The BBC World Service is hosting a series of programmes on the global obesity pandemic. Over the coming two weeks a range of documentaries and discussions will be held on the obesity time-bomb that is growing all over the West, but also in the developing world. In North America, a quarter of people are now morbidly obese, 60% is overweight, and one in three children will become obese. The epidemic is spreading rapidly to China and India.
BBC World Service - July 16, 2007.
A new report from Oregon State University shows the biofuels industry is on track to be a $2.5 billion chunk of the state's economy within 20 years. The study identifies 80 potential biodiesel, ethanol and biomass facilities which could produce a combined 400 million gallons (1.5 billion liters) per year of ethanol and another 315 million gallons (1.2 billion liters) of biodiesel. On an oil equivalent basis, this comes down to around 38,000 barrels per day.
Oregon State University - July 16, 2007.
Jatropha biodiesel manufacturer D1 Oils has appointed a leading plant scientist to its board of directors. Professor Christopher Leaver, Sibthorpian professor of plant science and head of the plant sciences department at Oxford University, has joined the Teesside company as a non-executive director. Professor Leaver, who was awarded a CBE in 2000, is a leading expert in the molecular and biochemical basis of plant growth and differentiation.
D1Oils Plc - July 16, 2007.
Panama and South Africa are set to cooperate on biofuels. A delegation consisting of vice-minister of Foreign Affairs Azis Pahad, of Finance, Jubulai Moreketi and of Finance, met with Panama's vice-chancellor Ricardo Durán to discuss joint biodiesel and ethanol production and distribution. Panama's goal is to become a hub for internationally traded bioenergy, making use of the strategic position of the Canal.
La Prensa Gráfica [*Spanish] - July 14, 2007.
Spanish investors are studying the opportunity to invest in agro-industrial projects in Morocco aimed at producing biofuel from the Jatropha plant. Morocco’s Minister for Energy and Mines, Mohammed Boutaleb, said Moroccan authorities are willing to provide the necessary land available to them, provided that the land is not agricultural, is located in semi-arid regions, and that the investors agree to use water-saving agricultural techniques, such as drip-feed irrigation.
Magharebia - July 14, 2007.
Philippine Basic Petroleum Corp. plans to raise as much as 2.8 billion pesos (€44.4/US$61.2 million) through a follow-on offering and loans to finance a 200,000 liter per day bio-ethanol plant in the province of Zamboanga del Norte. The move into biofuels comes in anticipation of the implementation of RA 9367 or the Philippines biofuels law. RA 9367 mandates five percent bioethanol blending into gasoline by 2009, and 10 percent by 2011.
Manila Bulletin - July 14, 2007.
The Michigan Economic Development Corporation last week awarded a $3.4 million grant to redevelop the former Pfizer research facility in Holland into a bioeconomy research and commercialization center. Michigan State University will use the facility to develop technologies that derive alternative energy from agri-based renewable resources.
Michigan.org - July 13, 2007.
Fuel prices increased three times in Mozambique this year due to high import costs. For this reason, the country is looking into biofuels as an alternative. Mozambique's ministries of agriculture and energy presented a study showing that more than five million hectares of land can be used sustainably in the production of crops that would produce biodiesel fuels. The first phase of a biofuel implementation plan was also presented, identifying the provinces of Inhambane, Zambezia, Nampula and Cabo Delgado as the first to benefit.
News24 (Capetown) - July 12, 2007.
The Malaysian Oleochemical Manufacturers Group (MOMG) has urged the government for incentives and grants to companies to encourage the development of new uses and applications for glycerine, the most important byproduct of biodiesel. Global production of glycerine is currently about one million tonnes. For every 10 tonnes of oil processed into biodiesel, one tonne of glycerine emerges as a by-product.
Bernama - July 12, 2007.
BioDiesel International AG has acquired 70 per cent of the shares in Lignosol, a Salzburg based company that is making promising progress in Biomass-to-Liquids conversion techniques. The purchase price is in the single-digit million Euro range.
ACN - July 10, 2007.
Gay & Robinson Inc. and Pacific West Energy LLC announced today a partnership to develop an ethanol plant in Hawaii based on sugarcane feedstocks. The plant's capacity is around 12 million gallons (45 million liters) per year. The partnership called Gay & Robinson Ag-Energy LLC, will also ensure the continuation of the Gay & Robinson agricultural enterprise, one of the oldest in Hawaii. Approximately 230 jobs will be preserved, and a large area of West Kauai will be maintained in sustainable agriculture.
Business Wire - July 10, 2007.
Water for Asian Cities (WAC), part of UN-Habitat, is extending partial financial support for the construction of several biogas plants across the Kathmandu valley and develop them as models for municipal waste management. The first biogas plants will be built in Khokna, Godavari, Kalimati, Patan, Tribhuvan University premises, Amrit Science College premises and Thimi.
The Himalayan Times - July 09, 2007.
EnviTec Biogas's planned initial public offering has roused 'enormous' interest among investors and the shares have been oversubscribed, according to sources. EnviTec has set the IPO price range at €42-52 a share, with the subscription period running until Wednesday. EnviTec last year generated sales of €100.7 million, with earnings before interest and tax of €18.5 million.
Forbes - July 09, 2007.
AthenaWeb, the EU's science media portal, is online with new functionalities and expanded video libraries. Check it out for video summaries of the latest European research activities in the fields of energy, the environment, renewables, biotech and much more.
AthenaWeb - July 04, 2007.
Biopact was invited to attend a European Union high-level meeting on international biofuels trade, to take place on Thursday and Friday in Brussels. Leaders from China, India, Africa and Brazil will discuss the opportunities and challenges arising in the emerging global biofuels sector. EU Commissioners for external relations, trade, energy, development & humanitarian aid as well as the directors of international organisations like the IEA, the FAO and the IFPRI will be present. Civil society and environmental NGOs complete the panorama of participants. Check back for exclusive stories from Friday onwards.
Biopact - July 04, 2007.
China's state-owned grain group COFCO says Beijing has stopped approving new fuel ethanol projects regardless of the raw materials, which has put a brake on its plan to build a sweet potato-based plant in Hebei.
The Standard (Hong Kong) - July 03, 2007.
Blue Diamond Ventures and the University of Texas A&M have formed a biofuels research alliance. The University will assist Blue Diamond with the production and conversion of non-food crops for manufacturing second-generation biofuels.
MarketWire - July 03, 2007.
African Union leaders are to discuss the idea of a single pan-African government, on the second day of their summit in Accra, Ghana. Libya's Colonel Muammar Gaddafi is championing the idea, but many African leaders are wary of the proposal.
BBC - July 02, 2007.
Triple Point Technology, a supplier of cross-industry software platforms for the supply, trading, marketing and movement of commodities, announced today the release and general availability of Commodity XL for Biofuels™. The software platform is engineered to address the rapidly escalating global market for renewable energy fuels and their feedstocks.
Business Wire - July 02, 2007.
Latin America's largest construction and engineering firm, Constructora Norberto Odebrecht SA, announced plans to invest some US$2.6 billion (€1.9 billion) to get into Brazil's booming ethanol business. It aims to reach a crushing capacity of 30 million to 40 million metric tons (33 million to 44 million tons) of cane per harvest over the next eight years. More soon.
International Herald Tribune - June 30, 2007.
QuestAir Technologies announces it has received an order valued at US$2.85 million for an M-3100 system to upgrade biogas created from organic waste to pipeline quality methane. QuestAir's multi-unit M-3100 system was purchased by Phase 3 Developments & Investments, LLC of Ohio, a developer of renewable energy projects in the agricultural sector. The plant is expected to be fully operational in the spring of 2008.
Market Wire - June 30, 2007.
Siemens Energy & Automation, Inc. and the U.S. National Corn-to-Ethanol Research Center (NCERC) today announced a partnership to speed the growth of alternative fuel technology. The 10-year agreement between the center and Siemens represents transfers of equipment, software and on-site simulation training. The NCERC facilitates the commercialization of new technologies for producing ethanol more effectively and plays a key role in the Bio-Fuels Industry for Workforce Training to assist in the growing need for qualified personnel to operate and manage bio-fuel refineries across the country.
Business Wire - June 29, 2007.
A paper published in the latest issue of the Journal of the American Ceramic Society proposes a new method of producing hydrogen for portable fuel cells that can work steadily for 10-20 times the length of equivalently sized Lithium-ion batteries. Zhen-Yan Deng, lead author, found that modified aluminum powder can be used to react with water to produce hydrogen at room temperature and under normal atmospheric pressure. The result is a cost-efficient method for powering fuel cells that can be used in portable applications and hybrid vehicles. More soon.
Blackwell Publishing - June 29, 2007.
An NGO called Grains publishes a report that highlights some of the potentially negative effects associated with the global biofuels sector. The findings are a bit one-sided because based uniquely on negative news stories. Moreover, the report does not show much of a long-term vision on the world's energy crisis, climate change, North-South relations, and the unique role biofuels can play in addressing these issues.
Grain - June 29, 2007.
Researchers at the Universidad de Tarapacá in Arica plan to grow Jatropha curcas in the arid north of Chile. The trial in the desert, is carried out to test the drought-tolerance of the biodiesel crop, and to see whether it can utilize the desert's scarce water resources which contain high amounts of salt minerals and boron, lethal to other crops.
Santiago Times - June 28, 2007.
India and Thailand sign a Memorandum of Understanding (MoU) that envisages cooperation through joint research and development and exchange of information in areas of renewable sources of energy like, biogas, solar-thermal, small hydro, wind and biomass energy.
Daily India - June 28, 2007.
Portucel - Empresa Produtora de Pasta e Papel SA said it plans to install biomass plants with an expected production capacity of 200,000 megawatt hours per year at its paper factories in Setubal and Cacia. The European Commission gave the green light for state aid totaling €46.5 million, contributing to Portucel's plans to extend and modernise its plants.
Forbes - June 28, 2007.
Petro-Canada and GreenField Ethanol have inked a long-term deal that makes Petro-Canada the exclusive purchaser of all ethanol produced at GreenField Ethanol's new facility in Varennes, Quebec. The ethanol will be blended with gasoline destined for Petro-Canada retail sites in the Greater Montreal Area.
Petro-Canada - June 27, 2007.
According to a study by the Korean Energy Economics Institute, biodiesel produced in Korea will become cheaper than light crude oil from 2011 onwards (678 won/liter versus 717.2 won/liter). The study "Prospects on the Economic Feasibility of Biodiesel and Improving the Support System", advises to keep biodiesel tax-free until 2010, after which it can compete with oil.
Dong-A Ilbo - June 27, 2007.
Kreido Biofuels announced today that it has entered into a marketing and distribution agreement with Eco-Energy, an energy and chemical marketing and trading company. Eco-Energy will purchase Kreido Biofuels’ biodiesel output from Wilmington, North Carolina, and Argo, Illinois, for a minimum of 3 years at current commercial market prices, as well as provide Kreido transportation and logistics services.
Business Wire - June 27, 2007.
Beijing Tiandi Riyue Biomass Technology Corp. Ltd. has started construction on its new fuel ethanol project in the county of Naiman in Inner Mongolia Autonomous Region's Chifeng City, the company's president told Interfax today.
Interfax China - June 26, 2007.
W2 Energy Inc. announces it will begin development of biobutanol from biomass. The biofuel will be manufactured from syngas derived from non-food biomass and waste products using the company's plasma reactor system.
Market Wire - June 26, 2007.
Finland based Metso Corporation, a global engineering firm has received an order worth €60 million to supply two biomass-fired power boilers to Portugal's EDP Producao - Bioeléctrica, S.A. The first boiler (83 MWth) will be installed at Celbi’s Figueira da Foz pulp mill and the second boiler (35 MWth) at Caima’s pulp mill near the city of Constância. Both power plants will mainly use biomass, like eucalyptus bark and forest residues, as fuel to produce together approximately 40 MWe electricity to the national grid. Both boilers utilize bubbling fluidized bed technology.
Metso Corporation - June 26, 2007.
Canada's New Government is investing more than $416,000 in three southern Alberta projects to help the emerging biofuels industry. The communities of Lethbridge, Drumheller and Coalhurst will benefit from the projects. Through the Biofuels Opportunities for Producers Initiative (BOPI), the three firms will receive funding to prepare feasibility studies and business plans to study the suitability of biofuels production according to location and needs in the industry.
MarketWire - June 26, 2007.
U.S. Energy Secretary Samuel Bodman is expected to announce today that Michigan State and other universities have been selected to share $375 million in federal funding to develop new bioenergy centers for research on cellulosic ethanol and biomass plants. More info soon.
Detroit Free Press - June 26, 2007.
A Kerala based NGO has won an Ashden Award for installing biogas plants in the state to convert organic waste into a clean and renewable source of energy at the household level. Former US vice president Al Gore gave away the award - cash prize of 30,000 pounds - to Biotech chief A. Saji at a ceremony in London on Friday.
New Kerala - June 25, 2007.
AltraBiofuels, a California-based producer of renewable biofuels, announced that it has secured an additional US$165.5 million of debt financing for the construction and completion of two plants located in Coshocton, Ohio and Cloverdale, Indiana. The Coshocton plant's capacity is anticipated to reach 60million gallons/year while the Cloverdale plant is expected to reach 100 million gallons/year.
Business Wire - June 23, 2007.
Brazil and the Dominican Republic have inked a biofuel cooperation agreement aimed at alleviating poverty and creating economic opportunity. The agreement initially focuses on the production of biodiesel in the Dominican Republic.
Dominican Today - June 21, 2007.
Malaysian company Ecofuture Bhd makes renewable products from palm oil residues such as empty fruit bunches and fibers (more here). It expects the revenue contribution of these products to grow by 10% this year, due to growing overseas demand, says executive chairman Jang Lim Kuang. 95% of the group's export earnings come from these products which include natural oil palm fibre strands and biodegradable mulching and soil erosion geotextile mats.
Bernama - June 20, 2007.
Argent Energy, a British producer of waste-oil based biodiesel, announced its intention to seek a listing on London's AIM via a placing of new and existing ordinary shares with institutional investors. Argent plans to use the proceeds to construct the first phase of its proposed 150,000 tonnes (170 million litres) plant at Ellesmere Port, near Chester, and to develop further plans for a 75,000 tonnes (85 million litres) plant in New Zealand.
Argent Energy - June 20, 2007.
If China wants to keep growing economically, it has no choice but to transit towards a sustainable and highly efficient bio-based economy. The People's Republic has understood this and the idea of such a 'circular' and 'cradle-to-cradle' economy in which products and processes rely on biomass and biotechnology is now an official policy in the new Five Year Plan.
The green vision on the production of goods and services is based on transforming knowledge from the life sciences into new, sustainable, eco-efficient and competitive products. From bioplastics to biofuels, in a circular, bio-based economy both the carbon cycle as well as the product cycles are clean and closed. Waste is no longer a useful concept, because what is seen as waste for one type of product is feedstock for another. The typical productive unit of this plant-based economy of the future is the integrated biorefinery.
The EU has been promoting the bioeconomy within the Union and abroad, and it was high on the agenda during Germany's presidency of the Council of the EU. This signals a conceptual shift away from the 'resource nationalism' so typical of fossil fuel based industrialisation, and towards a more reciprocal relationship between nations who share knowledge and experience on developing sustainable, bio-based processes. Recently, a joint statement outlining the commitment of the European Commission and China to establishing a knowledge-based bioeconomy was signed in Beijing on 6 July, with this spirit in mind.
The joint statement, which comes during the China-EU Science and Technology Year, was signed by Christian Patermann, Director of the Biotechnology, Agriculture and Food Directorate within the Commission's Research DG, and by Wang Hongguang on behalf of the China National Centre for Biotechnology Development.
We want to foster our cooperation with the largest and the most populated country in the world. [...] We are very much impressed by the very modern style, the very good equipment, the dedication of their people, their interest in cooperation. This is no longer a developing country. It's a country where we can also work on the basis of reciprocity - in the areas of co-funding, sharing views, sharing knowledge, in scientific and other technical areas. - Christian Patermann, Director of the Biotechnology, Agriculture and Food Directorate within the Commission's Research DG
A workshop held in Beijing on 2 and 3 July led to the identification of new ways to promote cooperation between the two nations. The gathering identified the following research fields for the possible development of joint actions. The list will be reviewed in 2009 and 2011:
waste processing and use, in particular with respect to bioethanol and biodiesel
biocatalysis for food and non-food uses
sustainable agro-forestry and plantation forestry
animal, plant and fish breeding (genetically modified (GM) and non-GM)
animal diseases and control; animal drugs, vaccines and vaccination strategies
food safety, nutrition and health
Both parties have 'long been engaged in a fruitful dialogue on the establishment of a Knowledge-Based BioEconomy (KBBE) and on related research (agriculture, forestry, fisheries, aquaculture, food and biotechnologies),' according to the statement: energy :: sustainability :: ethanol :: biodiesel :: bioenergy :: biofuels :: biomass :: bioproducts :: bioeconomy :: EU :: China :: This dialogue has included the participation of Chinese partners in 15 projects under the Food Quality and Safety section of the EU's Sixth Framework Programme (FP6).
Any ensuing future joint actions will be met by reciprocal scientific, technical and financial commitment, the statement makes clear. Mr Patermann says that European partners will very soon be participating in calls for proposals for Chinese research programmes. And the Seventh Framework Programme (FP7) is of course open to Chinese participation.
The statement also envisages joint meetings on a 12 or 18-month basis, and the possible establishment of an 'EU-China Platform on the Knowledge-Based BioEconomy'.
Irish rocker and activist Bob Geldof has thrown his weight behind a new project aimed at producing electricity from plant seeds in Africa. Geldof has joined Britain's Helius Energy Plc as a special adviser to support the company's bioenergy projects across the continent, which is seeing demand for power surge and which feels the impact of high oil prices more than any other region. Helius, listed on London’s Alternative Investment Market (AIM), is currently in discussion with South Africa's Eskom to supply the power utility with renewable energy, generated from biomass crops such as jatropha curcas, the seeds of which are a biodiesel feedstock.
'Life-changing' Speaking at a press conference in Johannesburg, Geldof said that bioenergy could simulate the economic growth required to lift Africa from poverty. “I do not use the word life-changing lightly,” Geldof said, adding that jatropha curcas was the first solution that he had seen in his 23 years of involvement with African causes that offered Africans jobs, cash crops and economic power.
Power through renewable energies is and will be a major tool for developing countries, particularly for rural populations. The potential is enormous, I think it will be extraordinary if the model is replicated in other parts of Africa, it will have life-changing effects. - Sir Bob Geldof
He pointed out that the failure of the Doha Development Round – the World Trade Organisation negotiations that aimed to lower trade barriers around the world, permitting free trade between countries of varying prosperity – and the unlikelihood of a standalone trade agreement for Africa, made it all the more important to find a solution for Africa’s farmers. Biofuels offer such a solution: energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: rural development :: poverty alleviation :: Doha :: Africa :: Geldof spoke to the media after returning from a trip to Swaziland where he visited jatropha curcas plantations planted by biodiesel producer D1 Oils. Pointing to a jatropha curcas seedling on the table, Geldof said that “the potential effect of this little fellow is enormous”.
Geldof said that he was impressed by the “life-changing” potential that the cultivation of jatropha curcas trees could have on poverty-stricken African communities. The oil expelled from the tree’s seeds can be processed into biofuels and the remaining plant material can be used to fire biomass energy-generation plants.
The activist was accompanied by Helius Energy chairperson Alex Worrall and Helius Energy co-founder and D1 Oils Africa CEO Demetri Pappadopoulos. Pappadopoulos said that every hectare of jatropha curcas would produce 2,7 tons of oil and 4,4 tons of biomass.
D1 Oils Africa has obtained rights to plant more than 40 000 ha of jatropha curcas in Africa, including Swaziland and Zambia. However, the South African Department of Agriculture is yet to publish its policy on Jatropha curcas, which is currently viewed as an invasive tree.
Pappadopoulos said that the first power from jatropha curcas biomass could be produced in the next three years when D1 Oils Africa expects to harvest the first commercial crops in Swaziland and Zambia.
South Africa In South Africa, Helius will install and operate both large 50-65MWe and small modular 5MWe biomass-powered electricity generation plants designed to meet the growing need for reliable power and support the essential move away from fossil fuels both for economic and environmental reasons, whilst taking advantage of renewable energy legislation developed to combat climate change.
This is good news for South Africa where recent, and anticipated ongoing, electricity shortages have demonstrated that the current power output is close to installed capacity. Helius is pursuing opportunities to develop its 50MWe biomass power plants and its modular GreenSwitch™ 5MWe plants in the country.
Dr Mohammed Jahed of Helius Energy Africa, comments, “The commitment to a greener, cleaner energy solution is one that is being made globally by Governments and business alike. This along with the existing climate offers an ideal opportunity for the introduction of ‘Green Electricity’ into the Southern African market.”
Helius is currently in discussions with Eskom proposing to become a significant Independent Power Provider with special emphasis on renewables. Additionally, Helius has been approached to join the Power Commissions Working Party in Zambia and is in discussion with the Government of Zambia for the establishment of new power plants, and the upgrading of existing facilities. The company is also in discussion with the Government of the Kingdom of Swaziland for a power supply agreement.
These projects will go a long way to securing electricity in Southern Africa, which is facing an ever-growing energy crisis.
Dr Jahed of Helius Energy Africa concludes, “We believe that with the involvement of Sir Bob Geldof we will raise the bar and ultimately awareness of the current energy crisis facing Africa and the solution offered by Helius to take advantage of the exciting opportunities to develop biomass as a sustainable source of renewable power.”
Elsewhere in Africa Besides being in discussion with Eskom, Helius Energy is in talks with the government of Zambia concerning the establishment of new power plants and the upgrading of existing facilities. The company is also in discussion with the Swazi government for a power supply agreement.
In addition to using biomass from jatropha curcas, Helius is also investigating the potential of using other biomass sources including the plant material remaining from bioethanol production.
In another development, petrochemical giant BP and D1 Oils Africa’s parent company, AIM-listed D1 Oils, have announced plans to establish a global joint venture based on the planting of Jatropha curcas trees.
D1 Oils Africa corporate affairs executive Penny Healy tells Engineering News that the proposed joint venture – which is subjected to the approval of D1 shareholders at an extraordinary general meeting to be held in the next few weeks – is “a huge vote of confidence” for cultivating jatropha curcas as a feedstock for biodiesel production.
Picture: Irish pop musician Bob Geldof addresses a news conference in Berlin April 24, 2007. Geldof has thrown his weight behind a new project aimed at producing electricity from plant seeds in Africa.
Opinions people have about innovations are influenced by the context in which they form their opinion. For example, opinions about a novel energy source like biomass are influenced by thoughts regarding other energy sources. The less knowledge, interest or time people have, the stronger this effect. Sustainable energy options must therefore be promoted in the right context says Dutch researcher Wouter van den Hoogen.
People frequently form opinions about new technologies, such as novel energy options, despite having a very limited knowledge of the subject concerned. The subject is often complex and people are either not particularly interested or have limited time. Wouter van den Hoogen’s research indicates that the opinions people form about various energy sources are related to each other.
The researcher argues that an integrated communication strategy should be used for the acceptance of each type of sustainable energy source introduced to the Dutch market. Promoting one specific energy source can adversely affect the acceptance of other new energy sources.
In seven experiments Van den Hoogen examined the boundary conditions within which so-called 'context effects' can occur. A context effect occurs if a person’s opinion about new technologies depends on subtle differences in the context in which the technology is introduced. The theme of these experiments was energy from biomass: bioenergy :: biofuels :: energy :: sustainability :: biomass :: knowledge :: perception :: psychology :: complexity :: It appeared that people were only sensitive for subtle differences in context if they had a weak basic attitude towards the subject. When people had a weak opinion, and another energy source was casually mentioned just before the assessment of biomass, then their opinion about the use of biomass was assimilated to the use of the other energy source.
Biomass was assessed more positively if sunlight was mentioned in this context, compared to when coal was mentioned. This is because people use the information in context, as an interpretation framework for assessing the unknown item. Still, this assimilation effect did not always occur in the experiments. Sometimes a comparison with the context led to a contrast effect: in this case, biomass was valued more highly if it was compared to coal and valued less if compared to solar energy. Although the assimilation effects also occurred when people were hindered from thinking, contrast effects required mental effort.
Until now, we have seen reports about the potential effects of large scale biofuel production on food prices. These studies are important, but incomplete because they do not analyse the opportunity costs of competitive biofuels at high oil prices. Some media have drawn the straightforward but quite deceptive conclusion from the studies that biofuels are to blame for ending the era of cheap food. Reality is a bit more complex than this.
What we really need are studies showing the effects of high oil prices on agriculture and food as compared to the effects of biofuels. Why are biofuels produced in the first place? Because they reduce the cost of transport fuels. Take the Brazilian example: a barrel of oil equivalent ethanol costs between US$ 35 and 40. Crude oil currently costs more than US$ 70 per barrel, which makes gasoline without taxes standing at around US$100 per barrel. In short, the biofuel costs a third, to half as much as the refined oil alternative.
In this context it is not difficult to see that ultimately high oil prices are to blame for increasing food prices, and not biofuels. Biofuels may result in costlier food, but the opportunity costs are: even higher food prices and generalised inflation. It is about time some major economic, agriculture and social think tanks start making this comparison.
Transport fuels are used in all economic sectors and thus have impacts not only on food prices, but on the entire economy. This is especially true for developing economies with a high 'energy intensity' (the amount of oil and energy needed to produce an amount of GDP). They suffer most. But even in highly developed economies, high oil prices drive inflation.
There are few studies analysing the effects of high oil prices on food prices, compared to the biofuels effect. A recent analysis [*.pdf] written by LEGC, an expert services firm, does give us some clues, though: it shows that high energy costs, especially those of crude oil, have a far bigger impact on retail food prices than biofuels based on food crops like corn. Note that corn ethanol is used in this study, whereas we urge for a study starting out with a comparison of all types of biofuels, including competitive and unsubsidised fuels such as sugarcane ethanol or palm oil biodiesel. This aside, the findings are important because they indicate that biofuels, by replacing costly oil, slow down the growth rate of the increase in prices for food, as measured by the Consumer Price Index. Put differently, not producing biofuels that replace costly oil, means food prices would increase even faster than they are currently doing: energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: inflation :: oil :: The argument is critical: rising oil prices have an impact not only on food prices, but on all sectors of the economy. Biofuel production on the contrary only has a relatively small impact (compared to oil's effect) on food prices, but can replace costly oil and help reduce the over-all effects of oil price related inflation in all sectors of the economy. Energy demand is as price inelastic as food demand, which means it just as important a product for consumers.
According to the study, the spike in US retail food prices is driven by rapidly growing demand, by skyrocketing oil and transportation costs, and by increased processing and packaging costs, a result of increased energy prices. The use of corn for ethanol plays a marginal role, the report finds. What is more, the study also shows that distiller’s grains, a byproduct of ethanol production and a high quality livestock feed, may help put downward pressure on food prices as livestock farmers purchase the grains instead of corn (table, click to enlarge).
The study was written by LEGC, a global expert services firm, and published by the Renewable Fuels Association (RFA) (this warrants some caution, because the RFA is known as a staunch advocate of corn based ethanol).
The purpose of the study titled, "The Relative Impact of Corn and Energy Prices in the Grocery Aisle" [*.pdf] is to examine and compare the impact on consumer food prices resulting from increases in respectively petroleum and corn prices. It found that increasing oil prices have about twice the impact on consumer food prices as equivalent increases in corn prices:
A 33 percent increase in crude oil prices – which translates into a $1.00 per gallon increase in the price of conventional regular gasoline – results in a 0.6 percent to 0.9 percent increase in the CPI for food while an equivalent increase in corn prices ($1.00 per bushel) would cause the CPI for food to increase only 0.3 percent.
The reason for the larger impact on food prices from petroleum and energy prices stems from the relative importance of energy in food production, packaging, and distribution compared to that of a single ingredient. While petroleum and energy prices affect virtually all aspects of agricultural raw material transportation, processing, and distribution of all finished consumer food products, corn prices affect only a segment of consumer foods – livestock, poultry and dairy.
Corn is an important feed ingredient for livestock and poultry producers and changes in corn prices can have significant impacts on profitability and production. However, meat, poultry, fish, eggs and dairy products account for only a fifth of the CPI for food which, in turn, is only 15 percent of the overall CPI. Crude oil and refined petroleum prices have increased sharply over the past several years and have put considerable pressure on consumers. Energy plays a significant role in the production of raw agricultural commodities, transportation and processing, and distribution of finished consumer food products. Several studies have looked at the impact of increased energy prices on food prices:
Reed, Hanson, Elitzak and Schluter utilized three different model structures to examine the impact of a doubling of crude oil prices on the CPI for food. They conclude that the short run impact of a doubling (e.g. 100 percent increase) in crude oil prices would cause a 1.82 percent rise in average food prices in the short run and 0.27 percent in the long run.
A more recent analysis published by Chinkook Lee examined the impact of energy price increases as an intermediate input for food processing and concluded that a 10 percent increase in energy prices results in a 0.2709 percent increase in the purchase (consumer) price of food and kindred products prices.
Earlier corn prices also have increased significantly over the past year as the markets have recognized the impact of increasing ethanol production on corn demand. The price of No. 2 Yellow corn at Central Illinois averaged $3.56 per bushel in May 2007, nearly 60 percent higher than yearago levels. The USDA and many private sector forecasters project ethanol production to exceed 15 billion gallons by 2017, utilizing more than 4 billion bushels of corn and maintaining corn prices well above $3.00 per bushel for most of the decade.
LEGC evaluated the impact of an increase in petroleum prices on consumer prices food prices by applying the impact elasticities summarized above to an assumed 33 percent increase in crude oil (the equivalent of a $1.00 increase in retail gasoline prices from current levels). To determine the impact of an increase in corn prices on livestock, poultry, dairy and consumer food prices the authors imposed a 33 percent increase in corn prices (about $1.00 per bushel from current levels) on the current LECG agricultural sector baseline forecast over the five year period 2007 through 2012. This is consistent with the increase in corn prices that has occurred over the past year.
The analyses by Reed and Lee indicate that a 33 percent increase in oil/energy prices would increase retail food prices by 0.6 percent and 0.9 percent. Reed indicates that a 100 percent increase in crude oil prices results in a shortterm increase of 1.82 percent in consumer food prices while Lee reports that a 10 percent increase in energy prices provides a 0.2709 percent increase in retail food prices. Restating these on an equivalent 33 percent basis (1.82 percent times .33 and 0.2709 times 3.3) provides the 0.6 to 0.9 percent range.
The equivalent 33 percent increase in corn prices over the fiveyear period is expected to reduce beef, pork, and broiler production by 2.6 percent between 2008 and 2012 and increase prices by 2.4 percent. Combined with higher turkey, egg, and dairy prices, the CPI for food is projected to increase an additional 0.3 percent. This result is consistent with the 0.2 percent contribution to food price inflation between September 2006 and April 2007 from meat, poultry, fish and dairy and the $1.15 per bushel increase in cash market corn prices.
The authors state that the days of cheap corn are more likely than not over. Livestock and poultry producers who enjoyed low and relatively stable corn (and other feed) prices over most of the past decade are now faced with the challenge of adjusting to an environment of higher feed prices. The new reality is that corn prices are likely to remain nearer to the $3.00 per bushel than the $2.00 per bushel mark for an extended period.
The good news, they write, is that prices may be more stable as corn production expands to meet ethanol requirements and new ethanol feedstocks and technologies emerge. Livestock and poultry producers also will have an incentive to increase use of the ethanol coproduct Distiller’s grains in order to control feed costs. This medium protein feed component can be used in place of corn in a substantial portion of the feed ration. As ethanol production expands, so will production of Distiller’s grains and thus putting downward pressure on prices.
Corn and energy prices both affect consumer food prices. However, since increases in corn prices are limited to a relatively small portion of the overall CPI for food, an increase in corn prices resulting from higher ethanol demand or a supply disruption such as a major drought is expected to have about half the impact of the same percentage increase in petroleum and energy prices.
Conclusion Biofuels may increase the price of food. But high oil prices increase not only the price of food much more, they also drive inflation and push prices for all goods and services up. In some developing countries, governments are already forced to spend twice the amount of money on importing oil products than on health... In short, all economic and social sectors are impacted by oil.
Let us take an example of the importance of oil in our economy. The clothes we wear are made from cotton that is grown in West-Africa. There, farmers use machinery (harvesters, irrigation equipment) that is powered by liquid fuels. Once harvested, the cotton is transported (needs oil) to ports, where it is shipped (needs oil), to Bangladesh or China, 10,000 miles away. There, the raw product is transported to, and transformed in factories (both steps need oil), and then shipped again to markets in the wealthy West (needs oil). Here, we use our cars to go to shops to buy our clothes. With our new clothes, we go out to have diner, to eat food that was produced by relying on liquid fuels. In short, in all the many steps from production to consumption, oil is required - in countless agricultural, industrial, and service sectors.
And the worst is yet to come. Just imagine what would happen (to the poorest, energy intensive economies) when oil production reaches a peak and a barrel costs US$100 or more. That would be outright disastrous for the world economy.
So it is time major economic, energy and agriculture think tanks join forces to write a clear report showing the opportunity costs of biofuels - that is, the effects of high oil prices on agriculture, industry, and society as a whole. Such a report may well show that biofuels are actually beneficial to all of us (at least when they are produced from crops that make sense and when they are not subsidised).
Such a study would not even address the benefits of biofuels on long-term agricultural production. As is well known, climate change may reduce farm output in vast parts of the world, which would obviously impact food prices tremendously; biofuels are one of the most straightforward ways to mitigate climate change. So there too, the opportunity costs of biofuels should be analysed in the context of long term agricultural production.
Canada and Brazil may join forces for the production of biofuels in Haiti, one of the top advisers of President Luiz Inacio Lula da Silva said on Wednesday. Canada's Governor General Michaelle Jean, herself born in Haiti, was in Brazil on a seven-day official visit and discussed the matter during her meeting with Silva in this capital city, international affairs adviser Marco Aurelio Garcia told reporters.
Jean and Silva also discussed ways to strengthen already existing co-operation projects in the areas of health and reforestation that the two countries have implemented in Haiti. Years of mismanagement, political instability, and economic decline have led the hilly island state to the brink of environmental collapse. Haiti is plagued by degradation on an unprecedented scale, with virtually all forest gone, and with devastating floods, heavy soil erosion and declining agricultural yields as a result (a good overview of this dramatic situation can be found in Jared Diamond's book Collapse, part three of which has a chapter on the causes of Haiti's environmental disaster.)
Biofuel crops may help to restore the damaged landscape and provide alternatives to fuel wood, the gathering of which is destroying the last remnants of Haiti's forests. Perennial plants like sugarcane and jatropha are easy to establish, require relatively few inputs, and prevent erosion. They can be integrated in existing agricultural practises and make them more sustainable (earlier post on a French company that is trying to get a biofuels industry off the ground in Haiti). Small, decentralised biofuel industries are expected to boost incomes of small farmers and reduce the economically disastrous oil dependence of the island state.
Brazil and Canada are members of the Friends of Haiti, along with the United States, France and Britain, who work towards supporting development efforts in the troubled country. Biofuels are seen as one of the levers that may to contribute to poverty alleviation efforts. But Lula's main concern is with mitigating climate change and strengthening energy security.
We want to join forces in strategic sectors. Canada has large deposits of fossil fuels and Brazil is a world reference in terms of biofuels. This means we have a special responsibility in terms of climate change and energy security. - Brazilian president Lula da Silva
The governor general reiterated Canada's desire to double trade with Brazil by 2012. Trade between the two countries hit about C$3.7 billion last year. Brazil is Canada's third largest export market in the Americas, and Jean called the country Canada's "most important trading partner in South America".
Earlier, the United States and Brazil pledged to help four poor nations in the Americas - the Dominican Republic, El Salvador, Haiti and St. Kitts - to produce biofuels. They would become the first beneficiaries of the recently signed U.S.-Brazil alternative-energy agreement, which aims to increase ethanol production in the region, as a way to stimulate sustainable economic development.
Picture: Haïti's landscape. Once covered in lush tropical rainforest - as it can still be seen in the Dominican Republic, which is part of the same island of Hispaniola - it has now changed beyond recognition. Restoration efforts are underway, but local pressures on the environment are still very high, with Haïti's people stripping the last bits of forest for energy.
Mitsui Engineering & Shipbuilding Co. annouced it will use a zeolite membrane developed by Mitsui & Co. subsidiary Bussan Nanotech Research Institute Inc. (BNRI) in dehydration systems for bioethanol plants.
Dehydration systems are used in the production of ethanol to remove water from the output. The most common method of removing water involves adding heat, but this increases energy consumption and carbon dioxide emissions.
The BNRI filter concentrates the ethanol by allowing only water to pass through the membrane, thereby helping to reduce process fuel consumption by around 10% compared to other methods. Mitsui and Mitsui Engineering will sell the systems in major ethanol producing countries such as Brazil and the US.
Zeolites materials used as absorbents, catalysts or ion exchangers. However, the large-scale production of zeolite membranes without defects had proven elusive, according to BNRI. BNRI now claims to have developed such zeolite membranes: bioenergy :: biofuels :: energy :: sustainability :: ethanol :: dehydration :: zeolite :: The membrane consists of a 3-D mesh-like structure where silicon oxide and aluminum oxide covalently share oxygen atoms. Its mesh “eyes” stack regular array of tiny pores in 3-D space. Those pores form channels at 0.4 to 0.8 nm width.
The membrane is supported on a ceramic tube. Water from the water-ethanol mix passes through the filter and into the tube. The ethanol flows out through a separate channel (schematic, click to enlarge).
Mitsui Engineering & Shipbuilding Co. is active the ethanol sector in South East Asia and Brazil. Interestingly, it earlier announced to be studying the use of cellulosic waste from oil palm plantations for the production of ethanol (previous post).
U.S. energy officials speaking at the side-lines of an US-Brazil summit in Brasilia, clearly speak out against some common misconceptions and false information on biofuels produced in the South: Brazil's ethanol production is not devastating the Amazon rain forest or hiking food prices. And there is a large potential to expand, without impacting either food or fiber supplies or forests. Dan Arvizu, director of the U.S. Department of Energy's National Renewable Energy Laboratory (NREL):
There is a huge misconception internationally that in Brazil, we're cutting down the rain forest to (make) fuels, which is not true. Done responsibly (ethanol production) does not have to (compete) with food or impact the environment
Cultivating sugar cane in the rain forest's tropical climate makes no business sense, says Gregory Manuel, International Energy Coordinator at the U.S. State Department:
Economics don't drive ethanol production in the rain forest. Yield rates in very wet environments are roughly half that in temperate environments.
Importantly, in Arvizu's assessment:
We think at least 25-30 percent of current (global) gasoline consumption could be replaced by biofuels using today's technologies without impacting food or fiber.
By the time such a large quantity is reached, second-generation conversion technologies will probably be in place allowing for a bigger share - one that remains fundamentally sustainable.
All this is of course not new. According to leading scientists who work for the International Energy Agency sugar cane based ethanol is largely environmentally sustainable (earlier post and here). The crop grows 1000 miles South of the Amazon. The scientific community knows that this is true for a whole range of other tropical and subtropical sugar and starch crops that explicitly do not grow in rainforest environments: from cassava and sorghum, to jatropha or sweet potatoes.
So why are these misconceptions still around? They are being pushed by powerful lobbies who want to protect their own interests, against biofuels produced in the South: bioenergy :: biofuels :: energy :: ethanol :: biodiesel :: biomass :: sugar cane :: Amazon :: sustainability :: lobby :: oil :: subsidies :: The 'President of the Poor', Luiz Inácio Lula da Silva, recently concluded his historic mission in Europe, where he convinced the Union of the fact that biofuels production in the South can be both sustainable and benefit the poor.
At the landmark International Conference on Biofuels, the European Union finally showed support for this vision, and signalled its intentions to import biofuels from the developing world. This idea of a global 'biopact' is what we have been working towards too. It holds the promise of a win-win strategy: biofuel production in the South can become a lever for large scale poverty alleviation, the fuels in question reduce greenhouse gases far more than those made in the temperate climes of the North, and consumers in the West will pay far less for biofuels.
EU Trade Commissioner Peter Mandelson signalled that he will not support biofuels in Europe as a way to subsidize wealthy farmers there. And the Swedish Trade Minister, Sven Tolgfors even went so far as to call for the removal of all trade barriers for imported biofuels. Indeed, Lula's work in Europe has resulted in a radical change in thinking, away from 'resource nationalism' to a vision of global solidarity, that puts biofuels on the agenda as a tool for a more equitable form of economic development.
An alliance of lobbies was not pleased to hear this vision being presented and has launched a viscious campaign to discredit biofuels from the South.
(1) Not surprisingly, European farmers and biofuel producers were furious after the Conference. They fear their huge subsidies and the protectionist barriers that make it possible for them to grow fuels, will be removed.
(2) Likewise, segments of the petroleum lobby try to discredit biofuels from the South because they pose a real threat to their business. Sub-Saharan Africa and Latin America alone can produce more biofuels than all of OPEC's output (earlier post).
(3) Strangely enough, some environmentalists and NGOs are siding with oil lobby and the subsidised EU farmers. These NGOs fear biofuels produced in the South may damage the environment, - a fair concern. But they have been spreading some questionable and simplistic information that damages their case. If implemented incorrectly, green fuels can indeed have environmental consequences. But if done right and monitored by sustainability criteria, they offer a major chance to mitigate climate change and alleviate poverty.
Some NGOs make the strategic mistake of taking Brazil as an example of how these fuels pose a threat to environment, in particular the Amazon rain forest. Or they try to play the 'food versus fuel' card in a way that makes no scientific sense: biofuels per se do not increase food prices, high oil prices do and biofuels made from crops like corn. When biofuels are sourced from the South, where they are made at a third of the costs of EU/US fuels and from non-food crops, then biofuels make food even relatively cheaper (that's a no brainer, with oil at US$75 and ethanol at US$35 per barrel).
Brazil has done its best to respond to all the criticisms, and with factual information it has convinced some key players: the scientific community, most of the trade negotiators in Europe and the U.S., and NGOs who see biofuels as a chance for massive poverty alleviation in the South. We have done our bit to get the facts out too.
But when it comes to the Amazon rainforest, it seems like there needs to be some more convincing, because some lobbies keep pushing false information and abuse this powerful symbol of biodiversity to protect their own interests (the lobbies do so at the risk of becoming irrelevant in the debate).
The simple fact is that sugarcane, from which ethanol is made in Brazil, does not grow in the Amazon.
It does not grow there for agro-technical reasons. It makes no agronomic, economic or technical sense to grow it there. The crop was introduced 450 years ago by the Portuguese, and since then, there have been no intrusions into the rainforest. In fact, sugarcane grows 1000 miles South of the forest (map, click to enlarge). There is neither a direct, nor an indirect land-use change pressure coming from the cane.
In Europe and the United States biofuel production costs far more than in Brazil and is highly subsidized. Fuels produced there would not survive in a liberalised biofuels market. The wealthy subsidised farmers know this, and want to protect their business against less costly imported biofuels. For this reason, they try to discredit tropical biofuels.
In Brasilia, the NREL chief said production growth must be monitored carefully to avoid unwanted consequences. But he added that the current global market for ethanol was still far from what could be produced sustainably.
And indeed, at the International Conference on Biofuels, it was largely agreed that sustainability criteria have to be developed for internationally traded biofuels. But such criteria should be based on facts, and not on the wishes of the oil, environmentalist, or European biofuel lobbies.
When the anti-biofuel lobbies like the oil industry and the NGOs, or the Euro-American biofuel producers who fear imports, keep spreading false information, they risk making themselves irrelevant in the sustainability debate on green fuels.
Cassava has one of the highest rates of CO2 fixation and sucrose synthesis for any C3 plant. With this in mind, researchers from Ohio State University develop transgenic cassava with starch yields up 2.6 times higher than normal plants by increasing the sink strength for carbohydrate in the crop. This means cassava makes for a 'super crop' when it comes to both CO2 fixation and carbohydrate production, i.e. sugars, the feedstock for ethanol - Plant Biotechnology Journal - Volume 4/Issue 4 - July 2006
Vietnam's Institute of Tropical Biology to invest in Jatropha research - Le courrier du Vietnam - Sept. 6, 2006
Genetic study proves humans have pushed orangutans to the brink of extinction; genetic decline coincides with establishment of oil palm plantations in Malaysia/Indonesia since the 1950/60s- Public Library of Science / Biology, Volume 4/Issue 2 - February, 2006
Synthetic Genomics and the Asiatic Centre for Genome Technology Sdn Bhd (ACGT) have created a multi-year research and development joint venture to sequence and analyze the oil palm genome. In-depth genomic analyses will be followed by subsequent studies that will analyze the oil palm’s root and leaf microbial communities, to identify biomarkers and metabolic pathways that affect the plant's growth and viability. Biopact - July, 2007
Researchers at the International Institute for the Semi-Arid Tropics have developed a sweet sorghum for the production of ethanol. The new variety has a very high sugar content in its root. Average yields in trial fields in the Philippines were between 95 to 125 tons, considerably higher than those of sugarcane - ICRISAT - Feb. 28, 2007
Sokoine University of Agriculture, Tanzania, develops sorghum and millet processing technologies suitable for local conditions in effort to empower small farmers - IPP Media - Sept. 6, 2006
South Africa blocks GM Sorghum project for fears over contamination of local wild sorghums - Kruger Park - Aug. 26, 2006
Brazilian authorities have given their fiat for field trials with genetically modified sugar cane plants. The Centro de Tecnologia Canavieira (Cane Technology Center - CTC) will test three genetically modified varieties that are expected to yield 15% more sugar - GMO Compass
The International Eucalyptus Genome Consortium's sequencing effort has been taken up as a project under the U.S. Dept. of Energy's Joint Genome Project for the year 2008. - Biopact June 12, 2007
Brazilian state of Acre intends to make cattle ranchers reforest land which they have cleared for grazing. The sustainable forestry policy is based on replanting economic tree crops such as mahogany, acai, Brazil nut and palms - BBCNews Sept. 27, 2006
Illegal deforestation of acacia for charcoal is becoming a serious problem in Kenya's Naivasha area. Nobel Peace Prize laureate Wangari Maathai's Green Belt Movement re-afforests with acacia but needs more support to win fight against illegal loggers - Kenya Times Sept. 5, 2006
Australian scientists are conducting a 'time-machine' experiment to see how eucalyptus trees cope with increased levels of CO2 and global warming. - University of Western Sydney Aug. 28, 2006
Bamboo planting can slow deforestation, scientists from the International Center for Research in Agroforestry in Nairobi, Kenya, say. Bamboo rapidly becoming economically beneficial crop with large potential for energy, bioremediation, and afforestation - Chosun (S.Korea) Aug. 30, 2006
"The beauty of miscanthus is that you only have to sow it once...Because of the way it grows, there is no need for fertilisers or chemicals", an English entrepreneur talks about his experience with Miscanthus as an energy crop - Grantham Today Aug. 8, 2006