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    A bioethanol plant with a capacity of 150 thousand tons per annum is to be constructed in Kuybishev, in the Novosibirsk region. Construction is to begin in 2009 with investments into the project estimated at €200 million. A 'wet' method of production will be used to make, in addition to bioethanol, gluten, fodder yeast and carbon dioxide for industrial use. The complex was developed by the Solev consulting company. FIS: Siberia - February 19, 2007.

    Sarnia-Lambton lands a $15million federal grant for biofuel innovation at the Western Ontario Research and Development Park. The funds come on top of a $10 million provincial grant. The "Bioindustrial Innovation Centre" project competed successfully against 110 other proposals for new research money. London Free Press - February 18, 2007.

    An organisation that has established a large Pongamia pinnata plantation on barren land owned by small & marginal farmers in Andhra Pradesh, India is looking for a biogas and CHP consultant to help research the use of de-oiled cake for the production of biogas. The organisation plans to set up a biogas plant of 20,000 cubic meter capacity and wants to use it for power generation. Contact us - February 15, 2007.

    The Andersons, Inc. and Marathon Oil Corporation today jointly announced ethanol production has begun at their 110-million gallon ethanol plant located in Greenville, Ohio. Along with the 110 million gallons of ethanol, the plant annually will produce 350,000 tons of distillers dried grains, an animal feed ingredient. Marathon Oil - February 14, 2007.

    Austrian bioenergy group Cycleenergy acquired controlling interest in Greenpower Projektentwicklungs GmbH, expanding its biomass operational portfolio by 16 MW to a total of 22 MW. In the transaction Cycleenergy took over 51% of the company and thereby formed a joint venture with Porr Infrastruktur GmbH, a subsidiary of Austrian construction company Porr AG. Greenpower operates two wood chip CHP facilities in Upper and Lower Austria, each with an electric capacity of 2 MW. The plants have been in operation since the middle of last year and consume more than 30,000 tonnes of wood chips and are expected to generate over €5 million in additional revenue. Cycleenergy - February 6, 2007.

    The 2008 edition of Bioenergy World Europe will take place in Verona, Italy, from 7 to 10 February. Gathering a broad range of international exhibitors covering gaseous, liquid and solid bioenergy, the event aims to offer participants the possibility of developing their business through meetings with professionals, thematic study tours and an international forum focusing on market and regulatory issues, as well as industry expertise. Bioenergy World Europe - February 5, 2007.

    The World GTL Summit will take place between 12 – 14th May 2008 in London. Key topics to be discussed include: the true value of Gas-to-Liquids (GTL) projects, well-to-wheels analyses of the GTL value chain; construction, logistics and procurement challenges; the future for small-scale Fischer-Tropsch (FT) projects; Technology, economics, politics and logistics of Coal-to-Liquids (CTL); latest Biomass-to-Liquids (BTL) commercialisation initiatives. CWC Exhibitions - February 4, 2007.

    The 4th Annual Brussels Climate Change Conference is announced for 26 - 27 February 2008. This joint CEPS/Epsilon conference will explore the key issues for a post-Kyoto agreement on climate change. The conference focuses on EU and global issues relating to global warming, and in particular looks at the following issues: - Post-2012 after Bali and before the Hokkaido G8 summit; Progress of EU integrated energy and climate package, burden-sharing renewables and technology; EU Emissions Trading Review with a focus on investment; Transport Climatepolicy.eu - January 28, 2007.

    Japan's Marubeni Corp. plans to begin importing a bioethanol compound from Brazil for use in biogasoline sold by petroleum wholesalers in Japan. The trading firm will import ETBE, which is synthesized from petroleum products and ethanol derived from sugar cane. The compound will be purchased from Brazilian petrochemical company Companhia Petroquimica do Sul and in February, Marubeni will supply 6,500 kilolitres of the ETBE, worth around US$7 million, to a biogasoline group made up of petroleum wholesalers. Wholesalers have been introducing biofuels since last April by mixing 7 per cent ETBE into gasoline. Plans call for 840 million liters of ETBE to be procured annually from domestic and foreign suppliers by 2010. Trading Markets - January 24, 2007.

    Toyota Tsusho Corp., Ohta Oil Mill Co. and Toyota Chemical Engineering Co., say it and two other firms have jointly developed a technology to produce biodiesel fuel at lower cost. Biodiesel is made by blending methanol into plant-derived oil. The new technology requires smaller amounts of methanol and alkali catalysts than conventional technologies. In addition, the new technology makes water removal facilities unnecessary. JCN Network - January 22, 2007.

    Finland's Metso Paper and SWISS COMBI - W. Kunz dryTec A.G. have entered a licence agreement for the SWISS COMBI belt dryer KUVO, which allows biomass to be dried in a low temperature environment and at high capacity, both for pulp & paper and bioenergy applications. Kauppalehti - January 22, 2007.

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Tuesday, April 10, 2007

Snowy forests increase warming, while tropical forests cool the planet

Planting trees which trap and absorb carbon dioxide as they grow can help to remove carbon dioxide from the atmosphere. But a new study suggests that, as a way to fight global warming, the effectiveness of this strategy depends heavily on where these trees are planted. In particular, forests in the tropics are very efficient at keeping the Earth at a cool temperature, because not only do they store carbon, they also produce clouds that act like a mirror, reflecting sunlight back into the atmosphere. Planting trees in snowy areas on the other hand may worsen global warming as their canopies absorb sunlight which would otherwise be reflected by the snow, the study suggests. However, while the forests of Europe, Siberia and Canada may contribute to warming, the authors stress they are not advocating chopping down trees.

The researchers, including Ken Caldeira of Carnegie's Department of Global Ecology and Govindasamy Bala at Lawrence Livermore National Laboratory, report their findings in the Proceedings of the National Academy of Sciences. The researchers' work simulates the effects of large-scale deforestation, and accounts for the positive and negative climate effects of tree cover at different latitudes. Protecting, reforesting and afforesting the tropics is strongly advocated:
Latitude-specific deforestation experiments indicate that afforestation projects in the tropics would be clearly beneficial in mitigating global-scale warming, but would be counterproductive if implemented at high latitudes and would offer only marginal benefits in temperate regions. Although these results question the efficacy of mid- and high-latitude afforestation projects for climate mitigation, forests remain environmentally valuable resources for many reasons unrelated to climate.
This is interesting news, because it may obliquely strengthen the case for bioenergy production based on energy trees planted in the tropics. Here's our take: a recent EU-report showed that both tropical Africa and Brazil have more than 92 million hectares of land that can be afforested and reforested with eucalyptus. Couple this potential to the concept of carbon-negative bioenergy ('Bio-Energy with Carbon Storage'), and we may have an extremely effective option to mitigate climate change. The advantages of such a system look as follows:
  • afforestation/reforestation with fast-growing trees in the tropics captures carbon from the atmosphere
  • as they grow, the trees produce dense tropical clouds that reflect the sunlight back into the atmosphere - this is called the 'albedo effect', the importance of which is stressed in the new study; we use the trees as temporary mirrors
  • once they are harvested, the trees are used as a solid biofuel for the production of energy, while the carbon dioxide captured from the atmosphere that would be released during the combustion is stored underground, in so-called carbon capture and storage (CCS) systems
  • the result is a highly efficient carbon-negative energy system that can power our societies while at the same time taking our 'historic' CO2 emissions - all the carbon dioxide from fossil fuels we pumped into the atmosphere since the industrial revolution - out of the carbon cycle; such a system cleans up the past
  • scientists have found that this kind of carbon-negative bioenergy concepts can take us back to pre-industrial CO2 levels by mid-century
Of course, much more research is needed into the actual albedo effect produced by fast-growing tropical energy trees that are harvested in (long) cycles; plantation trees may not produce the same effect as new forests that are left to stand permanently, as higher soil respiration fluxes resulting from decomposing organic material after crop rotation may offset the benefits:
:: :: :: :: :: :: :: :: :: :: :: :: ::

So far, we found very few studies focusing on the albedo effect of tropical energy plantations (there are several studies on this effect in extra-tropical plantations). One reference does suggests the following, though:
[on the micro-climate of plantations] There are also situations in which the forests are located in hilly regions along the coast and are subjected to a constant fog, which condenses on the canopy and falls to the forest soil adding to the rainfall level (Lima 1993). This effect also has been observed in some native eucalypt forests of Australia (Costin and Winbush 1961). This could indicate that Brazil's eucalypt plantations may have the same effects on the climate as a native forest located in the same region. Thus, the effect of planting a large area with eucalypts is likely to be the same as if other vegetation of similar structure and albedo were planted. In summary, certain research studies have shown that differences in the microclimate within eucalypt plantations may exist compared with those of other species and native forests, but the data are not conclusive (Poore and Fries 1985). - From a report by the Oak Ridge National Laboratory's Bioenergy Dept. [only accesible via *cache]: "Short-rotation eucalypt plantations in Brazil: environmental issues", s.d., s.l.
In any case, the author of the present study says this on the albedo effect of tropical trees in general: "When it comes to rehabilitating forests to fight global warming, carbon dioxide might be only half of the story; we also have to account for whether they help to reflect sunlight by producing clouds, or help to absorb it by shading snowy tundra."

Forests in colder, sub-polar latitudes evaporate less water and are less effective at producing clouds. As a result, the main climate effect of these forests is to increase the absorption of sunlight, which can overwhelm the cooling effect of carbon storage.

However, Caldeira believes it would be counterproductive to cut down forests in snowy areas, even if it could help to combat global warming. "A primary reason we are trying to slow global warming is to protect nature," he explains. "It just makes no sense to destroy natural ecosystems in the name of saving natural ecosystems."

More information:
G. Bala, K. Caldeira, et al, "Combined climate and carbon-cycle effects of large-scale deforestation" [*abstract], Published online before print April 9, 2007, Proc. Natl. Acad. Sci. USA, 10.1073/pnas.0608998104

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Environmentalist: palm oil not necessarily a failure as a biofuel, ban would be disastrous for the environment

Here at the Biopact, we were surprised to find an in-depth and very nuanced essay on why promoting sustainably produced palm oil based biofuel is wiser than calling for a simplistic 'moratorium'. Such a hypothetical import ban by the West on fuels made from the most productive energy crop would be far more disastrous for the environment than stimulating the production of eco-friendlier palm oil, even if it means expanding the sector. The main reasons: (1) palm oil employs millions of small farmers; taking away their livelihoods without providing realistic alternatives results in far more environmental destruction; (2) Asian demand is growing rapidly and only a sustainability offensive launched by the EU can bring a counter-weight; in order to kickstart this drive towards eco-friendlier production, more investments are needed in the sector, not less.

The essay was written by Rhett A. Butler, chief editor and researcher for Mongabay, a publication with a very strong record of promoting environmental sustainability, biodiversity and conservation, especially in the tropics. Butler develops a kind of reasoning we fully appreciate and understand. It is based on a pragmatic and realist vision, on strong knowledge of the social realities in the South, and on a deep analysis of the complex environmental economics of palm oil.

In particular, Butler argues against Marcel Silvius, a renowned climate expert at Wetlands International in the Netherlands, who recently said palm oil is 'a failure' as a biofuel because the deforestation it drives is responsible for greenhouse gas emissions. Butler sees this "not only as a misleading statement, more problematically, it doesn't help efforts to devise a workable solution to the multitude of issues surrounding the use of palm oil."

Let us summarise this battle between these two types of environmentalists - the idealist with irrealistic expectations and the pragmatic environmentalist who knows the field. We add some notes of our own.

Some basics and a taboo
Let us first describe some of the well known disadvantages and benefits of palm oil as a biofuel:
  • palm oil drives deforestation, illegal logging and biodiversity loss, but provides jobs to many of the world's poorest who have very few alternatives (around half of the world's palm fruit is produced by smallholders); on the other hand, biodiversity loss is irreversible, people losing their livelihoods (in case of a hypothetical ban on palm oil biofuels) is not; loss of income to the smallholder will however fuel a vicious socio-economic cycle that typically drives environmental degradation further (poverty, lack of investment in efficient agriculture leading to extensive forms of agriculture and ultimately to far more deforestation, etc...)
  • deforestation based on burning campaigns results in greenhouse gas emissions; there is however a strong taboo amongst some environmentalists that is not often discussed, namely the fact that oil palm trees, as they grow, recapture the carbon dioxide previously released and store more of it during their life-cycle than the original forest (up to twice as much); palm trees are more effective carbon sinks than pristine rainforests (the carbon dioxide released by the destruction of peatlands is another matter, though)
  • the carbon sink argument should not be misinterpreted; obviously nobody in his sane mind would advocate burning rainforests for the sole purpose of replacing them by a monoculture that happens to be more efficient at storing carbon; the point is that, there where forests have been cleared for non-palm related purposes, planting palm trees is a good idea
  • as Butler points out, a major benefit of palm oil, compared to other plants, is the fact that it is the most efficient energy crop known to man; it yields unsurpassed amounts of biomass feedstocks for biofuels (see table 1, click to enlarge); this means comparatively far less land is required for the production of a given amount of energy (compared with corn, this can be 10 times less); in a resource-constrained world, this is obviously an important factor
  • with the advent of second-generation biofuels, the vast amount of biomass produced by a palm plantation, but that is currently considered to be 'waste', becomes available for energy production; however, for these technologies and the production processes required to become commercially viable, more investments in the sector are needed, not less (see table 2, click to enlarge)
  • there is a great potential to intensify palm production (replacing old plantations with new high-yielding varieties, bringing better practises and skills to smallholder communities), to increase processing efficiencies and to create new markets and new value added products (such as bioplastics and second-generation biofuels from the vast stream of biomass residues); again, this requires more investments in the sector, not less; maintaining the current status quo would be disastrous for the environment, as it would fuel more extensive instead of intensive forms of production (more conversion of forest land instead of increasing yields on existing plantations)
Drawing on these basics, Butler writes:
:: :: :: :: :: :: :: :: :: :: ::

"Palm oil is quite obviously not a failure as a biofuel—it is derived from perhaps the most productive energy crop on the planet. A single hectare of oil palm may yield nearly 6,000 liters of crude biodiesel. In comparison, soybeans and corn generate only 446 and 172 liters per hectare, respectively. The problem with palm oil is not its yield, but how it is produced."
Presently much of the world's palm oil is coming out of the forests of Southeast Asia—increasingly in the biodiverse rainforests of Indonesia. Oil-palm cultivation has expanded in Indonesia from 600,000 hectares in 1985 to more than 6 million hectares by early 2007, and is expected to reach 10 million hectares by 2010. With such rapid growth—and room for expansion—Indonesia is expected to displace Malaysia as the world's largest producer of palm oil within a few years. Environmental groups say that clearing for oil-palm plantations is directly threatening key habitat for such endangered species as the orangutan, the Bornean Clouded Leopard, and the Sumatran Rhino as well as exacerbating illegal logging already rampant across the region. There is no dispute about this, these are facts.

Beyond forest-clearing for oil palm, palm-oil production often employs large amounts of fertilizer and generates hefty amounts of waste, which can pollute local waterways. An added threat comes from the conversion of carbon-rich peatlands for cultivation. Merely draining peatlands releases massive amounts of carbon dioxide into the atmosphere—Silvius's own Wetlands International estimates that destruction of these ecosystems and forests in Indonesia alone releases some 2 billion tons of CO2 per year or 8 percent of total anthropogenic emissions of the greenhouse gas.

"So yes, as currently practiced, palm-oil production often has a significantly negative impact on the environment, but it's unlikely that oil-palm plantation development will slow anytime soon. Its continuing growth is due to (1) lack of economic alternatives in many areas where the renewable energy source is grown and (2) rising biofuel demand from China."
People under pressure
After large-scale deforestation in the lowlands and the importation of millions of people through poorly-executed transmigration programs, there are few economic options in most of Borneo and Sumatra, two islands where much of the current land conversion for oil palm is occurring. Having lost jobs in the forestry sector, many villages are faced with having to decide whether to give up the remaining forest for oil palm or continue with subsistence living. Oil-palm plantations are often viewed as offering the best economic potential, especially given rapidly expanding demand from China.

While policymakers debate in Brussels the impact of biofuels, it seems clear that in the future China is going consume far greater amounts of biodiesel than Europe. With demand for cars surging and the country facing energy supply constraints and pollution problems, China appears to be ramping up for a massive expansion of diesel car production. Where is the diesel fuel to power these vehicles going to come from? Smart bets are on oil palm in southeast Asia and soybeans in the Amazon. Why else would state-backed Chinese firms be bankrolling oil-palm development in Indonesia and infrastructure projects linking coastal South America to the heart of the Amazon? The potential of close-to-home oil-palm plantations is simply too alluring.

Butler calls upon Europe to take the lead in a drive towards more sustainable palm oil production. This will require huge investments, but the dark alternative is a shift of markets, away from the very EU that could push for sustainability, and towards East Asia.

Offering palm oil producers a carrot
Since demand for palm oil isn't going to go away, Butler says:
"Europe's best approach is to convince Indonesian oil-palm producers to cultivate their crop in a manner that's less damaging to the environment, as exemplified by the Roundtable on ustainable Palm Oil (RSPO). This won't be done by hand-holding or Kumbaya circles; it will be done through financial incentives—if no one is demanding "green" palm oil, no one will produce it. Europe should inform producers that it is willing to buy a set amount of palm oil (in billions of liters per year), provided that it is independently certified as having been produced in an environmentally friendly and socially equitable way. Europe may even want to offer a minimum price guarantee to satisfy producers that it intends to hold up its side of the bargain."
With scaled-up production and reduced government subsidies (see below), it may turn out that sustainable palm-oil production isn't as costly as we've been led to believe. Further, a guaranteed market for eco-friendly palm oil will provide opportunities for innovation that could further reduce costs.

Europe should engage the Indonesian government as well. It should urge Indonesia to eliminate subsidies for oil-palm plantations grown on natural forest lands, ban development of peatlands, and set aside primary forests for conservation in exchange for funds reflecting the value of the carbon emissions avoided.

Europe's sustainability initiative should be comprehensive:
"Since neither the United States nor China is going to take the lead on this issue, Europe should not miss the opportunity to do so. In a place where there are few economic opportunities for large numbers of rural people living in a degraded landscape, green biofuels could go a long way toward addressing poverty, the environment, and global climate change. Figuring out a way to plant oil palm across the vast stretches of deforested wasteland in Indonesia could be immensely beneficial to local populations as well as the environment—palm-oil plantations sequester more carbon and support vastly more species of wildlife than barren land. Now's the time to act. Almost everyone will be better off from greener palm oil."
Butler hints at current initiatives that are worth supporting, like the Roundtable on Sustainable Palm Oil and the attempts by firms like Golden Hope Plantations Berhad, a Malaysian palm-oil producer, to cultivate the crop in a manner that helps mitigate climate change, preserves biodiversity, and brings economic opportunities to desperately poor rural populations.

What would be the basics of such an initiative aimed at radically greening palm oil production? Butler lists several of them:

Conserving natural forests
The most important step in reducing the environmental impact of palm oil is banning the establishment of oil-palm plantations in natural forest areas and peatlands. Oil-palm cultivation in both these areas does more harm than good, either through the reduction of biodiversity and ecological services (natural forests) or through the release of massive amounts of carbon dioxide (peatland conversion). Oil-palm plantations should be encouraged on existing agricultural lands and areas that have been heavily degraded and deforested.

Retaining natural forest cover is particularly important near oil-palm plantations where forest serves as a refuge for predators of oil-palm pests and can help reduce soil erosion on hillsides and water catchment areas, while slowing and reducing water runoff.

Minimizing haze
Every year a choking haze spreads across large parts of Southeast Asia. While most of this results from peatland and forest fires, some of the pollution is produced by vegetation burning on oil-palm plantations. This impact can be reduced using "zero burning replanting" techniques pioneered by Golden Hope Plantations.

Instead of burning stands of unproductive oil palm, Golden Hope cuts and shreds them and lets them decompose. This helps fertilize the soil for future crops—shortening the fallow period and lessening the need for chemical fertilizers—and reduces both "haze" and greenhouse-gas emissions. Further, under zero-burning techniques, land-clearing is cheaper ($300-400 per hectare saved in replanting costs) and independent of weather conditions. Concerns over increased risk of beetle infestation can be abated by using leguminous cover crops, which also fix nitrogen and enhance the soil.

Pest control
Monocultures in tropical climates often suffer from pest problems—oil-palm plantations are no exception. Generally, plantation owners are heavy users of pesticides that pollute waterways and affect local wildlife.

Golden Hope has taken a different approach. It has reduced its use of chemicals by focusing on biological control, including the use of beetles, birds, and fungi to deal with common oil-palm pathogens. Golden Hope builds owl boxes to attract rodent-eating barn owls and plants native tree species to draw bats and other insectivores. When pesticides are determined absolutely necessary, the company employs highly selective application of insecticides to control the worst outbreaks. Because it relies on early detection of pests, large-scale applications are rarely needed.

Palm-Oil Mill Effluent (POME)
Waste generated by the pressing of palm fruit during crude palm-oil production is a general problem for processors. While these compounds are non-toxic, they can't safely by discharged into local waterways due to their high acidity. Golden Hope addresses this issue by treating raw POME with anaerobic bacteria that break the effluent into methane (which can be recaptured as fuel), carbon dioxide, and water. The company holds the treated POME for longer than average and uses it as a substitute for inorganic fertilizer. Golden Hope also composts empty fruit bunches and other wastes from the production process, further diminishing the need for petroleum-based fertilizers.

Other techniques
In many parts of Indonesia, where plantation expansion is the fastest, there are serious concerns over the impact of oil palm on the water table. Golden Hope tries to minimize this risk by carefully managing water use through reservoirs and irrigations systems. To cut erosion, the company uses terracing and creeping leguminous covers, which also improve soil biodiversity and fertility.

Golden Hope encourages reforestation in forested reserves, on steep slopes, and on land near catchment areas, using native species—especially those with commercial, medicinal, culinary, and ecological value. Regarding these planted areas, the company says it aims to "enhance their attractiveness and ability to sustain fauna diversity by planting food tree species already endemic in the areas" and "encouraging resting by migrating birds by building perches and retaining dead tall trees."

Their effort seem to be paying off: surveys have recorded 268 species of flora and fauna, including 87 birds and 11 mammals, in oil-palm plantations. While this is lower than those found in primary or even secondary forest areas, it represents an improvement over barren land or other monocultures.

Expanding on these concepts for concessions in other parts of Malaysia and Indonesia, governments should encourage the recovery of developed secondary forests for recreation, biodiversity, and carbon value. Through some sort of carbon-trading or "avoided deforestation" mechanism, it may be possible to compensate these firms for forest conservation efforts. Beyond this direct monetary incentive, secondary forests can yield sustainable forest products and other ecological services for plantation workers and local communities.

Social Justice
Some of the biggest problems associated with palm oil production are social. While there is no doubt that oil-palm plantations provide much-needed employment opportunities in Indonesia—especially Borneo, which is used as an example in the next paragraphs—there are questions on the fairness of the existing system, which appears to sometimes lock small plantation owners into conditions akin to slavery.

Given the scarcity of timber in parts of Borneo, much of its population has few economic options at present. Oil palm seems to be the best alternative for communities that are just eking a living off rubber cultivation, subsistence rice farming, and fruit gardens. When a large agricultural firm enters an area, some community members are often eager to become part of an oil-palm plantation. Since these people lack legal title to their land, deals are often structured so that they acquire 2-3 hectares (508 acres) of land for oil-palm cultivation. They typically borrow some $3,000-6,000 (at 30 percent interest per year) from the parent firm for the seedlings, fertilizers, and other supplies. Because oil palm takes roughly seven years to bear fruit, the community members work as day laborers at $2.50 per day on mature plantations, according to Dr. Lisa Curran, a biologist who has spent more than 20 years in Borneo. In a series of papers, she has documented the emergence of oil-palm plantations on the island. While the community members are working in established plantations, their own plots generate no income but require fertilizers and pesticides, which are purchased from the oil-palm company. Once a plantation becomes productive, the average income for a two-hectare allotment is $682-900 per month. In the past, rubber and wood generated $350-1000 month, according to Curran. The low level of income, combined with large start-up costs and relatively high interest payments, virtually ensures that small holders will be perpetually indebted to the oil-palm company.

Curran said this debt, combined with almost total dependence on entities they barely trust, has a psychological impact on communities. Because there are no ways to contest actions by the company, conflicts invariably arise within communities, especially when a large part of the community has opposed the plantation. (Dayaks often oppose oil-palm schemes.) At times under-the-table means are used to sway a community. For example, a gift of a motorbike can win over influential community leaders. Once the oil-palm firm gets the approval, it may negotiate on a one-on-one basis with each household, eliminating any sort of bargaining power of the greater community.

Surveys by Curran suggest that communities in West Kalimantan are deeply concerned about flooding after the establishment of oil-palm plantations. They also worry about loss of forest resources and culture—older community members don't always like the idea of women and children working on plantations. Oil-palm cultivation also makes local people more dependent on agricultural firms, since they no longer grow their own food. Finally, some communities have expressed dissatisfaction about working for Malaysians. They would rather be working independently, according to Curran. While they have a litany of complaints, few see other alternatives.

Meanwhile oil-palm firms are making a fortune. By Curran's calculations, some firms in West Kalimantan are seeing a 26 percent annual internal rate of return over a 25-year period, an astounding number. Because of booming demand for biofuels, they have little downside risk.

Butler concludes by saying that:
"Given this situation, it is critical that sustainable oil-palm production include social justice for local people. Governments should work to ensure that there are standard contracts to guarantee basic legal rights to land and universal codes that prevent unfair lending practices. In especially remote areas, large oil-palm firms should be asked to pay some of the costs for health care and education of workers and their families.

These steps can help make oil-palm production more equitable and environmentally friendly. Done right, the world's most productive biofuel can go a long way towards improving the quality of life for millions of rural poor."

Image 1, credit: Mongabay.
Image 2: cc, Biopact, 2007.

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Malaysian company thinks it can produce 6.48 billion liters of ethanol from Nipah

Fresh news about that 'mysterious' energy crop called Nypa fruticans (also known as 'nipah' or 'mangrove palm'): Pioneer Bio Industries Corp Sdn Bhd (PBIC) claims it will be able to produce a startling 6.48 billion litres (1.7 billion gallons) of nipah palm ethanol per year when its planned refineries in Malaysia's North-Western Perak State begin operations in 2009. This amount is roughly equal to 780,000 barrels of oil equivalent per day.

Earlier, the same company had announced a far lower projected output of around 1 billion liters (previous post and here).

At the Biopact we understand the potential of nipah, a very robust palm that thrives in most tropical mangrove systems, because we are cooperating with a small NGO in Nigeria, where the plant has invaded vast tracts of the Niger Delta. The aim of the small project is to alleviate the rampant poverty that plagues the mangrove communities, by building a 'cottage' ethanol industry around the palm and to link it up with larger production facilities (earlier post).

Ethanol can be obtained from fermenting the sugar-rich sap that can be tapped continuously from the trees' inflorescence. Nipah has a very high sugar-rich sap yield. According to one study (earlier post), the palm can produce 6,480-15,600 liters of ethanol per hectare, compared to 3,350-6,700 liters/hectare from sugarcane. Others go so far as to estimate potential ethanol yields to be as high as 20,000 liters once plantation management is optimised. However, the tapping technique is labor-intensive and it remains a question whether production can be scaled up that easily.

Apparently, the malaysian company thinks it is possible. Speaking at a media briefing titled ambitiously "National Biofuel Project based on Ethanol from Nypa Palm - Industrial Project Investment and Solution for Solving Global Warming", Chairman Md Badrul Shah Mohd Noor put the venture into a larger perspective:
:: :: :: :: :: :: :: :: ::

He indicated that ethanol demand of the United States alone stood at 22 billion litres last year, and that the biofuel is forecast to provide 30% of global energy by 2020, up significantly from only two per cent last year.

Giving details about the nipah project, Mr Badrul Shah said the Perak state government has awarded the company the rights to harvest nipah sap on 10,000 hectares of land, for which it has to pay 324 million ringgits (€70/US$94 million) per year. (A quick calculation shows that this would only result in 200 million liters of ethanol, maximum. The question is: where will the other 6.28 billion liters come from? Earlier, the company said it would establish dedicated plantations, besides tapping sap from wild stands. This matter remains very vague.)

PBIC, a subsidiary of Pioneer Vaccination Biotech Corp Sdn Bhd, holds the patent to produce ethanol from nipah palm sap. Md Badrul Shah said the company will sign a multi-billion dollar contract with a major international company in July to supply nipah-based ethanol over a five-year period.

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Researchers look at key drivers of China's bioenergy strategy

Researchers from the East-West Center, a leading research organization promoting relations and understanding among the peoples and nations of Asia, the Pacific, and the United States, analysed China's motivations for investing massively in bioenergy. Kang Wu, a senior fellow at the East-West Center, and Caleb O’Kray, an EWC degree fellow and Ph.D. candidate in agricultural and resource economics at the University of Hawaii-Manoa, looked at how Chinese officials are trying to increase the efficiency and economy of renewable energy production, especially liquid biofuels and biomass.

China has huge potential to develop renewable energy such as small hydropower, commercial biomass, biofuels, wind power, solar energy, and other sources, but the researchers say Beijing is facing big challenges. Their findings are the result of a year-long study of the situation and extensive interviews with Chinese policy makers.

China's bioenergy plan is part of the latest Five Year programme and is aimed at replacing 12 million tons of oil by liquid biofuels by 2020. When it comes to solid biofuels, no targets have been set, but co-firing with coal is being studied intensively and supported by the EU. According to first estimates, biomass from agricultural residues can replace 100 million tons of coal per annum.

According to Wu and O'Kray, the Chinese are pursuing biofuels for three main reasons:
  • They want to alleviate poverty in rural areas; bioenergy production can be a driver to close the growing income gap between the urban rich and the rural poor that has led to serious social tensions
  • They want to decrease energy dependence on imported fossil fuels and thus improve energy security
  • They want to reduce carbon emissions; because China is mainly a coal-fired country, it is rapidly becoming the world's largest emissions contributor; bioenergy offers part of a cleaner solution
To a certain extent, Beijing has been successful. O’Kray in particular points out that “China has already solidified itself as a major player in biofuels, trailing only Brazil and the United States in net biofuel production and consumption.”

Oil price uncertainty
But, according to the researchers, despite the promising future China still faces tremendous challenges, the biggest among them being “uncertainty of oil prices, feedstock supply, and government policies.” Liquid biofuels like ethanol and biodiesel are married to the price of oil:
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Wu and O’Kray point out that while oil prices are high, “history suggests that they may drop at times, which (would) render some biofuel investment projects uneconomical,” slowing down development. Feedstock supply will be greatly effected by land limitations and food security issues, the researchers note. “With their unique history, Chinese desire secure food supplies,” and despite the many variables involved, “arable land availability and regional water supply issues (may) pressure officials into thinking twice before unilaterally expanding feedstock and biofuel production.”

“The biofuels industry,” O’Kray and Wu also point out, “is currently married to government subsidies and official support.” And despite a tilt toward the biofuel sector at the expense of other renewable energy sources, “government policies have delivered contradicting messages leaving many investors and developers at odds.”

Bioenergy to correct failed rural policies
The two point out that China is serious in increasing its renewable energy sources, especially biofuels, but they say other factors beyond energy may also be at play. A push toward biofuels could “help the State recover from failed agricultural planning policies by drawing down the large supplies of decaying feedstock and crops in the countryside".
And, they add, “A reduction in energy dependence on fossil fuels could also improve China’s energy supply structure, and biofuel development could help Beijing earn a needed improvement in its reputation in the international community by showing a willingness to reduce global carbon emissions.”

Whatever the reasoning behind the move into renewable energy, Wu and O’Kray foresee a bright future for China. But they caution that “while there are many budding industries and sources of biomass energy in China, in the long-term economic feasibility will be the determining factor,” and that “market and scientific uncertainty (still) enshrouds China’s biofuels future."

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