SA announces it has raised $70 million towards a $290 million Mozambique bioethanol plant expected to come onstream in 2011. The project, aimed at producing the lowest-cost biofuel, is undertaken by its newly launched group company Principle Energy Ltd (PEL). A subsequent equity fundraising of about $90 million is expected to be combined with an IPO, with the remaining $130 million to be raised as loans from banks who have shown interest. Investment in biofuels in Mozambique - a typical African 'biofuel superpower' in the making - now stands at more than $1 billion this year.

Principle, listed on London's AIM, raised the money from a group of hedge funds to start a sugar cane plantation of more than 20,000 hectares in the central region of Mozambique that will provide feedstock for the plant. According to the company, the facility will rank in the top five bioethanol plants in the world in terms of production. The plant will have a capacity 100 million liters of bioethanol a year. PEL is rolling out the programme over the next 4-5 years.

Yields 50% higher than Brazilian cane
Sugar cane is the best feedstock to produce first generation ethanol because of the very efficient way in which it can be turned into both liquid fuels as well as in bioenergy. Besides ethanol, bagasse is produced as an abunndant byproduct, which is utilized to generate renewable and carbon-neutral power. This makes sugarcane based biofuels highly efficient in terms of reducing carbon dioxide (80% less CO2 than gasoline), as well as giving it a very strong energy balance (between 8 and 10 to 1 - more here).

Interestingly, cane yields in Mozambique are expected to be over 50 percent higher than the Brazilian average, due to a better quality of soils, a more suitable climate and full irrigation. Brazil is the world leader in ethanol production from sugarcane making the most efficient and environmentally friendly biofuel currently available.

The new plant, to be built near Dombe town, about 200 km (125 miles) west of Beira port in the Sofala Province, will serve biofuels markets in Europe and North America and will be exempt from tariffs under European and U.S. trade agreements. It will truck bioethanol to Beira and ship the fuel to its markets in bulk tankers - a highly efficient operation. The investment would create 2,500-4,000 jobs:
:: :: :: :: :: :: :: :: :: :: ::

The project has already received approval at provincial level, and an application for the final go-ahead from the central government is expected to receive the green light before the end of January. Feasibility modelling was completed and independently verified by industry experts in July 2007.

Principle Capital has assembled a team of experts to manage the project, including Paul Zorner, Chief Technology Officer, who was the former Chief Scientist for Dow Chemical's Global Biotechnology platform and Richard Hurly, Chief Operating Officer, an agronomist with extensive experience on large scale Southern African agricultural projects, particularly working with South Africa's Industrial Development Corporation (IDC). In addition it has engaged three major project partners, to manage the engineering, agricultural and chemical aspects of the project.

Principle Capital has also established a subsidiary company called Principle Energy Management Services Limited ("PEMS"), which has entered into a five year management contract with PEL, pursuant to which it is entitled to management and performance fees from PEL. Principle Capital Partners Limited, a subsidiary of the Company, has been granted warrants to subscribe for new shares in PEL, which will be utilised to incentivise those involved in PEL's projects as well as to benefit the Principle Capital group. Principle Capital is investing $5m in PEL.

Mozambique has recently agreed other major biofuels investments and is seen as a typical African 'biofuel superpower' in the making. The country has an abundance of land - it only utilizes 5% of its potential arable land - and an excellent climate for a range of high yielding energy crops. Its short term sustainable potential bioenergy production capacity (that is production after meeting all food, fuel, fiber, fodder and forest product needs of local populations, without deforestation) is estimated at around 7 Exajoules, roughly the equivalent of 1.14 billion barrels of oil (3.14 million barrels per day).

Mozambique, a nation of 21 million mainly rural citizens, currently only consumes around 11,500 barrels of oil equivalent per day (2004 estimate), which means it can easily reach full oil independence and begin to supply world markets.

A case study on Mozambique's sustainable exportable bioenergy potential, written by scientists working for the International Energy Agency's Bioenergy Task 40 can be found here and in the article "Biomass and bioenergy supply from Mozambique" [*abstract / *.pdf]. This summer, Mozambique's Minister of Energy sketched his country's resources during a the EU's landmark international conference on biofuels; his presentation can be found here [*.pdf] and also see our own reporting on the conference.

Earlier this month (December 6-8) the country's Ministry of Agriculture organised a high level meeting to discuss Mozambique's biofuel policies and strategies. During the gathering, special attention was given to biofuel trade as it relates to the opportunities offered by the EU's biofuels targets, and on desiging robust policy frameworks to ensure that Mozambique's resources are exploited in the most sustainable and efficient way. (Biopact was invited to attend the meeting, but sadly couldn't do so. For those interested in the program, please contact us).

In October, Mozambique signed a $510 million deal with London-listed Central African Mining & Exploration Company Plc (CAMEC) to build a plant to produce 120 million litres of ethanol a year by 2010 (previous post).

In August, state-owned Mozambican Petroleum Co. (PETROMOC) unveiled a $408 million biofuels project aimed at easing an energy crunch in the fast-growing southern African nation (more here).

London Stock Exchange: Principle Cap Hldngs - Launch of Principle Energy - December 11, 2007.

Reuters Africa: Fund raises $70 mln for Mozambique biofuel plant - December 11, 2007.

Biopact: Mozambique signs ethanol mega-deal: $510 million, 30,000 hectares of sugarcane - October 22, 2007

Biopact: Mozambique's Petromoc seeks to invest $408 million in biofuels - August 30, 2007

Biopact: Brazilian ethanol is sustainable and has a very positive energy balance - IEA report - October 08, 2006

Biopact: Journal "Energy for Sustainable Development" focuses on international bioenergy trade - November 05, 2006

Salvador Namburete: Mozambique's Experience on Bio-fuels [*.pdf], Minister of Energy of the Republic of Mozambique, presentation at the International Conference on Biofuels, Brussels, July 5-6, 2007.

Batidzirai, B., A.P.C. Faaij, E.M.W. Smeets (2006), "Biomass and bioenergy supply from Mozambique" [*abstract / *.pdf], Energy for Sustainable Development, X(1), Pp. 54-81


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