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    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.

    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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Monday, December 03, 2007

Report finds revenues from deforestation are small compared to potential carbon credits - but does not take into account carbon negative bioenergy

Deforestation in tropical countries is often driven by the economic reality that forests are worth more dead than alive. But a new study by an international consortium of researchers has found that the emerging market for carbon credits has the potential to radically alter that equation. By putting a price on carbon sequestered in forests, they would be worth more intact than the profits from the products generated from deforestation.

However, the study did not take into account the emergence of carbon negative bioenergy production, which complicates the calculation even further. But then, the concept of negative emissions energy remains abstract, while deforestation is extremely concrete and must be tackled now. The 'virtual threat' of carbon negative bioenergy to any scheme aimed at compensating avoided deforestation, should remain virtual. It should not be seen as a barrier to policy makers who want to incorporate such avoided deforestation schemes within the new, post-Kyoto framework on strategies to reduce greenhouse gas emissions.

The new study, which was released this week at UNFCC Conference of Parties (COP-13) in Bali, compared the financial gains generated by deforestation over the last 10 to 20 years in areas of Southeast Asia, Central Africa and the Amazon Basin - most of it driven by a desire for farm land or timber - to the amount carbon that was released by the destruction. That comparison has become critically important because many industries in developed countries are set to spend billions of dollars to meet new requirements for curbing greenhouse gases by purchasing carbon credits tied to reductions elsewhere.

Reason and the need to reward avoided deforestation
The researchers - who conducted the study under the Partnership for Tropical Forest Margins (ASB) - found that in most areas studied, the various ventures that prompted deforestation are always the result of a rational calculation. But when the prospect of a carbon price attached to the forests is taken into account, these ventures rarely generated more than $5 for every ton of carbon they released and frequently returned far less than US $1. Meanwhile, European buyers are currently paying 23 euros (about US $35) for an offset tied to a one-ton reduction in carbon.
Deforestation is almost always driven by a rational response to what the market values and for some time now, it has just made more financial sense to many people in forested areas to cut down the trees. What we discovered is that returns for deforestation are generally so paltry that if farmers and other land users were rewarded for the carbon stored in their trees and forests, it is highly likely that a large amount of deforestation and carbon emissions would be prevented. - Brent Swallow, leader of the study and Global Coordinator of the Partnership for Tropical Forest Margins
Developing new incentives for reducing carbon emissions stemming from deforestation is high on the agenda in Bali. Deforestation is rampant in places like Indonesia, the Amazon and the Congo. Currently, confusion over how to value and monitor the large amounts of carbon stored in tropical forests has prevented the inclusion of forests in the carbon offset market that is mainly dominated by reductions achieved in the industrial sector, even though deforestation is responsible for some 20 percent of the world's carbon emissions.
We understand that allowing people in forested regions of developing countries to participate in carbon markets presents major challenges, but it�s naive to think that conservation is going to occur absent a market incentive. Everyone has a stake in finding a way to make it work because it's hard to see how any global effort to combat climate change will succeed if it ignores a major source of the problem. - Meine van Noordwijk, Southeast Asia Regional Coordinator of the World Agroforestry Centre (ICRAF)
Van Noordwijk and his colleagues arrived at their conclusions on the economics of deforestation after examining the trade-offs between carbon and financial returns in three areas in Indonesia, and one area each in Peru and Cameroon, all of which have undergone extensive deforestation:
:: :: :: :: :: :: :: :: :: :: :: :: :: :: ::

They found that in most instances at the sites in Indonesia, deforestation returned less than $5 per ton of carbon released and in some areas, less than $1. For example, in forested areas rich in peat, which is particularly efficient at trapping carbon, the figure was about $0.10 to $0.20 per ton.

Meanwhile, an analysis of deforestation in the Amazonian forests of the Ucayali Province of Peru produced similar results. Most of the deforestation, which was mainly driven by a desire for crop land, generated less than US $5 per ton of carbon released. The Cameroon study sites produced a better return. Deforestation returns about US $11 per ton of carbon emissions, which is mainly due to an increase in secondary forest and the fact that in Cameroon, cocoa production - which elsewhere has decimated tropical forests - has tended to occur within forests, and resulted in more in forest degradation than outright deforestation.

The report notes that offering economic rewards for carbon storage could be effective not only at encouraging conservation but also at encouraging activities in deforested areas that can recoup at least some of the lost carbon. For example, research shows that agroforestry, which encourages a broader use of trees on farms, can offer a win-win situation of improving smallholder incomes and absorbing carbon.

Dennis Garrity, Director General of the Nairobi, Kenya-based World Agroforestry Centre said that, not only does agroforestry have the potential to store carbon, it also addresses the need for alternative livelihoods amongst populations who currently benefit from deforestation.

Researchers caution that despite the clear benefits to be derived from assigning carbon credits to conserving forests, implementing a forest-based carbon market will be complicated.

The challenge will be to ensure that payments for maintaining forests actually reach local people, and do not end up in the wrong pockets. For the system to be effective, we will need new mechanisms for allocating payments that are efficient as well as fair. - Frances Seymour, Director General of the Center for International Forestry Research (CIFOR) based in Indonesia

Carbon Negative Bioenergy
Biopact has however added an entirely new perspective to the discussion of the value of forests when they are seen as carbon sinks. The new report shows that keeping forests intact brings in more potential revenue from carbon credits than revenues obtained from products generated on the basis of deforestation.

But this equation changes dramatically when the same logic were to be applied to the potential for the production of carbon negative bioenergy and fuels. Carbon negative bioenergy takes far more carbon dioxide out of the atmosphere, than intact forests ever can.

To understand this, one has to look at the concept in its most radical form: suppose one deforests an area to grow energy crops on them. These crops are then utilized to generate electricity, in biomass power plants. But when the carbon dioxide released during this process is consequently captured and stored (CCS) in geological formations (such as depleted oil and gas fields, or saline aquifers), you generate "negative emissions". In such a system, you actually take carbon dioxide out of the atmosphere.

How much? Researchers have found that in a Biomass Integrated Gasification Combined Cycle (BIGCC) plant, one can generate minus 1030 grams of CO2 per kilowatt hour of electricity thus produced with the CO2 sequestered underground. Electricity from coal generates around 800 grams per kWh - the difference thus being around 1830 grams.

One hectare of high carbon storing eucalyptus trees yielding 15 dry tons per hectare per year over a rotation period of 3 to 5 years, with an energy content of 17 GJ per ton, utilized in a BIGCC coupled to a CCS system with an overall efficiency (from plantation to sequestration) of 33%, would offset around 45 tons of CO2 compared to electricity generated from coal.

Per year, the carbon negative energy system would sequester around 24 tons of CO2 per hectare (or 6.5 ton of C). A mature rainforest only sequesters about 0.5 tons C per hectare per year (1.8 ton of CO2 equivalent).

If the original forest that were to be cleared, were to be used as a biomass feed for the production of carbon negative electricity, the advantage of such a system would be immediately present from year zero. If the forest is burned without the energy being used for the production of electricity, as is currently done in deforestation operations, it would be releasing all of its carbon into the atmosphere (250 tons of C per hectare or around 916 tons of CO2 per hectare). It would then take around 20 years of operating the carbon negative energy system to break even.

When sugarcane is used and fermented into biogas, more carbon dioxide can be captured in a far less costly way compared to utilizing woody biomass in a BIGCC (because capturing CO2 from biogas is much more straightforward than via the gasification and gas shifting process).

Many other future concepts are thinkable, with the most radical being the production of carbon negative hydrogen from biomass, which would be a transportable fuel that yields high amounts of negative emissions each time it is used.

So what does all of this mean? It implies that there are land use strategies - such as the production of energy crops for the production of negative emissions energy - that could compete with any scheme to avoid deforestation, purely on economic terms.

Biopact was interviewed about the threats posed by this alternative land use strategy for 'compensated reduction' or 'avoided deforestation' schemes. In the interview, we advocated the inclusion of other compensation schemes for communities willing to protect their forests: the biodiversity and ecosystem services of forests need to be expressed in monetary terms too, and must be made bankable. Otherwise, merely putting a price on the carbon sequestered in forests might not suffice.

However, it must be said that the production of negative emissions energy is, for the time being, only a concept. The 'virtual' value of this form of energy should be part of the discussion of the value of forests and of how to calculate it in a context of an emerging global carbon market, but it should not be a barrier to the implementation of avoided deforestation schemes.

Biopact is currently helping write a paper about the topic, to appear in a major energy journal next year.

In conclusion, nobody in his right mind can advocate deforestation for the production of food, forest products or energy when the prospect of a 'compensated reduction' scheme based on a carbon price is so close at hand - and certainly not now that the research discussed above so clearly indicates that avoided deforestation would be more profitable. Policy makers and delegates in Bali must succeed in approving a framework that compensates communities and nations willing to avoid deforestation. The "threat" of carbon negative energy to such schemes remains purely abstract, while deforestation is extremely concrete and needs to be tackled now. The fact that the countless ecosystems services and biodiversity provided by tropical rainforests are not 'bankable' yet - which would be a requirement if compensated reduction schemes want to be able to compete with carbon negative bioenergy -, should not be seen as a barrier to implementing such schemes.

About the study
The study was conducted by the World Agroforestry Center (ICRAF), the Center for International Forestry Research (CIFOR), the International Center for Tropical Agriculture (CIAT), and the International Institute for Tropical Agriculture (IITA), four of the15 centers of the Consultative Group on International Agricultural Research (CGIAR), and their national partners.

The Consultative Group on International Agricultural Research (CGIAR), established in 1971, is a strategic partnership of countries, international and regional organizations and private foundations supporting the work of 15 international agricultural research Centers. In collaboration with national agricultural research systems, civil society and the private sector, the CGIAR fosters sustainable agricultural growth through high-quality science aimed at benefiting the poor through stronger food security, better human nutrition and health, higher incomes and improved management of natural resources.

The World Agroforestry Centre (ICRAF) is the international leader in the science and practice of integrating 'working trees' on small farms in rural landscapes. The Centre works in more than 20 countries across Africa, Asia and South America.

Headquartered in Indonesia, the Center for International Forestry Research (CIFOR) is a leading international forestry research organization established in response to global concerns about the social, environmental, and economic consequences of forest loss and degradation.

Eurekalert: Report finds deforestation offers very little money compared to potential financial benefits - December 3, 2007.

Mongabay: Carbon-negative bioenergy to cut global warming could drive deforestation: An interview on BECS with Biopact's Laurens Rademakers - November 6, 2007.


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