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    Mascoma Corporation, a cellulosic ethanol company, today announced the acquisition of Celsys BioFuels, Inc. Celsys BioFuels was formed in 2006 to commercialize cellulosic ethanol production technology developed in the Laboratory of Renewable Resources Engineering at Purdue University. The Celsys technology is based on proprietary pretreatment processes for multiple biomass feedstocks, including corn fiber and distiller grains. The technology was developed by Dr. Michael Ladisch, an internationally known leader in the field of renewable fuels and cellulosic biofuels. He will be taking a two-year leave of absence from Purdue University to join Mascoma as the company’s Chief Technology Officer. Business Wire - November 7, 2007.

    Bemis Company, Inc. announced today that it will partner with Plantic Technologies Limited, an Australian company specializing in starch-based biopolymers, to develop and sell renewably resourced flexible films using patented Plantic technology. Bemis - November 7, 2007.

    Hungary's Kalocsa Hõerõmû Kft is to build a HUF 40 billion (€158.2 million) straw-fired biomass power plant with a maximum capacity of 49.9 megawatts near Kalocsa in southern Hungary. Portfolio Hungary - November 7, 2007.

    Canada's Gemini Corporation has received approval to proceed into the detailed engineering, fabrication and construction phases of a biogas cogeneration facility located in the Lethbridge, Alberta area, the first of its kind whereby biogas production is enhanced through the use of Thermal Hydrolysis technology, a high temperature, high pressure process for the safe destruction of SRM material from the beef industry. The technology enables a facility to redirect waste material, previously shipped to landfills, into a valuable feedstock for the generation of electricity and thermal energy. This eliminates the release of methane into the environment and the resultant solids are approved for use as a land amendment rather than re-entering the waste stream. In addition, it enhances the biogas production process by more than 25%. Market Wire - November 7, 2007.

    A new Agency to manage Britain's commitment to biofuels was established today by Transport Secretary Ruth Kelly. The Renewable Fuels Agency will be responsible for the day to day running of the Renewable Transport Fuels Obligation, coming into force in April next year. By 2010, the Obligation will mean that 5% of all the fuels sold in the UK should come from biofuels, which could save 2.6m to 3m tonnes of carbon dioxide a year. eGov Monitor - November 5, 2007.

    Prices for prompt loading South African coal cargoes reached a new record last week with a trade at $85.00 a tonne free-on-board (FOB) for a February cargo. Strong Indian demand and tight supply has pushed South African prices up to record levels from around $47.00 at the beginning of the year. European DES/CIF ARA coal prices have remained fairly stable over the past few days, having traded up to a record $130.00 a tonne DES ARA late last week. Fair value is probably just below $130.00 a tonne, traders said. At this price, some forms of biomass become directly competitive with coal. Reuters Africa - November 4, 2007.

    The government of India's Harayana state has decided to promote biomass power projects based on gasification in a move to help rural communities replace costly diesel and furnace oil. The news was announced during a meeting of the Haryana Renewable Energy Development Agency (HAREDA). Six pilot plants have demonstrated the efficiency and practicability of small-scale biomass gasification. Capital subsidies will now be made available to similar projects at the rate of Rs 2.5 lakh (€4400) per 100 KW for electrical applications and Rs 2 lakh (€3500) per 300 KW for thermal applications. New Kerala - November 1, 2007.

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Wednesday, November 07, 2007

FAO forecasts continued high cereal prices: bad weather, low stocks, soaring demand, biofuels, high oil prices cited as causes

Global cereal prices are expected to remain at high levels for the coming year due largely to problems in production in several major exporting countries and very low world stocks, says the latest Food Outlook report issued today by FAO in London. The convergence and interaction of a whole range of particular circumstances is the main cause for high prices and volatility in agricultural commodity markets: unfavourable weather in key production areas, low stocks, tight supplies, strong demand from rapidly growing economies, biofuels, record petroleum prices, high freight rates, currency developments and a high degree of speculation.

The FAO food price index rose by 9 percent in 2006 compared with the previous year. In September 2007 it stood at 172 points, representing a year-on-year jump in value of roughly 37 percent (graph 1, click to enlarge). The surge in prices has been led primarily by dairy and grains, but prices of other commodities have also increased significantly. The only exception is the price of sugar, which has been declining for the second year in a row. This trend occured despite record sugar based ethanol output in Brazil (graph 2, click to enlarge).

High price events, like low price events, are not rare occurrences in agricultural markets although often high prices tend to be short lived compared with low prices, which persist for longer periods. What distinguishes the current state of agricultural markets is rather the concurrence of the hike in world prices of, not just a selected few, but of nearly all, major food and feed commodities. As has become evident in recent months, high international prices for food crops such as grains continue to ripple through the food value/supply chain, contributing to a rise in retail prices of such basic foods as bread or pasta, meat and milk.
Rarely has the world witnessed such a widespread and commonly shared concern about food price inflation, a fear which is fuelling debates about the future direction of agricultural commodity prices in importing as well as exporting countries, be they rich or poor. - FAO Food Outlook
The price boom has also been accompanied by much higher price volatility than in the past, especially in the cereals and oilseeds sectors (more on the importance of volatility below). Increased volatility highlights the prevalence of greater uncertainty in the market. Supply tightness in any commodity market often raises price volatility in that market. Yet, the current situation differs from the past in that the price volatility has lasted longer, a feature that is as much a result of supply tightness as it is a reflection of ever-stronger relationships between agricultural commodity markets and other markets.

Among major cereals, this season’s main protagonist is wheat, the supply of which has been hampered by production shortfalls in Australia, a major exporter, and low world stocks, while demand has been strong, not only for food but also feed. In September, wheat was traded at record prices, between 50 and 80 percent above last year. Maize prices increased progressively from the middle of last year until February 2007, when they hit a ten-year high, but have fallen considerably since. Supply constraints in the face of brisk demand for biofuels triggered the initial price hike in maize prices. However, reacting to a massive expansion in plantings and expectations of a record crop this year, prices have started to come down, although by September they had still remained 30 percent above last year. Prices of barley, another important cereal, also soared lately. Supply problems in Australia and Ukraine, tighter availability of maize and other feed grains, compounded with strong import demand, have contributed to the doubling of prices of both feed and malting barley in recent weeks.

The tightness in the grain sector also affected the oilseed complex, which witnessed a year-on-year price surge of at least 40 percent, depending on crops and products. Soaring maize markets during the second half of the previous season contributed to keeping oilseed prices at high levels as maize plantings expanded at the expense of oilseed plantings. Due to the expected shrinking of world supplies and historically low inventories in 2007, in the face of faster rising demand for food and biodiesel, as well as unusually strong demand for feed, oilseed markets are experiencing further increases in prices in these early months of the new season.

Among all agricultural commodities, dairy products have witnessed the largest gains compared with last year, ranging from 80 percent to more than 200 percent. Higher animal feed costs, tight dairy supplies following (1) the running down of inventories in the European Union and (2) drought in Australia, (3) the suspension of exports by some countries (4) coupled with the imposition of taxes by others, and (5) dynamic import demand are the main factors that have sustained dairy prices at historically high levels.

High feed prices have also raised costs for animal production and resulted in an increase in livestock prices; with poultry rising most, by at least 10 percent. In addition, growth in consumption and gradual reductions in trade restrictions are contributing to the increase in meat and poultry prices this season.

Convergence of factors
The persistent upward trend in international prices of most agricultural commodities since last year is only in part a reflection of a tightening in their own supplies. Global markets have become increasingly intertwined. As a result, linkages and spill-over effects from one market to another have greatly increased in recent years, not only among agricultural commodities, but across all commodities and between commodities and the financial sector.

Financial markets
Market-oriented policies are gradually making agricultural markets more transparent and, in the process, are elongating the financial opportunities for increased portfolio diversification and reduction in risk exposures. This is a development that is taking place just as financial markets around the world are experiencing the most rapid growth, driven by plentiful international liquidity. This abundance of liquidity reflects favourable economic performances around the world, notably among emerging economies, low interest rates and high petroleum prices:
:: :: :: :: :: :: :: :: :: :: :: :: ::

These developments have paved the way for massive amounts of cash becoming available for investment (by equity investors, funds, etc.) in markets that use financial instruments linked to the functioning of agricultural commodity markets (e.g. future and option markets). The buoyant financial markets are boosting asset allocation and drawing the attention of speculators to such markets, as a way of spreading their risk and pursuing of more lucrative returns. Such influx of liquidity is likely to influence the underlying spot markets to the extent that they affect the decisions of farmers, traders and processors of agricultural commodities. It seems more likely, though, that speculators contribute more to raising spot price volatility rather than their levels.

Soaring oil prices
Soaring petroleum prices have contributed to the increase in prices of most agricultural crops: by raising input costs, on the one hand, and by boosting demand for agricultural crops used as feedstock in the production of alternative energy sources (e.g. biofuels) on the other. National policies that aim to reduce greenhouse gas emissions are behind the fast growth of the biofuel industry.

Rising fossil fuel prices and attempts to reduce dependence on imported oil, however, have provided the extra incentive for many countries to opt for even more challenging crop production targets. The combination of high petroleum prices and the desire to address environmental issues is currently at the forefront of the rapid expansion of the biofuel sector: this is likely to boost demand for feedstocks, most notably, sugar, maize, rapeseed, soybean, palm oil and other oilcrops as well as wheat for many more years to come. However, much will also depend on the supply and demand fundamentals of the biofuel sector itself.

Freight rates
Freight rates have become a more important factor in agricultural markets than in the past. Increased fuel costs due to record oil prices, stretched shipping capacity, port congestion and longer trade routes have pushed up shipping costs. The Baltic Exchange Dry Index, a measure of shipping costs for bulk commodities such as grains and oilseeds, has recently passed the 10 000 mark for the first time with freight rates up more than 80 percent compared with the previous year. Not only have these record freight values increased the cost of transportation, but they have significant ramifications on the geographical pattern of trade, as many countries opt to source their import purchases from nearer suppliers to save on transport costs. In many instances, this development has also sparked a noticeable reduction in the degree of world market integration, with prices at regional or localized levels falling out of line with world levels.

Exchange rates
Exchange rate swings play a critical role in all markets and agricultural markets are no exception. Yet, rarely have currency developments been as important in shaping agricultural prices as in recent months. The gradual decline in the US dollar against most currencies since 2005 has made imports from the United States cheaper, thereby boosting demand for products that are exported from the United States. As international prices of most commodities are also primarily expressed in US dollar, this weakening of the dollar has helped push the United States export prices higher, exasperating the overall price strength, especially, in recent months, for wheat.

Evidently, the increases in the US dollar dominated prices of commodities affect international buyers (importers) differently, depending on how the value of their own currency changed vis-à-vis the US dollar. The fact that the dollar depreciated sharply against all major currencies lessens the true impact of the rise in world prices, a major reason behind the brisk world import demand that, in spite of high prices, shows very little sign of retreat or rationing.

Looking ahead
The main factor affecting the uncertainty in agricultural markets is how linkages with other markets, including markets of other agricultural commodities, will influence the direction and magnitude of price changes during the coming months and into the next season. This volatility in prices, especially in the case of agricultural crops, will represent a major hurdle in decision-making by farmers around the world.

Nowhere is this more evident than in the current debate about wheat plantings for next season. To most farmers, the current high wheat prices are only one reason to plant more wheat. The other is the general anticipation that even if wheat prices were to decline from their current high values, the decrease is expected to be less than those of other competing crops. In other words, farmers would be better off planting more land to wheat because of its higher relative profitability compared with other crops. In fact, all indications point to more wheat being planted around the world for harvesting next year. The recent decision by the European Union to release land from its set-aside programmes and the move by other major producing countries such as India to encourage farmers to grow more wheat by raising wheat procurement prices are also likely to pave the way for a much-needed rebound in world production in 2008.

All of the above, of course, assumes a normal weather situation, notwithstanding the fact that weather is impossible to predict. Prolonged drought in Australia, especially this year and last, affecting as it did a major wheat exporter, is a case in point. Yet, a strong expansion in wheat production, assuming normal growth in consumption, is bound to bring down wheat prices.

This brings about a critical issue: if more wheat gets planted, what will happen to the prices of other crops? Part of the answer can be found in what took place in the previous season with maize: once maize prices began to rise, plantings expanded across the world; jumping by 19 percent alone in the United States. Higher plantings and favourable weather drove maize production to a record this year, and this abundance started to push down prices, which are now well below their earlier highs, but still above levels of last year. Given a limited potential for expanding the agricultural frontier, the increase in maize plantings was at the expense of reductions in areas dedicated to several other crops, the production of which suffered as a result. A good example is soybeans and, to some extent, wheat and cotton. It is clear that by shifting land out of one crop into another, prices of those crops with reduced planting could increase.

Such trends have always existed and switching crops to maximize returns is nothing new. Most countries produce a host of crops and planting periods together with areas can be similar, making substitution easier. However, what makes recent episodes differ from the past is that inventories are being kept at low (almost pipeline) levels, which makes prices particularly sensitive to unexpected changes. In other words, agricultural markets, and food crops in particular, may be going through a period whereby stocks, especially those in major exporting countries, no longer play their traditional role as a buffer against sudden fluctuations in production and demand. This change has come about because of reduced government interventions associated with a general policy shift towards liberalizing agricultural commodity markets.

The role of farmers in this ever more populated world has never been more critical. It is one of FAO's key roles, at this key juncture, to help farmers in making the right decisions, by providing them with reliable and timely information about market and price trends.

Volatility in agricultural commodities
Volatility measures the degree of fluctuation in the price of a commodity that it experiences over a given time frame. Wide price movements over a short period of time typify the term ‘high volatility’. International prices for agricultural commodities are renowned for their high volatility, a feature which has been, and continues to be a cause for concern among governments, traders, producers and consumers. Many developing countries are still highly dependent on commodities, either in their export or import. While high price spikes can be a temporary boom to the export economy, they can also heighten the cost of importing foodstuffs and agricultural inputs. At the same time, large fluctuations in prices can have a destabilizing effect on real exchange rates of countries, putting a severe strain on their economic environment and hampering efforts to reduce poverty. In a prolonged volatile environment, the problem of extracting the true price signal from the noise may arise, a situation that can lead to an inefficient allocation of resources. Greater uncertainty limits opportunities for producers to access credit markets and tends to result in the adoption of low risk production technologies at the expense of innovation and entrepreneurship. In addition, the wider and more unpredictable price changes of a commodity are, the greater is the possibility of realizing large gains on speculating future price movements of that commodity. That is to say, volatility can attract significant speculative activity, which in turn can initiate a vicious cycle of destabilizing cash prices.

Volatility measures how much prices have moved or how they are expected to change. Historical volatility represents past price movements and reflects the resolution of supply and demand factors. It is often computed as the annualized standard deviation of the change in price. On the other hand, implied volatility represents the market’s expectation of how much the price of a commodity is likely to move in the future. The data upon which historical volatility is calculated may no longer be reflective of the prevailing or expected supply and demand situation. For this reason, implied volatility tends to be more responsive to current market conditions. It is called “implied” because, by dealing with future events, it cannot be observed, and can only be inferred from the price of an “option”.

An “option” gives the bearer the right to sell a commodity (put option) or buy a commodity (call option) at a specified price for a specified future delivery date. Options are just like any other commodity, and are priced based on the law of supply and demand. Any excess or deficit of demand would suggest that traders have different expectations of the future price of the underlying commodity. The more divergent these expectations are, the higher the implied volatility of the underlying commodity. Using the price of an option to estimate price volatility is analogous to using the future’s price to estimate the spot price at the future’s delivery date and location.

Does implied volatility matter? Prices that are observed today of commodities which are traded in the major global exchanges are in someway determined by movements in implied volatility, in that they convey all information, future and the present, pertinent to the market and the commodity. Hence, implied volatility as a metric is an important instrument used in the price discovery process and as a barometer as to where markets might be headed.

How has volatility evolved?
For wheat, maize and soybeans, the CBOT is widely regarded as the major centre for their price discovery. Implied volatilities during the past ten years for these commodities as well over the past 22 months are shown in the following figure.

Volatility for wheat and maize has been creeping up steadily over the course of the decade, while soybean volatility has been relatively flat (graph 3, click to enlarge). Moreover, it now appears more of a permanent feature in the grain markets than was the case in the past. A more detailed examination of the recent past reveals just how volatile grain markets have become and how volatility has been sustained. Since the beginning of 2006, wheat and maize implied volatility has frequently spiked to levels in the realm of 30 percent, and as of 11 October 2007, implied volatility stood at 27 and 22 percent for each commodity, respectively. How are these values interpreted?

These percentages are a measure of the standard deviation in the expected price six months ahead. Assuming that prices are normally distributed, the properties of the distribution can be used to say ‘the market estimates with 68 percent certainty that prices will rise or fall by 27 percent for wheat and 22 percent for maize’. In a similar vein, the likelihood that prices will exceed their current values by more than 50 percent in six months time is perceived to have a probability of around 2 percent, in other words quite unlikely. This is not to say that such events will not take place. The surge in maize prices that began in September 2006 surprised the markets, then, although traders were betting on higher prices, they handed only a 5 percent chance of a 50 percent or more increase in the price of maize in six months. Instead, prices actually climbed by almost 60 percent in that period. A one-off misjudgement? Apparently not. More recently, wheat traders were caught totally off-guard, when in April 2007 they were 99 percent certain that wheat prices would not rise by more than half their value, in six months, wheat prices had doubled. The large upswings in implied volatilities witnessed today, bear testimony to the enormous uncertainty that markets face in predicting how grain prices could evolve in the short term.

In the absence of readily available options data to estimate implied volatility for other commodities, historical volatilities were calculated, and for consistency, computations were also made for soybeans, wheat and maize. Classifying the latter with rice under ‘bulk commodities’, a similar picture to the above is portrayed. Wheat and maize price volatility has steadily risen over the past decade, peaking at over 30 percent in 2007. By contrast, volatility in the rice sector has moved sharply downwards, and in 2007 stood at just one-eighth of the variability in the grain sector.

Among the vegetable oils, volatility has been fairly even since 1982 for all the products, but there appears some resurgence in the prices of palm, sunflower and rapeseed oil. The upturn in volatility for dairy product prices has been most striking, rising almost four-fold since 2005 in the case of butter. By contrast, price changes in meat products have been in a state of quiescence over the past two years. Similarly volatility for many raw materials, traditionally the highest of all agricultural commodities, has steadily fallen, but for sugar and tea, from the peaks of the previous year (graph 4, click to enlarge).

Volatility is an important property in understanding the tendency for a commodity to undergo price changes. More volatile commodities undergo larger and more frequent price changes. Implied volatility can be a useful metric in revealing how traders expect prices to evolve in the shorter term. However, given the huge upheaval in grain markets over the past year or so, it also exposes just how wrong expectations can be.

FAO: FAO forecasts continued high cereal prices - Unfavourable weather, low stocks, tight supplies amid strong demand cited as causes - November 7, 2007.

FAO: Food Outlook - Global Market Analysis 2007 - November 7, 2007.

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Researchers find climate change could diminish drinking water more than expected

As sea levels rise, coastal communities could lose up to 50 percent more of their fresh water supplies than previously thought, according to a new study from Ohio State University. Motomu Ibaraki, associate professor of earth sciences at Ohio State, led the study. Graduate student Jun Mizuno presented the results yesterday at the Geological Society of America meeting in Denver.

Hydrologists have simulated how saltwater will intrude into fresh water aquifers, given the sea level rise predicted by the Intergovernmental Panel on Climate Change (IPCC). The IPCC has concluded that within the next 100 years, sea level could rise as much as 23 inches (58cm), flooding coasts worldwide (earlier post).

Scientists previously assumed that, as saltwater moved inland, it would penetrate underground only as far as it did above ground. But the new research shows that when saltwater and fresh water meet, they mix in complex ways, depending on the texture of the sand along the coastline. In some cases, a zone of mixed, or brackish, water can extend 50 percent further inland underground than it does above ground (image, click to enlarge).

Like saltwater, brackish water is not safe to drink because it causes dehydration. Water that contains less than 250 milligrams of salt per liter is considered fresh water and safe to drink.
Most people are probably aware of the damage that rising sea levels can do above ground, but not underground, which is where the fresh water is. Climate change is already diminishing fresh water resources, with changes in precipitation patterns and the melting of glaciers. With this work, we are pointing out another way that climate change can potentially reduce available drinking water. The coastlines that are vulnerable include some of the most densely populated regions of the world. - Motomu Ibaraki, lead researcher, associate professor of earth sciences at Ohio State University
Vulnerable areas worldwide include Southeast Asia, the Middle East, and northern Europe
Almost 40 percent of the world population lives in coastal areas, less than 60 kilometers from the shoreline. These regions may face loss of freshwater resources more than we originally thought. - Jun Mizuno
Scientists have used the IPCC reports to draw maps of how the world's coastlines will change as waters rise, and they have produced some of the most striking images of the potential consequences of climate change:
:: :: :: :: :: :: :: :: ::

Ibaraki said that he would like to create similar maps that show how the water supply could be affected.

That's not an easy task, since scientists don't know exactly where all of the world's fresh water is located, or how much is there. Nor do they know the details of the subterranean structure in many places.

Worse than thought
One finding of this study is that saltwater will penetrate further into areas that have a complex underground structure.

Typically, coastlines are made of different sandy layers that have built up over time, Ibaraki explained. Some layers may contain coarse sand and others fine sand. Fine sand tends to block more water, while coarse sand lets more flow through.

The researchers simulated coastlines made entirely of coarse or fine sand, and different textures in between. They also simulated more realistic, layered underground structures.

The simulation showed that, the more layers a coastline has, the more the saltwater and fresh water mix. The mixing causes convection -- similar to the currents that stir water in the open sea. Between the incoming saltwater and the inland fresh water, a pool of brackish water forms.

Further sea level rise increases the mixing even more.

Depending on how these two factors interact, underground brackish water can extend 10 to 50 percent further inland than the saltwater on the surface.

According to the United States Geological Survey, about half the U.S. gets its drinking water from groundwater. Fresh water is also used nationwide for irrigating crops.

In order to obtain cheap water for everybody, we need to use groundwater, river water, or lake water, Ibaraki said. But all those waters are disappearing due to several factors - including an increase in demand and climate change.

One way to create more fresh water is to desalinate saltwater, but that's expensive to do, he said. To desalinate, we need energy, so our water problem would become an energy problem in the future.

Image: Researchers at Ohio State University have simulated how saltwater intrudes into fresh water supplies along coastlines, and found that mixed, or brackish, water, can extend much farther inland than previously thought. In this image from the simulation, saltwater is red and fresh water is dark blue. The colors in between represent brackish water with different amounts of salt. Credit: Jun Mizuno, Ohio State University.

Ohio State University: Climate change could diminish drinking water more than expected - November 6, 2007.

Biopact: IPCC Fourth Assessment Report: current and future impacts of climate change on human and natural environments - April 06, 2007

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China Holdings to build second 50MW biomass co-generation plant in Anhui

Biomass is rapidly becoming the preferred clean alternative to polluting coal in the country most dependent on the most climate destructive fossil fuel: China. One of the major green energy companies active in the sector is China Holdings, Inc., which announces it has executed its second development contract to build a 50MW biomass co-generation plant through its subsidiary China Power, Inc. The contract was signed with the local government of Anhui Province in the east of the country. The project is part of China's ambition to have 30GW of bioenergy capacity by 2020, making it the second-largest renewable after hydropower (previous post).

China Power, whose main competitors are Dragon Power, China Enersave and the National Bio Energy Company, now has 100 MW of biomass energy in the pipeline. It has acquired all the resources needed to construct and operate the plant, feedstock handling facilities, water supplies, the plant, 215 Mu (1 MU = 667 sq. meters) of land and biomass supplies from local agriculture.

The company will utilize a CAPS-II pyrolysis system to gasify and pyrolyse the biomass efficiently and with low emissions. It takes a modular design philosophy, maximizing the flexibility of the plant's possible expansion and adaptation to new requirements.

The biomass to electricity system is a two-stage process. In a first phase biomass is dried, pyrolysed, gasified with the combustible materials partially burned. The combustible gas plus a majority of the entrained combustible particles is then consumed in a combustion chamber which releases the thermal energy which is converted into electricity. The advantage of the two stage processing is that it burns the biomass in a clean manner under a controlled processing temperature. The process of trransforming solid biomass fuel at lower temperatures in the gasification chamber means that slagging of residual ash is eliminated.

The by-products from the process, the heat energy and ash, can be utilized to supply heat for households and industry, and fertilizer, thereby eliminating the need for the production of these products in an environmentally harmful manner.

China Power's biomass to electricity technology can be further described in twelve steps from collection, to combustion, to the production of electricity:
  1. The biomass fuel is collected in site and packed as bales. Biomass fuels are corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material.
  2. The feedstock is then stored in the storage yard and delivered to the biomass power plant.
  3. Next, the biomass fuel is weighed and taken to the storage area.
  4. The feedstock is then taken by the preloading system from the storage area to the loading hopper.
  5. The hydraulic charging ram puts the biomass fuel from the loading hopper to the gasification chamber, where the biomass fuel is dried, heated, pyrolysed and partially oxidized. This releases moisture, combustible gas and volatile components.
  6. The residual ash is discharged from the gasification chamber by the ash removal system.
  7. The collected ash is taken for further processing into fertilizer or other products.
  8. The combustible gas and volatile components is then transferred to the combustion chamber where it is further oxidized and releases energy.
  9. The energy released during this process heats the water/steam in the boiler to produce superheated steam.
  10. The superheated steam drives the steam turbine and generator producing electricity.
  11. The electricity is delivered into the power grid through a substation.
  12. The gas flows into the emission control system that includes a spray tower, bag filters, exhaust fans, and stack. The gas is treated to remove acid gas and particles to meet environmental requirements.
The 50MW biomass project has a total expected annual power generating capacity of 400 million kilowatt hours (kWh), expected annual revenues of approximately 250 million Yuan (e22.9/$33.6 million), and an expected annual net income (45% of revenue) of approximately 112.5 million Yuan based on 8,000 annual operation hours:
:: :: :: :: :: :: :: :: :: ::

The electricity sale price is 0.60 Yuan/kWh (approximately €0.054/$0.080/kWh) with a government policy stipulating a guaranteed purchase of the electricity obtained from bioenergy.

The total investment for this Biomass Renewable Energy Project (Power Capacity: 50 MW) is also approximately 580 million Yuan (€53.2/$77.9): 35% in cash investment and 65% will be China-based bank loans with preferred interest rates with government policy protection for the project.

The power plant is expected to be in full production in approximately 2 years.

The company's biomass to electricity technology is based upon processing biomass fuel like corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material in two stages at temperatures sufficient to produce steam-generated electricity. Biomass is solar energy settled on Earth through photosynthesis of plants. Most forms of photosynthesis release oxygen as a by-product.

There are 170 billions tons of biomass produced on Earth, as the fourth biggest energy resource on the earth after coal, oil and natural gas, but only less than 1% of biomass is currently used as an energy resource, and most of this application is located in rural areas with lower than 10% of energy efficiency and high indoor pollution.

A large part of China's biomass resource is currently burned by farmers, out in the open on their fields, resulting in a major air pollution problem

China Holdings sketches the Chinese policy context within which its projects are positioned as follows:

Renewability: Straw is renewable energy and is a part of nature's plants. The carbon on the inside of the straw can change to organic carbon through absorption of carbon dioxide (CO2) from the atmosphere during photosynthesis. The biomass energy project, as an alternative and renewable energy source, is fully supported by the central government and local governments of China. The development and construction of the renewable energy project is protected by The Renewable Energy Law, created on January 1, 2006 by the People Congress of China. The Chinese central government has set a series of tax exemption/deduction regulations to encourage the construction of renewable energy projects. The National Reform and Development Committee implements the purchase electricity price for renewable energy. It ensures the standard purchase electricity price is 0.25 Yuan/kWh addition base on the local average grid connection price (0.25-0.44 Yuan/kWh). In addition, there is a supervision system to ensure full purchase and payment.

Environmental Benefits
: official statistical information from the Ministry of Agriculture in May 2005 shows that the annual production of straw in China is about 650 million tons. Studies done by international energy organizations show that crop straw is a type of clean renewable energy resource. Normally the heating value of crop straw is about 15MJ/kg. Crop straw is the fourth energy resource after coal, petroleum and natural gas. Many developed countries have already used straw as raw material to generate energy. Each year China produces about 650 million tons of crop straw, which has the same energy content as 268 million tons of regular coal, about 13.7% of China coal production in 2004. By the year 2010, China will have had discarded 350-370 million tons of straw. If used to generate electrical power, it is equivalent to a 90 million KW generator running 5000 hours per year and generating 450,000 million kWh of electricity. This in return will gear the development of a greener economy and the greater sustainable economic development of China.

Economic Benefits: take 1040TPD as a sample, the average annual electricity sales revenue of a STE project is 232 million Yuan RMB, the average annual net profit is 100 million Yuan RMB, and the average net profit rate is 43%. The economic benefit is very profound. In addition, based on the most updated data from the China CDM Information Centre, the guiding price of CO2 is 51.21 RMB/ton. Recently, considering that 0.95kg of CO2 will be discharged when 1 kWh of electrical power is generated by using mineral fuel, each 4X260TPD STE plant is estimated to have 3.31 million tons of CO2 reductions during its 10 years CO2 reduction salable operation. With a price of 51.21 RMB/ton, the 1040TPD project can have an additional income of about 170 million RMB, which is 17 million RMB per year. For the 780TPD project, the CO2 reduction is 2.48 million tons over 10 years. With a price of 51.21 RMB/ton, there will be 127 million RMB in income, which is 12.7 million RMB per year. According to China Energy Research Institute's 2006 update report, China's Biomass Energy implementation and development has reached its power capacity for 2GW in 2005. China Biomass Energy Capacity will reach a total of 5GW in 2010, and 30 GW in 2020.

China Holdings: China Holdings, Inc. Announces 2nd Biomass Renewable Energy Project (Power Capacity: 50 MW); Total Potential: 100 MW in Biomass Energy Pipeline - November 5, 2007.

Biopact: China unveils $265 billion renewable energy plan, aims for 15% renewables by 2020 - September 06, 2007

Biopact: Expert: China's biomass power plants to be profitable in three years - October 30, 2007

Biopact: A closer look at China's biomass power plants - April 19, 2007

Biopact: China's Dragon Power to raise US$2 billion for 100 biomass power plants - August 07, 2007

Biopact: China EnerSave retrofits coal plants to burn biomass - June 18, 2007

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Trees for Clean Energy project: Kenyan farmers to benefit from biofuels in semi-arid zones

A looming global energy crisis with catastrophic consequences for development in poor countries, combined with rising concern over climate change is opening a new economic opportunity for farmers in the semi-arid Eastern province of Kenya.

Mobilised under the 'Trees for Clean Energy' project, 950 small farmers are learning how to cultivate Jatropha curcas - the wild oil seed plant found naturally in the area. Jatropha has been identified to be among one of the promising crops for first generation biodiesel production.

'Trees for Clean Energy' was launched by Zablon Wagalla, a Kenyan agricultural scientist, who thought about ways to help increase the incomes of his country's small farmers while reducing greenhouse gas emissions. Biofuel production seemed the most straightforward way. Through the project, youth process the Jatropha nuts into diesel fuel. The project thus helps meet local energy needs and generates income when surpluses are available. Jatropha production has the added benefit of transforming degraded land into productive farming areas. Wagalla's project is the winner of the YouthActionNet award for projects that induce positive social change.

The project is located in Kibwezi, a semi-arid district bordering the Tsavo National Park. Promoters of the project say Kibwezi is only a pilot case for the planned large scale cultivation of the plant in Kisumu, Kajiado and Kitui districts.

The goal is to put Kenya on the global map as one of the countries on the forefront in the fight against global warming, said Peter Moll, the chairman of the Biodiesel Kenya project, which has teamed up with the Trees for Clean Energy initiative.

Research has shown that jatropha is a multi-purpose plant with potential to meet a wide range of critical needs of resource-poor farmers in Africa. The most promising product of the plant is the non-edible vegetable oil seed that can be used to produce biodiesel with other byproducts being organic fertilizers and glycerin, a valuable chemical.

A recent study by the Association for Strengthening Agricultural Research in East and Central Africa (ASARECA) - which promotes economic growth, fighting poverty, reducing hunger and enhancing resources through regional collective action in agricultural research for development - found that the jatropha offers farmers in Eastern and Central Africa an opportunity to put into use the vast areas of semi arid land:
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Kenya's Ministry of Energy has created a National Biosafety Committee - a stakeholders' forum to craft a policy framework for the development of biodiesel in Kenya. The committee is exploring ways of using other crops such as maize, cassava, soybeans, and sugarcane to produce biofuels. George Wachira of the Petroleum Institute of East Africa told reporters that a draft document was ready and would soon be tabled for stakeholder discussion.

Agricultural economists say Jatropha offers Kenya the potential of extending crop husbandry as an economic activity into areas that are considered marginal because it requires minimal rainfall and has minimal negative impact on the food chain.

Kenya, like South Africa and India, has set a target of 200,000 hectares under jatropha cultivation in the next 20 years. Biodiesel Kenya's field trials go on at Ntashat Ranch in Kajiado district since March 2006.

Crop improvement
Jatropha remains a typically 'underresearched', wild plant. Current jatropha trees are expected to yield around 1.7 tonnes per hectare from mature, well managed plantations. Experts think improved elite seeds could increase this to 2.7 tonnes per hectare. Peter Moll says that it could take more than 10 years to produce sufficient high quality trees to sustain biofuel production on a commercial basis.

However, recent initiatives, most notably a joint venture between oil major BP and jatropha company D1 Oils - D1-BP Fuel Crops Limited - have launched plant science programmes comprising research and development, plant science, breeding, and production and multiplication of seed and improved seedlings.

Leading biotech company Bayer CropScience too recently announced it has launched a research program into improving the shrub. When this type of organisations focuses on breeding new cultivars, using the latest techniques, it is quite probably that highly productive Jatropha emerges on the market quite rapidly.

Business Daily (Nairobi) (via AllAfrica): Farmers in Arid Zones to Benefit From Biofuel Plan - November 6, 2007.

Association for Strengthening Agricultural Research in East and Central Africa: Development of a Long Term Strategic Plan for Regional Agricultural Research in the Eastern and Central African Region [*.pdf].

YouthAction Net: Trees for Clean Energy.

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

Biopact: Bayer CropScience to increase yearly R&D budget to €750 million to meet challenges of the bioeconomy - September 11, 2007

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Massachusetts leaders introduce biofuels bill: first to mandate home heating oil blend, first tax exemption for cellulosic ethanol

Massachusetts governor Deval Patrick, Senate President Therese Murray, and House Speaker Salvatore DiMasi have announced an interesting piece of legislation they are jointly backing to promote advanced biofuels as a way to reduce dependence on foreign oil, capture clean-air benefits, and capitalize on clean-fuel research for economic growth and jobs. Part of the motivation for the action comes from a recent report [*.pdf] on biofuels in Massachusetts prepared by the Northeast Biofuels Collaborative for congressman Bill Delahunt, which shows the multiple benefits of biobased transport and heating fuels for the state.

The bill to be filed by Governor Patrick, Speaker DiMasi and Senate President Murray includes the following measures:
  • a requirement for all diesel and home heating fuel sold in the Commonwealth to contain a minimum amount of renewable, biobased alternatives in their blends, with that amount rising from 2 percent in 2010 to 5 percent in 2013. These mandates will help build Massachusetts’ emerging biofuel refinery and distribution sector. Three refineries are in the planning stages in Pittsfield, Greenfield, and Quincy, and several local and national distributors are preparing to compete in this arena. Several other states have biodiesel content standards, but Massachusetts would be the first to establish a biofuel standard for home heating oil – of particular significance because the Northeast makes much greater use of oil for home heating than other parts of the country.
  • it exempts from the state gasoline tax ethanol derived from sources such as forest products, switchgrass and agricultural wastes. Massachusetts would be the first state in the nation to provide a tax incentive for cellulosic ethanol, an environmentally beneficial next-generation biofuel that Massachusetts–based companies are now rushing to bring to market.
The legislators also announced they would create a task force to explore other ways to promote advanced biofuels for their environmental and energy benefits as well as the economic benefits of a growing clean fuels industry based in Massachusetts. The gas-tax incentive for cellulosic ethanol is projected to create 3,000 new jobs in Massachusetts and pump $320 million into the economy as the advanced ethanol is brought to market:
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We need to add clean fuels to the mix today, but we also have to look ahead to the renewable fuel that will do the most good for the Commonwealth’s environment, energy efficiency and economy. The state gas tax exemption for cellulosic ethanol is a big step in the right direction. - Deval Patrick, Massachusetts Governor

We stand together on a bold new biofuels initiative that we believe will make Massachusetts yet again a national leader – the same way we did with public schools, medicine, technology and health care reform. It’s not just the right thing to do for our environment and our energy independence, it is the right thing to do for our economy. - Salvatore DiMasi, House Speaker

With advanced biofuels coming from an array of new feedstocks, including agricultural waste, sustainable energy crops, algae, and even cranberry bog biomass, many companies in the Commonwealth are already developing these fuels.
- Therese Murray, Senate President
The state gas-tax exemption for cellulosic ethanol would be the first state tax incentive in the nation for the next generation of ethanol. While an important step toward energy independence, ethanol from corn is an intermediate step toward cellulosic ethanol, which offers dramatic environmental benefits and can utilize a potentially broad array of New England–grown feedstocks. The signal sent by the state gas-tax exemption, creating instant market demand for their products, will spur Massachusetts companies on in the race to commercialize cellulosic ethanol.
This is the kind of leadership that will make Massachusetts a global center for advanced biofuels. Cellulosic ethanol is a renewable fuel that will be better for the environment, better for energy independence, and better for the economy. And with the encouragement we are getting from state government today, the next generation of ethanol will be brought to market by Massachusetts companies. - Bruce Jamerson, CEO of Mascoma Corp, a developer of cellulosic biofuels, based in Cambridge
U.S. Representative William Delahunt released a report detailing the benefits of biofuels for the Commonwealth, and vowed to promote biofuels at the federal level. Prepared for the congressman by the Northeast Biofuels Collaborative, a Boston–based nonprofit, the report identified four key areas for our consideration – vehicles, fuels, market access, and state incentives.

Noting that Saudi Arabia alone made $160 billion in 2005 exporting oil, Delahunt said:
New England is addicted to foreign oil. In Massachusetts alone, we spend more than $9 billion a year on petroleum, and it is very clear where most of those dollars are going. Developing cleaner fuels is not only important for our economy and our environment, it is critical for our national security. As we develop federal policies to expand the use of renewable fuels, we can do so in ways that boost efforts here in Massachusetts. - William Delahunt, U.S. Representative for Massachusetts

The Commonwealth of Massachusetts, Executive Department: Governor, Senate President, House Speaker unveil nation-leading biofuel measures - November 05, 2007.

Bill Delahunt: A proposed strategy to promote biofuels production and use in Massachusetts [*.pdf] - report prepared by the Northeast Biofuels Collaborative for U.S. Congressman Bill Delahunt (Massachusetts, 10th District), November 2007.

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Hillary Clinton outlines ambitious biofuels plan: 60 billion gallons by 2030

Even though the presidential elections in the United States are still a year away, the campaign is in full swing. The leading candidate, Hillary Clinton, has outlined details of her plan to dramatically increase biofuels production in an effort tackle America's energy and climate challenges. Boosting biofuels production is one of the key goals of Clinton’s energy plan, which would increase production of corn ethanol, cellulosic ethanol, biodiesel and other biofuels to 36 billion gallons (136.3 billion liters) by 2022 and 60 billion gallons (227.1 billion liters) by 2030.
Our nation’s dependence on foreign oil places our economy at risk, our security in jeopardy, and our planet in peril. But I believe we can transform the way we use and produce energy - and create at least 5 million jobs in new green industries. Renewables like biodiesel can be the fuel for a brighter future. And when I’m president, they’ll also fuel a 21st century green economy that helps us end our dependence on foreign oil and begin addressing the climate crisis. It’s time for America to retake our title as the innovation nation and to launch a green energy revolution. - Hillary Clinton, Senator for New York, leading presidential candidate
Clinton's five-point plan to increase production of biofuels to 60 billion gallons by 2030, part of her broader energy and climate agenda [*.pdf], includes:
  1. Extending Tax Incentives for Biofuel Production: Tax incentives for biofuels production are the foundation of support for the fledgling biofuels industry. By providing a per-gallon tax credit for corn ethanol, cellulosic ethanol, and biodiesel, the federal government has encouraged investment in biorefinery capacity, helping to bring about the rapid expansion in the industry. To encourage continued growth in the industry, Clinton would extend tax credits for these biofuels.
  2. Strengthening Ethanol Infrastructure and Flex-Fuel Vehicles: Automakers are expanding production of "flex-fuel" vehicles that can run on 85% ethanol blends (E85), but the total fleet of flex-fuel vehicles on the road today numbers only 6 million out of about 250 million cars in the US. In addition, of the 170,000 filling stations in the United States, there are fewer than 2,000 that have pumps that dispense E85 ethanol. As biorefinery capacity continues to grow, getting biofuels to market efficiently and putting them to use will depend on improving the distribution infrastructure and making sure that all vehicles can run on E85. To ensure that a growing supply can meet a growing demand, Clinton would: (1) require oil companies and other major gasoline retailers to have E85 pumps at half of their stations by 2012, and 100% by 2017; (2) require automakers to make all vehicles flex-fuel vehicles by 2015; (3) and invest in freight rail upgrades to bring biofuels more efficiently to market.
  3. Investing in Research to Accelerate Cellulosic Ethanol and Advanced Biofuels: Cellulosic ethanol and other advanced biofuels technologies offer the promise of using many types of biomass as feedstocks. In Iowa, there are plans to make cellulosic ethanol from corn stover by adding capacity to existing corn ethanol plants, a step that could increase production by about 20%. Elsewhere in the country, grasses, wood chips and other feedstocks can be utilized to make cellulosic ethanol. Commercializing this technology and getting it rapidly deployed will require investments in research and financial support to build the first generation of plants. To accomplish these goals, Clinton will invest $2 billion in cellulosic ethanol research and provide loan guarantees to build the first two billion gallons of cellulosic ethanol capacity.
  4. Starting the Next Generation of Energy Crops and Technologies: Moving to new energy crops will depend on farmers who take a risk on growing new crops. Clinton would create a new incentive program to reward farmers in the vicinity of planned cellulosic ethanol facilities to plant new energy such as perennial grasses and trees. This program will also provide conservation benefits and wildlife habitat. She would also establish a program to speed the development of harvesting, conversion and processing technologies needed to turn new feedstocks into biofuel.
  5. Ensuring Sustainable Biofuel Production: Clinton believes that America must achieve its biofuels expansion in a way that protects the environment, contributes to solving the climate change problem, and maximizes rural development. She will set a greenhouse gas emissions target for advanced biofuels to ensure that they move over time towards a standard of emitting at least 80% less greenhouse gases as compared to gasoline. In addition, she would develop biofuels guidelines to take into account impacts on land and water resources, water supplies, food prices and wildlife. And she will challenge agricultural research universities across the country to solve major challenges to biofuel expansion - like doubling corn yields and reducing the amount of water used in the refinery process - through a new federal grant and research prize program. In addition to environmental sustainability, Clinton will ensure economic sustainability for rural communities. She is committed to helping rural communities capture a larger share of the economic benefits of the next wave of biorefinieries. Among other things, she will promote local ownership of biorefineries by giving priority in awarding grants and loan guarantees to plants that are locally owned.
Biofuels thus are an essential part of Clinton’s strategy to reduce U.S. dependence on foreign oil and to catalyze a thriving renewables sector in the country. No state has proven the potential of biofuels more than Iowa, which leads the nation in biofuels output and is responsible for 32% of U.S. ethanol capacity and 20% of biodiesel capacity. Biofuels production has helped create about 53,000 jobs in Iowa alone. Corn ethanol and biodiesel have fueled this rapid growth and Iowa is a leader in the emerging cellulosic industry as well:
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Clinton’s plan will expand biofuels in Iowa and across the country by providing new incentives for biofuel production, funding for advanced research, support for biofuel infrastructure, and new environmental guidelines and local ownership initiatives to ensure biofuels are produced in a sustainable manner. These steps will help displace gasoline consumption and create millions of good American manufacturing jobs that cannot be outsourced.

Yesterday in Cedar Rapids, Hillary Clinton outlined the comprehensive agenda to tackle our nation’s twin challenges of energy independence and climate change. Her plan will aggressively reduce greenhouse gas emissions by 80% from 1990 levels by 2050, cut foreign oil imports by 66%, and transform our carbon-based economy into an efficient green economy, creating at least 5 million jobs from clean energy over the next decade.

Clinton believes that expanding biofuels and other renewables will help create clean energy jobs and fuel economic growth. America’s biofuels industry has grown rapidly over the past two decades, from producing only 175 million gallons in 1980 to more than 5 billion gallons today. Iowa has been at the forefront of this movement, and has reaped substantial economic benefits. At the end of 2006, the state had 26 operating ethanol facilities and 8 biodiesel plants, with many more under construction. The industry is growing rapidly; when all current construction projects are completed, Iowa will have doubled its ethanol production capacity and tripled biodiesel capacity.

The Clinton campaign presents the following points to make the case for the biofuels plan:
  • Biofuels support the creation of about 53,000 jobs in Iowa, including 30,000 jobs in ongoing operation and maintenance. [IRFA, 2007].
  • Ethanol and biodiesel generate $1.8 billion in household income for Iowa households - that’s $2,400 per family of four. [IRFA, 2007].
  • Hillary’s plan will build on these successes to catalyze a thriving renewables sector nationwide. The economic and employment impact of this effort are substantial.
  • Hillary’s plan to get on a path to produce 25% of our electricity needs from renewables by 2025 could help our economy create 2 million clean energy jobs over 10 years. [University of Tennessee, 25% Renewable Energy for the United States By 2025: Agricultural and Economic Impacts, November 2006]. This is a component of Hillary’s energy plan, which aims overall to help create more than 5 million jobs over a decade.
  • In addition, by strengthening the capacity of domestic manufacturers in biofuels and other renewable sectors, Hillary’s plan will help spur additional job growth from accelerated exports. A recent study found that "a renewable energy industry servicing the export market can generate up to 16 times more employment than an industry that only manufactures for domestic consumption." [Environment California Research and Policy Center, Renewable Energy and Jobs, 2003]. The export potential and related job benefits are substantial in a global renewables market that is projected to quadruple, from $55 billion in 2006 to $226 billion in 2016. [Clean Edge, 2007].
  • Combined with her efforts to promote energy efficiency, Hillary’s plan will help transform the US economy and create at least 5 million jobs from clean energy over ten years.
Hillary Clinton: Hillary Clinton’s Plan to Increase Biofuels Production and Create Clean Energy Jobs - November 7, 2007.

Hillary Clinton: Powering America's Future: New Energy, New Jobs [*.pdf].

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iGEM prize for team that modified bacterium for biobutanol production

A team of science students from the University of Alberta is one step closer to creating a clean and reliable source of butanol, an alternative biofuel, by using a manipulated bacterium. The 10-member group, who call themselves the 'Butanerds', won first prize in the Energy and the Environment category at the prestigious synthetic biology competition held this weekend at MIT - the fourth annual International Genetically Engineered Machine (iGEM) competition.
Everybody welcomed our idea. There are certain people working on similar kinds of technology that we were able to chat with and tell them why we thought butanol was better. For the most part, I think they agreed. [...] We haven't gotten any further with our lab work. Hopefully, within the next month we'll be producing butanol and we'll have furthered our development of our computer modelling. It's a very complex project. - Justin Pahara, senior team member
Pahara's team has been working on introducing the genes responsible for butanol production in the organism Clostridium into the E. coli bacterium. The students took five enzymes from Clostridium which play a key role in butanol production ('BioBricks', which ties in with the iGEM contest which focuses on using DNA as 'bricks' for the construction of biological machines) and put them into the cells of E. Coli. By using an organism that is photosynthetic, they can produce the fuel without competing for food supply. They also hope to increase E. Coli's tolerance to butanol.

The process is complicated and still rather inefficient, and Pahara's team is working with computer models to see how to increase production levels. Pahara said he hopes his team, composed of students in a number of different fields - including engineering and biochemistry - will have a system that can produce significantly more butanol by the end of next year.

Pahara said the award might help the team get more research funding by showing sponsors how the project was recognized in an international setting:
It's really hard to talk economics because we don't know what kind of system we're going to end up with. But you just have to look at oil prices right now: this is why biofuels are being investigated so intensely. - Justin Pahara
Biobutanol (butyl alcohol) has come under increasing interest because of its advantages as a renewable transportation fuel compared to first generation biofuels. It has a higher energy content than ethanol, can be used in the existing gasoline supply and distribution lines, has higher octane number, and can be mixed with gasoline in much higher proportions:
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The fuel can be obtained by breaking down lignocellulosic biomass via enzymes contained in microorganisms (earlier post). This means a potentially vast range of biomass feedstocks can be used which don't compete with food crops.

Major organisations working on the development of biobutanol are Japan's government-affiliated Research Institute of Innovative Technology for the Earth (RITE), which created a technology for the production of cellulosic biobutanol from materials such as grass cuttings and wood chips. The U.S. Department of Agriculture's Agricultural Research Service (ARS), which is experimenting with a way to convert cellulosic biomass into biobutanol using the bacterium Clostridium beijerinckii (earlier post).

Another player is biotech company Green Biologics which received a large (€855,000) fund to research strategies to develop the fuel from cellulosic biomass by utilizing thermophiles (see here).

But biobutanol made most headlines when chemical giant DuPont and petroleum major BP announced they were going to collaborate on producing the fuel, which they think holds promise over the longer term as one of the best gasoline substitutes (earlier post).

iGEM is a competition attracting hundreds of undergraduates from all over the world spend their summer making synthetic biology a reality. The question driving iGEM is: "can simple biological systems by built from standard, interchangeable parts and operated in living cells, or is biology too complicated to be engineered this way?" Synthetic biologists try to answer the question by actually engineering biological devices. The iGEM competition facilitates this by providing a standardized library of parts, which it calls BioBricks, to students, and asks them to build genetic machines with them. Students are welcome to make their own BioBricks, which is what the team from the University of Alberta did.

Broader goals of iGEM are to include the systematic engineering of biology; to promote the open and transparent development of tools for engineering biology; and, to help construct a society that can productively apply biological technology.

University of Alberta: Butanerds win MIT contest - November 5, 2007.

University of Alberta: U of A team building a better bacterium [includes video] - November 5, 2007.

MIT: fourth annual International Genetically Engineered Machine (iGEM) competition.

MIT iGEM Wiki: Registry of Standard Biological Parts.

Biopact: Japan's RITE develops cellulosic biobutanol technology - August 14, 2007

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

Biopact: Green biologics awarded €855,000 to boost biobutanol fuel development -
January 22, 2007

Biopact: DuPont outlines commercialisation strategies for biobutanol, cellulosic ethanol - February 22, 2007

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