Land for biofuels becoming a valuable natural resource
Earlier we reported about India and Brazil's bioenergy cooperation pact, which was signed on the eve of the first India - Brazil - South-Africa (IBSA) Summit. The press mentioned that a bilateral agreement about land sales was made. Today, we learn that one of the companies that will make use of this agreement is India's Reliance Industries.
The company is looking to buy thousands of hectares of land in Brazil on which it will grow sugar cane to produce ethanol. Land is cheap in Brazil at €700/US$1000 per hectare, abundant water just a dig away, and added to it are clear ownership titles and a government eager to get it all going.
The company's president R.C. Sharma offers us an interesting insight into what the logic behind the global bio-economy will be, and what place the issue of control over land will be playing. Land is rapidly becoming a most valuable natural resource.
According to Sharma:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: Brazil :: land ::
The company is looking to buy thousands of hectares of land in Brazil on which it will grow sugar cane to produce ethanol. Land is cheap in Brazil at €700/US$1000 per hectare, abundant water just a dig away, and added to it are clear ownership titles and a government eager to get it all going.
The company's president R.C. Sharma offers us an interesting insight into what the logic behind the global bio-economy will be, and what place the issue of control over land will be playing. Land is rapidly becoming a most valuable natural resource.
According to Sharma:
- The big pressure in coming decade will be on land for food and fuel. Brazil will become the world's food and fuel basket of future.
- In the 'flat world' of globalisation distance no longer deters investors, what matters is opportunity.
- Very few entrepreneurs understand the opportunity that lies in South America, where land is abundant, fertile, very cheap and governments are now stable.
- Ethanol and to a lesser extent biodiesel will become a globally traded commodity, sold to wherever there is demand
- Brazilian ethanol now costs US$30 a barrel. If you take into account its relatively lower calorific value, its price would be about $50 a barrel compared to gasoline. It is the cheapest fuel today, and nothing seems to indicate that oil prices will fall below the US$50 benchmark anywhere soon. Cellulosic ethanol might not be able to compete with 'tropical biofuels'.
- In the future, more and more countries will convert land into biofuel plantations to hedge against dependency on petroleum.
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: Brazil :: land ::
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