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    AltraBiofuels, a California-based producer of renewable biofuels, announced that it has secured an additional US$165.5 million of debt financing for the construction and completion of two plants located in Coshocton, Ohio and Cloverdale, Indiana. The Coshocton plant's capacity is anticipated to reach 60million gallons/year while the Cloverdale plant is expected to reach 100 million gallons/year. Business Wire - June 23, 2007.

    Brazil and the Dominican Republic have inked a biofuel cooperation agreement aimed at alleviating poverty and creating economic opportunity. The agreement initially focuses on the production of biodiesel in the Dominican Republic. Dominican Today - June 21, 2007.

    Malaysian company Ecofuture Bhd makes renewable products from palm oil residues such as empty fruit bunches and fibers (more here). It expects the revenue contribution of these products to grow by 10% this year, due to growing overseas demand, says executive chairman Jang Lim Kuang. 95% of the group's export earnings come from these products which include natural oil palm fibre strands and biodegradable mulching and soil erosion geotextile mats. Bernama - June 20, 2007.

    Argent Energy, a British producer of waste-oil based biodiesel, announced its intention to seek a listing on London's AIM via a placing of new and existing ordinary shares with institutional investors. Argent plans to use the proceeds to construct the first phase of its proposed 150,000 tonnes (170 million litres) plant at Ellesmere Port, near Chester, and to develop further plans for a 75,000 tonnes (85 million litres) plant in New Zealand. Argent Energy - June 20, 2007.

    The first conference of the European Biomass Co-firing Network will be held in Budapest, Hungary, from 2 to 4 July 2007. The purpose of the conference is to bring together scientists, engineers and members of public institutions to present the current state-of-the-art on biomass co-firing. Participants will also discuss future trends and directions in order to promote awareness of this technology as a sustainable energy supply, which could decrease the dependency on fossil fuels and guarantee a decentralised source of energy in Europe. The conference is supported by the EU-funded NETBIOCOF (Integrated European Network for Biomass Co-firing) project. NetBioCof - June 19, 2007.

    Green Energy Resources predicts US$50 per ton biomass woodchip prices within the next twelve months. The current US price level is between $25-32 per ton. Demand caused by the 25-30 new power plants planned in New England by 2010 does not include industry, institutions, universities, hospitals or conversions from natural gas, or cellulostic ethanol. Procurement of woodchips will be based on the delivery capacity of suppliers not local prices for the first time in history. Green Energy has been positioning in New England with rail and port locations to meet the anticipated sector expansion. MarketWire - June 19, 2007.

    In the first major initiative in the US to build a grassroots communications network for the advancement of biofuels adoption, a new national association called The American Biofuels Council (ABC) has been formed. American Biofuels Council - June 19, 2007.

    The Novi Sad-based Jerković Group, in partnership with the Austrian Christof Group, are to invest about €48 million (US$64.3m) in a biodiesel plant in Serbia. Property Xpress - June 19, 2007.

    Biodiesel producer D1 Oils, known for its vast jatropha plantations in Africa and Asia, is to invest CNY 500 to 700 million (€48.9-68.4 / US$65.5-91.7) to build a refinery in Guangxi Zhuang autonomous region, in what is expected to be the first biodiesel plant in the country using jatropha oil as a feedstock. South China Morning Post - June 18, 2007.

    After Brazil announced a record sugar crop for this year, with a decline in both ethanol and sugar prices as a result, India too is now preparing for a bumper harvest, a senior economist with the International Sugar Organization said. Raw sugar prices could fall further towards 8 cents per lb in coming months, after their 30% drop so far this year. Converting the global surplus, estimated to be 4 million tonnes, into ethanol may offer a way out of the downward trend. Economic Times India - June 18, 2007.

    After Brazil announced a record sugar crop for this year, with a decline in both ethanol and sugar prices as a result, India too is now preparing for a bumper harvest, a senior economist with the International Sugar Organization said. Raw sugar prices could fall further towards 8 cents per lb in coming months, after their 30% drop so far this year. Converting the global surplus, estimated to be 4 million tonnes, into ethanol may offer a way out of the downward trend. Economic Times India - June 18, 2007.

    A report from the US Department of Agriculture Foreign Agricultural Services (USDA FAS) estimates that the production of ethanol in China will reach 1.45 million tonnes (484 million gallons US) in 2007, up 12% from 1.3 million tonnes in 2006. Plans are to increase ethanol feedstocks from non-arable lands making the use of tuber crops such as cassava and sweet sorghum. USDA-FAS - June 17, 2007.

    The Iowa State University's Extension Bioeconomy Task Force carried out a round of discussions on the bioeconomy with citizens of the state. Results indicate most people see a bright future for the new economy, others are cautious and take on a distanced, more objective view. The potential for jobs and economic development were the most important opportunities identified by the panels. Iowa is the leading producer of corn based ethanol in the US. Iowa State University - June 16, 2007.

    Biofuel producer D1 Oils Plc, known for establishing large jatropha plantations on (degraded land) in Africa and Asia, said it was in advanced talks with an unnamed party regarding a strategic collaboration, sending its shares up 7 percent, after press reports linking it with BP. Firms like BP and other large petroleum companies are keen to secure a supply of biofuel to meet UK government regulations that 5 percent of automotive fuel must be made up of biofuels by 2010. Reuters UK - June 15, 2007.

    Jean Ziegler, a U.N. special rapporteur on the right to food, told a news briefing held on the sidelines of the U.N. Human Rights Council that "there is a great danger for the right to food by the development of biofuels". His comments contradict a report published earlier by a consortium of UN agencies, which said biofuels could boost the food security of the poor. Reuters - June 15, 2007.

    The county of Chicheng in China's Hebei Province recently signed a cooperative contract with the Australian investment and advisory firm Babcock & Brown to invest RMB480 million (€47.2/US$62.9 million) in a biomass power project, state media reported today. Interfax China - June 14, 2007.

    A new two-stroke ICE engine developed by NEVIS Engine Company Ltd. may nearly double fuel efficiency and lower emissions. Moreover, the engine's versatile design means it can be configured to be fuelled not only by gasoline but also by diesel, hydrogen and biofuels. PRWeb - June 14, 2007.

    Houston-based Gulf Ethanol Corp., announced it will develop sorghum as an alternative feedstock for the production of cellulosic ethanol. Scientists have developed drought tolerant, high-yield varieties of the crop that would grow well in the drier parts of the U.S. and reduce reliance on corn. Business Wire - June 14, 2007.

    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.

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Thursday, June 21, 2007

Latest Doha talks collapse again, agriculture remains stumbling block

Talks between trade powers to salvage global trade talks collapsed today, throwing the future of the World Trade Organisation's struggling 'Doha Development Round' deeper into doubt. The Doha round's original aim was to adjust the global trade regime in such a way that it helps lift millions out of poverty through more trade. Doha has faced problems from the start, mainly over agriculture, a highly sensitive political issue for both developing as well as wealthy nations.

Trade and agriculture ministers from the 'G4' - the EU and the US, representing rich nations, and India and Brazil, for the developing world - had been meeting in Germany to find a new breakthrough but talks collapsed and the parties blamed each other for the failure. Brazil and India said the EU and US did not offer enough concessions on agricultural subsidies and trade barriers. The EU and the US in turn blamed their counterparts for not going far enough on opening markets for manufactured goods. The wealthy countries try to secure export opportunities for their own corporations. However, the crux of the matter is that trade barriers and subsidies remain much higher for agriculture in the EU/US than for manufactured goods in the Global South. Also consider that 70 percent of people in developing countries depend directly or indirectly on agriculture, so they are the losers under the current trade regime.
  • The EU's latest offer was to eliminate export subsidies by 2013 and cut trade distorting domestic farm subsidies by more 70%.
  • EU officials told journalists the sort of tariff cuts being offered by Brazil in return would not have led to any additional exports from companies from the developed world.
  • the US offered to cap its overall spending on trade-distorting domestic support at $17 billion. But as leaders of the G20, the coalition of developing countries which also includes China and Argentina, India and Brazil are pushing for an annual US spending limit of no more than $15 billion.
The Doha round is seen by many as an opportunity for the developing world to gain access to agricultural markets in the West, while it would protect their markets from being flooded by heavily subsidized farm products. As such, a deal that cuts farm subsidies and trade barriers in the EU and the US would be important for the development of a global bioenergy industry in which the Global South would have clear competitive advantages that should be consilodated by classifying biofuels in a new way (an analysis of this complex matter).

Several people, including Nobel-prize winning economist Joseph Stiglitz (earlier post), Ted Turner (previous post) and C. Boyden Gray, ambassador to the EU (more), have even suggested that the global biofuel revolution may hold the key to revive the Doha talks. The latter said that continuing demand for corn for the production of ethanol could make it easier for the US to cut the enormous amount of subsidies US farmers receive. However, the idea met heavy resistance from Big Corn:
:: :: :: :: :: :: :: :: :: :: :: :: ::

In a recent essay, Stiglitz illustrated the Doha deadlock with the example of Brazilian ethanol, which can be produced far more efficiently than biofuels in the North:
Perhaps the most outrageous example is the US$0.14 per liter import tariff on ethanol in the US, whereas there is no tariff on oil, and only a US$0.13 per liter tax on gasoline. This contrasts with the US$0.13 per liter subsidy that US companies (a huge portion of which goes to a single firm) receive on ethanol. Thus, foreign producers can't compete unless their costs are US$0.27 per liter lower than those of US producers.
Sitglitz added that "Developing countries cannot, and should not, open up their markets fully to the US' agricultural goods unless US subsidies are fully eliminated. To compete on a level playing field would force these countries to subsidize their farmers, diverting scarce funds that are needed for education, health, and infrastructure".

Now in Potsdam, Washington has demanded that any deal that significantly cuts US farm subsidies must open new export markets around the world in agriculture, manufacturing and services. But Brazil and India said Washington was not prepared to go far enough to warrant additional concessions on their part in manufacturing goods or in lowering barriers to imports of U.S. farm goods.

"If the round is to move forward, there will have to be a substantial attitude change," said India's Commerce and Industry Minister Kamal Nath.

In a letter to Schwab and Mandelson on Wednesday, leading U.S. and European manufacturers warned they could not support an agreement that did little to open developing countries to additional exports. This dashed hopes of a breakthrough.

Without an agreement between the four powers at this meeting in Potsdam, diplomats and trade officials had warned that it would be difficult for the full 150-member state WTO to strike a deal as hoped by the end of July.

Some non-governmental organisations, altermondialists and civil society groups think the collapse of Doha is not necessarily a bad thing. Such a crisis of the formal trading system would open a new era in which developing countries can push for a new model that benefits poor societies and the environment more than the current WTO regime does today.

More information:
World Trade Organisation: Statement from Director-General Lamy concerning Potsdam outcome - June 21, 2007.

BBC: Latest world trade talks collapse - June 21, 2007.

Reuters India: G4 talks collapse, throw trade round into doubt - June 21, 2007.

Bloomberg: WTO Talks Break Down; EU and U.S. Blame India, Brazil - June 21, 2007.

Biopact: Stiglitz explains reasons behind the demise of the Doha development round - August 15, 2006

Biopact: Discussion text: global biofuels trade and WTO's role - October 21, 2006.

Article continues

Caribbean states urged to invest in biofuels to cut high oil import bills

With the right reforms and investments, Guyana, Jamaica and Barbados, could substitute at least ten per cent of their current gasoline consumption with domestic ethanol fuel, the President of the Inter-American Development Bank (IDB), Luis Moreno has said.

Moreno spoke at the first ever high-level Conference of the Caribbean that united heads of state from fifteen Caribbean nations and the U.S. who gathered in Washington to examine the growth and development of the Caribbean Community (Caricom) from a regional perspective. The three day summit was hosted by the World Bank, and co-hosted by the Inter-American Development Bank (IDB) and the Organization of American States (OAS).

Noting that with the exception of Trinidad and Tobago (an oil and gas exporting country) energy has become a critical issue for the Caribbean with the cost of their dependency soaring, he cited Jamaica's energy cost as growing by 41% in 2005 and 30% in 2006. It is now projected to pass US$2 billion this year. This is almost as much as the total amount of the country's exports.
The good news is that the Caribbean had significant potential in biofuels and wind power. Now more than ever, the Caribbean needs a bold energy strategy that combines energy conservation and efficiency with investments in renewable resources. - Luis Moreno, president IDB president Inter-American Development Bank.
Funds lost to expensive oil cannot be invested in much needed social and economic development programs. But biofuels can be produced efficiently from an abundance of tropical energy crops that thrive in the Caribbean, and replace fossil fuels in a competitive way. The region's technical exportable bioenergy potential over the long term (2050) is projected to be amongst the highest per capita (earlier post).

Quoting from a study the IDB financed in collaboration with Caricom (Caribbean Community) Moreno said that if Guyana, Jamaica and Barbados adopt the latest technology these three countries could also co-generate a total of 100 megawatts of electricity by burning sugarcane bagasse. The study, on expanding biofuel opportunities in the three Caribbean countries and which was conducted earlier this year, showed the potential that exists. Recently the IDB also published 'A Blueprint for Green Energy in the Americas', a major overview of the potential for biofuels in the Western Hemisphere:
:: :: :: :: :: :: :: :: :: :: :: :: ::

Moreno noted that the IDB has an active programme which grants technical assistance to help member governments determine the feasibility of renewable energy in the production of ethanol, biodiesel, biomass and other renewables.

In addition to a US$3 billion investment planned for private sector biofuel projects (here), Moreno announced that the IDB's private sector department was also preparing to launch a green energy programme that would provide at least US$300 million in loans for projects in energy efficiency and renewable energy in small developing countries.

He said the issue of energy was one of three priority areas that the IDB considered challenges for the Caribbean. The other two he described as competitiveness and "initiative opportunities for the majority."

More information:

Stabroek News: IDB president urges Caricom to look inwards for renewable energy - June 21, 2007.

Inter-American Development Bank, Environment Division (Sustainable Development Department): Issue Paper on Biofuels in Latin America and the Caribbean [*.pdf].

Article continues

Genencor introduces more efficient enzyme for corn ethanol

Genencor, a division of Danisco A/S, has announced it introduces a greener, more efficient enzyme for ethanol production. The new 'Maxaliq ONE' product significantly improves process efficiency in production of biofuels from corn and complements Genencor's growing range of dedicated enzymes for the ethanol industry (table, click to enlarge).

The enzyme optimizes the process of converting corn to ethanol by increasing throughput and the value of its by-product, known as distiller’s dried grain with solubles (DDGS) used as a component in formulating animal feed.

The Maxaliq ONE blend contains a novel thermostable enzyme that is used as a processing aid to efficiently reduce the viscosity of the liquefact and break down phytic acid in grains to create a higher value by-product DDGS:
:: :: :: :: :: :: :: :: ::

According to Genencor, the Maxaliq ONE blend used in conjunction with its Phytase Amylase Liquefaction System (PALS), reduces viscosity and reduces mash phytic acid in the dry-mill process. The addition of a simple step at the beginning of the process therefore results in efficient liquefaction. It thus improves the sustainability values of two industries, ethanol and animal nutrition [entry ends here].

Genencor enzymes and biotechnology solutions are aimed at improvements in several bioconversion steps for first generation ethanol production, notably:
  • Improving production efficiency
  • Increasing fuel volume produced
  • Reducing manufacturing costs
  • Decreasing waste products and gas emissions

Article continues

EU eases OPEC's fears of biofuels at 4th EU-OPEC Energy Dialogue

The 4th ministerial-level meeting of the energy dialogue between the European Union (EU) and the Organization of the Petroleum Exporting Countries (OPEC) was held in Vienna today. Ahead of the meeting the EU tried to ease fears by the OPEC on the rise of alternative energy sources in Europe. The EU-OPEC Energy dialogue, established in 2004, focused on OPEC's work on carbon-dioxide capture and storage, energy policy but also on the impact of financial markets on oil prices as well as improving market transparency and predictability. Biofuels remained a key point of debate.

German Economics Minister Michael Glos, serving as president of the EU Energy Council at the high-level meeting, said before the summit that burning of fossil fuels must be restricted for climate reasons. However, he reassured OPEC biofuels would be "introduced as a supplement" to fossil fuels. "We do not want to restrict OPEC," he told journalists at the outset of the meeting.

Earlier this year, the European Commission set out its strategy to turn the EU into a low carbon economy. It contains the ambitious target to source 20% of its overall energy mix from renewable energy by 2020. The European Council later translated this in an agreement amongst EU member states to set a 10% minimum target on the use of biofuels in transport by 2020 (earlier post).

OPEC warned earlier that in case of a long-term boom in biofuels it could cut down on investment in oil production, and that in turn a fuel shortage could be the result if biofuels ran into supply problems. The announcement was immediately countered by the chief of the International Energy Agency, who stressed that oil is in no way threatened by biofuels (earlier post).

EU experts reiterated ahead of the meeting that even if biofuels were increasingly used in Europe in the next years, the demand for oil would remain stable. Around 40 per cent of the EU's oil imports come from OPEC countries, and this share will only grow.

Crude oil prices have been hovering below the 70-dollar barrier for a while. Analysts believe that if this barrier is breached prices can climb a lot higher, into the mid-80s range. Glos warned that current prices were "the upper level of what will be tolerable for consumer countries," adding the OPEC had a shared interest in avoiding a global economic slowdown.

El-Bardri indicated earlier this week that OPEC was not considering raising its output at the moment. One reason is that increased input would go into stockpiles, as there is not enough refining capacity, OPEC argued:
:: :: :: :: :: :: :: :: ::

Among the participants in the meeting were EU Energy Commissioner Andris Piebalgs, Mohamed bin Dhaen AL Hamli, President of the OPEC conference, Abdalla Selem El-Badri, OPEC Secretary General and Michael Glos, German Minister of Economics.

The EU and OPEC representatives welcomed the progress that had been made since the third meeting of the energy dialogue in Brussels, Belgium, on 7 June 2006. This included: a roundtable on carbon dioxide capture and storage (CCS), held in Riyadh, Saudi Arabia, in September 2006; a workshop on the impact of financial markets on oil price and volatility, held in Vienna in December 2006; a roundtable on energy policies, held in Brussels last month; the launch of a joint study on refining; and other meetings and discussions. The representatives expressed their appreciation for the constructive exchanges of views in all these activities.

The first session of today’s meeting featured presentations by the EU on its recently adopted energy policy and by OPEC on oil market developments and prospects.

The EU presented the energy policy and action plan adopted in March 2007 by the European Council, focusing on sustainability, security of supply and competitiveness. This policy aims to enhance cooperation with key energy producers, transiting countries and major consumers, and calls for further development of bilateral and multilateral energy negotiations and agreements on energy. In addition, climate change is a key driver of the intimately combined EU energy and environment policy. And finally, energy technology becomes increasingly instrumental in improving efficiency and renewable energy sources for addressing climate change, by promoting clean fossil fuel and carbon capture and storage (CCS) technologies. With regard to oil market situation, the EU expressed its concern about expected seasonal increase in demand coupled with possible supply disruptions over the next few months which could lead to tightening in the oil market.

OPEC reiterated in its presentation that the present oil market remains well supplied, with commercial crude oil stocks above five-year average and an increasing level of upstream spare capacity. However, in addition to geopolitical constraints, tightness in the refining sector, which has been recognised as a matter for concern since the second EU-OPEC meeting in December 2005, continues to increase volatility and exert pressure on crude and product prices, in particular, on gasoline prices. OPEC reaffirmed its longstanding commitment to ensuring sound supply fundamentals at all times, and to offering an adequate level of spare capacity, for the benefit of the world at large.

Both sides emphasized the importance of continuously monitoring oil market developments and taking appropriate actions if necessary.

Participants expressed once again their mutual interest in stable, transparent and predictable oil markets, with reasonable prices that are consistent with the need for healthy world economic growth and steady revenue streams for producing countries, and that are conducive to the expansion of capacity to meet rising oil demand. They recognised the importance of secure future demand for crude and products in spurring timely investment both upstream and downstream, thus contributing to greater security of supply.

The two parties believed that the world is becoming increasingly interdependent, with a complex energy system that is steadily developing into a more global and interconnected one, through physical infrastructures and markets. Dialogue, partnerships and transparency were, therefore, considered essential in addressing the world’s energy needs, in a predictable, stable and harmonious manner.

In this connection, they reaffirmed their recognition of the reciprocal nature of energy security, with security of supply and security of demand being two faces of the same coin. It was, furthermore, emphasised that every effort should be made to minimise uncertainties along the supply chain, in order to reduce investment risks and support long-term market stability.

In noting that oil will remain the world’s leading energy source for the foreseeable future, the meeting agreed that, in the long run, on the basis of present information, there are enough conventional and non-conventional oil resources globally to meet the expected significant growth in demand. At the same time, however, both parties welcomed the growing diversity in the energy mix, including renewables. With regard to biofuels specifically, their sustainability was discussed, especially the many potential impacts of their large-scale trade and use for energy purposes. The EU highlighted the scope to tackle such problems through an appropriate policy framework.

The meeting also addressed the current shortages in skilled labour, equipment and services, both upstream and downstream, and rapidly rising costs, which the industry is currently facing, as well as the issue of human resources. A shortage of skilled labour for drilling, engineering, procurement, construction and other services and a downturn in the number of students in energy fields were seen as hampering the industry’s orderly expansion, and thus constituting a serious reason for concern. The meeting, therefore, decided to address this issue in the energy dialogue. It also reiterated the importance of energy technology and its decision to set-up a task force for examining the establishment of an EU-OPEC energy technology centre.

The two parties noted the big contribution that the EU-OPEC energy dialogue could make to broader-based challenges facing mankind, notably environmental harmony, sustainable development and the eradication of poverty. They agreed that cleaner fossil fuel technologies should be promoted, to help foster economic growth and social progress, while contributing to the protection of the environment. They stressed, in particular, the need for the further development and deployment of CCS technology, since this would have a key role in reducing net emissions of greenhouse gases. Both sides recognised once again the essential nature of the Millennium Development Goals and the fact that access by the poor to modern energy services facilitated the achievement of these goals.

Accordingly, they agreed upon the following specific joint actions:
  • A workshop on the oil refining sector, including the implications of biofuels, to take place in Brussels end 2007 or early 2008.
  • A study on the impact of financial markets on the oil price and volatility, with the terms of reference to be developed jointly in the coming months.
  • An enhanced discussion on CCS cooperation, leading up to a roundtable in the first quarter of 2008.
  • The development by the task force of the concept and operations of an EU-OPEC Energy Technology Centre, including the cooperative framework on education and training in the energy sector, with a report to be presented to the next annual meeting of the EU-OPEC Energy Dialogue.
The fifth meeting of the EU-OPEC Energy Dialogue will be held in Brussels, Belgium, in June 2008.

More information:
EU-OPEC Joint Statement: Further significant developments in the EU-OPEC Energy Dialogue - June 21, 2007.

EUX.TV: EU to ease OPEC fears of alternative fuels - June 21, 2007.

Petroleumworld: OPEC might not increase production in coming months: Badri - June 21, 2007.

EurActiv dossier: Geopolitics of EU energy supply - updated June 19, 2007.

Article continues

Diversa and Celunol merge to become Verenium

Diversa Corporation and Celunol Corp. announced today that they have completed their previously-announced merger [*.pdf] transaction to create Verenium Corporation. The new company possesses a growing portfolio of specialty enzyme products and technical and operational capabilities designed to enable the production of low-cost, biomass-derived sugars for a multitude of major industrial applications.

The most significant near-term commercial opportunity for Verenium will be the large-scale commercial production of cellulosic ethanol derived from multiple biomass feedstocks. Verenium's first jointly released enzyme product is 'Fuelzyme', a novel alpha amylase enzyme assembled from genes found in extremophiles, that allows for more cost-effective production of ethanol from corn.

Verenium begins operations with numerous unique attributes, including:
  • fully-integrated, end-to-end capabilities in pre-treatment, novel enzyme development, fermentation, engineering, and project development;
  • an operational cellulosic ethanol pilot plants in the United States;
  • a 1.4 million gallon-per-year demonstration-scale facility, currently under construction, to produce cellulosic ethanol from sugarcane bagasse and specially-bred energy cane
  • a diverse and growing portfolio of commercialized industrial enzyme products
  • over 300 issued or in-licensed patents for its technologies and processes, as well as over 450 pending patents.
Verenium will be structured and managed as three distinct, but interdependent, organizational units:
  • Specialty Enzymes Business Unit: currently generates commercial revenue from multiple sources, including industrial enzyme product sales, technology licenses, strategic partnerships, and government grants. The unit harnesses the power of enzymes to create a broad range of specialty products to meet high-value commercial needs. It has capabilities in the rapid screening, identification, and expression of enzymes-proteins that act as the catalysts of biochemical reactions.
  • Biofuels Business Unit: will be primary focused on the commercial-scale production and sale of cellulosic ethanol from company-managed production facilities throughout the US, as well as strategic partnerships and related revenue arrangements around the world.
  • Research and Development: the organization's primary goal will be to support both Verenium Business Units, as well as various existing strategic collaborative partners.
Verenium recently completed a significant upgrade of one of the nation's first operational cellulosic ethanol pilot facilities located in Jennings, Louisiana and expects to achieve mechanical completion of its 1.4 million gallon-per-year, demonstration-scale facility to produce cellulosic ethanol by the end of 2007.

In addition, the company's process technology has been licensed by Tokyo-based Marubeni Corp. and Tsukishima Kikai Co., LTD and has been incorporated into BioEthanol Japan's 1.4 million liter-per-year cellulosic ethanol plant in Osaka, Japan - the world's first commercial-scale plant to produce cellulosic ethanol from wood construction waste:
:: :: :: :: :: :: :: :: ::

As of March 31, 2007, the company had cash, cash-equivalents, and short-term investments on hand of approximately $125.5 million, which, together with approximately $20 million received in early April from the exercise of an over-allotment option related to the recent convertible notes offering, it believes to be sufficient to fund operations through at least 2008.

Verenium's Board of Directors will initially consist of nine members, six from Diversa and three from Celunol, including Mr. Riva. The non-employee Board members are: Dr. James Cavanaugh, who will serve as Chairman of the Board of Directors; Peter Johnson; Fernand Kaufmann, Ph.D.; Mark Leschly; Melvin Simon, Ph.D.; Cheryl Wenzinger; Joshua Ruch; and Michael Zak.

The company's executive management team is being led by Carlos A. Riva, President, Chief Executive Officer, and Director, and John A. McCarthy, Jr., Executive Vice President and Chief Financial Officer.

Verenium will be headquartered in Cambridge, Massachusetts and have research and operations facilities in San Diego, California; Jennings, Louisiana; and Gainesville, Florida. Due to the complementary nature of the two companies and the level of development activities being pursued, the company anticipates increasing its staff in Cambridge and Jennings, as well as building additional staff over time in San Diego to support the growth of the enzyme business and research and development efforts of the company.

In connection with the merger, Diversa will issue 15 million shares of common stock in exchange for all outstanding equity securities of Celunol, which includes shares issuable under Celunol options and warrants that will be assumed by the Company. As a result of the merger, former Celunol security holders will own approximately 24 percent of the company, while Diversa shareholders will own approximately 76 percent. Immediately following the merger, the Company will have approximately 63 million shares outstanding.

More information:
Diversa Celunol merger: Making Cellulosic Biofuels a Commercial Reality Creating - the First Company with Integrated, End-to-End Technologies to Convert Biomass into Fuel Ethanol [*.pdf], June 21, 2007.

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'Biomass Nippon': a look at Japan's national bioenergy strategy

Anxious to protect its islands against urban pollution and to reduce dependence on imported fossil fuels, Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) has launched a national programme to study the potential and promote the use of local bioenergy resources. The project is dubbed 'Biomass Nippon' and aims, for the first time, to analyse the local availability of biomass from all existing economic sectors.

The programme will actively engage in strengthening research capacities (with the establishment of experimental biorefineries), create an institutional structure and carry out policy work to facilitate the use of biomass. Because of their decentralised nature, bioenergy systems are often strongly rooted in local communities. For this reason, a comprehensive social framework will be crafted that will assess the impacts of biomass power generation on these communities.

Japan is the world's most energy efficient society, with an industrial sector that generates fewer greenhouse gas (GHG) emissions per unit of GDP produced than any other country (earlier post). But the island state wants to go further, because being a highly industrialised country, its total GHG emissions are still quite high and Japan is very dependent on imported energy.

Biomass Nippon, which receives 265 million Yen (€1.6/US$2.1 million) annually, thus aims to contribute to the creation of a low-carbon and 'circular' economy that utilizes renewable resources in a highly efficient manner. The main reasons behind the programme are:
  1. the prevention of climate change (to which Japan is highly vulnerable): to promote the use of 'carbon-neutral' biomass which will lead to the replacement of energy and products derived from fossil fuels with alternatives, and thus to mitigate carbon dioxide emissions
  2. the creation of a recycling-oriented society: to use limited resources in an effective manner by utilizing renewable biomass, thus accelerating the process of shifting society toward one which develops in a sustainable manner
  3. fostering new strategic industries: to restructure the industrial competitiveness of Japan by creating biomass-related industries as a strategic sector that develops new products, uniquely made in Japan
  4. activation of agriculture, forestry, and fishery, as well as associated rural communities: the utilisation of national biomass resources will re-activate the primary sector, as well as stimulate the rural communities involved in the sector
Analyses by researchers who are part of the IEA's Bioenergy Task 40 study group - which assesses bioenergy trade, economics and potentials - show that in principle Japan has the smallest long-term (2050) biomass production potential of all global regions. However, the MAFF itself estimates that the country currently has around 1,300 Petajoules of renewable energy embedded in its available biomass resources (graph, click to enlarge). This is equivalent to around 35 billion liters of oil per year (roughly 600,000bpd), or 33 million tons of carbon (equivalent to 3.3 times as much as the total amount of carbon contained in all plastic materials produced in Japan).

Renewable resources
Biomass Nippon distinguishes different kinds of sources from which this biomass can be obtained and has outlined a utilisation scenario for each of them:
  1. 'Waste streams': an increased utilization of paper waste, livestock waste, food waste, construction-derived wood residues, black liquor, and sewage sludge can be promoted relatively quickly
  2. 'Unused Biomass': by around 2010, the utilization of biomass which has never been used before will become quite visible: unused portions of farm crops such as rice straw or rice husk, and forestry residues left unused at sites will be converted into biofuels and bioproducts
  3. 'Dedicated Energy Crops': by around 2020, energy crops will be widely cultivated so that they can be utilized as an energy source and for bioproducts
  4. 'New Crops': by around 2050, newly developed crops such as marine plants and genetically modified crops will contribute to an increased production of biomass
 In order to assess the potential of these resources in-depth, Japan has been divided into 9 large regions that will each host a study cell, with a national bureau centralising the data. The national office will then map resources and install 'biomass professionals' in the different regions and per sector (biomass production through forestry and agriculture; conversion into liquid, solid and gaseous fuels and bioproducts...).

Bioconversion strategies
When it comes to strategies to develop technologies to convert biomass into finished products, Biomass Nippon envisions the creation of biorefineries and of a 'cascading' strategy for the use of raw biomass:
:: :: :: :: :: :: :: :: ::

  1. Biorefineries: will integrate technologies in a highly efficient manner and result in the production of a diverse range of fuels and useful materials starting from a given stream of raw biomass.
  2. Cascading strategy: alongside the development of individual relevant technologies, a 'cascading' (multi-stage) use of biomass is required for the purpose of utilizing biomass resources to the fullest, by using them repeatedly, as many times as possible, from the top end to the bottom in terms of product value, and by burning them at the end of the cascade to generate energy, in as efficient a manner possible.
More specific goals for the materialization of 'Biomass Nippon' consist of setting specific goals for the parties involved so that they can promote the utilization of biomass effectively.

The MAFF will set up certain goals from technological perspectives (energy conversion efficiency, cost target of process equipment/systems, etc.), from the point of view of the local communities (such as an increase in the number of communities which utilize biomass more than a certain level), and also from the nationwide viewpoint (such as posting a clear target level of biomass utilization).
Nationwide targets have been proposed as follows: to aim at 80% or higher for the utilization of waste biomass and 25% or higher for 'unused biomass', in terms of their carbon equivalent.
Policy, promotion and institutional frameworks
The basic strategies that must make 'Biomass Nippon' a success are divided into several groups, ranging from nation-wide awareness campaigns ('sensitizing the nation', 'boosting local ingenuity'), the creation of clear definitions of the roles taken by various stakeholders (private sector, communities, government) and the design of a negotiation and debating routine amongst the stakeholders. A framework to boost competitiveness within the sector of biomass technologies will be developed as well.

Finally, 'Biomass Nippon' will set up an institutional structure and carry out policy work:

  • the establishment of the "Biomass Japan Comprehensive Strategy Promotion Council" in order to facilitate a solid promotion of the relevant strategies.
  • the establish a "Biomass Information Headquarters", which works as the central base for information
  • to study new laws needed for promoting the Biomass Nippon Strategy
  • to undertake research and development for designing a social system in which an efficient utilization of biomass is encouraged, and to conduct a demonstration test for the envisioned outcomes
  • to implement a comprehensive package of measures in model communities under a coordinated program headed by relevant government offices
 Revisions of existing legislation for several energy and waste-treatment sectors and products are needed, as well as a new look at current energy production and distribution practises. Biomass Nippon will:
  • investigate a handling procedure to be applied to bioplastics as specific procurement items covered by the Green Purchasing Law
  • arrange matters so that power generation from biomass can be handled in the same manner as other kinds of new energy under the New Energy Law
  • promote the kind of agriculture which is oriented toward environmental conservation
  • facilitate power supply by means of locally distributed power sources, including biomass power generation
  • undertake quality evaluation of biomass-derived automotive fuels, assess their safety and environmental performance, and conduct driving tests on those fuels as well as evaluate the merits and demerits of their introduction into Japan
More information:
Ecologie Caradisiac: L'empire du Soleil levant embrasse la biomasse - June 15, 2007.

Ministry of Agriculture, Forestry and Fisheries: Outline of the Biomass Nippon Strategy.

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