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    One of India's largest sugar companies, the Birla group will invest 8 billion rupees (US$187 million) to expand sugar and biofuel ethanol output and produce renewable electricity from bagasse, to generate more revenue streams from its sugar business. Reuters India - April 9, 2007.

    An Iranian firm, Mashal Khazar Darya, is to build a cellulosic ethanol plant that will utilise switchgrass as its feedstock at a site it owns in Bosnia-Herzegovina. The investment is estimated to be worth €112/US$150 million. The plant's capacity will be 378 million liters (100 million gallons), supplied by switchgrass grown on 4400 hectares of land. PressTv (Iran) - April 9, 2007.

    The Africa Power & Electricity Congress and Exhibition, to take place from 16 - 20 April 2007, in the Sandton Convention Centre, Johannesburg, South Africa, will focus on bioenergy and biofuels. The Statesman - April 7, 2007.

    Petrobras and Petroecuador have signed a joint performance MOU for a technical, economic and legal viability study to develop joint projects in biofuel production and distribution in Ecuador. The project includes possible joint Petroecuador and Petrobras investments, in addition to qualifying the Ecuadorian staff that is directly involved in biofuel-related activities with the exchange of professionals and technical training. PetroBras - April 5, 2007.

    The Société de Transport de Montréal is to buy 8 biodiesel-electric hybrid buses that will use 20% less fuel and cut 330 tons of GHG emissions per annum. Courrier Ahuntsic - April 3, 2007.

    Thailand mandates B2, a mixture of 2% biodiesel and 98% diesel. According to Energy Minister Piyasvasti Amranand, the mandate comes into effect by April next year. Bangkok Post - April 3, 2007.

    In what is described as a defeat for the Bush administration, the U.S. Supreme Court ruled [*.pdf] today that environmental officials have the power to regulate greenhouse gas emissions that spur global warming. By a 5-4 vote, the nation's highest court told the U.S. Environmental Protection Agency to reconsider its refusal to regulate carbon dioxide and other emissions from new cars and trucks that contribute to climate change. Reuters - April 2, 2007.

    Goldman Sachs estimates that, in the absence of current trade barriers, Latin America could supply all the ethanol required in the US and Europe at a cost of $45 per barrel – just over half the cost of US-made ethanol. EuroToday - April 2, 2007.

    The Kauai Island Utility Cooperative signed a long-term purchase power agreement last week with Green Energy Team, LLC. The 20-year agreement enables KIUC to purchase power from Green Energy's proposed 6.4 megawatt biomass-to-energy facility, which will use agricultural waste to generate power. Honolulu Advertiser - April 2, 2007.

    The market trend to heavier, more powerful hybrids is eroding the fuel consumption advantage of hybrid technology, according to a study done by researchers at the University of British Columbia. GreenCarCongress - March 30, 2007.

    Hungarian privately-owned bio-ethanol project firm Mabio is planning to complete an €80-85 million ethanol plant in Southeast Hungary's Csabacsud by end-2008. Onet/Interfax - March 29, 2007.

    Energy and engineering group Abengoa announces it has applied for planning permission to build a bioethanol plant in north-east England with a capacity of about 400,000 tonnes a year. Reuters - March 29, 2007.

    The second European Summer School on Renewable Motor Fuels will be held in Warsaw, Poland, from 29 to 31 August 2007. The goal of the event is to disseminate the knowledge generated within the EU-funded RENEW (Renewable Fuels for Advanced Powertrains) project and present it to the European academic audience and stakeholders. Topics on the agenda include generation of synthetic gas from biomass and gas cleaning; transport fuel synthesis from synthetic gas; biofuel use in different motors; biomass potentials, supply and logistics, and technology, cost and life-cycle assessment of BtL pathways. Cordis News - March 27, 2007.

    Green Swedes want even more renewables, according to a study from Gothenburg University. Support for hydroelectricity and biofuels has increased, whereas three-quarters of people want Sweden to concentrate more on wind and solar too. Swedes still back the nuclear phase-out plans. The country is Europe's largest ethanol user. It imports 75% of the biofuel from Brazil. Sveriges Radio International - March 27, 2007.

    Fiat will launch its Brazilian-built flex-fuel Uno in South Africa later this year. The flex-fuel Uno, which can run on gasoline, ethanol or any combination of the two fuels, was displayed at the Durban Auto Show, and is set to become popular as South Africa enters the ethanol era. Automotive World - March 27, 2007.

    Siemens Power Generation (PG) is to supply two steam turbine gensets to a biomass-fired plant in Três Lagoas, 600 kilometers northwest of São Paulo. The order, valued at €22 million, was placed by the Brazilian company Pöyry Empreendimentos, part of VCP (Votorantim Celulose e Papel), one of the biggest cellulose producers in the Americas. PRDomain - March 25, 2007.

    Asia’s demand for oil will nearly double over the next 25 years and will account for 85% of the increased demand in 2007, Organization of Petroleum Exporting Countries (Opec) officials forecast yesterday at a Bangkok-hosted energy conference. Daily Times - March 24, 2007.

    Portugal's government expects total investment in biomass energy will reach €500 million in 2012, when its target of 250MW capacity is reached. By that date, biomass will reduce 700,000 tonnes of carbon emissions. By 2010, biomass will represent 5% of the country's energy production. Forbes - March 22, 2007.

    The Scottish Executive has announced a biomass action plan for Scotland, through which dozens of green energy projects across the region are set to benefit from an additional £3 million of funding. The plan includes greater use of the forestry and agriculture sectors, together with grant support to encourage greater use of biomass products. Energy Business Review Online - March 21, 2007.

    The U.S. Dep't of Agriculture's Forest Service has selected 26 small businesses and community groups to receive US$6.2 million in grants from for the development of innovative uses for woody biomass. American Agriculturalist - March 21, 2007.

    Three universities, a government laboratory, and several companies are joining forces in Colorado to create what organizers hope will be a major player in the emerging field of converting biomass into fuels and other products. The Colorado Center for Biorefining & Biofuels, or C2B2, combines the biofuels and biorefining expertise of the University of Colorado, Colorado State University, the Colorado School of Mines, and the Colorado-based National Renewable Energy Laboratory (NREL). Founding corporate members include Dow Chemical, Chevron, ConocoPhillips, and Shell. C&EN - March 20, 2007.

    The city of Rome has announced plans to run its public bus fleet on a fuel mix of 20 per cent biodiesel. The city council has signed an accord that would see its 2800 buses switch to the blended fuel in order to cut greenhouse gas emissions and local air pollution. A trial of 200 buses, if successful, would see the entire fleet running on the biofuel mix by the end of 2008. Estimates put the annual emission savings at 40,000 tonnes of carbon dioxide. CarbonPositive - March 19, 2007.

    CODON (Dutch Biotech Study Association) organises a symposium on the 'Biobased Economy' in Wageningen, Netherlands, home of one of Europe's largest agricultural universities. In a biobased economy, chemistry companies and other non-food enterprises primarily use renewable materials and biomass as their resources, instead of petroleum. The Netherlands has the ambition to have 30% of all used materials biobased, by 2030. FoodHolland - March 19, 2007.

    Energy giants BP and China National Petroleum Corp, the PRC's biggest oil producer, are among the companies that are in talks with Guangxi Xintiande Energy Co about buying a stake in the southern China ethanol producer to expand output. Xintiande Energy currently produces ethanol from cassava. ChinaDaily - March 16, 2007.

    Researchers at eTEC Business Development Ltd., a biofuels research company based in Vienna, Austria, have devised mobile facilities that successfully convert the biodiesel by-product glycerin into electricity. The facilities, according to researchers, will provide substantial economic growth for biodiesel plants while turning glycerin into productive renewable energy. Biodiesel Magazine - March 16, 2007.

    Ethanol Africa, which plans to build eight biofuel plants in the maize belt, has secured funding of €83/US$110 million (825 million Rand) for the first facility in Bothaville, its principal shareholder announced. Business Report - March 16, 2007.

    A joint venture between Energias de Portugal SGPS and Altri SGPS will be awarded licences to build five 100 MW biomass power stations in Portugal's eastern Castelo Branco region. EDP's EDP Bioelectrica unit and Altri's Celulose de Caima plan to fuel the power stations with forestry waste material. Total investment on the programme is projected at €250/US$333 million with 800 jobs being created. Forbes - March 16, 2007.

    Indian bioprocess engineering firm Praj wins €11/US$14.5 million contract for the construction of the wheat and beet based bio-ethanol plant for Biowanze SA in Belgium, a subsidiary of CropEnergies AG (a Sudzucker Group Company). The plant has an ethanol production capacity of 300,000 tons per year. IndiaPRWire - March 15, 2007.

    Shimadzu Scientific Instruments announced the availability of its new white paper, “Overview of Biofuels and the Analytical Processes Used in their Manufacture.” The paper is available for free download at the company’s website. The paper offers an overview of the rapidly expanding global biofuel market with specific focus on ethanol and biodiesel used in auto transportation. It provides context for these products within the fuel market and explains raw materials and manufacturing. Most important, the paper describes the analytical processes and equipment used for QA testing of raw materials, in-process materials, and end products. BusinessWire - March 15, 2007.

    Côte d'Ivoire's agriculture minister Amadou Gon has visited the biofuels section of the Salon de l'Agriculture in Paris, one of the largest fairs of its kind. According to his communication office, the minister is looking into drafting a plan for the introduction of biofuels in the West African country. AllAfrica [*French] - March 13, 2007.

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Monday, January 29, 2007

US considers risky geo-engineering options to avert abrupt climate change

The US government wants the world's scientists to develop technologies to block sunlight as a last-ditch way to halt 'Abrupt Climate Change' (ACC), in case it were to occur. It says research into 'geo-engineering' techniques such as seeding the oceans with iron, pumping sulphate droplets into the atmosphere, or launching giant mirrors into space would be an "important insurance" against rising emissions, and has lobbied for such a strategy to be recommended by a major UN report on climate change, the first part of which will be published on Friday.

The US has also attempted to steer the UN report, prepared by the Intergovernmental Panel on Climate Change (IPCC), away from conclusions that would support a new worldwide climate treaty based on binding targets to reduce emissions - as sought by Europe. It has demanded a draft of the report be changed to emphasise the benefits of voluntary agreements and to include criticisms of the Kyoto Protocol, the existing treaty which the US administration opposes. The final IPCC report, written by experts from across the world, will underpin international negotiations to devise a new emissions treaty to succeed Kyoto, the first phase of which expires in 2012. World governments were given a draft of the report last year and invited to comment.

Risky techniques
The US response, technically entitled "U.S. Government Review of the Second Order Draft of WGIII Contribution 'Climate Change 2007: Mitigation of Climate Change'" [*.pdf], says the idea of interfering with sunlight should be included in the summary for policymakers, the prominent chapter at the front of each IPCC report. It says: "Modifying solar radiance may be an important strategy if mitigation of emissions fails. Doing the R&D to estimate the consequences of applying such a strategy is important insurance that should be taken out. This is a very important possibility that should be considered."

Scientists have previously estimated that reflecting less than 1% of sunlight back into space could compensate for the warming generated by all greenhouse gases emitted since the industrial revolution. Possible 'geo-engineering' techniques include putting a giant screen into orbit, thousands of tiny, shiny balloons, or microscopic sulphate droplets pumped into the high atmosphere to mimic the cooling effects of a volcanic eruption. The IPCC draft said such ideas were "speculative, uncosted and with potential unknown side-effects".

A much safer option: Bio-Energy with Carbon Storage
The proposed geo-engineering options are risky and unnecessary because there exists a method that is safe and delivers energy while being implemented. The system is known as 'Bioenergy with Carbon Storage' (BECS) and is easy to understand: biomass would be planted on a massive scale at strategic locations around the planet and take CO2 out of the atmosphere. This biomass would then replace all coal, natural gas and oil in power stations that are connected to carbon sequestration facilities. In such a radical carbon negative energy system, atmospheric carbon would be put back into the ground -- where it used to be before the world started using fossil fuels. Societies would be able to function normally while BECS is being implemented on a large scale.

According to scientists, BECS can take us back to pre-industrial carbon levels in a short time (earlier post):
Under strong assumptions appropriate to imminent ACC, pre-industrial CO-levels can be restored by mid-century using BECS [...].
Negative emissions energy systems are key to responding to ACC because – taking account of rising levels on non-CO2 greenhouse gases, for which no means exists for accelerating natural removal processes – the need may be to get to CO2 levels below pre-industrial. This cannot be done by natural absorption, even with zero emissions
energy [such as wind, solar, nuclear].
A portfolio of Bio-Energy with Carbon Storage technologies, yielding negative emissions energy, may be seen as benign, low risk, geo-engineering that is the key to being prepared for ACC.
However, the US submission does not take the option into account:
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What's more, it complains the IPCC draft report is "Kyoto-centric" and it wants to include the work of economists who have reported "the degree to which the Kyoto framework is found wanting". It takes issue with a statement that "one weakness of the [Kyoto] protocol, however, is its non-ratificiation by some significant greenhouse gas emitters" and asks: "Is this the only weakness worth mentioning? Are there others?"

It also insists the wording on the ineffectiveness of voluntary agreements be altered to include "a number of them have had significant impacts" and complains that overall "the report tends to overstate or focus on the negative effects of climate change." It also wants more emphasis on responsibilities of the developing world.

The IPCC report is made up of three sections. The first, on the science of climate change, will be launched on Friday. Sections on the impact and mitigation of climate change - in which the US wants to include references to the sun-blocking technology - will follow later this year.

The likely contents of the report have been an open secret since the Bush administration posted its draft copy on the internet in April. Next week's science report will say there is a 90% chance that human activity is warming the planet, and that global average temperatures will rise another 1.5C to 5.8C this century depending on emissions. The US response shows it accepts these statements, but it disagrees with a more tentative conclusion that rising temperatures have made hurricanes more powerful.

More information:
US Government Review Collation: "U.S. Government Review of the Second Order Draft of WGIII Contribution 'Climate Change 2007: Mitigation of Climate Change'" [*.pdf] - Sept. 14, 2006

The Guardian: US answer to global warming: smoke and giant space mirrors - Jan. 27, 2007

RealClimate, Climate Science from Climate Scientists: Geo-engineering in vogue... - Jun. 28, 2006

Center for Research on Globalization: Climate Change and Geoengineering - ‘intentional large scale manipulation of the global environment’ - October 20, 2005

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Lula in Davos: wealthy countries should invest in biofuels in poor countries

Milton Maciel, a former government official who served as Secretary of Agriculture in Brazil’s northeastern state of Alagoas, one of Brazil’s main ethanol-producing regions, has recently launched Biofuels Now, an excellent resource on the Brazilian ethanol experience. Together with Henrique Oliveira's Ethablog and Marcelo Acuña Coelho's EthanolBrasil, we now have a network of expert analysts who track and translate the world's leading biofuel producer's rising influence in the post-oil world.

Lula in Davos
They report that Brazil's president Luiz Inacio Lula da Silva announced at the World Economic Forum (WEF) in Davos, Switzerland, that his country volunteers to transfer technology for production of biodiesel and ethanol to poorer countries, most of them in Africa and Central America, for free.

Speaking at the WEF, Lula suggested that rich countries should finance such kind of projects in countries in development, as a form of reducing inequality in the world.
“Biodiesel generates employment, generates income, generates development. Our biofuels program could be an example to be financed by rich nations to poorer nations of Africa and Central America” - Brazilian President Luiz Inacio Lula da Silva.
Reviving Doha
The left-leaning president has long been a symbol of the WEF's counterpart, the World Social Forum (WSF), which strives towards the establishment of an economic world order more in tune with the needs of the poorer countries. His presence in Davos is seen by some within the WSF community as betrayal. But Lula refuses to be pinned down by either camp and prefers a pragmatic approach to global problems. In Davos, he called on rich nations not to hold back the developing world by lack of flexibility on global trade talks. Trade ministers from about 30 countries have converged there to try to breathe life into the flagging Doha Round of World Trade Organization negotiations.

Developing nations have claimed aspects of the talks, including issues of trade tariffs, may hurt the world's poorest. The Doha Development Agenda was launched in 2001. But the talks have foundered on a number of points and have repeatedly stalled over the past few years. Developing nations believe that the EU and US must cut agricultural subsidies if progress is to be made. At the same time, the EU and US want big developing nations, such as Brazil and India, to open up their fast-growing markets in industrial goods and services. Lula said Brazil was ready to make concessions if Europe and the US were prepared to move too.
"We are fighting... to make rich countries aware that if there is no deal on the Doha Round, there will be no point in blaming things on Iraq, or thinking that they can resolve wars by giving out financial help every now and again. It's the possibility of growth, creating jobs and distributing wealth that will create a peaceful world." - Brazilian President Luiz Inacio Lula da Silva.
The trade ministers present at the forum have meanwhile agreed to revive the talks.

Making the link between biofuels and Doha
One of the main subjects discussed in Davos was global warming, caused principally by combustion of fossil fuels. Biodiesel and ethanol, if produced under economic and environmentally sustainable conditions, are a viable alternative to those fossil fuels. According to Maciel, tropical countries are exactly the countries who have the best conditions to accomplish such a sustainable and commercially viable production:
:: :: :: :: :: :: :: :: :: :: :: :: :: :: :: ::

Biofuels Now reports that Lula linked the biofuels opportunity to the trade negotiations, by stating that the USA, instead of producing ethanol from corn, could save much money if it decided to finance and acquire biofuel production from the poorest countries, which would mean a boost to trade and a possibility to lift the trade barriers and subsidies which currently protect the uncompetitive corn ethanol industry.

Maciel sees this as a much better alternative to continue importing oil from potentially hostile suppliers, an alternative not only with lower costs, but also without the burden of oil wars costs. And an alternative that, promoting some substantial development in biofuels producing countries, could not only reduce somewhat the terrible inequalities, but would also lessen the migratory pressure from those countries to USA, Canada and EU.

This is also the thesis of Biofuels Now: "A great number of poor countries in Africa and elsewhere have good environmental conditions that favor the development of sustainable biofuels industries and this could prove of great value for their development in the verge of Peak Oil. We partake completely the Brazilian government policy of taking biofuels technology to many other countries in the world. These countries have available soils, water, cheap land and labor; and also much, much poverty."

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U.S. ethanol subsidies and tariffs to be lifted - good news for developing world

Quicknote biofuel trade
In an interview with Dow Jones Newswires at the World Economic Forum's annual meeting in Davos, Switzerland, U.S. Energy Secretary Samuel Bodman said the United States "will need to have more imports of ethanol" if it is to meet the new mandate to cut gasoline use. The secretary also said that he did not see subsidies to U.S. farmers remaining in place beyond 2010 or import tariffs on ethanol beyond 2008. "The idea is that at some point in the future all these technologies need to stand the test of the free market," he said. Currently, American corn and ethanol producers receive billions worth of subsidies each year (earlier post), whereas a US$0.54-per-gallon tariff on imported ethanol protects the market against competitors from abroad.

This is very important news for the developing world, which stands to benefit immensely from what is perhaps the largest economic opportunity some of these largely agrarian societies faced in decades (see prof. John Mathews' Biofuels Manifesto). Countries in the tropics and subtropics have an important competitive advantage for the production of biofuels: they have large amounts of unused arable land, a large rural population and agro-climatic conditions favorable for the cultivation of energy crops.

The largest external barriers to the development of an export-oriented biofuels industry in the South are subsidies and tariffs imposed by industrialised countries. Once these are lifted, the global biofuels market is set to be supplied by developing countries who will benefit economically and socially. Some analysts think the emerging biofuels market may offer the key to unlock the World Trade Organisation's Doha Round of trade negotiations, which collapsed last year over U.S. subsidies (earlier post). We will follow up on the ramifications of Bodman's stance, as soon as potential biofuel producers from the South react or as soon as the role of the renewable fuels in the Doha negotiations is highlighted [entry ends here].
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Ethanol fuels hopes of Guangxi's small farmers

Hong-Kong based The Standard has an interesting story on how the biofuels opportunity may help lift millions of poor Chinese farmers gradually out of poverty. Nao Nakanishi and Niu Shuping report that something is afoot in China's top sugar-growing region of Guangxi. Over the past year, small new farmhouses have sprouted, looking incongruous among the southern region's fields of sugar cane and karst mountains - similar to those in Guilin.

High prices for the commodity in the past few years have encouraged farmers to plant cane to the outmost. It has helped pad the pockets of the small farmers in an impoverished region left behind by the country's economic miracle.

Now, hope runs high for Guangxi's 30 million poor farmers to jump on the biofuel bandwagon. Beijing has begun encouraging ethanol made from non-grain crops, such as cassava - known also as tapioca - the region's other main crop.

"We are talking about sugar televisions, sugar washing machines and even sugar brides," said Pan Xunxin, an official in Chongzuo, Guangxi's top sugar cane city west of Nanning. "Sugar is everything for this region. In the past, farmers could not think of anything beyond getting enough food... It would be good for farmers to have another means to earn money."

Cassava's promise
The question now is: how to produce enough non-grain biomass to sustain the large ethanol output envisioned by China's giants, grains trader COFCO and top oil producer China National Petroleum Corp? The answer: cassava.

"In the coming five years, China would develop ethanol only by using non-grain feedstock such as cassava or sweet sorghum," said an official advising Guangxi's local government. "To use cassava is more realistic and mature at this stage as we have the technology and production."

Guangxi accounts for a whopping 70 percent of China's annual cassava output of about nine million tonnes. It is already home to many producers of the cassava-ethanol used for manufacturing liquor, such as Guangxi Xintiande Energy:
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The region even exported ethanol for use in cars in the United States last year, helped by record crude oil prices. Food-grade ethanol can be processed into fuel ethanol. Local officials said Beijing has given the green light for four 200,000-tonne-per-year cassava fuel ethanol plants in Guangxi, even though the government is restricting new projects for fears over-investment might threaten food security.

State-run grains trader COFCO, in charge of constructing two of those four, will invest 860 million yuan to build the first in Hepu this year. It has already bought land for a cassava plantation.

And China National Petroleum Corp has begun feasibility studies ahead of setting up plants in Wuzhou and Laibin in Guangxi, they said.

Beijing wants Guangxi to house facilities to produce as much as one million tonnes of fuel ethanol per year from cassava.

Large demand
But industry officials warn it will not be easy for new fuel plants to obtain enough homegrown feedstock. Also, Beijing is unlikely to allow imports because subsidies are aimed at helping local farmers.

"The COFCO plant will face a big problem of feedstock," said another industry official in Qinzhou, which is 100 kilometers north of Hepu, where the COFCO plant is located.

"Their plantation is too small and won't be enough," he said, adding there are about 100 starch producers in the area already competing against each other over cassava.

Higher cassava prices, coupled with lower oil prices, are already squeezing margins of ethanol producers.

Privately owned Xintiande, based in Qinzhou, has suspended a plan to add 200,000 tonnes of capacity to its current 100,000 tonnes, partly due to tax changes and COFCO's first plant to be built not too far away.

COFCO, on the other hand, has difficulties finding a site for its second plant, they said. CNPC has taken two locations better suited to assuring its raw material supply.

China is already short of tapioca, importing 2.5 million to three million tonnes of cassava chips a year from Vietnam and Thailand, the world's top tapioca exporter. China is also one of the world's top sugar importers despite rises in its output. An official estimates China will need 14-15 million tonnes a year to fulfill the government plan.

Guangxi hopes to raise tapioca yield by 50 percent to about 30 tonnes per hectare by 2010, by cultivating barren land for the plant that can be grown on dry soil.

But not all are optimistic. Asked about a possible rise in Guangxi's cassava output, Guangxi Sugar Exchange Chairman Chen Ning said: "It all depends on the prices. But at present it's more profitable to grow sugar cane than cassava, if possible."

Chen added that if Beijing were to offer support, Guangxi could produce some fuel ethanol also from molasses, a by-product of sugar, currently used for making yeast or paper in the region.

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"Farmers to own biofuel plants" in the Philippines

Quicknote social sustainability
An Indian company has tied up with a local farmers group in the Philippines for the yearly supply of €7/US$9 million worth of sweet sorghum for ethanol production. The Rusni Distilleries, owner of the Ethanol Distilleries of India, can process 40,000 liters of ethanol per day from sweet sorghum which will be planted by some 15,000 small farmers allocating one hectare each from their average farm of 2.1 hectares.

Dr. William Dar, Director-General of International Crops Research Institute for Semi-Arid Tropics (ICRISAT) said this will be the first time that farmer federations will actively engage in and play an ownership role in agro-industrialization. Dar said there are many other ways to make farmers fully own biofuel processing plants. The strategies are important in order to increase the social sustainability of biofuel production in the developing world.

The ICRISAT recently developed sweet sorghum varieties with the specific aim of using them as a biofuel crop. Its first successful production trials took place in Andhra Pradesh, India, but the institute then explored the use of the crop in the Philippines and found the country to have a large suitable land base (earlier post). The crop is similar to grain sorghum with sugar-rich stalks. Being a water-use efficient crop, sweet sorghum has the potential to be a good alternative feedstock for ethanol production. The sweet sorghum is a sturdy plant that can resist drought conditions and can be planted as a second and third crop for agrarian reform communities.

Dar sees the following seasonally based cropping system as ideal: during the rainy season, upland farmers can plant the biofuel crop in the mountainsides to provide the feedstock needed by the ethanol plant while waiting for the rice farmers in low lying areas to harvest their rainy season crop. Farmers will be encouraged to engage in sweet sorghum production because they will own the ethanol plant. Funding will come from government agencies and financing institutions willing to help the farmers integrate their farms for the high value crops.

Even though this development in the Philippines remains a bit vague as to what the mechanism behind the ownership structure exactly looks like, the message is interesting because it seems to signal a break with what many feared might happen: a rush by large companies into ethanol investments, reducing farmers to mere producers of feedstocks while outsiders take most of the added values from the production chain. We will keep a close eye on this development and report back as details emerge [entry ends here].
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EU Commission calls for cuts in sugar production to avoid surplus

The European Commission today announced it took the first steps in a process towards a substantial withdrawal of quota sugar from the market, in order to avoid a significant surplus at the end of the season.

Withdrawal means a temporary reduction in the amount of sugar producers can produce under their quota. As such, a proportion of the sugar produced in the 2007/2008 marketing year will either have to be counted against the quota for 2008/2009 or be sold as out of quota sugar for industrial use, i.e. for bioethanol, chemical industry etc.

The Commission believes that a provisional figure for withdrawal of at least 2 million tonnes, corresponding to 12% of the quota, will be necessary. It will make a proposal to the Management Committee in February for a Commission Regulation fixing such a provisional figure. A definitive figure will be set later this year towards October, once the Commission has a clearer picture of the harvest and production of sugar.
"On several occasions, and in particular at the Council in November and December, I alerted sugar operators and Member States to the risks arising from a failure to reduce production quotas under the terms of last year's reform. My main concern was that the Restructuring Fund, which was established to help unprofitable producers to leave the sector, was not being allowed to operate as intended and that too few companies were benefiting from its existence. I have been quite clear that unless much more quota was renounced, the consequences would be serious for everyone." - Mariann Fischer Boel, Commissioner for Agriculture and Rural Development.
The EU reformed its sugar subsidy program in 2005, ending the dumping of cheap sugar on the world market. The reform has caused job cuts at refineries and forced many farmers out of growing sugar beet and sugar cane. Under the old system, production was supported by generous EU subsidies and import tariffs that guaranteed and inflated price for sugar.

That will now be phased out. EU sugar prices are more than three times higher than the global market rate. The EU also pays out export subsidies to get millions of tons of sugar off its market every year:
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On the eve of the deadline for this year's applications to the Restructuring Fund, it is confirmed that abandonment of sugar quotas for 2007/2008 will not exceed 650 000 tonnes. As a result, the market oversupply for 2007/2008 is expected to be very substantial.

As a result, the Commission will make use of Article 19 in the basic Regulation 318/2006. It is clear already today that a substantial withdrawal will be necessary to address the serious market imbalance. It is important to announce this initiative to sugar producers and beet growers at this early stage so that the industry can plan for the coming growing season and the contracting process, at a time when decisions on sowing are imminent. There will be less room for sugar under quota for the production year 2007/2008:

Separately, Commissioner Fischer Boel has asked her services to analyse the situation with regard to the Restructuring Fund with the purpose of making it more efficient and to ensure that sufficient quota is renounced by the industry in the coming years. The main objective must be to avoid a simple linear cut at the end of the restructuring period to the detriment of the sustainability of the whole sector.

More information:
European Commission, Agriculture: CAP reform: sugar.
EU Rapid News: Commissioner Fischer Boel calls for substantial preventive withdrawal from the sugar market to avert probable surplus - Jan. 29, 2007
International Herald Tribune: EU calls for cuts in bloc's sugar production to avoid surplus - Jan. 29, 2007

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