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    Scientists, economists and policy experts representing government and public institutions from more than 40 countries will exchange the latest information on economic and technology opportunities at the U.S. Department of Agriculture's "Global Conference on Agricultural Biofuels: Research and Economics", to be held Aug. 20-21 in Minneapolis. USDA ARS - August 14, 2007.

    A company owned by the Chinese government has expressed interest in investing up to 500 million US dollars in a biofuel project in Indonesia. The company is planning to use jatropha as its raw material and is targeting an annual output of around 1 million tons. Forbes - August 13, 2007.

    Virgin Atlantic, Boeing and General Electric are within weeks of selecting the biofuel for a flight demonstration in the UK early next year. The conversion of biomass via the Fischer-Tropsch process is no longer amongst the biofuel candidates, because the process has already been demonstrated to work. Ground testing of the chosen fuel in a development engine at GE is expected to begin in October-November. The limited flight-test programme will involve burning biofuel in one GE CF6-80C2 engine on a Virgin Boeing 747-400. Flight Global - August 13, 2007.

    Japan's Economy, Trade and Industry Ministry said Saturday it plans to introduce a new preferential tax system in fiscal 2008 aimed at promoting a wider use of biofuel, which could help curtail greenhouse gas emissions. Under the envisaged plan, biofuel that has been mixed with gasoline will be exempt from the gasoline tax--currently 53.8 yen per liter--in proportion to the amount of biofuel included. If blended with diesel oil, biofuel will be free from the diesel oil delivery tax, currently 32.1 yen per liter. Daily Yomiuri - August 13, 2007.

    Japan's Economy, Trade and Industry Ministry said Saturday it plans to introduce a new preferential tax system in fiscal 2008 aimed at promoting a wider use of biofuel, which could help curtail greenhouse gas emissions. Under the envisaged plan, biofuel that has been mixed with gasoline will be exempt from the gasoline tax--currently 53.8 yen per liter--in proportion to the amount of biofuel included. If blended with diesel oil, biofuel will be free from the diesel oil delivery tax, currently 32.1 yen per liter. Daily Yomiuri - August 13, 2007.

    Buenos Aires based ABATEC SA announces the release of a line of small biodiesel plants with modular design, high temperature reaction for the best yield, to produce from 50 to 1000 gal/day (190 to 3785 liter/day) of high quality methylester and valuable glycerol. PRWeb - August 10, 2007.

    Vegetable growers in North Queensland are trying to solve the problem of disposing of polyethylene plastic mulch by using a biodegradable, bioplastic based alternative. Trials are a collaboration of the Queensland Department of Primary Industries with the Bowen District Growers Association. Queensland Country Life - August 8, 2007.

    Hawaii's predominant utility has won approval to build the state's first commercial biofuel plant. It is the first substantial new power generator that Hawaiian Electric Co. has added in 17 years. HECO will build the $142.3 million facility at Campbell Industrial Park on Oahu beginning early next year, and expects to begin commercial operation in mid-2009. It will run exclusively on fuels made from ethanol or biodiesel. Star Bulletin (Honolulu) - August 8, 2007.

    PetroSun Inc. announced today that it conducted its initial algae-to-biofuel program held at Auburn and Opelika, Alabama. The company intends to hold a series of these programs during August and September with biodiesel refiners and firms that are researching the use of algal oil as a potential feedstock for jet fuel production. MarketWire - August 8, 2007.

    To encourage Malaysia's private sector to generate energy from biomass resources, national electricity company Tenaga Nasional Bhd (TNB) has increased the purchase price of electricity produced from palm oil biomass waste to 21 sen per kilowatt hour from 19 sen now. According to Minister of Enegry, Water and Communications, Datuk Seri Dr Lim Keng Yaik the new price structure, under the Renewable Energy Power Purchase Agreement (REPPA), will be implemented immediately. Such projects are eligible for the Clean Development Mechanism. Under the 9th Malaysian Plan, the country's government aims to achieve the installation of 300MW and 50MW of grid-connected electric power from renewable energy sources in Peninsular Malaysia and Sabah, respectively. Bernama - August 7, 2007.

    Aspectrics, which develops encoded photometric infrared and near infrared spectroscopy, will be launching a new range of biofuels analyzers designed to meet the demands of scientists and analysts to carry out biodiesel quality control and analyze biodiesel blend percentages in real time. Bioresearch Online - August 7, 2007.

    Irish start-up Eirzyme has secured a €10m investment from Canadian company Micromill System. The new company will produce low-cost enzymes to convert biological materials such as brewers' grains into bioethanol and biogas. RTE - August 6, 2007.

    Imperium Renewables says it has a deal to provide Royal Caribbean Cruises with biodiesel. The Seattle-based biodiesel maker, which is scheduled to inaugurate its Grays Harbor plant this month, will sell the cruise line 15 million gallons of biodiesel in 2007 and 18 million gallons annually for four years after that. The Miami-based cruise line has four vessels that call in Seattle. It is believed to be the single-largest long-term biodiesel sales contract to an end user in the U.S. Seattle Times - August 5, 2007.

    The J. Craig Venter Institute, leading the synthetic biology revolution, is expanding its Bio-Energy Program, seeking a senior scientist to head the new dedicated department. With ongoing research in biohydrogen, cellulosic ethanol, microbial fuel cells, and bacterial nanowires, the Environmental Genomics and Plant Genomics groups within JCVI are working on active components related to bio-energy. NatureJobs - August 5, 2007.

    Polish power and heat firm Praterm has decided to invest 50 to 100 mln zloty (€13.2-26.4 /US$18.1-36.4 mln) by 2013 in biomass production. The company has already bought Bio-Energia, an operator of four biomass heating plants with a total capacity of 14 MW. Wirtualna Polska - August 5, 2007.

    Brazil and Mexico will sign a cooperation agreement to collaborate on the production of ethanol from sugarcane, Gonzalo Mourão of the Brazilian chancellory's Departamento do México, América Central e Caribe said. Brazil's President Lula is on a tour of Central America and is currently in Mexico, after which he will visit Honduras, Nicaragua, Jamaica and Panama. He is set to sign several bilateral agreements on energy and biofuels with these countries. Reuters Brasil - August 4, 2007.

    Evergreen Pulp Inc. announced that it and Diversified Energy Corp. have been selected by the state of California for a $500,000, 36-month renewable energy project that aims to dramatically reduce natural-gas-use residue and natural gas at its Samoa mill. The Public Interest Energy Research Natural Gas Program, a part of the California Energy Commission, awarded four contracts for research, development and demonstration of technologies to replace natural gas with renewable resources, to four applicants from among a pool of 25. The state’s focus for the contracts was for biomass-to-gas and/or hybrid projects specifically addressing industrial and commercial process heating or combined heat and power needs. Eureka Reporter - August 4, 2007.

    Greenline Industries, which designs and builds biodiesel production facilities, and ULEROM, one of Romania's largest agri-business corporations, today announced the formal opening of their largest facility in Vaslui, Romania. The plant will produce some 26.5 million liters (7 mio gallons) per year. The Romanian facility is the 17th example of Greenline's technology featuring waterless wash, computerized, continuous flow and modular construction. PRNewswire - August 1, 2007.

    US Renewables Holdings announced today that it has successfully closed on $475 million of third party capital commitments in its most recent private equity fund, USRG Power & Biofuels Fund II, LP and related vehicles (collectively, "Fund II"), ahead of the fund's original target of $250 million. PRNewswire - August 1, 2007.

    Malaysian palm oil company Kim Loong Resources Bhd has secured European energy trading group Vitol as buyer for all its carbon credits from its planned biogas plant in Kota Tinggi. The biogas facility generates methane from palm oil mill effluent, a waste product. The project is expected to generate over RM2 million (€423,000/US$579,000) of earnings annually. The methane capture and power generation project was registered and approved by the Clean Development Mechanism. The Edge Daily - July 31, 2007.

    GreenHunter Energy, Inc. announces that its wholly-owned subsidiary, GreenHunter BioFuels, Inc., located in Houston, Texas has successfully acquired Air Emission Permits from TCEQ (Texas Commission of Environmental Quality) under TCEQ's Permit by Rule (PBR) programs. These permits open the way for construction of a 105 million gallon per year (mgy) biodiesel facility including a separate but related methanol distillation facility. PRNewswire - July 30, 2007.

    Together with Chemical & Engineering News' Stephen K. Ritter, the journal Environmental Science & Technology sent Erika D. Engelhaupt to Brazil from where she wrote daily dispatches of news and observations about biofuels research. In particular she focuses on a bioenerrgy research partnership between the American Chemical Society, the Brazilian Chemical Society, and the Brazilian Agricultural Research Corporation (EMBRAPA). Check out her blog. Dipatches from Brazil - July 28, 2007.

    Consultation is under way on a £50 million (€74/US$101million) renewable energy plant planned for the South Wales Valleys. Anglo-Dutch company Express Power plans to build a wood-fuelled biomass plant on Rassau Industrial Estate in Blaenau Gwent. The plant will generate an annual 160,000 MWh (Mega Watt hours) of green electricity for Wales from forestry, recycled wood and wood derivatives. ICWales - July 27, 2007.

    The price of New York crude leapt to 77.24 dollar a barrel on Thursday, marking the highest level since August 9, 2006, as keen global demand and tight supplies fuelled speculative buying, traders said. On Wednesday, the US government had revealed that inventories of American crude fell by 1.1 million barrels last week. France24 - July 26, 2007.

    Arriva, one of Europe's largest transport groups is trialling B20 biodiesel for the first time on 75 of its buses. The company is aiming to reduce total carbon emissions by around 14 per cent by using biodiesel as a 20 per cent blend (predominantly be a mixture of sustainable soya products, along with used cooking oil and tallow). The 75 buses in the innovative trial will carry around 130,000 passengers every week. Minimal engineering changes will be required to the fleet as part of the scheme. Arriva - July 26, 2007.

    Marathon Oil Corporation announces that it has completed two more projects adding biodiesel blended fuel at its Robinson and Champaign terminals in Illinois. The terminals now feature in-line ratio blending in order to provide soy-based B-2 (two percent biodiesel) and B-11 (eleven percent biodiesel). Marathon Oil - July 25, 2007.

    Norway-based renewable energy firm Global Green One has agreed to set up a € 101.6 million bioethanol plant in Békéscsaba (southeast Hungary), with more facilities planned for Kalocsa, Szombathely and Kõszeg, the latter of which was already a target for a €25 million plant in May this year. The Békéscsaba plant would process 200,000 tonnes of maize per year, employing around 100 people. The logistics part of the facility would also create 100 jobs. The company expects the factory to generate €65 million in revenues each year. Portfolio - July 25, 2007.

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Tuesday, August 14, 2007

SunEthanol secures funding for cellulosic ethanol technology based on 'Q Microbe'

SunEthanol Inc., a biofuels technology company, announced today that it has secured funding to commercialize the 'Q Microbe' (Clostridium phytofermentans), a unique natural bacteria capable of converting cellulose into ethanol. Series A financing for developing patent-pending cellulosic ethanol technology around the Q microbe has been provided by VeraSun Energy, Battery Ventures, Long River Ventures and AST Capital. SunEthanol’s Q Microbe technology, licensed from the University of Massachusetts, has the potential to make the production of ethanol from cellulose economically competitive.

SunEthanol’s Q Microbe and the cellulase enzyme it produces (image, click to enlarge) represents true consolidated bio-processing (CBP), a technology that consolidates multiple steps into a single efficient and natural process, potentially resulting in a lower cost of production and the ability to convert various forms of biomass into ethanol.

The microorganism was discovered by University of Massachusetts professor of microbiology, Dr. Susan Leschine in the soil of New England, near the Quabbin Reservoir, and is being developed for cellulosic ethanol production by Dr. Leschine and the SunEthanol lab team. Dr. Leschine serves as a senior advisor to SunEthanol. The team believes that the Q Microbe’s CBP process can be used with a wide variety of plentiful biomass feedstocks including: switchgrass, corn stover, wheat straw, sugar cane bagasse, and wood pulp. It can potentially be used in all parts of the world where biomass is plentiful.
University of Massachusetts faculty are among the most talented researchers in the world. We work hard to engender an academic environment that helps professors convert revolutionary discoveries to solutions to real-world problems and bring them to market. Spinning off new companies like SunEthanol is a win-win for the University and our state and nation’s economy—our professors and students are involved in basic and translational research that allows the University to foster new technologies, new companies and new jobs. - Jack M. Wilson, president of the University of Massachusetts.
Converting cellulose to ethanol is currently a complex, multi-step process. Cellulosic biomass - plant matter - is an abundant, low-cost source of stored energy. However, unlocking that embodied energy has presented a challenge. Cellulosic biomass is composed of highly ordered sugar polymers, which are shielded from enzyme attack by a matrix of other complex polymers. This makes biomass very difficult to break down into its constituent sugars, in order to ferment these sugars into ethanol:
:: :: :: :: :: :: :: :: ::

Typically, cellulosic biomass must go through an intensive pretreatment step, after which enzymes are used to break down the biomass into simple sugars suitable for fermentation by yeast into ethanol. Enzymes, along with the intensive pretreatment required for their use, are the largest single cost component of cellulosic ethanol production. SunEthanol's technology eliminates the need for a separate enzymatic conversion step, and broadens pretreatment options.

SunEthanol's proprietary catalyst offers other potential advantages. It can process an unusually diverse range of biomass feedstocks. It is also able to ferment all fermentable components of biomass (both C5 and C6 sugars, as well as other saccharides and polysaccharides), and ethanol is its primary product.
The development of a CBP solution has long been the goal of the biofuels industry, and SunEthanol has proven that their microbiological process has unique capabilities to meet the industry’s objectives. This funding will give them the support needed to increase the performance and scale of their technology as they work toward bringing it to market. - Jason Matlof, partner at Battery Ventures.
SunEthanol is a biofuels technology company that is commercializing the Q Microbe, a proprietary cellulosic ethanol production technology. SunEthanol’s consolidated bio-processing (CBP) microbe technology is expected to consolidate multiple steps into one efficient and naturally-occurring process, potentially resulting in a lower cost of production and the ability to convert various forms of biomass into ethanol. SunEthanol's patent-pending technology was developed by Dr. Susan Leschine and her team of research scientists at UMass. The company is backed by VeraSun Energy, Battery Ventures, Long River Ventures and AST Capital.

Since 1983, Battery Ventures has been investing in technology and innovation worldwide. The firm partners with entrepreneurs and management teams across technology sectors, geographies and stages of a company’s life, from start-up and expansion financing, to growth equity and buyouts.

Battery has supported many breakthrough companies around the world, including: Airespace (acquired by Cisco), Akamai Technologies, Cbeyond, LIFFE (acquired by EuroNext), and Neoteris (acquired by Netscreen). Its current portfolio includes emerging firms such as Advent Solar, BladeLogic, Freshpoint, Lion Cells, NanoConduction and Netezza, as well as more established companies such as ITA Software, Consona Corporation, MetroPCS and Nova Analytics. From offices in Boston, Silicon Valley and Israel, Battery manages nearly $3 billion in committed capital, including its current fund of $750 million.

Long River Ventures is an early stage venture capital firm based in central and western Massachusetts. The firm invests in a mix of seed, start-up, and more advanced early stage companies, typically with revenues under $5MM per year. Long River focuses on identifying promising opportunities and entrepreneurs in the emerging technology and life science centers of New England outside of the traditional Boston and New York metro regions.

VeraSun Energy Corporation, headquartered in Brookings, South Dakota, is committed to be a leading producer of renewable fuel. The Company has three operating ethanol production facilities located in Aurora, SD, Fort Dodge, IA, and Charles City, IA, with three facilities under construction in Hartley, IA, Welcome, MN and Reynolds, IN. VeraSun is in the process of acquiring another three biorefineries currently under construction in Albion, NE, Bloomingburg, OH and Linden, IN. Upon completion of the new facilities and those being acquired, VeraSun will have an annual production capacity of approximately one billion gallons by the end of 2008. The Company also has plans to extract oil from dried distillers grains, a co-product of the ethanol process, for use in biodiesel production.

The Company markets E85, a blend of 85 percent ethanol and 15 percent gasoline for use in Flexible Fuel Vehicles (FFVs), directly to fuel retailers under the brand VE85TM. VE85TM, the first-ever branded E85, is now available at more than 90 retail locations.

Image: A current research thrust of Dr. Leschine's laboratory is aimed at experimentally manipulating fermentation product formation by culturing microbes under conditions that promote the development of substrate-attached cellulose-decomposing communities known as “biofilms.” Surprisingly little is known about biofilm formation on cellulose, especially considering that biofilm production may dramatically affect cellulose decomposition. Presently, her team is focusing on Clostridium phytofermentans, a cellulose-fermenting microbe that produces H2 and exceptionally large amounts of ethanol. The image shows scanning electron micrographs of a C. phytofermentans biofilm on dialysis tubing (“regenerated cellulose”). A. Low magnification view of the biofilm showing cell aggregates on the surface of shredded dialysis tubing. B. Magnified section of biofilm showing individual cells embedded in a stringy extracellular matrix. Credit: Susan B. Leschine.

SunEthanol: bioprocessing technology.

Massachusetts Technology Transfer Center: Fuels from Biomass: Consolidated Bioprocessing of Biomass to Ethanol by Clostridium phytofermentans.

A. Warnick Thomas, A. Methe Barbara and B. Leschine Susan, "Clostridium phytofermentans sp. nov., a cellulolytic mesophile from forest soil" [*abstract], International Journal of Systematic and Evolutionary Microbiology, Vol 52, 1155-1160, 2002.

Susan B. Leschine: Microbial Physiology and Diversity: Cellulose and Chitin Decomposition, Biofilms on Natural Polymers, Fuels from Biomass, dept. of microbiology at the University of Massachusetts, Amherst.

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Greening the desert with biofuels: Inner Mongolia peasants show it's possible

Greening the desert by planting biofuel crops and making a profit from it? Yes, it is possible. Many energy crops have the capacity to fight major environmental problems like erosion, soil nutrient depletion or desertification. Biofuel crops can restore and revitalize entire ecosystems (earlier post). An excellent example comes from China's Inner Mongolia autonomous region, where poor peasants are pushing back desertification by planting a drought-tolerant shrub that is being used for the production of timber and bioenergy. The effort provides livelihoods, brings wealth to the poor, and ensures local access to energy.

Besides the farmers' own initiatives, the Chinese government has also developed an 'integrated sand-fixation technology' that makes it possible to grow more crops in the desert to halt its merciless progression.

The Worldwatch Institute's 'China Watch' reports that every year, gusting winds from Inner Mongolia’s sprawling desert — a 150,000-square-kilometer area the size of Greece — threaten China’s capital Beijing with damaging sandstorms. Inner Mongolia is also one of the country’s most impoverished areas. But these days, local peasants are benefiting from the region’s challenging environment.

In the early 1990s, to bridle the wind and prevent the sand from drifting, the city government called for the planting of sand willows (Salix psammophila). The desert greened for the first time. More importantly, local residents quickly discovered other uses for the bushes, such as making packaging planks. They established several local plank processing factories.

The sand willow has a fast growth cycle. It matures in three years and regrows quickly when cut, making it a high-yielding and cheap source for the planks. As market demand for the planks rises, many firms are now buying sand willow timber from villagers at a price of 240 RMB (roughly US$30) a ton.

Because local residents can earn money from it, they have begun planting more sand willows. In Pojianghai Village, plantations of the bushes are expanding quickly over the vast desert. Within 100 square kilometers of plank factories, sand willows have become the major income source for many peasants, and some households make as much as US$4,000 a year from them. This makes local pockets bulge, and has intensified the bridling of drifting sands.

Biomass plant brings wealth
Others have discovered new energy sources from the multi-use bushes. Li Jinglu, a businessman from Beijing, found out that the heat generated from burning sand willows is equivalent to that from burning coal.

In early 2007, the first desert biomass thermal power plant was constructed near to an existing methanol chemical plant, two kilometers away. The power plant uses the waste water from the methanol plant, and the biomass residue can be further processed into potassium fertilizer. The power plant is slated to begin operation early next year and will generate some 180–210 million kwh of electricity annually, according to Li.

Wulan Dalai, who lives in the Mu Us Desert, is the first resident to provide raw materials to the biomass plant. Last October, before the construction of the plant, he signed a contract with the investor, leasing out 3,500 mu (roughly 233 hectares) of his land for sand willow plantations. He will receive 20,000 RMB (US$2,500) a year in land rent alone:
:: :: :: :: :: :: :: :: :: ::

The invisible hand of the market is bringing new hope to Inner Mongolia’s expanding desert. In the past, the local government had to hire people to plant trees to hold back the drifting sands, and the trees seldom survived. Today, seeing the returns on sand willows, local villagers are treating their bushes like their babies.

So far, more than 1,300 households in the province have treated over 1,000 mu (67 hectares) of deserts. Residents are not only benefiting from the market, but they have also found an effective way to save the ecosystem.

Integrated Sand-fixation Technology
In 2005, the Institute of Plasma Physics of the Chinese Academy of Sciences developed an integrated "Sand-fixation Technology of an Integration of Ion Beam Vegetation Improvement and New Materials", which passed appraisal by an expert team. The appraising team was made up of sand control experts from Grassland Research Institute of the Chinese Academy of Agricultural Sciences of Inner Mongolia and members of a special topic expert team.

The appraisal concluded that the new technology to fix sand by the comprehensive integration of plants, microorganisms and ion beam improvement has evolved from the study of the compatibility of biological groups and their interaction with the environment to a study that has improved the micro-ecosystem of the rhizosphere of sand-binding plants by using such new materials as water-absorbing resin and rare earth.

This research topic studied the "micro-environment cultivation technology system" for licorice root and the "technology system of planting dryland willow and sand willow stems for thermal-radiation prevention and moisture-preserving cultivation", which has brought about the advanced technology system that can protect and promote the growth of plants in the desert.

Two years of application test in Kubuqi Desert has proved that this technology can increase the plant survival rate of licorice root, dryland willow and sand willow trees. It is both reliable and practicable, very suitable for re-vegetation in the desert and sandy land.

In a word, this research has put forward a new concept and new method for fixing and controlling sand. This technology is innovative in theory and has very good prospects in future application. So far there has been no document reporting this integrated technology system and this research is of advanced international standard.

China is a world leader in the fight against desertification. The PRC's recently announced forest bioenergy program is integrated with these efforts (earlier post).

WorldWatch Institute: Residents of Inner Mongolia Find New Hope in the Desert - August 14, 2007.

Ministry of Science and Technology of the PRC: "Integrated Sand-fixation Technology" Passed Appraisal - October 2005.

Biopact: China to boost forest-based bioenergy, helps win battle against desertification - July 17, 2007

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Impact assessment of EU's 2020 biofuels target on agricultural markets

Earlier this year, the European Commission's Directorate-General for Agriculture and Rural Development published an impact assessment [*.pdf] of the 10 percent biofuel obligation by 2020 on agricultural markets. Its main conclusions: the targets can be achieved by second generation technologies and imports, grain prices would not increase in any substantial way, and agricultural markets are expected to remain stable over the long run. The Commission's projections are based on the assumption that 30% of the biofuels will come from second-generation fuels, whereas 20% would be imported.

Note that the report was published before the landmark International Biofuels Conference, where international trade and imports received more attention and backing (earlier post).

Development of biodiesel and ethanol demand and the incorporation rate until 2020 in the EU-27
According to analyses of DG Transport and Energy (TREN) the current biofuels directive (EC 2003/30) promoting 5.75 percent biofuel by 2010 would not reach the target, because the markets and technologies don’t have enough time to react. However, over the longer run achievement of 6.9 percent could be expected by 2020. The new biofuel legislation, which promotes 10 percent biofuel by 2020, would therefore increase biofuel demand by 3.1 percent and it would also lead to a more evenly spread consumption pattern across the EU.

The Commission believes the biodiesel industry is very well developed and would continue its development over the next few years despite some recent readjustments of taxation of biofuels in some Member States. Increased availability of second generation Biomass-to-liquid (BLT) technology at an industrial scale is expected to boost developments in the biodiesel sector from 2014 onwards.

Feedstock composition for biodiesel and ethanol by 2020
The Commission expects a similar take off by second generation technologies in the bioethanol industry. However, the build up of first generation bioethanol capacities is expected to kick in from 2007 onwards and is assumed to gain pace from 2011-2013.

By 2013 the Commission expects an incorporation rate of 5.5 percent could be reached if Member States stringently aim at meeting the 10 percent objective in 2020. The impact on land use in the EU is expected to be relatively modest. Production from about 15 percent of arable land would be used. The total land used for first and second generation biofuel production would then be 17.5 million ha in 2020. Imports are expected to provide around 20 percent of the biofuel production:
:: :: :: :: :: :: :: :: :: :: ::

Under the 10 percent obligation, about 59 million tons of cereals, or 18 percent of domestic use, is expected to be used as first-, and including straw, also as second-generation biofuels. Most of the cereals used would be soft wheat and corn.

Grain, oilseed and vegetable oil markets in 2020 under the 10% target
The Commission expects that this would be provided by a yield increase of about 1 percent per year, which would lead to 38 million tons more cereals in 2020, and another 14 million tons could be grown on set aside land, if the set aside scheme lasts. Domestic use of cereals is expected to increase significantly while exports will decrease. Cereal prices would appear stable and reach €120/ton in real terms or €150/ton in nominal terms. The long run impact of biofuels on cereal prices is expected to be in the range of 3-6 percent as compared to 2006 prices. The second generation biofuel production would reach about a third of the domestic biofuels production, largely by incorporating the straw and wood based cellulosic material into production. About 1.75 million tons of oil equivalent (mtoe) wood based material is expected to be imported.

The oilseed markets is expected to be affected more strongly, particularly the sunflower seed market which is expected to see significant increases of prices, up by 15 percent, because of the limited global production potential. The rapeseed prices are expected to be kept on moderate levels, up by 8-10 percent, by the developing production in Russia and the Ukraine. Soybean oil prices are expected to increase significantly due to the development of biodiesel industries around the world, mainly in Brazil and in the United States.

The Commission sees the bioenergy production as one of the major main stream opportunities for agriculture over the medium and long term. The analysis assumes a contribution of 30 percent of second generation biofuel in 2020.

Land-use by 2020 under the 10% biofuel target
In conclusion the Commission considers the 10 percent obligation does not overly stretch the land availability or lead to a significant increase of intensities of production because of the limited pressure on markets.

The long term and relatively small increase in feed use expected in the EU over that time would leave enough possibilities for European farmers to support this new market outlet without a danger of returning to fertilizer and pesticide input patterns seen until the late 1980’s. Farm employment is also expected to decline less than without biofuels, and additional jobs are expected to be created in the downstream activities and processing of biofuel.

European Commission, Directorate-General for Agriculture and Rural Development, Directorate G. Economic analysis, perspectives and evaluations, G.2. Economic analysis of EU agriculture: The impact of a minimum 10% obligation for biofuel use in the EU-27 in 2020 on agricultural markets - Impact assessment Renewable Energy Roadmap [*.pdf], March 2007

Biopact: Highlights from the International Conference on Biofuels (Day 1) -July 05, 2007

Biopact: Sweden calls for the creation of a 'biopact' with the South - Highlights from the International Conference on Biofuels (Day 1, part 2) - July 05, 2007

Biopact: How Brazil convinced the EU on biofuels - Lula's speech - July 06, 2007

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Japan's RITE develops cellulosic biobutanol technology

Japan's government-affiliated Research Institute of Innovative Technology for the Earth (RITE) has developed technology for the production of cellulosic biobutanol from materials such as grass cuttings and wood chips. The fuel can be blended with diesel.

Although similar technology exists for ethanol fuel for gasoline cars, this is said to be a world first for diesel vehicles.

RITE is aiming for commercial production in three years. The institute was established in 1990 by the government and leading Japanese automotive and energy firms.

The biobutanol fuel in question is obtained by converting biomass via genetically modified microorganisms. The butanol was created by cultivating a large number of these microbes in a vat and adding sugar produced by breaking down such plant fibers as grass and tree cuttings, wood and rice straw.

Light oil is generally used in diesel fuel. But in testing commissioned by RITE, Honda Motor Co. (7267.TO) subsidiary Honda R&D Co. confirmed negligible effects on vehicle performance when biobutanol was mixed with light oil:
:: :: :: :: :: :: :: :: ::

RITE sees the biofuel as key to cutting greenhouse gases emitted from diesel vehicles. Once mass production begins, the fuel is seen costing almost the same to produce as bioethanol for gasoline-powered cars.

Demand for biofuels made from plants is expected to grow because they help curb carbon dioxide emissions. But to date, first-generation biodiesel fuels have been made from food-grade vegetable oils.

Large industrial and research organisations have been working to develop technologies for the conversion of cellulosic biomass. Players working on butanol are, besides RITE, BP Plc (BP) of the UK, DuPont Co. of the US (earlier post). RITE has already applied for an international patent on the technology.

Earlier, RITE and Honda joined efforts to develop cellulosic biomass.

Automotive world: Japan: New technology generates biodiesel from grass cuttings and wood chips - August 14, 2007.

RITE: RITE and Honda Jointly Develop New Technology to Produce Ethanol From Cellulosic Biomass [*.pdf] - Sept. 14, 2007.

Biopact: Scientists develop biobutanol from wheat straw - June 26, 2007

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