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    PetroChina Co Ltd, the country's largest oil and gas producer, plans to invest 800 million yuan to build an ethanol plant in Nanchong, in the southwestern province of Sichuan, its parent China National Petroleum Corp said. The ethanol plant has a designed annual capacity of 100,000 tons. ABCMoneyNews - December 21, 2007.

    Mexico passed legislation to promote biofuels last week, offering unspecified support to farmers that grow crops for the production of any renewable fuel. Agriculture Minister Alberto Cardenas said Mexico could expand biodiesel faster than ethanol. More soon. Reuters - December 20, 2007.

    Oxford Catalysts has placed an order worth approximately €700,000 (US$1 million) with the German company Amtec for the purchase of two Spider16 high throughput screening reactors. The first will be used to speed up the development of catalysts for hydrodesulphurisation (HDS). The second will be used to further the development of catalysts for use in gas to liquid (GTL) and Fischer-Tropsch processes which can be applied to next generation biofuels. AlphaGalileo - December 18, 2007.

    According to the Instituto Brasileiro de Geografia e Estatística (IBGE), Brazil's production of sugarcane will increase from 514,1 million tonnes this season, to a record 561,8 million tonnes in the 2008/09 cyclus - an increase of 9.3%. New numbers are also out for the 2007 harvest in Brazil's main sugarcane growing region, the Central-South: a record 425 million tonnes compared to 372,7 million tonnes in 2006, or a 14% increase. The estimate was provided by Unica – the União da Indústria de Cana-de-Açúcar. Jornal Cana - December 16, 2007.

    The University of East Anglia and the UK Met Office's Hadley Centre have today released preliminary global temperature figures for 2007, which show the top 11 warmest years all occurring in the last 13 years. The provisional global figure for 2007 using data from January to November, currently places the year as the seventh warmest on records dating back to 1850. The announcement comes as the Secretary-General of the World Meteorological Organization (WMO), Michel Jarraud, speaks at the Conference of the Parties (COP) in Bali. Eurekalert - December 13, 2007.

    The Royal Society of Chemistry has announced it will launch a new journal in summer 2008, Energy & Environmental Science, which will distinctly address both energy and environmental issues. In recognition of the importance of research in this subject, and the need for knowledge transfer between scientists throughout the world, from launch the RSC will make issues of Energy & Environmental Science available free of charge to readers via its website, for the first 18 months of publication. This journal will highlight the important role that the chemical sciences have in solving the energy problems we are facing today. It will link all aspects of energy and the environment by publishing research relating to energy conversion and storage, alternative fuel technologies, and environmental science. AlphaGalileo - December 10, 2007.

    Dutch researcher Bas Bougie has developed a laser system to investigate soot development in diesel engines. Small soot particles are not retained by a soot filter but are, however, more harmful than larger soot particles. Therefore, soot development needs to be tackled at the source. Laser Induced Incandescence is a technique that reveals exactly where soot is generated and can be used by project partners to develop cleaner diesel engines. Terry Meyer, an Iowa State University assistant professor of mechanical engineering, is using similar laser technology to develop advanced sensors capable of screening the combustion behavior and soot characteristics specifically of biofuels. Eurekalert - December 7, 2007.

    Lithuania's first dedicated biofuel terminal has started operating in Klaipeda port. At the end of November 2007, the stevedoring company Vakaru krova (VK) started activities to manage transshipments. The infrastructure of the biodiesel complex allows for storage of up to 4000 cubic meters of products. During the first year, the terminal plans to transship about 70.000 tonnes of methyl ether, after that the capacities of the terminal would be increased. Investments to the project totaled €2.3 million. Agrimarket - December 5, 2007.

    New Holland supports the use of B100 biodiesel in all equipment with New Holland-manufactured diesel engines, including electronic injection engines with common rail technology. Overall, nearly 80 percent of the tractor and equipment manufacturer's New Holland-branded products with diesel engines are now available to operate on B100 biodiesel. Tractor and equipment maker John Deere meanwhile clarified its position for customers that want to use biodiesel blends up to B20. Grainnet - December 5, 2007.

    According to Wetlands International, an NGO, the Kyoto Protocol as it currently stands does not take into account possible emissions from palm oil grown on a particular type of land found in Indonesia and Malaysia, namely peatlands. Mongabay - December 5, 2007.

    Malaysia's oil & gas giant Petronas considers entering the biofuels sector. Zamri Jusoh, senior manager of Petronas' petroleum development management unit told reporters "of course our focus is on oil and gas, but I think as we move into the future we cannot ignore the importance of biofuels." AFP - December 5, 2007.

    In just four months, the use of biodiesel in the transport sector has substantially improved air quality in Metro Manila, data from the Philippines Department of Environment and Natural Resources (DENR) showed. A blend of one percent coco-biodiesel is mandated by the Biofuels Act of 2007 which took effect last May. By 2009, it would be increased to two percent. Philippine Star - December 4, 2007.

    Kazakhstan will next year adopt laws to regulate its fledgling biofuel industry and plans to construct at least two more plants in the next 18 months to produce environmentally friendly fuel from crops, industry officials said. According to Akylbek Kurishbayev, vice-minister for agriculture, he Central Asian country has the potential to produce 300,000 tons a year of biodiesel and export half. Kazakhstan could also produce up to 1 billion liters of bioethanol, he said. "The potential is huge. If we use this potential wisely, we can become one of the world's top five producers of biofuels," Beisen Donenov, executive director of the Kazakhstan Biofuels Association, said on the sidelines of a grains forum. Reuters - November 30, 2007.

    SRI Consulting released a report on chemicals from biomass. The analysis highlights six major contributing sources of green and renewable chemicals: increasing production of biofuels will yield increasing amounts of biofuels by-products; partial decomposition of certain biomass fractions can yield organic chemicals or feedstocks for the manufacture of various chemicals; forestry has been and will continue to be a source of pine chemicals; evolving fermentation technology and new substrates will also produce an increasing number of chemicals. Chemical Online - November 27, 2007.

    German industrial conglomerate MAN AG plans to expand into renewable energies such as biofuels and solar power. Chief Executive Hakan Samuelsson said services unit Ferrostaal would lead the expansion. Reuters - November 24, 2007.

    Analysts think Vancouver-based Ballard Power Systems, which pumped hundreds of millions and decades of research into developing hydrogen fuel cells for cars, is going to sell its automotive division. Experts describe the development as "the death of the hydrogen highway". The problems with H2 fuel cell cars are manifold: hydrogen is a mere energy carrier and its production requires a primary energy input; production is expensive, as would be storage and distribution; finally, scaling fuel cells and storage tanks down to fit in cars remains a huge challenge. Meanwhile, critics have said that the primary energy for hydrogen can better be used for electricity and electric vehicles. On a well-to-wheel basis, the cleanest and most efficient way to produce hydrogen is via biomass, so the news is a set-back for the biohydrogen community. But then again, biomass can be used more efficiently as electricity for battery cars. Canada.com - November 21, 2007.

    South Korea plans to invest 20 billion won (€14.8/$21.8 million) by 2010 on securing technologies to develop synthetic fuels from biomass, coal and natural gas, as well as biobutanol. 29 private companies, research institutes and universities will join this first stage of the "next-generation clean energy development project" led by South Korea's Ministry of Commerce, Industry and Energy. Korea Times - November 19, 2007.

    OPEC leaders began a summit today with Venezuelan President Hugo Chavez issuing a chilling warning that crude prices could double to US$200 from their already-record level if the United States attacked Iran or Venezuela. He urged assembled leaders from the OPEC, meeting for only the third time in the cartel's 47-year history, to club together for geopolitical reasons. But the cartel is split between an 'anti-US' block including Venezuela, Iran, and soon to return ex-member Ecuador, and a 'neutral' group comprising most Gulf States. France24 - November 17, 2007.

    The article "Biofuels: What a Biopact between North and South could achieve" published in the scientific journal Energy Policy (Volume 35, Issue 7, 1 July 2007, Pages 3550-3570) ranks number 1 in the 'Top 25 hottest articles'. The article was written by professor John A. Mathews, Macquarie University (Sydney, Autralia), and presents a case for a win-win bioenergy relationship between the industrialised and the developing world. Mathews holds the Chair of Strategic Management at the university, and is a leading expert in the analysis of the evolution and emergence of disruptive technologies and their global strategic management. ScienceDirect - November 16, 2007.

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Tuesday, December 25, 2007

IEA Bioenergy releases comprehensive study on global wood pellets market

The IEA Bioenergy Task 40 has released a comprehensive study titled “Global Wood Pellets Markets and Industry: Policy Drivers, Market Status and Raw Material" [*.pdf], which covers the recent market and industry developments over the last decade for most existing and emerging biomass pellets markets, with special focus on the most relevant producers and the present market situation (until July 2007).

Prepared within the work of the IEA Bioenergy Agreement Task 40, researchers from Finland, Italy, the Netherlands and Brazil note in the report that recent policy and market changes have stimulated a rapidly increasing demand for biomass pellets. However, despite their high potential and growing demand, no studies at a global level with a specific focus on wood pellets markets have been carried out before.

The new study therefor provides an overview of the most important aspects of this booming market: the development of wood pellet technologies; the key drivers and policy contexts in the main markets; a sketch of different regional markets (Europe, North America and the emerging wood pellet industry in Latin America and Asia) with their respective pellet production, consumption and trade patterns as well as a comparison of pellet prices and other heating/power sources; and insight into solid forest industry by-products. The report concludes with an evaluation of the global raw-material potential for wood pellets from sawdust.

The report notes that biomass pellets offer one of the most cost-effective uses for biomass. The solid biofuel can be used in power plants (co-firing), in industrial boilers, in combined heat and powers systems (CHP) and in small scale home heating systems. Pellets are a competitive fuel compared to both liquid and gaseous fossil fuels as well as to other biofuels such as bioethanol, biomethanol and biohydrogen (at mid-2006 prices).

On a barrel of oil equivalent (bbleq) basis, pellets beat crude oil and even natural gas easily (graph, click to enlarge). However, the high bulk density and low volumetric energy density of pellets being lower, long distance trade may push up the price given high transport costs. Still, the fuel remains very competitive when scale advantages and smooth logistical chains are in place (large production centers, low-cost logistical chains from inland sources to ports, bulk transport in oceangoing ships). These chains are still under development and are expected to improve in the future as the global pellet market matures.

The competitiveness of pellets is shown in the country analyses, which indicate that for the end consumer, biomass pellets have been consistently the cheapest energy source over the past two years. Heating oil, natural gas, and electricity are all considerably more expensive, with in some cases a price difference reaching as high as 200 percent (natural gas versus pellets in Sweden; in Germany in mid-2007 natural gas prices were almost twice those of bulk biomass pellets; likewise, in Austria, pellets have been consistently less costly than heating oil since mid-2003, with peaks in the difference between 2005 and 2006 when the fossil fuel was often twice as expensive).

Key trends in the global market
Sweden, together with the USA and Canada, are the world’s largest producers of pellets with an annual production capacity exceeding 3,500,000 tonnes of wood pellets (about 16,5 TWh) in 2006. A second group of countries is composed of several EU Member States with a production ranging from 200,000 to 600,000 tonnes, including Austria, Germany, Italy, Estonia, Latvia, Russia, Poland and Denmark. The remaining countries produce much lower amounts.

Sweden is also the largest market so far, and trends show that the country will remain the leading market in the short term. Other large markets include mainly central European countries, such as Austria, Italy, Germany, the Netherlands, Denmark and Belgium. In 2007 more than 285 small to large pellet plants (with an annual capacity from 2,000 to 150,000 tonnes) were in operation in the EU, up from 230 in 2006. The bulk of these plants can be found in central and northern Europe (map, click to enlarge).

Policy as driver for pellet demand

Strong policy drivers in all regions were observed and investigated, but they differ by region. In Europe, concerns about climate change and strategies to realize renewable electricity targets are a predominant driver, especially for large-scale co-firing of pellets with coal:
:: :: :: :: :: :: :: :: :: ::

For small-scale heating applications, the price advantage/competition with fuel oil plays an important role. This second driver is also the predominant one for North America, combined with a desire to diversify fuel supply. For Asia, the general need for (new) energy carriers and shifting from the heavily polluting energy technologies towards low carbon ones may be the most important drivers behind increasing demand for biomass pellets.

Export and import opportunities for wood pellets
Several markets are mostly driven by export potential opportunities: the Baltic States (Estonia, Latvia, and Lithuania), Finland, Russia, Poland and Canada. They all have low internal sales. Canada produced around 1,200,000 tonnes of pellets in 2006 year, of which a high proportion was sent to Europe through the Rotterdam harbor in the Netherlands (stat, click to enlarge). The Canadian Pellets Association estimates that 700,000 tonnes of Canadian wood pellets will be used in European power stations in 2007.

Russia, with its 880 million hectares of woodland, is already exporting its pellets but with its huge potential, it could become one of the largest market globally for wood pellet provided economic and political conditions are in place. Some large potential producers like Brazil, Argentina, Chile and New Zealand are in the phase of planning the necessary infrastructure.

Furthermore, under the Kyoto Protocol the use of biomass for energy production gives credit to the user, not to the producer of the fuel. As such, Sweden, Italy, Denmark and other industrialized countries have a strong interest in importing pellets.

Globalization is taking place
Globalization is taking place and trade is becoming a key feature of wood pellets markets. A rising number of pellet producers from around the world, especially Canada and Russia, are already selling in Europe and are looking for new business contacts.

The pelletizing technology mainly comes from Europe and is exported to other parts of the world. Producers of pellet stoves and boilers are operating on a Europe-wide level and have been opening up new sales markets. Emerging markets are opening up both in Latin America and Asia.

A projection for China shows the People's Republic might be producing around 50 million tonnes of biomass pellet fuels by 2020 from a variety of sources such as switchgrass, agricultural residues (rice, sunflower, corn, soybean, cotton, etc...) and woody energy crops.

While in Latin America, pellet production is so far marginal, the European demand for pellets may trigger further investments in the near future.

Theoretical utilization potential of sawdust residues
Generally, forest biomass has been a marginal source of energy in industrial applications, but in some countries with a large forest industry sector, such as Sweden, Finland and Austria, forest biomass has remarkable importance. In Finland, for instance, renewable energy sources cover approximately 25% of the total primary energy consumption, and over 80% of renewable energy is derived from wood. Nearly 80% of wood energy is generated from the processing residues of the forest industry (schematic, click to enlarge). For the time being, the highly integrated wood streams in the Finnish forest industry are an exception. But similar models are expected to develop elsewhere.

The report analysed such wood streams in-depth in different countries but limited quantitative research on current biomass potential to an overview of globally produced sawdust residues. It revealed that an estimated gross sawdust potential exists of over 300 million m3. Five countries (USA, Canada, mainland China, Brazil and Russia) cover over two-thirds of this gross potential.

However, when the estimated demand for fibre by the particle board and fibreboard industry is substracted, net available potentials may only be about 80 million m3.

The largest part of this potential is situated in Brazil, the Russian Federation and Canada. Assuming 6 m3 sawdust for one tonne of wood pellets, this would imply a net potential of about 13 million tonnes, compared to a total production of an estimated 6 to 8 million tonnes in 2006.


Malgorzata Peksa-Blanchard, Paulo Dolzan, Angela Grassi, Jussi Heinimö, Martin Junginger, Tapio Ranta and Arnaldo Walter, "Global Wood Pellets Markets and Industry: Policy Drivers, Market Status and Raw Material Potential" [*.pdf], IEA Bioenergy Task 40, November 2007

Biopact: Biomass pellets revolution in Austria: 46% less costly than heating oil; most efficient way for households to reduce carbon footprint - October 06, 2007

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