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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.


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Friday, December 15, 2006

Developed countries finance emission reduction projects abroad for economic gain - study

A new study confirms an observation made often by analysts: developed countries have reasons other than philanthropy to help their neighbors reduce greenhouse gas emissions. Developed countries’ motivation to invest in greenhouse gas emission-reduction projects in developing countries is based on their desire to reduce air pollution they receive from abroad and keep transaction costs down, rather than to achieve global-scale pollution reductions. Nives Dolsak and Maureen Dunn, from the University of Washington-Bothell publish their analysis the journal Policy Sciences.

Dolsak and Dunn examine the projects launched under the so-called Joint Implementation (JI) mechanism that was created under the 1992 United Nations Framework Convention on Climate Change (prior to the Kyoto Protocol), which sought to first stabilize, then reduce global greenhouse gas emissions. The JI system is one of the three 'Flexible Mechanisms' under the Kyoto Protocol; the other two are Emissions Trading and the Clean Development Mechanism. Unlike the Clean Development Mechanism, JI takes place between countries which have an emission reduction requirement.

Sponsoring countries invest in greenhouse gas emission-reduction projects in other countries, by replacing a coal-fired power plant with a more efficient combined heat and power plant for example. However, the investing countries do not earn emission reduction credits from this financing. So why do they do it, and how do they choose which country to invest in?

Dolsak and Dunn’s statistical analysis, based on econometric techniques, shows that investment decisions are not motivated by philanthropy, but rather by economics. It makes sense for developed (or home) countries to test mechanisms through which developing (or host) countries can gain scarce capital and energy efficient technologies, while home countries meet reduction targets at a lower cost. In effect, home countries use host countries as “policy laboratories” in the event that such investments might lead to emission credits under future regimes. To keep the costs down, home countries are likely to locate JI projects in host countries with which they have had prior trade exchanges:
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For energy projects, such as Japan’s investment to improve energy efficiency in China’s metal industry, location decisions are driven by home countries’ desire to reduce air pollution from coal-fired power plants that they receive from neighboring countries. The same applies to JI projects in Eastern European transition countries, which still mine and burn coal. In these instances, geographical proximity of a host country to a home country is the main driver of investment decisions.

For carbon sequestration projects, such as America’s investment in the conversion of marginal agricultural lands to commercial tree plantations in Costa Rica, location decision is based on the host country’s potential for avoiding deforestation as well as by previous aid and trade patterns.

The authors advise policy makers to pay particular attention to regional pollution dynamics. They conclude that investing countries are not acting simply for the good of the planet, but rather wish to see a return on their investment. Dolsak and Dunn suggest that “those seeking to enhance multilateral cooperation via international regimes should pay close heed to the costs and benefits that regime creates for the key players.”

More information:
-Springer: It’s enough to turn your neighbors green - Dec. 14, 2006
-Joint Implementation at the UNFCCC
-Clean Development Mechanism at the UNFCCC

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