Austrian bioenergy group Cycleenergy acquired controlling interest in Greenpower Projektentwicklungs GmbH, expanding its biomass operational portfolio by 16 MW to a total of 22 MW. In the transaction Cycleenergy took over 51% of the company and thereby formed a joint venture with Porr Infrastruktur GmbH, a subsidiary of Austrian construction company Porr AG. Greenpower operates two wood chip CHP facilities in Upper and Lower Austria, each with an electric capacity of 2 MW. The plants have been in operation since the middle of last year and consume more than 30,000 tonnes of wood chips and are expected to generate over €5 million in additional revenue.
Cycleenergy - February 6, 2007.
The 2008 edition of Bioenergy World Europe will take place in Verona, Italy, from 7 to 10 February. Gathering a broad range of international exhibitors covering gaseous, liquid and solid bioenergy, the event aims to offer participants the possibility of developing their business through meetings with professionals, thematic study tours and an international forum focusing on market and regulatory issues, as well as industry expertise.
Bioenergy World Europe - February 5, 2007.
The World GTL Summit will take place between 12 – 14th May 2008 in London. Key topics to be discussed include: the true value of Gas-to-Liquids (GTL) projects, well-to-wheels analyses of the GTL value chain; construction, logistics and procurement challenges; the future for small-scale Fischer-Tropsch (FT) projects; Technology, economics, politics and logistics of Coal-to-Liquids (CTL); latest Biomass-to-Liquids (BTL) commercialisation initiatives.
CWC Exhibitions - February 4, 2007.
The 4th Annual Brussels Climate Change Conference is announced for 26 - 27 February 2008. This joint CEPS/Epsilon conference will explore the key issues for a post-Kyoto agreement on climate change. The conference focuses on EU and global issues relating to global warming, and in particular looks at the following issues: - Post-2012 after Bali and before the Hokkaido G8 summit; Progress of EU integrated energy and climate package, burden-sharing renewables and technology; EU Emissions Trading Review with a focus on investment; Transport
Climatepolicy.eu - January 28, 2007.
Japan's Marubeni Corp. plans to begin importing a bioethanol compound from Brazil for use in biogasoline sold by petroleum wholesalers in Japan. The trading firm will import ETBE, which is synthesized from petroleum products and ethanol derived from sugar cane. The compound will be purchased from Brazilian petrochemical company Companhia Petroquimica do Sul and in February, Marubeni will supply 6,500 kilolitres of the ETBE, worth around US$7 million, to a biogasoline group made up of petroleum wholesalers. Wholesalers have been introducing biofuels since last April by mixing 7 per cent ETBE into gasoline. Plans call for 840 million liters of ETBE to be procured annually from domestic and foreign suppliers by 2010.
Trading Markets - January 24, 2007.
Toyota Tsusho Corp., Ohta Oil Mill Co. and Toyota Chemical Engineering Co., say it and two other firms have jointly developed a technology to produce biodiesel fuel at lower cost. Biodiesel is made by blending methanol into plant-derived oil. The new technology requires smaller amounts of methanol and alkali catalysts than conventional technologies. In addition, the new technology makes water removal facilities unnecessary.
JCN Network - January 22, 2007.
Finland's Metso Paper and SWISS COMBI - W. Kunz dryTec A.G. have entered a licence agreement for the SWISS COMBI belt dryer KUVO, which allows biomass to be dried in a low temperature environment and at high capacity, both for pulp & paper and bioenergy applications.
Kauppalehti - January 22, 2007.
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.
Microscopic particles of plastic debris that litter marine environments may pose a previously unrecognized threat to marine animals by attracting, holding, and transporting water pollutants, a new study by British researchers is reporting. The findings are scheduled for the November 15 issue of the American Chemical Society's Environmental Science & Technology journal, but are available already as an open access article.
Earlier, scientists warned for the damage done to marine environments by larger particles from petroleum based plastics - socalled 'mermaid's tears' - which invade the marine food chain and poison our seas. This has prompted the development of bioplastics that rapidly degrade in seawater (previous post).
The new research is focused on yet another type of petroleum based plastics. Emma L. Teuten and colleagues note long-standing awareness that large pieces of plastic waste, including cargo wrapping sheet plastic and six-pack rings, can sicken and kill fish, birds, turtles and other animals. Seawater eventually breaks down these large pieces into microplastics (image, click to enlarge), which can adsorb high levels of PCBs and other toxins. Microplastics also enter the environment directly from use as "scrubbers" in household and industrial cleaning products. However, little research has been done on the environmental impact of these tiny, pollution-packed pellets.
In the new study, researchers exposed several different types and sizes of microplastics to phenanthrene, a major marine pollutant, and used a model to predict their effects on a group of sediment-dwelling marine worms (lugworms). The scientists found that addition of just a few millionths of a gram of contaminated microplastics to the sediments caused an 80% increase in phenanthrene accumulation in the tissues of the worms: energy :: sustainability :: biomass :: bioenergy :: petroleum :: plastics :: marine :: oceans :: bioplastics :: biodegradable :: bioeconomy :: Since lugworms are at the base of the food chain, phenanthrene from microplastics would be passed on and biomagnified in other marine animals. The finding suggests that microplastics are an important agent in the transport of pollutants in marine organisms.
Many plastics are less dense than water and float at the sea-surface microlayer where hydrophobic compounds can be concentrated by up to 500 times that of the underlying water column. Buoyant plastics can be transported across oceans to remote locations; thus, plastics may provide a mechanism for transport of hydrophobic chemical contaminants to remote and pristine locations. Upon fouling, these plastics can sink, transporting any sorbed contaminants to the sediment. Given the rapid rate at which plastic debris is accumulating in the environment, plastics could therefore become important in contaminant transport at a global scale, they conclude.
Petroleum based plastics can take decades or even hundreds of years to degrade fully. A transition towards biobased plastics that degrade over a matter of weeks or months, would obviously be a major strategy to prevent the further poisoning of our oceans and the creatures that inhabit it.
Picture: Submicroscopic particles of PVC (shown via electron microscope) and other plastics may pose a previously unrecognized pollution threat. Credit: Courtesy of Emma Teuten, University of Plymouth, UK
Imagine this. The year is 2015. An innovative automaker has teamed up with a novel type of energy company - a negative emissions producer. They make the amazing claim that by buying their efficient car and using their particular type of energy, you will be fighting climate change each time you drive the vehicle. You will not merely be "reducing" your carbon emissions (which is old world language). Instead you will in fact be taking carbon emissions from the past out of the atmosphere. You will be cleaning up old gas guzzlers' emissions. You will be taking CO2 from the 1980s away. By driving, you will be saving the planet. And the more you drive, the more you prevent catastrophic climate change.
The companies make another amazing claim: they say the EU's widely hailed efforts to reduce carbon emissions from cars from the present 160 grams per kilometer to 120 g/km are complete nonsense - an incredibly mediocre proposal. Because with their car and energy, you will be reducing carbon emissions by -30 grams per kilometer. Yes, minus 30 grams. Not 120, not zero, but -30.
Finally, they say leading scientists have calculated that when all of us were to do the effort of driving this car with carbon-negative energy and if we replace all other fossil fuels (coal, natural gas), with negative emissions energy, we can bring atmospheric CO2 levels back to pre-industrial levels by mid-century and thus prevent the destruction of life on the planet by global warming.
After hearing the news from the companies, climate campaigners began protesting at wind, solar and nuclear power plants which supply carbon-neutral electricity used by supposedly climate saving electric cars which had begun appearing on the market. Why are they protesting? They explain their anger:
We protest against the use of these old world renewables because they are carbon-neutral. These technologies are not ethical. People should stop using them because there are carbon-negative alternatives available that take historic emissons away. We cannot use carbon-neutral technologies because the window to fight climate change has long closed. All money must now be invested into negative emissions technologies, not in old-school solar and wind, let alone in dangerous nuclear. All those who refuse to invest in negative emissions energy are commiting a crime against the planet! - climate campaigners in 2015
Welcome to the bizarre, mildly surreal world of carbon-negative bioenergy. The public at large is not familiar with the concept yet. Anyone who claims that there will be a time when the more we drive our cars, the more we mitigate climate change, will be called outright crazy. Moreover, if the claim is correct it would mean the end of the climate change 'industry' and of global warming panic. This is clearly a threat to those who have an interest in keeping this panic alive without offering practical solutions. It is also a threat to the nuclear lobby and to some renewables lobbies who are offering mere 'carbon-neutral' energy. Understandably, for this reason, the concept is being ignored by these sectors, by governments and by mainstream media. The idea is too revolutionary.
However, it is only a matter of time before the amazing future of negative emissions energy becomes a reality. When people become aware of the implications of the concept, they will demand its immediate implementation.
But how does this concept work exactly? It is easy to understand: energy :: sustainability :: biomass :: bioenergy :: energy crops :: carbon balance :: carbon capture and storage :: negative emissons :: climate change :: global warming :: future :: When we grow biomass (trees, grasses), CO2 is taken out of the atmosphere. The plants use it as a fuel for their own growth. When these energy crops are then burned in a power plant or burned as biofuels in a combustion engine, CO2 is released back into the atmosphere. This is a 'carbon-neutral' cycle: you do not add new carbon dioxide to the atmosphere. But now comes the trick. When you capture the CO2 from the biomass power plant or the biofuel facility before it enters the atmosphere, and then sequester the greenhouse gas in geological formations such as depleted oil & gas fields, or saline acquifers, you obtain carbon-negative fuels and energy. Negative emissions energy can only be obtained from biomass (schematic, click to enlarge).
In this concept, called 'bio-energy with carbon storage' (BECS), energy crops act like 'carbon capturing' machines. BECS systems can result in negative emissions electricity (which can power future electric vehicles), or in negative emissions liquid and gaseous fuels (Fischer-Tropsch fuels, biohydrogen) for use in combustion engines and fuel cells.
Now each time you were to drive a car that taps such carbon-negative energy, something very strange happens. In the old world (today's world), you would have taken pride in "reducing" your carbon footprint. You thought you were doing a great thing by buying a hybrid that results in fewer emissions, but still adds greenhouse gas emissions. In the new world, you will only be content when you have taken emissions from the past - from the year 2000, from 1990, from 1980 - out of the atmosphere.
Where will the biomass for BECS come from? From any source: from grasses, from wood, from new energy crops that store more carbon-dioxide as they grow. The explicitly sustainable potential for biomass production is very high: IEA Bioenergy scientists have estimated it to be over 1300 Exajoules by 2050.
If we were to exploit this potential in a rational manner, we will be entering an entirely new, strange energy age, that of negative emissions. All the technologies and market mechanisms needed to make this happen are gradually coming together: efficient carbon capture techniques; highly productive non-food energy crops that require low amounts of inputs, yield high amounts of biomass and take more CO2 out of the atmosphere than older varieties; a carbon market; and a growing awareness of the fact that our time to mitigate climate change is up.
In practise, BECS can be coupled to 'intermittent' renewables like solar and wind power. Carbon-negative biomass power plants will deliver base load and peak load power to solar and wind farms. Nobody could any longer claim that wind power or solar actually increase the use of coal needed to deliver the base-load. A robust hybrid energy model will emerge - entirely clean, with a negative carbon balance.
Moreover, BECS allows for decentralised production: by identifying carbon storage sites that are located far away from populations, and by growing biomass nearby, liquid carbon-negative fuels can be produced and then shipped to markets. By decentralising the projects, the risk for CO2 leaks that would affect populations, is eliminated.
Another advantage of BECS over carbon capture from fossil fuels: leakage of sequestered CO2 originating from biomass would not be catastrophic, because, contrary to CO2 escaping from fossil fuel carbon storage projects, the CO2 that would enter the atmosphere does not add to the original CO2 levels.
Everyone who takes climate change seriously can only encourage the transition towards carbon-negative bioenergy. It allows us to drive our cars, buses and trucks guilt-free. It allows us to travel on airplanes guilt-free. It allows us to ship goods in a guilt free manner. In fact, it puts us before an entirely new, strange logic: the more we drive our cars with carbon-negative bioenergy, the more we tackle climate change; the more we prevent the extinction of thousands of species; the more we prevent the potentially catastrophic effects of global warming.
But we are aware of the fact that in order to make this amazing future a reality, a lot of courage and work is needed from all stakeholders: governments, energy companies, farmers and poor rural communities in the developing world, environmentalists and civil society, consumers in the West and the best geologists, plant biologists and engineers of this world.
Biopact is currently writing an introductory leaflet explaining the revolutionary BECS-concept and its bright green future more in depth. Anyone who will read it will be, we think, amazed at what it really implies. The concept deserves more attention. It is our best shot at preventing catastrophic climate change.
A US$ 30 million ethanol plant will be put up next year by independent oil player Eastern Petroleum and a Chinese partner in Sarangani province (→Flash Earth) in south-central Mindanao. Fernando Martinez, president of Eastern Petroleum, said the multi-million dollar ethanol plant would be a joint venture between his company and China's Guangxi Estates.
The ethanol plant with construction expected to take place in the last quarter of 2008 and to be completed in 2009 will have a capacity of 150,000-200,000 metric tonnes per year (520,000 to 690,000 liters per day / 137,400 to 182,300 gallons US per day). The primary feedstock will be cassava.
At present, Martinez said the partners have already developed a 2,000 hectare cassava plantation in Sarangani province and they were encouraging other countries in the East Asian Growth Area (EAGA) to do the same.
We have to encourage other countries in EAGA particularly Indonesia and Cambodia [because these] are places where we can grow and expand, because if the locals are not fast in acting then we might as well go there. - Fernando Martinez, president of Eastern Petroleum
Cassava is a low-input tuber crop that thrives in poor soils. In Asia it is mainly used for the production of industrial starch even though it also remains a major staple food. When converted into ethanol, a fuel with a relatively strong energy balance can be obtained (previous post).
Experts from leading agricultural organisations, like the Cassava Office for Asia of the International Center for Tropical Agriculture (CIAT), think the crop offers a major opportunity for poor farmers to prosper as a 'Green Cassava Revolution' is currently sweeping most Southeast Asian countries. With a combined effort from the science and policy community, cassava can bring a rural renaissance and benefit the poorest (previous post).
The Philippines, which has a large cassava potential, has been listed by Ernst & Young as one of the most attractive developing countries for investments in first generation biofuels (see Q1 report and Q2 report). Its geographical location at the center of the rapidly growing South East and East Asian region, its biofuels legislation and incentives, and its relative abundance of natural resources are key factors determining this attractiveness.
The Philippines' biofuels sector got a fresh impetus earlier this year after President Gloria Macapagal Arroyo passed the much-awaited Biofuels Act. The new act mandates minimum 1% biodiesel blending into all diesel from May this year and minimum 2% biodiesel blending from mid-2009. It calls for minimum 5% ethanol blending in gasoline from mid-2009, rising to 10% from around mid-2011. The Act also set up mechanisms to encourage investments in the local biofuels industry: sustainability :: energy :: ethanol :: biodiesel ::biomass :: bioenergy :: biofuels :: cassava :: Philippines :: Currently, the mandate for ethanol translates into the need for 60 million liters today and 300 million liters of ethanol from 2009 onwards. "So we will just need filling around 20-percent or less of the market. We have to put it there, everything including the ethanol plant. It does not make sense that we just import the feedstock," Martinez said. He added they expected the US$ 30 million ethanol plant to be commercially operational in the first quarter of 2010.
The biofuels act provides incentives for the production, distribution and use of locally-produced biofuels, such as specific tax and value added tax exemptions and financial assistance from government financial institutions.
Because of this, the Philippines have attracted major investments. Earlier, PNOC-Alternative Fuels Corp, the alternative fuels subsidiary of state-owned Philippine National Oil Co., signed a memorandum of understanding with UK-based Natural Resources Group Chemical Engineering under which the latter will pump $1.3 billion into the Philippines' biofuels sector.
The companies are looking at building a 3.5 million mt/year biodiesel and a 350,000 mt/year ethanol plant in the country and will also invest in jatropha plantations (earlier post). PNOC-AFC also signed an agreement with South Korea's Samsung in September 2006 to set up an integrated jatropha plantation and biofuels project.
US firm E-Cane Fuel Corp. announced it will invest €111/US$150 million to put up a fully integrated ethanol processing facility in Central Luzon, with sugarcane as the main feedstock (previous post).
Japan's Marubeni has also announced plans to set up five ethanol plants in the Philippines and local firm San Carlos Bioenergy is already building a 120,000 liters/day ethanol plant in the country.
The Philippine Department of Agriculture also sealed an agreement with India-based bioenergy company Praj Industries to help develop the country's nascent biofuels industry. Under a Memorandum of Understanding both parties will team up for feedstock development and setting up biofuel production plants (more here).
According to the Philippine Coconut Authority (PCA) Japanese firm Toyo Engineering Corp. recently announced it is about to complete a feasibility study on an integrated coco methyl-ester (CME) manufacturing plant that it plans to put up in the Philippines' northern region of Ilocos. It is further looking at 600,000 hectares of coconut plantation (earlier post).
Existing coco-biodiesel production capacity in the country is 140 million liters/year from two major companies alone - Chemrez and Senbel Fine Chemicals. At least 10 other smaller producers are said to have registered with the DOE for accreditation.
Finally, Brazil has agreed to intensify cooperation in energy security, particularly in the development and use of biofuels, with the Philippines. The countries agreed to boost cooperation in the development and use of ethanol, biodiesel and biomass energy (more here).
Crude palm oil futures contracts traded on the Malaysian derivatives exchange extended their record run after crude oil prices hit new highs in Asian trading today. According to Ben Santoso, DBS Vickers' plantation analyst in Indonesia, palm oil demand will outpace supply as rising oil prices will further spark interest in biofuels. Palm oil can be transesterified into biodiesel or used as a feedstock for next generation 'green diesel' (see NExBTL and palm oil). Over the longer term, its vaste waste biomass streams can be converted into cellulosic biofuels.
At midday, the benchmark contract for January delivery was up 70 ringgit at 2,870 ringgit (€597/$859) per metric ton. New York's main futures contract, light sweet crude for December delivery surged past $93 per barrel on mounting tensions in the Middle East.
The record prices are good news for the millions of small holders who grow the crop in South East Asia. But palm oil is also a basic foodstuff for the poor across the world, who spend most of their small budgets on food, including a large fraction on vegetable oils necessary to a healthy diet. For them, the surge is disastrous. However, a long term solution might be to expand the sector into regions where most of these poor live - that is rural Africa - and to have them actively participate in this booming market as small holders. This is more sensible than keeping them dependent on food hand outs from the World Food Program. However, it is only a long term ideal and doesn't tackle the current crisis. A temporary moratorium on palm oil's use for biofuels might be in order.
But there is more to the high price than the potential for biofuels alone. "Adverse weather, limitation of cultivated land as well as persistently high crude oil prices are issues which will be reflected in stronger prices", Santoso added. Malaysia and Indonesia together account for more than 85 percent of global palm oil production but both countries are expected to lower palm oil output this year after major palm oil-producing areas were hit by severe flooding early this year.
Besides these factors, demand for palm oil, especially from booming economies like China and India, is surging. The combination of all these factors - limited land in SE Asia, continuing high demand from rapidly developing economies, and the potential for biofuels - makes that the most effective long term strategy to reduce the price and to limit the damage to the poor, could be an expansion of the sector into Africa and Latin America, especially in zones where most of the world's 854 food insecure people live (that is in rural Africa). This would bring social and economic development and jobs to these rural poor, provided a small holder model is implemented. Their participation in a sustainable new market might be a more attractive solution to poverty alleviation, than keeping them dependent on food hand outs by the World Food Program.
Both Africa and Latin America have a very large unexplored potential for the cultivation of the crop (map, click to enlarge): energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: palm oil :: crude oil :: Malaysia :: The combination of a healthy long term demand outlook and the double use of palm oil as food and fuel, makes the world's most productive first generation biofuel crop virtually irresistible for investors. However, persistent high prices may initiate a 'gold-rush' type of investment into the sector, which could damage the sustainability of the crop.
Earlier, a Chinese company announced it is studying an investment of not less than $1 billion into a 3 million hectare palm oil and rubber plantation in the Democratic Republic of Congo - a highly problematic announcement given Congo's pristine rainforests which have been spared most of the palm oil driven destruction seen in Indonesia and Malaysia. Besides half a million barrels of oil equivalent energy, the Chinese project would bring 'a hundred thousand jobs' (previous post).
Soon after, Beijing officially announced a $5 billion investment into Congo's natural resource sector and into its infrastructures, to the surprise of institutions like the World Bank (earlier post).
New palm oil varieties, amongst them a cold-tolerant cultivar that has been trialed with success in the highlands of Kenya, offer major opportunities for social and economic development elsewhere in Africa than in the typical high potential zones. The crop requires relatively low inputs and upfront investments, and is highly suitable for a small holder model. As it is harvested manually and a perennial crop, there is no need for expensive farm equipment - which is often a major bottleneck in attempts to have small farmers participate in other crop markets.
The average price of crude palm oil for 2007 is estimated at 2,450 ringgit (€510/$734) before it accelerates to 2,650 ringgit (€551/$794) next year, added a market analyst.
Rising oil prices are a bigger threat to the world economy than climate change in the next 10 years - that was the surprising verdict of company executives from carbon trading, fuel cell, oil exploration and renewables firms who attended the Reuters Smaller Companies Forum. But climate change is likely to have a greater effect on the global economy over a 50-year timespan, according to those executives from old and new energy companies.
The experts did not comment specifically on the situation in the poorest countries, but there high oil prices are already a real disaster: according to the UN, some of the least developed countries (LDCs) are now forced to spend six times as much on oil than on health care. This obviously has major effects on the lives of millions of poor people.
According to the African Development Bank, for the wealthiest countries (non-oil producing OECD), oil imports make up less than 2% of GDP, whereas for African oil importing nations this was more than 10% of GDP in 2006. In poor oil importing countries, oil price rises of the current magnitude imply a significant reduction of economic growth rates, an erosion of trade balances, the destruction of progress in debt relief, a hike in inflation rates, higher unemployment and deeper poverty for the weakest (earlier post). Of the 47 poorest countries, 38 are net importers of oil, and 25 are fully dependent on imports (more here).
Biofuels are the only immediate alternative to liquid petroleum fuels and products which are so crucial to nearly all processes of an economy (from food production to trade, from mobility to the production of pharmaceuticals). No wonder developing countries want to invest in them: they offer the only strategy to stave off a societal catastrophe. The FAO's chief recently warned increased commodity and energy prices could cause political upheaval in developing countries. India's finance minister echoed the concerns calling high oil prices 'outrageous' and warning that they could significantly damage economic growth.
Over the longer term, a transition away from oil towards electricity would be a major step forward because it would allow for the efficient use of a broad spectrum of renewables, including radically carbon-negative bio-electricity. But it will take decades before electric vehicles and trucks penetrate the market in any significant way. For some transport sectors like aviation and shipping, there is virtually no alternative to liquid fuels.
Oil prices have quadrupled since 2002, and there seems to be no stopping the upward trend. The Reuters Smaller Companies Forum comes at the time when a new study [*.pdf] by Dr Robert L. Hirsh, senior Energy Program Advisor at the Science Applications International Corporation (SAIC) demonstrates the economy-destroying effects of peak oil. His conclusion is that economic growth will decline at a similar rate as oil output, that is, by 2 to 5 percent per year. There is a strict correlation between economic growth and oil supply (graph, click to enlarge). It is unclear whether we have actually reached the peak, but more and more analysts are beginning to suspect that this could be the case.
Recently, the world's leading scientific energy experts from 15 of the world's Academies of Science warned in a major report that the energy crisis is one of the major challenges facing humanity this century. They called for immediate action, especially in the developing world and amongst the poorest (that is, rural and remote populations) (previous post).
The finance director of carbon cutting project developer EcoSecurities told the Forum:
In a short-term scenario it is hard to say climate change is going to be a differentiating factor. If oil prices quadruple it is probably more of a challenge to the economy than climate change. - Jack MacDonald
But he added high oil prices would force businesses to tackle climate change earlier, as it is a greater problem in the longer term. Carbon-negative biofuels and bioenergy (schematic, click to enlarge) offer the advantage of reducing greenhouse gases in a far bigger and more affordable way than all other alternatives, which are carbon-neutral at best (more on negative emissions energy here and recent projects in 'bio-energy with carbon storage', here and here). So in theory, they can prevent two catastrophes: the peak oil disaster and the climate crisis: energy :: sustainability :: biomass :: bioenergy :: biofuels :: oil :: petroleum :: climate change :: peak oil :: Peter Bance, chief executive of fuel cell domestic boiler maker Ceres Power, whose fuel cell systems run on biofuels, said the world can cope with both pressures in the short term, but there were signs that natural catastrophes were already forcing a radical rethink.
Hurricane Katrina woke people in the U.S. up in a very big way, even though it was not necessarily 100 percent linked to climate change. Droughts and flooding are a much bigger long-term driver (of people's behaviour) than the oil price.
Dr Peter Finnegan, finance director of solar wafer maker PV Crystalox Solar Plc, said oil was a far more obvious threat to the economy than climate change over the next 10 years.
High oil prices have a direct cost implication in terms of industrial output.
However Eugene Whyms, Finance Director of oil and gas explorer EnCore Oil, said he did not think either issue was of much concern:
The threat from climate change -- I'm not sure what that is, apart from panic and extra taxes in case we all go under water," Whyms said, adding that the climate has always changed. And the oil price has doubled in the past few years, without any major consequences.
Note, Whyms, like many in the oil industry are not really concerned about the destructive effects of even marginal increases in oil prices for the developing world. In LDCs, oil imports constitute a major strain on the treasuries of governments and on the energy intensive economy.
The fight to tap oil fields in Alaska, the Arctic and Antarctic will be the key battleground between climate change campaigners and old, fossil-fuel based, energy firms, Whyms added. "The battle will probably come to a head on something emotive, like spoiling Antarctica," he said.
Asked whether those areas should be drilled, he said:
It would be very expensive and I don't think there is a big imbalance between oil supply and demand. I think the price has partly been pushed up by a lot of traders and speculators.
But the energy experts who warn for peak oil are far more concerned and think the petroleum industry is trying to blame high prices on speculation instead of on the real reason: a peaking of production. An oil company can never publicly admit it has hit its peak, because that would mean its immediate collapse.
Researchers at the Taiwan Forestry Research Institute (TFRI) and North Carolina State University in the U.S. have developed genetically modified Eucalyptus trees that store far more carbon dioxide and contain less lignin. - Biopact Sept. 17, 2007
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
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
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