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    Taiwan's Feng Chia University has succeeded in boosting the production of hydrogen from biomass to 15 liters per hour, one of the world's highest biohydrogen production rates, a researcher at the university said Friday. The research team managed to produce hydrogen and carbon dioxide (which can be captured and stored) from the fermentation of different strains of anaerobes in a sugar cane-based liquefied mixture. The highest yield was obtained by the Clostridium bacterium. Taiwan News - November 14, 2008.


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Saturday, November 10, 2007

Researchers successfully simulate and boost photosynthesis

In a major breakthrough in plant biology, scientists have succeeded in boosting the photosynthetic efficiency of plants. With new insights, researchers from the University of Illinois built a better plant, one that produces more leaves and fruit without needing extra fertilizer. They accomplished the feat using a computer model that mimics the process of evolution. It is the first model ever to simulate every single step of the photosynthetic process.

The research findings appear in an open access article in Plant Physiology, and will be presented today at the BIO-Asia 2007 Conference in Bangkok, Thailand. The leading researcher, Steve Long, is the deputy director of the Energy Biosciences Institute (EBI) and an affiliate of the Institute for Genomic Biology and the National Center for Supercomputing Applications (NCSA). The EBI is a bioenergy and biofuels research consortium of universities, which recently won $500 million in funding from BP.

The breakthrough has obvious consequences for the future of bioenergy. In a study on the global potential for biomass exports, IEA Bioenergy Task 40 researchers found that the planet can sustain a production of maximum 1300 Exajoules worth of bioenergy by 2050 in an explicitly sustainable way. That is, after meeting all the food, fiber and fodder needs of growing populations and without further deforestation. However, they purposely left advances in plant science out of the equation because they cannot be predicted. The authors referred to the unparalleled possibilities of biotechnology to improve energy crops further: the photosynthetic efficiency of most crops presently is only 0.4%, while the theoretical efficiency is 4.5%. Room for higher productivity is enormous, they state, and the bioenergy potential could thus be substantially higher in the future. It is within this context that the new findings make sense.

Photosynthesis converts light energy into chemical energy in plants, algae, phytoplankton and some species of bacteria and archaea. Photosynthesis in plants involves an elaborate array of chemical reactions requiring dozens of protein enzymes and other chemical components. Most photosynthesis occurs in a plant’s leaves.

Principal investigator Long, who is also a professor of plant biology and crop sciences at the University of Illinois, and collegues asked the following question:
The distribution of resources between enzymes of photosynthetic carbon metabolism might be assumed to have been optimized by natural selection. However, natural selection for survival and fecundity does not necessarily select for maximal photosynthetic productivity. Further, the concentration of a key substrate, atmospheric CO2, has changed more over the past 100 years than the past 25 million years, with the likelihood that natural selection has had inadequate time to reoptimize resource partitioning for this change. Could photosynthetic rate be increased by altered partitioning of resources among the enzymes of carbon metabolism?
It wasn’t feasible to tackle this question with experiments on actual plants. With more than 100 proteins involved in photosynthesis, testing one protein at a time would require an enormous investment of time and money. Therefor they started simulating, and now that they have the photosynthetic process ‘in silico,’ they can test all possible permutations on the supercomputer.

The researchers first had to build a reliable model of photosynthesis, one that would accurately mimic the photosynthetic response to changes in the environment. This formidable task relied on the computational resources available at the NCSA.

Xin-Guang Zhu, a research scientist at the center and in plant biology, worked with Long and Eric de Sturler, formerly a specialist in computational mathematics in computer sciences at Illinois, to realize this model.

After determining the relative abundance of each of the proteins involved in photosynthesis, the researchers created a series of linked differential equations, each mimicking a single photosynthetic step. The team tested and adjusted the model until it successfully predicted the outcome of experiments conducted on real leaves, including their dynamic response to environmental variation. The researchers then programmed the model to randomly alter levels of individual enzymes in the photosynthetic process:
:: :: :: :: :: :: :: :: :: :: :: ::

Before a crop plant, like wheat, produces grain, most of the nitrogen it takes in goes into the photosynthetic proteins of its leaves. Knowing that it was undesirable to add more nitrogen to the plants the researchers asked a simple question: can we do a better job than the plant in the way this fixed amount of nitrogen is invested in the different photosynthetic proteins?

Using 'evolutionary algorithms', which mimic evolution by selecting for desirable traits, the model hunted for enzymes that – if increased – would enhance plant productivity. If higher concentrations of an enzyme relative to others improved photosynthetic efficiency, the model used the results of that experiment as a parent for the next generation of tests.

This process identified several proteins that could, if present in higher concentrations relative to others, greatly enhance the productivity of the plant. The new findings are consistent with results from other researchers, who found that increases in one of these proteins in transgenic plants increased productivity.

By rearranging the investment of nitrogen, they could almost double efficiency.

An obvious question that stems from the research is why plant productivity can be increased so much. Why haven’t plants already evolved to be as efficient as possible?

According to Long, the answer may lie in the fact that evolution selects for survival and fecundity, while the scientists were selecting for increased productivity. The changes suggested in the model might undermine the survival of a plant living in the wild, but the researchers' analyses suggest they will be viable in the farmer’s field.


The research was sponsored by the National Science Foundation.

The Energy Biosciences Institute (EBI) is a new research and development organization that will bring advanced knowledge in biology, physical sciences, engineering, and environmental and social sciences to bear on problems related to global energy production, particularly the development of next-generation, carbon-neutral transportation fuels.

EBI represents a collaboration between the University of California, Berkeley, Lawrence Berkeley National Laboratory, the University of Illinois at Urbana-Champaign, and BP, which will support the Institute with a 10-year $500 million grant. EBI's multidisciplinary teams will collectively explore total-system approaches to problems that include the sustainable production of cellulosic biofuels, enhanced biological carbon sequestration, bioprocessing of fossil fuels and biologically-enhanced petroleum recovery.

EBI will educate a new generation of students in all areas of bioenergy, and will serve as a model for large-scale academic-industry collaborations. By partnering with a major energy company, EBI will facilitate and accelerate the translation of basic science and engineering research to improved products and processes for meeting the world's energy needs in the 21st century.

The Institute for Genomic Biology at the University of Illinois at Urbana-Champaign was established in 2003 to advance life science research and stimulate bio-economic development in the state of Illinois. It houses up to 400 researchers in three broad Program Areas: Systems Biology, Cellular and Metabolic Engineering and Genome Technology.

Picture (click to enlarge): In a computer model, researchers at Illinois were able to simulate the photosynthetic behavior of actual leaves. Here, a gas exchange system measures the rate of carbon dioxide and electron transport in intact leaves. Credit: Don Hamerman.

References:
Xin-Guang Zhu, Eric de Sturler and Stephen P. Long, "Optimizing the Distribution of Resources between Enzymes of Carbon Metabolism Can Dramatically Increase Photosynthetic Rate: A Numerical Simulation Using an Evolutionary Algorithm", Plant Physiology, 145:513-526 (2007).

University of Illinois at Urbana-Champaign: "Researchers successfully simulate photosynthesis and design a better leaf" - November 9, 2007.

IEA Bioenerggy Task 40: Edward Smeets, André Faaij,Iris Lewandowski, "A quickscan of global bio-energy potentials to 2050 An analysis of the regional availability of biomass resources for export in relation to the underlying factors" [*.pdf], Copernicus Institute - Department of Science, Technology and Society, Utrecht University, March 2004.



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Friday, November 09, 2007

International maritime body rejects risky ocean geoengineering

In a shot across the bows of ocean geoengineering companies, the London Convention - the International Maritime Organization (IMO) body that oversees dumping of wastes at sea - today unanimously endorsed a scientific statement of concern on ocean fertilisation and declared its intention to develop international regulations to oversee the controversial activities. It further advised states that such large-scale schemes are "currently not justified".
We applaud the London Convention for addressing a major gap in global governance. The Parties meeting here this week confirmed that large-scale ocean fertilization schemes are not scientifically justified and they urged governments to exercise utmost caution when considering such proposals. - David Santillo, Greenpeace International’s Science Unit
Geoengineering refers to intentional large-scale manipulation of land, ocean or atmosphere in an attempt to ‘fix’ climate change. The governments meeting at the London Convention were confronted with a rash of private ‘carbon trading’ schemes that claim to sequester greenhouse gases by dumping large quantities of iron, urea or other additives into the sea. These techniques, known collectively as 'ocean fertilisation', claim to draw climate change gases out of the atmosphere by prompting growth of plankton. The geoengineers seek to win ‘carbon credits’ as a financial reward for these activities – despite the fact that international scientific bodies have warned of potentially devastating ecological consequences for marine ecoystems (previous post).

Moreover, recently a 47 strong research team of leading oceanographers and biogeochemists from the international oceanographic mission KEOPS confirmed earlier doubts on the scientific merits of the technique, and warned for potentially negative effects. What is more, they even concluded that ocean fertilization as currently proposed won't work (here).

Other geoengineering proposals include emulating volcanoes' cooling effects by pumping sulphur into the atmosphere (debunked as dangerous - earlier post), creating a giant space mirror (which would be prohibitively costly), or generating highly reflective clouds (more here). Some of these proposals have been simulated and shown to be very risky (previous post).

In its Fourth Assessment Report, Working Group III of the International Panel on Climate Change (IPCC) discussed global warming mitigation strategies and said about geo-engineering:
Geo-engineering options, such as ocean fertilization to remove CO2 directly from the atmosphere, or blocking sunlight by bringing material into the upper atmosphere, remain largely speculative and unproven, and with the risk of unknown side-effects. Reliable cost estimates for these options have not been published. - IPCC, Fourth Assessment Report, Working Group III: Mitigation
The only technique seen as low risk, highly feasible and mentioned by the IPCC as one that could effectively help mitigate climate change, consists of the production of carbon-negative bioenergy (so-called 'bio-energy with carbon storage' or BECS systems). BECS is described as a geoengineering technique because it implies the creation of biomass plantations located at strategic places on the planet.

Ocean fertilization remains highly controversial, and the historic decision of the international body meeting in London this week came just as one company, Planktos, Inc., announced it had set sail from Florida, USA to dump iron in the ocean at an undisclosed location, possibly west of the Galapagos islands, known for their unique ecosystems.

A second private geoengineering outfit, Ocean Nourishment Corporation (ONC) of Australia, caused uproar this week in the Philippines with the discovery of a proposal to dump industrial urea in the ecologically sensitive Sulu Sea region. ONC is reportedly in discussions with the government of Morocco on another proposed dump:
:: :: :: :: :: :: :: :: :: :: ::

Geoengineering profiteers should have no right to alter the ocean commons for their private gain. Until now they’ve been exploiting the lack of international governance. The London convention is sending a clear message to geoengineering cowboys that ocean-dumping schemes are scientifically unjustified and must be regulated. We welcome the London Convention’s decisions on ocean-based geoengineering. We urge governments meeting at the United Nations Framework Convention on Climate Change in Bali next month, as well as the UN Convention on Biological Diversity, to follow the London Convention’s lead and begin an international process to put all geoengineering technologies under intergovernmental oversight. - Jim Thomas, ETC Group
Meanwhile, a third private geoengineering firm, Climos, Inc. of USA, attended the London Convention meeting where it proposed a voluntary “code of conduct” for ocean fertilisation – a proposal met with little enthusiasm.

The London Convention decisions were greeted with enthusiasm in the Philippines, where civil society organizations, small-scale fishers and environmentalists are protesting a proposal by Ocean Nourishment Corporation ”to dump urea in the Sulu Sea. The groups will hold a press conference on Monday 15 November in Manila to outline concerns and actions in the region.
There’s clearly an urgent need for international oversight. We were alarmed to discover that a geoengineering company had already approached the Philippines government. Although no permit has been issued yet, at least one experimental dumping of urea has already occurred in the Sulu Sea – without a permit, without environmental assessment, and without public consent. - Neth Dano, Third World Network.
According to Hope Shand of the ETC Group, a civil society organisation which screens the responsible use of new technologies, the London Convention has taken a first, important step to prevent geoengineering abuses. However, it maintains its call for a moratorium on large scale and commercial geoengineering projects until there is public debate, intergovernmental oversight and thorough assessment of social, economic and environmental impacts. Geoengineering techno-fixes are not an acceptable response to climate change, the ETC says.

References:
International Maritime Organization: London Convention.

ETC Group: London Convention Puts Brakes on Ocean Geoengineering - November 9, 2007.

Third World Network, SEARICE, Corporate Watch, ETC Group and Greenpeace South East Asia: Geoengineers prepare to pollute Philippine Seas as International Ocean Dumping Body Meets - November 5, 2007.

Rex Dalton, "Ocean tests raise doubts over use of algae as carbon sink", Nature 420, 722 (19 December 2002) | doi:10.1038/420722a

Biopact: The end of a utopian idea: iron-seeding the oceans to capture carbon won't work - April 26, 2007

Biopact: WWF condemns Planktos Inc. iron-seeding plan in the Galapagos - June 27, 2007

Biopact: Simulation shows geoengineering is very risky - June 05, 2007

Biopact: Climate change and geoengineering: emulating volcanic eruption too risky - August 15, 2007

Biopact: Capturing carbon with "synthetic trees" or with the real thing? - February 20, 2007

Biopact: IPCC Fourth Assessment Report: mitigation of climate change - May 04, 2007


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RWE and AEP to test carbon capture and storage on hard coal-fired power plant in West Virginia

American Electric Power (AEP) and RWE plan to collaborate in the testing of carbon capture and storage (CCS) technology for modern coal-based power plants. To this end, the partners have now signed a Memorandum of Understanding. Alstom will also participate in this project, which will be implemented on the AEP hard coal-fired Mountaineer plant (1,300 MW) in New Haven, West Virginia.

Alstom has developed a capture process based on ammonia that is to be used for the post-combustion capture of CO2 from flue gas. This process will be tested in a demonstration plant with an electrical capacity equivalent to 20 MW by capturing and scrubbing a corresponding slipstream from the flue gas. This way, up to 200,000 tons of CO2 are expected to be captured and stored on-site in deep saline formations – salt water-bearing strata – per year.

Biopact tracks developments in CCS, because the technology can be applied to biomass, resulting in carbon-negative energy and fuels. This kind of negative emissions energy, also known as 'bio-energy with carbon storage' (BECS) takes historic CO2 emissions out of the atmosphere. This sets it apart from both nuclear and renewables like wind, ordinary biofuels or solar, which are all 'carbon neutral' at best (schematic, click to enlarge, and see previous post, here and here).

Recently, RWE Power signed a collaboration agreement with BASF and Linde on the testing of new 'scrubbing agents' for capturing carbon in a pilot plant at RWE’s lignite-fired power plant site in Niederaussem (earlier post). Now it is joining American partners to validate the technology further.

Once the captured carbon is stored, the complete technology will have been tested. This area is managed by RWE's upstream subsidiary RWE Dea. The sub-project "storage", which will also be carried out by AEP, is subsidized by RWE Dea. Site-specific investigations of carbon storage capabilities, inter alia at the Mountaineer plant site, have been conducted in the US since 2002.

During the investigations, an approximately 2,740-meter exploratory well and seismic studies determined that the site was suitable for deep geological storage of CO2. Battelle Memorial Institute, a global science and technology enterprise and a leader in carbon storage research, is serving as the consultant on geological storage. RWE Dea will contribute its upstream and gas storage expertise.

The overall project – demonstration plant based on chilled ammonia and storage – is set to begin in 2009, provided that the application of this capture technology in a small-scale Wisconsin pilot plant operated by Alstom and the Electric Power Research Institute is successful. AEP and RWE are participating in this project as well:
:: :: :: :: :: :: :: :: :: ::

Once commercial viability of the capture technology is validated at Mountaineer, AEP plans to use Alstom’s chilled ammonia process on one of the 450-MW coal-fired units at its Northeastern Station in Oologah, Oklahoma. This commercial-scale system is scheduled to be operational at the end of this decade. It is expected to capture about 1.5 million tons of CO2 a year. The CO2 captured at Northeastern Station will be used for enhanced oil recovery (EOR).

AEP and RWE are members of the e8, a non-profit international organization composed of the nine leading electricity companies from the G8 countries. The e8 promotes sustainable energy development through electricity sector projects in developing nations worldwide.

8 November 2007 - American Electric Power (AEP), RWE and Alstom will collaborate during a planned validation of commercial-scale application of carbon capture and storage technology on an existing AEP coal-fired power plant.

RWE will join a project AEP announced in March when it signed a deal with Alstom, for post-combustion carbon capture technology using Alstom's chilled ammonia process. RWE will also participate in an associated project for deep geological storage of captured CO2.

References:
RWE AG: RWE and AEP to test carbon capture and storage on existing Mountaineer hard coal-fired power plant in West Virginia - November 8, 2007.

Biopact: RWE Power, BASF and Linde to cooperate on CO2 capture technology - September 28, 2007

Biopact: A quick look at 'fourth generation' biofuels - October 08, 2007

Biopact: Carbon-negative bioenergy recognized as Norwegian CO2 actors join forces to develop carbon capture technologies - October 24, 2007

Biopact: Carbon-negative bioenergy is here: GreatPoint Energy to build biomass gasification pilot plant with carbon capture and storage - October 25, 2007

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New public-private hybrid rice group aims to raise rice yields in the tropics

A new international research initiative, linking the private and public sectors for the first time and launched on November 9 at the 2007 Asian Seed Congress, aims to boost the research and development of hybrid rice for the tropics.

The Hybrid Rice Research and Development Consortium (HRDC), established by the International Rice Research Institute (IRRI), will strengthen public-private sector partnership in hybrid rice, a technology that can raise the yield of rice and thus overall rice productivity and profitability in Asia.

The news is important for the bioenergy community, because one of the criteria that need to be met in order to tap the vast theoretical potential for biomass production (previous post), is increased and more efficient food production. Both processes go hand in hand. Rice is the world's most important food crop, grown on approximately 152 million hectares of land (statistics here).

Hybrid rice takes advantage of the phenomenon of hybrid vigor - known as heterosis - to achieve yields 15 to 20% higher than nonhybrid (inbred) varieties. Over the past three decades, the technology has helped China achieve food security, but has not yet reached its potential in the tropics - the place where food production can be vastly improved and where the largest bioenergy potential can be found.
National agricultural research and extension systems and other public sector organizations engaged in hybrid rice research and development will be among the primary beneficiaries of funds generated by the HRDC. Rice farmers in Asia will benefit from accelerated access to hybrid rice-based technologies such as more and better hybrids, good-quality seed, knowledge, and services provided by the private and public sectors. - Dr. Fangming Xie, IRRI senior hybrid rice researcher
IRRI and its partners in the public and private sector have led research on development of, and use of, hybrid rice technology in the tropics for almost 30 years. Successful deployment of hybrid rice in Asia, however, requires more effective cooperation between public research institutions and the private sector in research to overcome current constraints.

The HRDC will be hosted by IRRI and will have three major objectives:
  1. Support research on developing new hybrids with enhanced yield heterosis, improved seed production, multiple resistances to stresses, and grain quality.
  2. Support research on best management practices for rice hybrids.
  3. Improve information sharing, public awareness, and capacity building.
Public and private sector organizations and companies with interest in hybrid rice development are invited to become members of the HRDC. For private-sector members, annual financial contributions under the consortium structure will take into account the status of seed companies at different stages of development. HRDC members will have access to improved parents, hybrids, and breeding lines, including seeds and associated information:
:: :: :: :: :: :: :: :: :: ::

The HRDC will have a public-private sector advisory committee and will meet annually to provide information to its members on new plant genetic resources available or under development, review research on hybrid rice management, discuss new research priorities, and make decisions on other consortium activities such as capacity building for both the public and private sectors.

According to IRRI senior hybrid rice researcher Fangming Xie, the HRDC will significantly enhance the capacity for hybrid rice research and product delivery, while providing services and support to the private sector in its product development and delivery that will benefit the general public.

References:
International Rice Research Institute: New hybrid rice group aims to raise rice yields in the tropics - November 9, 2007.

International Rice Research Institute: At Last, Tropical Hybrids - April 19, 2000.

IRRI / FAO: Adoption of Hybrid Rice in Asia - Policy Support - Proceedings of the workshop on policy support for rapid adoption of hybrid rice on large-scale production in Asia, Hanoi, Viet Nam, 22-23 May 2001, Rome 2002

Biopact: IEA report: bioenergy can meet 20 to 50% of world's future energy demand - September 12, 2007



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Al Gore invests in biofuels

Spanish renewable energy company Abengoa jumped as much as 7 percent Wednesday after an investment fund headed by former U.S. Vice President and Nobel Peace prize laureate Al Gore bought a stake in the firm.

UK-based Generation Investment Management purchased a small position in Abengoa, which specialises in biofuels, a company spokeswoman said. Abengoa declined to comment on the value of the Gore stake.

Abengoa was the top gainer on Spain's IBEX blue chip stock index Wednesday at 0842 GMT, trading at 29.30. The company is at the forefront of developing next generation cellulosic biofuels.

Gore won the Nobel Peace Prize last month, together with the UN's Intergovernmental Panel on Climate Chance (IPCC), for campaigning against climate change. He is chairman of Generation Investment Management, a firm which specialises in companies that promote sustainable development [entry ends here].
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Syntroleum announces successful completion of CTL demonstration; important for BTL technology and carbon-negative biofuels


Syntroleum Corporation, a synthetic fuels technology company, has successfully completed a demonstration of its proprietary technology designed to convert coal into clean synthetic liquid fuels. The test run utilized synthesis gas produced from coal and Syntroleum's proprietary cobalt catalyst technology in the conversion process. The 2,500-hour bench-scale test run was recently completed at Eastman Chemical Company's Kingsport, Tennessee facility.

Syntroleum says the demonstration is a very important step towards the development of biomass-to-liquids (BTL) processes resulting in synthetic biofuels. Importantly, because the cobalt catalyst used by Syntroleum localizes carbon capture to the shift reactor syngas product, it allows for easier CO2 capture and sequestration. With BTL technology combined with carbon capture and storage (CCS), a whole range of new bioenergy opportunities becomes available, including the production of carbon-negative biofuels. Unlike ordinary biofuels or renewables like wind or solar, which are merely 'carbon-neutral', these 'negative emissions' fuels take historic CO2 emissions back out of the atmosphere (earlier post).

Syntroleum's demonstration proved that fuels made from coal have the same superior synthetic Fischer-Tropsch (FT) qualities as those made from natural gas. The demonstration also indicated that Syntroleum's proprietary cobalt-based catalyst performs robustly under real-world coal-to-liquids (CTL) conditions, as was predicted from earlier extended life tests performed by Syntroleum.
We have now proven that the Syntroleum Process, and specifically our cobalt catalyst, performs very well on live coal syngas in a commercial environment. This is a great step for Syntroleum and we continue to believe that this technology will help pave the way to lowering our country's reliance on foreign sources of oil, by producing domestically sourced synthetic diesel and jet fuel. This successful demonstration under the most challenging condition of live coal derived syngas is also very important for the future of our Biomass-to-Liquids technology. - Jack Holmes, CEO of Syntroleum.
By showing that live coal derived syngas can be turned into liquids, biomass-to-liquids technology, which is less challenging, becomes a step closer. The syngas produced from gasifying such biomass feedstocks as corn stover, wood by-products, and chicken litter is more difficult to clean up than natural gas-based syngas (for gas-to-liquids production, GTL) but much easier than coal-based syngas. By demonstrating the commercial viability of its cobalt catalyst for coal, the company has addressed its suitability for any renewable feedstock.

The two major process steps in CTL (and GTL, BTL) production consist of gasification and Fischer-Tropsch synthesis (schematic, click to enlarge). After these steps, the liquids are further refined.

Gasification
A gasifier converts coal feedstock into gaseous components by applying heat and pressure to the coal in the presence of steam and oxygen. A gasifier differs from a combustor in that the amount of oxygen inside the gasifier is carefully controlled such that only a relatively small portion of the fuel burns completely, minimizing the formation of carbon dioxide:
:: :: :: :: :: :: :: :: :: :: :: :: ::


The combustion and gasification reactions are shown in Eq 1 and Eqs 2-4 respectively. The reaction of Eq 2 is termed partial oxidation. Rather than burning, most of the carbon-containing feedstock is chemically broken apart by the gasifier’s heat and pressure producing syngas. Water introduced into the gasifier also takes part in the chemical decomposition of coal, producing carbon oxides and hydrogen as in Eq 3-4.

The produced syngas is primarily hydrogen and carbon monoxide with other gaseous components. The actual composition depends on the conditions in the gasifier and the type of feedstock. Typical coal syngas H2:CO ratios are in the 0.4:1 to 0.9:1 range. For FT conversion, the desired ratio is 2.1:1. “Ratio adjustment” via the water-gas shift reaction of Eq 4 is thus required to convert syngas to FT hydrocarbons. This may be done in the gasifier, a catalytic shift converter, or the FT reactor itself by using catalysts with water-gas shift selectivity (e.g. iron). For optimum operation of the gasifier and the FT reactor, the preferred option is the catalytic shift converter.

This has the added advantage of eliminating CO2 from FT reactor tail gas and simplifying carbon capture. All CO2 is captured after water-gas shift as part of syngas cleanup.

Note - this is where the potential of carbon-negative biofuels comes in: when the CO2 from the process is captured from an already renewable feedstock - biomass - and then geosequestered, the result is a negative emissions fuel that takes historic CO2 emisions out of the atmosphere as it is used.

Other major gaseous components found in the syngas stream are derived from the sulfur and nitrogen containing compounds found in coal. In addition to the sulfur and nitrogen components the syngas may contain metals, e.g. mercury and arsenic. The metals, sulfur and reactive nitrogen compounds are removed from the gasifier effluent to provide clean syngas for further processing. Non-combustible components e.g. calcium and silicon, typically leave the bottom of the gasifier as slag.

Fischer-Tropsch Conversion
The FT process uses a catalyst to convert syngas to hydrocarbon products according to the general chemical pathway given by the following equation:

There is a distribution of intermediate feedstocks generated during this FT chemical process including unreacted gases, short and long chain paraffins, olefins and alcohols. The type of catalyst and operating conditions impact the distribution of the intermediate feedstocks generated.

Standard refinery hydroprocessing and fractionation is used to convert the raw chemicals generated into commercial products, primarily transportation fuels. The unconverted syngas and light gas products in the reactor tail gas are used for internal power generation as shown in the schematic.

Tests
Eastman Chemical Company and Syntroleum Corporation have developed their respective technologies and expertise independently. The companies combined their experience to demonstrate that coal can be effectively converted to liquid hydrocarbons with a cobalt based FT catalyst.

FT catalysts have historically been based on iron or cobalt. While iron catalyst requires a lower initial investment, cobalt has numerous performance advantages such as higher activity, higher diesel yields, longer life, and lower water gas shift activity resulting in lower overall operating cost. The higher activity and longer life of cobalt catalyst offsets the initial higher cost.

By not causing water-gas shift in the FT reactor, cobalt catalysts localize carbon capture (CO2 sequestering) to the shift reactor syngas product. The CO2-concentrated syngas may effectively be scrubbed as part of the cleanup process shown in the schematic. Exposure to contaminants increases with the longer life of the cobalt catalyst resulting in increased potential for catalyst deactivation. Therefore cobalt catalyst must be designed consistent with commercially available syngas cleanup processes.

Syntroleum has invested over one million hours of run time in bench scale FT catalyst tests, much of it in Continuous Stirred Tank Reactors (CSTR) like those used in the present study. These tests include extensive studies on trace levels of various contaminants and a patented regeneration process. Syntroleum's regeneration process separates the catalyst from the wax matrix returning it to the original oxide form. The catalyst is then re-reduced, slurried and returned to the reactor.

This procedure has been demonstrated at lab, pilot, and demonstration scale, restoring catalyst activity from a wide range of deactivation mechanisms. With this background, Syntroleum was able to establish a maximum target level of contaminants in the syngas and designed guard beds through which syngas produced at the Eastman facility was processed. The combined experience of the two companies was essential in the success of the demonstration program.

Data on the gasification and FT demonstration can be found in a non confidential White Paper.

Jet fuels
These results in conjunction with the Air Force's successful testing of Syntroleum's Fischer-Tropsch jet fuel last fall and the recent certification of FT jet fuel for the B-52 H Stratofortress bomber create an opportunity for Syntroleum to supply synthetic jet fuel from several sources to help the Air Force meet its target of providing 50 percent of its needs with a 50/50 synthetic blend by 2016.

As previously announced, Syntroleum has contracted to deliver 500 gallons of renewable synthetic jet fuel for testing by the Air Force. This fuel will be made using Syntroleum proprietary Biofining(TM) technology using a mixture of low grade animal fats and greases as provided by Tyson Foods.

Based on preliminary testing, Syntroleum believes this renewable fuel has almost identical properties to the natural gas-based FT jet fuel used in the certification tests.


References:
Syntroleum: White Paper: Fischer Tropsch Catalyst Test on Coal-Derived Synthesis Gas - s.d. [November 2007].

Syntroleum: Syntroleum Announces Successful Completion of Coal-to-Liquids Demonstration - November 8, 2007.

Biopact: A quick look at 'fourth generation' biofuels - October 08, 2007

Biopact: Syntroleum to deliver bio-based synthetic jet fuel to U.S. Department of Defense - July 09, 2007



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U.S. Senate farm bill puts $2.3 billion into biofuels

The 2007 U.S. federal Farm Bill has made it to the full senate, after passing the house in July. It contains a very strong support package for the development of next generation biofuels in the U.S. Iowa Senator Tom Harkin chairs the Senate Agriculture Committee in charge of the bill and presented its scope. Debate is expected to last for up to two weeks on the text which sets out agricultural support policies for the next five years.

Some $2.3 billion in federal support would flow to biofuels under the bill, half of it to develop cellulose as a companion to corn as a feedstock for fuel ethanol. The bill proposed a 'very robust' program in biofuels. It puts the U.S. on a path to produce 60 billion gallons of biofuels by 2030, roughly 10 times current output.

The package includes $1.1 billion to encourage farmers to grow biomass crops, in financial aid to construct ethanol plants using cellulose, found in grasses and wood, as a feedstock, and to help refiners buy biofuel feedstocks.

An additional $1.1 billion would be expended in tax credits for biofuels, including credits for cellulosic ethanol. Those provisions came from a Finance Committee bill that was merged into the panoramic bill drafted by the Agriculture Committee.

Cellulosic ethanol would be eligible for up to $1.28 a gallon in credits. The bill has a credit to small producer of 67 cents for cellulosic ethanol, the current 10-cent credit available to all small producers and the long-standing 51-cent tax credit for blending ethanol into gasoline.
[...] we confront a classic chicken-and-egg dilemma: Entrepreneurs won’t build cellulosic biorefineries in the absence of a reliable supply of feedstocks. And producers won’t grow the cellulosic feedstocks unless and until there are biorefineries to purchase them.

Well, in this bill, we address this dilemma very aggressively. On the supply side, we allocate $130 million over five years to the Biomass Crop Transition Program. We know it takes a few years to get crops like switchgrass started and established. So farmers are going to need financial assistance during the transition. And that’s what we provide in the Senate bill.

On the demand side, we allocate $300 million to support grants for biorefinery pilot plants, loan guarantees for commercial biorefineries, and support for repowering existing corn-ethanol plants and other facilities so they can process cellulosic biomass.

In addition, we continue the CCC bioenergy program with $245 million to support feedstock purchases for advanced biofuels production. And, we’re including about $140 million for biomass research and for biomass crop experiments.
- Tom Harkin, Chair Senate Agriculture Committee
A half-dozen senators want to add language to the farm bill to require the use of 36 billion gallons of biofuels by 2022, including 21 billion gallons of cellulosic ethanol, biodiesel and other alternative fuels. The mandate is now 7.5 billion gallons in 2012. Production is forecast for 6.5 billion gallons this year.
I’ll make this prediction: If we can preserve the Senate energy provisions in conference - and maybe get some additional funding for them, which we’ll certainly try to do – I predict that within five years we are going to see cellulosic biofuel refineries sprouting like mushrooms all across the country. - Tom Harkin
A more detailed overview of the provisions:
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  • $227 million for incentive payments to farmers to grow, harvest, transport and store biomass crops.
  • $422 million in grants and loan guarantees for construction of ethanol plants using biomass crops and to convert plants now using corn.
  • $425 million to help refiners buy feedstocks for "advanced biofuel production."
  • $270 million in grants and loans to expand production and use of renewable energy; 15 percent of money reserved for projects that convert animal waste to energy (biogas).
  • $2 billion in loan guarantees for biomass refineries and biofuels plants; half of the money for projects of less than $100 million, the other half for projects up to $250 million. Cost to government estimated as $800 million.
  • $500 million in loans, grants and loan guarantees to expand production and use of renewable fuels in rural areas.
  • $1.4 billion to help biorefiners buy feedstock for their plants and expand fuel output.
  • creation of a "biomass energy reserve" with five-year contracts that pay farmers an incentive to grow, harvest, store and transport biomass crops; must be within 50 miles of a bioenergy plant. Cost $75 million.
  • $200 million a year through 2016 for biomass research
  • purchase of surplus sugar to be sold to refiners to make ethanol
Producer and tax credits
  • Create small producer credit for cellulosic ethanol of 67 cents per gallon. Cost $282 million through 2012.
  • Extend small producer tax credit of 10 cents a gallon on up to 15 million gallons of ethanol from plants with capacity up to 60 million gallons a year for two years, to December 31, 2012. Estimated cost $57 million through 2012.
  • Create small producer tax credit of 10 cents a gallon, from December 31, 2007, for plants that produce ethanol with processes that do not use a fossil-based resource. Cost $211 million through 2012.
  • Extend production tax credits of $1 or 50 cents a gallon for biodiesel for two years, to December 31, 2010, and extend 10-cent a gallon small producer tax credit for 15 million gallons of fuel from plants with capacity of up to 60 million gallons a year for four years, to December 31, 2012. Cost $264 million through 2012.
  • Extend $1 a gallon tax credit for biodiesel created by thermal depolymerization. Credit is capped at 60 million gallons per year of co-produced fuel. Cost $211 million through 2012.
The cost of the tax credits is offset by three steps:
  • Reducing the 51-cent a gallon tax credit by 5 cent in the first calendar year after U.S. production tops 7.5 billion gallons. Raises $854 million through 2012.
  • Extending for two years, until December 31, 2010, 57-cent a gallon tariff on imported ethanol. Raises $25 million through 2012.
  • Excluding in calculations of alcohol eligible for fuel tax credit all but 2 percent of denaturant used to make the fuel undrinkable. Raises $284 million through 2012
References:
U.S. Senate Agriculture Committee: Harkin: Farm Bill Energy Title Makes Investments in Nation’s Energy Security - November 8, 2007.

Reuters: Senate farm bill puts $2.3 bln in biofuels - November 8, 2007.

Biopact: U.S. House proposes US$4.5 billion for biomass research, biorefineries -
May 22, 2007.

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Thursday, November 08, 2007

Indian sugar mills to produce 'bio-CNG' from cane biomass with European aid

In a very interesting development - a possibility Biopact hinted at long ago - three sugar factories from Maharashtra, India, have decided to produce 'bio-CNG' from sugarcane biomass as a transport fuel. The projects will be set up with finance from the German Investment and Development Company (DEG), one of Europe's largest international development banks, which has earmarked €15 million for lending to the factories. German firm Biogas Nord and Enersearch - a European research institute engaging in renewable energy solutions - will provide technical know-how.

In India, compressed natural gas (CNG) has been the fuel of choice in large metropolitan areas and major auto makers now offer CNG models (earlier post). With this new project, a bio-based alternative made from agricultural waste will make it available in rural areas. This represents an interesting case of energy 'leapfrogging' - rural communities jumping into a cleaner and renewable future, beyond what is already the cleanest alternative currently in use in the rapidly modernizing megacities. What is more, with oil approaching $100 and natural gas prices up as well, the bio-CNG makes commercial sense as well. Experts from the Indian Institute of Technology (IIT) predict it could become the cheapest of all transport fuels in India.

Biogas can be produced efficiently from any type of biomass via anaerobic digestion. The renewable gas contains around 60 to 70 percent methane (CH4) with the remainder being CO2 with minor amounts of contaminants and trace gases. For it to be used as a transport fuel in vehicles as a replacement for CNG, it has to be upgraded, with the CO2 scrubbed out. The fuel then becomes 'bio-CNG', a very clean, renewable gaseous energy source. The fuel is already being used on a relatively large scale in Europe, most notably in Sweden, Austria and Germany.

Greenhouse gas emissions and air pollutants from CNG/bio-CNG are considerably lower than those from liquid fossil fuels (previous post). Prices tend to be lower as well, which is why a switch to gaseous fuels for transport is encouraged in major metropolitan areas across the (developing) world. Several countries in the Global South - most notably Argentina, Pakistan, and India - have succeeded in converting large proportions of the public and private transport fleets to CNG. In India, demand for the fuel is now even outstripping [*.cache] that of traditional liquid fossil fuels by a factor of four.

Sugarcane and its main processing residues - distillery sludge, bagasse and spent wash - make for an excellent biogas feedstock. In fact, if sugarcane as a whole crop were to be converted into biogas instead of ethanol, around 35 percent more energy could be obtained per hectare, because anaerobic digestion is a more efficient bioconversion process. Researchers have found that when the energy from sugarcane bagasse, which is used as energy for ethanol distillation, is included in the calculations, the energy output for sugarcane biogas could be up to to 130 percent higher than the figure for ethanol.

The three cooperatives in Maharastra will be producing bio-CNG at a competitive 22-24 rupiah (€0.38-0.41/$0.55-0.61) per kilogram. This compares favorably to current CNG prices in India, which range between 20 and 25 rupiah. On an energy equivalent basis, the bio-CNG would be 30 to 50% less expensive than diesel, the cheapest liquid fuel:
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In the first phase, Warna sugar factory in Kolhapur, Jaywantrao Patil sugar factory in Nanded and Kisan Veer sugar factory in Satara would introduce the technology. About Rs 40 crore (€6.9/$10.2 million) would be required for commissioning the conversion systems at the three sugar factories.

Press mud and spent wash, by-products of sugarcane processing, would be used for producing biogas. The biogas would be further treated to produce bio-CNG. It is unclear which gas cleaning technology will be utilized, but several options are available: water adsorption, pressure swing adsorption or chemical absorption.

India has the world's second largest sugar industry, producing some 14 million tonnes per year grown on 3.6 million hectares of land. A total of 165 sugar mills are located in Maharashtra alone, more than half of all large facilities in India (maps, click to enlarge).

German firms Enersearch and Biogas Nord would be providing the technical know-how and machinery for the projects. Shubhada Jahagirdar, director at Enersearch, told reporters that German companies and financial institutions were keen on providing the know-how and support for the sugar companies as the technology and fuel production path has a large and attractive commercial potential.

Biogas Nord is already active in the biogas sector in India. Recently it acquired an order to build a biogas facility at a sugar factory in Maharastra (previous post).

In India, CNG has been a fuel of the cities, especially for vehicles. Now, with CNG being extracted from agricultural waste, it would be available for the larger rural population.

Ms Jahagirdar said that the bio-CNG technology was still at a pilot stage in Maharashtra and it could receive monetary support from the Sugar Technology Fund of the Union Government. The bio-CNG would be less costly than diesel, the most widely used liquid fossil fuel in the country. German financial institutions would extend project finance only to those sugar mills that have a healthy balance sheet.

Dr Virendra K. Vijay of the Indian Institute of Technology (Delhi), a biogas research expert, said that with crude oil close to $100 a barrel, bio-CNG could be an attractive alternative fuel. Its production cost could come down to 15 rupiah per kg - becoming the cheapest transport fuel in India (CNG currently costs between 20 and 25 rupiah per kg) -, if produced on a large scale.


Background
When biomethane is produced from dedicated energy crops, it can yield more energy than any other current type of biofuel. The green gas can be made from a very wide range of biomass crops as well as from abundant crop residues. Scientists have found [*.pdf] that for temperate grass species, one hectare can yield between 2,900–5,400 cubic meters of methane per year, enough to fuel a passenger car for 40,000 to 60,000 kilometers (one acre of crops can power a car for 10,000 to 15,000 miles).

A recent 'Biogas Barometer' report, published by a consortium of renewable energy groups led by France's Observ'ER, cites a 13.6% increase growth in biogas use for primary energy production between 2005 and 2006 in the EU (earlier post).

The total energy potential for biogas in the EU has been the subject of several projections and scenarios, with the most optimistic showing that it can replace all European natural gas imports from Russia by 2020 (more here). Germany recently started looking at opening its main natural gas pipelines to feed in the renewable green gas. And an EU project is assessing the technical feasibility of doing the same on a Europe-wide scale (previous post).

Biogas as a transport fuel offers particularly interesting prospects for the developing world, where oil infrastructures are not yet developed extensively. By relying on locally produced biomethane used in CNG cars, these countries could leapfrog into a clean, secure and green post-oil future.

For comprehensive overviews of the latest developments in biogas research, development and applications, please search the Biopact website.

References:
Hindu Business Line: Maharashtra sugar mills plan bio-CNG from cane biomass - November 8, 2007.

Colen, F., Pasqual, A., "Sugar cane (Saccharum sp.) juice energetic potential as substrate in UASB reactor", Energia na Agricultura, 2003, Vol. 18, No. 4, pp. 58-71

NVG Global - country reports: Thailand and Asia – Natural Gas Vehicle Market Review. Part One, Part Two - March 21, 2007.

Natural Gas Vehicle Network: CNG Growth Outstrips Traditional Fuels in India.

Biopact: Biogas Nord to make biomethane from bagasse in India - June 17, 2007

Biopact: German biogas company to make gas from sugarcane residues in India - March 20, 2007

Biopact: India's TVS Motor to roll out CNG-fueled motorbikes, allows leapfrogging with biogas - September 04, 2007

Biopact: Report: carbon-negative biomethane cleanest and most efficient biofuel for cars - August 29, 2007

Biopact: Experts see 2007 as the year of biogas; biomethane as a transport fuel - January 09, 2007

Biopact: Pre-combustion CO2 capture from biogas - the way forward? - March 31, 2007

Biopact: Hydrogen out, compressed biogas in - October 01, 2006

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IEA WEO: China and India transform global energy landscape - demand, emissions to grow 'inexorably'

In its latest World Energy Outlook (WEO 2007), the International Energy Agency warns that the huge energy challenges facing China and India are global challenges that will affect all countries. It calls for countries to step up their cooperation to address these challenges and calls the next 10 years critical to change a course that will otherwise see an 'inexorable' growth in oil and gas imports, coal use and greenhouse-gas emissions. The WEO charts a course to a more secure, competitive, lower-carbon energy system – a course that must involve the world’s two emerging giants.

The WEO this year focuses on energy developments in China and India and their implications for the world. If governments don’t change their policies, energy demand and carbon emissions are set to grow rapidly through to 2030 – even faster, in fact, than in last year’s Outlook. These trends would threaten energy security and accelerate climate change. But the WEO 2007 also shows how new policies can pave the way to an alternative energy future.

Incorporating a global update of the WEO mid- and long-term energy projections reflecting the latest data, WEO 2007 features 3 key energy scenarios to 2030:
  • Reference Scenario: shows the trends in surging energy consumption and CO2 emissions under existing government policies;
  • Alternative Policy Scenario: shows how policies driven by concerns for energy security, energy efficiency and the environment, under discussion but not yet adopted, could curb growth in energy demand;
  • High Growth Scenario: analyses what would happen to energy use if current high levels of economic growth in China and India persist through the projection period.
Energy developments in China and India are transforming the global energy system as a result of their sheer size and their growing importance in international energy markets. Rapid economic development will undoubtedly continue to drive up energy demand in China and India, and will contribute to a real improvement in the quality of life for more than two billion people. This is a legitimate aspiration that needs to be accommodated and supported by the rest of the world. Indeed, according to the IEA, most countries stand to benefit economically from China’s and India’s economic development through international trade.

Demand
But the consequences of unfettered growth in global energy demand are alarming for all countries. If governments around the world stick with existing policies – the underlying premise of the Reference Scenario – the world’s energy needs would be well over 50% higher in 2030 than today. China and India together account for 45% of the increase in global primary energy demand in this scenario. Both countries’ energy use is set to more than double between 2005 and 2030. Worldwide, fossil fuels – oil, gas and coal – continue to dominate the fuel mix. Among them, coal is set to grow most rapidly, driven largely by power-sector demand in China and India.

Emissions
These trends lead to continued growth in global energy-related emissions of carbon-dioxide (CO2), from 27 Gt in 2005 to 42 Gt in 2030 – a rise of 57%. China is expected to overtake the United States to become the world’s biggest emitter in 2007, while India becomes the third-biggest emitter by around 2015. China’s per-capita emissions almost reach those of OECD Europe by 2030:
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Oil
Consuming countries will increasingly rely on imports of oil and gas – much of them from the Middle East and Russia. In the Reference Scenario, net oil imports in China and India combined jump from 5.4 mb/d in 2006 to 19.1 mb/d in 2030 – this is more than the combined imports of the United States and Japan today. World oil output is expected to become more concentrated in a few Middle Eastern countries – if necessary investment is forthcoming.

Although production capacity at new fields is expected to increase over the next five years, it is very uncertain whether it will be sufficient to compensate for the decline in output at existing fields and meet the projected increase in demand. A supply-side crunch in the period to 2015, involving an abrupt escalation in oil prices, cannot be ruled out.

Alternative scenario
Government action can alter appreciably these trends. If governments around the world implement policies they are considering today, as assumed in an Alternative Policy Scenario, global energy-related CO2 emissions would level off in the 2020s and reach 34 Gt in 2030 - almost a fifth less than in the Reference Scenario.

Global oil demand would be 14 mb/d lower – a saving equal to the entire current output of the United States, Canada and Mexico combined. Measures to improve energy efficiency are the cheapest and fastest way to curb demand and emissions growth in the near term. The savings are particularly large in China and India. For example, tougher efficiency standards for air conditioners and refrigerators alone would, by 2020, save the amount of power produced by the Three Gorges dam. Emissions of local pollutants in both countries, including sulphur-dioxide and nitrous oxides, would also be reduced sharply. But even in the Alternative Policy Scenario, global CO2 emissions are still one-quarter above current levels in 2030.

In a “450 Stabilisation Case”, which describes a notional pathway to long-term stabilisation of the concentration of greenhouse gases in the atmosphere at around 450 parts per million, global emissions peak in 2012 and then fall sharply below 2005 levels by 2030. Emissions savings come from improved efficiency in industry, buildings and transport, switching to nuclear power and renewables, and the widespread deployment of CO2 capture and storage (CCS). Exceptionally quick and vigorous policy action by all countries, and unprecedented technological advances, entailing substantial costs, would be needed to make this case a reality.

High growth scenario
Economic growth in China and India could turn out to be significantly faster than assumed in the Reference and Alternative Policy Scenarios, resulting in more rapid growth in energy demand, oil and gas imports and CO2 emissions. In a High Growth Scenario, which assumes that China’s and India’s economies grow on average 1.5 percentage points per year faster than in the Reference Scenario, energy demand is 21% higher in 2030 in China and India combined. Globally, energy demand rises by 6% and CO2 emissions by 7%. In this case, it would be all the more urgent for governments around the world to implement policies to curb the growth in fossil-energy demand and related emissions.

Cooperation needed
The emergence of new major players in global energy markets means that all countries must take vigorous, immediate and collective action to curb runaway energy demand. The next ten years will be crucial for all countries, including China and India, because of the rapid expansion of energy-supply infrastructure. We need to act now to bring about a radical shift in investment in favour of cleaner, more efficient and more secure energy technologies. - Nobuo Tanaka, Executive Director of the International Energy Agency
IEA countries have long recognised the advantages of co-operation with China and India, reflected in a steady broadening of the range of collaborative activities through the IEA.
This relationship symbolises the interdependence of the global energy community. One of my priorities as the new IEA Executive Director is to step up our co-operation with both countries. In good time this could hopefully pave the way, with the support of all the governments concerned, to an ultimate objective of their future membership of the Agency. - Nobuo Tanaka

References:
IEA: World Energy Outlook 2007.

IEA: The Next 10 Years are Critical - the World Energy Outlook Makes the Case for Stepping up Co-operation with China and India to Address Global Energy Challenges - November 7, 2007.



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Wednesday, November 07, 2007

FAO forecasts continued high cereal prices: bad weather, low stocks, soaring demand, biofuels, high oil prices cited as causes

Global cereal prices are expected to remain at high levels for the coming year due largely to problems in production in several major exporting countries and very low world stocks, says the latest Food Outlook report issued today by FAO in London. The convergence and interaction of a whole range of particular circumstances is the main cause for high prices and volatility in agricultural commodity markets: unfavourable weather in key production areas, low stocks, tight supplies, strong demand from rapidly growing economies, biofuels, record petroleum prices, high freight rates, currency developments and a high degree of speculation.

The FAO food price index rose by 9 percent in 2006 compared with the previous year. In September 2007 it stood at 172 points, representing a year-on-year jump in value of roughly 37 percent (graph 1, click to enlarge). The surge in prices has been led primarily by dairy and grains, but prices of other commodities have also increased significantly. The only exception is the price of sugar, which has been declining for the second year in a row. This trend occurred despite record sugar based ethanol output in Brazil (graph 2, click to enlarge).

High price events, like low price events, are not rare occurrences in agricultural markets although often high prices tend to be short lived compared with low prices, which persist for longer periods. What distinguishes the current state of agricultural markets is rather the concurrence of the hike in world prices of, not just a selected few, but of nearly all, major food and feed commodities. As has become evident in recent months, high international prices for food crops such as grains continue to ripple through the food value/supply chain, contributing to a rise in retail prices of such basic foods as bread or pasta, meat and milk.
Rarely has the world witnessed such a widespread and commonly shared concern about food price inflation, a fear which is fuelling debates about the future direction of agricultural commodity prices in importing as well as exporting countries, be they rich or poor. - FAO Food Outlook
The price boom has also been accompanied by much higher price volatility than in the past, especially in the cereals and oilseeds sectors (more on the importance of volatility below). Increased volatility highlights the prevalence of greater uncertainty in the market. Supply tightness in any commodity market often raises price volatility in that market. Yet, the current situation differs from the past in that the price volatility has lasted longer, a feature that is as much a result of supply tightness as it is a reflection of ever-stronger relationships between agricultural commodity markets and other markets.

Among major cereals, this season’s main protagonist is wheat, the supply of which has been hampered by production shortfalls in Australia, a major exporter, and low world stocks, while demand has been strong, not only for food but also feed. In September, wheat was traded at record prices, between 50 and 80 percent above last year. Maize prices increased progressively from the middle of last year until February 2007, when they hit a ten-year high, but have fallen considerably since. Supply constraints in the face of brisk demand for biofuels triggered the initial price hike in maize prices. However, reacting to a massive expansion in plantings and expectations of a record crop this year, prices have started to come down, although by September they had still remained 30 percent above last year. Prices of barley, another important cereal, also soared lately. Supply problems in Australia and Ukraine, tighter availability of maize and other feed grains, compounded with strong import demand, have contributed to the doubling of prices of both feed and malting barley in recent weeks.

The tightness in the grain sector also affected the oilseed complex, which witnessed a year-on-year price surge of at least 40 percent, depending on crops and products. Soaring maize markets during the second half of the previous season contributed to keeping oilseed prices at high levels as maize plantings expanded at the expense of oilseed plantings. Due to the expected shrinking of world supplies and historically low inventories in 2007, in the face of faster rising demand for food and biodiesel, as well as unusually strong demand for feed, oilseed markets are experiencing further increases in prices in these early months of the new season.

Among all agricultural commodities, dairy products have witnessed the largest gains compared with last year, ranging from 80 percent to more than 200 percent. Higher animal feed costs, tight dairy supplies following (1) the running down of inventories in the European Union and (2) drought in Australia, (3) the suspension of exports by some countries (4) coupled with the imposition of taxes by others, and (5) dynamic import demand are the main factors that have sustained dairy prices at historically high levels.

High feed prices have also raised costs for animal production and resulted in an increase in livestock prices; with poultry rising most, by at least 10 percent. In addition, growth in consumption and gradual reductions in trade restrictions are contributing to the increase in meat and poultry prices this season.

Convergence of factors
The persistent upward trend in international prices of most agricultural commodities since last year is only in part a reflection of a tightening in their own supplies. Global markets have become increasingly intertwined. As a result, linkages and spill-over effects from one market to another have greatly increased in recent years, not only among agricultural commodities, but across all commodities and between commodities and the financial sector.

Financial markets
Market-oriented policies are gradually making agricultural markets more transparent and, in the process, are elongating the financial opportunities for increased portfolio diversification and reduction in risk exposures. This is a development that is taking place just as financial markets around the world are experiencing the most rapid growth, driven by plentiful international liquidity. This abundance of liquidity reflects favourable economic performances around the world, notably among emerging economies, low interest rates and high petroleum prices:
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These developments have paved the way for massive amounts of cash becoming available for investment (by equity investors, funds, etc.) in markets that use financial instruments linked to the functioning of agricultural commodity markets (e.g. future and option markets). The buoyant financial markets are boosting asset allocation and drawing the attention of speculators to such markets, as a way of spreading their risk and pursuing of more lucrative returns. Such influx of liquidity is likely to influence the underlying spot markets to the extent that they affect the decisions of farmers, traders and processors of agricultural commodities. It seems more likely, though, that speculators contribute more to raising spot price volatility rather than their levels.

Soaring oil prices
Soaring petroleum prices have contributed to the increase in prices of most agricultural crops: by raising input costs, on the one hand, and by boosting demand for agricultural crops used as feedstock in the production of alternative energy sources (e.g. biofuels) on the other. National policies that aim to reduce greenhouse gas emissions are behind the fast growth of the biofuel industry.

Rising fossil fuel prices and attempts to reduce dependence on imported oil, however, have provided the extra incentive for many countries to opt for even more challenging crop production targets. The combination of high petroleum prices and the desire to address environmental issues is currently at the forefront of the rapid expansion of the biofuel sector: this is likely to boost demand for feedstocks, most notably, sugar, maize, rapeseed, soybean, palm oil and other oilcrops as well as wheat for many more years to come. However, much will also depend on the supply and demand fundamentals of the biofuel sector itself.

Freight rates
Freight rates have become a more important factor in agricultural markets than in the past. Increased fuel costs due to record oil prices, stretched shipping capacity, port congestion and longer trade routes have pushed up shipping costs. The Baltic Exchange Dry Index, a measure of shipping costs for bulk commodities such as grains and oilseeds, has recently passed the 10 000 mark for the first time with freight rates up more than 80 percent compared with the previous year. Not only have these record freight values increased the cost of transportation, but they have significant ramifications on the geographical pattern of trade, as many countries opt to source their import purchases from nearer suppliers to save on transport costs. In many instances, this development has also sparked a noticeable reduction in the degree of world market integration, with prices at regional or localized levels falling out of line with world levels.

Exchange rates
Exchange rate swings play a critical role in all markets and agricultural markets are no exception. Yet, rarely have currency developments been as important in shaping agricultural prices as in recent months. The gradual decline in the US dollar against most currencies since 2005 has made imports from the United States cheaper, thereby boosting demand for products that are exported from the United States. As international prices of most commodities are also primarily expressed in US dollar, this weakening of the dollar has helped push the United States export prices higher, exasperating the overall price strength, especially, in recent months, for wheat.

Evidently, the increases in the US dollar dominated prices of commodities affect international buyers (importers) differently, depending on how the value of their own currency changed vis-à-vis the US dollar. The fact that the dollar depreciated sharply against all major currencies lessens the true impact of the rise in world prices, a major reason behind the brisk world import demand that, in spite of high prices, shows very little sign of retreat or rationing.

Looking ahead
The main factor affecting the uncertainty in agricultural markets is how linkages with other markets, including markets of other agricultural commodities, will influence the direction and magnitude of price changes during the coming months and into the next season. This volatility in prices, especially in the case of agricultural crops, will represent a major hurdle in decision-making by farmers around the world.

Nowhere is this more evident than in the current debate about wheat plantings for next season. To most farmers, the current high wheat prices are only one reason to plant more wheat. The other is the general anticipation that even if wheat prices were to decline from their current high values, the decrease is expected to be less than those of other competing crops. In other words, farmers would be better off planting more land to wheat because of its higher relative profitability compared with other crops. In fact, all indications point to more wheat being planted around the world for harvesting next year. The recent decision by the European Union to release land from its set-aside programmes and the move by other major producing countries such as India to encourage farmers to grow more wheat by raising wheat procurement prices are also likely to pave the way for a much-needed rebound in world production in 2008.

All of the above, of course, assumes a normal weather situation, notwithstanding the fact that weather is impossible to predict. Prolonged drought in Australia, especially this year and last, affecting as it did a major wheat exporter, is a case in point. Yet, a strong expansion in wheat production, assuming normal growth in consumption, is bound to bring down wheat prices.

This brings about a critical issue: if more wheat gets planted, what will happen to the prices of other crops? Part of the answer can be found in what took place in the previous season with maize: once maize prices began to rise, plantings expanded across the world; jumping by 19 percent alone in the United States. Higher plantings and favourable weather drove maize production to a record this year, and this abundance started to push down prices, which are now well below their earlier highs, but still above levels of last year. Given a limited potential for expanding the agricultural frontier, the increase in maize plantings was at the expense of reductions in areas dedicated to several other crops, the production of which suffered as a result. A good example is soybeans and, to some extent, wheat and cotton. It is clear that by shifting land out of one crop into another, prices of those crops with reduced planting could increase.

Such trends have always existed and switching crops to maximize returns is nothing new. Most countries produce a host of crops and planting periods together with areas can be similar, making substitution easier. However, what makes recent episodes differ from the past is that inventories are being kept at low (almost pipeline) levels, which makes prices particularly sensitive to unexpected changes. In other words, agricultural markets, and food crops in particular, may be going through a period whereby stocks, especially those in major exporting countries, no longer play their traditional role as a buffer against sudden fluctuations in production and demand. This change has come about because of reduced government interventions associated with a general policy shift towards liberalizing agricultural commodity markets.

The role of farmers in this ever more populated world has never been more critical. It is one of FAO's key roles, at this key juncture, to help farmers in making the right decisions, by providing them with reliable and timely information about market and price trends.

Volatility in agricultural commodities
Volatility measures the degree of fluctuation in the price of a commodity that it experiences over a given time frame. Wide price movements over a short period of time typify the term ‘high volatility’. International prices for agricultural commodities are renowned for their high volatility, a feature which has been, and continues to be a cause for concern among governments, traders, producers and consumers. Many developing countries are still highly dependent on commodities, either in their export or import. While high price spikes can be a temporary boom to the export economy, they can also heighten the cost of importing foodstuffs and agricultural inputs. At the same time, large fluctuations in prices can have a destabilizing effect on real exchange rates of countries, putting a severe strain on their economic environment and hampering efforts to reduce poverty. In a prolonged volatile environment, the problem of extracting the true price signal from the noise may arise, a situation that can lead to an inefficient allocation of resources. Greater uncertainty limits opportunities for producers to access credit markets and tends to result in the adoption of low risk production technologies at the expense of innovation and entrepreneurship. In addition, the wider and more unpredictable price changes of a commodity are, the greater is the possibility of realizing large gains on speculating future price movements of that commodity. That is to say, volatility can attract significant speculative activity, which in turn can initiate a vicious cycle of destabilizing cash prices.

Volatility measures how much prices have moved or how they are expected to change. Historical volatility represents past price movements and reflects the resolution of supply and demand factors. It is often computed as the annualized standard deviation of the change in price. On the other hand, implied volatility represents the market’s expectation of how much the price of a commodity is likely to move in the future. The data upon which historical volatility is calculated may no longer be reflective of the prevailing or expected supply and demand situation. For this reason, implied volatility tends to be more responsive to current market conditions. It is called “implied” because, by dealing with future events, it cannot be observed, and can only be inferred from the price of an “option”.

An “option” gives the bearer the right to sell a commodity (put option) or buy a commodity (call option) at a specified price for a specified future delivery date. Options are just like any other commodity, and are priced based on the law of supply and demand. Any excess or deficit of demand would suggest that traders have different expectations of the future price of the underlying commodity. The more divergent these expectations are, the higher the implied volatility of the underlying commodity. Using the price of an option to estimate price volatility is analogous to using the future’s price to estimate the spot price at the future’s delivery date and location.

Does implied volatility matter? Prices that are observed today of commodities which are traded in the major global exchanges are in someway determined by movements in implied volatility, in that they convey all information, future and the present, pertinent to the market and the commodity. Hence, implied volatility as a metric is an important instrument used in the price discovery process and as a barometer as to where markets might be headed.

How has volatility evolved?
For wheat, maize and soybeans, the CBOT is widely regarded as the major centre for their price discovery. Implied volatilities during the past ten years for these commodities as well over the past 22 months are shown in the following figure.


Volatility for wheat and maize has been creeping up steadily over the course of the decade, while soybean volatility has been relatively flat (graph 3, click to enlarge). Moreover, it now appears more of a permanent feature in the grain markets than was the case in the past. A more detailed examination of the recent past reveals just how volatile grain markets have become and how volatility has been sustained. Since the beginning of 2006, wheat and maize implied volatility has frequently spiked to levels in the realm of 30 percent, and as of 11 October 2007, implied volatility stood at 27 and 22 percent for each commodity, respectively. How are these values interpreted?

These percentages are a measure of the standard deviation in the expected price six months ahead. Assuming that prices are normally distributed, the properties of the distribution can be used to say ‘the market estimates with 68 percent certainty that prices will rise or fall by 27 percent for wheat and 22 percent for maize’. In a similar vein, the likelihood that prices will exceed their current values by more than 50 percent in six months time is perceived to have a probability of around 2 percent, in other words quite unlikely. This is not to say that such events will not take place. The surge in maize prices that began in September 2006 surprised the markets, then, although traders were betting on higher prices, they handed only a 5 percent chance of a 50 percent or more increase in the price of maize in six months. Instead, prices actually climbed by almost 60 percent in that period. A one-off misjudgement? Apparently not. More recently, wheat traders were caught totally off-guard, when in April 2007 they were 99 percent certain that wheat prices would not rise by more than half their value, in six months, wheat prices had doubled. The large upswings in implied volatilities witnessed today, bear testimony to the enormous uncertainty that markets face in predicting how grain prices could evolve in the short term.

In the absence of readily available options data to estimate implied volatility for other commodities, historical volatilities were calculated, and for consistency, computations were also made for soybeans, wheat and maize. Classifying the latter with rice under ‘bulk commodities’, a similar picture to the above is portrayed. Wheat and maize price volatility has steadily risen over the past decade, peaking at over 30 percent in 2007. By contrast, volatility in the rice sector has moved sharply downwards, and in 2007 stood at just one-eighth of the variability in the grain sector.


Among the vegetable oils, volatility has been fairly even since 1982 for all the products, but there appears some resurgence in the prices of palm, sunflower and rapeseed oil. The upturn in volatility for dairy product prices has been most striking, rising almost four-fold since 2005 in the case of butter. By contrast, price changes in meat products have been in a state of quiescence over the past two years. Similarly volatility for many raw materials, traditionally the highest of all agricultural commodities, has steadily fallen, but for sugar and tea, from the peaks of the previous year (graph 4, click to enlarge).

Volatility is an important property in understanding the tendency for a commodity to undergo price changes. More volatile commodities undergo larger and more frequent price changes. Implied volatility can be a useful metric in revealing how traders expect prices to evolve in the shorter term. However, given the huge upheaval in grain markets over the past year or so, it also exposes just how wrong expectations can be.

References:
FAO: FAO forecasts continued high cereal prices - Unfavourable weather, low stocks, tight supplies amid strong demand cited as causes - November 7, 2007.

FAO: Food Outlook - Global Market Analysis 2007 - November 7, 2007.


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Researchers find climate change could diminish drinking water more than expected

As sea levels rise, coastal communities could lose up to 50 percent more of their fresh water supplies than previously thought, according to a new study from Ohio State University. Motomu Ibaraki, associate professor of earth sciences at Ohio State, led the study. Graduate student Jun Mizuno presented the results yesterday at the Geological Society of America meeting in Denver.

Hydrologists have simulated how saltwater will intrude into fresh water aquifers, given the sea level rise predicted by the Intergovernmental Panel on Climate Change (IPCC). The IPCC has concluded that within the next 100 years, sea level could rise as much as 23 inches (58cm), flooding coasts worldwide (earlier post).

Scientists previously assumed that, as saltwater moved inland, it would penetrate underground only as far as it did above ground. But the new research shows that when saltwater and fresh water meet, they mix in complex ways, depending on the texture of the sand along the coastline. In some cases, a zone of mixed, or brackish, water can extend 50 percent further inland underground than it does above ground (image, click to enlarge).

Like saltwater, brackish water is not safe to drink because it causes dehydration. Water that contains less than 250 milligrams of salt per liter is considered fresh water and safe to drink.
Most people are probably aware of the damage that rising sea levels can do above ground, but not underground, which is where the fresh water is. Climate change is already diminishing fresh water resources, with changes in precipitation patterns and the melting of glaciers. With this work, we are pointing out another way that climate change can potentially reduce available drinking water. The coastlines that are vulnerable include some of the most densely populated regions of the world. - Motomu Ibaraki, lead researcher, associate professor of earth sciences at Ohio State University
Vulnerable areas worldwide include Southeast Asia, the Middle East, and northern Europe
Almost 40 percent of the world population lives in coastal areas, less than 60 kilometers from the shoreline. These regions may face loss of freshwater resources more than we originally thought. - Jun Mizuno
Scientists have used the IPCC reports to draw maps of how the world's coastlines will change as waters rise, and they have produced some of the most striking images of the potential consequences of climate change:
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Ibaraki said that he would like to create similar maps that show how the water supply could be affected.

That's not an easy task, since scientists don't know exactly where all of the world's fresh water is located, or how much is there. Nor do they know the details of the subterranean structure in many places.

Worse than thought
One finding of this study is that saltwater will penetrate further into areas that have a complex underground structure.

Typically, coastlines are made of different sandy layers that have built up over time, Ibaraki explained. Some layers may contain coarse sand and others fine sand. Fine sand tends to block more water, while coarse sand lets more flow through.

The researchers simulated coastlines made entirely of coarse or fine sand, and different textures in between. They also simulated more realistic, layered underground structures.

The simulation showed that, the more layers a coastline has, the more the saltwater and fresh water mix. The mixing causes convection -- similar to the currents that stir water in the open sea. Between the incoming saltwater and the inland fresh water, a pool of brackish water forms.

Further sea level rise increases the mixing even more.

Depending on how these two factors interact, underground brackish water can extend 10 to 50 percent further inland than the saltwater on the surface.

According to the United States Geological Survey, about half the U.S. gets its drinking water from groundwater. Fresh water is also used nationwide for irrigating crops.

In order to obtain cheap water for everybody, we need to use groundwater, river water, or lake water, Ibaraki said. But all those waters are disappearing due to several factors - including an increase in demand and climate change.

One way to create more fresh water is to desalinate saltwater, but that's expensive to do, he said. To desalinate, we need energy, so our water problem would become an energy problem in the future.

Image: Researchers at Ohio State University have simulated how saltwater intrudes into fresh water supplies along coastlines, and found that mixed, or brackish, water, can extend much farther inland than previously thought. In this image from the simulation, saltwater is red and fresh water is dark blue. The colors in between represent brackish water with different amounts of salt. Credit: Jun Mizuno, Ohio State University.

References:
Ohio State University: Climate change could diminish drinking water more than expected - November 6, 2007.

Biopact: IPCC Fourth Assessment Report: current and future impacts of climate change on human and natural environments - April 06, 2007


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China Holdings to build second 50MW biomass co-generation plant in Anhui

Biomass is rapidly becoming the preferred clean alternative to polluting coal in the country most dependent on the most climate destructive fossil fuel: China. One of the major green energy companies active in the sector is China Holdings, Inc., which announces it has executed its second development contract to build a 50MW biomass co-generation plant through its subsidiary China Power, Inc. The contract was signed with the local government of Anhui Province in the east of the country. The project is part of China's ambition to have 30GW of bioenergy capacity by 2020, making it the second-largest renewable after hydropower (previous post).

China Power, whose main competitors are Dragon Power, China Enersave and the National Bio Energy Company, now has 100 MW of biomass energy in the pipeline. It has acquired all the resources needed to construct and operate the plant, feedstock handling facilities, water supplies, the plant, 215 Mu (1 MU = 667 sq. meters) of land and biomass supplies from local agriculture.

The company will utilize a CAPS-II pyrolysis system to gasify and pyrolyse the biomass efficiently and with low emissions. It takes a modular design philosophy, maximizing the flexibility of the plant's possible expansion and adaptation to new requirements.

The biomass to electricity system is a two-stage process. In a first phase biomass is dried, pyrolysed, gasified with the combustible materials partially burned. The combustible gas plus a majority of the entrained combustible particles is then consumed in a combustion chamber which releases the thermal energy which is converted into electricity. The advantage of the two stage processing is that it burns the biomass in a clean manner under a controlled processing temperature. The process of trransforming solid biomass fuel at lower temperatures in the gasification chamber means that slagging of residual ash is eliminated.

The by-products from the process, the heat energy and ash, can be utilized to supply heat for households and industry, and fertilizer, thereby eliminating the need for the production of these products in an environmentally harmful manner.

China Power's biomass to electricity technology can be further described in twelve steps from collection, to combustion, to the production of electricity:
  1. The biomass fuel is collected in site and packed as bales. Biomass fuels are corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material.
  2. The feedstock is then stored in the storage yard and delivered to the biomass power plant.
  3. Next, the biomass fuel is weighed and taken to the storage area.
  4. The feedstock is then taken by the preloading system from the storage area to the loading hopper.
  5. The hydraulic charging ram puts the biomass fuel from the loading hopper to the gasification chamber, where the biomass fuel is dried, heated, pyrolysed and partially oxidized. This releases moisture, combustible gas and volatile components.
  6. The residual ash is discharged from the gasification chamber by the ash removal system.
  7. The collected ash is taken for further processing into fertilizer or other products.
  8. The combustible gas and volatile components is then transferred to the combustion chamber where it is further oxidized and releases energy.
  9. The energy released during this process heats the water/steam in the boiler to produce superheated steam.
  10. The superheated steam drives the steam turbine and generator producing electricity.
  11. The electricity is delivered into the power grid through a substation.
  12. The gas flows into the emission control system that includes a spray tower, bag filters, exhaust fans, and stack. The gas is treated to remove acid gas and particles to meet environmental requirements.
The 50MW biomass project has a total expected annual power generating capacity of 400 million kilowatt hours (kWh), expected annual revenues of approximately 250 million Yuan (e22.9/$33.6 million), and an expected annual net income (45% of revenue) of approximately 112.5 million Yuan based on 8,000 annual operation hours:
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The electricity sale price is 0.60 Yuan/kWh (approximately €0.054/$0.080/kWh) with a government policy stipulating a guaranteed purchase of the electricity obtained from bioenergy.

The total investment for this Biomass Renewable Energy Project (Power Capacity: 50 MW) is also approximately 580 million Yuan (€53.2/$77.9): 35% in cash investment and 65% will be China-based bank loans with preferred interest rates with government policy protection for the project.

The power plant is expected to be in full production in approximately 2 years.

The company's biomass to electricity technology is based upon processing biomass fuel like corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material in two stages at temperatures sufficient to produce steam-generated electricity. Biomass is solar energy settled on Earth through photosynthesis of plants. Most forms of photosynthesis release oxygen as a by-product.

There are 170 billions tons of biomass produced on Earth, as the fourth biggest energy resource on the earth after coal, oil and natural gas, but only less than 1% of biomass is currently used as an energy resource, and most of this application is located in rural areas with lower than 10% of energy efficiency and high indoor pollution.

A large part of China's biomass resource is currently burned by farmers, out in the open on their fields, resulting in a major air pollution problem

China Holdings sketches the Chinese policy context within which its projects are positioned as follows:

Renewability: Straw is renewable energy and is a part of nature's plants. The carbon on the inside of the straw can change to organic carbon through absorption of carbon dioxide (CO2) from the atmosphere during photosynthesis. The biomass energy project, as an alternative and renewable energy source, is fully supported by the central government and local governments of China. The development and construction of the renewable energy project is protected by The Renewable Energy Law, created on January 1, 2006 by the People Congress of China. The Chinese central government has set a series of tax exemption/deduction regulations to encourage the construction of renewable energy projects. The National Reform and Development Committee implements the purchase electricity price for renewable energy. It ensures the standard purchase electricity price is 0.25 Yuan/kWh addition base on the local average grid connection price (0.25-0.44 Yuan/kWh). In addition, there is a supervision system to ensure full purchase and payment.

Environmental Benefits
: official statistical information from the Ministry of Agriculture in May 2005 shows that the annual production of straw in China is about 650 million tons. Studies done by international energy organizations show that crop straw is a type of clean renewable energy resource. Normally the heating value of crop straw is about 15MJ/kg. Crop straw is the fourth energy resource after coal, petroleum and natural gas. Many developed countries have already used straw as raw material to generate energy. Each year China produces about 650 million tons of crop straw, which has the same energy content as 268 million tons of regular coal, about 13.7% of China coal production in 2004. By the year 2010, China will have had discarded 350-370 million tons of straw. If used to generate electrical power, it is equivalent to a 90 million KW generator running 5000 hours per year and generating 450,000 million kWh of electricity. This in return will gear the development of a greener economy and the greater sustainable economic development of China.

Economic Benefits: take 1040TPD as a sample, the average annual electricity sales revenue of a STE project is 232 million Yuan RMB, the average annual net profit is 100 million Yuan RMB, and the average net profit rate is 43%. The economic benefit is very profound. In addition, based on the most updated data from the China CDM Information Centre, the guiding price of CO2 is 51.21 RMB/ton. Recently, considering that 0.95kg of CO2 will be discharged when 1 kWh of electrical power is generated by using mineral fuel, each 4X260TPD STE plant is estimated to have 3.31 million tons of CO2 reductions during its 10 years CO2 reduction salable operation. With a price of 51.21 RMB/ton, the 1040TPD project can have an additional income of about 170 million RMB, which is 17 million RMB per year. For the 780TPD project, the CO2 reduction is 2.48 million tons over 10 years. With a price of 51.21 RMB/ton, there will be 127 million RMB in income, which is 12.7 million RMB per year. According to China Energy Research Institute's 2006 update report, China's Biomass Energy implementation and development has reached its power capacity for 2GW in 2005. China Biomass Energy Capacity will reach a total of 5GW in 2010, and 30 GW in 2020.

References:
China Holdings: China Holdings, Inc. Announces 2nd Biomass Renewable Energy Project (Power Capacity: 50 MW); Total Potential: 100 MW in Biomass Energy Pipeline - November 5, 2007.

Biopact: China unveils $265 billion renewable energy plan, aims for 15% renewables by 2020 - September 06, 2007

Biopact: Expert: China's biomass power plants to be profitable in three years - October 30, 2007

Biopact: A closer look at China's biomass power plants - April 19, 2007

Biopact: China's Dragon Power to raise US$2 billion for 100 biomass power plants - August 07, 2007

Biopact: China EnerSave retrofits coal plants to burn biomass - June 18, 2007



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Trees for Clean Energy project: Kenyan farmers to benefit from biofuels in semi-arid zones

A looming global energy crisis with catastrophic consequences for development in poor countries, combined with rising concern over climate change is opening a new economic opportunity for farmers in the semi-arid Eastern province of Kenya.

Mobilised under the 'Trees for Clean Energy' project, 950 small farmers are learning how to cultivate Jatropha curcas - the wild oil seed plant found naturally in the area. Jatropha has been identified to be among one of the promising crops for first generation biodiesel production.

'Trees for Clean Energy' was launched by Zablon Wagalla, a Kenyan agricultural scientist, who thought about ways to help increase the incomes of his country's small farmers while reducing greenhouse gas emissions. Biofuel production seemed the most straightforward way. Through the project, youth process the Jatropha nuts into diesel fuel. The project thus helps meet local energy needs and generates income when surpluses are available. Jatropha production has the added benefit of transforming degraded land into productive farming areas. Wagalla's project is the winner of the YouthActionNet award for projects that induce positive social change.

The project is located in Kibwezi, a semi-arid district bordering the Tsavo National Park. Promoters of the project say Kibwezi is only a pilot case for the planned large scale cultivation of the plant in Kisumu, Kajiado and Kitui districts.

The goal is to put Kenya on the global map as one of the countries on the forefront in the fight against global warming, said Peter Moll, the chairman of the Biodiesel Kenya project, which has teamed up with the Trees for Clean Energy initiative.

Research has shown that jatropha is a multi-purpose plant with potential to meet a wide range of critical needs of resource-poor farmers in Africa. The most promising product of the plant is the non-edible vegetable oil seed that can be used to produce biodiesel with other byproducts being organic fertilizers and glycerin, a valuable chemical.

A recent study by the Association for Strengthening Agricultural Research in East and Central Africa (ASARECA) - which promotes economic growth, fighting poverty, reducing hunger and enhancing resources through regional collective action in agricultural research for development - found that the jatropha offers farmers in Eastern and Central Africa an opportunity to put into use the vast areas of semi arid land:
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Kenya's Ministry of Energy has created a National Biosafety Committee - a stakeholders' forum to craft a policy framework for the development of biodiesel in Kenya. The committee is exploring ways of using other crops such as maize, cassava, soybeans, and sugarcane to produce biofuels. George Wachira of the Petroleum Institute of East Africa told reporters that a draft document was ready and would soon be tabled for stakeholder discussion.

Agricultural economists say Jatropha offers Kenya the potential of extending crop husbandry as an economic activity into areas that are considered marginal because it requires minimal rainfall and has minimal negative impact on the food chain.

Kenya, like South Africa and India, has set a target of 200,000 hectares under jatropha cultivation in the next 20 years. Biodiesel Kenya's field trials go on at Ntashat Ranch in Kajiado district since March 2006.

Crop improvement
Jatropha remains a typically 'underresearched', wild plant. Current jatropha trees are expected to yield around 1.7 tonnes per hectare from mature, well managed plantations. Experts think improved elite seeds could increase this to 2.7 tonnes per hectare. Peter Moll says that it could take more than 10 years to produce sufficient high quality trees to sustain biofuel production on a commercial basis.

However, recent initiatives, most notably a joint venture between oil major BP and jatropha company D1 Oils - D1-BP Fuel Crops Limited - have launched plant science programmes comprising research and development, plant science, breeding, and production and multiplication of seed and improved seedlings.

Leading biotech company Bayer CropScience too recently announced it has launched a research program into improving the shrub. When this type of organisations focuses on breeding new cultivars, using the latest techniques, it is quite probably that highly productive Jatropha emerges on the market quite rapidly.

References:
Business Daily (Nairobi) (via AllAfrica): Farmers in Arid Zones to Benefit From Biofuel Plan - November 6, 2007.

Association for Strengthening Agricultural Research in East and Central Africa: Development of a Long Term Strategic Plan for Regional Agricultural Research in the Eastern and Central African Region [*.pdf].

YouthAction Net: Trees for Clean Energy.

Biopact: D1 Oils and BP to establish global joint venture to plant jatropha - June 29, 2007

Biopact: Bayer CropScience to increase yearly R&D budget to €750 million to meet challenges of the bioeconomy - September 11, 2007


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Massachusetts leaders introduce biofuels bill: first to mandate home heating oil blend, first tax exemption for cellulosic ethanol

Massachusetts governor Deval Patrick, Senate President Therese Murray, and House Speaker Salvatore DiMasi have announced an interesting piece of legislation they are jointly backing to promote advanced biofuels as a way to reduce dependence on foreign oil, capture clean-air benefits, and capitalize on clean-fuel research for economic growth and jobs. Part of the motivation for the action comes from a recent report [*.pdf] on biofuels in Massachusetts prepared by the Northeast Biofuels Collaborative for congressman Bill Delahunt, which shows the multiple benefits of biobased transport and heating fuels for the state.

The bill to be filed by Governor Patrick, Speaker DiMasi and Senate President Murray includes the following measures:
  • a requirement for all diesel and home heating fuel sold in the Commonwealth to contain a minimum amount of renewable, biobased alternatives in their blends, with that amount rising from 2 percent in 2010 to 5 percent in 2013. These mandates will help build Massachusetts’ emerging biofuel refinery and distribution sector. Three refineries are in the planning stages in Pittsfield, Greenfield, and Quincy, and several local and national distributors are preparing to compete in this arena. Several other states have biodiesel content standards, but Massachusetts would be the first to establish a biofuel standard for home heating oil – of particular significance because the Northeast makes much greater use of oil for home heating than other parts of the country.
  • it exempts from the state gasoline tax ethanol derived from sources such as forest products, switchgrass and agricultural wastes. Massachusetts would be the first state in the nation to provide a tax incentive for cellulosic ethanol, an environmentally beneficial next-generation biofuel that Massachusetts–based companies are now rushing to bring to market.
The legislators also announced they would create a task force to explore other ways to promote advanced biofuels for their environmental and energy benefits as well as the economic benefits of a growing clean fuels industry based in Massachusetts. The gas-tax incentive for cellulosic ethanol is projected to create 3,000 new jobs in Massachusetts and pump $320 million into the economy as the advanced ethanol is brought to market:
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We need to add clean fuels to the mix today, but we also have to look ahead to the renewable fuel that will do the most good for the Commonwealth’s environment, energy efficiency and economy. The state gas tax exemption for cellulosic ethanol is a big step in the right direction. - Deval Patrick, Massachusetts Governor

We stand together on a bold new biofuels initiative that we believe will make Massachusetts yet again a national leader – the same way we did with public schools, medicine, technology and health care reform. It’s not just the right thing to do for our environment and our energy independence, it is the right thing to do for our economy. - Salvatore DiMasi, House Speaker

With advanced biofuels coming from an array of new feedstocks, including agricultural waste, sustainable energy crops, algae, and even cranberry bog biomass, many companies in the Commonwealth are already developing these fuels.
- Therese Murray, Senate President
The state gas-tax exemption for cellulosic ethanol would be the first state tax incentive in the nation for the next generation of ethanol. While an important step toward energy independence, ethanol from corn is an intermediate step toward cellulosic ethanol, which offers dramatic environmental benefits and can utilize a potentially broad array of New England–grown feedstocks. The signal sent by the state gas-tax exemption, creating instant market demand for their products, will spur Massachusetts companies on in the race to commercialize cellulosic ethanol.
This is the kind of leadership that will make Massachusetts a global center for advanced biofuels. Cellulosic ethanol is a renewable fuel that will be better for the environment, better for energy independence, and better for the economy. And with the encouragement we are getting from state government today, the next generation of ethanol will be brought to market by Massachusetts companies. - Bruce Jamerson, CEO of Mascoma Corp, a developer of cellulosic biofuels, based in Cambridge
U.S. Representative William Delahunt released a report detailing the benefits of biofuels for the Commonwealth, and vowed to promote biofuels at the federal level. Prepared for the congressman by the Northeast Biofuels Collaborative, a Boston–based nonprofit, the report identified four key areas for our consideration – vehicles, fuels, market access, and state incentives.

Noting that Saudi Arabia alone made $160 billion in 2005 exporting oil, Delahunt said:
New England is addicted to foreign oil. In Massachusetts alone, we spend more than $9 billion a year on petroleum, and it is very clear where most of those dollars are going. Developing cleaner fuels is not only important for our economy and our environment, it is critical for our national security. As we develop federal policies to expand the use of renewable fuels, we can do so in ways that boost efforts here in Massachusetts. - William Delahunt, U.S. Representative for Massachusetts

References:
The Commonwealth of Massachusetts, Executive Department: Governor, Senate President, House Speaker unveil nation-leading biofuel measures - November 05, 2007.

Bill Delahunt: A proposed strategy to promote biofuels production and use in Massachusetts [*.pdf] - report prepared by the Northeast Biofuels Collaborative for U.S. Congressman Bill Delahunt (Massachusetts, 10th District), November 2007.

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Hillary Clinton outlines ambitious biofuels plan: 60 billion gallons by 2030

Even though the presidential elections in the United States are still a year away, the campaign is in full swing. The leading candidate, Hillary Clinton, has outlined details of her plan to dramatically increase biofuels production in an effort tackle America's energy and climate challenges. Boosting biofuels production is one of the key goals of Clinton’s energy plan, which would increase production of corn ethanol, cellulosic ethanol, biodiesel and other biofuels to 36 billion gallons (136.3 billion liters) by 2022 and 60 billion gallons (227.1 billion liters) by 2030.
Our nation’s dependence on foreign oil places our economy at risk, our security in jeopardy, and our planet in peril. But I believe we can transform the way we use and produce energy - and create at least 5 million jobs in new green industries. Renewables like biodiesel can be the fuel for a brighter future. And when I’m president, they’ll also fuel a 21st century green economy that helps us end our dependence on foreign oil and begin addressing the climate crisis. It’s time for America to retake our title as the innovation nation and to launch a green energy revolution. - Hillary Clinton, Senator for New York, leading presidential candidate
Clinton's five-point plan to increase production of biofuels to 60 billion gallons by 2030, part of her broader energy and climate agenda [*.pdf], includes:
  1. Extending Tax Incentives for Biofuel Production: Tax incentives for biofuels production are the foundation of support for the fledgling biofuels industry. By providing a per-gallon tax credit for corn ethanol, cellulosic ethanol, and biodiesel, the federal government has encouraged investment in biorefinery capacity, helping to bring about the rapid expansion in the industry. To encourage continued growth in the industry, Clinton would extend tax credits for these biofuels.
  2. Strengthening Ethanol Infrastructure and Flex-Fuel Vehicles: Automakers are expanding production of "flex-fuel" vehicles that can run on 85% ethanol blends (E85), but the total fleet of flex-fuel vehicles on the road today numbers only 6 million out of about 250 million cars in the US. In addition, of the 170,000 filling stations in the United States, there are fewer than 2,000 that have pumps that dispense E85 ethanol. As biorefinery capacity continues to grow, getting biofuels to market efficiently and putting them to use will depend on improving the distribution infrastructure and making sure that all vehicles can run on E85. To ensure that a growing supply can meet a growing demand, Clinton would: (1) require oil companies and other major gasoline retailers to have E85 pumps at half of their stations by 2012, and 100% by 2017; (2) require automakers to make all vehicles flex-fuel vehicles by 2015; (3) and invest in freight rail upgrades to bring biofuels more efficiently to market.
  3. Investing in Research to Accelerate Cellulosic Ethanol and Advanced Biofuels: Cellulosic ethanol and other advanced biofuels technologies offer the promise of using many types of biomass as feedstocks. In Iowa, there are plans to make cellulosic ethanol from corn stover by adding capacity to existing corn ethanol plants, a step that could increase production by about 20%. Elsewhere in the country, grasses, wood chips and other feedstocks can be utilized to make cellulosic ethanol. Commercializing this technology and getting it rapidly deployed will require investments in research and financial support to build the first generation of plants. To accomplish these goals, Clinton will invest $2 billion in cellulosic ethanol research and provide loan guarantees to build the first two billion gallons of cellulosic ethanol capacity.
  4. Starting the Next Generation of Energy Crops and Technologies: Moving to new energy crops will depend on farmers who take a risk on growing new crops. Clinton would create a new incentive program to reward farmers in the vicinity of planned cellulosic ethanol facilities to plant new energy such as perennial grasses and trees. This program will also provide conservation benefits and wildlife habitat. She would also establish a program to speed the development of harvesting, conversion and processing technologies needed to turn new feedstocks into biofuel.
  5. Ensuring Sustainable Biofuel Production: Clinton believes that America must achieve its biofuels expansion in a way that protects the environment, contributes to solving the climate change problem, and maximizes rural development. She will set a greenhouse gas emissions target for advanced biofuels to ensure that they move over time towards a standard of emitting at least 80% less greenhouse gases as compared to gasoline. In addition, she would develop biofuels guidelines to take into account impacts on land and water resources, water supplies, food prices and wildlife. And she will challenge agricultural research universities across the country to solve major challenges to biofuel expansion - like doubling corn yields and reducing the amount of water used in the refinery process - through a new federal grant and research prize program. In addition to environmental sustainability, Clinton will ensure economic sustainability for rural communities. She is committed to helping rural communities capture a larger share of the economic benefits of the next wave of biorefinieries. Among other things, she will promote local ownership of biorefineries by giving priority in awarding grants and loan guarantees to plants that are locally owned.
Biofuels thus are an essential part of Clinton’s strategy to reduce U.S. dependence on foreign oil and to catalyze a thriving renewables sector in the country. No state has proven the potential of biofuels more than Iowa, which leads the nation in biofuels output and is responsible for 32% of U.S. ethanol capacity and 20% of biodiesel capacity. Biofuels production has helped create about 53,000 jobs in Iowa alone. Corn ethanol and biodiesel have fueled this rapid growth and Iowa is a leader in the emerging cellulosic industry as well:
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Clinton’s plan will expand biofuels in Iowa and across the country by providing new incentives for biofuel production, funding for advanced research, support for biofuel infrastructure, and new environmental guidelines and local ownership initiatives to ensure biofuels are produced in a sustainable manner. These steps will help displace gasoline consumption and create millions of good American manufacturing jobs that cannot be outsourced.

Yesterday in Cedar Rapids, Hillary Clinton outlined the comprehensive agenda to tackle our nation’s twin challenges of energy independence and climate change. Her plan will aggressively reduce greenhouse gas emissions by 80% from 1990 levels by 2050, cut foreign oil imports by 66%, and transform our carbon-based economy into an efficient green economy, creating at least 5 million jobs from clean energy over the next decade.

Clinton believes that expanding biofuels and other renewables will help create clean energy jobs and fuel economic growth. America’s biofuels industry has grown rapidly over the past two decades, from producing only 175 million gallons in 1980 to more than 5 billion gallons today. Iowa has been at the forefront of this movement, and has reaped substantial economic benefits. At the end of 2006, the state had 26 operating ethanol facilities and 8 biodiesel plants, with many more under construction. The industry is growing rapidly; when all current construction projects are completed, Iowa will have doubled its ethanol production capacity and tripled biodiesel capacity.

The Clinton campaign presents the following points to make the case for the biofuels plan:
  • Biofuels support the creation of about 53,000 jobs in Iowa, including 30,000 jobs in ongoing operation and maintenance. [IRFA, 2007].
  • Ethanol and biodiesel generate $1.8 billion in household income for Iowa households - that’s $2,400 per family of four. [IRFA, 2007].
  • Hillary’s plan will build on these successes to catalyze a thriving renewables sector nationwide. The economic and employment impact of this effort are substantial.
  • Hillary’s plan to get on a path to produce 25% of our electricity needs from renewables by 2025 could help our economy create 2 million clean energy jobs over 10 years. [University of Tennessee, 25% Renewable Energy for the United States By 2025: Agricultural and Economic Impacts, November 2006]. This is a component of Hillary’s energy plan, which aims overall to help create more than 5 million jobs over a decade.
  • In addition, by strengthening the capacity of domestic manufacturers in biofuels and other renewable sectors, Hillary’s plan will help spur additional job growth from accelerated exports. A recent study found that "a renewable energy industry servicing the export market can generate up to 16 times more employment than an industry that only manufactures for domestic consumption." [Environment California Research and Policy Center, Renewable Energy and Jobs, 2003]. The export potential and related job benefits are substantial in a global renewables market that is projected to quadruple, from $55 billion in 2006 to $226 billion in 2016. [Clean Edge, 2007].
  • Combined with her efforts to promote energy efficiency, Hillary’s plan will help transform the US economy and create at least 5 million jobs from clean energy over ten years.
References:
Hillary Clinton: Hillary Clinton’s Plan to Increase Biofuels Production and Create Clean Energy Jobs - November 7, 2007.

Hillary Clinton: Powering America's Future: New Energy, New Jobs [*.pdf].



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iGEM prize for team that modified bacterium for biobutanol production

A team of science students from the University of Alberta is one step closer to creating a clean and reliable source of butanol, an alternative biofuel, by using a manipulated bacterium. The 10-member group, who call themselves the 'Butanerds', won first prize in the Energy and the Environment category at the prestigious synthetic biology competition held this weekend at MIT - the fourth annual International Genetically Engineered Machine (iGEM) competition.
Everybody welcomed our idea. There are certain people working on similar kinds of technology that we were able to chat with and tell them why we thought butanol was better. For the most part, I think they agreed. [...] We haven't gotten any further with our lab work. Hopefully, within the next month we'll be producing butanol and we'll have furthered our development of our computer modelling. It's a very complex project. - Justin Pahara, senior team member
Pahara's team has been working on introducing the genes responsible for butanol production in the organism Clostridium into the E. coli bacterium. The students took five enzymes from Clostridium which play a key role in butanol production ('BioBricks', which ties in with the iGEM contest which focuses on using DNA as 'bricks' for the construction of biological machines) and put them into the cells of E. Coli. By using an organism that is photosynthetic, they can produce the fuel without competing for food supply. They also hope to increase E. Coli's tolerance to butanol.

The process is complicated and still rather inefficient, and Pahara's team is working with computer models to see how to increase production levels. Pahara said he hopes his team, composed of students in a number of different fields - including engineering and biochemistry - will have a system that can produce significantly more butanol by the end of next year.

Pahara said the award might help the team get more research funding by showing sponsors how the project was recognized in an international setting:
It's really hard to talk economics because we don't know what kind of system we're going to end up with. But you just have to look at oil prices right now: this is why biofuels are being investigated so intensely. - Justin Pahara
Biobutanol (butyl alcohol) has come under increasing interest because of its advantages as a renewable transportation fuel compared to first generation biofuels. It has a higher energy content than ethanol, can be used in the existing gasoline supply and distribution lines, has higher octane number, and can be mixed with gasoline in much higher proportions:
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The fuel can be obtained by breaking down lignocellulosic biomass via enzymes contained in microorganisms (earlier post). This means a potentially vast range of biomass feedstocks can be used which don't compete with food crops.

Major organisations working on the development of biobutanol are Japan's government-affiliated Research Institute of Innovative Technology for the Earth (RITE), which created a technology for the production of cellulosic biobutanol from materials such as grass cuttings and wood chips. The U.S. Department of Agriculture's Agricultural Research Service (ARS), which is experimenting with a way to convert cellulosic biomass into biobutanol using the bacterium Clostridium beijerinckii (earlier post).

Another player is biotech company Green Biologics which received a large (€855,000) fund to research strategies to develop the fuel from cellulosic biomass by utilizing thermophiles (see here).

But biobutanol made most headlines when chemical giant DuPont and petroleum major BP announced they were going to collaborate on producing the fuel, which they think holds promise over the longer term as one of the best gasoline substitutes (earlier post).


iGEM is a competition attracting hundreds of undergraduates from all over the world spend their summer making synthetic biology a reality. The question driving iGEM is: "can simple biological systems by built from standard, interchangeable parts and operated in living cells, or is biology too complicated to be engineered this way?" Synthetic biologists try to answer the question by actually engineering biological devices. The iGEM competition facilitates this by providing a standardized library of parts, which it calls BioBricks, to students, and asks them to build genetic machines with them. Students are welcome to make their own BioBricks, which is what the team from the University of Alberta did.

Broader goals of iGEM are to include the systematic engineering of biology; to promote the open and transparent development of tools for engineering biology; and, to help construct a society that can productively apply biological technology.

References:
University of Alberta: Butanerds win MIT contest - November 5, 2007.

University of Alberta: U of A team building a better bacterium [includes video] - November 5, 2007.

MIT: fourth annual International Genetically Engineered Machine (iGEM) competition.

MIT iGEM Wiki: Registry of Standard Biological Parts.

Biopact: Japan's RITE develops cellulosic biobutanol technology - August 14, 2007

Biopact: Scientists develop biobutanol from wheat straw - June 26, 2007

Biopact: Green biologics awarded €855,000 to boost biobutanol fuel development -
January 22, 2007

Biopact: DuPont outlines commercialisation strategies for biobutanol, cellulosic ethanol - February 22, 2007


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Tuesday, November 06, 2007

Harvard Center for International Development: "Biofuels can match oil production"

Even though some vested interests are trying to downplay the potential of biofuels, energy analysts and scientists know that their potential is truly vast - at least in theory. The director of Harvard University’s Center for International Development (John F. Kennedy School of Government), professor Ricardo Hausmann, joins those analysts and presents a well argued view on what would be needed for a sustainable bioenergy future to emerge. Writing in the Financial Times, he goes so far as to state that 'biofuels can match oil production'.

Biopact readers will recognize several points made by Hausmann, especially those dealing with the major policy and market transformations needed which must allow the 'biofuel super powers' of the future to supply world markets. Like many others, he too stresses that, with the right policies, the bioeconomy offers major chances for social and rural development in the Global South. Moreover, the author outlines the possible effects of biofuels on OPEC's monopolistic power.

Because prof Hausmann is a well known analyst of development economics and has served in major international development organisations (World Bank, Inter-American Development Bank, and as a minister in the Venezuelan government) and thus his insight carries some authority, we republish his essay here in full:

Peering into the future seldom produces a clear picture, Hausmann writes. But this is not the case with bio-energy. Its long-term impacts on the global economy appear to be pretty clear, making many long-term predictions quite compelling, including the demise of the price-setting power of the Organisation of the Petroleum Exporting Countries and the end of agricultural protectionism.

First, technology is bound to deliver a biofuel that will be competitive with fossil energy at something like current prices. It probably already has. Brazil has been exporting ethanol to the US at an average delivery price of $1.45 for an amount with the energy equivalence of a gallon of petrol. It is doing so profitably and in increasing amounts, in spite of a 54 cents a gallon tariff to protect American maize-based ethanol producers. Many countries are following suit.

But ethanol is an inconvenient chemical compound that is corrosive and soluble in water, thus limiting its immediate market to that of a gasoline additive. However, this is just the Betamax phase of the industry. There is plenty of private venture capital money being poured into finding more efficient ways of extracting energy from biomass and delivering it to transport and power systems. Over time, the technology will also become more flexible, allowing more crops to be used as feedstock, not just the current choice of sugarcane, maize and palm oil. New technologies will be able to extract energy from cellulose, allowing the use of pastures such as switch grass as well as the refuse of current food production. The cheque is in the mail.

Second, the world is full of under-utilised land that can grow the biomass that the new technology will require. According to the Food and Agriculture Organisation, the world has a bit less than 1.4bn hectares under cultivation. But using the Geographic Information System database, Rodrigo Wagner and I have estimated that there are some 95 countries that have more than 700m hectares of good quality land that is not being cultivated. Depending on assumptions about productivity per hectare, today’s oil production represents the equivalent of some 500m to 1bn hectares of biofuels. So the production potential of biofuels is in the same ball park as oil production today.

Third, even if only partially used, this large potential biofuels supply will cap the price of oil because its supply is much more elastic than the supply of oil. This will cause the price of oil to be set at the marginal cost of bio-energy, independently of the production decisions of Opec. If Opec tries to raise prices above the price at which biofuels become highly profitable, it will only crowd in more biofuels. Oil producers will still be rich, but they will not have incentives to form a cartel:
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Fourth, the price of agricultural land will be influenced by its potential use for bio-energy. As farmers choose what crop would suit them best, they will change what they produce and hence the whole system of relative prices of agricultural produce. This will imply a very large increase in the demand for agricultural land. Its price and that of the products that use it intensively – such as food and cotton – will go up. By how much? This will depend not only on the cost of bio-energy but also on how much additional land is put to use and the degree to which food crops will be complements or substitutes of bio-energy: they would be substitutes if switch grass were planted instead of soybeans; they will be complements if biofuels are made out of wheat stalk. My bet is that they will tend to be more substitutes than complements and the relative price of food will go up.

Fifth, the increase in the price of agricultural land and of food will relieve governments from the current political pressure to protect the agricultural sector. Governments that, as a consequence of the land glut, have been protecting and subsidising farmers will see them grow rich either because they “plant” biofuels themselves or because other producers switch into them, lowering the supply and increasing the price of other crops.

By contrast, consumers will be less enthusiastic and demand that something be done about the price of food.

The obvious solution will be to cut back on protectionism and liberalise trade in agriculture.

Sixth, the countries that have the largest endowment of under-utilised lands are in the developing world, especially Africa and Latin America. Putting that land into production will require a type of infrastructure that – as opposed to the dedicated variety required by extractive industries – usually crowds in other forms of investment by lowering transport costs in ample regions of the country.

Bio-energy will make those infrastructure investments socially profitable, creating a possible stepping stone into other industries.

Some policy action in industrialised countries will be required to make this world possible. Biofuels policy needs to stop being seen through the prism of agricultural support policy – which justifies a 54 cents a gallon US tariff on Brazilian ethanol – and instead become the purview of energy and environmental policies. Standards will have to be developed to allow the energy and automotive industries to co-ordinate technologies. To make this scenario appealing, the impact of the expansion of the agricultural frontier on the environment and biodiversity, and the distributive effects of the rise in food prices will have to be addressed.

But these problems seem solvable given the expected political benefits in terms of lower net carbon emissions, more energy security, more efficient agricultural policies and greater opportunities for sustainable development.


Ricardo Hausmann is Professor of the Practice of Economic Development and Director of the Center for International Development. Previously, he served as the first Chief Economist of the Inter-American Development Bank (1994 to 2000), where he created the Research Department. He has served as Minister of Planning of Venezuela (1992 to 1993) and as a member of the Board of the Central Bank of Venezuela. He also served as Chair of the IMF-World Bank Development Committee. He was Professor of Economics at the Instituto de Estudios Superiores de Administracion (IESA) (1985 to 1991) in Caracas, where he founded the Center for Public Policy. He also was a Visiting Fellow at Oxford University (1988 to 1991). His research interests include issues of growth, macroeconomic stability, international finance, and the social dimensions of development. He holds a PhD in economics from Cornell University.

References:
Financial Times: Biofuels can match oil production - November 6, 2007.

Biopact: IEA report: bioenergy can meet 20 to 50% of world's future energy demand - September 12, 2007

Biopact: IEA study: large potential for biomass trade, under different scenarios - May 13, 2007

Biopact: A look at Africa's biofuels potential - July 30, 2006

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French research consortium in biomass-to-liquids project - analyses three gasification technologies

France's chief research agency concerned with agronomy and development in the developing world (CIRAD) announces [*French] that a consortium of research organisations is finalizing a project aimed at developing an industrial process capable of transforming any type of lignocellulosic biomass into liquid biofuel that can be used in today's automotive engines, at a competitive cost. The technical pathway selected is thermochemical conversion by steam and liquefaction via the Fischer-Tropsch process - this 'biomass-to-liquids' (BtL) chain results in so-called 'synthetic biofuels'.

The project, known as 'GASPAR' is funded by the French Agency for Environment and Energy Management (ADEME), and is part of a larger national program which focuses on producing ultra-clean next generation biofuels for aviation, road and marine transport from France's abundant biomass resources. But results are transferable to biomass rich developing countries in the tropics and subtropics (see below), hence the participation of scientists from the Biomass Unit of the CIRAD (Centre de coopération internationale en recherche agronomique pour le développement). Other GASPAR researchers include scientists from Commissariat à l'Energie Atomique (CEA, nuclear energy agency), the Institut Français du Pétrole (IFP) and the Groupe de recherche sur l'Environnement et la Chimie Atmosphérique (GRECA) at the Université Joseph Fourier in Grenoble.

The consortium currently estimates that BtL fuels can replace 15% of France's liquid fossil fuel consumption 'easily' and at 'highly competitive' prices (with oil at $96 per barrel), even though a 45% substitution over the longer term would be feasible.

Via a range of pilot programs, GASPAR will analyse different gasification methods and technologies with the goal to obtain the most optimal types of syngas useable for further transformation into liquid fuels.

Biomass gasification is beginning to take a considerable share in co-generation plants that produce both heat and power, with several large facilities currently operational in France. For the production of synthetic biofuels, these gasification processes are currently unsatisfactory. The quality of the gas must be improved so that a hydrogen and carbon monoxide rich syngas is produced in a cleaner and more straightforward manner. The synthesis steps (Fischer-Tropsch) have progressed further and need less research.

In search for a better syngas, GASPAR looks at four different technologies: (1) gasification in fixed bed reactors, (2) gasification in entrained bed reactors, (3) in fluidized bed reactors and (4) at the treatment of tars at a temperature of 1000 degrees celsius:
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Phases 1 to 3 are aimed at comparing the three gasification processes and to determine their optimal operational conditions for the production of a syngas, without analysing the resulting tars. The pilot trials will be conducted at the relatively large scale reactors at the CIRAD and the CEA.

The fourth phase consists of analysing the cracking of tars which result from the biomass gasification. In this step, experiments in a gas treatment reactor will be conducted to lower the tar contents of syngases which must allow for a more efficient production of biofuels.

The research consortium is optimistic about the potential of the technology for France, estimating that synthetic biofuels can replace around 25 million tons of oil equivalent per year, with a first objective of replacing 8 million tons (which is 15% of France's liquid fossil fuel consumption) deemed 'very feasible'. GASPAR will result in fuels that can be utilized immediately in existing infrastructures and engines without any adaptation - synfuels can replace 100% of gasoline/diesel in a fuel tank (unlike first generation biofuels like ethanol and biodiesel). The BtL process thus promises to substitute a very significant part of France's transportation fuel needs.

Key CIRAD researchers in the project are Laurent Van de Steene, Eric Martin, Ghislaine Volle, François Broust, Ferdinand Fassinou, Jean-Philippe Tagutchou.

Developing countries
Interest in this technology is growing, because it could allow developing countries with a large biomass potential to export Fischer-Tropsch fuels easily. A recent article in Energy & Fuels, to cite just one example, documents the potential and hurdles of this vision. In "The impact of biomass pretreatment on the feasibility of overseas biomass conversion to Fischer-Tropsch products" researchers compare different biomass densification options (pelletisation, pyrolysis into bio-oil, or local BtL production).

The study concludes that large-scale, central, overseas BtL synthesis plants would be the most attractive route for the export of biomass. However, local logistic aspects require the construction of several small-scale synthesis plants, causing significant economical disadvantages due to economy of scale. The FT product can be produced from overseas biomass for 15 euro/GJ (or 55 euro ct/L of diesel equivalent). At the crude oil prices of late 2005 (around $60/bbl), large-scale BtL was considered as an economically feasible technology. WIth oil prices currently at US$96 per barrel, the option has become quite attractive.

Picture: one of the biomass gasification reactors utilized for GASPAR. Credit: CIRAD.

References:
CIRAD: "Gazéification de la biomasse pour la synthèse et la production de carburants renouvelables" - project overview.

Zwart Robin, Boerrigter Harold, Van Der Drift Abraham, "The impact of biomass pretreatment on the feasibility of overseas biomass conversion to Fischer-Tropsch products", Energy & Fuels , 2006, vol. 20, no5, pp. 2192-2197


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Diesel exhaust associated with higher heart attack, stroke risk in men

Increased roadway pollution produced by diesel fuel in vehicles is leading to a cascade of conditions that could result in heart attack or stroke, researchers suggested in the report of a study presented at the American Heart Association's Scientific Sessions 2007. Results are published in Circulation.

United Kingdom and Swedish researchers found that diesel exhaust increased clot formation and blood platelet activity in healthy volunteers - which could lead to heart attack and stroke.
The study results are closely tied with previous observational and epidemiological studies showing that shortly after exposure to traffic air pollution, individuals are more likely to suffer a heart attack. This study shows that when a person is exposed to relatively high levels of diesel exhaust for a short time, the blood is more likely to clot. This could lead to a blocked vessel resulting in heart attack or stroke. - Andrew Lucking, M.D., lead author of the study and a cardiology fellow at the University of Edinburgh
The double-blind, randomized, cross-over study included 20 healthy men, 21 to 44 years old. They were separately exposed to filtered air (serving as a control) and to diluted diesel exhaust at 300 micrograms per meter cubed (mcg/m3), a level comparable to curbside exposure on a busy street.

Researchers performed the exposures in a specially built diesel exposure chamber. At two hours and at six hours after exposure, researchers allowed a small amount of participants' blood to flow through a perfusion chamber. They measured clot formation, coagulation, platelet activation and inflammatory markers after each exposure.

To measure clot formation, researchers used low and high shear rates, recreating flow conditions inside the body's blood vessels. Compared to filtered air, breathing air with diluted diesel exhaust increased clot formation in the low shear chamber by 24.2 percent and the high shear chamber by 19.1 percent. This was seen at both two and six hours after diesel exposure (stat, click to enlarge):
:: :: :: :: :: :: :: :: ::

The researchers also found an increase in platelet activation, assessed by measuring the number of platelets associated with white blood cells. Platelets play a central role in blood clotting, and when they are activated, they associate with white blood cells such as neutrophils and monocytes, Lucking said. Diluted diesel exhaust inhalation increased platelet-neutrophil aggregates from 6.5 percent to 9.2 percent and platelet-monocyte aggregates from 21 percent to 25 percent at two hours after exposure. At six hours, researchers found a trend toward platelet activation, but it was not statistically significant.

After exposure to diesel exhaust, the participants had increased levels of activated platelets that became attached to white blood cells. When activated, the platelets can stick together and form a clot.

High levels of traffic pollution are known to increase the risk of heart attack in the immediate hours or days after exposure. These findings provide a potential mechanism that could link exposure to traffic-derived air pollution with acute heart attack. It's unclear whether these findings would apply to gasoline-powered engines, Lucking said. Diesel engines generate many times more fine pollutant particles than comparable-sized gasoline engines.

Diesel engines are becoming very popular because of increased fuel economy, Lucking added. While diesel engines burn more efficiently, they also put more fine particulate matter into the air.

Lucking encourages physical activity but suggested that people with existing cardiovascular disease try to exercise away from traffic congestion.

The researchers plan to collaborate again with researchers at the University of Umea, Sweden, to test particle traps retrofitted on diesel engines to determine whether these devices are effective in reducing diesel particles.

Exposure to air pollution clearly is detrimental and we must look at ways to reduce pollution in the environment, Lucking said. The U.S. Environmental Protection Agency (EPA) introduced its 1997 National Ambient Air Quality Standards (NAAQS) to educate the public about daily air quality levels, including information about ozone and particulate matter levels. These daily updates can be found on the EPA Web site, here, and in many newspapers across the country.

The American Heart Association supports these EPA guidelines for activity restriction for people with heart disease or those who have certain cardiovascular risk factors, for people with pulmonary disease or diabetes and for the elderly.

The British Heart Foundation funded the study.

References:
Andrew J Lucking; Magnus Lundback; Nicholas L Mills; Dana Faratian; Fleming Cassee; Ken Donaldson; Nicholas Boon; Juan J Badimon; Thomas Sandstrom; Anders Blomberg; David E Newby, "Regulation of Blood Coagulation and Fibrinolysis. Abstract 803: Diesel Exhaust Inhalation Enhances Thrombus Formation In Man", Circulation, 2007, 116:II_155

Eurekalert: Diesel exhaust associated with higher heart attack, stroke risk in men - November 6, 2007.


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Shell and Codexis expand collaboration to explore new 'super' enzymes for next-generation biofuels

The development of sustainable biofuel took a step forward today as Royal Dutch Shell plc expanded its collaboration with Codexis Inc. to develop new 'super' enzymes to convert biomass to fuel.

The new agreement covers five years of research collaboration and includes Shell making an equity investment in Codexis - a biocatalyst, synthetic biology and green chemistry company, - and taking a seat on the company’s board. Research will focus on adapting enzymes to improve the conversion of a range of raw materials into high-performance fuels. It will assist Shell in developing the next generation of biofuels as it explores a number of non-food bio materials, new conversion processes and alternative fuel products.

Codexis scientists create super enzymes capable of outperforming naturally occurring varieties. The company has successfully applied this pioneering technology to improve manufacturing processes for leading pharmaceutical companies, including Pfizer and Merck. The company has worked with Shell on biofuels since November 2006 and positive early results, including achievement of milestones ahead of schedule, have led to this new agreement and the broader collaboration announced today.
Breaking down and converting alternative, non-food bio material into high quality fuels for transport is complex. Processing efficiently at scale, in terms of both cost and C02 production, is challenging. This exciting research work into new powerful enzymes for more efficient conversion and better biofuels is part of Shell accelerating its drive to make next-generation biofuels a commercial reality. - Dr Graeme Sweeney, Shell Executive Vice President Future Fuels and C02
Codexis’ technology makes it possible to customize 'super' enzymes capable of selectively and efficiently performing a desired chemical process. This technology, referred to as 'DNA shuffling', is part of a directed evolution program to manipulate the DNA blueprint of an enzyme.

DNA shuffling is research technique that takes select genes or gene variants and then recombines or “shuffles” the DNA to create new hybrid genes (schematic, click to enlarge; an interactive overview here). The resulting gene library is then screened for novel biocatalysts that possess desired properties:
:: :: :: :: :: :: :: :: ::

Starting with a diverse set of genes that encode for variations of the enzyme catalyst, Codexis recombines, or shuffles these DNA sequences to create new variants. Using sophisticated high-throughput screening methods, novel biocatalysts with desired improvements are selected and these improved variants can then be put through the process again until a highly efficient biocatalyst is created that meets or exceeds targeted performance characteristics.
Codexis’ proven biocatalytic technology provides a powerful discovery pathway for development of next generation biofuels from renewable resources. In the first year of our collaboration, we have demonstrated the ability to solve complex technical challenges critical to successful biofuels development and commercialization. We look forward to continuing our work with Shell to bring clean, renewable liquid transportation fuels to the marketplace. - Alan Shaw, Ph.D., Codexis President and Chief Executive Officer
Codexis Inc., is a leading developer of clean biocatalytic process technologies that can substantially reduce the cost of manufacturing across a broad range of industries. Codexis’ proprietary directed evolution technologies enable novel solutions for efficient, cost-effective and environmentally friendly processes for pharmaceutical, energy and industrial chemical applications. In 2006, the company was recognised by the U.S. EPA with a Presidential Green Chemistry Challenge Award.

Royal Dutch Shell plc is working to meet government mandates for biofuel and, with its experience, expertise and assets, has become the world’s largest distributor of biofuels. The company is working with biofuel manufacturers to secure cost-effective supply and press for social and environmental safeguards. A constraint on the potential of conventional biofuels is that they use food crops. Shell is a leader in the development of next generation biofuels, using non-food bio materials, alternative processes and high-performance fuels.

References:
Codexis: Shell And Codexis Expand Collaboration To Explore New Super Enzymes For Next-Generation Biofuels - November 6, 2007.

Shell: media kit covering the new partnership, with videos and pics - November 6, 2007.

Shell: Quick guide to biofuels [*.pdf].

Shell: Shell Biofuels [*.pdf].


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African countries begin to recognize their vast biofuels potential


Reporters from the Deutsche Presse-Agentur (DPA) have visited African countries to see how they are positioning themselves in the biofuels debate. Visitors to the poor south-east African country of Mozambique are often taken aback at the cost of getting around, they write. "Petrol is the problem," taxi drivers in the capital Maputo retort when challenged over fares that begin at 100 meticais (close to 4 dollars) for a journey of no more than a couple of blocks.

Spiralling oil prices, which have resulted in a more than three-fold jump in fuel prices in Mozambique this year, are one factor fuelling the scramble among African countries with no reserves of 'black gold' to corner the market for greener alternatives. High oil prices have catastrophic effects on energy intensive developing countries (earlier post), but biofuels may mitigate some of these disastrous impacts.

From Mali to Madagascar, Senegal to South Africa, biofuels is the buzzword as African countries wake up to the possibility of using their vast land resources to grow crops that reduce their fossil fuel bill.

Some NGOs from the West, like Oxfam, have warned against land in developing countries being gobbled up by sprawling biofuels plantations. But Africans themselves, like Mozambique's director for 'new and renewable energy', Antonio Saide, rebuff those concerns: "We have enough land for enough food." And indeed, many of the sceptical NGOs do not take into account that Africa has vast unused land resources on which energy crops can be grown sustainably.

Projections by the International Energy Agency's Bioenergy Task forces show the continent can grow around 350EJ of bioenergy by 2050 in a high scenario, after the rising food, fiber and fodder needs for growing populations and livestock have been met, and under a 'no-deforestation' scenario. 300EJ is equivalent to twice the amount of the entire world's current petroleum consumption (see map, click to enlarge).

According to the UN's FAO, the effort could bring a rural renaissance and combat poverty and hunger in Africa. The Global South's staunchest biofuels proponent, Brazil's president Lula, sees bioenergy as more than just a weapon to fight poverty: it is a way to boost the sovereignty and economic independence of developing countries.

Biofuels carry the promise of much sought after foreign exchange as industrialized countries look to bioethanol and biodiesel to reduce their greenhouse gas emissions from transport. The European Union has decreed that 10 per cent of motor fuel used within its 27 member states must be biofuel by 2020. But European farmers have been slow to convert their operations from food to fuel crops leading EU officials to estimate they will have to import at least one-fifth of their biofuel needs. The world's largest emitter of greenhouse gases, the United States, has also announced plans to reduce its carbon footprint by increasing the use of renewable and alternative fuels nearly five-fold over the next 10 years.

These commitments are music to the ears of poor African countries that account for only a tiny proportion of global greenhouse gas emissions but are expected to be hardest hit by climate change, through increased flooding and drought.

A biofuel superpower in the making is how the vast former Portuguese colony of Mozambique is being talked up, where millions of hectares of unused land have been identified as suitable for the production of fuel crops. Some 700 million dollars has already been committed to biofuel production in Mozambique, including 510 million dollars from British-based Central Africa Mining and Exploration Company to produce ethanol from sugarcane in southern Gaza province.
The state has also received requests to open up more than 5 million hectares of land for the production of biodiesel, with coconuts, sunflowers and the weed-like jatropha plant being tested as possible feedstock. While energy independence is the primary goal, the small size of Mozambique's economy means that domestic energy needs could be quickly met by biofuels, Antonio Saide said. "We can very quickly satisfy the domestic market and begin to export," said Saide:
:: :: :: :: :: :: :: :: ::

Another African country with big plans for biofuels is Senegal, whose President Abdoulaye Wade has enthused about an African "biofuels revolution" and placed fuel crops at the heart of an agriculture renewal programme focussing on small farmers.

Not to be outdone African powerhouse South Africa is also preparing to plough money into biofuels, with construction already underway on one out of eight planned maize-to-ethanol refineries.

These Johnny-come-latelys in a biofuels industry dominated by Brazil have a number of aces up their sleeve. Many are United Nations Least Developed Countries that enjoy tariff-free access to the EU for their goods under the Everything But Arms initiative. The US African Growth and Opportunity Act also gives African countries preferential access to the US for a number of goods, that could be extended to include biofuels.

But growing fuel instead of food crops on a continent that is plagued by food insecurity has had its critics. Mindful of these concerns, drought-prone countries like Mozambique, Swaziland, Zambia, Madagascar and Mali are championing jatropha as a non-edible bio-oil plant that grows in almost any soil.

"Life-changing," was the verdict of rock star turned anti-poverty campaigner Bob Geldof on a jatropha plantation employing hundreds of workers in southern Swaziland, although questions remain around the plant's yield in sub-optimal conditions and the toxicity of its seeds.

Map: World's sustainable bioenergy potential by 2050 under four scenarios. Credit: IEA Bioenergy Task 40.

References:
Deutsche-Presse Agentur: Africa's big plans for biofuels - November 6, 2007.

IEA Bioenergy Task 40: Quickscan bio-energy potentials to 2050.



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Global survey: most people willing to make 'green sacrifices' to tackle climate change

In what may be seen as a message to politicians, a large survey [*.pdf] of 22,000 people in 21 countries reveals that most are ready to make personal sacrifices to address climate change, including paying more for polluting forms of energy. The poll, conducted by GlobeScan and the Program on International Policy Attitudes (PIPA) for the BBC World Service, asked questions about lifestyle choices and changes, carbon and energy taxes, and the need for more efficiency. U.S. citizens are just as climate conscious and willing to act than their European counterparts. Likewise, majorities of people in some developing countries - especially China, the world's largest emitter of greenhouse gases - are ready to spend money on climate mitigation.

A total of 22,182 citizens in Australia, Brazil, Canada, Chile, China, Egypt, France, Germany, Great Britain, India, Indonesia, Italy, Kenya, Mexico, Nigeria, the Philippines, Russia, South Korea, Spain, Turkey, and the United States were interviewed face to face or by telephone between May 29 and July 26, 2007. In eight of the 21 countries, the sample was limited to major urban areas. The margin of error per country ranges from +/-2.4 to 3.5 percent.

Lifestyle changes
The countries with the largest percentages saying that lifestyle and behavioural changes needed to tackle climate change will be definitely necessary are Spain (68%), Mexico (64%), Canada (63%), Italy (62%), and China (59%). The countries with the largest numbers saying that such changes will not be necessary are Nigeria (33%), Egypt (29%), Kenya (25%), the United States (19%) and India (18%).

Energy Costs

Large majorities in most of Europe and the Americas believe that it will also be necessary to “increase the cost of the types of energy that most cause climate change, such as coal and oil, in order to encourage individuals and industry to use less:” Chile (79%), Great Britain (77%), Canada (72%), Germany (70%), United States (65%), Brazil (64%), Mexico (61%), France (61%) and Spain (53%). Australia is the developed country where the largest majority (81%) believe energy costs will need to increase.

There are two exceptions, with 50 percent of Italians and 50 percent of Russians leaning toward the belief that such increases will not be necessary. Italy’s energy costs are already among the highest in Europe in part because it bans nuclear technology. Although Russia is a major oil producer, its consumershave faced rising energy prices in recent years.

Attitudes to increased energy costs in Asia range from the overwhelming 83 percent majorities in China and Indonesia to the divided views in South Korea and the Philippines. Indians lean toward the view that higher costs are needed: half (50%) say that increasing the cost of energy will be necessary and only 27 percent say it will not, though large numbers (23%) do not answer.

The only country with a majority (52%) against increasing the cost of fuels that produce greenhouse gases is Nigeria.

Tax Increases
Reactions are mixed on whether people would favour the raising of taxes on energy sources that contribute to climate change. Overall, only 50 percent are in favour and 44 percent opposed.

Urban Chinese have the largest majority (85%) who would support raising taxes on the fuels that contribute most to climate change.

The proportion of Chinese favouring higher energy taxes is 24 points greater than the next largest majorities in Australia and Chile (61% in both). This is followed by Germans (59%), Canadians (57%), Indonesians (56%), Britons (54%) and Nigerians (52%):
:: :: :: :: :: :: :: :: ::

Publics lean toward this measure in Mexico (50% to 46%) and are divided in Kenya (50% to 48%), Spain (49% to 47%), France (47% to 48%), Turkey (42% to 43%) and India (38% to 36%).

Majorities in Italy (62%), South Korea (59%), the Philippines (58%), Brazil (55%), Egypt (52%) and the United States (51%) are initially opposed to higher energy taxes. The poll then tested the relative influence of two different design options for an energy tax by asking those who initially did not support a higher energy tax whether they would favour this tax under one of two different conditions: if the revenues were “devoted only to increasing energy efficiency and developing energy sources that do not produce climate change” and if at “the same time as your other taxes were reduced by the same amount, keeping your total taxes at the current level.”

Combined with those who initially supported an energy tax, the percentage who change their position under each condition produces a large majority in every country ready to favour an energy tax.

In the six countries where majorities initially oppose higher fuel taxes, adding the condition of devoting revenues to improving efficiency and seeking out new sources produces large majorities in favour: Italy (78%), South Korea (70%), the Philippines (69%), Brazil (65%), Egypt (73%) and the United States (74%).

The six countries that were somewhat divided about tax increases also become supporters if revenues would be earmarked for energy programs: Mexico (74%), Kenya (81%), Spain (86%), France (79%), Turkey (75%) and India (60%).

The same holds true, but to a slightly lesser extent, if those initially against higher energy taxes are told their other taxes would be reduced so their total tax bill would remain the same. Countries that were opposed to tax increases then become supporters: Italy (69%), South Korea (70%), the Philippines (66%), Brazil (65%), Egypt (82%) and the United States (64%). And countries that were divided also show large majorities in favour: Mexico (64%), Kenya (78%), Spain (73%), France (79%), Turkey (78%) and India (66%).

Again, China stands out as exceptionally willing to consider higher taxes as a means of combating climate change. When those against or uncertain about higher taxes are asked whether they would support them to increase efficiency or develop new sources, the total in favour of tax increases becomes a nearly unanimous 97 percent. And when asked whether they would favour such increases if their total tax bill remained the same, 93 percent say yes.


GlobeScan Incorporated is a global public opinion and stakeholder research consultancy with offices in Toronto, London, and Washington. GlobeScan conducts custom research and annual tracking studies on global issues. With a research network spanning 50+ countries, GlobeScan works with global companies, multilateral agencies, national governments, and non-government organizations to deliver research-based insights for successful strategies.

The Program on International Policy Attitudes (PIPA) is a joint program of the Center on Policy Attitudes and the Center for International and Security Studies at the University of Maryland. PIPA undertakes research on attitudes in publics around the world on a variety of international issues and publishes the website/webzine WorldPublicOpinion.org.

BBC World Service is an international radio and online broadcaster delivering programmes and services in 33 languages. The radio output reaches 183 million weekly listeners around the globe, on platforms that include SW, AM, FM, digital satellite and cable channels. It has around 2,000 partner radio stations which take BBC content, and numerous partnerships supplying content to mobile phones. Its international online sites include audio and video content and offer opportunities to feedback directly and discuss world events. They receive over 704 million page impressions monthly, attracting 38.5 million unique users per month.


References:
BBC World Service: Climate change poll - detailed results [*.pdf] - November 2, 2007.


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Monday, November 05, 2007

Large glycerin surplus from biodiesel seen by 2010

Biodiesel production from vegetable oils or animal fats produces a large percentage (as much as 10%) of glycerin (glycerol) as a by-product. With a view on making the best use of this ever increasing by-product, the University Rey Juan Carlos (URJC) in Madrid has undertaken a research project entitled “Transformation of glycerine in biodiesel” which focuses on its recyclability. It estimates that in the next few years there will be a surplus of cheap glycerin in Europe since a parliamentary directive stated states that by the year 2010, 5,75% of the petrol and diesel sold for transport must be a biofuel.

Currently glycerin has a relatively high price making its use as an energy source prohibitive today. But the exponential growth of its production will eventually exceed its current demand for traditional uses, which is mainly in the synthesis of pharmaceutical products. According to data from the European Biodiesel Board, over three million tons of biodiesel were produced in 2005, which represents a growth of 64,7% with respect to 2004. In 2006 there was a production of five million tons, a 54% rise from the previous year. And it is believed that output will continue on this trend, with a yearly production of 10 million tons of biodiesel expected by 2010 and therefore around a million tons of glycerin. This underscores the importance of finding new applications for this by-product.

One of the more recent alternatives, and the one under investigation by the (URJC) research group directed by Juan Antonio Melero, consist of the transformation of glycerin into products that could partially replace diesel in a cost-competitive manner, with the added advantage that the compounds produced (glycerin ethers) added to diesel in certain proportions, improve the low temperature response, reducing its viscosity and contaminant emissions of the diesel:
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Other researchers have found cost-effective ways to use crude glycerin as feedstock for new types of biopolymers, bioplastic films, and green specialty chemicals such as propylene glycol. Others found glycerin makes for a suitable cattle and poultry feed or for the production of biogas.

Most recently researchers at Rice University in Houston announced they developed a way to convert glycerin into ethanol. Both sectors are now linked and could create synergies that make both more efficient (previous post).


References:
AlphaGalileo: By 2010 there will be a large glycerin surplus from the production of biodiesel - November 5, 2007.

Biopact: Scientists convert biodiesel byproduct glycerin into ethanol - November 04, 2007

Biopact: GS CleanTech to produce biodiesel from corn ethanol co-product - October 23, 2007

Biopact: The bioeconomy at work: Dow develops propylene glycol from biodiesel residue - March 19, 2007

Biopact: Students patent biopolymer made from biodiesel and wine byproducts - June 20, 2007

Biopact: Researchers make biodegradable films from biofuel and dairy byproducts - June 11, 2007

Biopact: Researchers study effectiveness of glycerin as cattle feed - May 25, 2007

Biopact: Biodiesel byproduct glycerine makes excellent chicken food - August 04, 2006

Biopact: Glycerin as a biogas feedstock - December 27, 2006

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Chinese biomass plant that sells carbon credits to Electricité de France comes online

A biomass-fired power plant that burns plant and vegetable stalks to generate electricity went into operation today in northeast China's Heilongjiang Province. The power plant, with an installed capacity of 30MW, is expected to burn more than 200,000 tons of stalks annually and generate 175 million kwh of electricity, according to Wang Jun'an, executive general manager of the Guoneng Wangkui Bio Energy Company in Wangkui County, Heilongjiang Province. Carbon credits will be sold to Electricité de France (EDF), the European state-owned energy giant.

The plant is the first of its kind in northeast China. The National Bio Energy Company (NBE), Ltd, a subsidiary of the State Grid Corporation of China, has earmarked 553 million yuan ($74 million) for the project. NBE currently operates six working biomass plants throughout the People's Republic. But it aims to have around 30 such plants with a combined capacity of 2,050 megawatts under construction and in operation by 2010 (previous post and here; click map to visit an interactive presentation).

As reported earlier, the plant will sell certified emission reduction (CERs) credits to EDF under the Clean Development Mechanism (CDM). Last year, EDF Trading signed a letter of intent with China National Bio Energy Co Ltd to purchase carbon credits from three of its biomass power projects, equivalent to 1.5 million tons of CO2. NBE's two other projects under contract with EDF are located in East China's Shandong Province and Northeast China's Jilin provinces (earlier post).

The CDM, an arrangement under the Kyoto Protocol, allows industrialized countries with a greenhouse gas reduction commitment to invest in projects that reduce emissions in developing countries. It is considered an alternative to more expensive emission reductions in industrialized countries:
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The National Bio Energy Company, which promotes China's renewable energy industry through biomass power generation, aims to generate 55 percent of the country's biomass power in 2010.

According to China's newest renewable energy development targets, biomass power will become the second largest sector after hydropower and grow almost three-fold to reach 5.5 GW in 2010 from 2 GW in 2005, and 15 times as much by 2020, to 30 GW (earlier post on China's new $265 billion Renewables Program).

References:
Xinhuanet: Biomass-fired power plant starts operation in NE China - November 5, 2007.

Biopact: A closer look at China's biomass power plants - April 19, 2007

Biopact: Expert: China's biomass power plants to be profitable in three years - October 30, 2007

Biopact: China unveils $265 billion renewable energy plan, aims for 15% renewables by 2020 - September 06, 2007

Biopact: French energy giant to buy carbon credits from Chinese biomass projects - October 26, 2006



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Biofuel producer leaves Australia for U.S.

Booming demand from China and India is the major factor responsible for the increase in food and commodity prices. An Australian biofuel producer is experiencing this first-hand and has decided to shut down its operations in Perth and Adelaide because the price of its main feedstock, tallow, has increased too much on Asian demand.

Perth-based Australian Renewable Fuels (ARF) blamed the shut-in of its two plants with a combined capacity of 44 million litres on rising prices of tallow: the raw material increased from A$600 (US$552) per tonne to A$900 (US$828) per tonne in the last six months as a result of burgeoning demand from China. "As a consequence, production of biodiesel from [the two plants] has become uneconomic, with no indication of material improvement in feedstock prices in the immediate future," ARF said in the statement issued to the Australian Stock Exchange.

The company is moving to the United States in search for more favourable market conditions because lack of government support is another factor that made production in Australia uneconomic.

ARF's Chairman Max Ger also lashed out at the Australian government and opposition for paying lip service to the woes of biodiesel producers. Ger told the Australian press the government had granted the company more than A$7 million (US$6.4 million) two years ago to build the plant in Adelaide, but subsequent changes to the Fuel Tax Act made it 'virtually impossible' to sell biofuel because incentives for users had almost dried up.

A legislative change last year made it impossible for users of biodiesel and mineral diesel blends to claim the A$0.36 (US$0.33) a litre tax rebate. "The federal government made it impossible for us to sell biodiesel to anybody but the oil majors," Ger said. However, oil companies, with the exception of Caltex, were indifferent, or 'mildly hostile' to biodiesel users, who relied on the oil majors to develop distribution networks, he added:
:: :: :: :: :: :: :: :: ::

With ARF losing money on every litre sold, Ger said the closures of the Picton (Perth) and Largs Bay (Adelaide) operations were needed to preserve cash. The two plants, which cost ARF A$47 million (US$43 million) to build, are now under care and maintenance pending a review by adviser, Macquarie Bank. ARF is now moving on to focus on the development of opportunities in the United States' biodiesel market, particularly in New Mexico. ARF deems the market conditions in the United States as more favourable, with a biodiesel mandate backing the demand and the presence of a more diverse range of feedstock as well as export prohibitions on tallow mitigating cost pressures.

ARF's move to cut its operations in Australia comes a week after former federal opposition leader, John Hewson resigned as the chairman of Australia-based Natural Fuel, which has been hit by rising costs and delays in the construction of a major plant in Singapore. Last month, AgriEnergy dropped plans to build a A$100 million (US$92 million) ethanol plant near Swan Hill, in favour of focusing on its advanced biodiesel plant at Beatrice, Neb., in the United States.

References:
The Age: Clean fuel company shuts works, sack workers - November 5, 2007.

Energy Current: Biofuel producer leaves Australia for U.S. - November 5, 2007.



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Black carbon from fossil fuels heats the planet, soot from biomass cools it

Black carbon contained in soot from the combustion of fossil fuels may be responsible for around 16% of the gross warming of the planet. According to testimony provided by five scientists before the US House Committee on Oversight and Government Reform, it may be the second-most significant global warming pollutant after carbon dioxide and ahead of methane.

The black carbon in soot performs its warming by absorbing sunlight, converting it into infrared (heat) radiation, and emitting that heat radiation to the air around it. Soot on the surface of snow and sea ice contribute to both the melting of those surfaces as well as the warming of the air (earlier post).

But according to the scientists, particles from burning biomass are less oily and contain a much lower black carbon fraction than fossil fuel soot particles. Biomass-burning particles thus tend to cool climate on a global scale. This results in the so-called 'global dimming' effect.

Testifying before the committee were:
  • Dr. Mark Z. Jacobson, Prof. of Civil and Environmental Engineering, Atmosphere/Energy Program, Stanford University
  • Dr. Tami C. Bond, Asst. Prof. of Civil and Environmental Engineering, University of Illinois at Urbana-Champaign
  • Dr. V. Ramanathan, Prof. of Climate and Atmospheric Sciences, Scripps Institute of Oceanography, University of San Diego
  • Dr. Charles Zender, Assoc. Prof. of Earth System Science, University of California at Irvine.
  • Dr. Joel Schwartz, Professor of Environmental Epidemiology, Harvard University
Because of the relatively short lifetime of soot in the atmosphere compared to greenhouse gases, control of soot may be the fastest method of slowing warming for a specific period, according to Dr. Jacobson.

Black carbon, noted Dr. Bond, adds 2-3 order of magnitude more energy to the climate system than an equivalent mass of CO2 because black carbon is an extremely good absorber of visible light. While carbon dioxide stays in the atmosphere for decades, it absorbs just a small amount of infrared radiation:

The findings have implications for the use of diesel fuel. Because of their increased fuel efficiency relative to gasoline vehicles, diesels are seen as an improvement over gasoline with respect to global warming issues. However, once soot warming is factored in, the difference between the two platforms is greatly reduced, as diesel emits more soot than gasoline:
:: :: :: :: :: :: :: :: :: ::

Methods proposed to control fuel soot include improving engines; switching fuels; adding particle traps; and changing vehicle technologies.
In sum, there is not an advantage and a potential disadvantage of diesel versus gasoline in terms of climate and air pollution impact. However, neither type of vehicle is satisfactory or useful for solving climate and health problems as the emissions from both are very high. Even modest improvements in mileage standards for all vehicles are beneficial, but will only delay the eventual increase in emissions due to a larger population. — Dr. Jacobson
The scientists therefor advise a conversion of vehicles from fossil fuels to electric, plug-in hybrid or hydrogen fuel cell vehicles, where the electricity or hydrogen is produced by a renewable energy sources.

The good new is that, given the fact that biomass particles may help cool the planet, their use in dedicated power plants would become a viable strategy to fight global warming. Moreover, unlike any of the conventional renewables (wind, solar, geothermal, etc...) biomass can be used in carbon-negative energy systems.

The overall effect of biomass used in so-called 'bio-energy with carbon storage' (BECS) systems on reducing global warming, can thus become even larger than first predicted.

Image: Map showing the annual mean temperature change due to dirty snow in degrees Celsius.

References:
U.S. House, Committee on Oversight and Government Reform: Hearing Examines Black Carbon and Global Warming - October 18, 2007

GreenCarCongress: Black Carbon May be Second-Most Significant Global Warming Pollutant After Carbon Dioxide; Alters Picture of Diesel Engine Benefits - November 5, 2007.

Biopact: Dirty snow may warm Arctic as much as greenhouse gases - cleaner fuels needed - June 06, 2007


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Sunday, November 04, 2007

AfricAlive visits life-saving palm oil plantation in Sierra Leone


AfricAlive is an initiative of Dutch students who are touring Africa in search of sustainable energy and development projects. In Sierra Leone they visit the Magbenteh Community Hospital in Makeni, which will be financed by palm oil, a commodity that has received a boost because of the biodiesel boom. The project not only brings modern health care to a deeply impoverished region, but also much needed jobs and incomes to the rural community.

This is the first in a series of three articles, in which we explore the potential of palm oil to contribute to social development in poor countries. Next we visit a group of Presbyterian women in Congo, who are tired of imported oil, and who have started their own palm oil initiative to break their dependence. Finally, we look at a famous palm oil cooperative in Costa Rica, where hundreds of farmers have joined forces to escape poverty with their crop. Today, the cooperative serves as an example of how local ownership and sustainable development can result in social progress. Palm oil does not in itself deserve the bad reputation some have ascribed to it. Rather, the modes of production in which it is caught deserve scrutiny.

Development work carried out by Western NGOs is often highly idealistic and keeps local people dependent on foreign aid. It may be philantropic to build a hospital in Africa with donated money, but if the project cannot be sustained over the longer term and if it doesn't become self-reliant, it becomes a perversity. Charity and paternalistic approaches to development are not the way forward - we all know the mantra, but very few people act accordingly. The Magbenteh Community Hospital in the north of Sierra Leone shows a different approach. Local smallholders there show overwhelming support for the plan, which consists of helping them to become modern, efficient palm oil producers - the profits of which will finance the clinic. A survey amongst more than 2000 of the region's rural families - who own the plantations - indicated 95% of them are willing to join the program, which is set to boost their incomes.

Between 1991 and 2001 a horrific civil war brought Sierra Leone to brink of collapse. Although the country has vast mineral resources - of which the diamonds are the most notorious - and the land is fertile, it belongs to the poorest countries in the world. The country is now slowly recovering after a relative peace has set in. But the war has destroyed almost the entire country's infrastructures, including most medical facilities. As a result of the lack of medical attention, more than 40% of all children dies before reaching the age of five and the average life expectancy is no more than forty years.

During the opening of the Magbenteh Community Hospital in Makeni, where he was present on the request of a friend, Dutch development worker Fred Nederlof was moved by the story of the project's founding father: Harald Pfeiffer. As a Swiss born physiotherapist working in Sierra Leone for 18 years, he had - with enormous efforts - accomplished the construction of the hospital. However there was no money left for the running costs: personnel, medication, maintenance, and so on. Back in Holland Fred Nederlof founded the Lion Heart Foundation (LHF), which has 'adopted' the hospital for a transition period of ten years.

To keep the hospital running, it currently depends on foreign support - an unsustainable state of affairs. To make it self-reliant in the future, the LHF has drawn up a masterplan. In this plan the hospital will generate revenues from paying patients, get support from the government and plans are formulated to create revenues from projects in the region. AfricaLive focuses on one these projects: the "Best of both worlds" palm oil project.

In the area around Yele around 3.500 farmers make a living from small scale palm oil plantations. These farmers work with low yielding palm trees and bad equipment. Their plantations are tiny pieces of land, covering 2 to 3 acres. The fruits of these palms are being converted into oil by primitive hand mills in a labour intensive process. This reduces the quality and quantity of the oil and thereby the revenues for the farmers:
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The 'best of both worlds' palm oil project consists of the development of sustainable commercial activities in the agricultural sector, with the participation of local communities. A oil palm nursery has been started, in which superior palm oil seedlings will grow into young trees, before they are planted on the plantations. The trees are high yielding cultivars. Besides the nursery, plans are being drawn up to construct an mechanical oil pressing facility.

After preliminary plans for the construction of a large centrally run plantation, the LHF now wants to involve the local farmers in their plans and they are now investigating the viability of a micro credit program. The advantage of this is that the project can count on the support from the local population and already existing palm plantations are being used and improved.

Farmers can purchase a ‘complete package’, consisting of the superior palm, the required equipment, technical and agronomic advice and supervision and the possibility to press the palm fruits mechanically. Research has shown that this will improve the revenues of the farmers by 50%. This means the plan will lead to higher employment rates, less poverty and rural development. A survey, held amongst 3.500 farmers, revealed that the plan could count on the active support of 95% of the farmers. To keep them involved and informed, regular meetings with them are conducted in which they are asked for their point of view on the project's implementation.

To take the project out of idealism, and into realism, the LHF created a commercial company, Ned Oil ltd., which will allow the palm oil farmers from around Yele to use its pressing facility to transform their palm fruits into palm oil, resulting in a higher quality as well as a larger quantity. The management of the facility will eventually be recruited from the local population and all other employees will be recruited from the local population from the start.

The AfricAlive team thinks this project is an example of existing and future development projects. The baseline should always be: 1. Support from the local community, 2. Self-sustainability and continuation of the project after the NGO distances itself and 3. Protection of the local environment by undertaking the project in a socially responsible manner. Next to this, the project stimulates self-reliance, entrepreneurship and it creates employment, both directly and indirectly.

References:
AfricAlive: overview of projects.

The Lion Heart Foundation: Magbenteh Hospital project.

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Scientists convert biodiesel byproduct glycerin into ethanol

Recently, a way to connect the ethanol and biodiesel industries was revealed when it was determined that biodiesel could be a value-added product for ethanol plants through corn oil extraction technology (previous post). But now the link is reversed: researchers at Rice University in Houston have developed a way to convert glycerin (glycerol), a byproduct of biodiesel production, into ethanol. Both sectors are now linked and could create synergies that make both more efficient.

The glycerin-to-ethanol pathway is seen as promising, which is why the scientists behind it formed Glycos Biotechnologies to commercialise it. Once considered a valuable co-product, crude glycerol is rapidly becoming a 'waste product' with a disposal cost attributed to it - a result of the biodiesel boom.

Ramon Gonzalez and Syed Shams Yazdani have identified the metabolic processes and conditions that allow a known strain of Escherichia coli to convert glycerin into ethanol through an anaerobic fermentation process. Gonzalez is currently the William Akers assistant professor in chemical and biomolecular engineering at Rice University, and Yazdani is a postdoctoral research associate. They publish their findings in Current Opinion in Biotechnology.

In a comparison of feedstock and operating costs, Gonzalez found that ethanol from glycerol is 39 cents cheaper to produce than ethanol from corn. Feedstock costs per gallon were 53 cents for corn, versus 30 cents for glycerol. Per gallon operating costs were 52 cents for corn and just 36 cents for glycerol. The main reason for the difference in costs is that there is no preprocessing. In feedstock operations, the corn must be ground and cooked, and the sugar extracted. It is a process that is both capital and process intensive: one needs to work all the way from the corn grain to arrive at the sugars, and then start the fermentation. Meanwhile, glycerin doesn't require those steps because it comes preprocessed. This means no enzymes to buy and less equipment.

The implications of this research are so promising that the process may be commercialized before cellulosic ethanol. Gonzalez partnered with Paul Campbell, who researches, develops and markets blends of microbes for industrial, agricultural and environmental markets, to form Glycos Biotechnologies Inc. The company, which was funded by Houston-based venture capital fund DFJ Mercury, expects to complete its pilot plant in early 2008:
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"Once we have the pilot running and working properly, [commercialization] is a matter of months," Gonzalez says, noting that the pilot plant is being designed to be one step away from a commercial-scale plant. Gonzalez couldn't say how big the pilot plant will be, but he says it would be capable of fermenting at least 10,000 liters.

Glycos Biotechnologies will not develop and sell the technology, Gonzalez says. Instead, the company plans to form partnerships with those already in the biodiesel, glycerin and ethanol industries, he says. The company's Houston location lends itself well to working with biodiesel producers, as there are several in the region.

Gonzalez says this process could be collocated with either an ethanol or biodiesel facility, and there are advantages to each. If collocated with a biodiesel plant, costs to transport glycerin would be saved. At least initially, this will be the most likely deployment of the company’s technology.

Glycerol is the principal component of glycerin, a clear, odorless, viscous liquid. It is found in animal fats, vegetable oils or petrochemical feedstocks, and is derived through soap production and the transesterification process, in which fatty acids and alcohol are mixed. Although glycerin has more than 1,000 uses, including many applications as an ingredient or processing aid in cosmetics, toiletries, personal care, drugs and food products, it is typically used in a highly refined and purified form. Refined glycerin is mostly pure glycerol, with the salt, methanol and free fatty acids removed.

The rapid growth of the biodiesel industry changed the glycerin market. In fact, it was cited as the reason that Dow Chemical Co., which produced synthetic glycerin, exited the glycerin production business in North America in 2006. "The increased supply of glycerin in North America due to biodiesel production, which caused prices to drop, was a factor in that decision," says Catherine Maxey, business public affairs director for Dow Chemical. "However, we continue to produce synthetic glycerin in Europe for sales into specialized markets such as pharmaceutical, personal care and food applications, among others, where high quality is the major requirement. The high purity at constant quality levels of Dow's synthetic glycerin presents distinct advantages over natural glycerin in these specialized end applications."

Maxey's point about glycerin quality is important when considering the market for the biodiesel by product. Biodiesel production yields unrefined glycerin. Biodiesel producers will usually then boil the glycerin to recover the methanol. This results in what is called crude glycerin, which is the form of glycerin most biodiesel producers sell. "[In most commercial applications], the quality of the glycerin must be high," says Gonzalez. "It can't be the nasty thing that comes out of biodiesel plants. If you use a feedstock that is not pure oil in biodiesel production, the glycerin is not very nice." Glycos's technology, however, can use the "nasty" glycerin—both unrefined and crude.

The Process

Gonzalez became interested in glycerol while he was an associate professor at Iowa State University. His initial research philosophy was to develop a microbial fermentation process for converting a low-cost, high-carbon feedstock into something with a higher value—not necessarily ethanol. Glycerol was targeted as the carbon source because it is the byproduct of an established and growing industry.

According to a report by Gonzalez and Yazdani, glycerol is competitive with sugar used in the production of chemicals and fuels via microbial fermentation at its current price, which is about 2.5 cents per pound. Additionally, glycerol has yield advantages over sugar due to the highly reduced nature of carbon atoms. "A pound of sugar won't contain enough energy to produce a pound of ethanol, because it also makes carbon dioxide," Gonzalez explains. "With a half-pound of glycerol, you still get a half-pound of ethanol."

Once glycerin's advantages as a feedstock were established, Gonzalez set forth to find the product. "Once we decided on glycerol, we had to see what we could do with it," Gonzalez says. He knew it could be fermented, and indeed, that it could be fermented into ethanol. This is not the first time that glycerin has been successfully fermented into ethanol. It was first done in 1877, using fungi as the agent. In his report, Gonzalez says many microorganisms are able to metabolize glycerol in the presence of external electron acceptors, but few are able to do so fermentatively. Gonzalez discovered one microorganism that could — E. coli. In previous studies, researchers had been unable to successfully convert glycerol to ethanol with the bacteria. "The major find is that we found conditions that enable a native, nonpathogenic strain of E. coli to [ferment glycerol to ethanol] without oxygen," Gonzalez says. "We don't need to do much genetic engineering to have ethanol as the main product."

Initially, the researchers didn't engineer the genetics at all, and focused instead on finding the appropriate environment that would allow a wild-type, common, nonpathogenic strain of E. coli ferment glycerol. "The key is not the type of strain, but rather the fact that we were able to create an appropriate environment," Gonzalez says. The environmental conditions include an acidic pH, avoiding accumulation of fermentation gas hydrogen and appropriate medium composition. With the right environment, ethanol is the primary product from glycerol fermentation with E. coli.

"Since we have that fermentation already going, now we can tweak or engineer the E. coli to produce items beyond ethanol," Gonzalez says. Currently, Glycos is focusing on commercializing the technology to produce ethanol, with the coproducts being formic acid and hydrogen.

"The value of formic acid is higher than ethanol," Gonzalez says. It can make hydrogen, and it's also being researched for use in fuel cells. Glycos Biotechnologies is also developing microbial platforms which will convert glycerin into other high-value chemicals.

Eventually, Gonzalez says he would like to produce succinic acid, a four-carbon molecule that can be converted into a variety of high-value biobased chemicals or materials. "If you take all the glycerin and turn it into succinic acid, you make much more money than with ethanol," he says. However, the market is still right for ethanol. "What I have found is that producing ethanol from glycerin is appealing for a lot of people in the biodiesel industry because there is a market for ethanol," Gonzalez says. "There might be a product of higher value, but that product may not have an established market and there's a lot of risk in that."

Even if this technology takes off, it's limited by the growth of the biodiesel industry, an industry that is struggling under the weight of high feedstock prices. There is certainly an oversupply of crude glycerin with respect to today's market, but not enough to satisfy the demand for ethanol on its own. The production of 1 million gallons of biodiesel generates about 100,000 gallons of crude glycerin. The biodiesel industry has built the capacity to produce 1.68 billion gallons of biodiesel, and thus 168 million gallons of crude glycerin. Since the conversion rate of glycerol to ethanol is about 1 to 1, approximately 168 million gallons of ethanol would be produced in a year if all available crude glycerin from biodiesel production were converted into ethanol.

More significant than the amount of ethanol produced is where it would be produced. This technology could bring ethanol to regions that were previously less accessible. Biodiesel production facilities, which are not as dependent on being close to feedstock sources as ethanol facilities, are disbursed throughout North America along coasts and in major port locations—usually close to population centers. For example, neither Texas nor New Jersey have any ethanol facilities in operation, but they do have 150 MMgy and 74 MMgy of biodiesel production capacity, respectively. Converting crude glycerin to ethanol could supply locally produced ethanol to markets like Houston, San Francisco and Las Vegas.


Other researchers have found cost-effective ways to use crude glycerin as feedstock for new types of biopolymers, bioplastic films, and green specialty chemicals such as propylene glycol. Others found glycerin makes for a suitable cattle and poultry feed or for the production of biogas.


Image: Because of its ubiquity, E. coli is frequently studied in microbiology and is the current "workhorse" in molecular biology. Its is widely used in genetic engineering and enzymes extracted from it are used industrial fermentation processes.

References:
Yazdani SS, Gonzalez R, "Anaerobic fermentation of glycerol: a path to economic viability for the biofuels industry", Current Opinion in Biotechnology, Vol. 18, Issue 3, June 2007, Pages 213-219. doi:10.1016/j.copbio.2007.05.002

Biopact: GS CleanTech to produce biodiesel from corn ethanol co-product - October 23, 2007

Biopact: The bioeconomy at work: Dow develops propylene glycol from biodiesel residue - March 19, 2007

Biopact: Students patent biopolymer made from biodiesel and wine byproducts - June 20, 2007

Biopact: Researchers make biodegradable films from biofuel and dairy byproducts - June 11, 2007

Biopact: Researchers study effectiveness of glycerin as cattle feed - May 25, 2007

Biopact: Biodiesel byproduct glycerine makes excellent chicken food - August 04, 2006

Biopact: Glycerin as a biogas feedstock - December 27, 2006


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Punjab allocates 31 biomass power projects to private players


The Punjab Energy Development Agency (PEDA) has finalised the allocation of 31 decentralised biomass power projects with an aggregate capacity of 338MW to private developers. These bioenergy projects have a capacity ranging from 5 MW to 20 MW and will be set up in 31 tehsils (administrative units) of the state on the basis of competitive bidding.

The feedstock will come from the vast stream of biomass residues generated in Punjab's farm sector. The state is India's bread basket, symbol of the Green Revolution, and boasts a large potential of biomass waste (earlier post). Much of this resource is currently burned in fields, which results in large CO2 emissions and air pollution. Now the biomass will be used in efficient, dedicated power plants instead and replace fossil fuels.

Per capita energy consumption in the state of Punjab is the highest on the sub-continent at 972kwh/year (nearly thrice the national average). Power shortages running as high as 20% with peak hour shortages at 26% are becoming a major concern. To counter this, the state has set a target to add another 1,000MW of power through renewable energy resources by 2012, more than half of which will come from biomass. The new allocation is part of this program.

Punjab's Science, Technology and Environment Minister Bikramjit Singh Majithia said that these power projects are being set up on a Build, Operate and Own (BOO) basis. Private investment to the tune of 14.5 billion rupiah (€254.4/$369.4) has been attracted to the sector so far. Out of these, 21 such projects having total capacity of 220 MW have already been allocated to private developers.

All power projects are likely to be commissioned by September 2009.
  • 6 cogeneration biomass plants with a total capacity of 39 MW are under execution and likely to be commissioned by December 2007
  • 4 cogeneration biomass projects with a total capacity of 91 MW are under execution and likely to be commissioned by December 2007
  • 8 cogeneration biomass facilities with a total capacity of 71 MW are in the pipeline and MOUs for these would be signed shortly
With the commissioning of all these power projects, direct employment for 1600 skilled persons and indirect employment for 5000 persons will be created in the state. The biomass plants are expected to reduce the state's greenhouse gas emissions, responsible for climate change, considerably.

Added to the current allocation is a loan by the Japan Bank of International Cooperation worth 8 billion rupiah (€148/US$196 million) which the state government will use for adding an extra 200MW of bioenergy, to be managed by the state.

M. P. S. Bajwa, chairman of PEDA, says the state has a 1000MW potential for the production of renewable energy from agro-residues through co-generation (earlier post):
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Even though Punjab forms less than 1.5% of India's territory, it provides the country with two thirds of all grain crops. The state's crops yield vast amounts of field-based and process-based biomass residues (agricultural production data can be found here, in combination with residue-to-product ratios for different crops, here).

In order to tap this vast potential, and besides private investments, a unique system of 'farmer-to-farmer' bioenergy cooperatives have been created (earlier post), and the Punjabi state government now wants to introduce a biomass based energy project in each tehsil.

Biomass most competitive
According to PEDA, the biomass initiative ideally requires an investment of 30 to 50 million rupiah (€551,000 - 918,000 / US$ 736,000 - 1.22 million) per installed MW, should be multifuel and can be set up on 10-20 acres of land. Compared to this a hydroelectric project on average costs around 80 to 100 million rupiah (€1.47 - 1.83 / US$ 1.96 - 2.45 million) per MW, whereas a solar energy plant costs around 10 times as much as biomass cogeneration.

The Punjab State Electricity Board has been requested to sign Power Purchase Agreements (PPAs) for renewable energy power projects. The time for tariff approval would also be reduced.


Picture: Three farm workers in the province of Punjab burn rice stubbles after threshing. The advantages are savings in diesel fuel, time, and reduced pest and weed carryover into the next crop. Disadvantags are the release of greenhouse gas emissions and air pollution. By harvesting the stubbles for bioenergy, they receive a market value that is higher than the savings. Credit: USDA.

References:
Hindu Business Line: Punjab allocates 31 biomass power projects to pvt players - November 3, 2007.

Biopact: Punjab's bioenergy potential from agricultural waste estimated at 1000MW; major investments being made - December 11, 2006

Biopact: Farmer-to-farmer biomass power in Punjab - December 20, 2006

Biopact: Crop residues: how much biomass energy is out there? - July 14, 2006


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