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    Mongabay, a leading resource for news and perspectives on environmental and conservation issues related to the tropics, has launched Tropical Conservation Science - a new, open access academic e-journal. It will cover a wide variety of scientific and social studies on tropical ecosystems, their biodiversity and the threats posed to them. Tropical Conservation Science - March 8, 2008.

    At the 148th Meeting of the OPEC Conference, the oil exporting cartel decided to leave its production level unchanged, sending crude prices spiralling to new records (above $104). OPEC "observed that the market is well-supplied, with current commercial oil stocks standing above their five-year average. The Conference further noted, with concern, that the current price environment does not reflect market fundamentals, as crude oil prices are being strongly influenced by the weakness in the US dollar, rising inflation and significant flow of funds into the commodities market." OPEC - March 5, 2008.

    Kyushu University (Japan) is establishing what it says will be the world’s first graduate program in hydrogen energy technologies. The new master’s program for hydrogen engineering is to be offered at the university’s new Ito campus in Fukuoka Prefecture. Lectures will cover such topics as hydrogen energy and developing the fuel cells needed to convert hydrogen into heat or electricity. Of all the renewable pathways to produce hydrogen, bio-hydrogen based on the gasification of biomass is by far both the most efficient, cost-effective and cleanest. Fuel Cell Works - March 3, 2008.

    An entrepreneur in Ivory Coast has developed a project to establish a network of Miscanthus giganteus farms aimed at producing biomass for use in power generation. In a first phase, the goal is to grow the crop on 200 hectares, after which expansion will start. The project is in an advanced stage, but the entrepreneur still seeks partners and investors. The plantation is to be located in an agro-ecological zone qualified as highly suitable for the grass species. Contact us - March 3, 2008.

    A 7.1MW biomass power plant to be built on the Haiwaiian island of Kaua‘i has received approval from the local Planning Commission. The plant, owned and operated by Green Energy Hawaii, will use albizia trees, a hardy species that grows in poor soil on rainfall alone. The renewable power plant will meet 10 percent of the island's energy needs. Kauai World - February 27, 2008.

    Tasmania's first specialty biodiesel plant has been approved, to start operating as early as July. The Macquarie Oil Company will spend half a million dollars on a specially designed facility in Cressy, in Tasmania's Northern Midlands. The plant will produce more than five million litres of fuel each year for the transport and marine industries. A unique blend of feed stock, including poppy seed, is expected to make it more viable than most operations. ABC Rural - February 25, 2008.

    The 16th European Biomass Conference & Exhibition - From Research to Industry and Markets - will be held from 2nd to 6th June 2008, at the Convention and Exhibition Centre of FeriaValencia, Spain. Early bird fee registration ends 18th April 2008. European Biomass Conference & Exhibition - February 22, 2008.

    'Obesity Facts' – a new multidisciplinary journal for research and therapy published by Karger – was launched today as the official journal of the European Association for the Study of Obesity. The journal publishes articles covering all aspects of obesity, in particular epidemiology, etiology and pathogenesis, treatment, and the prevention of adiposity. As obesity is related to many disease processes, the journal is also dedicated to all topics pertaining to comorbidity and covers psychological and sociocultural aspects as well as influences of nutrition and exercise on body weight. Obesity is one of the world's most pressing health issues, expected to affect 700 million people by 2015. AlphaGalileo - February 21, 2008.

    A bioethanol plant with a capacity of 150 thousand tons per annum is to be constructed in Kuybishev, in the Novosibirsk region. Construction is to begin in 2009 with investments into the project estimated at €200 million. A 'wet' method of production will be used to make, in addition to bioethanol, gluten, fodder yeast and carbon dioxide for industrial use. The complex was developed by the Solev consulting company. FIS: Siberia - February 19, 2008.

    Sarnia-Lambton lands a $15million federal grant for biofuel innovation at the Western Ontario Research and Development Park. The funds come on top of a $10 million provincial grant. The "Bioindustrial Innovation Centre" project competed successfully against 110 other proposals for new research money. London Free Press - February 18, 2008.

    An organisation that has established a large Pongamia pinnata plantation on barren land owned by small & marginal farmers in Andhra Pradesh, India is looking for a biogas and CHP consultant to help research the use of de-oiled cake for the production of biogas. The organisation plans to set up a biogas plant of 20,000 cubic meter capacity and wants to use it for power generation. Contact us - February 15, 2008.

    The Andersons, Inc. and Marathon Oil Corporation today jointly announced ethanol production has begun at their 110-million gallon ethanol plant located in Greenville, Ohio. Along with the 110 million gallons of ethanol, the plant annually will produce 350,000 tons of distillers dried grains, an animal feed ingredient. Marathon Oil - February 14, 2008.

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Wednesday, September 12, 2007

High oil prices disastrous for developing countries

Oil prices have breached the psychological barrier of US$80 per barrel today, as a result of a report by the U.S. Energy Information Agency which showed that crude oil inventories have sharply declined. The rise comes despite OPEC's recent announcement that it agreed to raise output by 500,000 barrels per day.

Norway's energy minister Odd Roger Enoksen says these high prices are 'justified' and that 'global oil markets are balanced'. Present high oil prices are needed to develop new resources in harder-to-reach places and offset rising production costs: "(Production) costs have increased a lot in the last couple of years, and we need a high price to develop new resources". Peak oil analysts would say that this is a discourse typical of oil producing countries that have maxed out. And indeed, Norway's North Sea oil fields have already hit that infamous peak.

Enoksen says record oil prices have a limited effect on that abstract thing called the 'global economy', but he does admit, by way of detail, that:
Of course the less developed countries can suffer from high oil prices but so far we have not seen threatening signs (of an oil-induced slowdown in global growth).
We don't see this as a detail. In fact, high oil prices are outright disastrous for developing countries and are already hitting them. The 'global economy' is dominated by a handful of highly industrialised countries whose economies are robust and can cope easily with volatility in energy prices. But for oil importing developing countries, representing more than 2 billion people, the situation is entirely different. Their economies are energy intensive and each increase in oil prices affects all productive segments of society immediately. Abundant and cheap energy is key to development. Scarce and expensive energy is detrimental to progress. The correlation is one of the best established relationships in development economics. The generic 'human development index' strictly correlates with the 'energy development index' (earlier post).

For the wealthiest countries (non-oil producing OECD), oil imports make up less than 2% of GDP, whereas for African oil importing nations this was more than 10% of GDP in 2006 (more here *.doc). In poor oil importing countries, oil price rises of the current magnitude imply a significant reduction of economic growth rates, an erosion of trade balances and a hike in inflation rates.

If coupled with low foreign reserves some of the effects of current high oil prices are: decreased import capacity, lower consumption and investment, lower production and employment. And as always, the poor are hit hardest as they face lower employment prospects, higher inflation (fuel, transportation, basic goods), and cuts in government spending on social services (in a recent report, when oil stood at around US$ 60 per barrel, the UN found that some of the poorest countries are already forced to spend twice as much on imported oil as on such fundamental social services as health care and education (earlier post). According to an African Development Bank document on the effects of high oil prices on African societies:
Lower employment prospects and the higher inflation rate will lower the purchasing power of the poor who have fewer (if any) instruments to hedge against the oil price increase. The biggest impact will be through higher price of kerosene which is used for cooking and lighting. The poor will also be affected by higher transportation costs. Clearly, higher petroleum costs will increase commuting costs and, especially in the case of agricultural economies, the cost of getting the crops to the markets.
Of the 47 poorest countries, 38 are net importers of oil, and 25 are fully dependent on imports (more here):
:: :: :: :: :: :: :: :: ::

Given the limited availability of foreign exchange, these poor oil-importing countries face a number of options. Consumers and firms could decide to reduce their oil consumption but since the demand for oil is highly inelastic in the short-term, they may be compelled to reduce their consumption of other imported goods. Doing so could undermine economic growth especially if capital goods imports are affected.

Alternatively, countries could try to access foreign currencies to fill the gap and finance the energy bill. However, obtaining funds from private markets, bilateral and multilateral sources must be consistent with medium-term sustainability and sound debt management. In highly indebted poor countries, the only solution to fill the financing gap, and not to weaken growth, is to obtain grants or highly concessional loans. More importantly, governments will have to consider sustainable financing plans as all evidence points to oil remaining at high prices.

High oil prices will also exert a heavy toll on the budget both on the revenue and expenditure sides. On the revenue side, the tax base will be eroded if the profitability of oil-consuming companies is adversely affected and if unemployment increases. Expenditure could increase wherever governments subsidize oil products, or programs, which make intensive use of petroleum products. In that regard, an important question is if there should be complete pass-through of the oil price increase.

Governments are under heavy pressure to intervene to cushion the effect of the oil price increase. If the price of oil is not mean-reverting, price controls will lead to ever increasing losses which will ultimately be borne by current or future tax payers.

Subsidies to public utilities can also worsen the consolidated government budget deficit. In many countries electricity is produced using oil and is sold by law below its cost of production. In this case, the government will have to bear the additional expenditure from a higher oil bill. If the government does not have the resources to do so (for instance, if foreign reserves are too low), it may have to resort to rolling blackouts which have very adverse effects. Moreover, governments will themselves face higher energy bills through their own activities and that of state-owned companies.

Central banks may be tempted to tighten their monetary policy in reaction to the increase in inflation. Previous oil price shocks have produced significant increases in real interest rates which undermined domestic investment, pushed countries deeper into recession and produced stagflation. Furthermore, a rising fiscal deficit, combined with increasing public expenditures due to petrol consumption by public entities, can prompt the authorities to use monetary creation to finance the additional expenditures. As the increase in the price of oil is akin to a supply shock, an accommodating monetary policy would contribute to inflation. Non-inflationary policies are needed to avoid hyperinflation and to maintain monetary credibility.

For all these major problems, alternative sources of energy may offer a way out provided they are produced locally and can compete with oil. Many developing countries have the natural resources and the agro-ecological conditions to produce such competitive biofuels. But this would require significant investments in these countries, known for their difficult investment climates.

In any case, it is high time for the energy and development think tanks of this world to start working on a study showing the social and economic effects of high oil prices on the economies of the poorest countries and the potential for biofuels to mitigate these effects. Such an exercise could demonstrate the fact that biofuels have an important role to play not just in mitigating climate change, but in shielding the poorest countries from the catastrophic effects of high oil prices. Biofuels are not merely 'green', they are 'red' and 'blue' too - they can bring social justice and security.

Reuters: Norway says high oil prices justified - September 11, 2007.

Ralf Krüger: Impact of high oil prices on oil-importing countries in Africa [*.pdf], UNECA
Project LINK meeting, Fall 2006, Geneva.

African Development Bank Group: Can Struggling African Economies Survive Escalating Oil Prices?

African Development Bank Group: High Oil Prices and the African Economy [*.doc] - Concept paper prepared for the 2006 African Development Bank Annual Meetings Ouagadougou, Burkina Faso.

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IEA report: bioenergy can meet 20 to 50% of world's future energy demand

In a new publication the International Energy Agency's Bioenergy Executive Committee highlights the potential contribution of bioenergy to future world energy demand. It summarises the wide range of biomass resources available and potentially available, the conversion options, and end-use applications. Associated issues of market development, international bioenergy trade, and competition for biomass are also presented. Finally, the potential of bioenergy is compared with other energy supply options.

In the document titled 'Potential Contribution of Bioenergy to the World’s Future Energy Demand', the analysts put the total energy potential for sustainably produced biomass at 1100 Exajoules (EJ) by 2050 under a most optimal scenario. In a more average scenario bioenergy's contribution to the world's future energy supply ranges between 20 and 50% (200 - 400 EJ), depending on different energy demand scenarios. Some 130-260 EJ of this amount would be made up of liquid biofuels, more than the world's current total mineral oil output. Over the longer term (2100), more land becomes available and the share of bioenergy increases (graph 1, click to enlarge). For this contribution to materialize, the development and deployment of perennial crops in developing countries is of key importance, as is the creation of international markets. The IEA Bioenergy Excom states that for many rural communities in developing countries such a situation would offer good opportunities for socio-economic development.

Current and future energy demand
The researchers note that global current fossil energy use totals 388 EJ. Energy demand is expected to at least double or perhaps triple during this century. At the same time, concentrations of greenhouse gases (GHGs) in the atmosphere are rising rapidly, with fossil fuel-derived CO2 emissions being the most important contributor. In order to minimise related global warming and climate change impacts, GHG emissions must be reduced to less than half the global emission levels of 1990. In addition, security of energy supply is a global issue. A large proportion of known conventional oil and gas reserves are concentrated in politically unstable regions, and increasing the diversity in energy sources is important for many nations to secure a reliable and constant supply of energy.
In this context, biomass for energy can play a pivotal role. Energy from biomass, when produced in a sustainable manner, can drastically reduce GHG emissions compared to fossil fuels. Most countries have biomass resources available, or could develop such a resource, making biomass a more evenly spread energy supply option across the globe. It is a versatile energy source, which can be used for producing power, heat, liquid and gaseous fuels, and also serves as a feedstock for materials and chemicals.
Due to rising prices for fossil fuels (especially oil, but also natural gas and to a lesser extent coal) the competitiveness of biomass use has improved considerably over time. In addition, the development of CO2 markets (emission trading), as well as ongoing learning and subsequent cost reductions for biomass and bioenergy systems, have strengthened the economic drivers for increasing biomass production, use, and trade.

The IEA Bioenergy ExCom notes that biomass and bioenergy are now a key option in energy policies. Security of supply, an alternative for mineral oil and reduced carbon emissions are key reasons. Targets and expectations for bioenergy in many national policies are ambitious, reaching 20-30% of total energy demand in various countries. Similarly, long-term energy scenarios also contain challenging targets.

Sufficient biomass resources and a well-functioning biomass market that can assure reliable, sustainable, and lasting biomass supplies are crucial preconditions to realise such ambitions. Relatively recently, international trade in biomass resources has become part of the portfolio of market dealers and volumes traded worldwide have increased at a very rapid pace with an estimated doubling of volumes in several markets over the past few years.

Global biomass potential
Various biomass resource categories can be considered: residues from forestry and agriculture, various organic waste streams and, most importantly, the possibilities for dedicated biomass production on land of different categories, e.g., grass production on pasture land, wood plantations and sugar cane on arable land, and low productivity afforestation schemes for marginal and degraded lands.

The potential for energy crops depends largely on land availability considering that worldwide a growing demand for food has to be met, combined with environmental protection, sustainable management of soils and water reserves, and a variety of other sustainability requirements. Given that a major part of the future biomass resource availability for energy and materials depends on these complex and related factors, it is not possible to present the future biomass potential in one simple figure. Table 1 (click to enlarge) provides a synthesis of analyses of the longer term potential of biomass resource availability on a global scale. Also, a number of uncertainties are highlighted that can affect biomass availability:
:: :: :: :: :: :: :: :: :: ::

These estimates are sensitive to assumptions about crop yields and the amount of land that could be made available for the production of biomass for energy uses, including biofuels. Critical issues include:
  • Competition for water resources: Although the estimates presented in Table 1 generally exclude irrigation for biomass production, it may be necessary in some countries where water is already scarce.
  • Use of fertilisers and pest control techniques: Improved farm management and higher productivity depend on the availability of fertilisers and pest control. The environmental effects of heavy use of fertiliser and pesticides could be serious.
  • Land-use: More intensive farming to produce energy crops on a large-scale may result in losses of biodiversity. Perennial crops are expected to be less harmful than conventional crops such as cereals and seeds, or even able to achieve positive effects. More intensive cattle-raising would also be necessary to free up grassland currently used for grazing.
  • Competition with food and feed production: Increased biomass production for biofuels out of balance with required productivity increases in agriculture could drive up land and food prices.
Taking a more average estimate than the most optimal scenario, the researchers think future biomass production on different types of land could be broken down as follows:

Energy farming on currrent agricultural land
Energy farming on current agricultural (arable and pasture) land could, with projected technological progress, contribute 100 - 300 EJ annually, without jeopardising the world’s future food supply. A significant part of this potential (around 200 EJ in 2050) for biomass production may be developed at low production costs in the range of E2/GJ assuming this land is used for perennial crops.

Energy farming on marginal and degraded land
Another 100 EJ could be produced with lower productivity and higher costs, from biomass on marginal and degraded lands. Regenerating such lands requires more upfront investment, but competition with other land-uses is less of an issue and other benefits (such as soil restoration, improved water retention functions) may be obtained, which could partly compensate for biomass production costs.

Biomass wastes and residues
Combined and using the more average potential estimates, organic wastes and residues could possibly supply another 40-170 EJ, with uncertain contributions from forest residues and potentially a significant role for organic waste, especially when biomaterials are used on a larger scale.

In total, the bioenergy potential could amount to 400 EJ per year during this century. This is comparable to the total current fossil energy use of 388 EJ.

Key to the introduction of biomass production in the suggested orders of magnitude is the rationalisation of agriculture, especially in developing countries. There is room for considerably higher landuse efficiencies that can more than compensate for the growing demand for food.

The development and deployment of perennial crops (in particular in developing countries) is of key importance for bioenergy in the long run. Regional efforts are needed to deploy biomass production and supply systems adapted to local conditions, e.g., for specific agricultural, climatic, and socio-economic conditions.

Conversion options
Conversion routes for producing energy carriers from biomass are plentiful. Figure 1 (click to enlarge) illustrates the main conversion routes that are used or under development for production of heat, power and transport fuels. Key conversion technologies for production of power and heat are combustion and gasification of solid biomass, and digestion of organic material for production of biogas. Main technologies available or developed to produce transportation fuels are fermentation of sugar and starch crops to produce ethanol, gasification of solid biomass to produce syngas and synthetic fuels (like methanol and high quality diesel), and extraction of vegetal oils from oilseed crops, which can be esterified to produce biodiesel.

The various technological options are in different stages of deployment and development. Tables 2 and 3 (click to enlarge) provide a compact overview of the main technology categories and their performance with respect to energy efficiency and energy production costs. The ‘End-use Applications’ section discusses the likely deployment of various technologies for key markets in the short- and the long-term.

Current and projected performance data for transport biofuel production techniques

Current and projected performance data for bioenergy production techniques

Short-term represents best available technology or the currently noncommercial systems which could be built around 2010. Long-term represents technology with considerable improvement, large-scale deployment, and incorporation of process innovations that could be realised around 2040. This is also the case for the biomass supplies, assuming biomass production and supply costs around E2/GJ for plants which are close to the biomass production areas.

Market development and international trade
Biofuel and biomass trade flows are modest compared to total bioenergy production but are growing rapidly. Trade takes place between neighbouring regions or countries, but increasingly trading is occurring over long distances.
The possibilities for exporting biomass-derived commodities to the world’s energy markets can provide a stable and reliable demand for rural regions in many developing countries, thus creating an important incentive and market access that is much needed. For many rural communities in developing countries such a situation would offer good opportunities for socio-economic development. Sustainable biomass production may also contribute to the sustainable management of natural resources.
Importing countries on the other hand may be able to fulfil cost-effectively their GHG emission reduction targets and diversify their fuel mix.

Given that several regions of the world have inherent advantages for producing biomass (including lignocellulosic resources) and biofuels in terms of land availability and production costs, they may gradually develop into net exporters of biomass and biofuels.

International transport of biomass (or energy carriers from biomass) is feasible from both the energy and the cost points of view. The import of densified or pre-treated lignocellulosic biomass from various world regions may be preferred, especially for second generation biofuels, where lignocellulosic biomass is the feedstock and large-scale capital intensive conversion capacity is required to achieve sound economics. This is a situation comparable to that of current oil refineries in major ports which use oil supplies from around the globe.

Very important is the development of a sustainable, international biomass market and trade. Proper standardisation and certification procedures are to be developed and implemented to secure sustainable biomass production, preferably on the global level. Currently, this is a priority for various governments, market players, and international bodies. In particular, competition between production of food, preservation of forests and nature and use of land for biomass production should be avoided. As argued, this is possible by using lignocellulosic biomass resources that can come from residues and wastes, which are grown on non-arable (e.g., degraded) lands, and in particular by increased productivity in agricultural and livestock production.

Demonstration of such combined development where sustainable biomass production is developed in conjunction with more efficient agricultural management is a challenge. However, this is how bioenergy could contribute not only to renewable energy supplies and reducing GHG emissions, but also to rural development.

Biomass and bioenergy in the world's future energy supply
What contribution can biomass make to future global energy (and bio-products) demand? A wide diversity of projections of potential future energy demand and supply exist. Typically, scenarios are used to depict uncertainties in future developments and possible development pathways. The ‘Special Report on Emission Scenarios’ (SRES) developed in the context of the Intergovernmental Panel on Climate Change (IPCC) is based on four storylines that describe how the world could develop over time.

Differences between the scenarios concern economic, demographic, and technological development and the orientation towards economic, social, and ecological values. The storylines denoted A1 and A2 are considered societies with a strong focus towards economic development. In contrast, the B1 and B2 storylines are more focused on welfare issues and are ecologically orientated. While the A1 and B1 storylines are globally oriented, with a strong focus towards trade and global markets, the A2 and B2 storylines are more regionally oriented.

Graph 2 shows the total energy demand for secondary energy carriers (such as transport fuels, electricity, gas, etc.) in four distinct years of the four scenarios. Clearly, the various scenarios show large differences in demand and energy mix, as a result of variations in population dynamics, and economic and technological development.

Total primary (the presumed mix of fossil fuels, renewables and nuclear) energy demand in 2050 varies between about 800 EJ and 1,400 EJ. As discussed previously, the total primary biomass supplies in 2050 could amount to 200-400 EJ. This is conservative relative to the increased availability of primary biomass for the different SRES scenarios, shown in graph 1. The circled lines depict the total primary energy demand per scenario, corresponding with the projected energy consumption data in graph 2. All scenarios project a gradual development of biomass resource availability, largely corresponding to the (potentially) gradually increased availability of land over time.

Assuming conversion to transport fuels with an expected average conversion efficiency of 65%, this would result in 130-260 EJ of fuel. This is up to double the current demand and a similar range to the expected demand in the SRES scenarios discussed above.

Competing markets for biomass?
Biomass cannot realistically cover the whole world’s future energy demand. On the other hand, the versatility of biomass with the diverse portfolio of conversion options, makes it possible to meet the demand for secondary energy carriers, as well as biomaterials. Currently, production of heat and electricity still dominate biomass
use for energy.

The question is therefore what the most relevant future market for biomass may be. For avoiding CO2 emissions, replacing coal is at present a very effective way of using biomass. For example, co-firing biomass in coal-fired power stations has a higher avoided emission per unit of biomass than when displacing diesel or gasoline with ethanol or biodiesel.

However, replacing natural gas for power generation by biomass, results in levels of CO2 mitigation similar to second generation biofuels. Net avoided GHG emissions therefore depend on the reference system and the efficiency of the biomass production and utilisation chain. In the future, using biomass for transport fuels will gradually become more attractive from a CO2 mitigation perspective because of the lower GHG emissions for producing second-generation biofuels and because electricity production on average is expected to become less carbon-intensive due to increased use of wind energy, PV and other solar-based power generation, carbon capture and storage technology, nuclear energy, and fuel shift from coal to natural gas.

In the shorter term, however, careful strategies and policies are needed to avoid brisk allocation of biomass resources away from efficient and effective utilisation in power and heat production or in other markets, e.g., food. How this is to be done optimally will differ from country to country.

The use of biomass for biomaterials will increase, both in well established markets (such as paper, construction) and for possibly large new markets (such as bio-chemicals and plastics) as well as in the use of charcoal for steel making. This adds to the competition for biomass resources, in particular forest biomass, as well as land for producing woody biomass and other crops. The additional demand for bio-materials could surpass the current global biomass use (which is some 10% of the global energy use).

However, increased use of bio-materials does not prohibit the production of biofuels (and electricity and heat) per se. Construction wood ends up as waste wood, paper (after recycling) as waste paper, and bio-plastics in municipal solid waste. Such waste streams still qualify as biomass feedstock and are available, often at low or even negative costs.

Cascading biomass over time in fact provides an essential strategy to optimise the CO2 mitigation effect of biomass resources. The IPCC (2007) reports that the largest sustained mitigation benefit will result from a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fibre, or energy from the forest. This could for example involve conventional forests producing material cascades (e.g., solid wood products, reconstituted particle/fibre products, paper products) with wood or fibre that cannot be reused/recycled being used for energy.

Comparison with other energy supply options
State-of-the-art scenario studies on energy supply and mitigation of climate change agree that all climate-friendly energy options are needed to meet the future world’s energy needs and simultaneously drastically reduce GHG emissions.

Intermittent sources such as wind and solar energy have good potential, but their deployment is also constrained by their integration into electricity grids. In addition, electricity production from solar energy is still expensive.

Hydropower has a limited potential and commercial deployment of geothermal and ocean energy, despite their large theoretical potentials, has proved to be complex.

Biomass in particular can play a major and vital role in production of carbon-neutral transport fuels of high quality as well as providing feedstocks for various industries (including chemical). This is a unique property of biomass compared to other renewables and which makes biomass a prime alternative to the use of mineral oil.

Given that oil is the most constrained of the fossil fuel supplies, this implies that biomass is particularly important for improving security of energy supply on the global as well on a national level.

In addition, competitive performance is already achieved in many situations using commercial technologies especially for producing heat and power. It is therefore expected that biomass will remain the most important renewable energy carrier for many decades to come. Conversion to power with an assumed average efficiency of 50% logically results in 100-200 EJe, also a similar range to the expected future demand.

Additional future demand for (new) biomaterials such as bio-plastics could add up to 50 EJ halfway through this century.
It is clear, therefore, that biomass can make a very large contribution to the world’s future energy supply. This contribution could range from 20% to 50%. The higher value is possible when growth in energy demand is limited; for example, by strongly increased energy efficiency.
Opportunities for bioenergy
Biomass is a versatile energy source that can be used for production of heat, power, and transport fuels, as well as biomaterials and, when produced and used on a sustainable basis, can make a large contribution to reducing GHG emissions.

Biomass is the most important renewable energy option at present and is expected to maintain that position during the first half of this century and likely beyond that. Currently, combined heat and power (CHP), co-firing and various combustion concepts provide reliable, efficient, and clean conversion routes for converting solid biomass to power and heat.

Production and use of biofuels are growing at a very rapid pace. Although the future role of bioenergy will depend on its competitiveness with fossil fuels and on agricultural policies worldwide, it seems realistic to expect that the current contribution of bioenergy of 40-55 EJ per year will increase considerably.
A range from 200 to 400 EJ may be expected during this century, making biomass a more important energy supply option than mineral oil today – large enough to supply one-third of the world’s total energy needs.
Bioenergy markets provide major business opportunities, environmental benefits, and rural development on a global scale. If indeed the global bioenergy market is to develop to a size of 300 EJ over this century (which is quite possible given the findings of recent global potential assessments) the value of that market at E4-8/GJ (considering pre-treated biomass such as pellets up to liquid fuels such as ethanol or synfuels) amounts to some E1.2-2.4 trillion per year.

Feedstocks can be provided from residues from agriculture, forestry, and the wood industry, from biomass produced from degraded and marginal lands, and from biomass produced on good quality agricultural and pasture lands without jeopardising the world’s food and feed supply, forests, and biodiversity.

The pre-condition to achieve such a situation is that agricultural land-use efficiency is increased, especially in developing regions.

Considering that about one-third of the above-mentioned 300 EJ could be supplied from residues and wastes, one-quarter by regeneration of degraded and marginal lands, and the remainder from current agricultural and pasture lands, almost 1,000 million hectares worldwide may be involved in biomass production, including some 400 million hectares of arable and pasture land and a larger area of marginal/degraded land. This is some 7% of the global land surface and less than 20% of the land currently in use for agricultural production.

There are rapid developments in biofuel markets: increasing production capacity, increasing international trade flows, increased competition with conventional agriculture, increased competition with forest industries, and strong international debate about the sustainability of biofuels production.

Biomass is developing into a globalised energy source with advantages (opportunities for producers and exporters, more stability in the market) and concerns (competing land use options, sustainability).

Biomass trading and the potential revenues from biomass and biomass-derived products could provide a key lever for rural development and enhanced agricultural production methods, given the market size for biomass and biofuels. However, safeguards (for example, well-established certification schemes) need to be installed internationally to secure sustainable production of biomass and biofuels. In the period before 2020 substantial experience should be obtained with sustainable biomass production under different conditions as well as with deploying effective and credible certification procedures.

Especially promising are the production of electricity via advanced conversion concepts (i.e., gasification, combustion, and co-firing) and biomass-derived fuels such as methanol, hydrogen, and ethanol from lignocellulosic biomass. Ethanol produced from sugar cane is already a competitive biofuel in tropical regions and further improvements are possible.

Both hydrolysis-based ethanol production and production of synfuels via advanced gasification from biomass of around E2/GJ can deliver high quality fuels at a competitive price with oil down to US$45/ barrel.

Net energy yields per unit of land surface are high and GHG emission reductions of around 90% can be achieved, compared with fossil fuel systems. Flexible energy systems, in which biomass and fossil fuels can be used in combination, could be the backbone for a low risk, low-cost, and low carbon emission energy supply system for large-scale supply of fuels and power, providing a framework for the evolution of large-scale biomass raw material supply systems.

IEA Bioenergy Executive Committee: Potential Contribution of Bioenergy to the World's Future Energy Demand - September 2007.

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UNDP biomass gasification project brings sustainable electricity, jobs to Indian villages

A bioenergy project in India's south-eastern state of Karnataka is bringing sustainable and carbon-neutral energy to rural villages in a decentralised way. Small gasifiers turn locally produced biomass into wood-gas used to power generators. The electricity is then used to power irrigation equipment, to pump up drinking water, and to light up the village.

The project also tackles one of the great problems of the developing world, namely indoor smoke pollution which results from cooking on open fires. According to the World Health Organisation, this 'killer in the kitchen' claims the lives of some 2 million women and children each year. The utilization of producer gas for cooking is far less polluting.

The Biomass Energy For Rural India (BERI) initiative, a project of the state government and the United Nations Development Program's Global Environment Facility, has so far tested the small gasifiers in 28 villages in the Tumkur district. Because of its success, BERI is now looking to replicate the model across rural India.
The concept is to develop technology packages to produce energy on decentralised mode so that rural people can get energy easily and also to use biomass to produce green energy to reduce CO2 emissions at the global level which also has an impact on climate change issues. Another advantage is local benefit like people can use energy efficient systems and methods to see that the energy is used very efficiently. - Dr M H Swaminath, Project Coordinator, BERI
Contrary to energy systems based on wind, solar or hydropower, the biomass project delivers affordable electricity and gas on a continuous and reliable basis. The project's success has prompted a similar initiative by the Indian Institute of Science and Cummins India, who aim to scale up production of small gasification plants to bring them to thousands of villages in India (previous post).

The BERI project relies on biomass gasification, a process that converts biomass to a combustible gas in a reactor, known as a gasifier, under controlled conditions (schematic, click to enlarge). The combustible gas, known as 'producer gas' or 'wood gas' has a composition of approximately 19 % CO, 10 % CO2, 50% N2, 18% H2 and 3 % CH4. This gas which has a calorific value of 4.5 - 5.0 MJ/cubic metre is then cooled and cleaned prior to combustion in internal combustion engines for power generation purposes. The project demonstrates the technical soundness of 40, 100, 200 and upto 500 KW of gas engine based biomass gasifier systems.

A wide range of locally available biomass feedstocks is being used: woody biomass from Eucalyptus, Casuarina, Acacias, Albizzias, Cassia siamea and many other tree species; agricultural residues such as coconut shells, mulberry stalks, briquetted biomass of saw dust, coffee husk, groundnut husk, rice husk and other residues:
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Started in 2001, the project has brought light into hundreds of villager's lives. CNN-IBN's Priyanjana Dutta spoke with Laxmi, one of them. Laxmi's house like the whole village is now getting electricity through the biomass based gasifier systems, pumping drinking water, irrigating their lands and using it for cooking purposes. "Earlier we used to use wood that made the whole house smoky and the vessels black. After switching to this gas the vessels are cleaner, the house is not smoky and we are also living happily,” says Laxmi.

But there are more benefits to the project. Laxmi and the other villagers are now involved in new activities like biomass production, the regeneration of existing plantations, harvesting and treating the biomass and supplying it to the different gasifiers. Right now the project is aimed at helping 4,000 families in this cluster of 28 villages. The larger goal is to promote this concept at the national level and then at the global level, says Dr Swaminath:

Climate change today is an inconvenient truth. But BERI thinks that using appropriate bioenergy technology will not only reduce green house gas emissions but also help meet rural energy requirements in a sustainable manner.


IBN Live: Farmers use biomass, reduce carbon footprints - September 12, 2007.

The Biomass Energy for Rural India project website.

Biopact: Biomass gasification systems to power thousands of villages in rural India - September 10, 2006

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Analysts: labor-intensive Jatropha not a magic bullet

The oilseed plant Jatropha curcas is often touted as a biodiesel crop that can be grown on poor soils and requires relatively few inputs. However, analysts warn that this new 'underresearched' biofuel plant currently faces three major problems: yields are unreliable, seeds are toxic, requiring careful handling, and harvesting the nuts is extremely labor intensive.

Jatropha remains a wild plant that has not yet undergone the heavy agronomic, biotechnological and commercial research cycles so typical of the major oilseed crops that currently dominate the market. This is changing rapidly as biotech companies are investing in improving the crop (e.g. Bayer CropScience and D1Oils/BP).

However, the woody perennial shrub has attracted interest in countries like India and China because it can grow on barren, marginal land and does not intrude on farmland needed to grow food crops. Trial projects have shown that the crop can blend it with local farm practises as it is easy to maintain and requires few upfront costs and fertilizer and water inputs. So far, no major pests or diseases have been identified for Jatropha.

Labor intensive

However, M. R. Chandran, adviser to the Roundtable on Sustainable Palm Oil, today told an oil and fats conference that the crop is very labour-intensive as each fruit ripens at a different time. It needs to be harvested separately and manually.

In an earlier overview of labor inputs needed for different energy systems, Biopact too warned that Jatropha may be too labor intensive and would require very cheap labor to make economic sense. The labor intensity of biofuel production can be a benefit, as it implies the creation of a large number of jobs (see the renewable energy jobs calculator). But in order to be socially acceptable, the production system must also allow an increase in wages over time. Else, a situation akin to plantation slavery emerges in which laborers are kept in perpetual dependence, and the social potential of biofuel production evaporates.

In short, a balance must be found between labor intensity and the potential to take laborers along in an upward trend towards increased incomes. A crop like palm oil, also harvested manually, yields far more oil (energy) per man-hour, but still provides many jobs - a perfect balance (see table, click to enlarge).

Moreover, the very essence of an economic energy system is to produce as much energy as possible with as few energy and labor inputs as possible. Jatropha clearly faces a problem there:
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A second difficulty with Jatropha lies in the fact that its nuts and leaves are toxic. These toxic qualities have been exploited in traditional medicine across the developing world, where concoctions of Jatropha substances are used to heal wounds and treat a great variety of ailments (hence its popular name, the 'purging nut'). The plant can also be found in many West-African villages where it is used as a natural hedge to protect fields from grazing animals, who spontaneously stay away from the poisonous plant. But now that Jatropha production is being scaled up as a biofuel crop, the toxicity of the seeds may become a hazard for the people who have to harvest and process the seeds.

Research is needed to understand potential health risks for harvesters and handlers at the processing plants. An engineer specialising in oil and fat processing plants, including for biodiesel production, said special facilities were needed for crushing jatropha nuts as they could produce a toxic vapour. However, the same engineer, who declined to be named, is optimistic and said his company hoped to seal a deal with a private investor to build one of the world's first large-scale jatropha-based biodiesel plants in China's southern province of Yunnan before the end of this year.

Finally, so far Jatropha has not enjoyed much professional efforts to improve its productivity. According to analysts, it would take at least five years of intensive breeding and plant improvement before the crop could achieve productivity that would make its cultivation economically viable.

The oil yield of current wild species is less than 2 tonnes per hectare with large swings from year to year. Compare this with palm oil, yields of which are around three times as high, with continuous plant improvement research leading to varieties that yield ever more.

In short, jatropha still faces major difficulties to make it as an attractive biofuel crop. Some caution is required by potential investors who should not be blinded by the current hype surrounding the plant. On the other hand, most of these problems may be solved over the coming years. There is no reason to assume that the crop would be resistant to yield improvements. According to several sources, classic breeding techniques will possibly result in varieties with twice the productivity of wild plants. Modern biotechnology could develop genetically improved Jatropha, even though this would be controversial.

When it comes to the toxic nature of the seeds, several initiatives are already underway to turn this into a benefit: researchers hope to utilize the toxins in pharmaceutical applications (earlier post). Simple technical interventions and the establishment of safety procedures at seed crushing mills and biodiesel plants may offer solutions to the health risks that could emerge in the processing stage.

The labor question remains. However, Biopact knows that several organisations are currently researching mechanical harvesting techniques for Jatropha. They basically come down to systems that resemble olive harvesting machines ('tree-shakers'). It remains to be seen whether these techniques become viable, as jatropha continuously yields ripe nuts without there being any clear 'harvest' season.

Reuters: Toxic jatropha not magic biofuel crop, experts warn - September 12, 2007.

Biopact: D1 Oils and BP to establish global joint venture to plant jatropha - June 29, 2007

Bipact: Interview: DaimlerChrysler, farmers see great future in jatropha - June 30, 2007

Biopact: Renewable energy jobs calculator - August 07, 2007

Biopact: Jobs per joule: how much employment does each energy sector generate? - September 01, 2006

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Sweden signs biofuel accord with Brazil; abolishes tax on imported ethanol

The Swedish government has signed a biofuel cooperation agreement with Brazil and will remove its heavy import tax on ethanol produced in the South. The move is seen as a way to push EU member states to do the same. Both governments will also work together to help African countries become biofuel producers who can supply global markets. Sweden is thus creating the kernel of a genuine 'biopact'.

The deal comes after the publication yesterday of an OECD report that was written at the request of the Swedish government, Europe's largest importer of ethanol (earlier post). This document says there is an urgent need to liberalise the global biofuels market. The report urges the removal of subsidies for inefficient biofuels made in the North, and the abolishment of taxes in the EU and the US on imported ethanol, in order to allow the use of sustainable and carbon-reducing biofuels made in the South (more here).

These fuels, such as ethanol from sugar cane, are much more efficient than biofuels made in the North which do not substantially reduce greenhouse gas emissions and which push up food prices because they rely on food crops such as corn and wheat. Sweden is Europe's staunchest supporter of a 'biopact' in which the North imports efficient biofuels from the South instead. For this reason, it has been leading a diplomatic effort to remove trade barriers (more here).

Towards a free market
The country is now putting its money where its mouth is. Sweden has agreed to abolish the heavy import tariff on ethanol under a biofuels accord signed during a visit of Brazilian President Luiz Inacio Lula da Silva. This is a major success for the Brazilian head of state, who is currently on a biofuel diplomacy tour in Europe.
We intend to abolish this special tax that was introduced on January 1, 2006 in Sweden. We want to take away this tax as fast as possible. - Swedish Prime Minister Fredrik Reinfeldt.
The European Union member states currently impose a 19 eurocent per liter tax on imported ethanol (equivalent to around US$1/gallon). Sweden, Europe's leading green nation, expects to remove this tax as early as January 1, 2009. From then on, European biofuel producers will no longer be protected by the heavy tariff and face direct competition from Brazilian producers whose production costs are much lower. At least in Sweden, which imports 80 per cent of its ethanol. However, under the biofuel accord, Sweden has vowed to push for an EU-wide abolishment of the tax.

The agreement also furthers cooperation between the two countries to help African nations realize their large biofuel potential. Under the accord, Sweden and Brazil will facilitate the creation of bilateral and multilateral biofuel agreements between developing countries and industrialized countries, as a way to create a global market for sustainable biofuels. This is another area in which the Brazilian government has been very active (more here and here). According to the FAO, biofuel production in Africa can stimulate an 'agricultural renaissance' on the continent and reduce poverty on a large scale (earlier post).

The African continent has a very large potential to produce biofuels without threatening forests or food, fiber and feed supplies. The sustainable potential is estimated to be around 410 Exajoules by 2050 under an optimal scenario (earlier post). This is roughly the equivalent of the world's total current energy consumption:
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Bio-ethanol made from sugar cane is the most efficient source of biofuel and is also a market where Brazil hopes to expand its global reach. The production model can be transferred to Africa, where land is abundant and agroclimatic conditions are very suitable for the production of biofuels that effectively reduce carbon dioxide emissions.

Sweden is strongly in favor of globalising the biofuel market and sees a great role for developing countries who can utilize the opportunity as a way to boost their own energy security and alleviate poverty on a massive scale. The vision has received support from the FAO and the WorldWatch institute, who say biofuels offer a chance for an 'agricultural renaissance' in Africa.

Commenting on his diplomatic success in Sweden, president Lula said: "I'm very happy to be backed by Sweden. The relations between Sweden and Brazil are extraordinarily good. There are 200 Swedish companies in Brazil, but it's not only because of the number of jobs that are generated by Swedish companies but also because of the political thinking, the way we (have worked) together for so many years."

Lula said that in the face of climate change, "we can no longer keep blaming someone else for being responsible" for threats to the planet. "If each party takes ... responsibililty to do things right, then we have a chance to save our planet."

Lula was to take part in a seminar on biofuels on Wednesday before leaving for Denmark. He will then visit Oslo on Friday and will arrive in Madrid on September 17.

Swedish Government: Brasiliens president Luiz Inácio Lula da Silva träffar statsminister Fredrik Reinfeldt [webcast] - September 11, 2007.

AP: Sweden, Brazil sign biofuels deal during Lula visit - September 12, 2007.

Correio de Bahia: Lula estreita cooperação com a Suécia - September 12, 2007.

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The bioeconomy at work: Mazda develops 100% PLA based biofabric for vehicle interiors

The world’s first biofabric made with completely plant-derived fibers, suitable for use in vehicle interiors, has been developed by Mazda Motor Corporation in collaboration with Teijin Limited and Teijin Fibers Limited. The innovation shows again that the automotive industry is playing a vanguard role in the development of biobased plastics and materials that replace petroleum based products (overview of other examples).

This newly developed biofabric does not contain any oil-based materials, yet it possesses the quality and durability required for use in vehicle seat covers. Resistant to abrasion and damage from sunlight, in addition to being flame retardant, the new biofabric meets the highest quality standards. Based on this biotechnology, Mazda will strengthen its future research and development on non-food-based materials in consideration of the impact such technologies have on food supplies.

Mazda plans to use the biofabric for the seat covers and door trim in the all-new Premacy Hydrogen RE Hybrid that will be exhibited in October at the Tokyo Motor Show 2007. The all-new Premacy Hydrogen RE Hybrid will also feature a bioplastic, which Mazda developed in 2006, in the vehicle’s instrument panel and other interior fittings.
We are convinced that our new technology, which enables the manufacture of this material without any oil-based resources, will become a cornerstone for future biotechnologies aimed at reducing the burden on the environment. Mazda, working together with our locally-based partners, will continue its research and development programs aimed at achieving a future car society that is eco-friendly. - Seita Kanai, Mazda’s director and senior executive officer in charge of R&D
This newly developed biofabric has harnessed the latest technologies to control the entire molecular architecture of raw resins to improve fiber strength until the fabric attained sufficient resistance to abrasion and light damage for practical use in vehicle seat covers.

The biofabric is made of 100 percent polylactic acid - a plastic created by combining large numbers of lactic acid molecules that are made from fermented carbohydrates such as plant sugars:
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Mazda developed this new biofabric in collaboration with Teijin Limited and Teijin Fibers Limited, companies with R&D and manufacturing sites in the region near Mazda’s headquarters in Hiroshima.

Other crucial qualities necessary for the highest performing fabrics, such as fire retardant properties, were achieved through Mazda’s accumulated experience in surface technologies built up through years of cooperation with several local companies.

All of Mazda’s biomaterials fall under the “Mazda Biotechmaterial” brand name. Mazda is dedicated to continuing its research and development efforts for these environmentally friendly technologies which will help to realize a sustainable society in the future.

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