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    Bulgaria's Rompetrol Rafinare is to start delivering Euro 4 grade diesel fuel with a 2% biodiesel content to its domestic market starting June 25, 2007. The same company recently started to distributing Super Ethanol E85 from its own brand and Dyneff brand filling stations in France. It is building a 2500 ton/month, €13.5/US$18 million biodiesel facility at its Petromidia refinery. BBJ - June 13, 2007.

    San Diego Gas & Electric (SDG&E), a utility serving 3.4 million customers, announced it has signed a supply contract with Envirepel Energy, Inc. for renewable biomass energy that will be online by October 2007. Bioenergy is part of a 300MW fraction of SDG&E's portfolio of renewable resources. San Diego Gas & Electric - June 13, 2007.

    Cycleenergy, an Austrian bioenergy group, closed €6.7 million in equity financing for expansion of its biomass and biogas power plant activities in Central and Eastern Europe. The company is currently completing construction of a 5.5 MW (nominal) woodchip fired biomass facility in northern Austria and has a total of over 150 MW of biomass and biogas combined heat and power (CHP) projects across Central Europe in the pipeline. Cycleenergy Biopower [*.pdf] - June 12, 2007.

    The government of Taiwan unveils its plan to promote green energy, with all government vehicles in Taipei switching to E3 ethanol gasoline by September and biofuel expected to be available at all gas stations nationwide by 2011. Taipei Times - June 12, 2007.

    A large-scale biogas production project is on scheme in Vienna. 17,000 tonnes of organic municipal waste will be converted into biogas that will save up to 3000 tonnes of CO2. 1.7 million cubic meters of biogas will be generated that will be converted into 11.200 MWh of electricity per year in a CHP plant, the heat of which will be used by 600 Viennese households. The €13 million project will come online later this year. Wien Magazine [*German] - June 11, 2007.

    The annual biodiesel market in Bulgaria may grow to 400 000 tons in two to three years, a report by the Oxford Business Group says. The figure would represent a 300-per cent increase compared to 2006 when 140 000 tons of biodiesel were produced in Bulgaria. This also means that biofuel usage in Bulgaria will account for 5.75 per cent of all fuel consumption by 2010, as required by the European Commission. A total of 25 biofuel producing plants operate in Bulgaria at present. Sofia Echo - June 11, 2007.

    The Jordan Biogas Company in Ruseifa is currently conducting negotiations with the government of Finland to sell CER's under the UN's Clean Development Mechanism obtained from biogas generated at the Ruseifa landfill. Mena FN - June 11, 2007.

    Major European bank BNP Paribas will launch an investment company called Agrinvest this month to tap into the increased global demand for biofuels and rising consumption in Asia and emerging Europe. CityWire - June 8, 2007.

    Malaysian particleboard maker HeveaBoard Bhd expects to save some 12 million ringgit (€2.6/US$3.4 million) a year on fuel as its second plant is set to utilise biomass energy instead of fossil fuel. This would help improve operating margins, group managing director Tenson Yoong Tein Seng said. HeveaBoard, which commissioned the second plant last October, expects capacity utilisation to reach 70% by end of this year. The Star - June 8, 2007.

    Japan's Itochu Corp will team up with Brazilian state-run oil firm Petroleo Brasileiro SA to produce sugar cane-based bioethanol for biofuels, with plans to start exporting the biofuel to Japan around 2010. Itochu and Petrobras will grow sugarcane as well as build five to seven refineries in the northeastern state of Pernambuco. The two aim to produce 270 million liters (71.3 million gallons) of bioethanol a year, and target sales of around 130 billion yen (€800million / US$1billion) from exports of the products to Japan. Forbes - June 8, 2007.

    Italian refining group Saras is building one of Spain's largest flexible biodiesel plants. The 200,000 ton per year factory in Cartagena can handle a variety of vegetable oils. The plant is due to start up in 2008 and will rely on European as well as imported feedstocks such as palm oil. Reuters - June 7, 2007.

    The University of New Hampshire's Biodiesel Group is to test a fully automated process to convert waste vegetable oil into biodiesel. It has partnered with MPB Bioenergy, whose small-scale processor will be used in the trials. UNH Biodiesel Group - June 7, 2007.

    According to the Barbados Agricultural Management Company (BAMC), the Caribbean island state has a large enough potential to meet both its domestic ethanol needs (E10) and to export to international markets. BAMC is working with state actors to develop an entirely green biofuel production process based on bagasse and biomass. The Barbados Advocate - June 6, 2007.

    Energea, BioDiesel International and the Christof Group - three biodiesel producers from Austria - are negotiating with a number of Indonesian agribusiness companies to cooperate on biodiesel production, Austrian Commercial Counselor Raymund Gradt says. The three Austrian companies are leading technology solution providers for biodiesel production and currently produce a total of 440,000 tons of biodiesel per annum in Austria, more than half of their country’s annual demand of around 700,000-800,000 tons. In order to meet EU targets, they want to produce biodiesel abroad, where feedstocks and production is more competitive. BBJ - June 6, 2007.

    China will develop 200 million mu (13.3 million hectares) of forests by 2020 in order to supply the raw materials necessary for producing 6 million tons of biodiesel and biomass per year, state media reported today. InterFax China - June 6, 2007.

    British Petroleum is planning a biofuel production project in Indonesia. The plan is at an early stage, but will involve the establishment of an ethanol or biodiesel plant based on sugarcane or jatropha. The company is currently in talks with state-owned plantation and trading firm Rajawali Nusantara Indonesia (RNI) as its potential local partner for the project. Antara - June 6, 2007.

    A pilot project to produce biodiesel from used domestic vegetable oil is underway at the Canary Technological Institute in Gran Canaria. Marta Rodrigo, the woman heading up the team, said the project is part of the EU-wide Eramac scheme to encourage energy saving and the use of renewable energy. Tenerife News - June 6, 2007.

    Royal Dutch Shell Plc is expanding its fuel distribution infrastructure in Thailand by buying local petrol stations. The company will continue to provide premium petrol until market demand for gasohol (an petrol-ethanol mixture) climbs to 70-90%, which will prove customers are willing to switch to the biofuel. "What we focus on now is proving that our biofuel production technology is very friendly to engines", a company spokesman said. Bangkok Post - June 5, 2007.

    Abraaj, a Dubai-based firm, has bought the company Egyptian Fertilizers in order to benefit from rising demand for crops used to make biofuels. The Abraaj acquisition of all the shares of Egyptian Fertilizers values the company based in Suez at US$1.41 billion. Egyptian Fertilizers produces about 1.25 million tons a year of urea, a nitrogen-rich crystal used to enrich soils. The company plans to expand its production capacity by as much as 20 percent in the next two years on the expected global growth in biofuel production. International Herald Tribune - June 4, 2007.

    China and the US will soon sign a biofuel cooperation agreement involving second-generation fuels, a senior government official said. Ma Kai, director of the National Development and Reform Commission, said at a media briefing that vice premier Wu Yi discussed the pact with US Secretary of Energy Samuel Bodman and other US officials during the strategic economic dialogue last month. Forbes - June 4, 2007.

    German biogas company Schmack Biogas AG reports a 372% increase in revenue for the first quarter of the year, demonstrating its fast growth. Part of it is derived from takeovers. Solarserver [*German] - June 3, 2007.

    Anglo-Dutch oil giant Royal Dutch Shell PLC has suspended the export of 150,000 barrels per day of crude oil because of community unrest in southern Nigeria, a company spokesman said. Villagers from K-Dere in the restive Ogoniland had stormed the facility that feeds the Bonny export terminal, disrupting supply of crude. It was the second seizure in two weeks. Shell reported on May 15 that protesters occupied the same facility, causing a daily output loss of 170,000 barrels. Rigzone - June 2, 2007.

    Heathrow Airport has won approval to plan for the construction of a new 'green terminal', the buildings of which will be powered, heated and cooled by biomass. The new terminal, Heathrow East, should be completed in time for the 2012 London Olympics. The new buildings form part of operator BAA's £6.2bn 10-year investment programme to upgrade Heathrow. Transport Briefing - June 1, 2007.

    A new algae-biofuel company called LiveFuels Inc. secures US$10 million in series A financing. LiveFuels is a privately-backed company working towards the goal of creating commercially competitive biocrude oil from algae by 2010. PRNewswire - June 1, 2007.

    Covanta Holding Corp., a developer and operator of large-scale renewable energy projects, has agreed to purchase two biomass energy facilities and a biomass energy fuel management business from The AES Corp. According to the companies, the facilities are located in California's Central Valley and will add 75 MW to Covanta's portfolio of renewable energy plants. Alternative Energy Retailer - May 31, 2007.

    Two members of Iowa’s congressional delegation are proposing a study designed to increase the availability of ethanol across the country. Rep. Leonard Boswell, D-Ia., held a news conference Tuesday to announce that he has introduced a bill in the U.S. House, asking for a US$2 million study of the feasibility of transporting ethanol by pipeline. Sen. Tom Harkin, D-Ia., has introduced a similar bill in the Senate. Des Moines Register - May 30, 2007.

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Friday, May 18, 2007

Researchers improve bio-oil refining, aim for carbon negative production system

A team of University of Georgia (UGA) researchers has improved the processing of bio-oil (pyrolysis oil) into biofuels that can be mixed with diesel. Unlike previous pyrolysis fuels derived from wood, the new and still unnamed fuel can be blended directly with biodiesel and petroleum diesel to power conventional engines.

The group's findings [*abstract] are detailed in the early online edition of the American Chemical Society journal Energy and Fuels. Tom Adams, author and director of the UGA Faculty of Engineering outreach service, explains that scientists have long been able to derive oils from wood, but they had been unable to process it effectively or inexpensively so that it can be used in conventional engines. The researchers have developed a new chemical process, which they are working to patent, that inexpensively treats the oil so that it can be used straight in unmodified diesel engines or blended with biodiesel and petroleum diesel.
"The exciting thing about our method is that it is very easy to do. We expect to reduce the price of producing fuels from biomass dramatically with this technique. [...] This research will really benefit the citizens of the state, and that fits perfectly into the mission of a land grant institution. Georgia has 24 million acres of forested land, and we could see increased employment and tax revenues based on this research. Another huge benefit is that this fuel would reduce the amount of fuel we import from other states and from other countries." - Tom Adams, director of the UGA Faculty of Engineering
The new process works as follows: wood chips and pellets - roughly a quarter inch in diameter and six-tenths of an inch long - are heated in the absence of oxygen at a high temperature, a process known as pyrolysis. Up to a third of the dry weight of the wood becomes charcoal, while the rest becomes a gas. Most of this gas is condensed into a liquid bio-oil and chemically treated. When the process is complete, about 34 percent of the bio-oil (or 15 to 17 percent of the dry weight of the wood) can be used to power engines. The researchers are currently working to improve the process to derive even more oil from the wood.

Towards carbon-negative biofuels
Adams points out that the pyrolysis system offers an opportunity to make biofuels radically carbon-negative, meaning that they do not merely reduce heat-trapping carbon dioxide in the atmosphere, but actually take more of it out than they release (see: "Biochar soil sequestration and pyrolysis most climate-friendly way to use biomass for energy"). As long as new trees are planted to replace the ones used to create the fuel, the biofuel is carbon-neutral. But if the charcoal fraction obtained from pyrolysis is stored as a fertilizer in soils, then the biofuel becomes carbon-negative:
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The researchers have created test plots to explore whether the charcoal can indeed be used as a fertilizer. If the economics work for the charcoal fertilizer, going carbon negative becomes a very green option.
"You're taking carbon out of the atmosphere when you grow a plant, and if you don't use all of that carbon and return some of it to the soil in an inert form, you're actually decreasing the amount of carbon dioxide in the atmosphere. We're optimistic because in most types of soil, carbon char has very beneficial effects on the ecology of the soil, its productivity and its ability to maintain fertility."
The idea of storing "bio-char" or "carbon black" into soils is thousands of years old. Scientists working in the Amazon and in the West African rainforest found that native populations had been using the technique of sequestring charcoal in soils for millennia. Such "terra preta" or "dark earth" plots are surprisingly fertile compared to non-treated soils (earlier post). The technique is currently receiving a lot of attention from the renewable energy community and from climate scientists alike, because it promises to offer a reliable and affordable method to reduce carbon dioxide emissions. The process could be implemented on a vast scale in low-fertility and problematic soils across the tropics and the subtropics.

But more research is needed. As Adams says, although the new biofuel with carbon negative potential has performed well, further tests will allow the researchers to assess its long-term impact on engines, its emissions characteristics and the best way to transport and store it. "It's going to take a while before this fuel is widely available", Adams said. "We've just started on developing a new technology that has a lot of promise."

The research was funded by the U.S. Department of Energy, the Georgia Traditional Industries Pulp and Paper Research Program and the State of Georgia upon the recommendation of the Governor's Agriculture Advisory Committee.

More information:
Manuel Garcia-Perez, Thomas T. Adams, John W. Goodrum, Daniel P. Geller, and K. C. Das, "Production and Fuel Properties of Pine Chip Bio-oil/Biodiesel Blends" [*abstract], Energy and Fuels, May 18, 2007, ASAP Article 10.1021/ef060533e S0887-0624(06)00533-0.

University of Georgia: New biofuel from trees developed at UGA: Still-unnamed fuel can be blended with biodiesel, petroleum diesel - May 18, 2007.

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Southern Ocean carbon sink weakens

Scientists have observed the first evidence that the Southern Ocean’s ability to absorb carbon dioxide, the major greenhouse gas, has weakened by about 15 per cent per decade since 1981. The Southern Ocean normally cycles about 15% of the world's carbon dioxide, but can no longer keep up. Researchers had predicted this weakening would occur somewhere in the second half of this century, not this soon. The Southern Ocean's efficiency at cycling vast amounts of carbon dioxide is due to its cool waters.

Now a four-year study by scientists from Germany's Max-Planck Institute for Biogeochemistry, the University of East Anglia (UEA) and the British Antarctic Survey (BAS) reveals that an increase in winds over the Southern Ocean, caused by greenhouse gases and ozone depletion, has led to a release of stored CO2 into the atmosphere and is now preventing further absorption of the greenhouse gas.

The study [*abstract] published in Science today shows that this weakening of one of the Earth’s major carbon dioxide sinks will lead to higher levels of atmospheric carbon dioxide in the long-term, in what is called a 'positive feedback'.
"This is the first time that we've been able to say that climate change itself is responsible for the saturation of the Southern Ocean sink. This is serious. All climate models predict that this kind of 'feedback' will continue and intensify during this century. The Earth's carbon sinks - of which the Southern Ocean accounts for 15% � absorb about half of all human carbon emissions. With the Southern Ocean reaching its saturation point more CO2 will stay in our atmosphere." - Lead author Dr Corinne Le Quéré, UEA and BAS.
The new research suggests that stabilisation of atmospheric CO2 is even more difficult to achieve than previously thought. Additionally, acidification in the Southern Ocean is likely to reach dangerous levels earlier than the projected date of 2050.

The Biopact thinks these findings once again strengthen the case of those who say we may already be facing a 'dangerous climate change' scenario that warrants radical interventions and the uncompromising implementation of the precautionary principle. Likewise, the case for the massive introduction of carbon negative bioenergy systems ('BECS') that take historic CO2 emissions out of the atmosphere is becoming ever stronger:
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Professor Chris Rapley, Director of British Antarctic Survey makes the point on the need to limit our reliance on fossil fuels: "Since the beginning of the industrial revolution the world's oceans have absorbed about a quarter of the 500 gigatons of carbon emitted into the atmosphere by humans. The possibility that in a warmer world the Southern Ocean - the strongest ocean sink - is weakening is a cause for concern."

The saturation of the Southern Ocean was revealed by scrutinising observations of atmospheric CO2 from 40 stations around the world. Since 1981 the Southern Ocean sink ceased to increase, whereas CO2 emissions increased by 40%.

Dr Paul Fraser, who leads research into atmospheric greenhouse gases at Australia's CSIRO Marine and Atmospheric Research, says the international team’s four-year study concludes that the weakening is due to human activities.

“The researchers found that the Southern Ocean is becoming less efficient at absorbing carbon dioxide due to an increase in wind strength over the Ocean, resulting from human-induced climate change,” Dr Fraser says.

“The increase in wind strength is due to a combination of higher levels of greenhouse gases in the atmosphere and long-term ozone depletion in the stratosphere, which previous CSIRO research has shown intensifies storms over the Southern Ocean.”

The increased winds influence the processes of mixing and upwelling in the ocean, which in turn cause an increased release of carbon dioxide into the atmosphere, reducing the net absorption of carbon dioxide into the ocean.

More information:
Corinne Le Quéré, et al., Saturation of the Southern Ocean CO2 Sink Due to Recent Climate Change, Science, Published Online May 17, 2007, Science DOI: 10.1126/science.1136188

Eurekalert: Climate change affects Southern Ocean carbon sink - May 18, 2007.

CSIRO: Southern ocean carbon sink weakened - May 18, 2007.

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Australia and South Korea team up to produce bioproducts from sugarcane

Australia may take a place in the front line of the global biochemical industry thanks to a new partnership between the University of Queensland (UQ) and the Korea Advanced Institute of Science and Technology (KAIST). Both institutions have teamed up to develop and patent the technology to convert sugar cane into bioplastics and green chemicals. The UQ-KAIST partnership matches Queensland's strengths in sugar cane production with South Korea's status as a global chemicals giant. The goal of the agreement is to fuse biotechnology and nanotechnology to create hyper-efficient biorefineries that convert sugar cane into a multitude of green products.

Queensland Premier Peter Beattie was present at the signing of the UQ-KAIST agreement in Seoul earlier this month. UQ Senior Deputy Vice-Chancellor Professor Paul Greenfield, who signed the collaboration deal, said that the trillion dollar global chemical industry was expected to shift gradually from reliance on oil to reliance on biomass in coming decades.
“Researchers from UQ's Australian Institute for Bioengineering and Nanotechnology (AIBN) and KAIST will aim to perfect the technology to use sugar cane instead of fossil fuel to manufacture plastics and chemicals. As well as assisting economic growth and job creation in Australia, this will help Australians contribute to a better global environment." - University of Queensland Vice-Chancellor Paul Greenfield
According to Greenfield, replacing oil with sugarcane would reduce the use of non-renewable resources for chemicals by up to 90 percent. Chemical production currently accounts for seven percent of the world's energy use.

Mr Beattie said: “Now we have one of the world's top research partnerships on the case, and that means we're driving a whole new industry.” The emerging green chemistry sector offers the potential to create jobs in regional Australia. Ideally, biorefineries will be built close to cane farms in order to use low cost, green energy supplied by bagasse (a sugar by-product), whereas the chemical building blocks of the plant will be used for the production of renewable and biodegradable plastics, detergents, drugs, glues, gels, and biopolymers. About 1000 employees would be needed to build a biorefinery.

Recent advances in biotechnology allow scientists to “program” microorganisms to make complex chemicals from simple renewables such as sugar cane. KAIST, regarded as the “MIT of South Korea”, is a world leader in this programming, while UQ's AIBN has world-class experts in bioplastic production and characterization:
:: :: :: :: :: :: :: :: :: :: :: ::

“We have things that South Korea needs: raw materials for biochemicals; and bioplastics research expertise,” Professor Greenfield added. AIBN is Australia's only fully-integrated research institution where scientists and engineers collaborate to solve problems at the point where biotechnology and nanotechnology meet.

Other players are looking at sugar cane for bioproducts too. Earlier this month, leading green chemistry company Metabolix announced a collaboration with the Cooperative Research Centre for Sugar Industry Innovation through Biotechnology, an alliance of Australia's sugarcane biotechnology research organizations, to develop natural plastics from sugarcane.

The future of biobased products hints at decentralisation and reliance on local biomass resources. This paradigm set to benefit developing countries who are currently dependent on foreign petrochemical industries. Small countries with a thriving sugar cane industry have already seen the opportunity. The tiny Indian Ocean state of Réunion, for example, recently launched an ambitious research program aimed at building a biorefinery in the next four years that will rely on utilising sugar cane to produce a range of bioproducts and biofuels.

More information:
University of Queensland: Sugar hit for “green” chemical industry - May 3, 2007.

Biopact: Metabolix to develop bioplastics from sugarcane - May 09, 2007

Biopact: Sugar cane has "enormous potential for green chemistry" - September 03, 2006

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Zimbabwe's jatropha project receives US$11.6 million

The governor of the Reserve Bank of Zimbabwe has announced the institution has so far disbursed 2.9 billion Zimbabwean dollars (€8.6/US$11.6 million) for the national biodiesel project out of a total of $3 billion availed by the country's government last year.

Zimbabwe's biodiesel project is aimed at avoiding fuel shortages which have become a factor in the country's economic decline. The program is primarily based on the cultivation of Jatropha curcas, a drought tolerant shrub the oil-rich seeds of which make for a biodiesel feedstock. Responding to questions from parliamentarians in Harare, the bank's governor Dr Gideon Gono said a total of $2,937 billion has so far been invested into the biodiesel project leaving a balance of $62 million.

Finealt Engineering, a registered company wholly owned by the government, is running the project. The funds are being used for plant design equipment, vehicle expenditures, recurrent expenditures, salaries, office furniture and stationery and consultancy fees. The governor further noted that site preparation, which included soil tests, site clearing, environmental impact assessment, topographical survey and erection of the site offices had been completed.

Civil works at the site are in progress. However, there is a challenge of financial resources to pay the contractor. Procurement of equipment, which includes steel vessels, oil expellers, lab and workshop equipment, earthing and pumping material have been delayed largely due to shortages of foreign currency.

Currently, farmers are selling a tonne of jatropha seeds grown on their own small plots of land for 60,000 Zimbabwean dollars (€178/US$240) per ton. With an oil content of 40% and processing efficiencies based on small human powered oil expellers, this jatropha oil is competitive when crude oil prices are above US$60 per barrel. If operations were to be scaled-up and automated, the plant oil would have a considerably larger margin:
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Finealt Engineering is working towards scaling up the industry and has applied for clearance to plant Jatropha cuttings along the major roads of the nine districts in Mashonaland East from the Department of Works in the Ministry of Local Government, Public Works and Urban Development in an effort to increase national production of the high oil-yielding plant.

Currently, Finealt is in the process of purchasing Jatropha seed for processing once the plant is set up. A total site area of 102 hectares, which includes 50 hectares targeted for the production of jatropha seedlings has been set aside so far.

Since 2005, Zimbabwe's government through the Ministry of Energy and Power Development and the National Oil Company of Zimbabwe has been stepping up efforts to promote the production of the Jatropha curcas plant as an alternative source of biodiesel to avert fuel shortages in the country. It established a Jatropha Growers and Bio-fuels Association aimed at disseminating information, technology and agricultural inputs to farmers.

Apart from extracting biodiesel fuel from jatropha, the government is also collaborating with Triangle Limited to reopen an ethanol blending plant which is expected to reduce the country's fuel imports by 10 percent when it becomes operational later this year.

More information:
The Daily Mirror (Harare): Bio-diesel project at advanced stage [*cache]- August 31, 2006

The Herald (Harare): Biodiesel project gets $2,9 billion - May 18, 2007.

Overview of Jatropha projects in Zimbabwe.

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World's largest iron producer CVRD to use biodiesel in its trains

In what is a major boost to Brazil's biodiesel industry, the president of state-owned company Petrobras Distribuidora (BR), Graça Foster, and the logistics executive director at mining giant Companhia Vale do Rio Doce (CVRD), Eduardo Bartolomeu, have signed a contract [*Portuguese] for the supply of B20, a mixture of 20% biodiesel and 80% common diesel to the mining company.

The fuel will be used in the locomotives that operate on the Carajás Railway and on the Railway connecting Vitória (in Espírito Santo) to Minas Gerais, both in southeastern Brazil.

The contract propels CVRD to the status of one of the biggest consumers of biodiesel in the world. Vale do Rio Doce is the largest logistics service provider in Brazil and the largest producer and exporter of iron ore in the world.

The deal is part of broader fuel supply agreement worth 10 billion reais (€3.8/US$5.1 billion) over 5 years, with Petrobras delivering 1.807 billion liters of biodiesel, diesel, and gasoline per year.

In total Petrobras Distribuidora will open 80 supply points across the country covering the mining, melting and logistical operations of CVRD. The project will create 600 direct jobs.

Currently, CVRD is present in 13 Brazilian states, has business in countries on four continents and offices in New York, Brussels, Johannesburg, Tokyo and Shanghai. The company is the largest private company in Latin America.

Brazil is working to provide incentives to the use of cleaner fuels, like biodiesel, and CVRD's uptake of the biofuel is a major step forward for the industry. Brazil's recently launched Pro-Biodiesel program is aimed at producing sustainable biodiesel, in which small farmers play a role through the Social Fuel policy (earlier post).

Petrobras for its part has made several biofuel innovations, including the development of a new type of biodiesel, called H-Bio which is made from hydrogenating vegetable oils in existing oil refineries:
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CVRD announced in January a US$6.334 billion investment budget for 2007. According to the mining company, the budget includes the highest amount ever spent in organic growth in the history of the company, as well as investments on Inco, a Canadian mining company acquired by Vale do Rio Doce last year.

Total investments in 2006 were higher, at US$ 26 billion, but that was due to the purchases made by Vale. The company paid US$ 19 billion for Inco, US$ 2.4 billion for Caemi, US$ 47 million for Rio Verde Mineração, and US$ 27.5 million to own all shares of Valesul. Purchases not included, US$ 4.5 million were effectively invested last year, that is, US$ 1.8 million less than the value forecasted for this year.

The company plans on spending US$ 1.698 billion to maintain its existing operations, US$ 4.230 billion in projects, and US$ 406 million in research and development.

The company will invest US$ 1.635 billion in flagship sector, which is iron minerals; US$ 811 million in the aluminum sector; US$ 720 million in logistics services; US$ 2.55 billion in non-iron minerals; US$ 209 million in coal, US$ 101 million in electric energy, US$ 114 million in the steel sector; and US$ 197 million in other sectors.

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Chile slashes taxes on biofuels to avoid social and health crisis

Quicknote bioenergy economics
It's winter time in the Southern hemisphere, and in Chile this means people start to heat their homes with natural gas or fuel oil. Cold temperatures in Argentina this week however decreased the supply of gas to Chile. Even though the Argentinean government declared that Chileans will be provided their regular supply of gas, the latter are seeking energy alternatives to ensure supplies for the country. Increased energy prices for transport fuels and natural gas means millions of poor and low income families are forced to choose between reducing their mobility or heating less. A cruel choice, for in many parts of Chile winter means temperatures below zero whereas mobility is an equally basic need.

In order to avoid such a potential social and health crisis caused by energy poverty, the Chilean Ministers of Economy, Energy, Agriculture and Revenue - led by the left-wing government of President Bachelet - have decided to exempt biofuels from a tax in order to promote their use to boost energy security.

According to Ecoperiódico [*Spanish], the tax applies to gasoline and diesel, and with this measure the prices of bioethanol and biodiesel will be a third of the price of one liter of gasoline. This must allow the poor and lower incomes to save on energy expenditures, or at least to make it through winter.
Chile decided this Wednesday to eliminate a specific tax on biofuel, that is also paid on gasoline and diesel in order to promote their use. This takes place in the middle of the concerns about the reduced supply of gas from Argentina, which is the only supplier of this resource.
The note continues explaining that Chile imports almost all of the fuel it consumes, and this decision will help reduce the fluctuations in fuel prices and gas supply. One of the most affected areas is the northern part of the country. Here, the Ministry of the Interior is working on an agreement [*Spanish] with the University of Tarapacá to develop a test field of Jatropha curcas on 1,500 hectares. The oil-seeds of this crop yields a feedstock for cold tolerant biodiesel that can be used in vehicles as well as in heating stoves and boilers [entry ends here].
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