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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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Sunday, December 24, 2006

European firm to invest €46 million in Brazil's biodiesel industry under "social fuel" policy

The Brazilian government's biofuels policies contain interesting provisions which say that if producers source their feedstocks from small farmers, they get tax exemptions. It seems like most large investors find the propositions so appealing that they opt for this "social fuel" seal.

The system is aimed at strengthening the social sustainability of agricultural production - a top priority for the Brazilian government. According to Brazilian officials, large-scale biofuel production can act as a lever to reduce rural poverty, provided small farmers are made an integral part of the rapidly evolving industry (earlier post). By investing in energy crops, for which they obtain secure supply contracts, Brazil's countless smallholders can raise their incomes and diversify their crop portfolio, thus reducing the risks they otherwise often face when relying on a single crop. The social sustainability policy is seen as a strategy not only to fight rural poverty but to slow down mass migration from the country-side to the mega-cities (mega-slums), which is a consequence of it.

Brazil's socially framed ethanol expansion program is expected to bring up to 3.6 million jobs by 2010 (earlier post), whereas its new biodiesel program might equal that amount (President Lula's take on the program).

One amongst the many companies stepping into the "social fuel" system, is the Malta-based Agrenco Group who will be investing 130 million Brazilian reals (€46/US$60.4 million) in an oilseed complex in the state of Mato Grosso, one of Brazil's poorest regions.

In a statement issued by Finacom, the financial arm of the group, it was revealed that the complex includes a crushing and biodiesel plant and a biomass power plant. The complex is part of Agrenco’s larger plan to invest a total of €84 million (US$110 million) in three biodiesel and crushing plants in Brazil. The company intends to build other hubs in Parana and Mato Grosso do Sul states. Altogether, they will produce 380,000 tons of biodiesel:
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The announcement was made in the capital of Mato Grosso, Cuiabá city, by Agrenco Group CEO Antonio Iafelice at a meeting with Mato Grosso state governor Blairo Maggi. Francisco Ramos, shareholder of the Agrenco Group, and José Marcos Lorenzetti, director of Agrenco Bioenergia, also took part in the meeting.

The biodiesel plants will apply for the “social fuel” seal granted by the federal government, and therefore be eligible for tax-exemption, as the oilseed will be supplied by small-scale farmers. The plants use a multi-seed technology, meaning they can crush and produce biodiesel from oilseed such as soybeans, jatropha, castor, and sunflower.

Part of Agrenco’s biodiesel production will be used for its own fleet of 3,000 trucks and lorries. Another portion will be delivered to farmers and the remainder will be available to the external market.

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US firm to produce ethanol in Tanzania

Tanzania's president Jakaya Kikwete's recent visit to the US is beginning to pay off. During his trip, Kikwete stressed that his country has a large potential for the production of biofuels, both for the domestic market as well as for exports. He added that Tanzania is currently facing a fuel crisis, and that high oil prices are a burden on the developing country's economy.

A quick look at some facts about Tanzania's potential:
  • a potential arable land base of 67.2 million hectares of arable land, of which 5.2% is currently used (see the FAO's Terrastat database)
  • very high land suitability for starch crops (mainly maize, cassava) and a relatively high suitability for sugar cane (see the FAO's land suitability maps for rainfed cropping)
  • low land prices, estimated to be below US$ 100 per hectare (earlier post)
  • a large rural population in desperate need of jobs and additional incomes; some 80% of Tanzania's labor force makes a living off the land
Of course, many challenges remain, ranging from infrastructural and market access barriers to a problematic investment climate.

Nonetheless, in principle Tanzania could become a biofuels superpower and begin to leapfrog into a post-petroleum era (earlier post). US company Renew Energy listened to the president, was clearly interested in his country's biofuels potential, and has meanwhile arrived in Dar Es Salaam to carry out a feasibility study that will probably lead to actual production of ethanol within two years.

The firm specialises in the production of ethanol fuel made from sugarcane, according to Mr Robert Welch, chief consultant. He said that if the deal materialises, his company would need to acquire at least 10,000 hectares (25,000 acres) of land to grow sugarcane, the raw materials for production of the biofuel. Most likely, the province of Morogoro (see map) will be chosen. "If things work out as planned, we will establish the industry in one or two years' time," he added.

He said the fuel produced will be used for local consumption with the excess to be exported to US where demand is big and growing:
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Mr Welch said their focus was to have the sugarcane plantation in the Morogoro region while looking for other regions to start the farms. Mr Welch described biofuel which is usually used by vehicles and running of machines, as a cheaper product compared to petrol, saying its local price will be 30 per cent less than that of petrol and that he was expecting to meet 10 per cent of the country's demand for petrol. Currently the price of petrol ranges between 1,290/- and 1,300/- per litre. He said that the biofuel can be mixed with petrol in a ratio of 25 per cent of biofuel to 75 per cent of petrol. (Note: ethanol's energy content is some 30% below that of gasoline, which has to be taken into account when talking about price differences).

Currently the country's demand for petrol is about 1.5 billion liters, meaning that the Tanzania could make up to 10% savings on its fuel import bill.

Apart from biofuel production, Mr Welch said that his company would be using a sugarcane byproduct (bagasse) for the productio of electricity.

The Deputy Minister for Industry, Trade and Marketing, Mr David Mathayo, confirmed that the Renew Energy Company had indicated interests to invest in the ethanol production and that the investor has already met the Minister for Energy and Minerals Mr Nazir Karamagi and the Director of Tanzania Investment Centre (TIC), Mr Emmanuel Ole Naiko. If the project takes off, it is expected to ease Tanzania's fuel crisis as well as stimulate business and economic growth through direct and indirect employment.

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Brazilian manufacturer Obvio! to develop tri-fuel car

In Brazil 70% of all car owners use biofuels in their vehicles. It was there that so-called flex-fuel or bi-fuel vehicles, which can operate on both gasoline and ethanol or a blend of the two, were first developed. The appearance of these cars was a prerequisite for the country's ethanol program to become a success.

Brazil is also the home of innovative car manufacturer Obvio! Automotoveiculos which has announced that it is developing a tri-fuel vehicle that works on gasoline, ethanol and natural gas and other future fuels (such as compressed biogas). Earlier, Italian auto maker Fiat brought a similar 'trybrid' to the drawing board, which we considered as highly suitable for the megacities of the Global South because it works on easily available biofuels (earlier post). Development of these 'multi-flex' cars is crucial for a global biofuels industry to take off. It strengthens the case for the creation of a diversified fuel portfolio, in which both gaseous and liquid biofuels are brought to the consumer.

Rio de Janeiro based company Obvio! selected British automotive engineering consultancy Lotus Engineering to develop two trybrid high-performance microsports cars for markets across the globe, in a deal potentially worth over £70 (€104/US$137) million.

The lightweight urban microsports cars, designated 828 and 012, are the first products for the new Brazilian OEM. The full engineering programme will include the development of an advanced vehicle safety structure based on aerospace technology (picture), and the integration of ‘trybrid’ engines that will run on gasoline, bio-ethanol or natural gas, and other powertrain variants.
Lotus Engineering was a clear first choice as our engineering consultancy. It has an impressive track record in managing complex engineering projects and in developing exciting, efficient cars; its wide range of expertise will be invaluable to us. We will now move forward together at a fast pace to bring these high performance “ultra-safe urban microsports cars” to the US, European and Japanese markets. -Ricardo Machado, Chief Executive, Obvio!
Lotus Engineering will work with a range of Brazilian ‘supplier partners’ to develop two variants of the new chassis concept which will be engineered incorporating Niess Elliptical Survival Rings, already well-proven in the aerospace industry. Providing exceptional chassis performance as well as class-leading safety, the concept also allows for very light structures - target weight for the 012 is 750kg (1,648 lbs) and for the 828 is 600kg (1,318 lbs). This will enable the vehicles to feature exceptionally good performance characteristics while also running with highly efficient and economical power plants:
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Mike Kimberley, Chief Executive, Group Lotus, said: “I am delighted that Lotus Engineering has been selected by Obvio! to deliver the entire design and development programme for these ground-breaking cars. Lotus Engineering has a very strong heritage in developing innovative solutions for clients and we look forward to working with Obvio! in what we believe will be a radical new approach from a dynamic new automotive player.”

Obvio! is committed to ensuring its highly distinctive and innovative new models are fun to drive and are practical for everyday use. They are configured with the driver and two passengers sitting three-abreast and also feature scissor-opening doors to aid access and parking in tight spaces.

Initially, power will come from a 1.6-litre unit produced by Brazilian engine manufacturer Tritec Motors. Lotus Engineering will develop a new engine management unit, which will give the engine “trybrid” capabilities, running automatically on natural gas, bio-ethanol or gasoline. In parallel, Lotus will develop 170hp and 250hp turbocharged variants for higher performance models in the Obvio! range. Electrically-powered variants of both cars are expected to follow shortly after the trybrid models.

Obvio! has already signed a US$700m pre-paid contract to supply a total of 50,000 units per annum, spread between the 012 and 828 models, to its exclusive North American distributor, California-based ZAP - Zero Air Pollution (OTC BB:ZAAP.OB). Distributors for other major world markets will be appointed over the next 18 months. The Brazilian firm has committed to exceeding all worldwide safety regulations for passenger cars, while exciting performance will be achieved through an impressive power-to-weight ratio and class-leading driving dynamics.

A core Obvio!-Lotus engineering management team will be based in a dedicated project centre at Lotus’ Hethel headquarters. It will manage the engineering programme for the two vehicles, which will be delivered by Lotus Engineering facilities worldwide and for the first time by a group of high-profile Brazilian-based tier one suppliers who will be heavily involved from the very earliest stages. The two vehicles will be built in Brazil, with production expected to start late in 2008.

Mr. Kimberley concluded: “This agreement means a great deal to us – not only are we delivering a very strong technical offering but we will once again have the opportunity to ‘connect’ our iconic Lotus brand to Brazil. Three of the country’s most famous sports personalities, Emerson Fittipaldi, Nelson Piquet and Ayrton Senna, played a major role in helping Team Lotus to win 79 Grands Prix and seven Constructors' Championships in Formula One. With this heritage behind us, we are proud to be able to play a leading role in the development of the Brazilian car industry.”

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