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    Brasil Ecodiesel, the leading Brazilian biodiesel producer company, recorded an increase of 57.7% in sales in the third quarter of the current year, in comparison with the previous three months. Sales volume stood at 53,000 cubic metres from August until September, against 34,000 cubic metres of the biofuel between April and June. The company is also concluding negotiations to export between 1,000 to 2,000 tonnes of glycerine per month to the Asian market. ANBA - October 4, 2007.

    PolyOne Corporation, the US supplier of specialised polymer materials, has opened a new colour concentrates manufacturing plant in Kutno, Poland. Located in central Poland, the new plant will produce colour products in the first instance, although the company says the facility can be expanded to handle other products. In March, the Ohio-based firm launched a range of of liquid colourants for use in bioplastics in biodegradable applications. The concentrates are European food contact compliant and can be used in polylactic acid (PLA) or starch-based blends. Plastics & Rubber Weekly - October 2, 2007.

    A turbo-charged, spray-guided direct-injection engine running on pure ethanol (E100) can achieve very high specific output, and shows “significant potential for aggressive engine downsizing for a dedicated or dual-fuel solution”, according to engineers at Orbital Corporation. GreenCarCongress - October 2, 2007.

    UK-based NiTech Solutions receives £800,000 in private funding to commercialize a cost-saving industrial mixing system, dubbed the Continuous Oscillatory Baffled Reactor (COBR), which can lower costs by 50 per cent and reduce process time by as much as 90 per cent during the manufacture of a range of commodities including chemicals, drugs and biofuels. Scotsman - October 2, 2007.

    A group of Spanish investors is building a new bioethanol plant in the western region of Extremadura that should be producing fuel from maize in 2009. Alcoholes Biocarburantes de Extremadura (Albiex) has already started work on the site near Badajoz and expects to spend €42/$59 million on the plant in the next two years. It will produce 110 million litres a year of bioethanol and 87 million kg of grain byproduct that can be used for animal feed. Europapress - September 28, 2007.

    Portuguese fuel company Prio SA and UK based FCL Biofuels have joined forces to launch the Portuguese consumer biodiesel brand, PrioBio, in the UK. PrioBio is scheduled to be available in the UK from 1st November. By the end of this year (2007), says FCL Biofuel, the partnership’s two biodiesel refineries will have a total capacity of 200,000 tonnes which will is set to grow to 400,000 tonnes by the end of 2010. Biofuel Review - September 27, 2007.

    According to Tarja Halonen, the Finnish president, one third of the value of all of Finland's exports consists of environmentally friendly technologies. Finland has invested in climate and energy technologies, particularly in combined heat and power production from biomass, bioenergy and wind power, the president said at the UN secretary-general's high-level event on climate change. Newroom Finland - September 25, 2007.

    Spanish engineering and energy company Abengoa says it had suspended bioethanol production at the biggest of its three Spanish plants because it was unprofitable. It cited high grain prices and uncertainty about the national market for ethanol. Earlier this year, the plant, located in Salamanca, ceased production for similar reasons. To Biopact this is yet another indication that biofuel production in the EU/US does not make sense and must be relocated to the Global South, where the biofuel can be produced competitively and sustainably, without relying on food crops. Reuters - September 24, 2007.

    The Midlands Consortium, comprised of the universities of Birmingham, Loughborough and Nottingham, is chosen to host Britain's new Energy Technologies Institute, a £1 billion national organisation which will aim to develop cleaner energies. University of Nottingham - September 21, 2007.

    The EGGER group, one of the leading European manufacturers of chipboard, MDF and OSB boards has begun work on installing a 50MW biomass boiler for its production site in Rion. The new furnace will recycle 60,000 tonnes of offcuts to be used in the new combined heat and power (CHP) station as an ecological fuel. The facility will reduce consumption of natural gas by 75%. IHB Network - September 21, 2007.

    Analysts fear that record oil prices will fuel general inflation in Kenya, particularly hitting the poorest hard. They call for the development of new policies and strategies to cope with sustained high oil prices. Such policies include alternative fuels like biofuels, conservation measures, and more investments in oil and gas exploration. The poor in Kenya are hit hardest by the sharp increase, because they spend most of their budget on fuel and transport. Furthermore, in oil intensive economies like Kenya, high oil prices push up prices for food and most other basic goods. All Africa - September 20, 2007.

    Finland's Metso Power has won an order to supply Kalmar Energi Värme AB with a biomass-fired power boiler for the company’s new combined heat and power plant in Kalmar on the east coast of Sweden. Start-up for the plant is scheduled for the end of 2009. The value of the order is approximately EUR 55 million. The power boiler (90 MWth) will utilize bubbling fluidized bed technology and will burn biomass replacing old district heating boilers and reducing the consumption of oil. The delivery will also include a flue gas condensing system to increase plant's district heat production. Metso Corporation - September 19, 2007.

    Jo-Carroll Energy announced today its plan to build an 80 megawatt, biomass-fueled, renewable energy center in Illinois. The US$ 140 million plant will be fueled by various types of renewable biomass, such as clean waste wood, corn stover and switchgrass. Jo-Carroll Energy - September 18, 2007.

    Beihai Gofar Marine Biological Industry Co Ltd, in China's southern region of Guangxi, plans to build a 100,000 tonne-per-year fuel ethanol plant using cassava as feedstock. The Shanghai-listed company plans to raise about 560 million yuan ($74.5 million) in a share placement to finance the project and boost its cash flow. Reuters - September 18, 2007.

    The oil-dependent island state of Fiji has requested US company Avalor Capital, LLC, to invest in biodiesel and ethanol. The Fiji government has urged the company to move its $250million 'Fiji Biofuels Project' forward at the earliest possible date. Fiji Live - September 18, 2007.

    The Bowen Group, one of Ireland's biggest construction groups has announced a strategic move into the biomass energy sector. It is planning a €25 million investment over the next five years to fund up to 100 projects that will create electricity from biomass. Its ambition is to install up to 135 megawatts of biomass-fuelled heat from local forestry sources, which is equal to 50 million litres or about €25m worth of imported oil. Irish Examiner - September 16, 2007.

    According to Dr Niphon Poapongsakorn, dean of Economics at Thammasat University in Thailand, cassava-based ethanol is competitive when oil is above $40 per barrel. Thailand is the world's largest producer and exporter of cassava for industrial use. Bangkok Post - September 14, 2007.

    German biogas and biodiesel developer BKN BioKraftstoff Nord AG has generated gross proceeds totaling €5.5 million as part of its capital increase from authorized capital. Ad Hoc News - September 13, 2007.

    NewGen Technologies, Inc. announced that it and Titan Global Holdings, Inc. completed a definitive Biofuels Supply Agreement which will become effective upon Titan’s acquisition of Appalachian Oil Company. Given APPCO’s current distribution of over 225 million gallons of fuel products per year, the initial expected ethanol supply to APPCO should exceed 1 million gallons a month. Charlotte dBusinessNews - September 13, 2007.

    Oil prices reach record highs as the U.S. Energy Information Agency releases a report that showed crude oil inventories fell by more than seven million barrels last week. The rise comes despite a decision by the international oil cartel, OPEC, to raise its output quota by 500,000 barrels. Reuters - September 12, 2007.

    OPEC decided today to increase the volume of crude supplied to the market by Member Countries (excluding Angola and Iraq) by 500,000 b/d, effective 1 November 2007. The decision comes after oil reached near record-highs and after Saudi Aramco announced that last year's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent. OPEC - September 11, 2007.

    GreenField Ethanol and Monsanto Canada launch the 'Gro-ethanol' program which invites Ontario's farmers to grow corn seed containing Monsanto traits, specifically for the ethanol market. The corn hybrids eligible for the program include Monsanto traits that produce higher yielding corn for ethanol production. MarketWire - September 11, 2007.

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Thursday, October 04, 2007

Scientists propose artificial trees to scrub CO2 out of the atmosphere - but the real thing could be smarter

Some scientists suggest the threat of climate change has become so great, that we must begin to consider 'geo-engineering' the planet to mitigate global warming. Several futuristic proposals are on the table, but many of these have been dismissed as too risky (previous post). Two broad categories can be distinguished: geo-engineering 'mirrors' that reflect sunlight back into space to cool the planet, and options based on capturing and storing CO2.

Amongst the first series the following ideas have been suggested: emulating the cooling effects of a large volcanic eruption by filling the atmosphere with sulphur particles (dismissal here), making clouds more reflective by pumping fine salty water particles into them, and building a giant space mirror by launching billions of thin glass plates into space to reflect sunlight away from Earth (which would be absurdly costly).

Carbon capture ideas include the proposal to 'fertilize' the oceans with iron to induce algae blooms that capture CO2 (critique here), and building 'synthetic trees' that suck CO2 out of the atmosphere with the gas consequently stored deep under ground (earlier post).

Artificial trees
The latter idea is now becoming a reality. Frank Zeman at Columbia University believes CO2 could be efficiently extracted from the atmosphere using a relatively simple chemical process involving pumping air from the atmosphere through a chamber containing sodium hydroxide, which reacts with the CO2 to form sodium carbonate. This carbon-containing solution is then mixed with lime to precipitate powdered calcium carbonate – a naturally occurring form of which is limestone. Finally, the 'limestone' is heated in a kiln releasing pure CO2 for storage.

The 'artificial tree' concept is discussed in an article in the current online edition of Environmental Science & Technology. Zeman calculates that one carbon atom would need to be expended as fuel – to pump air and heat the process – in order to capture four carbon atoms from air.

Zeman has no commercial plans for his idea, but Klaus Lackner, a former colleague at Columbia who originally developed the concept, has meanwhile set up a private company called Global Research Technologies to explore the possibilities of making money out of it.

Real trees and carbon-negative energy

According to Jon Gibbins, an expert on energy technology at Imperial College in the UK, Zeman and Lackner's idea faces two major problems: (1) it could provide a justification for continuing to burn fossil fuels, and (2) it does not present a clean energy system as it merely removes carbon dioxide from the atmosphere. There is however a concept that performs the same function as Zeman's idea but delivers renewable, ultra-clean carbon-negative energy at the same time, which allows us to move away from fossil fuels. This concept, known as 'Bio-energy with Carbon Storage' (BECS) is based on real trees designed to capture and store more carbon, and on advanced bioconversion concepts:
:: :: :: :: :: :: :: :: ::

Gibbins believes it makes more sense to use carbonaceous fuels to generate electricity, capture the CO2 at the power plant, and use the resulting electricity to power cars and trains.
Is it better to burn fossil fuels and capture the carbon dioxide from air, or to decarbonise the power first and put that into transport? If we bite bullet and move on to electricity then we can use electricity from anywhere, including renewable sources. - Jon Gibbins, Imperial College
If the fuels in question are renewable biomass - real trees - the electricity produced becomes carbon-negative. Such BECS systems perform the same function as Zeman's idea, but are more efficient and allow us to make a transition towards carbon-negative electricity for transport, away from fossil fuels.

Zeman claims that his process does not use any more energy than decarbonising emissions straight from power plants. But Gibbins points out that much of Zeman's process is run on electricity, while carbon capture at (biomass) power plants relies on waste heat, making the system potentially more efficient.

The BECS concept offers the possibility to couple biomass production and trade to a global transition to carbon-negative electricity. Unlike other renewables like wind or solar - which are carbon-neutral and merely prevent emissions from occuring in the future - BECS systems take emissions from the past out of the atmosphere and can take us back to lower CO2 levels far more quickly.

Scientists who developed BECS concepts within the context of 'Abrupt Climate Change' (ACC) scenarios, project that the systems can reduce atmospheric CO2 levels rapidly, safely and without the need for alternative and risky geo-engineering interventions. If implemented on a global scale, BECS can bring atmospheric CO2 back to pre-industrial levels by mid-century (earlier post and especially here).

The prospects for BECS systems are looking good. Recently the UNFCCC announced it would include carbon storage into the Clean Development Mechanism (CDM), but only in developing countries where more than 50% of all electricity is generated by coal. Many of these countries have a large potential to produce sustainable biomass close to geosequestration sites. Its inclusion into the CDM means the BECS concept will be eligible for carbon credits which would make it more feasible.

Moreover, recent advances in plant biology have seen scientists designing fast-growing trees with enhanced carbon capturing capacities. A hybrid larch tree with 30% greater carbon sink capacity was developed (previous post), as well as an eucalyptus with 15% increased carbon capturing capacity (more here). Such trees would be used as primary carbon capture 'machines', then transformed into bioenergy (bio-electricity or biofuels) and the carbon captured and geosequestered.

Finally, a major advantage of BECS is that it can be implemented in a decentralised way, increasing its safety (one of the major risks with geosequestration is the potential for CO2 leakage). Geosequestration sites can be selected far away from inhabited regions; there, biomass would be grown and converted into the carbon-negative biofuel, which would then be shipped to power stations there where electricity is needed. If the biomass is converted by using synthetic fuel production methods (gasification coupled to Fischer-Tropsch synthesis), the carbon-negative fuels later used in cities would be ultra-clean and emit virtually no harmfull emissions. Recently a project in this sense was started, initiating the transition to BECS. It is based on producing synthetic fuels from a mixture of coal and biomass, with CO2 emissions sequestered (earlier post). When the coal is left out, a full BECS-system emerges that results in ultra-clean, carbon-negative fuels that can be used for transport, or for the production of electricity.

Image: rendering of a synthetic tree used by the BBC in a documentary about geo-engineering options, which included a discussion of Lackner's idea. Credit: BBC.

Frank Zeman, "Energy and Material Balance of CO2 Capture from Ambient Air", Environmental Science & Technology, ASAP Article, September 26, 2007, doi:10.1021/es070874m

Biopact: Capturing carbon with "synthetic trees" or with the real thing?- February 20, 2007

Biopact: A closer look at the revolutionary coal+biomass-to-liquids with carbon storage project - September 13, 2007

Biopact: Carbon-negative energy gets boost as UNFCCC includes CCS in CDM mechanism - September 19, 2007

Biopact: Japanese scientists develop hybrid larch trees with 30% greater carbon sink capacity - October 03, 2007

Biopact: Scientists develop low-lignin eucalyptus trees that store more CO2, provide more cellulose for biofuels - September 17, 2007

Biopact: Simulation shows geoengineering is very risky - June 05, 2007

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Study: tariff reductions in the Doha Round will erode border protection for EU agricultural products

Agriculture is at the centre of the multilateral round of trade negotiations under the World Trade Organization (WTO), the so-called 'Doha Round'. The Global South wants both the United States and the European Union to decrease farm subsidies and abandon tariffs for agricultural products. The developing countries stand united in the G-20, but are confronted with an ongoing dispute between the EU and the US, which holds back progress (earlier post). Market access compared to export competition and domestic support is the most difficult of the three pillars to negotiate. The US is aggressively demanding for significant reductions in tariffs, but the EU is unable to do so because further tariff reductions will erode border protection for some of its important agricultural products.

MTT Agrifood Research Finland has completed an interesting study [*.pdf] to reveal the sensitive agricultural products in the EU due to further tariff reductions in the projected Doha Round. The EU agricultural products are examined by tariff lines at eight digit level. These products are butter, skim milk powder, beef meat, poultry meat, pig meat, white sugar, wheat, barley, and maize. The sensitivity of EU agricultural products to the fluctuation of exchange rates from USD 0.90 per Euro to USD 1.50 per Euro is analysed in conjunction with the different tariff reduction formulas according to the EU proposal, WTO draft proposal, and US proposal for tariff-cuts.

Out of the many proposals submitted to the WTO for the tariff reduction formula, the US proposal is the most extreme and the EU proposal is the most lenient with the G-20 proposal and the WTO draft proposal being in the middle. Naturally, the projected results show that the EU proposal will generate a lower number of sensitive products compared to the WTO draft proposal, and the US proposal will generate the highest number of sensitive products:
:: :: :: :: :: :: :: :: :: :: ::

The results reveal that poultry meat has the lowest border protection among the examined EU agricultural products, followed by butter. Poultry meat is sensitive to the tariff reduction formula under the WTO draft proposal in almost all the exchange rate scenarios, except when the Euro is very weak (USD 0.90 per Euro). Likewise, butter is sensitive to the tariff reduction formula under the US proposal in almost all the exchange rate scenarios with the exception of a very weak Euro – USD 0.90 per Euro.

On the other hand, EU cereals such as wheat, barley, and maize are the most resilient to the erosion of border protection due to further reduction in tariffs in the projected Doha Round, followed by skim milk powder in the EU dairy sector. Border protection for cereals remains intact even after implementing the tariff reduction formulas from all the three proposals. In addition, border protection for cereals is not affected by a variety of exchange rate scenarios.

As the second most resilient product, skim milk powder is only sensitive to the tariff reduction formula under the US proposal and when the Euro is very strong – USD 1.50 per Euro. The results also demonstrate that EU agricultural products are very sensitive to the fluctuations of exchange rate. There are no sensitive agricultural products under any of the tariff reduction proposals if the Euro is very weak – USD 0.90 per Euro. On the contrary, a very strong Euro (USD 1.50 per Euro) will create the highest number of sensitive products in the projected Doha Round.

WTO members are entitled to select and designate an appropriate number of sensitive products. Proposals have extended from as little as one percent to as much as fifteen percent of tariff lines. The WTO draft proposal estimated that the number of sensitive products may be between four to eight percent of all agricultural tariff lines. Therefore, the EU may be eligible to designate between 88 to 176 tariff lines as sensitive products. This study has analysed only nine tariff lines out of the 2200 tariff lines for EU agricultural products. The examined EU agricultural products may represent other tariff lines in the same product category, but potential sensitive products at eight digit level have to be analysed individually in order to choose the correct and exact number of sensitive products for the EU.

Ellen Huan-Niemi, "Market access under the World Trade Organisation: Identifying sensitive products in the EU" [*.pdf], MTT Working Papers 146, 23 pages - October 2007

Biopact: Latest Doha talks collapse again, agriculture remains stumbling block - June 21, 2007

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Thermoelectric devices could save energy by tapping waste heat

Energy lost from hot engines and combustion systems could save billions of dollars if it could be captured and converted into electricity via thermoelectric devices, Clemson University physicist Terry Tritt told scientists gathered in Dallas for the NanoTX ’07 conference. Tritt delivered an address at the Alan MacDairmid Memorial Nano Energy Summit on challenges in alternative energy, specifically thermoelectricity used to generate electrical energy from waste heat.

Thermoelectric generators are based on materials that are special types of semiconductors. When coupled, they function as a heat pump: a temperature gradient is applied across a sample, electrons diffuse from the hot to the cold part due to the larger thermal speed of the electrons in the hot region, a charge difference then builds up between the hot and cold region, creating a voltage and producing an electric current (schematic, click to enlarge).

Thermoelectric materials can be used for either cooling or power generation. Although current devices have a low conversion efficiency of around 10 per cent, they are strongly advantageous as compared to conventional energy technologies. The converters have no moving parts and are therefore both reliable and durable.

Such waste heat recovery technologies could increase the efficiency of small bioenergy power systems and even of ordinary biomass cooking stoves (an example of research in this context). Large biomass power systems allow for polygeneration and the use of heat in distributed (district) heating and cooling systems. But small biomass power systems generate equally large amounts of waste heat that can not always be used in such a straightforward way. Thermoelectric generators could recover this waste heat and convert it into more electricity.

Many more applications can be envisioned. One of the more interesting ones involves capturing waste heat from cars' internal combustion engines.
Thermoelectric generators are currently used in NASA’s deep-space probes to convert the heat of radioactive elements to electrical energy, powering these systems for over 30 years. Thermoelectric energy conversion is a solid-state technology that is environmentally friendly. One of the more promising ‘down-to-earth’ applications lies in waste-heat recovery in cars. - Terry Tritt, Clemson University
More than 60 percent of the energy that goes into an automotive combustion cycle is lost, primarily to waste heat through the exhaust or radiator system. Even at the current efficiencies of thermoelectric devices, 7 to 8 percent, more than 1.5 billion gallons of diesel could be saved each year in the U.S. if thermoelectric generators were used on the exhaust of heavy trucks. That translates into billions of dollars saved:
:: :: :: :: :: :: :: :: ::

Clemson research focuses on developing higher-efficiency thermoelectric materials that could increase savings significantly. Research on the electrical and thermal properties of new materials could reduce the world’s reliance on fossil fuels and has shown promise with two classes of materials: low-dimensional systems for enhanced electrical properties and increased phonon scattering that leads to inherently low thermal conductivity.

Tritt heads up the Department of Energy’s Center of Excellence in Thermoelectric Materials Research at Clemson, one of the leading laboratories for thermoelectric materials in the world. The national center focuses on the next generation of thermoelectric materials for power conversion and refrigeration. Researchers in physics, materials science and chemistry screen promising new classes of materials in order to achieve higher-performance thermoelectric materials. DOE recently renewed the program with more than $1 million a year in research funding for the next three years.

NanoTX, presented by Semiconductor Industry Association, highlights advances in nanoscience and explains how nanotechnology is being used today and how it will impact a broad range of industries tomorrow, including electronics, energy, aerospace, defense, biomedicine, robotics, chemicals and more.

Clemson University: Clemson physicist addresses international forum on thermoelectric energy - October 4, 2007.

Thermoelectric News: US DoE awards $3 Million to Clemson - September 29, 2004.

NanoTx '07 conference & expo.

An older but good introduction to the topic of thermoelectric material science can be found in: Terry M. Tritt, "Thermoelectric materials: Holey and Unholey Semiconductors", Science 5 February 1999: Vol. 283. no. 5403, pp. 804 - 805, DOI: 10.1126/science.283.5403.804

C. Lertsatitthanakorn, "Electrical performance analysis and economic evaluation of combined biomass cook stove thermoelectric (BITE) generator", Bioresource Technology, Volume 98, Issue 8, May 2007, Pages 1670-1674, doi:10.1016/j.biortech.2006.05.048

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MyFuel to build two large palm oil biodiesel plants in Malaysia

Malaysia-based MyFuel Ltd plans to invest some 160 million ringgit (€33.2/US$46.9 million) to set up two biodiesel facilities at the Port Klang Free Zone, one of the main ports of Malaysia, located south of Kuala Lumpur. MyFuel has been granted the license to set up the biodiesel plants and expects them to be completed in June of next year.

The palm oil-based methyl ester plants, to be built on a 3.2 hectare factory site on a 30-year lease, will have an output of 100,000 and 250,000 metric tonnes a year. Group managing director George Joukado told Malaysia's state news agency Bernama the plants will be equipped with process equipment from European supplier Desmet Ballestra.

At full production the plants will create annual turnover and spin-offs estimated to exceed 1 billion ringgit (€208/US$293 million).
The extraordinarily high palm oil prices, choppy international biodiesel market conditions and the rise in fossil fuel prices certainly pose a challenge. However, they will not unduly upset the long-term prospects and viability of biodiesel. - George Joukador, managing director MyFuel
According to Joukador, the company has signed supply arrangements with reputable palm oil suppliers and has signed agreements with third parties for marketing and sales to ensure the reliable supply of feed stocks and pre-marketing of end-products:
:: :: :: :: :: :: :: ::

It has inked a marketing and distribution agreement with biodiesel brand leader World Energy Alternatives (WEA) under which all WEA purchases of biodiesel from Asia Pacific will be supplied by MyFuel.

MyFuel has two subsidiaries for the Malaysian operation - Biodiesel SP Sdn Bhd and Biodiesel LD Sdn Bhd.

Surging feedstock prices have prompted Malaysia, the world's leading palm oil producer, to put on hold the implementation of a biofuel act aimed at facilitating the commercialization of Malaysian-made palm oil-based biodiesel. However, prices are expected to decrease as new production comes online.

Bernama: MyFuel To Invest RM160 Mln In Biodiesel Facilities - October 3, 2007.

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IISD report challenges EU biofuel subsidies, calls for end to tariff

A new report gives yet another boost to the idea of a Biopact, which consists of wealthy countries in the North importing efficient and sustainable bioenergy and biofuels made in the South, as a way of creating a new trade relationship in which development, poverty alleviation and energy security take center stage. In order for such a pact to succeed, trade reform is needed and subsidy schemes in the EU and the US must be changed.

The European Union's support for biofuels may not be the most cost-effective way for the 27-country bloc to tackle climate change, the new study concludes. Its lead author argues that the EU better import sustainable biofuels made in poor countries like Brazil, because they are highly energy efficient, reduce greenhouse gas emissions far more and are highly competitive compared to biofuels made in the EU. The same researchers, working for the Global Subsidies Initiative (GSI), earlier analysed biofuel subsidies and their trade distorting effects in the US and came to similar conclusions (previous post).

Last year EU governments spent at least €3.7 billion ($5.2 billion) on subsidising biofuel production. Such support is likely to grow in the coming years because the Union has set a strategy of raising the quantity of road fuel generated from biofuels from its present level of 2 percent to 10 percent by 2010.

But the International Institute for Sustainable Development (IISD) in Geneva has queried if allocating large amounts of public funds to EU biofuels is desirable. In a study titled Biofuels At What Cost? Government Support for Ethanol and Biodiesel in the European Union [*.pdf] it calculates that the cost of using ethanol from sugar beet to avoid emitting one tonne of carbon dioxide (CO2) - the main gas blamed for climate change - ranges from slightly less than €600 to €800 ($760 to $1,000).

Producing biofuels from crops grown in the EU is generally an energy-intensive business, which in itself makes use of considerable quantities of fossil fuels. As a result, the study says, the overall saving of fossil fuels brought by biofuels may be low, and introducing carbon or pollution taxes may prove more effective.

Generally, biofuels made from high-sugar crops such as sugar cane or high yielding oil crops like palm oil can contribute to higher savings on fossil fuels than those made from oilseeds or grains. More than 90 percent of the 6 million tonnes of biofuels produced in the EU during 2006 was made from rapeseed oil.

Ron Steeblik from the GSI urged the Union to eliminate tariffs on imported ethanol, a fuel made from sugar. Ethanol with an alcohol content of 80 percent is subject to a tariff of 19.20 euros (27 dollars) per 100 litres. 'Denatured' alcohol, which has a lower content, is taxed at just over half that level.
These taxes are inimical to poor countries like Brazil. This is contrary to the EU's general policy of trying to reduce tariffs. It is far higher than any tariff on industrial goods and is an old-fashioned instrument for protecting agriculture.

Import tariffs on ethanol from Brazil, one of the most efficient producers of biofuels, reduce the amount of sales that can be made by a developing country. The EU's policy is incoherent. If biofuels are so good, why is it taxing them so heavily at the border?
- Ron Steenblik, lead author, Global Subsidies Initiative
The EU executive, the European Commission, is expected to propose a new law setting down the criteria for supporting biofuels by the end of this year:
:: :: :: :: :: :: :: :: :: :: ::

Officials are examining how to prevent support for biofuels in cases where their production involves the emission of more greenhouse gases than would eventually be saved by using them instead of pure fossil fuels.

However, there are some who support biofuel subsidies. Lena Ek, a Swedish Liberal member of the European Parliament (MEP), said that "biofuels will be there as part of the solution" to global warming. She asked, therefore, if subsidising them is "really a bad thing."

Ethanol has proven economically beneficial to Brazil, she added. "Brazil has got out of the fossil economy," she noted. "Last year it paid off the debt it owed to the World Bank."

Swedish conservative MEP Anders Wijkman said: "We need subsidies if we want new energy in the market place. But the question is how do we lock ourselves into a production scheme that is really feasible. The logical question is how to ensure the end result really eliminates carbon dioxide."

A European Commission official said that there is a "serious misunderstanding" about the factors motivating biofuels policy in the Union. One widely held view, he said, is that the principal objective is to support the income of crop farmers. "It has nothing to do with that," the official said.

The real issue for the Union, according to the official, is having a "policy in place" to meet an increased demand for biofuels.

But Ron Steeblik said that high subsidies for biofuels "could potentially create a lot of instability for other markets, including the agriculture market."

His colleague at the Global Subsidies Initiative David Runnalls said that the EU should beware of aping the support system for biofuels in the U.S. He argued that it is preferable to support research into biofuels, as has been done in Canada, than to link support for them to the level of production, the method favoured in Washington.

In some parts of America, he said, subsidies account for 2.40 dollars of the price of a three-dollar gallon of biodiesel.

"There is a potentially distorting effect of biofuels wrongly applied in the wrong place and the wrong time," said Runnalls. "We are not opposed to subsidies. What we are opposed to is governments spending them in an ill-advised fashion."

IISD: International Institute for Sustainable Development's Global Subsidies Initiative releases Biofuels – At What Cost? Government support for ethanol and biodiesel in selected OECD countries - October 3, 2007.

Global Subsidies Initiative: Biofuels At What Cost? Government Support for Ethanol and Biodiesel in the European Union [*.pdf] - October 3, 2007?

Biopact: Subsidies for uncompetitive U.S. biofuels cost taxpayers billions - report - October 26, 2006

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