PetroChina Co Ltd, the country's largest oil and gas producer, plans to invest 800 million yuan to build an ethanol plant in Nanchong, in the southwestern province of Sichuan, its parent China National Petroleum Corp said. The ethanol plant has a designed annual capacity of 100,000 tons.
Karnataka state produces draft biofuel policy
India's southwestern state of Karnataka has produced a draft biofuel policy suggesting legislation to mandate the use of the green fuels both in the transport and industrial sector. The policy projects major social and economic benefits to emerge for the state's predominantly rural population, especially its sugarcane farmers who face a crisis.The document was prepared by a subcommittee of experts constituted by the Agriculture Department and as a first step proposed the mandatory use of biofuel in all state-owned vehicles, including those of public sector undertakings. It further recommends a mandate for the use of bioenergy in stationary applications, including power stations and generators of the industrial sector.
The draft policy wants Karnataka to follow the Union Government’s target of blending 5 per cent biofuel with fossil fuel next year, thereafter progressively stepping it up to 10 per cent by 2015, 15 per cent by 2020 and ultimately to 20 per cent by 2025.
Biofuel expert Balakrishna Gowda, member of the subcommittee, said the biofuel sector will provide supplementary incomes to farmers, especially sugarcane growers, who are in dire straits owing to the crash in prices of various agricultural produce. While first generation biodiesel is produced from the seeds of neem, jatropa, honge and other oilseed bearing species, ethanol will be produced from sugarcane, sweet sorghum and other sugar and starch-rich crops. Later on, cellulosic biomass will be the feedstock for advanced biofuels.
Karnataka is one of India's key sugarcane growing areas (map, click to enlarge), with over 300,000 hectares dedicated to the crop and over 40 sugar factories in operation. However, despite a record global output in sugarcane ethanol, world sugar prices have declined over the past year, affecting millions of farmers across the country (here, here and here). In October, Karnataka's farmers joined their collegues from across the nation in pressuring the government into mandating biofuels, to take the sugar industry out of its crisis (here).
Both national and state governments responded positively and see the biofuels sector as an opportunity to alleviate rural poverty and economic insecurity. Members of Karnataka's subcommittee on biofuels project the following numbers to apply to the sector as it would emerge in the state once the policy comes into force:
- 500,000 hectares of unused farmland land suitable for energy crops and trees would be devoted to bioenergy
- biofuels and bioenergy would provide 200,000,000 - 250,000,000 rupees (€3.5/$5m - €4.37/$6.35) of net annual income for each of the state's 29 districts, or a total of €100-127 / $145-184 million.
- the bioenergy sector would offer additional employment for 15 to 60 days a year in rural areas; roughly 66% of Karnataka's 53 million inhabitants live in rural areas, wih 56% of the state's workforce employed in agriculture
- with an estimated poverty ratio of 25% and much of this due to hidden rural unemployment, the biofuels industry is set to play a key role in alleviating rural poverty
Laying emphasis on the marketing network, the committee also recommends establishing a cooperative market system on the lines of milk unions with assured price and purchase policy. Plans are also afoot to derive carbon trading benefits from this eco-friendly activity:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: biodiesel :: poverty alleviation :: sugarcane :: agriculture :: biotechnology :: Karnataka :: India :: The sub-committee further suggests the creation of an autonomous board to oversee the implementation of the biofuel policy and to monitor the activities related to research and development.
The draft policy has now been circulated to representatives of various bodies and institutions to elicit their views.
The draft biofuel policy suggests popularising the use of biofuels by making it mandatory for vehicles of the government agencies, captive fleets and machinery of industrial organisations and companies. The Karnataka state public transport corporation transports an average of 2.2 million passengers daily and employs about 25,000 people. It would use biofuels in its fleet of more than 10,000 buses.
The document comes at a time of high oil prices, with biofuels expected to reduce the dependence on fossil fuels and to save foreign exchange. India imports nearly three-fourths of its crude oil requirement and spent more than $57 billion in 2006-07 for the purpose - almost equal to the country's entire trade deficit. Recently, with oil at $80 per barrel Palaniappan Chidambaram, Finance Minister of India, called these prices 'outrageous' and dangerous to the country's development.
The price of crude oil is an enormous external risk. Since these outrageous prices cannot be fully passed through to the consumers in India, the burden falls largely on the domestic budget and constrains our capacity for investment. - Indian Finance Minister Palaniappan ChidambaramBiofuels are largely expected to be competitive with oil products, especially when they are produced from highly efficient crops like sugarcane and sorghum, which can be grown in abundance in Karnataka and for which the state has a strong infrastructure already in place (sugarcane and sugar mills). Moreover, Karnataka is India's biotech hub, scoring strong on innovation and research and development in the biotechnology sector, which is expected to play a key role in future biofuels.
In addition, the policy document notes efficiently produced biofuels reduce environmental pollution: they show a substantial reduction in the emissions of hydrocarbons and carbon monoxide as well as in particulate matter. As more stringent fuel emission norms are expected to be implemented in the near future, biofuels can take advantage of their low emissions profile.
References:
The Hindu: Panel recomnmends mandatory use of biofuel in State-owned vehicles - December 22, 2007.
The Hindu: Sugarcane growers warn of protests - December 20, 2007.
WebIndia: Karnataka farmers bat for ethanol production by sugar units - October 14, 2007.
Biopact: World sugar prices keep falling, despite ethanol boom - July 22, 2007
Biopact: India: 'outrageous' oil price damages economy, as $80pb could be new floor price - September 27, 2007
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Thursday, December 27, 2007
Schmack Biogas and HgCapital in €130 million deal on biogas plants
The world's largest biogas plant manufacturer Schmack Biogas AG and HgCapital, a leading private equity investor in Europe's renewables sector, have signed a €130 ($189) million framework agreement that will run until 2010. Under the agreement, Schmack Biogas will build 12 to 15 biogas plants with a combined capacity of approximately 30 MW. Biogas is seen by HgCapital as a sector with a huge growth potential, especially because the efficient biofuel can be fed into existing natural gas pipeline networks and because it accomodates a broad diversity of biomass feedstocks.
The bulk of the plant construction volume is expected to be ordered in 2008 and 2009. The framework agreement also covers the development of the respective project sites. Schmack Biogas AG assumes that the site development services provided will be reflected in 2007 and 2008 sales and earnings.
Ulrich Schmack, CEO of Schmack Biogas AG, says HgCapital is an experienced investor in renewable energies and already has extensive experience with biogas technology. Against this background, the strategic partnership is seen as all the more valuable. Schmack Biogas is particularly pleased that Regensburg based Aufwind Schmack - also involved in wind and geothermal projects - will be in charge of the commercial management of the projects, as the company has already worked successfully with HgCapital in the past.
Through Aufwind Schmack HgCapital has already invested in a number of biogas plants in Germany that use Schmack Biogas’s technologies (see animation):
HgCapital makes long-term equity investments in Western European renewable energy projects and development companies. It covers a broad spectrum of renewable energy technologies and focuses on projects and companies with total investment volumes of €20-€500 million. It is also active as a buyout investor with a focus on investments in businesses with enterprise values ranging between €75 and €750 million.
HgCapital's business model combines sector specialisation with pro-active company support as well as the corresponding management expertise across each phase of the investment process. HgCapital manages more than €2.7 billion for some of the world’s leading institutional and private investors. Its goal is to achieve outstanding results for our investors, management teams and intermediaries. on HgCapital please visit .
Schmack Biogas AG is a leading German supplier of advanced biogas plants. Established in 1995, the company provides its services through two divisions, namely Planning and Construction and Plant Management and Service, and is one of the few full-service providers in the industry. Apart from technical support, the company focuses on comprehensive microbiological service.
Through its subsidiary, Schmack Energie Holding the company now also operates its own plants and markets the biogas produced as well as the electricity and heat generated – mainly together with joint venture partners. To date, Schmack Biogas has built 204 plants with a combined nominal output of approx. 61 MW.
In Europe, biogas is being developed on a large scale for the production of fuels for stationary power generation (to be used in natural gas plants, in cogeneration units or in fuel cells), as well as for the transport sector (earlier post and here). It is being fed into the natural gas grid on an increasingly large scale (previous post and especially here) or in dedicated pipelines supplying cities, while some are creating real biorefineries around it that deliver green specialty chemicals, fuels and power (earlier post). The green gas can be made by the anaerobic fermentation of biomass, either obtained from dedicated energy crops (such as specially bred grass species, biogas maize or sugarcane), or from industrial, municipal or agricultural waste-streams.
Of all biofuels, biogas delivers most energy per hectare of crops. It is also the least carbon intensive production path, with some biogas pathways actually delivering carbon-negative bioenergy (earlier post and here). Importantly, biogas can be integrated in carbon capture and storage systems (CCS), in a way that presents advantages over other CCS pathways (earlier post).
According to a recent assessment of the sector, the world market for biogas currently has a value of around €2 billion, expected to grow to €25 billion by 2020 (previous post). But the competition is growing, worldwide. Some projections show biogas may replace all of Europe's natural gas imports from Russia by 2020 and yield up to 500 billion cubic meters per year (earlier post).
Animation: integrated biogas technologies developed by Schmack Biogas. Credit: Schmack Biogas AG.
References:
Schmack Biogas AG: Schmack Biogas signs framework agreement with HgCapital - Order volume of approx. EUR 130 million until 2010 - December 20, 2007.
Biopact: Market study tracks global boom in biogas, Germany technology leader - July 13, 2007
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