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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, February 22, 2007

Message to Euro-Americans: eat local food, buy global biofuels

The BBC has an interesting story on how Mr Peter Ndivo and Mr Samuel Mauthike, both small Kenyan farmers, are affected by the confusion around concepts such as 'carbon footprints', 'fair trade' or 'food miles'.

Euro-American consumers buy large quantities of fresh luxury products, such as orchids, baby corn, tiny tomatoes, palm hearts, mangos or carambola stars. Most of these exotic vegetables, fruits and flowers are grown by small farmers in the tropics, like Peter and Samuel. The products are flown to Euro-America on a daily basis, in jumbo jets. The smallholders depend on the market for their livelihoods - it feeds their families and allows them send their children to school.

Now consumers in the West have decided "to do something" about global warming, as individuals. They read up on things and experiment with concepts such as 'food miles': calculate how much greenhouse gas emissions a locally grown vegetable is worth, compared to one flown in from, say, Kenya. If the Kenyan vegetable - the baby corn or the mango - is "guilty" of more carbon emissions, the wealthy consumer in Europe or America decides to stop buying it. Problem solved. A clear conscience... But the Kenyan farmer falls back into poverty because he just lost his lucrative market.

If the consumer in Europe and America really wants to start buying local food to reduce greenhouse gas emissions, then that is allright, provided he starts buying globally produced biofuels to compensate for the loss of markets faced by the poor farmers in the South. The Kenyan baby corn grower could switch to big corn for ethanol instead. Or better, he would grow woody biomass, sweet potatoes, cassava, sweet sorghum or sugarcane - highly efficient crops to make solid and liquid biofuels from. Contrary to luxury fruits, vegetables or flowers, biofuels do not have to be served 'fresh' and flown in by air. They can be stored and shipped to Europe and America very efficiently, in huge tankers and ships.

The International Energy Agency's Bioenergy Task 40, which studies the feasibility of sustainable trade in biofuels, has thoroughly analysed long-distance transport and found that the greenhouse gas emissions arising from shipping biofuels from the tropics to the ports of Europe and America, are negligeable. After their long trip in huge and efficient tankers, the biofuels from the South still dramatically reduce greenhouse gas emissions when used by Europeans and Americans in their cars. They mitigate climate change far better than biofuels produced in Europe or the US, simply because they are far more efficient to produce (earlier post). One hectare of sugar cane delivers 8 to 10 times more energy than a hectare of corn grown in the US. If imported by Europe or the US, the sugar cane ethanol is still 7 to 9 times more energy efficient upon arrival (earlier post). Higher energy efficiency ultimately means lower carbon emissions.

In short, our message to wealthy consumers in the West is simple: buy local food if you think this will change global warming (which is not always the case), but please buy globally produced biofuels. You will help millions of farmers in the South, and you will reduce carbon emissions far more radically than if you were to use inefficient biofuels made in Europe or America. You have the money and the power. Spend it wisely.

More information:
IEA Bioenergy Task 40: International bioenergy transport costs and energy balance
IEA Bioenergy Task 40: Life cycle inventrory of existing biomass import chains for green electricity production [*.pdf]
IEA Bioenergy Task 40: Sustainability of brazilian bioethanol [*.pdf], and see earlier post [entry ends here].
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EU seeks to force transport CO2 rules on trade partners

Being the world's largest economy, the EU can use its muscles on trade issues and help transform the global economy into a more sustainable one. This transformative power is being demonstrated by the landmark REACH legislation, which forces all manufacturers of chemical products to obey the EU's rules on consumer safety, health and the environment. Since manufacturers from around the globe obviously want to sell their products in the EU, they are forced to creating better, cleaner and safer products that match the Union's criteria. The law is spurring innovation.

A similar mechanism is set to emerge in the sector of green cars and airlines. Now that the EU's Environment Council on 20 February 2007 agreed on an ambitious target to cut greenhouse-gas emissions by 20% by 2020 in order to reduce global warming (earlier post), both these sectors will have to adapt. And the EU's reach will be global once again: any car maker or airline that wants to sell or fly into the EU, will have to obey the rules which are aimed at achieving a low carbon economy for the 21st century (earlier post): only green cars with low emissions will be allowed into the block, whereas foreign airlines will have to conform as all international routes will be included in the European Emissions Trading System (ETS). At least, this is a likely scenario (earlier post).

If the EU's emission reduction target is to be achieved, member states will first have to agree amongst themselves on two controversial plans which target emissions from transport:
  1. the introduction of a mandatory CO2 cap for cars, which are responsible for more than 10% of all greenhouse-gas emissions in the EU (earlier post)
  2. the inclusion of aviation in the EU's Emissions Trading Scheme, in order to reduce airlines' growing contribution to climate change
While ministers from all member states, except Poland, backed the broad lines of the Commission's strategy, many voiced concern regarding the impact that it would have on employment and the competitiveness of the EU's automobile sector.

Spain even suggested that the CO2 cap should be applied not only to European manufacturers but also to all vehicle manufacturers seeking to sell cars in the EU, regardless of their nationality. This would avoid placing European carmakers at a disadvantage with their competitors. And this would allow Europe to leverage its power on a global scale:
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The Commission's plans to integrate aviation into the EU's CO2 emissions cap-and-trade system also received broad support from member states, but a majority of countries insisted that all routes – intra-EU and international – be covered by the scheme as of the same date.

This would effectively force foreign airlines to comply with EU aviation emissions rules. But US carriers are adamant that this would be illegal and that the EU must wait for a global agreement to be reached in the International Civil Aviation Organisation (ICAO).

More information and different positions of EU actors on the issue can be found at Euractiv.

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Latin America's farmers prepare for prosperity on biofuels boom

The tortilla crisis in Mexico, which grabbed the international headlines, was blamed on price rises caused by the the burgeoning US ethanol industry which turned large quantities of maize into biofuel. Now, mainstream media are finally realizing that the simple law of supply and demand works its usual way.

Farmers throughout Latin America - from Mexico and Brazil to Argentina and Ecuador - feel as if they have just won the jackpot. Some of them had ceased production years ago, because the (non tariff) trade barriers and US subsidies were too high to compete with their American counterparts. But now, they are entering the market again and are reaping unprecedented profits. If the US were to reduce its barriers, their fortune would grow bigger still.

Since 1994, Mexico's rural sector has lost an estimated 1.6 million jobs, prompting many farmers to seek work in the US. But farmer Rogelio Zacaula, 66, says many of his fellow maize farmers are now sticking around or are even coming back now that the agricultural sector is set to revive in a spectacular manner because of the biofuels opportunity. Their increased incomes - which have quadrupled in one season - are injected back into the economy, and offset the rise in tortilla prices. Meanwhile, biofuels produced in Mexico provide new jobs and deliver cheaper fuel to the country's consumers. In the long-run, the total economic balance of the biofuels phenomenon is positive, even for an oil exporting country like Mexico.

The price of maize had languished around $2 a bushel for years before the ethanol boom caused prices to soar, reaching $4.04 a bushel this week. Corn prices should reach new highs over the next five years, according to Keith Collins, chief economist for the U.S. Department of Agriculture.

In the United States, 111 ethanol refineries are operating and 78 are under construction, according to the industry's Renewable Fuels Association. Concerned about global climate change and dependence on Middle East oil, US and European leaders have set high targets for increasing the use of biofuels.

Collins predicts American farmers will need to plant 90 million acres of maize by 2010 - nearly 10 million more than now - just to meet US demand. This is too tall an order, meaning that world markets will need to turn to maize-producing regions such as Latin America and Africa to fill the gap if US exports drop.

Brazil and Argentina, the western hemisphere's biggest maize exporters after the US, are expecting near-record harvests in 2007:
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Meanwhile, Mexico is also in the top ten. Zacaula grows his newly valuable crop in the shadow of the Orizaba volcano, and he's a man in a good mood.

"I have never seen prices like this," said Mr Zacaula, 66, who has been growing maize since he was ten. "We suffered for so many years, years in which no-one even wanted to buy our crop - until now."

"They see that there are opportunities here," said Mr Zacaula, a father of seven whose family cultivates just over 100 acres. He has invested his profits in a cement home, a pickup truck and a small herd of cattle.

Mr Zacaula belongs to a group of 6,000 farmers who have signed a contract with the government to sell their maize for a fixed price. In exchange, they are guaranteed a market, plus discounts on fertiliser and seed, and the use of tractors and other equipment.

Mexican farmers who now plant maize on 21 million acres are proposing expanding that by 4.3 million acres this year alone. They want the government to fund the irrigation of another 1.9 million acres.

Referring to the healthy profits, Carlos Salazar of the National Confederation of Mexican Corn Growers said: "Maybe the government will finally pay attention to us now that we're all dressed up pretty."

Growers hope the ethanol phenomenon will cushion what they feared would be a devastating blow with the full opening of borders to US exports of maize and beans in 2008 under the North American Free Trade Agreement.

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India's Haryana state utilities to buy electricity from 21 biomass projects worth US$ 745 million

Taking a big leap forward into the renewable energy sector, the Haryana Renewable Energy Development Agency (HAREDA) signed Memoranda of Understanding (MoU) on power purchasing agreements with seven independent power producers (IPPs) to buy a large amount of renewable electricity.

The initiative will result in the generation of 686MW of power through 21 biomass power plants and four wind energy projects at a total cost of 33 billion rupiah (€570/US$745 million).

The State of Haryana is located in India's North-Western region and has a population of some 21 million inhabitants. It is the first state in the country to have achieved 100% electrification, reaching all villages. The average Haryana inhabitant consumes around 550kWh of electricity per year (compare this to the US average of 13,250kWh per person per year).

HAREDA recently analysed the power generation potential through renewables and found the following results:
  • Biomass: 1400 MW
  • Bagasse Cogeneration (bagasse is residual sugar cane biomass): 100 – 150 MW
  • Small Hydro Projects: 45 MW
  • Municipal Solid Waste: 17 MW
  • Solar Energy: 5.5 - 6.5MW
  • Wind Energy: being mapped
The Haryana government stresses that energy security and the abundance of supplies is of the upper most important for growth and development, and that it has given top priority to harness all types of energy - from nuclear and coal to renewables - through launching several large projects. In november 2005 a policy notification was released encouraging the private sector to set up renewable energy power projects in the state:
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The policy is aimed at promoting generation of electricity through renewable energy sources. Chief Minister Bhupinder Singh Hooda says this would be the future of energy generation for the state, adding that only the speedy setting up of these projects with a time lag of 20 moths after signing the Power Purchase Agreement for biomass projects and 26 months for wind projects, the people, the producers and the Government would be benefited, he added.

Earlier, in his presentation, Financial Commissioner and Principal Secretary, Renewable Energy Department, Mr. S.C.Chaudhary informed that the biomass based power projects would generate 246 MW of power and the wind energy based power projects would produce 440 MW power and these would start generation of power by the mid of 2009.

The director of the Haryana Renewable Energy Department and of HAREDA, Sumita Misra signed the MoU's for biomass power projects M/s Starwire India Ltd., New Delhi, M/s Gammon India Ltd., Mumbai, M/s Tecpro Energy Pvt. Ltd. Chennai, M/s Jyoti Biomass Power Ltd., Hyderabad and M/s Turboatom -TPS Projects Ltd., New Delhi. Similarly, in case of setting up of wind energy based power projects, the MoUs were signed with two IPPs including, M/s Suzlon Energy Ltd., Pune and M/s. Enercon India Ltd., Mumbai.

Misra said that the power generated by these projects would be purchased by the Power Utilities on the tariff decided by the Haryana Electricity Regulatory Commission as per provisions in the Electricity Act, 2003. The Commission has already fixed the tentative tariff and had invited comments from the stake holders for finalising the tariff. She said that these renewable energy projects would not only be environment friendly, but these would also help in reducing the power cuts during the peak hours. As these power generation projects would be located near the load centres, these would help in reducing the transmission losses.

More information:
HAREDA: Consultation Paper for fixation of Tariff for RE Power Projects [*.pdf].

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DuPont outlines commercialisation strategies for biobutanol, cellulosic ethanol

Even though the Biopact aims to help present and promote the role of the developing world in the nascent bioeconomy, the advances made by multinationals on this front will to a large extent determine what this green economy will look like and which products are set to dominate the market.

DuPont is one such company, investing massively in bioproducts related research. It has now clarified some of its commercialisation strategies at an alternative energy conference where it shed a light on its work on biobutanol (earlier post and here) and cellulosic ethanol.

Dupont Biofuels vice-president and General Manager John Ranieri told investors at the Piper Jaffray Alternative Energy Symposium, which focused on industry and investment trends in solar, cleantech and biofuels, that the bioeconomy offers global opportunities, and that cellulosic ethanol and next generation biofuels, such as biobutanol, will be viable replacements for gasoline transportation fuels.

DuPont outlined a three-part strategy to commercialise new biofuel products and to increase their efficiency:
  1. improving existing ethanol production through differentiated agricultural seed products and crop protection chemicals
  2. developing and supplying new technologies to allow conversion of cellulose to biofuels
  3. developing and supplying next generation biofuels such a biobutanol with improved performance
The multinational will link its R&D efforts to commercialisation in the following way:
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1. Improve Existing Ethanol Production: DuPont had more than $300 million in revenues in 2006 and growing at greater than 20 percent per year from seed and crop protection solutions that increase yield per acre and enhance ethanol yield of grain through biotechnology. For the ethanol industry, DuPont subsidiary Pioneer Hi-Bred International Inc. offers more than 180 seed hybrids that are marketed through its IndustrySelect(R) program, bringing specialized grain traits that improve the efficiency of ethanol production.

2. Technology to Produce Cellulosic Biofuels: DuPont and the U.S. Department of Energy are jointly funding a research program to develop technology to convert corn stover into ethanol. The technology was licensed to Broin Companies, the nation's largest dry mill ethanol producer, in October 2006. A 25 million gallon per year commercial-scale plant in Emmetsburg, Iowa, will begin production of cellulosic ethanol in the next four to six years. Ranieri outlined how the Integrated BioRefinery technology package will significantly increase the amount of ethanol per acre achievable by using corn grain and stover on the same amount of land.

3. Biobutanol Partnership with BP and Advanced Biofuels Pipeline: DuPont's partnership with BP to develop biobutanol is based on its strategy to bring advanced biofuels to market to expand the use of biofuels in gasoline. Biobutanol will be the first product available and offers improved performance. It enhances ethanol-gasoline blends by lowering the vapor pressure when co-blended with these fuels; it resolves fuel stability issues in that biobutanol-gasoline blends can be distributed via the existing fuel supply infrastructure; it improves blend flexibility allowing higher biofuels blends with gasoline; and it improves fuel efficiency (better miles per gallon) compared to incumbent biofuels. Fleet testing of biobutanol has begun in the United States and the European Union. Biobutanol market testing is targeted for later this year in the United Kingdom. Additional global capacity will be introduced as the technology advances and market conditions dictate.

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