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    During a session of Kazakhstan's republican party congress, President Nursultan Nazarbayev announced plans to construct two large ethanol plants with the aim to produce biofuels for exports to Europe. Company 'KazAgro' and the 'akimats' (administrative units) of grain-growing regions will be charged to develop biodiesel, bioethanol and bioproducts. KazInform - March 6, 2007.

    Saab will introduce its BioPower flex-fuel options to its entire 9-3 range, including Sport Sedan, SportCombi and Convertible bodystyles, at the Geneva auto show. GreenCarCongress - March 2, 2007.

    British oil giant BP plans to invest around US$50 million in Indonesia's biofuel industry, using jatropha oil as feedstock. BP will build biofuel plants with an annual capacity of 350,000 tons for which it will need to set up jatropha curcas plantations covering 100,000 hectares of land, to guarantee supply of feedstock, an official said. Antara [*cache] - March 2, 2007.

    The government of Taiwan has decided to increase the acreage dedicated to biofuel crops -- soybean, rape, sunflower, and sweet potato -- from 1,721 hectares in 2006 to 4,550 hectares this year, the Council of Agriculture said. China Post - March 2, 2007.

    Kinder Morgan Energy Partners has announced plans to invest up to €76/US$100 million to expand its terminal facilities to help serve the growing biodiesel market. KMP has entered into long-term agreements with Green Earth Fuels, LLC to build up to 1.3 million barrels of tankage that will handle approximately 8 million barrels of biodiesel production at KMP's terminals on the Houston Ship Channel, the Port of New Orleans and in New York Harbor. PRNewswire - March 1, 2007.

    A project to build a 130 million euro ($172 million) plant to produce 200,000 cubic metres of bioethanol annually was announced by three German groups on Tuesday. The plant will consume about 600,000 tonnes of wheat annually and when operational in the first half of 2009 should provide about a third of Germany's estimated bioethanol requirements. Reuters - Feb. 27, 2007.

    Taiwan's Ministry of Economic Affairs has announced that government vehicles in Taipei City will begin using E3 fuel, composed of 97% gasoline and 3% ethanol, on a trial basis in 2007. Automotive World - Feb. 27, 2007.

    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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Tuesday, March 06, 2007

The bioeconomy at work: new success in engineering plant oils, replacing petrochemicals

As we progressively move towards the post-petroleum, bio-based economy, new breakthroughs in biotechnology become more frequent. The vision behind advocates of the bioeconomy is that all products derived from oil can and should gradually be replaced by biodegradable, efficient, climate neutral plant-based alternatives.

Researchers at the U.S. Department of Energy's Brookhaven National Laboratory, collaborating with scientists from the Georg-August University of Göttingen (Germany), have made another contribution to achieving this goal: using genetic manipulation to modify the activity of a plant enzyme, they succeeded in converting an unsaturated oil in the seeds of a temperate plant to the more saturated kind usually found in tropical plants, such as palm oil. The technique may yield materials that can replace petrochemicals. Interestingly, the process works in reverse: tropical oil-bearing plants can be triggered to deliver oils with a higher ratio of unsaturated fatty acids.

Potentially, the technique allows for a finetuned 'economy' of engineered oils, in which the metabolism of the seeds of oil bearing plants and the biosynthesis of the enzymes they rely on, is managed in such a way that it yields the ideal type of oil suited for the production of a particular product, be it biofuels with specific properties (cold tolerance, cloud point, melting point), green lubricants and resins, or bioplastics and biopolymers.

The research has been published online by the Proceedings of the National Academy of Sciences (PNAS):
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While conversion of an unsaturated oil to an oil with increased saturated fatty acid levels may not sound like a boon to those conscious about consuming unsaturated fats, "the development of new plant seed oils has several potential biotechnological applications," says Brookhaven biochemist John Shanklin, lead author on the paper.

For one thing, the new tropical-like oil has properties more like margarine than do temperate oils, but without the trans fatty acids commonly found in margarine products. Furthermore, engineered oils could be used to produce feedstocks for industrial processes in place of those currently obtained from petrochemicals. Shanklin also suggests that the genetic manipulation could work in the reverse to allow scientists to engineer more heart-healthy food oils.

"Scientists have known for a long time that the ratio of saturated to unsaturated fatty acids plays a key role in plants' ability to adapt to different climates, but to change this ratio specifically in seed oils without changing the climate is an interesting challenge," remarked Shanklin. "Our group sought to gain a better understanding of the enzymes and metabolic pathways that produce these oils to find ways to manipulate the accumulation of fats using genetic techniques."

The researchers focused on an enzyme known as KASII that normally elongates fatty acid chains by adding two carbon atoms. The longer 18-carbon chains are more likely to be acted on by enzymes that desaturate the fat. So the scientists hypothesized that if they could prevent the chain lengthening by reducing the levels of KASII, they could decrease the likelihood of desaturation and increase the level of saturated fats in the plant seeds.

Their hypothesis was supported by the fact that scientists had previously identified a plant with a mutated KASII that showed reduced enzyme activity, and these plants were able to accumulate more saturated fats than was normal. So the Brookhaven team set out to reduce KASII activity with the use of RNA-interference (RNAi) to see if they could further increase the level of saturation in plant seed oils.

The Brookhaven scientists performed their experiments on Arabidopsis, a plant commonly used in research. Like other plants from temperate climates (e.g., canola, soybean, and sunflower), Arabidopsis contains predominantly 18-carbon unsaturated fatty acids in its seed oil. Tropical plants, in contrast (e.g. palm), contain higher proportions (approximately 50 percent) of 16-carbon saturated fatty acids.

The results were surprising. The genetic manipulations that reduced KASII activity resulted in a seven-fold increase in 16-carbon unsaturated fatty acids - up to an unprecedented 53 percent - in the temperate Arabidopsis plant seed oils.

"These results demonstrate that manipulation of a single enzyme's activity is sufficient to convert the seed oil composition of Arabidopsis from that of a typical temperate pant to that of a tropical palm-like oil," Shanklin said. "It is fascinating - and potentially very useful - to know that we can change the oil composition so drastically by simple specific changes in seed oil metabolism, and that this process can occur independently from the adaptation to either tropical or temperate climates."

For example, such a technique could lead to the engineering of temperate crop plants to produce saturated oils as renewable feedstocks for industrial processes. Such renewable resources could help reduce dependence on petroleum.

Conversely, methods to increase the activity of KASII, and therefore the production of 18-carbon desaturated plant oils, may provide a useful strategy to limit the accumulation of saturated fatty acids in edible oils, leading to more healthful nutrition.

Picture: Arabidopsis seeds viewed through a fluorescence microscope. Two show the fluorescent markers used to track inserted genes; the third is an unmodified, wild type seed, which appears dark. Courtesy: BNL Media & Communications Office

More information:

Mark S. Pidkowich, Huu Tam Nguyen, Ingo Heilmann, Till Ischebeck, and John Shanklin, Modulating seed {beta}-ketoacyl-acyl carrier protein synthase II level converts the composition of a temperate seed oil to that of a palm-like tropical oil, [*abstract] Proc. Natl. Acad. Sci. USA, 10.1073/pnas.0611141104, March 5, 2007

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IEA chief economist: EU, US should scrap tariffs and subsidies, import biofuels from the South

President Bush visits Brazil this week and is expected to hear President Lula lobbying him to end American ethanol tariffs. Brazil's push is now receiving the support from an unlikely quarter - the authoritative International Energy Agency (IEA), the independent energy adviser to 26 of the most industrialized nations.

The IEA understands its case: it has been studying all aspects of biofuels and bioenergy in-depth for years now, with dedicated scientific Task Forces (see IEA Bioenergy), which unite top experts in the field. Bioenergy Task 40 - which analyses the potential for sustainable international trade in biofuels - has made the case very clearly: a large amount of green fuels can be produced in a sustainable manner, without threatening the food security of people and without threatening ecosystems and biodiversity, in the Global South and exported efficiently to world markets (earlier post). Other Bioenergy Task forces come to the same conclusion. Europe and America do not have this capacity.

Earlier we reported on how the IEA's very chief, Claude Mandil, knowing the science, called on Europe and the United States to end their trade distorting subsidies for biofuels that can not compete in the market. He also urged the large consumers to import green fuels from the developing world instead (earlier post).

Now the IEA's Chief Economist, Fatih Birol, is joining this position: biofuels made in the EU and the US, using food grains, make no economic sense. They are inefficient and cannot compete against biofuels made in the South, where good agro-ecological conditions and suitable crops result in efficient fuels. Moreover, inefficient biofuels made in the US and the EU do not really contribute to reducing greenhouse gases, whereas those made in the developing world do.

For all these reasons, Birol says "the U.S. and Europe should scrap import duties on developing countries and in the longer term reconsider all subsidies."

The case for a 'Biopact' of sorts (see our Biofuels Manifesto) is increasingly being strengthened by scientists, economists, and energy experts alike.

The recent dip in oil prices proves the point: the EU/US government policy-fuelled rush to produce biofuels is backfiring as it pushes up costs and makes their domestic biofuels far less competitive. A looming biofuels glut plus falling rival crude oil prices, down a fifth on last summer's highs, mean producers can less easily pass on their spiraling costs. The present dip will last until demand rebounds, perhaps as far off as the end of the decade. Falling oil prices are hurting sales of biofuel which was barely competitive before, pricking European and U.S. euphoria built on subsidies and ambitious targets.

Profits are still to be had but a continuing scramble for raw materials like corn, soy and wheat will knock margins as producers re-negotiate more pricey supply contracts.

Still thriving, however, is biofuels pioneer Brazil - the symbol for the fact that biofuels made in the South make sense -, which has a booming domestic market where more than two-thirds of all new cars can run on either gasoline or ethanol:
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Biofuels costs will likely fall and demand and prices rise in Europe and the U.S. as better infrastructure and economies of scale kick in over the next two to three years, analysts say.

U.S. Democrats last week proposed a $15 billion energy plan, including boosting the country's network of ethanol service stations, for example.

But biofuels future also depends on oil prices, and analysts cannot guarantee crude oil will stay above the $60-$65 where it is trading now and undercutting biofuels - excluding subsidies - outside Brazil, according to the IEA.

Another factor is input cost: but sugar, corn, grain and palm oil prices are all seen holding or rising in the near term.

A new generation of biofuels made from waste like straw and wood chips would ease input shortages, but is not expected to be commercially available before 2009 and possibly much later.

In the United States soaring demand is expected to beat farmers' efforts to keep up, with high corn prices likely in the near-term, not least after Bush in January asked Congress to back a near 5-fold increase in the use of biofuels by 2017.

The biofuels craze is risking a surplus in the United States and elsewhere.

Investors F&C, with 155 billion euros ($204.9 billion) under management, says it has exited investments including the second biggest U.S. ethanol producer VeraSun, because of the prospective over-supply and margin squeeze.

A glut is also expected in parts of Europe, where biofuels support is switching from tax credits to blending targets, and notably Germany where higher taxes have knocked sales by as much as a third this year so far.

"In the very short-term we have far too much production capacity," said the EBB's Garofalo.

Elsewhere, Spanish energy firm Abengoa is mulling suspending output at its biggest ethanol plant, partly on higher grain prices and partly because the domestic market is saturated under present blending labeling rules.

Oil major Total has put on hold a biodiesel project with Finnish refiner Neste Oil, while prospective British ethanol producer Ensus postponed last December plans to list on London's Alternative Investment Market.

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Chinese Academy of Sciences outlines alternative energy and conservation strategies

After compre- hensive studies, a panel of the Chinese Academy of Science's (CAS) Academic Divisions recently wrote a set of recommendations on the long- and medium-term development strategy for energy sources that can supplement or substitute petroleum in China. Some of the strategies conform with the country's bioenergy plan (earlier post).

The report gauges the future development trends of energy sources both in China and the world, making forecasts on the availability of petroleum resources, their demand, and production capacities from 2020 to 2050. The forecast consists of two parts, (1) on the supplementation and substitution of petroleum fuel and (2) on the improvement and substitution of the power systems of transport vehicles, respectively.

Regarding the development of petroleum substitutes, including fuels from non-conventional oil and coal, natural gas and biomass, the report makes the following proposals for action over the next five years:
  1. Vigorously promoting the prospecting and assessment of China's oil shale resources.
  2. Deepening the research and development of key technologies that are directly or indirectly associated with liquefaction; providing support to the construction of demonstration plants with an annual production capacity up to one million tons of substitute fuels using the two technological alternatives, with a view to gaining experiences for industrial application of the production technologies.
  3. A scientific verification on gasoline and diesel substitutes in an all-round manner should be completed as soon as possible. Also in need is the encouragement given to the technologies using cellulose and semi-cellulose as raw materials for ethanol production. Research should be conducted into the breeding of fast-growing energy-rich plants in desert and desolate areas that can provide biomass for bio-ethanol and biodiesel manufacturing. Furthermore, efforts should be made to develop mass production bases for those fuels without the occupation of farmlands.
  4. Continuously promoting industrialization of the production of bio-ethanol and biodiesel from biomass.
As the shortage of conventional petroleum becomes increasingly acute and crude oil prices keep soaring, the markets for non-conventional petroleum (referring only to extra-heavy oil, and the petroleum from oil sands and oil-shale) are expected to constantly expand, partly making up for the shortfall. Resources of coal and natural gas are relatively abundant in this country, and their conversion into the fuel driving transport vehicles is now technologically viable and could be competitive when prices of conventional fuels are at the high end of the range.

According to the CAS, during the period of the world's transition to a post-petroleum economy, increased use of coal and natural gas as a substitute of conventional fuel should be possible.

Other optional substitutes include biomass-based ethanol, carbinol (a methanol based alcohol), dimethyl ether, biodiesel, synthetic oil and hydrogen, which are also internationally seen as a direction for development. Equally significant are technological innovations with regard to transport vehicles. There is a need to develop energy-efficient vehicles, vehicles using substitute fuels or powered by electricity, as road transport is a most important part of the transport and communication industry. Rail transit systems are a major approach for public transportation and a main way of energy conservation:
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The following proposals are raised on energy conservation in the transport and communication industry:

First of all, positive efforts should be made to promote the adoption of new power systems for the automobiles, which are good at energy saving and diversified for energy sources. Priority should be given to electrified power systems with zero discharge of exhaustive gases. There is the need to vigorously carry out the research and development of highly efficient, low-cost systems of fuel cells and lithium ion batteries. The key issues in the application of electric vehicles and its early industrialization lie in the solution to the problems of electric power supply and hydrogen fuel storage on vehicles. To this end, resources should be pooled to remove the technological bottlenecks such as short service life, high production costs, poor reliability and performance of such systems. Meanwhile, feasibility studies and large-scale demonstration projects should be conducted on such infrastructure facilities as hydrogen fueling stations and electric vehicle charging stations so as to speed up the industrial development of fuel cells and lithium ion batteries.

Secondly, electrified rail transportation should be developed in a big way. Railway electrification and increased speed of passenger trains are the way of ensuring the dominant position of railways in the communication and transport industry. More efforts should be made to develop urban rail transit systems, with a view to effectively curbing the rapidly increasing number of automobiles used in cities and reduce the per vehicle consumption of oil.

The report notes that introduction of energy-efficient technologies is time consuming and has to be accomplished in well-planned phases. For work over the next five years, it suggests that support should be rendered to the research, development and pilot studies by various sectors in this regard. Initial work should be done on selective basis when putting such technologies to industrial application. Prudence should be the approach toward massive application of such technologies in industrial production in the current R&D phase, and only after a full verification will it be appropriate for the government to make a major decision to its large-scale industrialization. The report also proposes a key national research program in the field, which should be launched through coordination of the national authorities and implemented continuously under the centralized leadership and management.

More information:
Chinese Academy of Sciences: CAS scientists make suggestions on energy source development - March 6, 2007.

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