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    The BBC World Service's current 'One Planet' programme focuses on revolutionary technologies and research that uses a next-generation of GM crops as factories for the production of new pharmaceuticals, green products and alternatives to petroleum-based chemicals. One Planet - August 16, 2007.

    Germany's Biogas Nord has been commissioned to construct a large multi-feed biogas plant with a capacity of 2.8 MW of electrical power in Romania. The value of the order is approximately €3.5 million. The plant will be built in the Transylvanian region close to the county town of Oradea. Interestingly, a synergy will be created by coupling the facility to the construction of a biodiesel plant. In so doing, the waste products resulting from the production of biodiesel, such as rapeseed pellets and glycerin, will be brought to the biogas plant as substrates. Ad-Hoc News - August 16, 2007.

    The University of Western Ontario's Research Park at Sarnia has received $10-million in funding for the development of biofuel technologies. The funds will be used for the creation of the 'Ontario Bioindustrial Innovation Centre' at the University, including the addition of a commercialization centre with incubator suites, laboratory equipment, pilot plant space and space for startup companies. The Observer - August 16, 2007.

    Philippine Bio-Sciences Co., Inc. (PhilBio) and its Clean Development Mechanism subsidiary in Cebu, has told the Central Negros Electric Cooperative (Ceneco) that it will soon open a 10 megawatt biogas plant in Cebu. According to the company, under current conditions electricity generated from biogas is around 20% less costly than that generated from fossil fuels. Philippine Bio-Sciences - August 15, 2007.

    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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Thursday, August 16, 2007

The bioeconomy at work: new PLA technology improves heat resistance of bioplastics

CSM subsidiary Purac, market leader in lactic acid production, announces [*.pdf] it will extend its portfolio with Lactides, offering bioplastics producers the technical and economical solutions that have so far restrained them from entering the Poly-Lactic Acid (PLA) bioplastics market.

Packaging suppliers are constantly on the lookout for high-quality forms of biodegradable materials, as consumers and regulatory bodies are demanding environmentally-friendly packaging. Mandates from giant supermarkets, forcing suppliers to make the switch, are also coming into effect. But current PLA-based plastics are less robust than their petroleum-based counterparts. However, new technologies are gradually changing this situation: some have found ways to embed nanoparticles into the polymer to strengthen it (previous post), whereas others have succeeded in improving properties by compounding cellulose fibers into the PLA (more here).

Purac contributes to the need for stronger PLA plastics by expanding its product portfolio with patented D(-) technology. With compounded (D- and L+) PLA polymers it becomes possible to efficiently produce bioplastics that withstand temperatures of at least 175 °C, for diverse applications such as hot-fill bottles, microwaveable trays, temperature resistant fibres, electronics and automotive parts. The previous heat resistance record for PLA-plastics stood at 150 °C, achieved by a cellulose fiber-reinforced compound (previous post).

Poly-Lactic Acid is a raw material for bio-degradable plastics, an environmentally-friendly alternative to oil-based plastics. PLA is produced from lactic acid coming from starches and sugars from crops such as such as corn, sugar beet, cassava and sugar cane.
Market growth has been hampered by the availability of economically achievable production technology. By using Lactides as a monomer for PLA production, Purac bridges the technology gap that currently restricts the plastics industry to accelerate the PLA market growth. The Lactide technology will reduce costs and investments for the bio-plastics industry and significantly contribute to the growth of the PLA market. With the new D(-) technology bioplastics producers can now produce compounds for a wide variety of new high-end applications. - Arno van de Ven, VP Chemicals and Pharma at Purac
Purac has filed several patents to protect its technologies. Together with leading plastics producers, the company is now investigating the necessary investments to be able to meet future demand. Industry experts project a steady market growth as of 2010 when products will be available in sizeable volumes:
:: :: :: :: :: :: :: :: ::

According to research carried out by the UK Campden and Chorleywood Food Research Association Group, the current use of sustainable packaging is limited as its barrier properties are inferior to its petroleum polymer counterparts.

The report also claims that biodegradable and compostable packaging is only environmentally friendly when industrially composted, and in the UK, for example, there are few systems available.

Companies who have invested in PLA over the last 5 years include Amcor, Toray Industries, Bebo, and US-based Naturally Iowa, while retailers like Delhaize in Belgium and Auchan in France have been testing PLA for various food packaging.

Purac, a subsidiary of CSM, produces lactic acid, lactates, gluconates, lactitol, lactides and polylactides, for the meat, bakery, confectionery, dairy, cosmetics and pharma industries.

Biopact: The bioeconomy at work: cellulose fibre-reinforced PLA bioplastic with improved heat resistance, rigidity and moldability - May 17, 2007

Biopact: Nanoparticle additive makes PLA based bioplastics stronger - July 23, 2007

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Inter-American Development Bank approves US$120 million for biofuel project in Brazil

The Board of Directors of the Inter-American Development Bank (IDB) has approved its first private sector financing for a bioenergy project in Brazil for a total of US$120 million to Usina Moema Acúcar e Alcohol Ltda., a major sugar, ethanol and bioenergy producer based in the State of São Paulo, that is operating in one of the fastest growing industries in Brazil and worldwide.

This operation is part of IDB’s initiative to promote the structuring of senior debt financing for five Brazilian ethanol production projects that will have a total cost of US$997 million. These investments will contribute to Brazil’s goal of tripling annual ethanol production by 2020.

The IDB also supports the Brazilian government’s goal of becoming a global center of excellence for research and development in biofuels. The Bank is holding discussions with senior Brazilian officials with a view to facilitating technology transfer and technical assistance, so that other countries in the region can benefit from Brazilian know-how.

Moema operates seven sugar and ethanol plants in São Paulo state (map, click to enlarge). At the largest of its facilities, the Usina Moema, it produces around 4.5 million tons of sugar cane, 320,000 tons of sugar and 200 million liters of ethanol. Sugar cane residues (bagasse) are used to co-generate around 50GWh of renewable, carbon-neutral electricity:
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“In past years, Moema’s brisk growth was financed primarily by short- and medium-term debt,” said IDB team leader Leandro Alves. “Moema is now in the process of refinancing up to US$120 million of such debt through a financing package put together by the IDB.”

The package comprises an IDB loan of up to US$40 million from the Bank’s ordinary capital and $80 million of co-financing from commercial banks.

“The transaction will help Moema increase the average life of the debt being refinanced from approximately 10 months to 6.6 years,” explained the other IDB team leader, Sylvia Larrea. “It will therefore improve the company’s debt profile towards one more consistent with the long-term nature of its assets, enhancing the sustainability of the company,” added Larrea.

The operation will allow Moema to redirect funds currently used to service short-term debt to fund its capital investment plan, including projects to boost Moema’s production of sugar, ethanol and energy co-generation from biomass.

IDB’s private sector window serves as a catalyst, not only enabling financing in the long tenors required by the company, but also mobilizing private funds in the form of co-financings. Required implementation of IDB’s Environmental and Social Management System ensures a good management of potential environmental, social, health, safety, and labor impacts.

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Mitsubishi Corp to invest in three types of biofuels both in Japan and abroad

Japan's largest trading company Mitsubishi Corp. aims to take a slice of the growing green fuel market with a planned annual capacity of 2 billion liters (530 million gallons) of green ethanol by 2017, a senior manager tells Reuters.

The new plants will be based in Japan and other parts of Asia as well as in South America, where supply of feedstock is sustainable, competitive and ample, says Takashi Miyazaki, a general manager at Mitsubishi's renewables energy business unit.

Mitsubishi in April set up a team of 15 staff to produce and market three types of green fuel: (cellulosic) ethanol, (second-generation) green diesel and biomass fuel pellets.
  • Ethanol: In one of the first few deals, Mitsubishi this month invested 300 million yen (€1.9/$2.6 million) to take a 34-percent stake in a government-backed project to build an ethanol plant with annual output of 15 million liters on the northern island of Hokkaido. Kirin Brewery Co. Ltd., Japan's second largest brewer, is providing fermentation technology to the Hokkaido project.
  • Biodiesel: Miyazaki also said Mitsubishi plans to produce 1 to 1.5 million tonnes a year of biodiesel by 2017 after building plants in Asia or in Central and South America. The volume is compared with 5 million tonnes a year of the existing rapeseed-origin biodiesel market in Europe. Japanese household goods maker Lion Corp. will provide expertise when Mitsubishi starts its biodiesel projects. Lion has developed technology to produce methylester sulfonate, used in laundry detergents, from palm oil, a major feedstock for biodiesel in Asia.
  • Pellets: on bio-pellets used to co-fire with coal and used to reduce CO2 emissions, Mitsubishi plans for a capacity of 4 million tonnes a year by 2017, of which domestic output will be 20,000 to 30,000 tonnes. Global demand for bio-pellets made from wood waste is expected to grow to 150 million tonnes a year by 2030, up from 8 million tonnes currently, according to the company's estimate.
The company is not new to the bioenergy sector. Recently it signed a comprehensive cooperation agreement with Dynamotive, a developer of second-generation biofuels based on the pyrolysis of biomass (previous post). Mitsubishi also agreed to a 30-year ethanol supply agreement with Brazilian producer Sao Martinho (more here and here). But the Japanese trading firm now wants to go beyond trading and actively pursues a stake in the production chain:
:: :: :: :: :: :: :: :: ::

The production of renewable energy - biofuels, biomass, solar energy and wind energy - has become one of Mitsubishi's new focused business segments.

Analysts said investing in unconventional areas is an industry-wide trend as trading firms look for a new source of profit growth. "I think biomass energy is relatively contiguous with the company's existing business," said Ben Wetmore, senior analyst at Mizuho Securities.

Global demand for biomass ethanol is set to leap to 280 billion liters (74 billion gallons) a year by 2030, boosted by policy incentives and new technology cutting production costs, more than six times as much as the 40 billion liters (10.5 billion gallons) produced currently, according to the company's forecast.

"Manufacturing is the most profitable in this field of business as we think supplies will have to catch up with high-flying demand in the next few decades," Miyazaki said. But he declined to elaborate on details of Japan's top trading company's investment plans for renewable fuels.

"It's difficult to sum it up. We understand it takes four to five years to build a facility and five to six years to make profits out of it," he said. "Also, situations differ from one country to another," he added.

Reuters: Mitsubishi plans drive on biofuels output - August 16, 2007.

Biopact: Dynamotive and Mitsubishi Corporation sign cooperation agreement - August 02, 2007

Biopact: Sao Martinho announces 30 year ethanol export contract with the Mitsubishi - March 26, 2007

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Brazil and Benin sign biofuel cooperation agreement

More and more organisations are becoming convinced of the fact that biofuels can help lift millions of poor farmers out of poverty, boost their access to food and energy, and offer economic development and energy security. Most recently, the UN's Food and Agriculture Organisation (FAO) called for the creation of a 'biopact' between the North and the South, saying biofuels offer a historic chance to alleviate poverty in the developing world (ealier post). Likewise, the UNIDO, the IEA, the EU, the Worldwatch Institute and several food research organisations stressed the same basic facts. Recently, African scientists concluded that bioenergy and biofuels are key to help achieve the UN's ambitious Millennium Development Goals (previous post).

One country has been promoting this vision like no other and is actively introducing its own successful biofuels model and technologies to Sub-Saharan Africa: Brazil. The country's president, Luiz Inácio Lula da Silva, has been touring both Africa and Latin America tirelessly, promoting biofuels as a tool to create a more just world, to fight climate change and to combat poverty and food insecurity. According to the president, biofuels may bring genuine sovereignty to developing nations and unite the Global South around a new energy paradigm (earlier post).

The technical potential for the sustainable production of renewable fuels in Africa and Latin America is vast, with some estimates putting it at more than 650 Exajoules for both continents, by 2050 (earlier post). Consider that the world currently consumes roughly 440EJ of energy from all sources (oil, gas, coal, nuclear).

To turn this huge technical potential into concrete opportunities, Lula has signed biofuel cooperation agreements with dozens of countries, offering technical assistance and policy advice based on Brazil's decades-long experience in the sector. The latest agreement [*Portuguese] was signed yesterday between Lula and his Beninese counterpart Thomas Boni Yayi. In a series of letters of intent both countries will strengthen cooperation in biofuel production and exchange political consultation.

Under the biofuel agreement, Brazil and Benin agree to work together to produce, use and commercialize fuels made from crops, and to offer support to each other. A team of eight Brazilian ethanol experts will establish a presence in the West-African country to help it develop a production capacity:
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The two nations will also establish a political consultation mechanism. Under the mechanism, Brazil and Benin will hold regular contacts to develop bilateral cooperation in politics, economy, society, culture, science and technology, as well as regional issues.

In his speech, President Lula said fuels like ethanol and biodiesel will give more countries the chance to become involved in energy production which serves as a tool to promote development.

President Yayi described Lula as 'a friend' of Africa and recalled the fact he had surpassed previous Brazilian leaders in the number of African countries visited. Lula has traveled to 17 nations on the continent, paying a visit to Benin in February 2006. Brazil hosts the largest black community outside of the African continent, and has deep relations with the people across the Atlantic.

On Thursday, the Beninese president will travel to Sao Paulo, where he will visit an ethanol plant and meet biofuel entrepreneurs as well as the FIESP (Federação das Indústrias do Estado de São Paulo). On Friday, he will visit Salvador, in northeastern Brazil, where there are many descendants of slaves brought from Benin during the colonial and imperial period. There he will sign a Cooperation Protocol between Salvador and Cotonou.

Agência Brazil: Presidente do Benin deve assinar protocolo de intenções na área de energias renováveis - August 15, 2007.

Biopact: Brazil in Africa: South-South cooperation on bioenergy speeding up - March 13, 2007

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Interpellets 2007: conference looks at wood pellets as an alternative to fossil fuels

There have been dramatic developments in the oil market, according to the latest Oil Market Report from the International Energy Agency (IEA). Everything is pointing to an impending supply shortage, which could lead to record prices (previous post). More efficient energy use and more renewable energies are therefore important elements for climate protection and energy security.

Biomass pellets may offer a sustainable, cost-effective and environmentally friendly alternative to the imminent shortage of fossil fuels. Heating with the biofuel is already less costly than using fuel oil. As a consequence the use of pellets is growing rapidly in the EU (overview for 2005) and international trade is growing steadily (earlier post). The 7th Pellets Industry Forum, which takes place in the International Congress Centre Stuttgart on 9th and 10th October, will explore the promising future of this biofuel as it establishes itself in an international market (conference programme). Following the Forum, the Interpellets 2007 trade fair will bring together pellet producers, traders, suppliers and service providers from Germany and abroad. The trade fair will take place from 10th to 12th October in the Neue Messe Stuttgart (New Trade Fair Centre Stuttgart).

In its latest oil market report, the International Energy Agency (IEA) warns of an oil supply shortage until 2012. The prognosis: price explosions on the oil market and greater reliance on the Organization of Petroleum Exporting Countries (OPEC). According to the IEA, the cause of this critical development is a growth in demand while supply levels remain virtually unchanged. The IEA, which has previously been cautious in its forecasts, now predicts an average annual growth in oil demand of 2.2 per cent for the next five years, which equates to approximately 96 million barrels a day. The growth in demand is particularly strong in newly industrialising countries with large populations, such as China and India. At the same time, there is a marked drop in oil supply from more accessible oil producing regions such as the North Sea. The oil supply from non-OPEC states will increase by just one per cent a year and the reliance of large consuming countries on OPEC will continue to grow. In view of these developments, it is imperative that we rethink our energy policy – towards more efficient energy use and renewable energies.

Wood pellets: a viable alternative?
The 7th Pellets Industry Forum and the Interpellets 2007 trade fair will look at how wood pellets can offer security of supply and whether they are cost-effective and environmentally friendly in terms of production and consumption.

As production expands, the price of wood pellets will come down. Already, the cost of one kilowatt hour of heating energy when using wood pellets (3.7 cents) is 35% lower than for heating oil (5.7 cents). Moreover, the burning of wood pellets in pellet heating systems is low in emissions and CO2 neutral: the values are well below the emission limits set by Germany's 1st Federal Emmission Control Ordinance. In addition, the burning of wood pellets releases precisely the same amount of CO2 that has been used in growing the wood. Thus pellets have many advantages as an alternative fuel: anyone heating with pellets is independent of the vagaries of oil and gas prices, supports the nascent bioeconomy and makes a major contribution to climate protection.

In view of the growing international fuel trade and the increasing market interest in pellet technology, it is vitally important to exchange information about current developments and technology trends:
:: :: :: :: :: :: :: :: :: ::

This exchange focuses on national and international market development as well as current and planned developments in pellet production.

For example, Finn Normann Jensen from the Austrian pelletiser manufacturer Andritz Sprout AG will be giving a lecture on “Trends in the global pelletising business” at the 7th Pellets Industry Forum. Over 400 delegates are expected to attend the 7th Pellets Industry Forum (9th/10th October, International Congress Centre Stuttgart).

The aim of the Interpellets 2007 trade fair is to encourage an international exchange of experience and serve as a platform for the European pellet sector. The pellet sector’s entire supply chain will be represented at Interpellets 2007, from manufacturers through to wholesalers, suppliers and service providers. The organiser, Solar Promotion, is expecting around 150 exhibitors and 6,000 visitors, with approximately 20 per cent coming from abroad.

Organisers and supporters of Interpellets 2007 and the 7th Pellets Industry Forum: The specialist trade fair Interpellets 2007 and the 7th Pellets Industry Forum is organised by Solar Promotion GmbH, Pforzheim. Interpellets 2007 is supported by the German Energy Pellet Association e.V. (DEPV) and the International Solar Energy Society German Section e.V. (DGS).

Interpellets: Wood pellets as an alternative to declining oil supply - August 9, 2007.

A brochure on the conference and the trade fair can be found here [*.pdf].

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Petrobras announces strategic plan for 2020, expands biofuels activities globally

Brazil's state-owned oil company Petrobras announces that its Board of Directors approved the Strategic Plan 2020 and the Business Plan 2008-2012. The business plan maintains the company's aggressive growth targets and underscores the challenges to be met in the natural gas and biofuel markets. We focus on the plans, because Petrobras is the most active and innovative player in the biofuels sector and has taken steps to bring Brazil's model to Africa. In its new business plan, biofuels and bioenergy development receives US$ 1.5 billion.

The Strategic Plan 2020, which establishes the mission, vision, strategies and corporate objectives of the company for the future, has expanded Petrobras' vision as a leader in Latin America to being one of the largest integrated energy companies in the world. The plan maintains the strategy of expanding operations in the oil, oil products, petrochemicals, gas energy, biofuels and distribution markets with profitability, social and environmental responsibility and integrated growth.

The plan also highlights the company's operational excellence in management, human resources and technology in alignment with the following strategies:
  • Exploration and Production: to grow production and oil and gas reserves sustainably, and to be recognized for excellence in E&P operations;
  • Downstream and distribution: to expand integrated operations in refining, commercialization, logistics and distribution both in Brazil and abroad with a focus on the Atlantic Basin;
  • Petrochemicals: to expand operations in petrochemicals in Brazil and South America on an integrated basis with the Petrobras Group's other businesses;
  • Gas and Energy: to develop and spearhead the Brazilian natural gas market and operate on an integrated basis in the gas and electric energy markets with a focus on South America;
  • Biofuels: to operate on a global basis in biofuels commercialization and logistics, leading the domestic production of biodiesel and expanding participation in the ethanol business.
The new plan poses fresh management challenges, including:
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  • Capital Discipline: to endeavor to achieve greater efficiency in the implementation of projects (terms and costs); Management of Inventory; Reduction in Operating and Administrative Costs and Portfolio Management;
  • Human Resources: to be an international benchmark in the energy segment, in personnel management, having its employees as its most valuable asset;
  • Social Responsibility: to be an international benchmark in social responsibility in the management of the businesses, contributing to sustainable development;
  • Climate Change: to reach levels of excellence in the energy industry with respect to greenhouse gas reductions in processes and products, contributing to the sustainability of the business and the mitigation of global climate change;
  • Technology: to be a global benchmark in technologies which contribute to the company's sustainable growth in the oil, natural gas, petrochemicals and biofuels industries.
The Business Plan 2008-2012 establishes production targets for oil and natural gas in Brazil: these will be 3,058,000 barrels of oil equivalent per day (boed) in 2012 and 3,455,000 boed in 2015. Petrobras aims to maintain a balance between growth in production and Brazilian refinery capacity, the target for domestic processed crude throughput in 2012 being 2,061,000 barrels per day (bpd), with a 90% participation of domestic crude.

The international targets also reflect the company's integrated growth with production estimates of 436,000 boed of oil and gas in 2012 and processed crude throughput in Petrobras' refineries in other countries amounting to 348,000 bpd.

Petrobras' total estimated output (Brazil and overseas) by 2012 has been revised to 3,494,000 barrels daily and the target for 2015 set at 4,153,000 boed.

The integration process has also been extended to petrochemicals where the company is estimating expansion in operations in Brazil and Latin America, in so doing, capturing synergies with the other businesses of the Petrobras Group.

The plan calls for investments of US$ 112.4 billion until 2012, representing an annual average of US$ 22.5 billion, being 87% (US$ 97.4 billion) in Brazil and 13% (US$ 15.0 billion) overseas. This amount represents an increase of 29% compared with the previous Plan.

The highlights of the investments in Brazil are represented by the growth in Exploration and Production (an increase of 32%), Downstream (an increase of 35%) and Petrochemicals (an increase of 30%).

The plan also places an emphasis on biofuels which will receive investments of US$ 1.5 billion.

Investments in the international operations will focus largely on the area of Exploration and Production particularly in Latin America, West Africa and the Gulf of Mexico.

The growth of investments is due to: US$ 13.3 billion in new projects, US$ 10.9 billion for the increase in costs due to increased market demand for sector equipment and services, US$ 4.2 billion due to local currency appreciation and the remainder with respect to other factors such as changes in the project scope, in the business model, etc.

The company aims to become a global company in the commercialization and logistics of biofuels, leading the domestic production of biodiesel and expanding its share of the ethanol business. In line with this strategy, H-BIO (bio-refining) will provide leverage for growth in this market.

Petrobras: bioenergy portal.

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CARE: food aid destroys local markets in Africa

Imagine the immensity of the following contradiction: a country like the Democratic Republic of Congo can produce food for an estimated 3 billion people, but today it is a net importer of food, and a large part of its 60 million inhabitants receive food aid distributed by an army of NGOs from the West. The example can be replicated across Sub-Saharan Africa.

Leading humanitarian aid organisation CARE now says part of this obscenity is the result of the way the food aid industry currently works. Food aid has become an end in itself and constitutes a form of dumping that can be extremely destructive to local agricultural markets. The food aid 'industry' has become one of the dreadful 'dependency factors' that keep Africa in eternal poverty and dictate its development (these factors include the continuing effects of colonialism, resource wars induced by the West, the presence of post-colonial political satraps, hegemonic NGOs, foreign aid, Worldbankism, and indeed, food aid).

Especially the food aid system employed by the United States is seen as counter-productive: the U.S. government buys cheap food from powerful American agribusiness, hands it out to American charities in Africa, who then get to sell it for a profit. With the profit the NGOs fund themselves. This system has become big business and ruins the chances of local farmers to compete. Some go so far as to say food aid feeds everyone, except the poor.

To make its point, CARE has decided to refuse about US$45 million a year in federal funding from the U.S., saying the system hurts the very poor people it aims to help. "If someone wants to help you, they shouldn't do it by destroying the very thing that they're trying to promote," said George Odo, a CARE official who grew disillusioned with the practice while supervising the sale of American wheat and vegetable oil that is flooding Kenya.

As the U.S. Congress considers a new farm bill, neither the Bush administration nor representatives are looking to undo the practice, known as "monetization." In fact, some nonprofit groups say it has worked well and are pressing for sharp increases in the tonnage of American food shipped for sale and distribution to support development programs.

The Christian charity World Vision and 14 other groups say that CARE is mistaken, that the system works because it keeps hard currency in poor countries, can help prevent food price spikes in them and does not hurt their farmers. But criticism of the practice is growing. And some say the NGOs who stand behind the system have become government contractors instead of organisations with a mission to help the poor.

Former President Jimmy Carter, whose Atlanta-based Carter Center uses private money to help African farmers be more productive, says a flawed food aid system has survived partly because the charities that get money from it defend it:
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Agribusiness and shipping interest groups have tremendous political clout, but charitable groups are influential, too, Carter said, because "they speak from the standpoint of angels".

"The farm bloc is powerful, but when you add these benevolent organizations, the totality of that has blocked change in the system," said Carter, who is also a Georgia farmer.

Some charities that champion monetization bristle at such suggestions. And their allies in Congress say that maritime and agribusiness interests are essential allies for programs to aid the hungry.

"Sure it's self-interest if staying in business to help the hungry is self-interested," said Avram Guroff, a senior vice president at ACDI/VOCA, which ranked sixth in monetization sales last year. "We're not lining our pockets."

But Peter Matlon, an agricultural economist based in Nairobi and a managing director of the Rockefeller Foundation, said converting American commodities into cash for development was a case of "the tail wagging the dog," with domestic farm policies in the United States shaping hunger-fighting methods abroad.

"The NGOs have been ignoring this evidence for years that there's a negative impact on the prices farmers receive," said Matlon, who is involved in a $150 million effort financed by the Rockefeller and Bill and Melinda Gates foundations to increase the productivity of African farmers.

The Government Accountability Office, the non-partisan, investigative arm of Congress, also concluded this year that the system was "inherently inefficient."

CARE and Catholic Relief - who rank first and second in money raised through monetization - say they recover only 70 to 80 percent of what the United States paid for the commodities and shipping.

But while Catholic Relief Services and Save the Children, which ranked fifth last year in such sales, agree with CARE that the system is inefficient, they also say they will not stop converting American food into money unless Congress replaces the lost revenues with cash. They help a lot of poor people with the money, they say.

The experiences of Walter Otieno, a grizzled Kenyan farmer in mud-stained pants, illustrate the paradoxes of paying for rural development through sales of American farm goods.

Over the years, he had watched four of his 12 children die of measles, which is more often fatal for the malnourished. He has had difficulty growing enough to feed his family. "My children were skinny and their skin was dull," he said.

Then last year he began growing a small patch of sunflowers on a hill sloping down to Lake Victoria with help from a program that CARE finances through the sale of American farm goods here.

A CARE extension worker, Rosemary Ogala, has taught him and dozens of farmers in his group where to buy sunflower seed, when to plant it, how to space the rows and when to harvest.

CARE has also connected them to a ready market: the Kenyan company Bidco Oil Refineries, whose managers say they could more than quintuple the amount of sunflower seed they buy from Kenyan farmers to process into vegetable oil.

The profit Otieno earned from the crop rescued his family from dire poverty. Now, with his new earnings, he plays with his sons and daughters, plump on eggs and milk, at the family's general store, a tiny shack stocked with goods financed by the sunflower sales. "Our lives have changed," he said.

The question is whether small-scale sunflower farmers like Otieno would have done better if nonprofit groups had not sold tons of American crude soybean oil, a competing product, to the same Kenyan company that purchased Otieno's meager crop. CARE and some other experts say the answer is a clear yes.

In 2003, Bidco bought almost 9,000 metric tons of crude soybean oil sold to the United States by Bunge, the agribusiness giant. Altogether that year, Bunge sold the United States 15,180 metric tons of oil for resale by the nonprofits in Kenya.

American law requires aid groups to establish that such sales will not discourage production by local farmers, but some critics say it is a conflict of interest to ask nonprofit groups to select experts to make this determination.

In this case, the nonprofit organizations hired a consultant who advised them in 2003 that they could safely sell up to 38,000 metric tons of vegetable oil in Kenya, which mostly depends on imports. That amount, about 10 percent of the country's consumption, was "negligible," he said.

But Odo of CARE disagreed, saying in a memo that "the truth is that the subsidized importation from the U.S. reduces the growth in the local market."

Ultimately, CARE's decision to phase out such sales evolved from a senior manager's change of heart. Daniel Maxwell, a professor of nutrition at Tufts University, was a food security adviser for CARE in Nairobi who saw sales of American food as an imperfect, but useful way to raise money.

He knew firsthand, however, how risky it was to manage projects financed in fluctuating commodities markets. When prices sank, CARE had too little money and was sometimes forced to lay off workers.

Maxwell also strongly suspected that buyers offered too little for the farm goods, knowing they were dealing with aid workers who were novices in commodities trading.

As he and Christopher Barrett, an agricultural economist at Cornell University, researched a book, "Food Aid After Fifty Years," his doubts deepened.

"Not only was it a pain the neck," he said, "but there were potentially serious knock on effects that would be damaging to farmers and trade."

In 2004, Maxwell and Barrett made the case against the practice at CARE headquarters in Atlanta. They recalled that the senior vice president, Patrick Carey, who has since died, cautioned them that leaving the system would be like "an act of partial suicide" for the nonprofits.

Nonetheless, by 2009 CARE will end almost all of its participation in such projects across the developing world. It will try to raise money to replace the lost revenues from philanthropies and other donors, and by making its own aid programs profitable.

One of those programs could be seen in action one recent afternoon in the Kenyan village of Poche. CARE has helped local women bypass local middlemen to sell pineapples at better prices in big supermarkets in Nairobi, 10 hours away by road.

One woman, Doreen Amimo, a 52-year-old grandmother, has seen her weekly earnings rise to $18 from $11. She can now afford to feed and clothe an orphaned niece and nephew.

"And I never lack sugar in the house," she said, "and we can have tea and milk every morning!"

These farmers are selling their fruit to a small company, Vegcare, that CARE and a Kenyan company started with an investment of $170,000 in 2005. Vegcare advises farmers on how to grow pineapples that meet supermarket standards, buys them and trucks them to a wholesaler in Nairobi that supplies Nakumatt, a Kenyan supermarket chain.

CARE's idea is that a profitable business is more likely than a charitable venture to survive when foreign aid runs out. CARE managers here say they hope its renunciation of most of the money from commodity sales will free it to candidly address the flaws in the American strategy to combat world hunger.

"What's happened to humanitarian organizations over the years is that a lot of us have become contractors on behalf of the government," said Odo of CARE. "That's sad but true. It compromised our ability to speak up when things went wrong."

Picture: American wheat flooding Mombasa, Kenya. Credit: Evelyn Hockstein for The New York Times.

International Herald Tribune: Charity finds that U.S. food aid for Africa hurts instead of helps - August 16, 2007.

New York Times: CARE Turns Down Federal Funds for Food Aid - August 16, 2007.

Time: CARE Says No Thanks to U.S. Food Aid - August 16, 2007.

Global Issues: Food Dumping [Aid] Maintains Poverty - June 25, 2005.

Christopher B. Barrett, "Food Aid: Is It Development Assistance, Trade Promotion, Both, or Neither?", American Journal of Agricultural Economics, Vol. 80, No. 3 (Aug., 1998), pp. 566-571, doi:10.2307/1244559

Jonathan Krieckhaus, Dictating Development: How Europe Shaped the Global Periphery, Pittsburgh: University of Pittsburgh Press, 2006.

Jean-François Bayart, L'Etat en Afrique, La Politique du ventre, Paris, Fayard, 1989.

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