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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.

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Thursday, January 25, 2007

The bioeconomy at work: bioplastics from plant-based oils

The bioplastics and biopolymers discussed earlier in our overview are mainly based on the fermentation of starches and sugars. But a considerable amount of research is underway on using straight vegetable oils instead, as substitutes for petroleum.

Richard Larock, professor of chemistry at Iowa State University, is amongst those researchers. His work has resulted in the production of plastics from soybean and corn oil that are considerably cheaper than their petrochemical counterparts.

One of Larock's plant-based materials is reinforced with glass fibers, the kind of tough bioplastic he and his industrial collaborators will use to develop, test and manufacture new hog feeders. The professor says his research project is very much tied to Iowa's culture - after all, the state is America's leading producer of corn, soybeans and pork.

Larock has invented and patented a process for producing various bioplastics from inexpensive natural oils, which make up 40 percent to 80 percent of the plastics. Larock said the plastics have excellent thermal and mechanical properties and are very good at dampening noises and vibrations. They're also very good at returning to their original shapes when they're heated.

"This project should create new technology and jobs, expand opportunities for bio-based industries and agricultural suppliers, decrease our dependence on oil, strengthen the agricultural economy of Iowa, utilize ISU patented technology, provide new markets for farmers and marry new agricultural product development with sophisticated manufacturing skills and the knowledge to commercialize these projects." - Professor Richard Larock, Iowa State University.

The project is partially supported by a grant of $96,000 from the Grow Iowa Values Fund, a state economic development program. Larock is working with AgVantage Inc., a Rockford, Ill., company with manufacturing facilities in Iowa, and R3 Composites, a Muscatine manufacturer:
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Ron Hagemann, a principal with AgVantage, said designs for a bioplastic hog feeder have been drawn up. The designs include radio frequency identification technology that can monitor and record the feeding habits of individual hogs. Molds for the high-tech feeders should be completed later this year and prototypes should be ready for testing in a hog building next spring. If all goes well, he said a product should be ready for commercialization by the end of next year.

Hagemann said the feeders' biggest advantage in the marketplace will be material costs. Corn and soybean oils are significantly cheaper than petrochemicals. And that's particularly true when oil prices are high.

Hagemann said he expects this project to be a very good test of Larock's plastics.

Hogs, after all, aren't known for being gentle with their feeders.

"I've told Richard that if we can do this, it's all downhill from here," Hagemann said.

But Larock isn't stopping with the feeder project. He's looking at adding other low-cost agricultural ingredients to his bioplastics. He's now studying whether distillers dried grains, a co-product of ethanol production that's sold as animal feed, can add strength to his bioplastics.

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Brazil accuses US and EU of 'hypocrisy' on biofuels

A day after President Bush delivered his State of the Union address in which he calls for a large increase in the use of biofuels, Brazil accuses both the United States and the European Union of not talking straight. Their positions on biofuels and climate change are 'hypocritical' as long as both blocks impose barriers on biofuel imports from the South. On the other hand, the EU is investing in African ethanol production and gives out signals that it might be interested in tapping the continent's large potential.

Both the US (earlier post) and the EU (earlier post) recently announced ambitious new plans to increase the use of biofuels in order to strengthen energy security and fight climate change.

But a high representative at Brazil's Ministry of Commerce and Trade states that the tariffs imposed on Brazilian ethanol allow ethanol producers in the North to make fuels that make no sense, neither from the perspective of reducing carbon dioxide emissions, nor from a commercial point of view. Biofuels such as ethanol made from sugarcane are far more climate friendly and energy efficient than biofuels made from crops like corn.

According to Otaviano Canuto, Brazil's representative at the World Bank, the doublespeak of the US and the EU is based on the fact that Western governments cannot admit to their consumers that biofuels from the South are competitive without subsidies and when oil is above US$40 per barrel. The governments of the EU and the US are afraid to upset their energy farmers, whose fuels can only survive when oil stands at US$60-80. According to the Interamerican Development Bank, Brazil produces ethanol at a cost of approximately US$0.83 per gallon.

The undeniable competitive advantage of the South is being blacked out by a barrage of subsidies, tariffs and so-called nonmarket barriers.

Tariffs and subsidies
The United States impose a tariff of US$0.51 per gallon of ethanol produced in Brazil. The U.S. Congress recently extended the tariff until 2009. According to the World Bank, the European tariffs are even higher.

When it comes to subsidies, the picture looks even worse: in its recently published report (earlier post) entitled “Biofuels: At What Cost? Government Support to Ethanol and Biodiesel in the United States”, the Geneva-based Global Subsidies Initiative calculated that American corn ethanol, received a whopping US$6.8 billions worth of subsidies in 2006 via hundreds of schemes (this is $1.87 per gasoline gallon equivalent or “gge”). The annualised estimate for 2007-2012 is even higher at $8.7 billion (or $1.96 per gge):
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Brazilian experts argue that Midwestern corn farmers in the U.S. would not survive market competition without the protectionist tariff, not even after receiving billions worth of subsidies each year. In Europe, the lobbying work mainly comes from producers in Spain, France and Sweden. The EU too recently extended its energy crop subsidies to €45 per hectare.

Until now, Brazil succeeded in exporting US$600 million worth of ethanol in 2005, mainly to Japan and Sweden, two countries committed to fulfilling their Kyoto obligations.

United States interested, but in the grip of lobbyists
Despite the tariff, there are some signs that the U.S. is interested in importing ethanol from the South. Jeb Bush, President Bush's brother and governor of Florida, recently created the Interamerican Ethanol Commission which aims to lift the tariff and raise the consciousness of the American consumer about tropical biofuels.

The U.S. Department of Energy recently calculated that American ethanol producers might never attain the efficiency and productivity levels of their Brazilian counterparts, not even when socalled 'second-generation' production methods are used. This is why imports must be considered.

But this is also why a large and powerful machinery of lobbyists is fighting to the death to keep its subsidies in place.

Contradictory voices in Europe
On the one hand, the EU has imposed barriers on imported ethanol, but on the other, it recognises the importance of the production potential in the South.

More specifically, and according to diplomatic sources, the government of the United Kingdom is looking into producing ethanol in Africa, most notably Mozambique, in order diversify its import portfolio.

"The objective is to create an African ethanol industry very fast, with the objective of first supplying the South-American market. The UK provides the funds", confirms a high representative of the British Department of Agriculture (DEFRA).

According to the British ambassador in Brazil, Peter Collecott "the idea is to produce ethanol for the African market, after which it will be easier to make it a truly global commodity." Collecott confirmed that "the project is currently being analysed".

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ICRISAT harnesses ethanol from drought tolerant sweet sorghum

The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), presented its first batch of ethanol made from sweet sorghum as an alternative source of biofuel to Philippine President Gloria Macapagal-Arroyo.

William Dar, former minister of the Philippine Department of Agriculture and current director general of the Indian-based ICRISAT, paid Arroyo a courtesy call in the Malacanang Palace to present the group's success in harnessing ethanol from the promising plant whose scientific name is Sorghum bicolor (L.) Moench. Arroyo lauded the group and vowed to promote sweet sorghum immediately as an alternative feedstock for ethanol production.

Sweet sorghum is similar to grain sorghum with the difference that its stalks are very rich in sugar. The plant's main advantage is the efficiency with which it uses water and its capacity to survive in saline soils. This makes sweet sorghum a good alternative feedstock for ethanol production in semi-arid climates and relatively poor soils. Many scientists think that a variety of drought-tolerant and salt-tolerant (tropical) grass species, amongst which sweet sorghum, the "camel among crops" (referring to its survival in dry conditions) could be the key to agricultural development in areas affected by aridity and saline soils.

To make the case ICRISAT already experimented with the crop to make biofuels and succeeded in doing so at its pilot plant in Andhra Pradesh, India (earlier post), but Dar said that the institute's newly developed variety of sorghum was now tested "under Philippine conditions" to verify its viability and determine if it is able to propagate locally:
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He explained the research institute's sweet sorghum plantation testing center at the Mariano Marcos State University in Batac, Ilocos Norte has responded well to ICRISAT's extraction process and is immediately available for planting in areas where future ethanol distillers may be established.

On January 17, Arroyo signed into law Republic Act No. 9367, also known as the "Biofuels Act of 2006," that promotes the use of alternative transport fuels consistent with the Declaration on East Asian Energy Security ratified by the 16 heads of state of the Association of Southeast Asian Nations and its dialog partners during the just-concluded 12th ASEAN Summit in Cebu, Philippines.

The Biofuels Act of 2006 seeks to reduce the country's dependence on imported fuels with due regard to the protection of public health, the environment and natural ecosystems consistent with the country's sustainable economic growth that would expand opportunities for livelihood.

The Act mandates the use of biofuels as a measure to develop and utilize indigenous renewable and sustainably-sourced clean energy sources to reduce dependence on imported oil.

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Europe's forest growth exceeds wood demand for energy

Demand for wood is increasing as bioenergy continues to receive attention as a 'carbon-neutral' energy source that can reduce Europe's energy depence. The Commission's latest policy initiative in the area, part of the energy and climate change package of 10 January 2007, proposed that 10% of EU transport fuel should come from biofuels by 2020.

The Commission has promised to focus on second-generation biofuels produced from lignocellulosic sources such as straw, timber or woodchips. Second-generation biofuels such as cellulosic ethanol or synthetic biofuels made from bio-oil are obtained from the biochemical or thermochemical conversion of biomass feedstocks, with the exception of processes such as direct combustion, fermentation or transesterification. These next-generation fuels are believed to be superior to the current 'first generation', made from low yielding crops such as sugar beet and rapeseed. The forest-based sector in Europe employs around 3.5 million people and has an annual turnover of some €400 billion.

The capability of European forests to meet both growing demand from biofuels and the more traditional uses of wood such as timber, pulp and paper came under scrutiny at a workshop organised by the United Nations and forest-based industry organisations on 11-12 January in Geneva.

Over one hundred particpants in the workshop noted with that, despite increasing demand for wood, annual forest growth in Europe still far exceeds the volume of wood harvested. Europe's current consumption of wood-based products for energy directly harvested from forests stands at around 40 million tons of oil equivalent (Mtoe). Its potential is estimated to be around 43Mtoe in 2010, 39-45Mtoe in 2020 and between 39 and 72Mtoe in 2030 (see graph, click to enlarge). The increase in forest volume offers more habitats for biodiversity, a wide array of timber and offers employment opportunities, the participants agreed.

However, they warned that the intensified use of forests may have some unwanted side-effects:
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* Forests help to protect soil from erosion, and play an important role in the water cycle and in water quality. However, intensive logging may impair these functions;
* more intensively used forests may pose a problem for biological diversity. Tree species composition may be less varied, as choices concentrate on fast-growing species, leading to a reduction of genetic diversity;
* increased demand may mean that the growth of food and the provision of other non-wood goods and services on lands will be less attractive, and;
* increased extraction of trees may lead to a risk of nutrient imbalance.

In order to use wood resources sustainably in the future, the workshop recommended that governments, in cooperation with stakeholders, introduce comprehensive policies for the forest sector, rural development and energy while at the same time ensuring co-ordination of these policies with other sectors.

More information:

UNECE/FAO: Background Paper: Mobilizing Wood Resources: Can Europe's Forests Satisfy the Increasing Demand for Raw Material and Energy under Sustainable Forest Management? Prepared by: Gero Becker (University of Freiburg, Germany), Evelyn Coleman (Forest Policy Analyst, Tschugg, Switzerland), Sebastian Hetsch (UNECE/FAO Timber Section), Yves Kazemi (Swiss Forest Policy Analyst, Forest & Society Consulting), Kit Prins (UNECE/FAO Timber Section).

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