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    Record warm summers cause extreme ice melt in Greenland: an international team of scientists, led by Dr Edward Hanna at the University of Sheffield, has found that recent warm summers have caused the most extreme Greenland ice melting in 50 years. The new research provides further evidence of a key impact of global warming and helps scientists place recent satellite observations of Greenland´s shrinking ice mass in a longer-term climatic context. Findings are published in the 15 January 2008 issue of Journal of Climate. University of Sheffield - January 15, 2007.

    Japan's Tsukishima Kikai Co. and Marubeni Corp. have together clinched an order from Oenon Holdings Inc. for a plant that will make bioethanol from rice. The Oenon group will invest around 4.4 billion yen (US$40.17 million) in the project, half of which will be covered by a subsidy from the Ministry of Agriculture, Forestry and Fisheries. The plant will initially produce bioethanol from imported rice, with plans to use Hokkaido-grown rice in the future. It will produce 5 million liters per year starting in 2009, increasing output to 15m liters in 2011. The facility will be able to produce as much as 50,000 liters of bioethanol from 125 tons of rice each day. Trading Markets - January 11, 2007.

    PetroSun, Inc. announced today that its subsidiary, PetroSun BioFuels Refining, has entered into a JV to construct and operate a biodiesel refinery near Coolidge, Arizona. The feedstock for the refinery will be algal oil produced by PetroSun BioFuels at algae farms to be located in Arizona. The refinery will have a capacity of thirty million gallons and will produce 100% renewable biodiesel. PetroSun BioFuels will process the residual algae biomass into ethanol. MarketWire - January 10, 2007.

    BlueFire Ethanol Fuels Inc, which develops and operates carbohydrate-based transportation fuel production facilities, has secured capital liquidity for corporate overhead and continued project development in the value of US$15 million with Quercus, an environmentally focused trust. BlueFire Ethanol Fuels - January 09, 2007.

    Some $170 billion in new technology development projects, infrastructure equipment and construction, and biofuel refineries will result from the ethanol production standards contained the new U.S. Energy Bill, says BIO, the global Biotechnology Industry Organization. According to Brent Erickson, BIO's executive vice president "Such a new energy infrastructure has not occurred in more than 100 years. We are at the point where we were in the 1850s when kerosene was first distilled and began to replace whale oil. This technology will be coming so fast that what we say today won't be true in two years." Chemical & Engineering News - January 07, 2007.

    Scottish and Southern Energy plc, the UK's second largest power company, has completed the acquisition of Slough Heat and Power Ltd from SEGRO plc for a total cash consideration of £49.25m. The 101MW CHP plant is the UK’s largest dedicated biomass energy facility fueled by wood chips, biomass and waste paper. Part of the plant is contracted under the Non Fossil Fuel Obligation and part of it produces over 200GWH of output qualifying for Renewable Obligation Certificates (ROCs), which is equivalent to around 90MW of wind generation. Scottish & Southern Energy - January 2, 2007.

    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, January 15, 2008

European ethanol association eBIO wants single tariff to protect EU producers

The European Bioethanol Fuels Association (eBIO) would like to see a 'coherent' European import policy in 2008 to close what it calls 'existing loopholes' and thus to pave the way for a well protected domestic industry. That is what Robert Vierhout, Secretary-General of eBIO, said in his organisation's first market commentary over at Ethanol Statistics. Instead of calling for an abandonment of Europe's protectionist measures, Vierhout calls for the introduction of a single tariff, which would be imposed on poor countries that are currently not subjected to the existing, steep duty. Wealthy, lavishly subsidised and inefficient European biofuel producers who push up food prices would thus be favored over unsubsidised, far more efficient and competitive producers in poor developing countries that could actually use some money and jobs.

Biopact thinks eBIO's position is highly problematic. Compared with European ethanol (from grains), the same fuel produced in the South (from sugarcane) is much more energy efficient, reduces GHGs far more substantially (graph, click to enlarge), requires considerably less land to produce a given amount of fuel, is largely sustainable (earlier post) and is far more competitive. In short, there is no rational argument in favor of the protection of European biofuels over these better fuels from the South. Consumers in the EU, developing country farmers, the environment and the climate would benefit from free trade in biofuels. Even without tariffs to protect rich European farmers and biofuel producers, there are enough opportunities in the emerging bioeconomy for all of them to benefit. What is more, even though they cannot compete today, oil prices are likely to reach levels that would make even European producers profitable without subsidies and import duties on foreign biofuels.

In 2007 the EU will have imported roughly 800 million litres of ethanol for the fuel stream from Brazil only, which equals more than one third of total EU-production. According to Mr. Vierhout, “the number shows that Europe is already today the continent, which is very open to biofuel imports if not the most open one in the world”.

He mentions that the EU allows duty free ethanol access from the least developed countries (LDC), countries belonging to the African, Caribbean and Pacific group of states (ACP) and states falling under the Generalised System of Preferences (GSP+) and that this proves there's no need for an abandonment of tariffs.
A total suppression of import duties is thus not only unnecessary, but would even harm the development of those regions as well as the European agricultural and industrial sector. Replacing all our fuel ethanol needs by imports would undermine the security of supply goal as well as sustainability objectives. Unrestrained expansion from production in Third countries could after all result in unwanted environmental effects. eBIO therefore would like to see a coherent European import policy in 2008. - Robert Vierhout, Secretary-General of eBIO
eBIO's logic is questionable. Its use of the fact that the EU allows poor countries with no existing ethanol capacity to enter the market unhindered as proof of its commitment to free and efficient trade, is an empty gesture. The truth is that the producers who really matter today, Europe's real competitors - such as Brazil - feel the full weight of the world's heaviest biofuel tariff: ethanol with an alcohol content of 80 percent is subject to a tariff of €19.20 per 100 litres. This level is higher than the more often criticized $0.54/gallon tariff imposed by the U.S.

Ethanol, primarily from Brazil, is thus seriously disadvantaged although it is vastly superior from an environmental and efficiency perspective since it gives lower indirect carbon dioxide emissions in production and requires much less land to generate a given amount of fuel.

What is more, Vierhout actually calls for:
the introduction of a single tariff line for all ethanol imported for fuel use.
Depending on the level of such a general tariff, this could be a major step backwards. If it implies a lowered tariff on ethanol from Brazil and other producers that matter, it could be legitimized as a very temporary measure. Temporary, because when APC countries, who have a large technical biofuel potential and who used to escape the duty, become large scale exporters, they would be facing the new single tariff - which is completely unacceptable from a social, environmental, historical and economic perspective. Now that African countries understand that they have a unique opportunity to escape poverty by tapping into their comparative advantages to make efficient fuels, we should allow them to do so, instead of denying them yet another chance to develop. By subsidizing EU agriculture and by dumping food on their markets, we have already been denying millions of African farmers the opportunity to make a living and have pushed entire countries into poverty. A repeat of this unfair and shameful situation would simply be immoral.

Numerous social, environmental, development and energy think tanks have therefor called for the complete abandonment of all EU and US tariffs and trade barriers on biofuels: from the IEA and the World Bank, to the IMF, the IISD, the OECD and the FAO - all have warned that these measures deny poorer countries market access, limit the availability of the most efficient biofuels, and could have detrimental effects on the environment. Just yesterday, the OECD repeated that the tariffs are 'wasteful' and 'distorting'. And according to the IMF, these protectionist measures are to blame for increased food prices, not biofuels per se - the fund called for their abolishment.

In any case, sooner or later, all biofuel duties will have to go, especially when Brazil succeeds in reclassifying ethanol from its current status of an agricultural commodity into that of a fuel commodity (earlier post), or when it wins its recently initiated WTO case against the US tariff (more here), which would set a precedent that would force the EU to drop its import duties.

eBIO further forgets to mention another important fact: the enormous subsidies its sector and European farmers receive from the EU each year. Calling these subsidies 'lavish' would be an understatement. European farmers receive up to €40 billion in subsidies annually, and according to the Global Subsidies Initiative, subsidies dedicated solely to biofuels amounted to a whopping €3.7 billion ($5.2 billion) in 2006 alone (previous post). Without these subsidies, not many European biofuel producers would survive. Brazilian ethanol on the contrary is unsubsidized and competes very well with gasoline.

Finally, Vierhout talks about the need for social and environmental sustainability criteria, without mentioning the fact that such rules - if too stringent - could constitute a non-tariff barrier to trade - that is, yet another veiled measure to protect the world's wealthiest farmers against competition from their more efficient collegues in developing countries. The call for such criteria is also based on a lack of historical insight into the key drivers of modernity (previous post):
:: :: :: :: :: :: :: :: :: :: :: :: ::

In his outlook for the European fuel ethanol market in 2008, eBIO's chief further discusses the most pressing issues that can be found in other countries too: a need for better legislation, the development of fair sustainability criteria, and an improved grip on feedstock supplies.


To start with, legislation plays an important role in the development of the EU bioethanol fuel market. 2008 awaits the industry with two major pieces of legislation: Firstly, the Commission is to publish its proposal on a Renewable Energies Directive that will replace the existing Biofuels Directive on January 23. Key element is the (likely) introduction of a binding biofuels target of 10% by energy content by 2020. Such a decision would mark a strong signal to bioethanol producers, car manufactures and road fuel distributors to prepare for a partly bio-fueled transport sector in the near future.

Secondly, the Fuel Quality Directive is under scrutiny by the European Parliament and the Council. This Directive sets technical standards for transport fuels and needs to be amended in order to allow for higher biofuel blends. The EU decisionmaking bodies Council of Ministers and European Parliament have expressed the will to agree on a common text before mid 2008. However, this could proof difficult as the responsible Parliamentary Committee has proposed a complex and far reaching system on sustainability for road transport fuels. It seems that sustainability is so popular that we might have 2 sets of criteria in 2 different Directives.


After all, sustainability is also linked to the introduction of a binding 10% biofuels target. The requirement of sustainable production of biomass for biofuels will be enforced by a certification scheme. The up-coming Renewable Energies Directive will define the criteria, which will most likely include land use change, preservation of biodiversity and thresholds on greenhouse gas (GHG) emissions savings to be achieved. Europe’s ethanol industry fully supports this move provided sustainability criteria will apply to all biomass production regardless its origine and end-use.

However, one needs to bear in mind that European farmers already today comply with the most rigorous standards on sustainable farming globally. eBIO is confident that this will be acknowledged by applying cross-compliance rules to verify the fulfillment of the land use change and biodiversity criteria. When it comes to the GHG saving calculation tool we will keep a sharp eye on whether it will be workable and fair. Furthermore, eBIO will underline strongly the contribution home-grown biofuels can deliver in raising energy independence and security. Biofuels should not be just a tool to deliver GHG savings.

Feedstock availability
The year 2007 was marked by high grain prices caused by strong increased demand in Asia, very poor weather conditions in many grain exporting countries and a strong increase in speculation with soft commodities. These higher prices also triggered an emotional debate on the impact of biofuel product and food availability and prices. Ironically, the first that fell victim of these high grain prices was the biofuel industry itself as it squeezed profitability margins in the bioethanol sector substantially. As a reaction on this price development the European Union decided to abolish for at least one year the set aside obligation, which until the early Nineties subsidized non-production. The expected extra yield of certainly more than 10 mio tonnes will have a positive effect on the overheated cereals market in 2008 and is going to ease the situation of many European ethanol producers. Furthermore, eBIO expects that the promotion of bioethanol will give a new incentive to European farmers to adapt their production to the new market realities. Increased yields, rationalized production processes and a market-based agricultural business will secure food and fuel supply for the decades to come.


Ethanol Statistics: eBIO market commentary: An ethanol outlook for 2008 - January 14, 2007.

Biopact: IISD report challenges EU biofuel subsidies, calls for end to tariff - October 04, 2007

Biopact: IMF chief economist: biofuels could help cut farm subsidies, protectionism main cause of high food prices - December 06, 2007

Biopact: OECD calls biofuel tariffs "wasteful" and "destorting"; calls for open markets - January 14, 2008

Biopact: Paper warns against subsidies for inefficient biofuels in the North, calls for liberalisation of market - major boost to idea of 'Biopact' - September 11, 2007

Biopact: FAO chief calls for a 'Biopact' between the North and the South - August 15, 2007


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