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    Taiwan's Feng Chia University has succeeded in boosting the production of hydrogen from biomass to 15 liters per hour, one of the world's highest biohydrogen production rates, a researcher at the university said Friday. The research team managed to produce hydrogen and carbon dioxide (which can be captured and stored) from the fermentation of different strains of anaerobes in a sugar cane-based liquefied mixture. The highest yield was obtained by the Clostridium bacterium. Taiwan News - November 14, 2008.

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Saturday, July 21, 2007

Probing biology's dark matter: new device makes study of microbes more accessible

Microbiologists have coaxed less than one percent of the bacterial species that inhabit natural environments into growing in culture. The study of these tiny organisms promises to bring breakthroughs in many science and technology fields, in particular in the bioconversion of biomass to useful products (previous post, here and here). But the vast majority of microbes are notoriously resistant to growing in laboratory cultures because they are so intricately linked to their own unique ecosystems. However, a new microfluidics device created by researchers from the Howard Hughes Medical Institute (HHMI) and Stanford University may help scientists who want to identify and characterize new microbes circumvent the need to culture them at all.

HHMI investigator Stephen R. Quake and Stanford collegues report their research [*abstract] on the device in the July 17, 2007, issue of the Proceedings of the National Academy of Sciences (PNAS). The findings have far-reaching implications for the rapidly developing field of microbial ecology, as well as advancing microfluidics technologies, which could do for biology what silicon chips did for electronics. Quake and his colleagues have already used the device to analyze a rare bacteria found in the human mouth, using just a single cell.

Various methods have given scientists a glimpse of the profound diversity that characterizes different microbial worlds. One approach is to look for variations in the sequence of a specific gene found in all microorganisms; another is a complete inventory of all the pooled genes in a microbial community. These types of studies, however, yield few insights into the character of individual members of a microbial ecosystem, leaving most species almost entirely enigmatic.

Those unstudied organisms are biology's 'dark matter', Quake says. Like the dark matter that astronomers can only infer must exist in the universe, these organisms have never been studied directly. Quake and his colleagues hope their new technology will change that.
We are hoping to open a whole new chapter in how one understands the microbial universe. Microfluidic tools can give us direct access to this dark matter. - Stephen R. Quake, Howard Hughes Medical Institute
Quake's research lies at the nexus of physics, biology, and biotechnology. His microfluidics chips, which he designs to tackle problems in fields including structural genomics, systems biology, microbial ecology, and synthetic chemistry, are akin to having a fully automated laboratory on a postage stamp-sized wafer. Remember the early days of electronics with all of those big vacuum tubes and wires. Next came the transistor and finally the silicon chip, which dramatically revolutionized computers and modern electronics. Microfluidics is following the track of silicon chips and promises to revolutionize biology in the same manner:
:: :: :: :: :: :: :: :: :: :: ::

The microfluidic chip designed by Quake and his colleagues for the current study is equipped with tiny chambers and valves that allow researchers to isolate microbes at the nanoliter scale. Because each microbe is isolated in a vanishingly small volume of liquid, the concentration of its genetic material within that solution is actually quite high - meaning Quake and his colleagues can easily amplify and analyze the genome of an individual cell, eliminating the need to persuade the organism to multiply in a laboratory culture. The chip offers the potential to discover untold new species of microbes lurking within deep sea vents, ordinary dirt, toxic sludge, or virtually any environment.

To demonstrate the power of the new device, the scientists first used it to target a possible new phylum, of which one member is a rod-shaped bacterium that live between the gums and teeth of humans. The candidate phylum, called TM7, has no cultivated or sequenced members. The scientists demonstrated that they could inject a solution containing multiple types of microbes into a chip, and manipulate tiny valves to direct individual rod-shaped bacteria into miniature chambers. Once individual microbes were isolated, the researchers could extract the DNA and amplify it using routine methods.

In this way, the researchers were able to sequence and assemble more than 1,000 genes, providing insight into the physiology of this previously unstudied group of bacteria. Most TM7 genes, they found, had remarkably little similarity to genes in known bacterial groups. But some of the genes hinted at interesting aspects of the organism's biology, such as an unusual gliding motion that groups of TM7 bacteria might use to get around, and a gene shared with bacteria known to cause chronic inflammation.

Just as importantly, the researchers say, they have demonstrated the success of their new technology in analyzing a rare component of a complex microbial community - and there is plenty more to explore. Quake's team has already begun using the chip to isolate, identify, and sequence communities of microbes that reside in termite hindguts (and that have attracted attention for their potential usefulness in breaking down cellulose), and his lab at Stanford is custom building chips for other scientists interested in pursuing any culture-resistant microbe or discovering the dark matter of a specific environment.

Picture: colonies of recombinant Streptomyces bacteria are designed to produce enzymes called cellulases. With these enzymes, the bacteria can break down cellulose on the way to producing ethanol. Courtesy of NREL/U.S. Dept. of Energy/Photo Researchers.

Stephen R. Quake, et. al. "Dissecting biological "dark matter" with single-cell genetic analysis of rare and uncultivated TM7 microbes from the human mouth" -
PNAS, July 17, 2007, vol. 104, no. 29, 11889-11894, Published online before print July 9, 2007, 10.1073/pnas.0704662104

Eurekalert: Probing biology's dark matter - July 19, 2007.

Biopact: Entomologists discover cellulase genes in termite guts - February 28, 2007

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Brazilian government to outlaw sugar cane planting in Amazon and Pantanal

The Brazilian government announces [*Portuguese] a new set of measures to get rid of the many misunderstandings surrounding the country's sugar cane ethanol, once and for all. Part of the new legislation will be largely symbolic.

In some circles and amongst the public at large, there is a serious lack of knowledge about the Brazilian ethanol industry. People think the sugar cane from which the fuel is derived, is grown in the Amazon rainforest or contributes to its deforestation. Nothing is further from the truth. The vast bulk of the cane is grown 1000 miles south of the Amazon in the south-central state of São Paulo, and far away from biodiversity hotspots like the Pantanal (map, click to enlarge). There is no indication that second-order effects from the expansion of sugar cane plantations results in increased deforestation (and as such, let's not forget that, over the past few years, the current Brazilian government succeeded in reducing deforestation rates by 50% - a major effort and historic trend-reversal lauded by even the most critical environmentalist). Even U.S. energy officials - who have not the slightest interest in saying so, on the contrary - recently stressed that Brazilian biofuels have no impacts on the rainforest (earlier post).

In Brazil, there are approximately 440 million hectares of arable land. The sugar cane industry uses up only 1 per cent of this area (but yields a tremendous amount of energy that has made Brazil independent of oil imports). Still, some groups who work against Brazil's successful model - which it wants to export to poor developing countries to their great benefit - are deliberately creating a false image of this sector. These groups include some players of the oil industry, a select club of radical environmentalists, and lobbyists from the US and EU ethanol industry, who fear that the much more efficient, sustainable and competitive Brazilian fuels will replace theirs. Indeed, sugar cane ethanol has an energy balance of between 8 and 10 to 1, corn ethanol has an energy balance of 1 to 1, with some even finding a negative balance; likewise, cane ethanol reduces greenhouse gas emissions by up to 80% compared to gasoline, for corn ethanol the reduction is marginal, at around 0 to 10 per cent. In short, as independent scientists have repeatedly said: Brazilian ethanol is largely sustainable, helps tackle climate change and is highly energy efficient (see here and here); corn ethanol is neither).

The Brazilian government, and president Lula in particular, have tried their best to explain the reality of the sugar cane industry in the country, but some misunderstandings seem to persist. For this reason, Brazil will now explicitly outlaw the growing of cane in both the Amazon and the Pantanal. This step is an international marketing effort needed to convince the rich countries of the benefits of trading and importing Brazilian biofuels. Experts are already convinced of the many advantages of such a trade, but now the uninformed, the unwilling and the anti-Brazilian lobbies must be countered.

The legislation will result in the production of an agricultural zoning-map that will clearly delineate areas where sugar cane will be allowed to grow. For the time being, measures to penalise those who do not follow the zoning order have not been outlined. The map will be ready within one year.

Speaking to an audience of international journalists at a conference on Brazilian biofuel exports to Europe, Agriculture Minister Reinhold Stephanes announced the decision, and added that areas other than the Amazon will be studied for protection:
This is a governmental decision. We are going to create a zoning system for sugar cane, with a restrictive map. This map will outlaw every possibility of establishing plantations in the biome of the Amazon and the Pantanal. - Reinhold Stephanes, Minister of Agriculture of Brazil
The law is largely symbolical, because it makes no economic nor agronomic sense to grow cane in the rainforest anyways, the climate and soils of which are not conducive to a good crop. But such a law is most certainly welcome.

A more important pillar of the zoning map will consist of a set of incentives funded by the federal government to stimulate sugar cane growers to plant the crop in degraded areas, like old pastures. There are millions of hectares of such degraded pastures laying around unproductively today. Planting sugar cane on them would partly restore their health.

Finally, and crucially, by December of this year, the government will finalise its social and environmental sustainability criteria for both ethanol and biodiesel, which will facilitate the international trade of these biofuels:
:: :: :: :: :: :: :: :: :: :: :: :: ::

"The basic certification documents will soon be finalised and distributed amongst the producers", the Agriculture Minister said.

President Lula, who, after a long campaign, finally convinced the EU of the many benefits of Brazilian ethanol as compared to EU- and US-produced biofuels, has developed a smart discourse to counter prevailing misunderstandings about the sector that has made his country the focus of international attention. This has even turned Sweden, a world leading example of a country that makes intelligent green and sustainable energy choices, into an outspoken ally of the Brazilian vision (earlier post).

Both at the landmark International Conference on Biofuels held recently in Brussels, as well as in numerous speeches, columns and televised debates, the president has routinely summarized the facts:
  • that cane is not grown in the Amazon, and that it never will, simply because of agro-technical reasons;
  • that labor conditions have been historically bad, but that progress towards the humanisation of the sector is being and will be made (cane cutters are now much better protected by new laws and receive far better wages than ever before - but more is needed to improve the working conditions);
  • that the benefits of Brazil's model far outweigh the disadvantages (the substantial reduction of greenhouse gas emissions helps protect the environment because unmitigated climate change will be disastrous for the entire planet and all of its biodiversity, not only for the Amazon or the Pantanal);
  • that the Brazilian model can be exported to poor developing countries, most notably African, who stand to benefit massively from it
A whole set of objective and scientifically sound arguments.

When it comes to food versus fuel, Lula has stressed over and over again, with clear scientific and sociological backing, that food insecurity is not a matter of a lack of food, but of a lack of income to buy food (earlier post). Sugar cane ethanol does not in any way threaten food output or prices, on the contrary, it allows farmers to boost incomes and countries to cut expensive oil imports. This may benefit the poor (the vast majority of whom rely on agriculture and who eat more than sugar alone). However, there is no denying that the utilization of food crops such as corn - which should never be used for the production of ethanol because they are inefficient, don't reduce greenhouse gas emissions, and have a very weak energy balance - can have disastrous consequences for the millions of poor who depend on it for their daily needs. Sugar cane is not corn. It cannot be repeated often enough.

One of the more often quoted points made by Lula is of a mildly ironic and historiographic nature. It goes something like this:
The Portuguese who came here first and who introduced sugar cane to Brazil, were very intelligent people. 470 years ago, they discovered the Amazon, and they have never planted a single cane stalk there. They didn't, because the climate and the soil there are simply not suitable. Instead, they started planting cane a thousand miles south, in São Paulo, where it still grows today.
Earlier, Lula often spoke in terms of 'national pride' when it comes to Brazil's successful biofuels industry. Today, he speaks in terms of 'national sovereignty' which is boosted by the fuel, but also of 'international solidarity'. It is taken this seriously. And if it is up to Lula - a pragmatic leftist, and president of the largest African community oustide the African continent - the benefits of Brazilian biofuels will soon be exported to some of the poorest countries in the world, most notably to Africa. There, they can strengthen economies and rural population's livelihoods, cut foreign energy dependence, and indeed, beef up much needed 'sovereignty'. For Lula, biofuels are a matter of international cooperation, fair play, and solidarity. The Biopact shares this vision, and hopes it can contribute to developing it further.

EthanolBrasil: Governo veta plantio de cana na Amazônia - July 18, 2007.

Biopact: Brazilian ethanol is sustainable and has a very positive energy balance - IEA report - October 08, 2006

Biopact: Nature sets the record straight on Brazilian ethanol - December 09, 2006

Biopact: Two handy books answer FAQs on Brazilian ethanol - May 22, 2007

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Friday, July 20, 2007

Green Power Generators unveils dedicated biodiesel gensets for entertainment industry

Green Power Generators, a new company specializing in custom built biodiesel fueled generators, today announced it made available a new line of generators designed to dramatically reduce carbon emissions in both small and large-scale events and productions. Derived from biological sources such as vegetable oil, biodiesel fuel is safe to handle and as biodegradable as sugar.

GPG has chosen to highlight designs first for members of the entertainment industry, but the generators will be of equal interest for any business that involves high energy consumption. To make its case, GPG refers to a 1998 biodiesel lifecycle study, jointly sponsored by the U.S. Department of Energy and the U.S. Department of Agriculture, concluded biodiesel reduces net carbon dioxide emissions by 78% compared to petroleum diesel.

Quick Facts about the biodiesel generators:
  • GPG generators feature Cummins Tier-3 engines that meet the most stringent emissions standards set forth by the EPA. Only 1% of generators currently used are Tier-3.
  • generators are rated to operate smoothly in high and low temperatures.
  • feature Movie Quiet design utilizing a three-stage insulation process for sound reduction.
  • analog engine controls with individual digital meters for amps, voltage and hertz allow for reliability and ease of operation.
  • GPG’s generators feature Dual-Redundant voltage regulators with a changeover switch. If one regulator fails, the user can switch over to a second regulator within seconds.
  • electric priming feature that allows the engine to be primed of fuel within minutes.
  • variable speed hydraulic fan drive utilizing synthetic hydraulic fluid allow for a reduction in change intervals.
In its annual report card issued in November 2006, the UCLA Institute of the Environment put the film industry number two behind the Aerospace industry on the list of industry pollution offenders in California. The potential benefits of GPG’s new generators for the industry are welcomed by environmental experts.
Generators are the biggest polluters on sets, at concerts and events, and we wanted to change that. We hope to pioneer a change in the way we do things in Hollywood, and beyond. We have already been embraced by several environmental non-profits who will help us encourage all large scale productions to use clean burning fuel. - Tomer DeVito, co-founder of GPG and a television commercial and music video producer.
According to Alton Butler, co-founder of GPG and president of Line 204 Studios, GPG’s parent, the industry standard tier-2 diesel engines are not qualified to burn biodiesel. The available industry standard diesel-engine generators can burn only up to 5% bio-diesel (B5). Burning a higher percentage risks losing operators to lose the warranty on the genset. Currently productions don’t have an option for burning cleaner fuels:
:: :: :: :: :: :: :: :: ::

According to Debbie Levin, president of the Environmental Media Association, "Very few options exist for producers who want to reduce the emissions on their sets. GPG presents a formidable option that should be a no-brainer not only for Hollywood but for any industry that outsources power."

GPG has their own supply of biodiesel fuel, as well as transportation, utility and re-fueling trucks that run on fuel from the same source, ensuring that all measures are taken to prevent unnecessary carbon emissions.

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FPL Energy teams up with Citrus Energy to make cellulosic ethanol from citrus waste

FPL Energy, LLC, a subsidiary of FPL Group, today announced that it has signed a letter of intent with Citrus Energy, LLC, of Boca Raton, Florida, to develop a commercial scale biorefinery that will convert citrus waste to cellulosic ethanol.

The ethanol plant will be owned and operated by FPL Energy and is expected to produce 4 million gallons (15m liters) of ethanol per year. It will be located on the grounds of a local Florida citrus processor.
Citrus Energy’s mission is to develop fuel ethanol that minimizes environmental impact and cost by using citrus waste and other biomass. FPL Energy, as the largest renewable energy generator in the U.S., is the ideal partner. - David Stewart, president of Citrus Energy
FPL Energy says that ethanol from citrus peel could result in a new Florida industry producing over 60 million gallons of fuel per year, which could replace about one percent of Florida’s annual gasoline consumption. Florida has 100 million citrus trees on 700,000 acres yielding around 5 million tons of citrus waste per year.

Citrus Energy recently received a US$2.5 million grant to study “Fuel Ethanol Production from Citrus Waste Biomass” [*.pdf], from the Florida government under its 'Renewable Energy Technologies Grant Program' (earlier post).

The feedstock
Typically citrus processing waste is dried into citrus pulp pellets (CPP) and fed to cattle. But production of CPP requires a large capital investment by the processor with a negative return on investment. The CPP losses are borne by the main product from citrus, orange or grapefruit juice.

Citrus processing waste, a pectin, cellulose and soluble sugar rich mixture of peel, segment membranes and seeds is thus available at no cost and in large volumes with potentially no transportation costs. This waste citrus biomass stream will be used as a cellulosic ethanol feedstock. According to Cirtus Energy, citrus waste feedstock can produce ethanol at significantly lower cost than corn feedstock and is the most economically attractive and technically feasible of the potential cellulosic feedstocks.

The conversion process
The project's competitive advantage is based on technology which allows the ethanol production process to take advantage of a feedstock where the primary costs of growing, harvesting, and collection are supported by the existing product stream.

Comprehensive research, conducted largely at the USDA/ARS Citrus and Subtropical Products Laboratory (Citrus Lab) in Florida provides the technical background for the proposed bio-refinery. The key step is conversion of citrus (primarily orange and grapefruit) processing waste to a mixture of glucose, fructose, galacturonic acid, arabinose, galactose, and xylose by hydrolysis using a mixture of commercial pectinase, cellulase, and beta-glucosidase enzymes. The soluble sugar content in processed citrus waste increases from 23 to 62 percent through this enzymatic hydrolysis process. Fermentation of the sugars is done using traditional brewers yeast and the resulting "beer" has the ethanol separated and converted to fuel grade ethanol using a distillation and dehydration process:

According to Citrus Energy, the economic and environmental advantages of this process are:
:: :: :: :: :: :: :: :: ::
  1. Feedstock is available at the plant at no cost with no transportation costs.
  2. The feedstock is processed immediately with no requirement for storage.
  3. Unlike lignocellulosic feedstocks, this cellulosic process is commercially viable in the short term.
  4. Rural economic development including local energy expenditures; cleaner fuel; and rural employment.
  5. No toxins produced. The acid or high temperature pre-treatment used in conversion of other cellulosic feedstocks for ethanol production can cause toxins which raise environmental concerns.
  6. Reduced foreign oil dependence and improved trade deficit.
  7. Energy Security through domestic fuel source; local energy security.
  8. Less combustion related emissions of global climate change (greenhouse) gases.
  9. Environmental protection and improvement including less toxic emissions than fossil fuels.
  10. 10. Biodegradability of ethanol leaks and spills when compared to MTBE.
Citrus Energy sees itself as strategic player in the cellulosic ethanol opportunity because of the following factors:
  • A citrus waste feedstock that allows an economically attractive cellulosic ethanol revenue stream to be the basis for broadening the feedstock supply to energy crops.
  • The ability to raise funds for new cellulosic ethanol opportunities based on a profitable business and proven economic and technical success in cellulosic ethanol production.
  • A four month window (the citrus off-season) to use the enzymatic hydrolysis, fermentation, and distillation equipment at the production facility as a large scale experimental operation for energy crop research. This capital equipment is available at no cost as the financial burden is being carried by the citrus ethanol product.
  • An opportunity to have significant state and federal funding assistance to grow the energy crops on the tens of thousands of acres of phosphate mined lands that require remediation to be returned to food production agriculture. This could allow Citrus Energy to continue in its "no cost/low cost" biomass feedstock model.
FPL Energy is an energy supplier utilizing clean fuels such as natural gas, wind, solar, hydroelectric and nuclear to generate electricity. It is the U.S. leader in wind energy with 49 wind facilities in operation in 15 states. It is a subsidiary of FPL Group, (NYSE: FPL) one of the nation's largest providers of electricity-related services with annual revenues of nearly $16 billion. FPL Group's principal subsidiary is Florida Power & Light Company, one of America's largest electric utilities, serving 4.4 million customer accounts in Florida.

: citrus peel waste like this will beused for ethanol production rather than cattle feed, its current use. Credit: Bill Widmer.

Cirtus Energy: “Fuel Ethanol Production from Citrus Waste Biomass” [*.pdf].

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E.ON UK submits application for 25MW biomass plant

E.ON UK, an arm of German energy giant E.ON, announces it has submitted a scoping statement to build a £60 million (€89.2 /US$123.2 m) dedicated biomass power station in Sheffield. Rated at 25MW, the new renewable energy plant would produce enough power for around 40,000 homes by burning a combination of recycled wood and specially grown energy crops such as willow or tropical elephant grass (Pennisetum purpureum).

This is the second of E.ON UK's biomass developments, with construction nearing completion at the UK's largest dedicated biomass power station at Steven's Croft near Lockerbie in Scotland. That plant is rated at 44MW, generating enough electricity to power 70,000 homes (earlier post). The company started testing the facility yesterday. Besides building dedicated biomass power plants, E.ON also co-fires biomass at two of its coal power stations.

The Sheffield plant would displace around 80,000 tonnes of carbon dioxide emissions every year - the equivalent of taking more than 20,000 cars off the UK's roads each year - and is expected to create 20 full-time jobs.
[...] biomass development is a great opportunity to make a contribution to the Yorkshire and Humber Region's target of reducing greenhouse gas emissions by at least 20% by 2010. It's through projects like this that we can change the way that we produce energy in the UK, helping keep the lights on at the same time as reducing the impact we have on our environment. And it's not just the environment that will benefit - we're expecting there to be a number of benefits to the local community in terms of new jobs and investment in the area. - Dr Nilton Chan, E.ON UK Project Developer
In addition to the displacement of carbon emissions, the company is investigating the potential for supplying renewable heat to neighbouring commercial and industrial establishments, further strengthening the project's efficiency:
:: :: :: :: :: :: :: :: ::

The scoping statement has been submitted to statutory consultees, including Sheffield City Council and Rotherham Metropolitan Borough Council, and outlines the proposed project including the potential environmental impact of the new development.

It is hoped that a full planning application will be submitted to the council later this year, following the completion of initial design activities and environmental studies.

If the project gets the green light, construction is expected to start early in 2009, with the first power being produced in 2011.

Local people will get the opportunity to learn more about the proposed development at a public exhibition planned for later in the year.

In addition to Sheffield City Council and Rotherham Metropolitan Borough Council, statutory consultees include Darnall Ward, English Nature, English Heritage, Environment Agency, Groundwork Sheffield, Sheffield Wildlife Trust, Highways Agency, South Yorkshire Forest Partnership, Tinsley Forum and Yorkshire Forward.

E.ON is co-firing biomass alongside coal at two of its power stations, building the UK's largest dedicated biomass power station in Scotland and owns the largest traditional hydro power station in England and Wales. The retail business, branded Powergen, is a leading energy supplier in the UK, with around 8.5 million electricity and gas customer accounts, both domestic and SME.

Picture: a stand of elephant grass. Pennisetum purpureum is a species of grass native to the tropical grasslands of Africa. It is a tall perennial plant, growing to 2-4.5m tall (rarely up to 7.5 m), with razor-sharp leaves 30-120 cm long and 1-5 cm broad. It has a very high productivity and has received considerable research attention because of its potential as a dedicated biomass crop.

E.ON UK: E.ON UK gets the ball rolling on biomass power station at Blackburn Meadows in Sheffield - July 18, 2007

E.ON UK: Next stages of testing to be undertaken at E.ON's Steven's Croft biomass power station - July 19, 2007

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ESV Group signs 60yr lease for major biofuel storage and logistics facilities at Terneuzen port

Now that the EU is accepting the vision that it will have to import biofuels, the need for 'bioports' is becoming more tangible. The Netherlands and Belgium, with their many sea ports, are preparing for the creation of such logistical hubs that will import, store, process and distribute solid and liquid biofuels and bioenergy feedstocks (earlier post and here).

In this context, the ESV Group plc, a logistics, trading and biofuel farming company, announces it has signed a sixty year lease agreement with the Port Authority of Zeeland Seaports and Exploitatiemaatschappij Schelde Maas Beheer BV on 98,000 square metres of land in the port area of Terneuzen.

Via ESV Bio-Africa Lda, the group has recently started establishing a 11,000 hectare jatropha plantation in Mozambique. The vegetable oil that can be used as a biodiesel feedstock is meant for exports to the EU.

These activities are yet another indication that Africa's biofuel potential is beginning to be recognized. By 2050, the continent can yield more than 400 EJ of sustainably produced biofuels, without threatening forests or the food, fuel and fiber needs of rapidly growing populations (earlier post). Consequently, a large potential for global bioenergy trade has been identified by researchers (more here).

ESV's lease in the Netherlands, at the Axel Plain, allows for:
  • the Zeeland Sea Ports Authority development of a 200 metre quay for vessels of maximum length of 180 metres and maximum draft of 11.5 metres
  • a separate jetty for tanker barges and coasters
  • storage and logistic facilities for a minimum of 600,000 metric tons throughput of vegetable oil, ethanol and clean minerals per year with an overall storage capacity of 176,000 cubic metres for vegetable oils, ethanol and clean minerals per year
Additionally, ESV will have a first right of refusal on an initial 30,000 square metre plot of land adjacent to the Axel Plain. The Company expects the facility to be operational by mid 2009. According to Masoud Alikhani, Chairman of ESV, Terneuzen is strategically excellently positioned to provide a central hub for supplying the European biofuel market:
:: :: :: :: :: :: :: :: :: :: ::

The facility will not only provide the Northern European access point for shipping in vegetable oil from ESV's own production projects but also for other biofuel suppliers both within and outside of Europe.

ESV was established as a logistics and trading company and is in the process of re-positioning itself as a major provider of raw vegetable oil for supply to the emerging European biodiesel industry, the European Union having targeted its biodiesel requirements for 2010 as 10.2 million metric tonnes. ESV currently has substantial business interests in farming and farming logistics. Its main operations are conducted through:
  • A purchase agreement with Agri-Ukraine Ltd, Cyprus who operates a substantial 12,000 hectare farming operation in Poltava;
  • A management agreement with Dnipro Cargo Ltd, Cyprus whereby ESV Group Plc manages a grain terminal at Kherson sea port, a strategically located facility on the Black Sea; and
  • ESV Bio Africa Lda which is developing a major jatropha plantation in Mozambique for the production of raw vegetable oil.
ESV Group plc: Mozambique biofuel project.

Port of Zeeland - Terneuzen and Vlissingen, website.

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Thursday, July 19, 2007

UNCTAD: poorest countries need investments in science and technology

The United Nations Conference on Trade and Development (UNCTAD) today released its annual Least Developed Countries Report 2007 [*.pdf], in which it calls for a boost in investments in science, technology and innovation (STI) in the poorest countries. After years of focusing attention on market reform and economic liberalization (1990s) and then on 'good governance' (2000s), the least developed countries (LDCs) now need more knowledge-based development if they want to escape the poverty trap. LDCs are defined as the 50 poorest countries - the majority of them in Africa - whose combined population totals 767 million.

Over the past 25 years, STI projects and knowledge-based development initiatives have received marginal funds from the major international development agencies (e.g. in 2003–2005 'good governance' received $1.3 billion, agricultural extension a meagre $12 million...). Now, the UNCTAD sees investments in technology, science and learning environments as crucial for poverty reduction strategies.

Comparison of the capability of countries to innovate: a huge gap between highly developed and least developed countries (click to enlarge).

The overal argument of the UNCTAD's analysis is that:
unless the LDCs adopt policies to stimulate technological catch-up with the rest of the world, they will continue to fall behind other countries technologically and face deepening marginalization in the global economy. Moreover, the focus of those policies should be on proactive technological learning by domestic enterprises rather than on conventionally understood technological transfer, and on commercial innovation rather than on pure scientific research.
The report also stresses that sheer economic liberalization - long the mantra of development agencies - is no guarantee for successful development, on the contrary:
Since the 1990s most LDCs have undertaken rapid and deep trade and investment liberalization. Liberalization without technological learning will result, in the end, in increased marginalization.
The report contains many interesting observations that can directly be linked to the biofuels and bioenergy industry that is emerging in LDCs. Such an industry holds the potential to boost local development, but a precondition is that the sector becomes knowledge and technology-driven instead of merely relying on static comparative advantages of LDCs.

The subject of knowledge, technological learning and innovation is a large one, and the important UNCTAD report is the first to address the issue in the context of the least developed countries. It focuses on five issues:
  • the extent to which the development of technological capabilities is occurring in LDCs through international market linkages, particularly through international trade, foreign direct investments and licensing
  • the way in which STI issues are currently treated within LDCs and how STI policies geared towards technological catch-up could be integrated into the development strategies of LDCs
  • current controversies about how stringent intellectual property rights regimes affect technological development processes in LDCs and policy options for improving their learning environment
  • the extent of loss of skilled human resources through emigration and policy options for dealing with that issue
  • how overseas development aid is supporting technological learning and innovation in the LDCs and ways to improve it
Technological change in LDCs
So what kind of strategies does the UNCTAD recommend, in order to boost STI and knowledge-based development? First of all, it is important to look at how technological change happens in LDCs, because the process differs considerably from that in highly developed countries:
:: :: :: :: :: :: :: :: :: :: ::

Processes of technological change in rich countries, where firms are innovating by pushing the knowledge frontier further, are fundamentally different from such processes in developing countries. There, innovation primarily takes place through enterprises learning to master, adapt and improve technologies that already exist in more technologically advanced countries:
The central issue is not acquisition of the capability to invent products and processes. Rather, policies to promote technological change in LDCs, as in all developing countries, should be geared to achieving catch-up with more technologically advanced countries. That is, they are concerned with learning about and learning to master ways of doing things that are used in more technologically advanced countries.
It can hardly be expected that an LDC is already knocking at the frontiers of technological breakthroughs. Creative technological innovation also occurs when products and processes that are new to a country or an individual enterprise are commercially introduced, whether or not they are new to the world, the report says.
In short, innovation occurs through "creative imitation", as well as in the more conventional sense of the commercialization of inventions.
Different economic sectors are based on unique processes of technology adoption. For agriculture, the type of technological effort that is required is influenced by agriculture's high degree of sensitivity to the physical environment (circumstantial sensitivity). The strong interaction between the environment and biological material makes the productivity of agricultural techniques, which are largely embodied in reproducible material inputs, highly dependent on local soil, climatic and ecological characteristics. This means that there are considerable limits to the agricultural development which can occur simply through the importation of seeds, plants, animals and machinery (agricultural technology) that are new to the country.
What is required is experimental agricultural research stations to conduct tests and, beyond that, indigenous research and development capacity to undertake the inventive adaptation of prototype technology which exists abroad – for example, local breeding of plant and animal varieties to meet local ecological conditions. Without such inventive adaptation capabilities, knowledge and techniques from elsewhere are locally of limited use.
For industry and services, such circumstantial sensitivity is less important, but nevertheless technological effort is required because technology is not simply technological means (such as machinery and equipment) and technological information (such as instructions and blueprints), but also technological understanding (know-how). The latter is tacit and depends on learning through training, experience and watching.

The development of firm-level capabilities and support systems is vital for successful assimilation of foreign technology. There's a difference between 'core competences', 'dynamic capabilities', and 'technological capabilities':

Core competences
Core competences refer to the knowledge, skills and information to operate established facilities or use existing agricultural land, including production management, quality control, repair and maintenance of physical capital, and marketing.

Dynamic capabilities
Dynamic capabilities refer to the ability to build and reconfigure competences to increase productivity, competitiveness and profitability and to address a changing external environment in terms of supply and demand conditions.

Technological capabilities
Technological capabilities as such are particularly important for the process of innovation. The effective absorption (or assimilation) of foreign technologies depends on the development of such dynamic technological capabilities. R&D can be part of those capabilities, but only a part. Design and engineering capabilities are particularly important for establishing new facilities and upgrading them.

Beyond this, production processes involve various complex organizational processes related to the organization of work, management, control and coordination, and the valorization of output requires logistic and marketing skills. All these can be understood as part of “technological learning” in a broad sense.

Context: policy, institutional framework
The enterprise (firm or farm) is the locus of innovation and technological learning. But firms and farms are embedded within a broader set of institutions which play a major role in these processes. In advanced countries, national innovation systems have been established to promote R&D and link it more effectively to processes of innovation. In LDCs, what matters in particular are the domestic knowledge systems which enable (or constrain) the creation, accumulation, use and sharing of knowledge.

Those systems should support effective acquisition, diffusion and improvement of foreign technologies. In short, there is a need to increase the absorptive capacity (or assimilation capacity) of domestic firms and the domestic knowledge systems in which they are embedded.

1. Building technological capacilities through international market linkages
The level of development of technological capabilities in LDCs is very weak, the report notes. Indicators to show this are scarce and not wholly appropriate. But an examination of where LDCs stand on some of the key indices reveals a dismal performance from an international comparative perspective.

The domestic knowledge systems in the LDCs are very weak and the level of technological capabilities of domestic enterprises is very low. Initiating a sustainable process of knowledge accumulation that could accelerate the development of productive capacities in the LDCs will not be a simple task, because classic recipes have failed:
Technological assimilation and absorption in LDCs through market mechanisms are taking place only to a very limited degree, as reflected in the weak development of technological capabilities and productive capacities. For some channels, notably capital goods imports, the scale of interaction in relation to GDP is much too low. For other channels, notably FDI and exports, the scale of interaction is actually high, but the learning effects of those channels are low. Thus, the growing integration of LDCs into international trade and investment flows since the 1980s has not prevented their marginalization from technology flows.
But the task is not impossible either. According to the UNCTAD, a strategy for catch-up needs to focus on the following fields:
  • building of an endogenous knowledge base, which takes into account informal knowledge systems as they develop in the informal economy (including such things as creative repair, reprocessing and recycling of artefacts, including in some cases complex technologies)
  • traditional knowledge plays a crucial role in various sectors, including agriculture, health and creative industries.
  • learning through international linkages. This latter option is seen as vital by the UNCTAD.

So how can poor countries tap these international knowledge and technology pools?

The report looks at different options, including (1) imports of capital goods, (2) learning by exporting, (3) foreign direct investment, and (4) licensing.

Imports of capital goods
By far the most important source of technological innovation in LDCs, as perceived by firms themselves, is new machinery or equipment. Most of the machinery and equipment operated in LDCs is imported, and therefore imports of capital goods, and their effective use, are overall the main source of innovation for firms in LDCs.

But capital good imports by LDCs have lost momentum over the last 25 years. They have been hampered by their premature de-industrialization process, the slow progression of the investment rate, the composition of their fixed capital formation (with a low share of machinery and equipment) and balance-of-payments restrictions. The sluggishness of those imports means that domestic firms are upgrading their processes and products only marginally. Importing relatively few capital goods implies that LDC firms are forgoing the potential technological learning and adaptive innovation associated with a greater volume of imports of technology embodied in those goods.

Different countries often limit their imports of capital goods to develop the most obvious sectors (a country with mining potential imports mining machines, oil rich countries import oil processing tools, etc...). But, interestingly, when it comes to agriculture and ICT - crucial for all countries, regardless of their other natural resources - the report notes:
As a group LDCs imported relatively little agricultural machinery and ICT capital goods. This indicates, on the one hand, the low level of technological development of those countries’ agriculture and, on the other hand, the still incipient penetration by the recent wave of ICT and ICT-based innovation.

Exports and the role of global value chains
The report suggests that LDC firms can develop their technological capabilities through the market linkages they develop with their downstream customers, including in particular the foreign ones. Integration into global value chains (GVCs) often represents one of the very few options for LDC firms and suppliers to secure access to international markets and innovative technologies, and to learn by exporting.

However, the upgrading process is fraught with difficulties and obstacles, which are particularly great for LDC firms. International value chains are increasingly driven by buyers and downstream lead firms. The latter have the power to set the standards (technical, quality, environmental) that must be met in order to participate in the chain. Chain leaders, however, rarely help producers to upgrade their technological capabilities so that they are able to fulfil those requirements. Barriers to integrate such global value chains are therefore becoming higher.
In most cases LDCs have increased their specialization in relatively basic products at a low stage of processing. Those export patterns indicate that little technological upgrading has taken place recently among LDC firms, irrespective of their participation in GVCs.

Foreign direct investment
It is generally contended that the arrival of transnational corporations leads to technological upgrading of domestic firms through technological spillovers via imitation, competition, training, labour mobility, backward and forward linkages, and exports (which entail exposure to the technology frontier). Those spillover effects have the potential to increase the productivity of other firms.

However, the materialization of the potential positive impacts of FDI on knowledge accumulation in host countries hinges on a large number of conditions, including their structural characteristics, the type of insertion of transnational corporations in host economies, their job-generating impact, and the direct consequence of their entry for domestic firms.

The report notes that foreign direct investments in the LDCs have sped up markedly over the past few years, but as such this is not sufficient to guarantee technology spill-overs to local firms:
There is little evidence of a significant contribution by FDI to technological capability accumulation in LDCs. This is not due to those countries’ insufficient 'opening' to foreign investors, given the policy changes that they have enacted since the 1980s and the substantial growth of FDI penetration since the 1990s. Rather, its limited contribution is due to the type of integration of transnational corporations into host countries’ economies, the sectoral composition of FDI, the priorities of policies enacted by LDCs and the low absorptive capacity of those countries.
Biopact notes that the biofuels and bioenergy potential in many LCDs is large and that part of it may be tapped by foreign companies, which could boost tech transfers via spill-over effects. But in this context, the report issues an interesting warning about what is needed for this to succeed. The lesson, from which parallels to a future biofuels industry can be drawn, comes from the African mining sector:
In African LDCs typically the mineral extraction activities of TNCs are capital-intensive, have little impact on employment, are highly concentrated geographically, have high import content and result in exports of their output as unprocessed raw materials. Most of those operations are wholly owned by foreign investors (rather than joint ventures) and a large share of their foreign exchange earnings is retained abroad. Those operations tend to operate as enclaves since they are weakly integrated into domestic economies, as they have few forward and backward linkages in host economies.
Currently, some of the main channels for potential knowledge circulation between TNCs and domestic firms are largely absent, namely linkages, joint ventures and labour turnover.

The use of licensing as a channel for accessing the international knowledge pool (through imports of disembodied technology) is directly related to the income level and technological sophistication of economies. Licensing should therefore be less relevant to LDCs than to other developing countries as a channel for foreign technology diffusion

In conclusion, the report notes that learning associated with international transactions does not occur automatically. Consequently, measures to increase the volume of exports or FDI inflows do not guarantee any increase in learning.
Instead, the learning intensity of such transactions is variable, and the key policy issue is to raise that "learning intensity" – that is, to increase the magnitude of knowledge and skill acquired “per unit” of exports, imports or inward FDI. It is on the learning potential of international linkages that policy – at national, regional and international levels – should focus.

2. National policies to promote technological learning and innovation
The report notes that in current development and poverty alleviation discourses, the need for improved technology and science policies receives little attention.

Partly to blame are the so-called 'structural adjustment programmes', which have been particularly intensely implemented within the LDCs. These programmes, pushed by the World Bank and the IMF and mainly aimed at economic liberalisation, show great omissions of technology issues.

However, the UNCTAD notes that this presents a paradox, because these very institutions have always stressed that promoting technological change is as a key source of economic growth: technological progress is at the heart of efforts by the OECD to promote growth in its own member countries.
The broad revival of interest in policies to promote technological change, partly inspired by the East Asian success, is indicative of wide dissatisfaction with current policies. There is a desire to find a new, post-Washington Consensus policy model, as well as the intuition that it is in this area – promoting technological change – that it is possible to find more effective policies to promote growth and poverty reduction. If LDCs do not participate in this policy trend they will be increasingly marginalized in the global economy, where competition increasingly depends on knowledge rather than on natural-resource-based static comparative advantage.

Policy suggestions
The UNCTAD gives some suggestions as to how LDCs can embed attention for science and technology into their national development strategies. Laying the foundations of such an integrated policy would consist of the following steps.

  1. Technological catch-up in LDCs will require the co-evolution of improvement in physical infrastructure, human capital and financial systems, together with improved technological capabilities within enterprises and more effective knowledge systems supporting the supply of knowledge and linkages between creators and users of knowledge.
  2. It will also require a pro-growth macroeconomic framework which can ensure adequate resources for sustained technological learning and innovation, as well as a pro-investment climate which stimulates demand for investment.
  3. Improving physical infrastructure, human capital and financial systems is absolutely vital because many LDCs are right at the start of the catch-up process and have major deficiencies in each of those areas. Without an improvement in these foundations for development, it is difficult to see how technological change will occur.

These are the foundations. But the report goes further and has identified six major strategic priorities for LDCs at the start and the early stages of catch-up:
  1. Increasing agricultural productivity in basic staples, in particular by promoting a new Green Revolution
  2. Promoting the formation and growth of domestic business firms
  3. Increasing the absorptive capacity of domestic knowledge systems
  4. Leveraging more learning from international trade and FDI
  5. Fostering diversification through agricultural growth linkages and natural resource-based production clusters (the bioenergy sector can become such a web of diversification)
  6. Upgrading export activities
The UNCTAD thinks a systems-approach is needed to get these priorities on track, not so much a simple linear model of innovation processes. This requires measures which go beyond those that are traditionally identified with S&T policies, particularly supporting scientific research, expanding universities and setting up research institutes.

Such a systematic approach should include:
  • measures to stimulate the supply side of technology development, but also measures to stimulate the demand for technology development
  • measures to lubricate the links between supply and demand, and measures that address framework conditions
  • these measures should influence all the interrelated factors that affect the ability and propensity of enterprises (both firms and farms) to innovate.

The relevant STI policy tools thus include explicit measures which are concerned with S&T human resource development, public S&T infrastructure and policies to affect technology imports.

But beyond this they include a number of implicit measures, such as public physical infrastructure investment; financial and fiscal policies which increase the incentive for investment and innovation; trade policy and competition policy; public enterprises and public procurement; and regulation, notably in relation to intellectual property rights and other innovation incentive mechanisms.

Most importantly:
There is above all a need for improved coherence between macro- and microeconomic objectives. Excessive pursuit of macroeconomic stabilization objectives can undermine the development of conditions necessary for productive investment and innovation. In the past the instruments of STI policy were articulated through an oldstyle industrial policy which involved protection and subsidies for selected sectors. Those instruments should now be articulated within the framework of a new industrial policy which is based on a mixed, market-based model, with private entrepreneurship and government working closely together in order to create strategic complementarities between public and private sector investment.

Role of the State
Within such a new industrial policy, the State should act as a facilitator of learning and entrepreneurial experimentation. The private sector is the main agent of change. However, the relevant institutions and cost structures are not given but need to be discovered. The State should facilitate this process and play a catalytic role in stimulating market forces; and it should perform a coordinating function based on an agreed strategic vision of country-level priorities for technological development.

There are significant private sector risks in undertaking pioneer investments which involve setting up activities that are new to a country. Moreover, there are significant spillover effects which are beneficial to the country but which the private entrepreneur cannot capture. This implies the need for a partnership and synergies with the public sector to socialize risks and promote positive externalities. The State stimulates and coordinates private investment through market-based incentives aimed at reducing risks and sharing benefits.

STI governance

The major trend of the past few years in development thinking stressed 'good governance' and ways to strengthen State capacities. And indeed, it could be argued that the suggested STI policies will never work in LDCs because State capacities there are simply too weak.

UNCTAD notes however that policies and projects introduced during the 'good governance' years, were just as complex as those aimed at promoting STI:
There are major deficiencies in governmental capacity in LDCs, particularly with regard to long-neglected STI issues. However, the problem of State capacity needs to be seen in dynamic rather than static terms. Just as firms learn over time by doing, Governments also learn by doing. The key to developing State capacity in relation to STI issues is therefore to develop such capacity through policy practice.
According to the report, States need some room to experiment with these STI policies, in line with countries’ development objectives. For successful catch-up experiences it is important that the Government does not act as an omniscient central planner. Instead, success and good governance for creating technology learning environments will depend on:

  • the State formulating and implementing policy through a network of institutions which link government to business.
  • the establishment of intermediary government–business institutions
  • policies should never favour or protect special interest groups, or support particular firms (“cronyism”)
  • the State apparatus itself should undergo the necessary organizational restructuring because technological learning and innovation is naturally cross-sectoral. Merely establishing Science & Technology Ministries won't suffice and can even lead to an overemphasis on science and an underemphasis on innovation at the enterprise level. The appropriate organizational structure for integrating technological development issues into policy processes needs careful consideration.

3. Intellectual property rights
The UNCTAD report contains an interesting chapter on how intellectual property rights (IPRs) can contribute to technology learning. But for this lever to bear fruit, players have to go through several complex stages. For the time being, IPRs won't play that much of a role in the least developed countries:
IPRs are unlikely to play a significant role in promoting local learning and innovation in the initiation stage, the point in the catch-up process where most LDCs are now located. Moreover, technology transfer through licensing is unlikely to provide great benefits for LDCs. Even if under certain conditions IPRs were to positively encourage technology transfer through licensing, LDCs are unlikely to become significant recipients of licensed technology. The low technical capacity of local enterprises constrains their ability to license in technology, while the low GDP per capita in LDCs is not likely to stimulate potential transferors to engage in such arrangements. IPRs, particularly patents, promote innovation only where profitable markets exist and where firms possess the required capital, human resources and managerial capabilities.
4. International migration of skilled labor
For biofuels and bioenergy to benefit local communities and LDC economies, it is crucial that local expertise is used, or that it is created. If scientists, engineers and management are recruited from abroad, chances are that knowledge and technology capabilities will not spill-over to local actors. On the other hand, a brain drain of biotechnologists, agronomists and engineers from LDCs to developed countries, jeapordizes the establishment of science and technology-based bioeconomies.

The UNCTAD report sees the importance of these movements of 'brain drain' and 'brain gain', and their impacts on the knowledge stock of LDCs.

International migration of skilled persons in principle contributes to building the recipient countries’ skills endowment, while entailing a loss in the origin country’s stock of human capital. The most important issue for countries’ long-term development is the net effect of migratory flows. LDCs have a low skill endowment. Therefore, the international migration of skilled persons from and to those countries can have a strong impact on their human capital stock.
The human capital endowment of an economy is a fundamental determinant of its long-term growth performance, its absorptive capacity and its performance in technological learning. It is also a requirement for the effective working of trade, FDI, licensing and other channels as means of technology diffusion. In LDCs the major migratory flow of qualified professionals is that of skilled people settling mainly in developed countries.
The costs of emigration can in principle be (partly) offset by other developments, including higher enrolment in tertiary education, an increase in remittances and the eventual brain gain through the return of emigrants, brain circulation by means of temporary return, and creation of business and knowledge linkages between emigrants and home countries (leading to technology flows, investment, etc.). These increased flows in knowledge, investment and trade are more likely to occur in the case of industries producing tradable products than those producing non-tradables.

But the UNCTAD warns that these positive effects of 'brain circulation' are not likely to occur in LDCs, for clear reasons:
Many of those positive effects, however, occur only once countries have reached a certain level of development and income growth. That implies the existence of considerably improved economic conditions in home countries, which provide incentives for temporary or permanent return of emigrants and for the establishment of stronger knowledge and economic flows. Moreover, an improved domestic environment entails lower out-migration pressure. That situation is obviously not the one prevailing in LDCs. Those countries are therefore the most likely to suffer from brain drain, rather than benefiting from brain circulation, brain gain or the other positive effects possibly associated with emigration.

For the LCDs, three main features of skilled emigration have been observed since the 1990s:
  • Emigration rates were generally high among tertiary-educated persons by international standards, with an unweighted mean for LDCs of 21 per cent in 2000 (much higher than for all all lower-middle-income and low-income countries)
  • There was considerable variation in the total rates of emigration among tertiary–educated persons by and within country groups among the LDCs. They were close to 25 per cent (unweighted) in the island LDCs, West Africa and East Africa, and lowest in the generally more populated Asian LDCs (6 per cent), with Central Africa falling in between (14 per cent).
  • Out-migration among tertiary-educated persons from LDCs to OECD countries has accelerated over the last 15 years. The unweighted mean emigration rate rose from 16 per cent in 1990 to 21 per cent 10 years later. That intensification of emigration among skilled persons was much stronger than among all emigrants from LDCs.
The top-educated persons (with more than basic tertiary training) emigrate in far greater numbers than for the tertiary-educated population as a whole. It is estimated that as many as 30–50 per cent of the developing world’s population trained in science and technology (including those from LDCs) live in the developed world. This has a direct impact on those countries’ skills base, their absorptive capacity and their technological catch-up possibilities.

The UNCTAD formulates policy recommendations on how best to deal with these migration flows, in such a way that they limit the impact on the knowledge-base of the LDCs.

5. 'Knowledge aid'
The classic saying goes that it's better to teach a man how to fish, than to throw him a fish whenever he's hungry. Likewise, the justification for foreign aid is often articulated only on the basis of pressing economic, social and political objectives (e.g. food aid, with less attention for teaching people how to grow more food).

So more fundamentally, aid can help to build up the knowledge resources and knowledge systems of LDCs. This is particularly important for the LDCs because their level of technological development is so low and technological learning through international market linkages is currently weak.
Aid can play an important role in developing a minimum threshold level of competences and learning capacities which will enable LDCs to rectify that situation. Indeed, the provision of more knowledge aid, if directed towards the right areas and appropriate modalities, may be the key to aid effectiveness.
The UNCTAD defines 'knowledge aid' as aid that supports knowledge accumulation within partner countries.

Knowledge aid can be provided in two ways:
  • either through supplier executed services, where, for example, donors provide consultants who advise on, or design and develop, projects, programmes and strategies
  • or through strengthening the knowledge resources and knowledge systems of the partners themselves, a process which may be called 'partner learning'
In either case, those activities might be designed to increase knowledge resources for institutional, regulatory and policy development, or to support the development of productive capacities through technological learning.

Aid to build STI capacities
Aid to build science, technology and innovation capacity is a particular form of knowledge aid and should support:
  • the development of productive capacities through building up domestic knowledge resources and domestic knowledge systems
  • the development of governmental capacities to design and implement STI policies
The report estimates that such aid to STI has been a low priority amongst donors, when it comes to funding efforts in LDCs: reported aid disbursements for research and the development of advanced and/or specific human skills (including agricultural education and extension), constituted only 3 per cent of total aid disbursements during the period 2003–2005, with 90 per cent allocated to building human skills, particularly higher education.

A brief overview of the numbers for 2003-2005 for all LDCs combined show that knowledge aid has captured a marginal share of the overall aid budgets:
  • aid for agricultural research equal to only $22 million per year
  • only $62 million for vocational training
  • a meagre $12 million per year for agricultural education and training
  • $9 million per year for agricultural extension
  • development of advanced technical and managerial skills received only $18 million per year
  • disbursements for what is described in the reporting system as “technological research anddevelopment” – which covers industrial standards, quality management, metrology, testing, accreditation and certification – received only $5 million per year during 2003–2005.
Clearly, STI has not been a priority for donors. But most startlingly, for the one STI area that is
emphasized in the routine poverty alleviation programmes, namely agricultural research and extension, aid commitments to LDCs have actually fallen rather than risen since the late 1990s. Compare this with the annual technical cooperation commitments to improve 'governance' (in the widest sense). In 2003–2005 these were $1.3 billion. Agricultural extension received $12 million...

As the UNCTAD report simply notes: it will be impossible to ensure 'good governance' if States don't have a productive and viable economy to build on and to draw incomes from.

The authors make some policy recommendations that could help deal with the problem of the lack of aid going to knowledge, technology and science. The recommendations are offered per sector:

Agricultural R&D
Although agriculture is the major livelihood in the LDCs, the current agricultural research intensity – expenditure on agricultural research as a share of agricultural GDP – is only 0.47 per cent. That compares with 1.7 per cent in other developing countries. The LDC agricultural research intensity is far below the 1.5 to 2 per cent recommended by some international agencies. Moreover, the low level reflects a serious decline in the agricultural research intensity in the LDCs since the late 1980s, when the figure stood at 1.2 per cent.

Non-agricultural technological learning and innovation
Agriculture is still the major source of employment and livelihood in the LDCs, but the employment transition which they are undergoing means that this position is not tenable if development partners wish to reduce poverty sustainably and substantially.

One important recommendation for the non-agricultural sector is that donor-supported physical infrastructure projects should all include components use the construction process to develop domestic design and engineering capabilities.

In addition, there is a need for public support for enterprise-based technological learning, which should be in the form of grants or soft loans for investment in the relevant types of knowledge assets. Such support should be undertaken as a costsharing public–private partnership for creating public goods, particularly in relation to the development of design and engineering skill through enterprise-based practice. These STI capacity-building activities could be particularly useful if they are linked to value chain development schemes, FDI linkage development and the facilitation of South–South cooperation.

“Aid for Trade”
There is widespread support for scaling up this kind of aid amongst LDCs. Experiences show that technological learning and innovation are central to successful cases of trade development. However, technological learning and innovation have been conspicuously absent from past efforts to provide Aid for Trade. They are neglected within current attempts to define the scope of the subject.

It is recommended that aid for technological learning and innovation for tradable sectors be a key component of Aid for Trade, and LDC development partners should adopt best practices which are evident from successful cases of trade development, such as palm oil in Malaysia and Nile perch in Uganda. Note that environmentalists have condemned precisely these two examples as cases of how trade development can destroy the most basic foundations of sustainability.

By way of conclusion, we can say that many insights and recommendations from the UNCTAD report can be readily applied to the development of strategies with which LDCs can approach the opportunities of the emerging bio-economy. Such an new, green economy holds the potential to boost local development and allows poor countries to leapfrog beyond the fossil fuel era. But in order to transit towards this sustainable, biobased economy, investments in knowledge and technology are urgently needed. The sector is highly competitive, and mere comparative advantages (agro-ecological resources) won't suffice for these countries to participate in it in a meaningful way.

Biopact readers know that we have often stressed the need for appropriate tech transfer strategies in the biofuels sector. Brazil has gone some way in this respect, and has forged South-South collaboration efforts by linking its own expert agricultural research organisations with those of poor countries. There's also France's bioenergy knowledge-exchange initiative, which couples students from the country to collegues in developing countries. But overall, these initiatives remain marginal. A much more urgent and broader effort is needed to create robust ways for the North to help the South strengthen its capacities to boost investments in STI.

For example, policies in LDCs must ensure that when foreign companies from highly developed countries enter the sector in poor countries, technology and knowledge transfers as well as opportunities for joint-ventures occur that allow local players to acquire expertise and technological capabilities. Else, biofuels may become just another 'resource grab'.

On the other hand, States need to craft policies and infrastructures that make it possible for local players to 'absorb' knowledge (it's a two-way process). Finally, as we have stressed earlier, national and international policy frameworks and investments in STI in developing countries are crucial for the bioenergy sector to flourish in a genuinely sustainable way.

Professor John Mathews, an expert on STI and knowledge-driven industrial development strategies has writen in-depth analyses on the subject as it relates to the biofuels sector in developing countries (for an example, see 'A Biofuels Manifesto').

On an ending note, consider this. Those of us who understand the complex and multi-dimensional concept of 'sustainable development' will admit that such an understanding requires study, exchanges between thinkers, scientists and policy makers. Don't we all want the people in the South - who are often merely the passive subjects of such concepts - to acquire the capacities needed to develop their own notions of sustainability and the skills to implement them?

UNCTAD: The Least Developed Countries Report, 2007. Knowledge, technical learning and innovation for development [*.pdf, full report] - July 2007.

UNCTAD: The Least Developed Countries Report, 2007 [*.pdf, summary] - July 19, 2007.

UNCTAD: The Least Developed Countries Report, 2007, Highlights - July 19, 2007.

John Mathews, A Biofuels Manifesto: Why Biofuels Industry Creation Should be 'Priority Number One' for the World Bank and for Developing Countries [*.pdf] - September 2006.

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ScottishPower announces UK's largest energy crop plan

ScottishPower announced it is looking to contract Scottish farmers to produce 250,000 tonnes of energy crops to be burned at Scotland’s two coal fired power stations, Cockenzie and Longannet. The energy crop will displace coal burned in the stations.

Energy crops provide carbon neutral fuel as the CO2 that is released when the crop is burned is equal to the CO2 that is captured as the plant is grown. ScottishPower already burn carbon neutral biomass such as wood at the coal fired power stations as part of their renewable programme.

The project will use about 12% of Scotland’s total agricultural land – roughly 35,000 hectares - with 5 % of the company’s coal requirement displaced by energy crops by 2013.

The energy crops will be a mix of crop types including cereal crops and short rotation coppice (SRC) such as willow. ScottishPower, part of the Iberdrola group, plans to maximize the use of set aside land, and minimize the effect on land used for food crops.

SRC consists of densely planted, high-yielding varieties of either willow or poplar, harvested on a 2 to 5 year cycle, although commonly every 3 years. SRC is a woody, perennial crop, the rootstock or stools remaining in the ground after harvest with new shoots emerging the following spring.

A plantation could be viable for up to 30 years before re-planting becomes necessary, although this depends on the productivity of the stools. In the UK, yields achievable from willow SRC at first harvest are expected to be in the range 7 to 12 oven dry tonnes per hectare per year depending on site and efficiency of establishment. New varieties are expected to greatly increase yields:
:: :: :: :: :: :: :: :: :: ::

ScottishPower is already the UK’s largest generator and developer and operator of on-shore wind energy and this is the latest strategic initiative toward reduced carbon emissions.

Frank Mitchell, ScottishPower’s Generation Director, said: “This is a significant step in our renewable energy programme ultimately displacing 300,000 tonnes of carbon emissions per year. However, it is also an excellent opportunity for farmers with ScottishPower offering support for the Scottish agricultural community”.

In the UK, support for renewables is provided through the Renewables Obligation (RO) that requires suppliers to source 10% of their electricity from renewable sources by 2010, rising to 15.4% by 2015.

The UK Government announced new support for biomass in March 2006 under the revised Climate Change Programme and in May of the same year the Scottish Executive pledged funding of £20 million for biomass, marine, hydrogen and fuel cell projects and microrenewables.

More recently, the UK's Department for Environment, Food and Rural Affairs, the Department of Trade and Industry and the Department of Transport released their joint Biomass Strategy for the UK, which shows considerable potential for locally produced biofuels. However, it also considers imports (earlier post).

Picture: short rotation willow coppice. Credit: Defra Energy Crops.

ScottishPower: ScottishPower Announces UK's Largest Energy Crop Plan - July 19, 2007.

U.K.'s Forestry Research service: Information about short rotation coppice for growers, researchers and the bio-energy industry.

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First conference dedicated to biomass co-firing held in Budapest ends

The first Conference of the European Biomass Co-firing Network was held in Budapest from the 2nd to the 4th July. Over 60 European experts gathered to discuss the prospects for co-firing and future technological advances, including recommendations for future research, defining the research fields and policies that need to be strengthened in order to extend the application of the biomass co-firing technologies in Europe. This has been the first-ever specific event entirely dedicated to biomass co-firing.
Biomass co-firing is the most cost-effective means of producing energy from biomass as it can be added to an existing coal-fired power plant with only small modifications of the entire system. - Conference chairman Dr Schories from TTZ Bremerhaven in Germany.
Indeed, co-firing is a near term, low-cost option for efficiently and cleanly converting biomass to electricity by adding biomass as a partial substitute fuel in high-efficiency coal boilers. It has been demonstrated, tested, and proved in all boiler types commonly used by electric utilities with little or no loss in total boiler efficiency. Co-firing offers a stepping stone towards full biomass-fired power plants.

According to the global database maintained by the IEA's Bioenergy Task 32 on Biomass Combustion and Cofiring, over 150 initiatives world-wide currently cofire biomass in boilers that use different types of coal as the main fuel. The biomass is obtained either from dedicated energy crops, or from (internationally traded) agricultural and forestry residues. In 2005, the EU witnessed a 16% growth of electricity produced from biomass (earlier post).

During three days, the conference in Budapest enabled the discussion and exchange of experiences among researchers, policy makers and end users on the latest advances, the barriers to overcome in the next years and the role this renewable energy it has to play in the future.

The Conference has been prepared in the framework of NETBIOCOF, (Integrated European Network for Biomass Co-firing), a coordination action funded under the Sixth Framework Program for Research and Development of the European Commission. For two years it has gathered most of the important universities, research institutes and European associations in the field of biomass co-firing.

The consortium has studied the current status of biomass co-firing in Europe and proposes measures for the wider implementation of this technology for renewable energy in the years to come. The partners have studied the situation from the technical, legal, economical and social point of view to provide answers to all the relevant groups of actors involved in the decision making process:
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Moreover, the project has included in its studies not only the EU-15, but also the Central and Eastern European Countries, which present a huge potential for future scientific cooperation and joint trade opportunities. Facing this scenario, NETBIOCOF gathers experts from 19 countries with long experience in every stage in this field: from biomass production, supply and preparation to the different co-firing technologies.

The work in these two years has enabled the establishment of a biomass co-firing research co-ordination network that will promote European co-operation between research organisations devoted to biomass co-firing, promoting the uptake of innovative technologies to expand the use of biomass co-firing in new and existing power plants with emphasis towards the New Member States.

The network plans its 2nd conference in 2008 with a proactive outreach to end-users, such as utilities and potential investors to promote the broader implementation of biomass co-firing.

NETBIOCOF has also a strong component on dissemination of the latest findings in co-firing and information exchange among the partners and the scientific community. The project launched a public on-line database on its web page where the reports produced as a result of each task and other relevant information are uploaded and made available to the general public. This database has proven successful; showing a high number of downloads in the documents available so far.

Image: A view inside a step grate boiler. Credit: IEA Bioenergy Task 32.

Informationsdienst Wissenschaft: First-ever biomass-cofiring dedicated conference held at Budapest - July 19, 2007.

NETBIOCOF: Integrated European Network for Biomass Co-firing.

IEA Bioenergy Task 32: Biomass Combustion and Co-firing.

IEA Bioenergy Task 32: Biomass Combustion and Co-firing: An Overview [*.pdf] - s.d.

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Dow and Crystalsev to make polyethylene from sugar cane in Brazil

The Dow Chemical Company, the world's largest producer of polyethylene, and Crystalsev, one of Brazil's largest ethanol players have announced plans for a world-scale facility to manufacture polyethylene from sugar cane. The news comes after Braskem, a leading Brazilian chemical company, recently succeeded in making the ubiquitous product from cane based ethanol (earlier post).

Polyethylene is the most widely used of all plastics and can be found in all kinds of everyday products, from food packaging, milk jugs and plastic containers to pipes and liners. The bioeconomy is based on making plant based alternatives to the pertochemical plastics and polymers, in efficient biorefineries. This new, green economy is making steady progress: we now have a bio-based alternative most of the commonly used plastics (more here). By using renewable resources for the production of biomaterials, both the carbon footprint and the environmental impact of the products are significantly reduced. With record oil prices, finding a crop-based substitute becomes even more attractive.

Under the terms of a memorandum of understanding agreed by Dow and Crystalsev, the two companies will form a joint venture in Brazil to design and build the first integrated facility of its scale in the world. It is expected to start production in 2011 and will have a capacity of 350,000 metric tons. The venture will combine Dow's leading position in polyethylene with Crystalsev's know-how and experience in ethanol to meet the needs of Dow's customers in Brazil and what will likely be international interest.

The new facility will use ethanol derived from sugar cane, an annually renewable resource, to produce ethylene - the raw material required to make polyethylene, the world's most widely-used plastic. Ethylene is traditionally produced using either naphtha or natural gas liquids, both of which are petroleum products. It is estimated that the new process will produce significantly less CO2 compared to the traditional polyethylene manufacturing process.

The companies have already begun conducting a feasibility study to assess various aspects of the project, including engineering design, location, infrastructure needs, supply chain logistics, energy and economics. The study, which is expected to take one year, will also look at the possibility of receiving approval for the project and the process as a Clean Development Mechanism (CDM). The CDM was developed by the United Nations to help companies manage their carbon credits from emerging market projects:
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The areas being considered as potential sites for the new facility are currently being used for low-density cattle grazing and are not near any rain forests. Both companies have underscored their commitment to ensuring that the plant is located in a sustainable environment.

The new facility will use Dow's proprietary Solution technology to manufacture DOWLEXT polyethylene resins - the world's leading linear low density polyethylene, which combines toughness and puncture resistance with high performance and processability. The material offers significant advantages in a range of different applications, including pipes, films, membranes, and food and specialty packaging.

At a molecular level, the joint venture's product will be identical to the DOWLEXT polyethylene resins manufactured at other Dow facilities. The advantage of this material versus most renewable resource-based plastics is that customers will be using a drop-in replacement made with a renewable resource not a different polymer altogether. Also, like the traditional PE product, the sugar cane-based polyethylene would be fully recyclable using existing infrastructure.

Dow has operated in Brazil since 1956 when it established a Latin America headquarters in São Paulo. As Dow has expanded, so has its presence in Brazil with 21 locations, including manufacturing plants, business centers and research and development facilities. Dow has 2,100 employees in Brazil.

Crystalsev is a 100% Brazilian group that commercializes products made from sugar cane through three areas: providing of services to mills; commercialization of sugar and alcohol; and trading - purchase, resale and management of assets. The Group produces 1.8 million tons of sugar, which corresponds to 8% of all sugar manufactured in Brazil, and employs 30,000 people. Crystalsev operates in several regions in the country through 13 companies that, together, form the second major producer of sugar cane in Brazil. Its management system is used as a model in the sugar & alcohol industry.

Sugarcane remains key and is only gradually beginning to reveal its potential to yield products other than liquid biofuels. The humble crop is a goldmine of potential green chemistry products, ranging from bioplastics, detergents, tinctures, drugs, glues, gels, biopolymers and a whole range of molecules and platform chemicals. Major science organisations and companies are now investing in the production of bioplastics from sugarcane (amongst them the University of Queensland, the Korea Advanced Institute of Science and Technology and Metabolix.)

The good thing is that the crop thrives in developing countries, who know they now have a resource in hand that allows them to leapfrog beyond the petroleum era. In the future, they will rely on highly integrated biorefineries that convert biomass into a wealth of fuels, green chemicals and energy. A glimpse of this future in developing countries already comes from the tiny island state of Réunion, where scarce research resources are being invested in sugarcane based green chemistry and biorefineries (earlier post).


Dow Chemical: Dow and Crystalsev Announce Plans to Make Polyethylene from Sugar Cane in Brazil - July 19, 2007.

Biopact: The bioeconomy at work: Braskem develops polyethylene from sugarcane ethanol - June 25, 2007.

Biopact: Notes on biopolymers in the Global South - March 11, 2007

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Gevo receives funding from Virgin Fuels and Khosla Ventures to make biobutanol

Pasadena-based Gevo, a California Institute of Technology spinoff that will produce advanced biofuels, including butanol, to help the world end its addiction to oil, announced today that Virgin Fuels has joined founding investor Khosla Ventures in a Series B venture round and will join the Gevo Board. In addition, Gevo announced that Patrick Gruber has joined the company as CEO. Gruber is a 20-year veteran of the bioscience industry and companies including Cargill and NatureWorks.

Gevo intends to produce biobutanol from different types of biomass, including sugar cane, corn byproducts and grasses. Its bioprocessing technology uses fermentation to convert plants to alcohol-based fuels. Initially, the company intends to make butanol variants for automobiles, trucks and jets using the same basic technologies. It will explore next-generation biofuels as well, such as bio-based isobutanol.

Most money invested in biofuels has been targeted at first and second-generation ethanol. But butanol, which today is often used as a paint thinner, can be produced as a fuel with clear advantages. Butanol has a higher energy density than ethanol, but it does not absorb water, which means it can't be effectively distributed through pipelines. However, there are still technical hurdles to be overcome for biobutanol production to be scaled up. (More on biobutanol here, here and here).
Gevo aims to represent not only a step toward true energy diversity for the country, but yet another cost-effective alternative to fossil fuels. Major credit should be given to the founders of Gevo and the Caltech team for their groundbreaking work with biological systems toward new developments in alternative energy. - Vinod Khosla, managing partner of Khosla Ventures.
Khosla recently told biotechnology industry representatives that he believes biofuels could someday replace 100% of fossil fuels. With Khosla Ventures the investor is funding a range of bioenergy and green chemistry startups, including in a vast project in Brazil (previous post).

Sir Richard Branson formed Virgin Fuels last year to make investments in renewable energy companies, in part to produce fuels for his fleet of airplanes (more here and here).
Mitigating the effects of climate change will require incredible efforts around the globe. Through Virgin Fuels, we look for investments in companies - such as Gevo, Inc. - that will help to significantly reduce net greenhouse gas emissions, improve management of scarce resources, and have a long term positive impact on our society. - Richard Branson, Virgin Fuels
Gevo has exclusively licensed technology in the field of biofuels developed in the labs of Frances Arnold at Caltech and other prominent labs:
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Gevo will take the best of the scientific world, combined with top business practices, to succeed in replacing existing technologies with new, more environmentally sound alternatives. I am excited to have the chance to make a difference through our institution's work with Gevo. - Frances Arnold, company founder and professor of chemical engineering and biochemistry at Caltech.
Gruber joins Gevo from Outlast Technologies, where he served as President and CEO. Prior to this, he was a founder and CTO of Cargill Dow/NatureWorks LLC, the first company to develop and successfully commercialize the renewable resource-based PLA (Polylactic Acid) to replace petrochemical plastics. While at Cargill, Gruber held a number of executive positions that included Director of Technology Development for Cargill’s bio-products areas and Technical Director of Cargill’s BioScience division. He was the Leader and later the General Manager of Cargill’s Renewable Bioplastics project.
Gevo is at the forefront of turning biomass into products like butanol, making this break-through process a commercial and affordable reality. Gevo is well-positioned to become the world’s leading advanced biofuels company, and I’m very pleased to be a part of it. - Patrick Gruber, CEO Gevo Inc.
Founded in 2005, Gevo, Inc. is working on new methods for the production of alternative fuels. Gevo is based upon technology developed at the California Institute of Technology by Gevo founders Frances Arnold, Matthew Peters, and Peter Meinhold and is funded by Khosla Ventures and Virgin Fuels. Gevo is based in Pasadena, California.

Khosla Ventures offers venture assistance, strategic advice and capital to entrepreneurs. The firm helps entrepreneurs extend the potential of the Internet to new markets such as mobile and supports breakthrough scientific work such as bio refineries. Vinod Khosla founded the firm in 2004. Vinod has been labeled the #1 VC by Forbes and Fortune recently labeled him as one of the nation's most influential ethanol advocates, noting "there are venture capitalists, and then there's Vinod Khosla." The firm's capital comes entirely from its own partners and a portion of all profits are donated to charitable causes, with an emphasis on micro-finance, education, and the environment. Khosla Ventures is based in Menlo Park, California.

Virgin Fuels has been established to invest up to $400mn in companies in the renewable energy and resource efficiency sectors in the US and Europe. Virgin Fuels is a sector-focused, multi-stage investment firm investing primarily in expansion/growth capital opportunities with an allocation to venture capital.

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Report: the future of biofuels is not in corn, better alternatives available

A new report released today by Food & Water Watch, the Network for New Energy Choices, and the Vermont Law School Institute for Energy and the Environment shows that of all possible biofuels, corn based ethanol scores worst when it comes to environmental impacts, consumer benefits, and greenhouse gas emission reductions. The corn ethanol refinery industry, the beneficiary of new renewable fuel targets in the proposed energy legislation as well as proposed loan guarantee subsidies in America's 2007 Farm Bill, will not significantly offset U.S. fossil fuel consumption without unacceptable environmental and economic consequences, the report finds.

The findings do not come as a surprise to Biopact and other energy experts (such as Claude Mandil or Fatih Birol from the IEA). American consumers should know that there is a sound alternative to the subsidised 'lobby fuels' they are now forced to pay for. They could import fuels that do benefit the environment, have a positive energy balance, reduce greenhouse gas emissions, are far less costly and that may benefit poor countries in the developing world. Ethanol made from sugarcane would be an example (earlier post), biofuels made from cassava (more here) or sweet sorghum another. But these good biofuels are currently blocked out from the U.S. consumer market because of a $54 cent per gallon import tariff, put in place to protect corn ethanol, which costs 76% more to make than sugarcane ethanol.

The European Union has recently admitted that imported biofuels are much better for all of us. Trade chief Peter Mandelson has said biofuel subsidies for farmers in the wealthy West can no longer be defended (here). And Sweden has even become a staunch advocate of a 'biopact' of sorts, explicitly fighting for trade distortions to be removed (earlier post). It is time the U.S. follows the example.

Food & Water Watch Executive Director Wenonah Hauter says that the new Farm Bill which supports corn ethanol in the U.S. benefits only a specific group of people: "Rural communities won't benefit from the Farm Bill becoming a fuel bill. In the long run, family farmers and the environment will be losers, while agribusiness, whose political contributions are fueling the ethanol frenzy, will become the winners".
Rising oil prices, energy security, and global warming concerns have led to today's 'go yellow' hype over corn ethanol. But all biofuels are not equal. Expansion of the corn ethanol industry will lead to more water and air pollution and soil erosion of America's farm belt, while failing to significantly offset fossil fuel use or combat global warming. - Scott Cullen, Senior Policy Advisor for the Network for New Energy Choices.
The report, The Rush to Ethanol: Not all BioFuels are Equal [*.pdf], is a comprehensive review of the literature on the environmental and economic implications of pinning America's hopes on corn ethanol to reduce dependency on fossil fuels. Report findings include the following:
  • Not all biofuels are equal. Corn - now used to produce 95 percent of U.S. ethanol and the only commercially viable ethanol feedstock prepared to capitalize on refinery subsidies in the Farm Bill - is the least sustainable biofuel feedstock of all raw materials commonly used.
  • The capacity of corn ethanol to offset U.S. fossil fuel use is extremely limited. Dedicating the entire U.S. corn crop to ethanol production would only offset 15 percent of gasoline demand. Conversely, modest increases in auto fuel efficiency standards of even one mile per gallon for all cars and light trucks, such as those passed by the Senate last month could cut petroleum consumption by more than all alternative fuels and replacement fuels combined.
  • Corn ethanol is the wrong biofuel for combating global warming. The most favorable estimates show that corn ethanol could reduce greenhouse gas emissions by 18 percent to 28 percent, while cellulosic ethanol is estimated to offer a reduction of 87 percent compared to gasoline. [Note, first-generation sugarcane ethanol reduces GHGs by 80 to 90 percent]
  • Ethanol is not the solution to revitalizing rural America. While higher commodity prices and cooperatively owned ethanol refineries could be a boon to independent farmers, unregulated ethanol industry growth will further concentrate agribusiness, threatening the livelihood of rural communities.
Michael Dworkin, of the Vermont Law School Institute for Energy and the Environment, says that "as long as we spend more on subsidizing energy suppliers than we do on investments in energy efficiency, we are on a path to pain. We are already subsidizing corn-ethanol with more money than we spend on high-mileage cars or on quality mass-transit. That's good for some companies and some politicians, but it"s bad for our nation and our world."

Both the farm and energy legislation being debated in Congress contain provisions that will set biofuels policy for years to come. While the politicians promise that America will be driving on switchgrass-based ethanol instead of gasoline in the next decade, the majority of the subsidies will go to corn-based ethanol refiners in the near term:
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The groups made recommendations on U.S. biofuels policy including the following proposed reforms to ethanol provisions of the 2007 Farm Bill:
  • Biofuels promotion policies should be tied to a sustainable fuel standard that ensures best management practices of land, water, and soil use, and other measures to reduce impacts on wildlife and natural ecosystems.
  • Any ethanol funding in the U.S. Farm Bill should focus on research and development of cellulosic ethanol. There is sufficient private investment in corn ethanol development and refining already. Because cellulosic ethanol is not ready for market, any subsidies for refining in this year's bill will only lock U.S. ethanol production even more tightly to corn.
  • No coal-fired ethanol refineries should be eligible for federal subsidies. Instead, small scale ethanol refineries should be encouraged to use lignin, a cellulosic byproduct, as fuel.
  • Loan guarantees for refineries should be directed to locally owned facilities that benefit farmers and rural communities. The farm bill should include measures similar to those in place in Minnesota to ensure that subsidies are only provided to refinery operations that are farmer majority-owned.
Biopact welcomes this report, but has some small additional remarks:

(1) of course, energy efficiency and smart conservation are always the single biggest priority whereas policies that stimulate life-style changes are important too (e.g. promoting more public transport, which is far more efficient, or healthy mobility options); biofuels clearly come in at the bottom of a long list of priorities.

But (2) if biofuels are introduced, U.S. consumers should have the right to import fuels that are much better than corn ethanol. They should be allowed to choose biofuels made elsewhere that can be demonstrated to effecively reduce GHGs, and that benefit small, poor farmers and rural communities in the developing world. Unlike corn ethanol, these fuels might be competitive without subsidies. Brazilian ethanol costs 76% less to make than U.S. corn ethanol.

(3) A set of social and environmental sustainability criteria should be introduced, which shows consumers which biofuels have what kind of impacts. This allows them to make informed decisions, that go beyond the non-choice they now face.

(4) For a win-win scenario to materialise - importing good biofuels from the Global South - both subsidies for Big Corn must be removed, and the $54 cent per gallon import tariff on imported ethanol must be scrapped.

(5) Finally, subsidies are not bad in themselves, provided they are temporary and distributed in a fair way. Subsidies can be used to kickstart the establishment of a biofuel distribution infrastructure in the U.S. and to help refiners to invest in production capacity. It is important that such an infrastructure is in place, for imported biofuels to make a chance in the U.S.

However, the subsidies and trade distortions as they exist today to support the corn ethanol industry are both unjust, cost the consumer dearly (both in the U.S. and in corn importing nations), is bad for the environment and for the economy as a whole.

Americans have a choice: they can pick good biofuels, or bad biofuels. Ultimately, they have the political power to decide on the matter. If they want to make the right choice, all they have to do is to vote for the right Congressmen. Some suggestions: Jeb Bush, Richard Lugar or Michael Bloomberg. All have called for the $54 cent import tariff on Brazilian ethanol to be scrapped. On the other hand, the political system in the U.S. is such that even the most rational politicians, once elected, have the tendency to fall prey to the irrational demands of the mighty agribusiness lobby.

The Network for New Energy Choices promotes safe, clean, and environmentally responsible energy solutions. We advocate for energy conservation, energy efficiency and renewable energy as the solutions to our energy crisis and we work to educate the public about the way we produce, distribute and consume energy.

Food & Water Watch is a nonprofit consumer organization that works to ensure clean water and safe food in the United States and around the world. We challenge the corporate control and abuse of our food and water resources by empowering people to take action and by transforming the public consciousness about what we eat and drink.

The Vermont Law School Institute for Energy and the Environment distributes scholarly, technical and practical publications; provides forums and conferences for professional education and issue development; and serves as a center for graduate research on energy issues, with an environmental awareness.

New Energy Choices: The Rush to Ethanol: Not All Biofuels are Equal [*.pdf] - July 2007.

Eurekalert: The future of biofuels is not in corn - New, comprehensive analysis shows how ethanol is being oversold - July 19, 2007.

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Wednesday, July 18, 2007

Scientist skeptical of algae-to-biofuels potential - interview

Several recent developments have shed doubt on the viability of algae-to-biofuels concepts. Companies have exaggerated their production capacity, experienced serious failures, switched technologies (greenhouses instead of photobioreactors) or simply decided to give up on the concept all together and started investing in terrestrial energy crops instead. Biopact has always been open minded about algae and their potential as biofuel feedstocks: if the technology works out, then all the better for all of us, but if progress is slow and the concept needs much more research, then we think this should be stated in earnest (previous post).

Laurens Rademakers conducted the following interview with Dr. Krassen Dimitrov, who recently made an in-depth analysis of algae-to-biofuel concepts. The scientist remains a skeptic and outlines why he thinks it won't be easy to utilize the micro-organisms to produce large amounts of renewable fuels. He also sketches his view on more promising sustainable energy concepts, and on the challenges ahead to mitigate climate change. Dr. Dimitrov works at the Australian Institute for Bioengineering and Nanotechnology (AIBN, University of Queensland), where he carries out research at the interface of biotech and nanotech.

Biopact: A while ago, you started writing about biofuels made from algae and you have serious doubts about the potential of this technology. What is the basis of your skepticism?
Dr. Dimitrov: Interest in biofuels rises with clockwork regularity whenever the words 'energy crisis' enter the news. This was the case in the 1980s and all of the options, including microalgae, were considered and heavily researched back then. My own interests in biofuels began in the 90s as I considered them for my next career move.

The reason algae are always quoted as the 'perfect' feedstock is that they can grow extremely fast in optimal conditions. In Mother Nature, however, 'fast' is not always a winner, or else the entire biosphere would have been overtaken by bacteria, which can divide every twenty minutes.

Fast proliferation is usually at the expense of rigour and adaptability. Plants do not grow as quickly as algae, however, they have elaborate mechanisms that allow them to survive and grow in various conditions, so they require less care and lower expenses for cultivation.

Therefore, with algae one has to always consider the trade-off between high growth rates and how expensive it is to maintain conditions that would allow them. The other very important boundary is imposed by thermodynamics - the yield is limited by the amount of energy (sunlight) available – so improving the cultivating conditions follows the law of diminishing returns, as every percentage of yield that one can wrestle out becomes harder and harder as one approaches the theoretical limit.

Biopact: You made things concrete by writing a case study on the technology of a particular algae-to-biofuels company, GreenFuels Technologies. What were your findings?
Dr. Dimitrov: GreenFuel Technologies gained notoriety for their heavy promotion of microalgae cultivation in photobioreactors (PBRs), however, following the considerations above, this is probably the most absurd approach that can be undertaken. While it is expected that PBRs would be best suited to allow maximum growth rates, these are hardly devices that cancel the laws of thermodynamics. In my study I have shown that while it may be theoretically possible to achieve growth rates that are up to ten times higher than the best terrestrial growth rates (in the tropics), the expenses associated with PBRs are hundreds of times larger than terrestrial cultivation, making PBRs economically illogical:
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My GreenFuel study [*.pdf] focused on industrial photosynthetic capture through PBRs, which are the most expensive extreme in the algae sector. Going down the expense curve, there are approaches - such as open ponds - that are less expensive; potentially there may be some optimum, where microalgae cultivation becomes cheap enough yet with sufficient control over external conditions to secure reasonable yields. Open ponds, are still iffy in my opinion, however, they are not as absurd as PBRs.

I presented my study to Jennifer Fonstad, who is currently the chairman of GreenFuel, on March 15th. I have not heard directly back from the company, however, they had circulated a response, that I found lacking, and that can be found here.

Interestingly in their latest releases, GreenFuel avoids using the word 'photobioreactor', and instead prefers 'greenhouses'. I have seen a schematic of their 'third generation design' and it is basically an algal pond with bubbling CO2 that is housed in a greenhouse. From that we can safely assume that the bioreactor is dead, after millions of dollars were spent on it and GreenFuel is now in the business of greenhouse aquaculture. This is not going to work either, eventually they will either have to shut down, or join the other companies that pursue open ponds.

Speaking of how GreenFuel responds to criticism, I just have to mention that the company had threatened a very prominent scientist, with decades of experience in algal research who, when asked about their approach, had expressed a strong skepticism. When I saw the legalistic threat against this legitimate skeptic, it made me truly infuriated. Misusing the legal process to shut up scientific experts can only be described as medieval.

Biopact: So what's your assessment of algae-based biofuels for the longer term? Will the technology ever be viable on a large scale?
Dr. Dimitrov: The answers above partially address this issue. There is no question that microalgae have the potential for high productivity per area, albeit with all associated high cultivation costs. In certain Malthusian scenarios of the future one can envision that land becomes so expensive that humans will need to highly optimize its use, for animal feed, for example. In terms of making significant contribution to energy in the next 20-30 years, though, the answer is a sound 'no', and if somebody wants to bet me on that, I would gladly take that bet.

Biopact: You conclude that there is a real 'hype' surrounding algae biofuels. But the sector is attracting some serious money from venture capitalists. How can investors be so blind to basic physics and biological laws, which you demonstrated to work against algae biofuels?
Dr. Dimitrov: Some venture capitalists can be blind, ignorant and disrespectful towards science, there is no question about that and I have experienced it firsthand. This is, however, only one third of the answer; there are two other factors at play.

First, some venture investors operate on the principle 'find the bigger fool'. When they start a company they don’t think about building a long-lasting business, but rather making it attractive to somebody who is less sophisticated, such as a big bureaucratic corporation, or alternatively, promoting it to the public with the help of corrupt investment bankers. We saw this with the internet bubble a decade ago: established businesses paid crazy money for unproven internet startups; the scandals with investor bankers and analysts shamelessly promoting Internet IPOs. Undoubtedly, there is a current hope that something like that will develop around alternative energy.

Second, investing in fancy alternative energy startups helps some venture capitalists in their fundraising. VCs are paid a fixed percentage of assets, which is irrespective of how well they do. Getting money from limited partners is extremely competitive and it helps their 'dog and pony show' to demonstrate that they are abreast the fashionable green energy wave.

Ultimately money changes hands, but no value is created, so who is left holding the bag? All evidence points that it is the pension funds who will get shafted. Due to demographics in the Western world there is lot of retirement money that need to be invested now; unfortunately with investor managers like these some people will have retirements that are less comfortable that they would have hoped for.

Biopact: So let's consider algae to be out of the race for now. The global energy and fuel crisis, as well as climate change, will have to be tackled in other ways. What do you see as absolute priorities to help solve these intertwined crises, when it comes to our energy consumption?
Dr. Dimitrov: These are two separate issues: for the energy and fuel crisis we have strong market forces in place, while for global climate change we don’t.

Because of that the fuel issue is actually being addressed, here are examples of things that are significant now and that were not fifteen years ago:
  • Tar sands are increasingly becoming exploited for oil production, the volumes have grown a lot, especially in Canada.
  • In some countries, for example in Eastern Europe, people are en masse retrofitting their cars to run on compressed gas. [Note: Pakistan would be another example of a successful CNG program; the country succeeded in converting 1 million cars in under two years time - more here]
  • Bioethanol has grown dramatically. At current oil prices ethanol from sugarcane is very competitive: Brazil has the land and the intent to go much further in that regard.
  • Hybrid cars that consume significantly less fuels are becoming very popular in the Western world.
  • There are many gas-to-liquid and coal-to-liquid projects in various stages of development around the world, in Qatar, China, and Papua New Guinea.
All these things are happening, and will continue for the next 15-20 years. People need to understand that in energy we cannot expect dramatic changes overnight. The sector is so enormously huge, it takes many years to design and build an energy project. We have become used to the fast pace in the IT world, if you write a new software you can distribute it over the Internet and it can become adopted worldwide within months. Nothing like that will happen with fuels.

In terms of climate change the market just doesn’t work and things will get much worse before they get better. Especially since some of these fuel alternatives above that are most cost effective, such as CTL and tar sands, actually have a larger CO2 footprint than conventional oil. There is a great article on that by UC-Berkeley. This CO2 from emerging liquid fuels is in addition to the new cohort of coal-fired power plants that is coming online.

When the world gets to actually doing something concrete and meaningful in regard to global warming, I strongly believe that the only option left would be to scrub CO2 from the air, I will be writing on that in the near future.

Biopact: You are working in the field of nanotechnology and at the interface of nano- and biotech. Do you see any interesting developments in these disciplines that could lead to clean and affordable energy?
Dr. Dimitrov: Yes, as a way of introduction, let me continue from the previous question. One approach that experts agree is a most technologically ready form of non-carbon energy production is Concentrated Solar Power. It is a viable solar conversion approach and we will likely see CSP grow in significance. CSP generates electricity, however that does not address the transportation sector, as the problem with electric cars is still their range. We believe that nanotechnology can play significant role in designing batteries with higher and higher energy densities so that electric cars charged on CSP electricity can become reality. At AIBN we have several projects on using nanotechnology for improved battery performance.

Realistically, I don’t expect that energy densities will ever approach these of liquid hydrocarbons, however, electric cars, in addition to lowering emissions have other benefits:
  1. better efficiencies of electric motors compared to ICE. While a tank of gas will always contain more energy than a battery with a similar volume, less of this energy goes to the wheels in the ICE than in the electric car
  2. less noise pollution: a factor in big cities
  3. better acceleration, electric cars are fun to drive
So, if you are to ask me today, what 'sustainable future' I believe has the best chance of succeeding in the long run, it will be electricity generation via CSP tied to electric cars for transportation. That’s something that could take 25-30 years to materialize in scale, but it has a shot.

Biopact, cc, 2007.

: Tetraselmis Suecica, a large green flagellate with a high lipid level that was tested extensively during the U.S. Aquatic Species Program in the 1980s.

Dimitrov, K. "GreenFuel Technologies, a Case Study for Industrial Photosynthetic Energy Capture" [*.pdf] - Brisbane, Australia, March 2007.

Dimitrov, K. "GreenFuel Technologies: Case Study for Industrial Photosynthetic Capture - Follow-up Discussion" [*.pdf] - Brisbane, Australia, April 2007.

Updates on Dimitrov's analyses of algae biofuels can be found here.

Biopact: An in-depth look at biofuels from algae - January 19, 2007

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Report: community forest enterprises drive sustainable forestry, but stifled by red tape

A new study reports that Community Forest Enterprises (CFEs) represent an invisible investment of US$2.5 billion in management and conservation in some of the planet's richest forest habitats. This is more than governments in tropical regions spend directly on forest conservation. However, these enterprises are being side-lined in the international forestry arena, putting forests at risk the world over. The report was commissioned by the International Tropical Timber Organization (ITTO), an intergovernmental NGO based in Yokohama, Japan. The report was released at a conference on the subject in the capital of Acre, one of eight states that comprise the Brazilian Amazon.

According to the new report titled Community-based Forest Enterprises in Tropical Forest Countries: Status and Potential, the sector employs more than 110 million people worldwide. Such community forest enterprises harvest wood on a sustainable basis, and collect bamboo, rattan, fibers, nuts, resins, medicinal herbs, honey and wood for energy and other natural products to increase local wealth. At the same time, they are having an important impact on conservation of natural resources.
As the fastest growing segment of the global forest sector, community forest enterprises (CFEs) have the potential to lift millions of forest communities out of poverty. But only if they are given secure rights to forest resources and assistance with removing the red tape that impedes progress in almost every tropical region. - Andy White, Coordinator of the Rights and Resources Initiative, and a co-author of the report.
The report concludes that the potential for growth of the CFE sector is 'huge' but will require government action to provide clear rights to forest resources for community enterprises, fewer burdensome taxes, greater flexibility in the way rules are applied, rapid approval of applications submitted to relevant agencies, and an end to indirect subsidies to large-scale producers.

Produced for ITTO by Forest Trends and its partners in a global coalition, the Rights and Resources Initiative, the report bases its conclusions on a review of current research and on 20 case-studies of successful enterprises in Africa, Latin America, Asia and the Pacific Islands:
The report shows that there is a great deal of untapped potential for CFE development in many tropical countries. In the Gambia, for example, 170,000 hectares have been categorized as community forests, but only 13,000 hectares are in the hands of local villagers. In Cameroon, 4 million hectares are designated for communities, yet only 40,000 hectares are approved for legal use. - Manoel Sobral Filho, ITTO Executive Director
A growing force of conservation
Despite the continuing challenges, CFEs are becoming a significant force, particularly in terms of their impact on the economies of poor nations, according to the study. Communities worldwide now own or have the right to manage 11 percent of the world's natural forests, and in developing countries, this share rises to 22 percent:
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The study suggests that CFEs can generate a wide range of goods and services, while reducing poverty among local populations, and fostering biodiversity conservation and investments in social infrastructure, including schools and healthcare facilities. Several of the enterprises studied, including two in Mexico and one in the Gambia, reported returns of 10 to 30 percent from forest-based activities.

"This report uncovers something that only a few experts have recognized so far: if allowed to be real players, community forest enterprises can become very profitable, many of them with return rates above 10 percent," said Sobral. And the growing market for ecosystem services promises even greater returns, he added.

Community enterprises augment local incomes and sustain traditional ways of life by establishing environment-friendly plantations, or by gathering forest products in ways that don't normally register in national production and trade figures. But they represent significant wealth, all the same. Rattan, for instance, is a forest product that is worth US$5b in the international markets. An herb used in West African cooking generates US$220m in Europe and the US, and US$20m in Ghana. The wood carving industry in Jodhpur, India, generates US$200m and employs 85,000 people.

Authors of the report argue, however, that much more could be done to support CFEs. Of the 600 million people in Africa, 400 million depend directly or indirectly on the forests. In all, more than 1 billion mostly poor people live within and around the world's forests.

The authors further found that:
  • Illegal logging undermines price structures for forest products and acts as a disincentive for members to remain part of a 'legal' organization.
  • Too much control by government or donor supporters can stifle the ability of CFEs to develop innovative management.
"The study reflects the experience of communities worldwide," said Alberto Chinchilla, a founding board member of the Global Alliance of Community Forestry, a worldwide network of community forestry organizations. "A top-down approach on the part of national governments and international NGOs and donor countries has prevented forestry enterprises from thriving. The bottom line is that local communities need to be part of the equation and not just bystanders."

Among those who rely on the forests for their livelihoods and a significant part of their cash income are indigenous peoples, small landholders, craftsmen and individuals employed by informal forestry enterprises. They are all threatened in their way of life by the destruction of natural habitat.

"In those countries where efforts have been made to reduce barriers and guarantee ownership of forested land, as is the case in Mexico and Guatemala, community-based enterprises soar," said White from Rights and Resources Initiative, who co-authored the study with Augusta Molnar, Megan Liddle, Carina Bracer, Arvind Khare and Justin Bull and a diverse set of case study authors. "And we've found that besides improving income and social cohesion in the communities, these organizations become important biodiversity conservation agents."

Market Evolution in the forestry sector
Growing domestic markets in emerging economies have triggered new demand and new opportunities. China alone more than doubled its imports of forest products in seven years, climbing from US$6.4b in 1997 to US$13b in 2004. CFEs now manage 370 million hectares of forest, about 10% of the world's total. They are expected to jump to 700-800 million hectares in 2015 and reach 50% by 2050, according to estimates from the World Resources Institute (WRI). A growing consumer preference for materials produced in a socially and environmentally sustainable fashion offers a new area for growth, as does interest in services that help the world to combat climate change.

"The market for such services offers new perspectives for equitable payment to local communities involved in the conservation of watersheds and carbon sequestration," said Chinchilla. "But we need the means to develop this enormous social and environmental potential."

"And we need people, particularly in the richer countries, to start paying for these global services," added Sobral. "The benefits in terms of poverty alleviation, forest conservation and community development could be huge."

The ITTO is an intergovernmental organization promoting the conservation and sustainable management, use and trade of tropical forest resources. Its 60 members represent about 80% of the world's tropical forests and 90% of the global tropical timber trade. ITTO's policy work stresses the need for equitable, participatory and community-based processes in forest management and forest landscape restoration and provides practical advice to forest managers on how to develop such processes. ITTO's project work is assisting many small forest communities to develop sustainable, forest-based enterprises.

The Rights and Resources Initiative (RRI) is a new coalition of organizations dedicated to raising global awareness of the critical need for forest tenure, policy and market reforms, in order to achieve global goals of poverty alleviation, biodiversity conservation and forest-based economic growth. Partners currently include ACICAFOC (Coordinating Association of Indigenous and Agroforestry Communities of Central America), the Center for International Forestry Research (CIFOR), Civic Response, the Foundation for People and Community Development (FPCD), Forest Peoples Programme, Forest Trends, the World Agroforestry Center (ICRAF), Intercooperation, the World Conservation Union (IUCN), and the Regional Community Forestry Training Center for Asia and the Pacific (RECOFTC).

Picture: Women tend their plantation in the Volta region, Ghana. Courtesy: J. Gasana


Eurekalert: Report finds forest enterprises stifled by red tape, putting forests, incomes at risk - July 16, 2007.

RRI: Community Forest Management and Enterprises, Global Issues and Opportunities, Conference overview - July 2007.

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Schmack Biogas and E.ON to build Europe's largest biogas plant, will feed gas into natural gas grid

Schmack Biogas AG, the world's largest biogas plant manufacturer and service company, announces [*German] it will build Europe's biggest biogas plant together with E.ON Ruhrgas and E.ON Bayern. The investment for the 4MW facility is around €15.8 million, with each partner contributing a third. After upgrading, high quality bio-methane produced from renewable biomass will be fed into the natural gas grid.

The total output of the new plant will be 10 MWGas which is the equivalent of around 4MW of electric power. The construction of the facility will take place in Schmack's industrial park in Schwandorf and will begin mid-2007. From December 2007 onwards, biogas will begin to be fed into the natural gas grid.

To get a grip on the scale of the plant, consider that most currently built biogas plant in Germany are in the 150kW to 500kW range. The new facility has a much larger capacity and was designed to ferment 61.500 tonnes of biomass per year. Using current technologies, some 16 million cubic meters of biogas can be obtained, which translates into energy for around 5000 households.

The project management, construction and operation of the mega-plant will be taken care of by the Schmack Energie Holding GmbH. E.ON Bayern Wärme, will market the heat, whereas E.ON Bioerdgas GmbH will market the biogas and feed it into the natural gas pipelines.

Biogas has a huge potential on a global scale, with some experts seeing it so large that the plant based methane could replace all of the EU's natural gas imports from Russia by 2030 (earlier post):
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Schmack's use of renewably grown biomass is a boon to the economy and agricultural sector of the region around Schwandorf. For the first time, the region's farmers have an opportunity to start growing bioenergy crops that are certain to be taken off by the biogas plant.

Compared to other biogas companies, Schmack uses dedicated biogas crops (energy maize), which reduced the land needed to grow feedstocks by up to a third. The energy crops restore degraded land and increase its fertility.

Ulrich Schmack, CEO of Schmack Biogas said: "We are pleased to be working with two of the most prominent energy companies to build this large plant. By marketing the heat generated, an important new stream of income is obtained. We think this scale represents the future of the biogas market."

Dr. Peter Deml, E.ON Bayern AG: "With Schmack Biogas we have a highly competent partner for this project. With this investment, we are showing that E.ON Bayern is committed to renewable energy, both in the short as the long term."

Schmack Biogas AG is the world leading provider of biogas plants and services. The company was founded in 1995 and has quickly become a provider of total solutions. Besides technical services, it offers microbiological expertise. Recently it created a subsidiary, Schmack Energie Holding, with which it invests in operations of biogas facilities owned by Schmack. Up to today, the company has built 179 plants with a combined capacity of 45MW.

Schmack's announcement comes after another German player, Nawaro Bioenergie AG, said its vast 20MW biogas complex is nearing completion. Contrary to Schmack's project which is based on one large plant, that of Nawaro consists of 40 smaller units (earlier post).

Translated by Laurens Rademakers, for Biopact, CC, 2007.

Schmack Biogas AG: Schmack Biogas plant Bau einer 4 MW-Biogas- Anlage zur Gaseinspeisung Gemeinsame Investition mit E.ON Ruhrgas und E.ON Bayern [*.pdf] - July 13, 2007.

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EU biodiesel output doubles in 2 years, may reach 2010 targets early

The European Biodiesel Board (EBB) announces its official figures [*.pdf] for the year 2006, which confirm that the overall biodiesel production the EU increased from 3.2 million tonnes in 2005 to nearly 4.9 tonnes last year. This represents a 54% yearly growth, which follows a 65% record high growth in the previous year 2005. But the EBB also warns that lack of clear standards and legislation may put a dent in this growth. It offers recommendations for much needed interventions. Finally, the board lashes out at the American "B99" export subsidy for biodiesel, which is disrupting EU biodiesel markets. This international trade violation will be disputed before the WTO.

Continued growth
EU biodiesel production has more than doubled in the last two years (from 1.9 million tonnes in 2004), marking a further acceleration in the continuous expansion of the European biodiesel sector. Growth rates in 2002, 2003 and 2004 were 30-35%. Biodiesel now makes up 80% of the EU's total biofuel output. European producers account for 77% of world-wide biodiesel production.

Germany remains by far the largest producer, accounting for more than half of the entire EU's output. France and Italy follow. In the UK, output is still relatively low, but tripled from 2005 to 2006. New entrants include Belgium, the Netherlands and Portugal (table 1, click to enlarge).

Today, in Europe, there are already 185 fully operational biodiesel plants. Over 58 are under construction. In 2007, capacities for biodiesel production reached 10.2 million tonnes (table 2, click to enlarge), setting the foundation for a further strong expansion of the sector, which will be able to meet the 2010 EU targets two years early. Thanks to the plants currently under construction, production capacities are expected to reach even much higher levels, growing by the same rate at least until the end of 2008.

In terms of industrial capacities, the EU biodiesel industry is ready to reach the 2010 EU target and will certainly be ready, well in advance, to fulfil the 10% biofuel targets endorsed by the EU heads of state last March at the Spring Summit (earlier post).

'Legislative desert'
However, the EBB warns that in the EU, biodiesel is still strongly hindered by the lack of appropriate market measures able to create a real market for the biofuel in member states. As a result, the important increase in industrial biodiesel capacity risks to remain very largely underutilized and production may start stagnating if not declining already from this year onwards, unless urgent action is taken. This would be a paradox, taking into account that such industrial capacity has been developed in order to respond to the EU biodiesel targets, which EU authorities recently doubled.

The EBB says this paradox needs to be avoided: the EU cannot on the one hand ask the biodiesel industry to undertake a long walk to reacht very high levels of production in the long run, and on the other hand leave this same industry alone to cross a legislative and standards desert over the next two years.

Urgent legislative and standardisation provisions need to be adopted in many member states and by the CEN in order to create a real market for the biodiesel quantities that will be needed to fulfil the 2010 and 2020 targets. The EBB suggests the following interventions:
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  • Member States legislations and new EU law need to create the real conditions in order to sell biodiesel in the various countries: real conditions means not just only 'theoretical' targets or mandates with no practical impact, as so far occured in Italy, Spain, Poland and many other countries, but efficient legislations enabling the biodiesel capacities already present in these countries to produce and sell the high quality product that they are able to deliver;
  • To this aim, the biodiesel incorporation rate in EN 590 diesel (with no labelling) needs to be increased quickly from the 5% to 10% and then again to a 15% biodiesel in diesel rate by 2015 if we are seriously aiming at a 10% minimum target in all Member States in 2020;
  • In this sense, the EBB urges the CEN to accelerate its work in order to amend the European diesel standard EN590 to include a 10% biodiesel incorporation (the work is lagging behind because of the strong opposition of some vehicle manufacturers) and to start adapting technology and norms to incorporate 15% biodiesel by 2015; if conservatism and inertial logics will continue to prevail in the CEN, this could be achieved by way of legislation introducing once and for all these percentages under the EU definition of diesel fuel (i.e. with no separate labelling), detailed by the fuel quality Directive 98/70 currently under revision.
Diesel deficit, gasoline surplus
At the European level, biodiesel makes up precisely 80% of EU biofuels production (bioethanol output stood at 1.2 million tonnes in 2006) and is very likely to carry on being the biofuel most demanded in order to fill future ambitious EU targets. EU fuel markets are experiencing increasing diesel deficits and gasoline surpluses - we imported 24 million tonnes of diesel from Russia already in 2005 and the same year we exported 19 million tonnes of gasoline to the U.S. In 2006 and 2007 this trend is being amplified by the genereal dieselisation of EU vehicles. Biodiesel and diesel substitutes demand as a "security of supply" demand will be the main driver for future EU fuel distribution markets.

With its strong diesel demand, at the international level, the European Union continues to excel as "biodiesel land": the EU is the worldwide leader in biodiesel production, both in terms of biodiesel capacities and production. In 2006 we produced 77% of biodiesel produced world-wide. In the U.S., the world's second largest biodiesel producer, production amounted to around 250 million gallons (approx. 836,000 tonnes) in 2006.

American export subsidy
The international context is however perturbed by the continuing negative effects of the "B99" U.S. export subsidy, which is disrupting the EU biodiesel market. Through the B99 scheme - which the EBB deems 'unfair' -, American producers can access EU markets with a competitive advantage of roughly €200/m³ when compared to EU manufacturers, and they are able to sell U.S. originated biodiesel at the same or even at a lower price than the cost of the EU's industry's raw materials.

After having alerted EU authorities about urgent action to be taken at WTO level against this scheme, the EBB is now preparing a countervailing duty complaint to be filed against this international trade violation. Mostly due to the negative impact of B99 exports, EU biodiesel production is expected to stagnate in the year 2007, in spite of the 50-60% growth of the last two years and in spite of the fact that EU production capacities have reached more than 10 million tonnes in 2007.

Finally, the EBB notes that it is worth underlining that major EU agricultural organisations have recently officially indicated that the very largest part of future biodiesel demand, even in the perspective of 2020 targets, can be produced from raw materials originated in the EU thanks to the yield potential growth for EU oilseeds. (Biopact and others think this will not be the case and the EU will have to rely on imported feedstocks.)

The European Biodiesel Board, also known as EBB is a non-profit organisation established in 1997. It represents the voice of the EU biodiesel industry by gathering 55 companies and associations. It aims to promote the use of biodiesel in the EU. EBB members represent an 80% share of the EU's biodiesel output.

EBB: 2006, 2007 production and capacity statistics [*.pdf] - July 17, 2007.

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Bioenergy in the UK could 'threaten wildlife'

British environmental groups are making an urgent plea to the UK government not to downgrade other environmental concerns in promoting bioenergy to help tackle climate change. Their call comes after the UK's Department for Environment, Food and Rural Affairs, the Department of Trade and Industry and the Department of Transport released their joint Biomass Strategy for the UK (earlier post).

In a policy paper titled Bioenergy in the UK, turning green promises into environmental reality [*.pdf], they say crops such as willow, oil-seed rape and miscanthus or elephant grass, grown for energy generation, could be sown over large areas of the UK, forming monocultures that provide little sustenance for wildlife.

It warns that without proper management, cultivation of crops for fuel, electricity and heat could cause further declines of farmland wildlife, damage the character of landscapes, harm historic and archaeological sites and damage soil and water quality.

The policy paper calls for:
  • A UK-wide assessment of bioenergy's potential and drawbacks
  • Certification of all bioenergy schemes to ensure producers prove cuts to greenhouse gas emissions
  • Planning policies that guard against unsuitable bioenergy developments and changes in land use
The report, being published by 11 organisations, including the The Royal Society for the Protection of Birds, National Trust, the Campaign to Protect Rural England (CPRE), Council for British Archaeology, and The Wildlife Trusts welcomes the opportunities bioenergy development creates and says the potential for environmental harm from new energy schemes can be avoided.

Sian Atkinson, Conservation Policy Officer at the Woodland Trust, said:
This is a crucial time. Bioenergy offers some positive opportunities, not just for reduction of greenhouse gases, but also to improve biodiversity. For example, development of the wood fuel industry could stimulate markets for low-grade timber, enabling much-needed restoration of ancient woodland sites planted with conifers. However, there are also grave risks associated with the development of bioenergy, and we would urge the government to address these concerns as a matter of urgency.
Ian Woodhurst, CPRE's farm campaigner and chairman of the group, said:
With the right crop, in the right place, managed in the right way we can provide our communities with the sustainable energy supplies they need to tackle climate change. But we need to make sure we don't end up with an agro-fuel industry that ends up wrecking the very thing we seek to protect.
The organisations believe that where farmers are paid to grow bioenergy crops, they should be required to assess their environmental impact:
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Abi Bunker, Agriculture Policy Officer at the RSPB, said:
This report should serve as a wake-up call to government. Instead of jumping on the bioenergy bandwagon and regretting the damage later, the UK should be developing the bioenergy sector with care, avoiding damage to wildlife and making sure that emissions really are reduced. Nearly 2.5 million acres could soon be planted with crops for biofuels and heat and power generation by 2020. That is a lot of land to sacrifice if environmental safeguards are not put in place first.
Ian Woodhurst, CPRE's Farming Campaigner and Chair of Link's Farming and Rural Development Group, said:
It's vital that bioenergy crops deliver the real carbon savings that they promise without damaging the character of our landscapes and our wildlife. With the right crop, in the right place, managed in the right way we can provide our communities with the sustainable energy supplies they need to tackle climate change. But we need to make sure we don't end up with an agro-fuel industry that ends up wrecking the very thing we seek to protect.
Frances Griffith, Hon Vice-President, Council for British Archaeology, said:
Although bioenergy offers a good potential avenue for reducing fossil fuel use, we must take care. Some of the establishment and cultivation processes for energy crops cause a great deal of soil disturbance. It is essential that proper advice is taken to ensure that we avoid archaeological sites - they may have survived in the ground for thousands of years, but they can be destroyed for ever in an afternoon.
Helen Meech, Senior Policy and Campaigns Officer at the National Trust, said:
At many of our properties, the National Trust is using small-scale biomass for heating and hot water. It's a positive and practical way to cut our carbon emissions. However, it is crucial that the growth of bioenergy in the UK does not come at a high price - serious damage to our natural and historic environment. We're particularly concerned about potential environmental damage from intensively grown biofuel crops used for transport fuels. This report is a timely reminder that government has a key role to play to ensure that the growth of bioenergy in the UK is sustainable, working in partnership with conservation organisations, farmers and land managers.
The Royal Society for the Protection of Birds: Bioenergy could do more harm than good - July 18, 2007.

Wildlife and Countryside Link et. al., Bioenergy in the UK - turning green promises into environmental reality [*.pdf] - July, 2007.

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Sunflower Integrated Bioenergy Center begins testing of coal-based algae-to-biofuels system

Recently, algae company GreenFuel Technologies experienced setbacks with its bioreactor system which led to the layoff of half the company’s 50-person staff and Bob Metcalfe’s appointment as interim CEO. Cambridge-based GreenFuel seeks to use algae to convert carbon dioxide emissions (e.g. from coal plants) into biofuel, by feeding the emissions to algae (schematic, click to enlarge).

The company has meanwhile abandoned the idea of using the hyper-expensive photobioreactors (a technology Biopact has always seen as unfeasible), and quickly started testing 'greenhouses' instead. Recent experiments with this technology in the desert of Arizona resulted in unstable cultures, and the greenhouses had to be shut down. GreenFuel Technologies described the event as a 'sucessful failure' (legendary words in the renewable energy community). But worse was yet to come: it suffered another blow when it learned that its algae-harvesting system would cost twice as much as anticipated.

In short, on all key parameters and processing steps, there have been failures. Earlier, South African algae company De Beers broke down because it could not perform what it had promised its investors (more here). Other hyped algae companies have meanwhile silently switched to growing terrestrial energy crops (e.g. Algodyne). Biopact's scepticism towards algae biofuels (previous post) is being substantiated. As we have always said, this technology may have some merit and may become feasible in open ponds, over the ultra-long term, if costs can be reduced by a factor of 20 and if major breakthroughs are made in biotechnology (creation of strains that can be carefully controlled).

Still, some keep believing in the viability of algae systems as they are currently being hyped. The Sunflower Integrated Bioenergy Center project announces it reached a 'milestone' recently when equipment arrived to begin the first phase of on-site testing for the coal-based algae-to-biofuels system. Following testing and demonstration of the technology, the system will be used to produce renewable fuels from carbon dioxide (CO2) emissions at the existing and two proposed coal-fired generating units at Holcomb Station.

The equipment will soon be used to identify the strains of algae that grow best in western Kansas when attached to Sunflower's coal-based plant at Holcomb, Kansas. Funding for this initial phase of development is being provided by Tri-State Generation and Transmission Association, Inc., Westminster, Colorado, and Sunflower, both partners in the Holcomb Expansion project.

GreenFuel Technologies delivered a mobile laboratory last week that will be used to ensure that flue gas from Sunflower's power plant can be used to grow microalgae in an enclosed environment. If this test is successful, additional tests will determine which specific strain will grow best in western Kansas with Sunflower's plant:
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About the recent 'succesful failures', Clare Gustin, Sunflower's Vice President, Member Services and External Affairs says:
GreenFuel Technologies recently learned valuable production lessons at their Arizona algae project that will benefit the Holcomb Expansion partners, so we are pleased they have decided to focus their efforts on five projects globally and provide us with their newest technology. We are dealing with leading edge technologies, so we understand that as we move from an emerging technology to one that is commercially viable, we will have obstacles to overcome.
GreenFuel's 'Emissions-to-Biofuels' process uses naturally occurring algae to capture and reduce flue gas CO2 emissions into the atmosphere. When the algae farm is commercially operational, the algae will be harvested daily and be converted into a broad range of biofuels or high-value animal feed supplements.

Development of an anaerobic digester, biodiesel plant, and dairy subsystems is ongoing with the ethanol plant projected to be under construction later this fall. The total projected investment is expected to be $417 million and will create 161 new jobs.

Schematic: GreenFuel Technologies' idealized scheme to use carbon emissions from power plants to grow algae. Credit: GreenFuel Technologies.

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GreenField Ethanol demonstrates membrane technology, may save 40% energy costs

GreenField Ethanol, Canada’s largest ethanol producer, announced it has completed a successful trial demonstration of new technology that will dramatically improve the ethanol production process.

At a project at its plant in Tiverton, Ontario, GreenField joined with Quebec-based Vaperma to demonstrate and study their membrane technology. The Vaperma Siftek membrane can remove more than 40 per cent water from an alcohol water mixture producing a 99 per cent fuel-grade ethanol product. Vaperma's process is unique to the industry and has the potential to revolutionize the alcohol production process.

GreenField Ethanol began discussions with Vaperma two years ago about installing a demonstration project at its Tiverton, Ontario ethanol plant. This project proved to be the first large-scale demonstration in North America of membrane technology for the dewatering of ethanol.

The Vaperma Siftek membrane is a high-performance, highly stable polymer membrane. The proprietary technology uses a polyimide-based material forming a solvent-resistant, asymmetric, integrally-skinned permeation membrane (schematic, click to enlarge).

To separate water from ethanol, water vapor permeates across the membrane at a much greater flux than ethanol. The high permeability of water is due to its relatively high adsorption and high diffusion rate in the membrane. The higher selectivity and permeance of water compared to ethanol are attributed to the unique polymer formulation and the membrane fabrication process.

Over the last 20 years, the Pressure Swing Adsorption (PSA) process using molecular sieve dehydration (MSD) has earned industry-wide acceptance in the separation of ethanol from water. This semi-continuous process produces a purge stream which contains between 60% and 80% ethanol that must be reboiled in the distillation process.

The Vaperma process allows for significant energy savings because the membrane eliminates distillation and molecular sieve units. By replacing these, GreenField would be able to save up to 40 per cent in energy costs:
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The unit in Tiverton used substantially less energy and therefore fewer greenhouse gases were created in the process – reducing the plant's CO2 footprint. While our plants are all extremely efficient, the less natural gas we use to make steam, the better for the environment. - Robert Gallant, GreenField President and CEO
GreenField Ethanol, formerly Commercial Alcohols, is Canada’s leading ethanol producer. The company produces 250 million litres a year of corn-based fuel ethanol at its plants in Chatham and Tiverton, Ontario and Varennes, Quebec. Two more plants are under construction in Hensall and Johnstown, Ontario, and will be operational in 2008. GreenField Ethanol will be one of the top producers in North America with five operating plants, producing more than 700 million litres of ethanol per year by 2008. GreenField's Ethanol is available at more than 1,500 gas stations across Canada.

Vaperma is an emerging developer, manufacturer and supplier of advanced
gas separation systems. Vaperma breakthrough patented polymer membrane technology combines solvent and high temperature resistances into a strong hollow fibre which enables it to address new industrial applications. Yesterday, it officially opened its new 22,000 square-foot research and technology centre for the development and pilot testing of clean energy gas separation membranes.

Vaperma’s innovative hollow fiber membrane is a proprietary, made-in-Canada technology that represents a new “dewatering” process for the production of fuel ethanol. The technology also has strong potential for the dehydration of natural gas.

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Tuesday, July 17, 2007

OPEC basket price hits record; analysts see $95pb this year

Prices for crude oil produced by the Organization of Petroleum Exporting Countries (OPEC) rose to a new all-time-high at the start of this week. The OPEC Secretariat itself announced the news today. The price for one barrel (159 litres) of OPEC-produced crude rose to 72.83 dollars, an increase by 34 cents compared to last Friday.

The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Minas (Indonesia), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and BCF 17 (Venezuela).

The crude price was 15 cents above the last record high of 72.68 dollars on August 8, 2006. OPEC analysts in Vienna believe the continued critical situation regarding Nigeria's oil production to be one factor behind the continued price hike. Other factors are technical problems which have marred production of North Sea oil and capacity problems of US-based refineries.

Meanwhile, the Guardian reports that Goldman Sachs warned that prices could hit a peak of $95 a barrel by the end of the year.
Our estimates show that keeping OPEC production at current levels and assuming normal winter weather, total petroleum inventories would fall by over 150m barrels or 6.5% by the end of the year, which would push prices to $95 a barrel with a demand response. - Goldman Sachs
The key Middle Eastern members of oil cartel OPEC are urged to increase output immediately. Goldman Sachs said OPEC production was a million barrels per day down on last year at a time when demand is strong.

A further increase in oil prices would add to inflationary pressures in developed countries, with some analysts already fearful that dearer energy increases the risk of at least one more quarter-point increase in base rates from the Bank of England.

OPEC today sought to calm increasingly frenzied global energy markets when it predicted that world demand for oil would grow only modestly in 2008. It downplayed the need for extra production, citing greater energy efficiency, higher taxes and conservation as factors limiting the growth in demand [entry ends here].
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São Paulo Research Foundation and Dedini to invest R$100 mio in cellulosic ethanol research

With oil prices closing in on record levels at $75 per barrel, Brazil's biofuels and bioproducts sector keeps attracting investments. From Ethanol Brasil [*Portuguese] we learn that São Paulo's Research Foundation (Fapesp) and Dedini SA, have signed a cooperation agreement [*.doc/Portuguese] to research new bioconversion technologies and to build a pilot plant for the production of cellulosic ethanol. The joint investment is worth 100 million reals (€39.1/US$53.8 million).

The 'Fundação de Amparo à Pesquisa do Estado de São Paulo' (Fapesp) and Dedini's Indústrias de Base signed the agreement today during the 'International Symposium and Fair on Agro-industrial Sugar-ethanol Technologies' (Simpósio Internacional e Mostra de Tecnologia da Agroindústria Sucroalcooleira, Simtec), which saw its fifth edition being held in the city of Piracicaba.

The investment will be around 100 million reals, with Fapesp and Dedini each contributing 50 per cent. The collaboration will result in the creation of research teams with scientists recruited from universities and research institutions in São Paulo state, as well as from Dedini.

According to Sérgio Leme, vice-president of Dedini, the research may result in improved bioconversion of sugar cane - including the tranformation of cellulose rich bagasse into liquids - , an increase in the productivity of processing equipment and machines, as well as in improved fermentation processes to convert sugar and cellulose into alcohol. The agreement covers the coming five years.

A distillery for the industrial production of cellulosic ethanol will be built by Dedini, where the company will continue researching its DHR process (Dedini Hidrólise Rápida), which converts bagasse, the byproduct from sugar production, into liquids (earlier post). Dedini already established a pilot-plant in its São Luiz factory, which is managed by the Dedini Agro group, located in Pirassununga (São Paulo state)

Picture: vast streams of bagasse, piled up at a sugar factory and left to dry. Often, the bagasse is burned to generate green power that fuels the sugar-ethanol plant, with excess electricity sold to the grid. [entry ends here].
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Researchers sequence mushroom genome - could combat carbon, find better biofuels and clean up soils

An international team of researchers from Europe and the United States is carrying out a global effort to sequence the genome of one of the world’s most important mushrooms - Agaricus bisporus -, the white table mushroom. According to the scientists, the secrets of its genetic make up could assist the creation of biofuels, support the effort to manage global carbon, and help remove heavy metals from contaminated soils.

The Agaricus mushroom family are highly efficient ‘secondary decomposers’ of plant material such as leaves and litter – breaking down the material that is too tough for other fungi and bacteria to handle. How exactly it does this, particularly how it degrades tough plant material known as lignin, is not fully understood. By sequencing the full genome of the mushroom, researchers hope to uncover exactly which genes are key to this process. That information will be extremely useful to scientists and engineers looking to maximize the decomposition and transformation of plant material into biofuels.

The mushroom also forms an important model for carbon cycling studies. Carbon is sequestered in soils as plant organic matter. Between 1–2 giga tons of carbon a year are sequestered in pools on land in the temperate and boreal regions of the earth, which represents 15–30% of annual global emissions of carbon from fossil fuels and industrial activities. Understanding the carbon cycling role of these fungi in the forests and other ecosystems is a vital component of optimizing carbon management.

That however is not the end of the mushrooms talents; several Agaricus species are able to hyper-accumulate toxic metals in soils at a higher level than many other fungi. Understanding how the mushroom does this improves prospects of using such fungi for the bioremediation of contaminated soils:
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Agaricus bisporus is one of the most widely cultivated mushrooms and the genome research will also benefit growers and consumers through identification of improved quality traits such as disease resistance.

The University of Warwick’s horticultural research arm Warwick HRI will co-ordinate provision of genetic materials to the Joint Genome Institute in California for sequencing, will organise analysis of the sequence data and act as curator of the mushroom genome.

Agaricus bisporus has around 35 megabases of genetic information coding for an estimated 11,000 genes. The researchers expect to have a 90% complete genome within 3 years

The other partners in the international project team are: DOE Joint Genome Institute USA, University of Bristol, USDA Research at University of Wisconsin, Southeast Missouri State University, Clark University, Sylvan Inc USA, Institut für Forstbotanik der Universität Göttingen, Pacific Northwest National Laboratory, Public University of Navarre, Penn State University, Plant Research International Wageningen and Universiteit Utrecht.

University of Warwick: Decoding mushroom’s secrets could combat carbon, find better biofuels & safer soils - July 17, 2007.

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Study: biofuels to supply more than 15% of world's transport fuels by 2030

Market analyst Global Insight, Inc. says in a new study titled The Biofuels Boom: Implications for Automotive, Agriculture & Energy [*.pdf] that more than 100 billion gallons (378.5 billion liters) of bioethanol and biodiesel will be produced globally per year by 2030, an amount equal to more than 15% of the world's road transport fuel needs.

The study runs with two basic scenarios on liquid transport fuels that show dramatically different implications, paths, and consequences for the economy, for biofuel producers and for the automotive industry. The reference case is titled 'Market remanaged' and is based on the idea that OPEC re-emerges as the market ‘governor’. OPEC attempts to manage prices in the low $60/bbl range. The second scenario, titled 'Supply constrained' conceives of a new oil market era, in which the supply-demand balance is based on demand, with supply having difficulties to keep track; price spikes are common and unprecedented oil price levels of more than $100/bbl become a reality.

The study analyses the feasibility of bioconversion technologies, by looking at the entire production chain (biomass propagation, growth, harvesting, and collection; biomass pretreatment). The technologies covered are the biochemical route (sugars into ethanol), the thermochemical routes (gasification, pyrolysis), ordinary transesterification and the hydrogenation of vegetable oils to produce 'green diesel'. Biobutanol is covered as well. Table 1 offers an overview of which technologies Global Insight thinks to be commercially and economically feasible over the longer term, and in which state of development they currently are.

Potential supply
Under the different scenarios, biofuels will increase significantly, possibly reaching 15% of the total motor fuel pool world-wide (graph, click to enlarge). Both the EU, the U.S. and Brazil remain leaders.
  • The United States could reach 35% of on-road petroleum demand — in the same range as Brazil
  • Biomass producers will be in an advantageous position to produce renewable fuel feedstocks
  • The move will affect oil and gas producers in the United States and Canada by shifting away from petroleum-based fuels
When it comes to biodiesel, the study says that demand and potential supply can be based on non-edible oils such as jatropha, on wood waste, and other non-food products. In Europe, new technologies employing biomass conversion into liquids look promising such as NExBTL developed by Neste. In the U.S. biodiesel demand is expected to reach around 5 billion gallons (18.9 bn liters) by 2030, whereas in the EU it will stand at around 7 bn gallons (26.5 bn liters) by then. The EU has a supply gap and will have to rely on imported feedstocks (graph, click to enlarge).

U.S. growth in bioethanol will continue to come mainly from corn, and is projected to reach 15 bn gallons by 2015 (about 1 million barrels per day) and a whopping 60 bn gallons by 2030. In the EU demand is expected to reach slightly less than 3.5 bn gallons (13.2 bn liters) by 2030, but growth will be again be limited by local supply constraints and must rely on imports from Africa and South America (graph, click to enlarge). We think the projection for U.S. production of ethanol is slightly unrealistic, especially given the much higher commercial feasibility of producing the fuel in the South.

Implications for the Automotive Industry
Based on a survey of automotive manufacturers and analyses by Global Insight’s Automotive Group, the report shows what are the possible consequences of the biofuels boom for automotive manufacturers:
  • High volumes of biofuels in the United States will almost certainly require flex-fuel vehicles (FFVs) capable of running on blends up to 85% ethanol (E85)
  • In Europe, ethanol content is held for most countries to 10% (E10), which is technically compatible in current vehicles
  • Biodiesel levels of 5% (B5) are possible in virtually all vehicles, and new vehicles can be developed to accept blends up to 30% (B30)
  • Technical fixes to meet higher biofuels levels are known, but will add some costs to vehicles
Zooming in on these consequences as they may be expected under the two scenarios and as they relate to vehicle emissions, the report finds the following for the EU:
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'Market remanaged' scenario
  • 2012: EU standard of 130 g/km CO2 emissions (without biofuels benefit) could be met
  • 2018: EU new vehicle CO2 emissions reach 120 g/km (without renewable fuel credit) and holds at this level to the end of the period
'Supply constrained' scenario
  • 2012: EU standard of 130 g/km CO2 emissions (without biofuels benefit) could be met
  • 2018: EU new vehicle CO2 emissions reach 120 g/km
  • 2025: EU new car efficiency is 90 g/km CO2

For the U.S., the situation looks as follows:

'Market remanaged' scenario
  • 2018: New vehicle fleet fuel economy reaches 32 mpg (193 g/km CO2), but there is much uncertainty
  • 2030: New vehicle fleet fuel economy reaches 48 mpg (128 g/km CO2), but there is much uncertainty
'Supply constrained' scenario
  • 2020: New vehicle fleet fuel economy reaches 45 mpg (137 g/km CO2), but there is much uncertainty; requires 60% hybridization in the United States
  • 2030: New vehicle fleet fuel economy reaches 53 mpg (117 g/km CO2), but there is much uncertainty

Implications for hybrid vehicles
The study finds that hybrid vehicles are introduced across all major (high volume) model lines, and hybrid diesels are introduced. As the cost of hybrid components decreases, the diesel-hybrid combination becomes attractive as a market differentiator.

Diesels will continue to play a significant role in EU
In 2008 diesel cars trend at 50–60% share of the new car fleet, in 2009 diesel hybrids enter the market as mechanism for meeting fuel efficiency CO2 emissions targets. By 2015 diesel vehicles take 65% of the new light duty vehicle fleet, whereas by 2030 diesels are expected to make up 35% of light duty vehicle fleet and at least 25% of the on-road fleet.

The study was conducted by Global Insight's Agriculture, Automotive and Energy Groups who worked with some 20 companies and organizations representing different perspectives of the biofuels industry. The Global Insight study was released at a conference in Monaco sponsored by the Foundation Prince Albert II de Monaco.

Global Insight: The Biofuels Boom: Implications for Agriculture, Energy, and Automotive - [*.pdf], detailed presentation - July 2007.

Global Insight: The Biofuels Boom: Implications for Agriculture, Energy, and Automotive, study page.

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China to boost forest-based bioenergy, helps win battle against desertification

Jia Zhibang, director of the State Forestry Administration announced today China will establish 13.33 million hectares of forests by 2020 to produce liquid and and solid biofuels for power generation and transport. The hectarage will rise from a planned 833,333 hectares in 2010 and provide enough biomass to produce over 6 million tonnes of biodiesel a year and power generators with capacity of 15 gigawatts. The energy forests will contribute massively to China's already successfull attempts aimed at reducing desertification.

The People's Republic recently presented its 'Agricultural Biofuel Industry Plan', which raised targets for all types of biofuels. The forest-based bioenergy plan is part of this policy (earlier post), which may bring a large number of jobs to China's many farmers (previous post). Because the energy forests help fight desertification, they contribute positively to restoring the environment and may protect agricultural land.

Presenting the plan, Jia said the lipid- and starch-rich materials from the forests could be processed into liquids to make biodiesel and ethanol fuel, whereas woody biomass can be pelletized and used in power plants to replace coal, and thus reduce carbon dioxide emissions substantially. (More on China's biomass-fired power plants, here and here).

The country plans to produce more than six million tons of forest-based biodiesel and will increase the installed capacity of renewable, biomass-based power generation by more than 15 million kilowatts by 2020, Jia said. The potential of the country's forest-based bioenergy would thus be equivalent to 200 million tons of coal, the utilization of which would reduce the consumption of fossil energy by 10 percent. Ultimately, biomass can be used in carbon-negative energy systems (more here, here and especially here), and reduce carbon dioxide emissions even further.

Currently, China is home to more than four million hectares of oil plants nationwide, and 154 kinds of energy trees could produce seeds containing more than 40 percent of oil, with total production of the seeds totaling five million tons. Another 57 million hectares of waste land are available and suitable for planting trees for the production of forest-based bioenergy, according to Jia.

Jia said the administration would develop the forest-based bioenergy together with the China National Petroleum Corporation, the country's grain importer and exporter COFCO and the State Grid Corporation of China.

Jia's collegue, Zhu Lieke, vice-director of the State Forestry Administration (SFA), said Chinese land vulnerable to desertification is dwindling by about 1200 square kilometers per year thanks to years of afforestation efforts. China now tops the world in afforestation with 54 million hectares of man-made forest, according to Jia:
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The nation has been promoting voluntary tree-planting and forestation, closing the forest area to allow for natural regeneration and fostering of young forests, said Jia. Since China began advocating voluntary tree-planting and forestation 26 years ago, the Chinese people have planted 49.2 billion trees, he added. The Chinese government will endeavor to double the total forest annual growth in 30 to 50 years, to one billion cubic meters, Jia said.

China's aim to expand its acreage of trees suitable for providing feedstocks for power plants and biodiesel makers comes down to an increase by 16 times during the 2010-2020 period.

China had a total of 622 gigawatts of installed generating capacity as of late 2006. Output for diesel totaled 117 million tonnes last year. China has been anxious to boost its use of alternative energy in recent years as its heavy reliance on burning coal to meet energy needs has caused serious environmental problems. The government plans to reduce the percentage of coal in consumption to 66.1 percent by 2010 from 69.1 percent in 2005, while improve renewable energy usage, excluding hydropower, to 0.4 percent from 0.1 percent.

Xinhua: China to boost forest-based bioenergy - July 17, 2007.

People's Daily Online: China sees shrinking deserts: official - July 17, 2007.

Reuters: China anxious to boost energy output from forest - July 17, 2007

Biopact: China announces 'Agricultural Biofuel Industry Plan': new crops, higher targets - July 04, 2007

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Zambian scientists call for investments in biofuels

Zambian scientists researching the use of biofuel as an alternative energy source presented results from studies showing the country has the capacity to produce a large amount of biofuels. This, however, would depend on proper investment to produce the renewable energy.

The analyses to this effect were conducted by the University Of Zambia School Of Agriculture and the National Institute for Scientific Research. According to the studies’ findings, the country has the capacity for the large scale production of biofuels based on a range of crops.

The call comes after the National Association for Peasant and Small-Scale Farmers of Zambia (NAPSSF) announced that it wants about 300,000 small-scale farmers to start growing biofuel crops on more than 150,000 hectares of land next year, in order to reduce rural poverty and cut energy costs.

Zambia is one of the countries that make Africa's sustainable and long-term biofuel potential so large (earlier post); the country has been identified by Biopact as having vast opportunities, for several reasons. Key points:
  • Zambia has some 58 million hectares of potential arable land
  • The country's farmers currently use 5.2 million hectares of this, or around 9%
  • Zambia has excellent agro-ecological conditions for a range of crops, including sugarcane, sweet sorghum, maize, cassava, groundnut, jatropha and tropical grass species
  • 63.5% of people there live in the countryside and in 2030, more than half of Zambia's population will still live in rural areas
  • 85% of the nation's people try to make a living in the agricultural sector but some 50% of all people are un- or underemployed.
  • 86% of all Zambians (the vast bulk of the rural population) lives below the poverty line
In such a situation, biofuel production promises to bring massive chances for poverty alleviation and rural development. Currently, because of a lack of access to modern farming inputs, agricultural yields are extremely low. This situation is such that with truly minor interventions, such as micro-doses of fertilizer, crop yields can in some cases be doubled (as was recently demonstrated in a study amongst smallholders in neighboring Zimbabwe). But in order for small farmers to make such micro-interventions, they need extra incomes - which can be provided by biofuels, which allow them to diversify their crop portfolio.

The Zambian scientists made a basic study on sweet sorghum, to show the potential for biofuels in the country. They demonstrate the crop is environmentally friendly, requiring low water inputs; moreover, besides biofuels (sugar for ethanol), it also yields food and fiber. (See the ICRISAT's pro-poor biofuels initiative based on improved, high yield and drought-tolerant sweet sorghum).

The other crop that has undergone scrutiny in recent months is Jatropha curcas, which has, however, attracted controversy from local farmers, who called for caution in its use. Although the plant can grow well in the country, there were concerns from farmers that jatropha had a tendency to overgrow other vegetation which can cause serious environment problems:
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Sweet sorghum on the other hand has now been identified as a crop that can be used for both food production and as a source for ethanol.

The two research institutes have called for increased funding towards research to find alternative sources of energy which would provide the country relief from spending large sums of money importing fossil fuel for energy.

Zambia is highly dependent on imported oil. With high prices, the entire economy is impacted, because all fuels all economic sectors, from agriculture and industry, to transport and services. According to the UN, some poor countries are now spending twice the amount of money on importing oil, than on health care.


Afriquenligne: Zambian scientists call for investment in biofuel energy - July 16, 2007.

Biopact: ICRISAT's pro-poor biofuels initiative - video - May 28, 2007

Biopact: Fertilizers boost crop production amongst smallholders in Zimbabwe - April 13, 2007

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Jane's Intelligence Review: "biofuels bring new global security risks"

It is interesting to see how some experts from a particular knowledge field - in this case strategic and geopolitical insight - make assessments about biofuels, a sector they are not particularly familiar with. This often leads to them either stating the obvious, painting an incomplete picture or making unsound analyses.

An excellent example comes from Jane's Intelligence Review, a publication on intelligence and defence. Everyone wants to have something to say about biofuels, so the defence and intel consulting business does so too. Independent analyst Anna Gilmour says "that while biofuels offer many advantages for producing countries, the potential long-term environmental degradation and increased competition for land and water resources means it cannot be viewed as a risk-free alternative to non-renewable fuels."

Of course, biofuels aren't risk-free, but the question is: what is the alternative? Why are biofuels produced in the first place? What if we don't produce them and just keep relying on oil? Will the risks be lower? Does continued oil dependency bring lower energy security risks? Are sky-high oil prices good for the economy and the poor? Obviously not. Biofuels are produced in order to mitigate the much bigger risks of increased oil prices, the potential socio-economic disasters brought by climate change and to reduce poverty and underdevelopment. But Gilmour does not make a comparative analysis, so her assessment of the risks of biofuels sadly remains rather marginal.

Earlier, a much more thorough assessment of the geopolitics and security risks of biofuels written by Clingendael (Netherlands Institute of International Relations) showed that - because they replace oil, which entails far more risks for conflict - biofuels substantially reduce geopolitical and strategic risks on virtually all parameters. Biofuels bring jobs to the rural masses, reduce migration pressures, bring income to the poor and increased food security, and they are produced in more than hundred countries that can all become traders, whereas oil is supplied by only a handful of (unstable) countries. (See: Future fuels and geopolitics: the role of biofuels - *.pdf).

Gilmour says greater use of land for biofuel production will inevitably mean a reduction in land for food crops at a time when the rising global population is putting increased demand on food and water supplies.

Note that this assessment is not based on a broad set of scenarios, some of which demonstrate that biofuels may bring new opportunities for high input agriculture to farmers who currently rely on extensive low input practises (such as slash-and-burn). Technically speaking, increased incomes from biofuels could eventually reduce the amount of land devoted to both food and fuel. Moreover, there is a vast expanse of land in the developing world, currently not under production, simply because it wasn't interesting to invest in it until now. Lack of investment, not lack of land is the problem.

Authoritative and scientific analyses, of which Gilmour apparently isn't aware, clearly demonstrate that without endangering food, fiber, fuel, forest, land and water resources for local people, the planet can support the production of 1500 Exajoules of internationally tradeable bioenergy and biofuels, by 2050. This is while taking into account rapidly growing populations. 1500EJ is roughly 3.5 times the total amount of energy currently consumed by the entire world (400EJ) from all sources (coal, oil, gas, nuclear):
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But governments definitely have to play a role in ensuring that infrastructures and policies make it possible to invest in this vast untapped land resource. Else, a rush on the most accessible land will occur.

Then, Gilmour makes a very strange point:
“While there is clearly a growing demand for the conversion to biofuel production it could also expose governments to rising social unrest, as food prices rise and poorer members of society reap few benefits from the new ‘wondercrop’. Apart from the social unrest and job losses, the expansion of this industry has the potential to increase internal conflict between governments and non-state armed groups in countries such as Colombia, Thailand, Indonesia and the Philippines."
A questionable assessment, because the obvious contrary is more likely: due to their labor intensity, biofuels bring plenty of jobs, as Brazil has already demonstrated (6 million new jobs in the sector; Indonesia plans 2.5 million, Nigeria 3 million).

If Gilmour points to land-conflicts in certain countries, they are not the result of growing biofuel needs, they are the result of bad governance. In Indonesia, examples show that smallholders have sold their land to palm oil companies, to make a good profit with which they can now feed and educate their children for the first time. Alternatively, smallholders themselves make unprecedented profits on the biofuels boom.

Gilmour then takes a very local fait divers from Colombia, a narco-state under civil war, that has nothing to do with biofuels as such: "large tracts of supposedly unused land are actually used for illegal cultivation of coca plants, from which cocaine is extracted. With most of Colombia’s non-state armed groups heavily dependent on the lucrative cocaine trade, efforts to repurpose this land towards biofuel production would be strongly opposed on several fronts."

She continues:

"The Colombian government lacks the military strength to provide adequate protection to workers responsible for clearing coca and in convincing farmers to give up the lucrative coca crop. Also, the likely retaliation from insurgents will pose a long-term challenge to the development of Colombia’s biofuel industry", adds Gilmour.

Clearly, this is a highly localised problem that has nothing to do with biofuels as such. Not all countries in the South produce vast amounts of cocaine.

What we need is a much more robust analysis on the opportunity costs of biofuels. Why are biofuels produced? What if we don't produce them and just keep relying on oil? Will the risks be lower?

With high oil prices, prices for all productive sectors go up, from agriculture to industry and services, including basic food commodities; they jeopardize national governments' abilities to invest in social programmes and in poverty alleviation (already some developing countries spend twice the amount on oil, than on health).

Moreover, not using biofuels means greenhouse gas emissions keep rising much more quickly, with the potentially disastrous results we all know about: mass migration, drought, sea-level rise, conflict and war.

It is strange to see an independent analysis for such an authoritative publication making such a rather superficial analysis on one of the greatest transformations of our times.

But from what Gilmour writes, it is clear that some countries need strong policies and better governance, to ensure that paramilitary groups and gangs don't keep doing what they usually do: forcing people into labor or stealing their belongings (such as land). That should be so even without biofuels.

Also note: critics and cynical people would say that Jane's is in the business of creating risks. If there aren't such risks, they can always be imagined. If Jane's were to compare the risks of oil dependence with those of biofuels, it would however come to a more balanced view on energy risks.


Jane's: Pursuit of biofuels bring new global security risks - July 16, 2007.

Clingendael International Energy Program, Lucia van Geuns: Future Fuels and Geopolitics: the Role of Biofuels [*.pdf] - December 9, 2007.

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Monday, July 16, 2007

Europe's Happy Planet Index: more carbon doesn't make us happier

New Europe-wide research using an innovative measure of carbon efficiency and real economic progress reveals that Europe is less efficient now at delivering human well-being than it was 40 years ago. The European Happy Planet Index compiled by the New Economics Foundation (NEF), an innovative 'think and do' tank, reveals for the first time the carbon efficiency with which 30 European nations produce long, happy lives for their citizens. The new ranking reveals a very different picture of the health and wealth of European nations. (Earlier, the NEF already produced a similar, global index, see the Happy Planet Index website).

The 'Happy Planet Index' (HPI) is an indicator of efficiency. Specifically, it compares the ultimate outcome of human endeavour – experienced well-being – with the ultimate input – planetary resources – at the national level. HPI poses two important questions: 1. Do high levels of resource consumption necessarily lead to high well-being outcomes? 2. Is it possible to achieve high levels of well-being without high levels of consumption?

In other words, do the gains in well-being achieved by the richest Western nations justify the massive additional strain that these countries place on the environment? The most straightforward way to see how countries in Europe are faring in terms of their resource consumption efficiency – and so to understand the unique perspective which HPI provides – is to walk-through the calculation step by step, comparing nations at each turn.

In its report titled The European Happy Planet Index, An index of carbon efficiency and well-being in the EU [*.pdf], the NEF looks back over the last 40 years and comes to surprising and worrying conclusions. In an age of climate change, when it is more important than ever that we use our resources efficiently, NEF's Index, published in association with Friends of the Earth, reveals that:
  • Europe as a whole has become less efficient, not more, in translating fossil fuel use into relatively long and happy lives. In fact, the Index reveals that Europe is less carbon efficient now than it was in 1961.
  • Across Europe people report comparable levels of well-being whether their lifestyles imply the need for the resources of six and a half, or just one planet like Earth. The message to politicians is that people are just as likely to lead satisfied lives whether their levels of consumption are very low or high and therefore they should not be afraid of policies to reduce demand.
  • Countries that follow Anglo-Saxon socio-economic development pathways score worse than those that follow the Scandinavian model, which is far more focused on social solidarity and environmental sustainability.
To calculate the European Happy Planet Index, NEF first ranks countries separately for their carbon footprint, life expectancy and life satisfaction. Then countries are ranked for the efficiency with which their resource use translates into relatively long and happy lives. In the results a huge range of performance is revealed. This shows great potential to meet the challenge of reducing our collective carbon footprint, and to do so without damaging quality of life.
Countries like Iceland, the highest scoring nation on our Index clearly show that happiness doesn't have to cost the earth. Iceland's combination of strong social policies and extensive use of renewable energy demonstrate that living within our environmental means doesn't mean sacrificing human well-being - in fact, it could even make us happier. By learning from the differences between European countries and by copying the best practices, we believe it will be possible to both greatly reduce our carbon footprint, and increase our well-being. - Nic Marks, founder of NEF's Centre for well-being
Andrew Simms, NEF's policy director and head of the climate change programme says that "countries that have most closely followed the Anglo-Saxon, strongly market-led economic model show up as the least efficient. These findings question what the economy is there for. What is the point if we burn vast quantities of fossil fuels to make, buy and consume ever more stuff, without noticeably benefiting our well-being? We know that someone is just as likely to have high life satisfaction while living within their environmental means, as someone who recklessly over-consumes. So, what is preventing us from radically changing direction, and reaping the benefits? If Europe doesn't lead, India, China and Brazil will not follow."

The Index reveals that with regard to life expectancy and life satisfaction (happy life years):
  • North European countries like Denmark, Switzerland, Iceland, Finland and Sweden do best in terms of life satisfaction.
  • The UK comes a disappointing 15th in both league tables for life satisfaction and life expectancy. Contrasted with nations such as France and Germany this puts the UK just ahead in terms of life satisfaction, with Germany 16th and France 19th; but behind on life expectancy with France in 7th place and Germany just ahead in 14th.
  • The so-called transition economies, such as Bulgaria, Lithuania, Latvia, and Romania do worst in both tables, differing only slightly in rank order.
Where the carbon footprint is concerned, a more interesting and less obvious picture begins to emerge:
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  • While Luxembourg is by far the worst country for its carbon footprint per person (so bad in fact that we couldn't fit it on our scale), from a league of 30 nations the UK comes in fourth from the bottom. Finland and Estonia join the UK and Luxembourg at the bottom of the table as the other countries with worse consumption per head of population.
  • The Scandinavian nations have some of the lowest per capita carbon footprints in Europe, despite also being amongst the richest and happiest nations. Some of the differences can be explained by access to domestically available renewable energy sources, but not all. Even wealthy, high consuming Switzerland has only the ninth largest footprint.
  • Europe as whole is responsible for almost three times its fair, global share of carbon emissions.
When all the indicators are put together a picture of relative carbon efficiency and well being emerges, with very bad news for the UK.

Iceland comes top of the European HPI. Scandinavian countries are the most efficient - achieving the highest levels of well-being in Europe at relatively low environmental cost with Sweden and Norway joining Iceland at the top of the HPI table. The UK comes 21st in the league of 30 countries and only transition economies, and Portugal, Greece, and Luxembourg do worse.
Our economy has been binge-drinking fossil fuels for decades. But not only has this been wrecking the environment we all depend on, it's not been making us any happier either. Gordon Brown needs to set the UK in a new direction - where the aim of Government is to improve the quality of people's lives, without costing the earth. This means an explicit focus on the type of economy we have, not just its size - we need low-carbon and high-happiness as goals for our society, not just ramped-up GDP. - Simon Bullock, economy campaigner for Friends of the Earth.
On current performance, Europe is not remotely close to navigating an economic course set to reach its desired location on climate policy. It needs to achieve a carbon footprint small enough to help prevent the planet warming by more than 2 degrees above pre-industrial levels. This requires cuts in emissions by industrialised nations of between 70 and 80 per cent by 2050 compared to 1990 levels according to Sir Nicholas Stern, author of the Treasury's influential report on the economics of climate change.

Worse still, as the European Happy Planet Index reveals, Europe is heading in the wrong direction, its carbon footprint still growing, and its level of carbon efficiency in terms of fuelling happy, long lives - lower than at any level in the last 40 years.

To reverse this trend, we need to look to the example of those European countries that are already the most efficient - some of the most socially progressive and technologically advanced nations anywhere in the world.

Innovative policies will need to be developed that significantly reduce per capita carbon footprints whilst enhancing well-being. This will require comprehensive action, but the key targets for policy makers are:
  • Reducing consumption overall and setting legally binding targets for carbon reduction: Every European government needs to set legally binding targets for reducing carbon dioxide emissions, setting carbon budgets for 3-5 year periods, to ensure each country does its part in keeping global temperature increases below 2 degrees Celsius.
  • Reducing inequalities: Inequalities - not just of income, but also of education, health and social opportunity - have a damaging impact on well-being. Governments should aim to halt and reverse rises in inequality, and provide more support for local communities to thrive.
  • Support meaningful lives: It is time that European governments invested in and implemented national well-being accounts to inform policy making across government, ensuring that the impact of policy decisions on people's well-being is taken into account.
NEF and Friends of the Earth call on the UK and other European governments, and the European Commission to adopt this analysis and embrace and apply new measures of progress, like the HPI. Only then will we be equipped to address the twin challenges of delivering a good quality of life for all whilst remaining within life-supporting environmental limits.

The impacts of global warming, both within the EU and around the world, means that we can no longer justify the marginal benefits reaped from our current high and inefficient levels of resource consumption. The price paid by future generations and people alive today in poorer countries, who have far fewer resources with which to adapt, is simply too great.

Europe needs urgently to find a new development path where good lives don't cost the earth.

NEF: UK 21st in European league of carbon efficiency and well-being - July 16, 2007.

NEF and Friends of the Earth: The European Happy Planet Index, An index of carbon efficiency and well-being in the EU [*.pdf, registration required], July 2007.

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Scientists discover new plant-bacterial symbiotic mechanism: may increase crop yields tropical soils

The growth of most plants depends on the presence of sufficient amounts of nitrogen contained in the soil. However, a family of plants, the legumes, is partially free of this constraint thanks to its ability to live in association with soil bacteria of the Rhizobium genus, capable of fixing nitrogen from the air. When these bacteria come into contact with their host plant, they trigger in the roots the formation and development of organs, termed nodules, where they continue to live. This close relationship is called symbiosis, which benefits both organisms involved: the plant supplies nutritive elements to the bacteria which in return pass on the nitrogen they have stored up.

These interactions improve crop yields of leguminous plants that are crucial for human diet (soybean, peas, ground nuts and so on), as animal feed (alfalfa, clover, sainfoin) and in the future as bioenergy feedstock. In addition, cultivation of legumes living in symbiotic association with bacteria can contribute to vegetation regeneration schemes on soils depleted in nitrogen owing to overexploitation, erosion or desertification. The plant cover thus formed can help achieve ecological restoration, by enriching the soils in nitrogen. However, the symbiotic processes studied predominantly concern the leguminous plants of temperate zones, very little those of the tropics.

Now a large team from the Institut de Recherche pour le Développement's Laboratoire des Symbioses Tropicales et Méditerranéennes and its partners (CIRAD, AGRO-M, INRA, University of Montpellier, with the participation of the Genoscope at Evry, the CEA, the DOE Joint Genome Institute, the University of Minnesota and the University of Missouri) has discovered [*French] a new symbiotic mechanism. The research is published in Science.

The findings are promising for future techniques for bringing these bacteria into association with different leguminous plants. It therefore becomes possible to increase agricultural production of a greater number of important plants, particularly in tropical zones where soil nitrogen deficiency is a serious handicap. The discovery may also result in agricultural techniques that allow cutting down the use of fertilizers.

Taking as model a symbiosis between a tropical aquatic legume, Aeschynomene, and Bradyrhizobium, bacteria of the Rhizobia family, they revealed a new mode of communication at molecular level between these two organisms. The bacteria of this original model have their own photosynthetic pathway, a unique property in the rhizobia. This special character confers on it the exceptional, rare ability to form nodules on the stems of its host-plant. The plant thus acquires the possibility of fixing much higher quantities of nitrogen than those usually measured in leguminous plants which have nodules only on their roots.

The researchers sequenced the genes of two bacterial strains of Bradyrhizobium, ORS278 and BTAi1, in order to find out their genetic make-up and identify the genes involved in this rather special form of symbiosis. These bacteria were found to have no nod genes, usually essential for nodulation:
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Bradyrhizobium consequently appeared to use mechanisms that involved other genes. This surprising result calls into question the universally recognized model of molecular communication that initiates the rhizobia-legume symbiosis. This common model requires the presence of several nod genes which allow synthesis of the Nod factor, a compound elaborated by the bacterium which enables the plant to recognize it, by molecular recognition, thereby allowing the microorganism to penetrate inside the plant by the root hairs. The finding raises the question as to what signalling pathway Bradyrhizodium might use to gain entry to the plant and set off nodulation.

The first observation was that the bacteria did not penetrate the roots of its host-plant by the hairs. It took advantage of 'crack zones' comparable with wound areas. The set of results obtained from subsequent work, seeking to identify the genes involved in producing the unknown signal molecule that plays the role of Nod factor, prompted the team's hypothesis that a molecule similar to a plant hormone, cytokinin, could act in the mechanisms by triggering nodulation. The discovery of the nature of the signal molecule itself, which remains to be fully determined, brings a glimpse of future agricultural applications.

Many plants live in symbiosis with bacteria, but the mechanisms are known for only a small number of these interactions. The demonstration of alternative pathways capable of triggering the nodulation signal in certain rhizobia is promising for future techniques for bringing these bacteria into association with different leguminous plants. It therefore becomes possible to increase agricultural production of a greater number of important plants, notably in tropical countries, while cutting down the use of fertilizers.

The research was conducted in the Laboratoire des Symbioses Tropicales et Méditerranéennes, mixed research unit UMR 113 (IRD, CIRAD, AGRO-M, INRA, University of Montpellier), with the participation of the Genoscope at Evry, the CEA, the DOE Joint Genome Institute, the University of Minnesota and the University of Missouri.

Image: the bacterial photosystem based on Bradyrhizobiumis is placed in the nodules of Aeschynomene and gets activated because of the phytochrome. Credit: Eric Giraud, IRD.

Eric Giraud et al., "Legume Symbioses: Absence of Nod Genes in Photosynthetic Bradyrhizobia" [*abstract], Science, 1 June 2007: Vol. 316. no. 5829, pp. 1307 - 1312, DOI: 10.1126/science.1139548, 2007.

Institut de Recherche pour le Développement: Le rôle des phytochromes pour la première fois déterminé chez des bactéries, Fiche 154 - May 2002.

Eurekalert: A new plant-bacterial symbiotic mechanism promising - July 15, 2007.

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Biomaxx to build biodiesel pilot plant in Thailand - small scale units for decentralised production

Toronto-based Biomaxx Systems Inc., announces it has selected Thailand as the location for a biodiesel demonstration plant. According to the company, Thailand offers significant advantages over the other locations considered, due to its rapid industrialization, the potential Thai government corporate tax incentives and the cooperative nature of the Thailand government agencies. The BioMaxx Management team also recognizes that the Thailand government is very receptive and committed to the environment and renewable energy technologies and actively promotes new business opportunities in the bioenergy sector.

Thailand currently ranks 10th on a 'Biofuels Attractiveness Index' prepared by Ernst & Young. For ethanol it ranks 11th, for biodiesel, it is put at the 9th place (earlier post).

The selected location in Thailand will be in the fertile and agricultural rich area south of the capital of Bangkok, in close proximity to the bustling port of Laem Chabang. Laem Chabang is one of Asia’s newest and most advanced shipping ports and will offer the ability to accept shipments of feedstocks and allow BioMaxx to ship equipment to the regions within Asia and abroad.

According to the company, Thailand has an abundance of feedstocks that BioMaxx will process in its biodiesel demonstration facility under various operating conditions to attain production yields and optimize production criteria. The demonstration plant will assist BioMaxx in the development of a product line of small scale biodiesel production plants to be marketed in Asia and around the world. The small scale plants are customizable to the specific feedstocks as dictated by client requirements.

This vision of scaling down production plants is important for applications in the developing world, where decentralised production may have considerable advantages over large centralised concepts:
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BioMaxx is currently finalizing agreements with strategic partners in Thailand and hopes to have formal contracts completed within the following weeks.

BioMaxx Systems is a biotechnology consulting company that focuses on the development of innovative technology solutions to address our dependence on fossil fuels. The company develops technologies to produce clean fuels such as ethanol and hydrogen and promotes clean, efficient alternatives that reduce harmful carbon dioxide emissions and greenhouse gases.

Further, the company works on different bioconversion pathways, including:
  • Biomass to energy – the development of systems that are capable of producing both heating and electricity from renewable biomass sources.
  • Industrial and municipal wastewater management and treatment processes and industrial and agricultural waste management.
  • Biosurfactants production and application in soil bioremediation and biodegradation of toxic pollutants. Biosurfactants are low toxicity biodegradable microbial active surface agents that can be produced from inexpensive raw materials. They have many applications in paint and coatings, textiles, agriculture, construction, food and beverage and cosmetics but most notably they can be used to rapidly clean contaminated soil (soil bioremediation) and degrade industrial toxic pollutants. Biosurfactants can accelerate the process and enhance biodegradation of soil, cleaning the soil in months not years.
  • Novel processes for the production of specialized enzymes, proteins, polymers, food grade acids, bio-degradable plastics and others.

Biomaxx: Biomaxx Systems Inc. selects Thailand for location of Bio-diesel demonstration plant - July 13, 2007.

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Germany to increase biofuels blending to 10%, develops sustainability criteria

The German Ministry of the Environment and the Ministry of Agriculture announce [*German] that the Federal Government will increase the amount of biofuels to be used in Germany's transport sector from 5 to 10 percent. According to the ministers, biofuels contribute significantly to reducing greenhouse gas emissions and thus help tackling climate change. Besides tax reductions for renewable fuels, the government has introduced, since the beginning of this year, the mandate to mix biofuels into fossil fuels. This blending requirement will now be doubled.

The ministers agreed on the outline of the plans during a Roundtable on Biofuels with the German automakers, the oil industry, farmers and biofuel producers. According to agriculture minister Horst Seehofer and environment minister Sigmar Gabriel, all actors agreed on increasing the target to 10%, with the auto makers pledging to make new technologies available to accomodate biofuels.

Importantly, the actors were unanimous in asking biofuels and feedstocks to be produced in a sustainable way. A growing share of Germany's biodiesel comes from imported feedstocks. The German government is therefor working on developing a set of sustainability criteria for imported fuels:
It would be unsound to see the CO2-advantage of biofuels being negated by the destruction of rainforests in the tropics. The Federal Government is therefor working with a sense of urgency towards establishing a set of sustainability criteria to which biofuels will be coupled. - Horst Seehofer, Germany's agriculture minister
The larger blending requirement, in combination with possible tax incentives, will allow smaller producers to participate further in the market, Seehofer stressed:
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Over the past months, German biodiesel producers have had difficulties in competing, partly due to the fact that the tax exemption for the fuel was phased out. This prompted American producers to tap a loophole which allowed them to export biofuels to Germany in a profitable way (earlier post). Tax exemptions may eventually be reintroduced.

But experts at the Roundtable said that this may not be necessary, because high oil prices make biofuels - especially biodiesel - once again competitive. According to them, prospects are that petroleum prices will keep rising over the medium term.

Translated for Biopact, by Jonas Van Den Berg, CC.

Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz: Zukünftig mehr Biosprit in deutschen Tanks - July 13, 2007.

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Africa, Latin America, China and the biofuel revolution: Lester Brown versus Lula

The debate on whether biofuels are a boon for poor countries, continues. Lester Brown, founder and president of the non-profit Earth Policy Institute, recently spoke about how China's growing resource consumption and the rise in oil prices pushes up food prices around the world. If biofuels are added to this equation, Brown thinks we will have difficulties in feeding the world. Brown addressed the CIES World Food Business Summit in Shanghai where spoke about the coming 'Ethanol Shock' and its impact on global food prices.

Technically speaking, Brown's vision is not entirely correct, because there is vast potential for biofuels, both in Africa and Latin America, without threatening food production. The long-term technical potential is estimated to be around 1500 Exajoules per year, under a high input, high efficiency scenario. The entire world currently consumes 400Exajoules of energy, from all sources (coal, natural gas, oil, hydro, renewables). These projections have been produced by researchers who work for the IEA Bioenergy Task 40 study group (earlier post).

But there is of course a large difference between what is technically possible, and what actually happens on the ground. Policies, economics, and trade rules determine who will benefit from this potential, and who stands to lose. To be taken into production, the vast expanses of non-forest land in Africa require more than good intentions. In principle many African countries should be net food exporters, but in the real world a whole range of factors makes that the contrary is true. In this context, Brown may be right in thinking that biofuels made from crops such as corn may cost the poor dearly:
In effect, the price of oil is beginning to set the price of food. If the price of oil jumps from $60 a barrel to $80 a barrel, the price of grain will follow it up. If it jumps to $120 a barrel, the price of grain will continue to follow. We are in a new economic era now where oil and food are interchangeable commodities because we can convert grain, sugar cane, soy bean – anything – into fuel for cars. This is an entirely new issue – one that we’ve never faced before. The ethanol lobby in Washington likes to say we (Americans) don’t eat very much corn and that is true. Mexicans eat a lot of corn – Mexican cuisine is a corn based cuisine and when the price of corn doubled the price of tortillas went up 60% and we had food riots and demonstrations in cities throughout Mexico.
Brazil's president Luiz Inacio Lula da Silva however, has an entirely different vision, and thinks biofuels offer the opportunity of the century to help fight poverty, especially in Africa. In an IPS text, he writes that food insecurity is not a matter of physical food scarcity, as Brown seems to suggest, it is a matter of a lack of purchasing power.
But the potential of biofuels go far beyond providing a new source of clean and renewable energy. The ethanol industry has created 1.5 million jobs directly and 4.5 million indirectly in Brazil. In its first phase, the biodiesel programme created more than 250,000 jobs, especially for small-scale farmers in semi-arid areas, generating income and helping to settle people on the land.

It is also important to point out that biofuel production does not threaten food security, because it affects only 2 percent of our agricultural land. Moreover, by generating new income that can be used to buy food it helps combat hunger.
Lula sums up several other advantages of biofuels, for the poor:
These programmes also put a damper on chaotic migration, staunching the exodus from rural to urban areas, reducing the pressure on major cities, and providing a disincentive to small-scale miners and farmers to raze forests.
In addition, the expansion of sugar cane production has helped restore overgrazed pasture land that had little or no potential for agriculture.
Developing countries thus stand to benefit significantly from biofuels. Given their enormous potential for creating jobs and generating income, they offer a real option of sustainable development., especially in countries that depend on the export of scarce natural resources. At the same time, ethanol and biodiesel open up new paths of development, especially in the bio-chemical industries, in the form of social, economic, and technological alternatives for countries that are economically poor but rich in sun and arable land.
Moreover, biofuels help reduce the threat of dangerous climate change, which is set to affect poor people most, and threatens biodiversity on a global scale. Finally, oil importing developing countries suffer heavily under rising oil prices, with some now spending twice as much on importing oil, than on health care.

For the time being, biofuels may be the only pragmatic and feasible way to reduce greenhouse gas emissions. According to Lester Brown, climate change will come at a huge cost, and this may ultimately destroy economies, especially if oil prices keep going up at the same time. But putting a price on carbon now, can change this dark prospect:
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I don’t know what the cost will be of beating climate change – but what will the cost be of climate change? The study concluded that we are looking at a massive market failure. The market does not tell you the truth about the cost of burning fossil fuels. The cost of burning a gallon of gasoline is closed to $10 than $3. The cost of burning coal huge compared with market prices.

We are all economic decision makers as consumers, corporate planners, government policy makers, bankers. We rely on the information of the market to make our decisions. It is telling that burning coal is cheap but in fact it is not. It tells us a gallon of gasoline in the US costs us $3 when in fact when you incorporate all of the costs it is closer to $10 per gallon. The challenge is to get the market to tell the truth and the way to do that is to adjust the taxation system. Lowering income taxes and offset that by introducing carbon taxes. In the process we get the economy steered in an environmentally sustainable direction.
President Lula thinks biofuels offer one of the few practical and feasible energy systems that allow us to tackle climate change in a straightforward, sustainable and affordable way:
Brazil has over thirty years of success in its production of fuels that combine energy security and broad economic, social, and environmental benefits. The one-quarter ethanol and three-quarter gasoline mix used by regular cars and the use of alcohol by flex-fuel cars, made it possible for Brazil to cut the consumption and imports of fossil fuels by 40 percent. Since 2003, we have reduced our carbon dioxide emissions by over 120 million tonnes, thus helping slow global warming.
Interestingly, to achieve large scale biofuel production in Africa and Latin America, the president calls for something we have called 'triangular' cooperation, novel 'South-North-South' forms of collaboration:
I am convinced that biofuels should be at the centre of a planetary strategy to preserve the environment. Agreements like that signed by Brazil and the US and now being negotiated with European countries would provide for the creation of three-way projects in Central America, the Caribbean, and Africa, combining Brazilian technology with these regions' favourable climates and soils.

The Brazilian government and business class are already offering bilateral technical co-operation in the production of biofuels in Mozambique in a marriage of Brazilian technology and British financing. This formula could be adapted throughout sub-Saharan Africa.

For a world facing environmental degradation and the increase of energy prices, biofuel offers real promise. It can help poor countries combine economic growth with social inclusion, and environmental conservation. In short, it is a valiant ally in the fight against social and political instability, violence, and migratory chaos.
On a most important point, the contradiction between Lester Brown's vision and that of Lula may be overcome. Because, as said earlier, ultimately it is policies and trade rules which determine whether biofuels benefit society or only a small group of multinationals:
However, this revolution can only occur if the rich countries open their markets to the poorest and eliminate agro-subsidies and barriers to the import of biofuels.

It is a win-win situation. Developing countries will generate jobs for marginalised populations and funds to energise their economies while developed countries can tap into a source of competitively-priced clean energy instead of investing in massively expensive innovations to make conventional fuels more green.

The creation of a rigorous system of public certification of biofuels backed by multi-lateral agreements and the commitment of the public will help protect the environment and guarantee dignified working conditions.

Biofuels offer us a way to allow all humanity to prosper without mortgaging the future of generations to come. This is the message I will carry to the World Conference on Biofuels that Brazil is organising for 2008. Together Brazil and Africa can help forge a just, lasting, and truly global solution to the major challenges of the 21st century.
Finally, president Lula sketches the steps which have led his country to cooperate with Africa, in a way that both the U.S. and the E.U. could learn from. After all, until recently Brazil was called a 'third world' country itself; today, and conscious of its own history, it is actively helping really poor developing countries kickstaring a new economic and social mode of production that Brazil thinks will bring social and economic justice:
It was clear from the discussions during the recent G8 Summit in Heiligendamm, Germany, that issues like climate change, sustainable development, new and renewable sources of energy, and development financing are global matters which the countries of the South must have a say in.

Ultimately, it is our populations that are directly affected. Moreover, our countries are generating innovative and creative proposals to resolve the problems. The contributions of leaders from South Africa, Brazil, China, India, and Mexico during the Broader G8 Summit made the importance of real North-South dialogue clearer than ever.

Africa has a central role to plan in this debate. The continent is undergoing profound transformations which are laying the groundwork for a new cycle of political stability and economic dynamism. With 53 countries, vast natural resources, and a young population, it is anxious to realise its full potential for development and prosperity.

This Africa, which I have visited five times during my first term and will certainly return to, is strengthening its economic, trade, and political ties with Brazil.

In the Africa-South American Summit in 2005, and in the two sessions of the Brazil-Africa Forum, we explored in depth the great potential of this alliance, which can be further strengthened and improved by biofuels.
Luiz Inacio Lula da Silva is the president of Brazil. Lester R. Brown is founder and president of the Earth Policy Institute.

IPS: Africa, Latin America and the Biofuel Revolution, by Luiz Inacio Lula da Silva - July 16, 2007

FoodWeek Online: Ethanol Shock: Lester Brown’s rationale - July 16, 2007.

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Sunday, July 15, 2007

European Parliament votes in favor of dismantling energy giants

The European Union is currently undergoing a complex transition towards a liberalised energy market. Such a liberalisation should lower prices for consumers and allow new players, including green energy providers, to acquire a share of the market. The stakes are high as national energy giants control much of Europe's energy landscape and national interests fuel resistance to this vision. Moreover, concentration of power in the energy sector is tightly linked to the continuation of support for fossil fuel based energy supplies; the creation of a free common energy market would allow green providers to become more competitive.

One of the key strategies towards achieving a free energy market is full 'ownership unbundling' – breaking large companies into separate production and distribution operations. The European Commission has long made clear that it favours this approach as the best way to ensure fair competition and ultimately lower prices for consumers in the Union's opening electricity and gas sector.

But Germany and France - who own energy giants such as EDF and E.ON - argue that further liberalisation will threaten supply security and lead to price instability. EU leaders partly gave in to this pressure and showed only partial backing to the unbundling approach at their Spring Summit of 8-9 March. They insisted that existing European Directives on liberalisation be implemented before any further moves are made.

Some socialist forces in Europe resist the vision, saying that dogmatic liberalisation should never triumph over concerns about maintaining public service missions. Such 'public service' can best be guaranteed by national governments and (partly) state-owned energy companies.

But despite these criticisms, a clear majority of EU MEPs has now voted in favour of fully unbundling the ownership of companies that produce and transmit electricity and gas, saying that this would be the most efficient measure to tackle chronic under-investment in the network infrastructure and guarantee access to the market by new competitors.
This is a good day for European consumers, both big and small, but also for the environmental profile of the EU internal market. Indeed, it is clearly indicated by the Parliament's call for all "'subsidies for non-renewable energy sources to be eliminated'. Importantly, it is a clear demand to the Commission to address, in its September package, the question of bias in favour of coal and nuclear power production. - Claude Turmes, Energy spokesman for the European Greens
The report tabled by MEP Alejo Vidal-Quadras, has no binding character but seeks to influence Commission proposals on energy liberalisation due in September. The text lashes out at attempts by certain governments to create "national energy champions", claiming that this amounts to nothing more than protectionism.

Even if this measure [of unbundling] is not considered as the magic tool which will resolve all of the problems, it will be the best one to promote investment in infrastructure in a non-discriminatory way, fair access to the grid for new entrants and transparency in the market. - Alejo Vidal-Quadras, EU MEP (EPP-ED, European People's Party and European Democrats), lead author of the report

The report also called for an end to state-owned companies, such as France's EDF or Italy's ENEL, saying that these are contrary to free competition as they subject the functioning of the market to political considerations:

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The report further calls for more coordination and cooperation between national regulators since the existence of 27 different rules - one for each country - is a serious obstacle to the internal market in energy. The European Parliament proposes a harmonisation of the competences of all the national regulators and especially a reinforcement of their independence, to avoid excessive intervention of governments, as was the case in Spain during the takeover bids of Endesa, the main electricity operator.

The text backed by the plenary, also demands to put an end to regulated tariffs as these are used by some countries against the arrival of new operators in their national markets, and they are a false signal to consumers: "We are in a period where we need to optimise the use of energy and citizens need a radical change of attitude in their consuming habits, which requires that they know the real costs of energy", Vidal-Quadras explained.

Vidal-Quadras expects the European Commission to take into account the Parliament's proposals for the new legislative package to liberalise energy markets, which are due to be presented next September. In the meantime, he asked the Commission to act firmly against those countries which are not yet implementing the first package of liberalisation directives approved in 2003 "as these were enough to create a free competition market and to reach the internal energy market."

French MEPs, both from the right and the left, unsurprisingly rejected the proposal, in a sign that the Commission will face a tough battle against national ambitions when it presents its liberalisation package later this year. Despite French President Sarkozy's ideological committment to free market liberalism, liberalisation of the energy market remains a taboo, for him too. European MEP's from his UMP party rejected the report.
In a context of strong competition, with the emergence of powerful non-European operators, it appears dangerous to dismantle European energy enterprises in the name of a dogmatic competition policy that is a far cry from the industrial logic of strengthening the EU in global arena. - Statement by the UMP members of the EPP-ED
They added that unbundling would prevent traditional energy operators from carrying out the necessary investments to ensure security of gas and electricity supply, saying: "Handing this over to new entrants, which do not necessarily have sufficient financial means, or to non-European companies, which do not necessarily share our forecasts on future needs, is very dangerous and very preoccupying."

EPP-ED: European Parliament calls for more legislative measures to build up a common energy market. Alejo Vidal-Quadras MEP - July 10, 2007.

EPP-ED: Séparation patrimoniale des entreprises énergétiques: les Députés européens de l'UMP expriment leur opposition - July 10, 2007.

The Greens: EU energy market: EP gives clear mandate to the Commission to break up German and French energy oligopolies - July 10, 2007.

European Commission: Energy for a Changing World.

Parliament ITRE committee: Draft report: Prospects for the internal gas and electricity market [*.pdf]

Parliament Legislative Observatory: Report: Prospects for the internal gas and electricity market.

EurActiv: MEPs call for dismantling of energy giants - July 11, 2007.

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Simulated crop provides answer to irrigation issues

With biofuels taking an ever larger share of agricultural output, it becomes important to find technologies and policies that increase the efficiency of inputs such as water, fertiliser and pesticides. Irrigation management is one important field that leaves room for improvement. Scientists from Oklahoma State University, the Punjab Agricultural University, and Texas A&M have found [*abstract] that a simple economic intervention can substantially reduce water use by farmers in India's Punjab.

South Asia has witnessed a rapid growth in rice and wheat production that has defined the 'Green Revolution' there. During the past 30 years, the Indian Punjab has transformed its agriculture through new technology that provides for high-producing plants, increased fertilization, and irrigation. Rice and wheat production has more than doubled with an increase in farmed areas, totaling about 6.4 million acres of rice and 8.4 million acres of wheat. Because of this, Punjab has now become India's bread basket, and has acquired a large bioenergy potential from agricultural residues (earlier post, here and here).

While the Indian Punjab's agricultural performance continues to be impressive, evidence suggests that it's coming at a price: their groundwater use is becoming increasingly dangerous to the environment. In some areas, the water quality is worsening as water tables decline. In other areas, water is flooding the soil making it difficult for plant growth. The rampant use of irrigation is encouraged by cheap water policies that provide producers with little or no expense for water use.

Since irrigation water charges are extremely cheap, farmers seem to use it more excessively and inefficiently. They are able to raise crop yields but at the cost of extremely low water quality. It is used this way due to crop decisions farmers must make for their crops before knowing the weather conditions for the upcoming season. Irrigation provides a way around these weather misjudgments. Farmers can adjust the amount of water coming to their crops by irrigation to supplement the precipitation levels.

In response to this dilemma, the Oklahoman, Punjabi and Texan scientists have investigated the use of alternative cropping systems to reduce irrigation water use and improve environmental conditions in a study funded by the United Nations Development Program (UNDP). A simulation model was used (CropMan) to assess the biological structures, processes and economic practicality of an alternative range of cropping systems. Crops that were studied included maize, cotton, sorghum, soybeans, and mustard. Results from this research were published in the July-August 2007 issue of Agronomy Journal:
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The scientists gathered agronomic, geographic, and climatic data of the Punjab region. The data was entered into the simulation model and was adjusted for known farming conditions. Irrigation water response functions were estimated for each of the cropping systems, which showed how crop yields responded to alternative types of irrigation water strategies. Simulations assessed how irrigation water pricing affects the choice of cropping patterns among producers in the Indian Punjab.

The study found that two of the alternative crops, cotton and soybean, would enter cropping patterns provided that irrigation water prices moved to about 25% of the price charged by municipal water authorities in large cities such as New Delhi. Shifting cropping patterns toward more water-efficient enterprises would decrease irrigation water use on a typical rice field by nearly 66%. Charging producers for their irrigation water use was found to have only a modest effect on farm income. According to the research, once farmers have to pay for the water that irrigates their crops, they will use much less, but much more efficiently. This will subdue much of the potential environmental damage and reverse downward trends.

Research is ongoing at Punjab Agricultural University to field test alternative cropping systems across a range of irrigation management strategies. Additional field testing is planned to determine how the alternative crops would perform under actual farming conditions. Further research is needed to assess the environmental benefits that would accompany the increased water efficient cropping patterns found in this study, as well as to determine the most socially accepted water pricing for Punjabi farmers.

S. K. Jalotaa, A. Soodb, J. D. Vitalec, and R. Srinivasand, "Economic Analysis Simulated Crop Yields Response to Irrigation Water and Economic Analysis. Increasing Irrigated Water Use Efficiency in the Indian Punjab", Published online 26 June 2007 Published in Agronomy Journal, 99:1073-1084 (2007), DOI: 10.2134/agronj2006.0054

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