Illovo Sugar announces £100 million investment in Mali sugar, biomass and ethanol sector

South Africa's Illovo Sugar has announced that it has approved a £100 million (€140/$208 million) investment in the emerging sugar, biomass and ethanol sector in Mali, one of the world's poorest countries. The single project will by itself cover 10% of Mali's gasoline needs, supply electricity to thousands of the country's rural poor, eliminate sugar imports completely and meet growing demand for the foodstuff in the region.

Associated British Foods plc (ABF), an international food, ingredients and retail group holds a 51% stake in Illovo Sugar. Illovo Sugar will hold a 70% stake in the investment of 1.4 billion rand for the construction of a new sugar mill, an ethanol plant and an electricity co-generation unit that will utilize waste biomass (bagasse) from sugar processing to generate 4MW of renewable, carbon-neutral electricity. The remaining stake will be held by the government of Mali and private investors.

Illovo will manage a Mali government-sponsored agricultural development plan to produce the 1.5 million tonnes of sugar cane per annum required to supply the new facility. The project is based on a 14,000 hectare cane-growing operation that will be managed on behalf of the government and with the local community.

The project is vast in comparison to Mali's resource base. A Sahelian country, it currently produces less than 500,000 tons of sugarcane per year, primarily in the Southern region (map, click to enlarge). The Illovo project would by itself triple the entire country's output. Mali is a largely agricultural country, with over 80 per cent of its population making a living off the land. More than 60 per cent of all people there live under the poverty line.

Mali is fully dependent on oil imports. Luckily it only consumes around 4300 barrels per day of petroleum products, about half of which comes in the form of gasoline. Illovo's single ethanol plant would produce around 15 million liters per annum, thus roughly covering 10 per cent of Mali's total gasoline needs:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: bagasse :: molasses :: electricity :: sugar :: Mali ::
Sugar production at the new mill will begin in December 2009, reaching full capacity two years later. The factory will ultimately produce 200,000 tonnes of sugar per annum. Mali's own sugar production currently stands at around 30,000 tonnes per year, while demand is roughly 130,000 tonnes. The Illovo project will thus cover the entire country's sugar needs and supply regional markets.

The deal between the Malian government and Illovo took two years to negotiate and it covers everything from long-term labour relations, shift systems and the legality of foreign workers to repatriation of dividends, set prices for ethanol and electricity and the incorporation of ethanol into the country's fuel.

George Weston, Chief Executive of Associated British Foods, said that this investment in Mali follows Illovo’s recently announced expansion in Zambia.

Illovo Sugar's managing director Don MacLeod has adopted a cautious approach to ethanol production. It can take place only if government makes its production viable through incentives or taxes, and mandates its use in the fuel mix. For instance, in Brazil ethanol makes up 25% of the fuel mix and there is a 35% difference on the duties of petrol and ethanol, he says.

Unlike the production of biodiesel - which has the potential to drive up world food prices because it diverts food to fuel - the production of ethanol is not expected to drive sugar prices higher. That is because ethanol is produced from molasses, a non sucrose byproduct.

Illovo Sugar is the largest cane sugar producer in Africa and one of the world’s lowest cost producers. It is the leading producer in South Africa, Malawi, Zambia and Swaziland and has a strong and growing presence in Tanzania and Mozambique. It produced 1.7 million tonnes of sugar in the 2006/7 season and has development programmes to expand its capacity substantially.

Associated British Foods is a diversified international food, ingredients and retail group with sales of £6.8billion and 85,000 employees in 43 countries. It has significant businesses outside Europe in southern Africa, the US, China and Australia.

British Sugar is a substantial business within ABF. It has operations in the UK, Poland, China and southern Africa which process some 4 million tonnes of sugar annually. It is the most efficient sugar producer in Europe and has a proven ability to create value through improvement in agricultural yields, operational efficiencies, co-product development, marketing and product innovation. It has world class production facilities and technical expertise. The largest and most efficient beet sugar factory in the world is at Wissington in Norfolk and this is also the site for the UK’s first bioethanol plant.

British Sugar has four cane sugar mills in Guangxi province in southern China and sugar production exceeded 0.5 million tonnes in 2006/7. It announced on 24 August 2007 its first investment in the beet sugar industry in north east China.

References:
Associated British Foods: Illovo Sugar announces £100 million investment in Mali - November 22, 2007.

Financial Mail: Illovo Sugar Power projects - November 23, 2007.

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Consortium of NGOs, universities launches biofuels program to bring energy, food and water security to the poor in Africa, Asia

A consortium of international NGOs, universities and think tanks in Africa and Asia have launched a five-year research programme to help deliver sustainable, secure and affordable energy to millions of the continents' rural poor. Lack of access to energy is one of the key barriers to development and economic well being. Bioenergy and biofuels offer a historic opportunity to both strengthen the livelihoods of the poor, improve their access to energy, and reduce greenhouse gas emissions. The five-year research programme known as 'Policy Innovation Systems for Clean Energy Security' or PISCES, will therefore integrate thinking and research on water, food and energy security by focusing on the pivotal issue of bioenergy and biofuels. The project aims to help achieve the Millennium Development Goals, which, many experts feel, will not be achieved without tackling the intertwined issues of climate change and energy security.

The £790,000 (€1.1/$1.6 million) PISCES project is led by the African Centre for Technology Studies, (ACTS), a Nairobi-based science, technology and environmental policy intergovernmental organization that generates new knowledge through policy analysis and outreach. The programme is funded by the UK’s Department for International Development (DFID). ACTS is partnering with Practical Action Consulting, an international NGO, the M.S.Swaminathan Research Foundation (MSSRF), which focuses on technology for poverty reduction, the University of Dar es Salaam and the University of Edinburgh, together with a network of national and international partners and collaborators including the Centre for Energy Policy and Technology (ICEPT), Imperial College London, UK, Germany's GTZ GmbH (Development Agency) and India's ICF International.

According to Professor Judi Wakhungu, the Executive Director of ACTS, the objective of PISCES is to produce policy-relevant information and approaches that can be applied by governments in developing the role of bioenergy in delivering energy access for the poor. PISCES is focused on bioenergy – incorporating biomass from natural sources, biowaste streams from agriculture and industry, and biofuels from purpose grown energy crops.

The Inception Workshop was held in Nairobi from September 26-29 and was attended by governments, donors, International Organisations, NGOs, companies and universities. Participation in initial consultations has come from across the regions of focus in Kenya, Tanzania, South India and Sri Lanka.

Currently 2.5 billion people still rely on traditional forms of biomass in the form of firewood, dung or crop residues for basic energy services. According to Wakhungu, there is exploding global interest and activity in the growing of energy crops for the production of biofuels. Increased cultivation of energy crops could provide increased energy access for the poor and offer a historic opportunity for the improvement of their livelihoods. But this requires appropriate policies to ensure the opposite does not occur.

Wakhungu says that at the macro-level, bioenergy has the potential to increase global energy supplies without increasing carbon emissions. At the local level it could absorb vital water supplies and fertile land needed to cultivate food. It is against this backdrop of unprecedented global interest in bioenergy that PISCES will integrate research on water, food, energy and environmental security, with a focus on the role of bioenergy in increasing energy access and security of livelihoods for the poor without degrading the climate and environment.

The new and existing technologies, including plant varieties, processes, appliances and practices, that are required if bioenergy is to power sustainable development will be analysed, developed and tested. The circular and dynamic relationships between the climate and environment, and bioenergy production and consumption, will be investigated and evaluated.

PIECES will also be looking at the socio-economic studies and market analysis aimed at determining types of structures, incentives and regulations that could create and sustain access and delivery of bioenergy to poor people:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: climate change :: energy security :: rural development :: poverty alleviation :: Millennium Development Goals :: Africa :: Asia ::

The programme hopes to build a networked centre of expertise, bringing together experts and policymakers who are to bring these and other strands of research together and, crucially, into use. The Kenyan permanent secretary for energy, Mr. Patrick Nyoike, in his opening address at for the PISCES Inception Workshop, underlined the need for research into the realization of affordable and reliable energy with a particular focus on bio-mass energy.

The opening speech was read for him by the chief economist at the ministry, Mr. Wilfred M. Deche. The permanent secretary said in part: According to the PS, next to food, fuel represents the most important expenditure for poor households, yet the poor face limited, inefficient and expensive energy options to meet their heating and lighting needs.

Most rural villagers in Africa depend predominantly on biomass to meet their modest energy needs largely due to widespread poverty. Fuel wood, he said, is used together with crop residue and dung for cooking. These traditional fuels, as presently used, have inherent disadvantages.

“Collection is arduous and is also known to cause acute respiratory problems when combustion takes place in kitchens with limited ventilation. In addition, the uncontrolled use of bio-mass energy has been closely associated with climate variability with adverse Implications for hydro energy and food production”, he said.

Several policy reforms have been put in place to enable Kenya’s ministry of energy to effectively fulfil its mandate. These include the Poverty Reduction Strategy Paper, the Economic Recovery Strategy for Wealth and Employment Creation, Sessional Paper No.4 of 2004 on Energy, the Energy Act of 2006 which became operational on 7th July 2007 and vision 2030. All these policy documents recognize the pivotal role that provision of quality and clean energy services play in the country's social-economic transformation.

Kenya is endowed with significant amounts of renewable energy resources such as wind, solar, geothermal, small hydro and biomass.

With exception of biomass which account for 68 per cent of the national primary energy consumption and large hydro power projects, little efforts have been expended towards the exploitation of these other renewable energy resources which if harnessed, can play a significant role in the country's energy supply mix.

According to the PS, the biofuels offer cost-effective and sustainable opportunities with the potential to meet 50 per cent of the world energy demands in the next century and at the same time meet the requirements of reducing carbon emission from fossil fuels Biofuels sources such as agricultural crops, biomass residues and wastes provide about 14 per cent of the world’s primary energy supplies.

A task force has been set up to prepare a strategy for development of biodiesel which will in future be replicated for other forms of bioenergy.

Picture: Kenyan Sorghum farmer. Credit: ICRISAT - pro-poor biofuels initiative.

References:
UK Department for International Development: Improving access to Reliable and Affordable Energy Services towards Achieving the Millennium Development Goals.

Africa Science News: DFID funds bio-energy programme in Africa, Asia - November 27, 2007.

Practical Action: DFID PISCES Energy Research Consortium.

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Japanese researchers develop fuel cell that works on sunlight and glucose from biomass

A new type of fuel cell powered by sunlight and glucose derived from biomass is described in the latest issue of the International Journal of Global Energy Issues. The experimental device works by using sunlight to convert the glucose into hydrogen to power the cell, which produces several hundred millivolts. The researchers from Japan's Oita University think this renewable, green and sweet fuel supply might help tackle climate change.

The use of biological resources, such as food waste and managed high-energy crops, are gradually becoming a viable approach to reducing the planet's reliance on fossil fuels. However, imaginative ways to convert these materials into useful, electrical energy are still required. Renewable biomass resources include starch, cellulose, sucrose, and lactose. These complex sugar molecules can be readily converted to the much simpler glucose molecule with little energy cost through fermentation processes.

The glucose could then be used to release hydrogen using enzymes.

It is this last step that chemists Yutaka Amao and Yumi Takeuchi of Oita University, in Dannoharu, Japan, have focused on to build their glucose-powered fuel cell.

The researchers have built the biofuel device with a transparent conductive glass electrode coated with a highly colored molecule that can mimic the natural process of photosynthesis. This molecule is incorporated into light-absorbing titania. The coating can absorb energy from sunlight and release it into another chemical layer on the electrode. This is connected to a platinum electrode and the pair is immersed in a glucose solution to complete the circuit:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: sugar :: glucose :: photosynthesis :: hydrogen :: fuel cell ::

When light shines on the light-active electrode enzymes in the chemical layer are triggered to react with glucose molecules in the solution and release hydrogen ions, the dissolved hydrogen ions then attract electrons from the platinum electrode, which causes a current to flow through the wire connecting the electrodes.

References:
Yutaka Amao, Yumi Takeuchi, "Visible light-operated glucose-O2 biofuel cell",
International Journal of Global Energy Issues 2007 - Vol. 28, No.2/3 pp. 295 - 303, DOI: 10.1504/IJGEI.2007.015881

Eurekalert: Sweet fuel supply - Could a fuel cell that runs on glucose save the planet? - November 28, 2007.

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UN demands free trade in biofuels to tackle climate change

The landmark Human Development Report 2007/2008 which focused on the impacts of climate change on development, urges wealthy countries to open their markets for efficient biofuels made in developing countries in the subtropics and the tropics. The United Nations Development Program's (UNDP) report was officially presented in Brasília with president Luiz Inacio Lula da Silva being the host. Not coincidentally, Brazil is the leader in the use of sustainable biofuels. Lula is known for his vision which says biofuels can boost both poverty alleviation in the developing world on a massive scale, as well as providing energy security and independence from catastrophic high oil prices.

With the Human Development Report, the UNDP joins a large series of energy, climate and development experts in demanding a removal of the trade barriers imposed by the US and the EU on efficient biofuels from the South, such as Brazilian sugarcane ethanol. Organisations and institutions supporting the same call include: the UN's FAO (Food and Agriculture Organisation), the UNIDO (UN Industrial Development Organisation), the GBEP (Global Bioenergy Partnership), the OECD, the WorldWatch Institute, the International Energy Agency (IEA) and many others.

In an analysis of potential climate change mitigation options, which include bioenergy and biofuels, the authors make a case for a 'Biopact' of sorts - the win-win situation in which countries from the South utilize their comparative advantages to make carbon reducing fuels to supply the less efficient North:

International trade could play a much larger role in the expanding markets for alternative fuels. Brazil is more efficient than either the European Union or the United States in producing ethanol, Moreover, sugar-based ethanol is more efficient in cutting carbon emissions. The problem is that imports of Brazilian ethanol are restricted by high import tariffs. Removing these tariffs would generate gains not just for Brazil, but for climate change mitigation. - UNDP, Human Development Report 2007/2008

The suggestion was made based on the knowledge that such biofuels from South emit far less carbon dioxide than biofuels made in the North. The case of sugarcane ethanol is given as an example: it emits 70 to 80 percent less greenhouse gases than fossil fuels, while ethanol made from corn offers only a 10 to 20 percent reduction. Moreover, ethanol from the (sub)tropics, which can be made from a vast range of highly efficient crops, has a much stronger energy balance. For cane ethanol this is up to 8 to 1, for corn ethanol barely 1 to 1 (some scientists have even found it to be negative). Finally, unlike biofuels made from crops like corn or rapeseed, these fuels have had no impact on food prices. Brazilian ethanol production is at all time highs, whereas sugar prices have declined (previous post).

Scientists have found the technical potential for sustainable biofuels in the South to be very large. Researchers from the International Energy Agency's Bioenergy Task 40 have found that, by 2050, Africa and Latin America alone could produce more than 500 Exajoules of exportable bioenergy, after meeting all food, fiber, fodder and forest products needs of growing populations (more here).

The United States and the European Union have imposed barriers on Brazil's ethanol, which almost doubles the price to consumers in those countries, according to Brazilian producers:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: biodiesel :: poverty alleviation :: developing countries :: trade :: tariffs :: Brazil ::

Brazilian President Luiz Inacio Lula da Silva said in a document attached to the report that the use of ethanol in transportation reduces carbon gas emission by approximately 25.8 million tons per year in his country.

"Our aim is to increase the supply of biodiesel by 5 percent in Brazil up to the year 2013," said the president.

The report highlighted the fact that Brazil holds the fifth lowest emissions rate per capita among the 70 countries with the highest human development indices. In 2004 its carbon footrpint was was 1.8 ton per inhabitant, 60 percent lower than the world's average of 4.5 tons and more than 10 times lower than the average American (table, click to enlarge), Australian or Canadian.

Efficient biofuels have played an important role in this achievement.

For the first time in the history of the Human Development Index, Brazil ranks amongst the countries with a "high development" status. Its economic growth however has a low carbon profile, making the country an example for others to follow.


Image: carbon intensity of the economy, and per capita carbon footprint: Brazil and the US compared. Credit: online interactive tools on carbon footprinting at the UNDP HDR website.

References:
Xinhua: UN suggests removal of tariffs on Brazilian ethanol - November 27, 2007.

UNDP Human Development Reports website.

UNDP: Human Development Report 2007/2008 [*.pdf] - English Summary.

UNDP Human Development Reports: Fighting climate change: Human solidarity in a divided world - November 27, 2007.

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