Ecologists find nitrogen pollution boosts plant growth in tropics by 20 percent - relevance for bioenergy

A study by UC Irvine ecologists finds that excess nitrogen in tropical forests boosts plant growth by an average of 20 percent, countering the belief that such tropical ecosystems would not respond to nitrogen pollution. Surprisingly, not only pristine rainforests but those regrown from slash-and-burn agriculture - which make up more than half the world's tropical forests - also responded to the added nitrogen. One of the researchers told Biopact that tropical grasslands responded as well, but the intensity of the response depended on precipitation levels. The research results appear in the February issue of the journal Ecology (in press).

These findings could be significant to the bioenergy community, because they would imply that biochar based carbon-negative bioenergy systems ("slash-and-char") could be even more viable than estimated: their capacity to store atmospheric carbon dioxide into soils, via biochar obtained from regrown forests and energy crops, would be enhanced because of the increased plant growth resulting from atmospheric nitrogen fertilization.

Faster plant growth means the tropics will take in more carbon dioxide than previously thought, though long-term climate effects are unclear, the researchers say. Over the next century, nitrogen pollution is expected to steadily rise, with the most dramatic increases in rapidly developing tropical regions such as India, South America, Africa and Southeast Asia.

Major nitrogen sources are N fertilizer, applied to farmland to improve crop yield, which affects ecosystems downwind by seeping into runoff water and evaporating into the atmosphere. Industrial burning and forest clearing also pumps nitrogen into the air.

Using data from more than 100 previously published studies, David LeBauer, graduate researcher of Earth system science at UCI and lead author of the study, and Kathleen Treseder, associate professor of ecology and evolutionary biology at UCI, analyzed global trends in nitrogen’s effect on growth rates in ecosystems ranging from tropical forests and grasslands to wetlands and tundra. Nitrogen, they found, increased plant growth in all ecosystems except for deserts (figure, click to enlarge).

Surprisingly, tropical forests that were seasonally dry, located in mountainous regions or had regrown from slash-and-burn agriculture also responded to added nitrogen. Although these are not the tropical forests that typically come to mind, they collectively account for more than half of the world’s tropical forests.

Tropical grasslands responded too, but here the picture is more complex, as tropical grasslands are also limited by precipitation. The proportional increase in grassland productivity was constant across a rainfall gradient, but total growth increase was greatest at high levels of precipitation:
energy :: sustainability ::biomass :: bioenergy :: biofuels :: tropics :: forests :: slash-and-burn :: slash-and-char :: biochar :: plant growth :: nitrogen :: climate change ::
Scientists believed added nitrogen would have little effect in the tropics because plants there typically have ample nitrogen and are constrained by low levels of phosphorus. If one necessary plant nutrient is in short supply – in this case phosphorus – plant growth will be poor, even if other nutrients such as nitrogen are abundant. Experiments in the study added nitrogen at the high end of ambient nitrogen pollution to test the maximum potential response.

It is difficult to predict the long-term effects of nitrogen on global climate change. One factor will be the degree to which humans change natural ecosystems, for example by cutting down or burning the tropical forests. Further, climate change may determine whether these areas grow back as forests or if they are replaced by grasslands or deserts. It also is unknown how nitrogen will affect the fate of carbon once plants die and begin to decompose.

What is clear is that we need to consider how nitrogen pollution interacts with carbon dioxide pollution. Our study is a step toward understanding the far-reaching effects of nitrogen pollution and how it may change our climate. - David LeBauer

The scientists' work was supported by the National Science Foundation, the Department of Energy and a fellowship from the Kearney Foundation for Soil Science.

References:
LeBauer, David S., and Kathleen K. Treseder. 2008. "Nitrogen limitation of net primary productivity in terrestrial ecosystems is globally distributed", Ecology 89:371–379 (in press).

LeBauer, David: Nitrogen Limitation of Net Primary Productivity - research page at the UCI.

UC Irvine: Nitrogen pollution boosts plant growth in tropics by 20 percent - February 6, 2008.

Biopact: Biochar and carbon-negative bioenergy: boosts crop yields, fights climate change and reduces deforestation - January 28, 2008

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StatoilHydro and India's ONGC team up for carbon capture & storage and CDM projects

StatoilHydro and India's leading oil company ONGC have signed a Memorandum of Understanding to jointly explore the potential of developing Carbon Capture and Storage (CCS), and CDM (clean development mechanism) projects in India.

The two companies have agreed to jointly screen possibilities for developing CCS and CDM projects within ONGC’s operations in India. The cooperation could result in CO2 emissions reduction projects as well as the promotion of energy efficiency and growing use of renewable energy under the mechanisms of the Kyoto Protocol.

Biopact continues to track CCS developments (see references) because the technologies can be applied to bioenergy, in which case the most radically green energy system emerges: one that actively removes CO2 from the atmosphere to yield 'negative emissions'. When CCS is coupled to biomass-based electricity production or to biohydrogen production, each time consumers use the decarbonized energy, they would be cleaning up the atmosphere and be fighting climate change. Bioenergy coupled to CCS overcomes the senseless binary opposition often heard in clean energy debates, which pit fossil fuels with carbon capture versus renewables. "Bio-energy with carbon storage" (BECS) systems are both: renewable, and capturing carbon.

Nuclear power or renewables like wind, biomass and solar are called 'carbon neutral' because they do not add CO2 to the atmosphere, or only very small amounts over their lifecycle. But carbon-negative bioenergy goes much further: when CO2 from carbon-neutral bioenergy production is captured and then stored, a negative emissions energy system appears. This is so because during their growth, crops capture and store CO2 from the atmosphere. If, after extracting the energy from these energy crops, the greenhouse gas is geosequestered, the negative emissions balance is the result.

Such radical BECS systems, using CCS technologies developed by the fossil fuel industry, can yield negative carbon emissions as large as minus 1000 grams per kWh of electricity. Ordinary renewables all result in net emissions (solar: +100gCO2eq/kWh, wind and non-BECS biomass: +30gCO2eq/kWh, nuclear: +15gCO2eq/kWh). In short, the difference between BECS and all other energy systems is very significant (graph, click to enlarge).

What is more, one of the major obstacles to the implementation of CCS projects when used on fossil fuels - the issue of CO2 leakage - would be absent in BECS systems, because the CO2 is biogenic in nature and would not result in net carbon emissions. Any leakage from BECS sequestration sites would be benign, in contrast to leakages from sequestered CO2 that originated from fossil fuels.

A Biopact member was recently interviewed by Mongabay, a leading environmental news organisation, about the potential and risks of BECS systems in developing countries. Laurens Rademakers explained biomass can be produced efficiently in many of these countries, some of who already have oil & gas infrastructures in place (which could coupled to CCS), and where suitable geosequestration sites are present. India would be one such country and could benefit greatly from BECS systems, as it is set to become the world's third largest carbon emitter in the mid term future.

For the time being, CCS is not included in any formal emissions reduction scheme - neither in the EU's plans and mechanisms nor in the Kyoto Protocol's CMD. But if CCS were to be included, the radical negative emissions BECS systems could be appearing first in developing countries, because they have a large and sustainable potential for the production of biomass:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: carbon capture and storage :: carbon emissions :: carbon-neutral :: carbon-negative :: negative emissions :: bio-energy with carbon storage :: India ::

The signing between StatoilHYdro took place at a special event organised by TERI (The Energy and Resources Institute) and the Norwegian Embassy prior to the Delhi Sustainable Development Summit (DSDS) in New Delhi, 7-9 February.

Norway’s Prime Minister Jens Stoltenberg and Nobel Peace Prize winner Dr Rajendra Pachauri were also present at the signing.

The agreement is an excellent start for developing environmental projects and technology transfers. India’s energy sector is growing fast and we’re excited to contribute with our CCS and CDM competence in the cooperation with ONGC. - Alexandra Bech Gjørv, Senior Vice President New Energy, StatoilHydro

The DSDS is an annual event that has matured into India’s most important gathering of international leaders concerned with global sustainable development. This year’s conference attracted the prime ministers of India, Norway, Denmark and Finland, as well as numerous ministers and government officials from several countries.

StatoilHydro has an agreement with ONGC that gives it access to exploration acreage off India, mostly in deep water. StatoilHydro will also enter block 98/2 in the KG basin on the Indian east coast with a 10% equity share. ONGC will receive technological support from StatoilHydro to increase the recovery of its Vasai East oil field. Furthermore, StatoilHydro will also provide ONGC with offshore operator know-how. Gas finds in the area The 98/2 block that is operated by ONGC is in the appraisal phase after a number of gas finds have been made in the block.


A CCS agreement between a European oil & gas company and a developing, emerging economy is not new. Recently, Total SA and Indonesia signed a similar deal. Indonesia is one of the leading candidates to implement CCS projects. It too has a large biofuel potential that could be coupled to carbon capture and storage (previous post).

References:
StatoilHydro: StatoilHydro and ONGC cooperate in India - February 6, 2008.

Biopact: Total and Indonesia sign a MOU on CO2 capture and storage: towards carbon negative bioenergy? - December 17, 2007

Mongabay: Carbon-negative bioenergy to cut global warming could drive deforestation:
An interview on BECS with Biopact's Laurens Rademakers - November 6, 2007


Scientific literature on negative emissions from biomass:
H. Audus and P. Freund, "Climate Change Mitigation by Biomass Gasificiation Combined with CO2 Capture and Storage", IEA Greenhouse Gas R&D Programme.

James S. Rhodesa and David W. Keithb, "Engineering economic analysis of biomass IGCC with carbon capture and storage", Biomass and Bioenergy, Volume 29, Issue 6, December 2005, Pages 440-450.

Noim Uddin and Leonardo Barreto, "Biomass-fired cogeneration systems with CO2 capture and storage", Renewable Energy, Volume 32, Issue 6, May 2007, Pages 1006-1019, doi:10.1016/j.renene.2006.04.009

Christian Azar, Kristian Lindgren, Eric Larson and Kenneth Möllersten, "Carbon Capture and Storage From Fossil Fuels and Biomass – Costs and Potential Role in Stabilizing the Atmosphere", Climatic Change, Volume 74, Numbers 1-3 / January, 2006, DOI 10.1007/s10584-005-3484-7

Further reading on negative emissions bioenergy and biofuels:
Peter Read and Jonathan Lermit, "Bio-Energy with Carbon Storage (BECS): a Sequential Decision Approach to the threat of Abrupt Climate Change", Energy, Volume 30, Issue 14, November 2005, Pages 2654-2671.

Stefan Grönkvist, Kenneth Möllersten, Kim Pingoud, "Equal Opportunity for Biomass in Greenhouse Gas Accounting of CO2 Capture and Storage: A Step Towards More Cost-Effective Climate Change Mitigation Regimes", Mitigation and Adaptation Strategies for Global Change, Volume 11, Numbers 5-6 / September, 2006, DOI 10.1007/s11027-006-9034-9

Biopact: Commission supports carbon capture & storage - negative emissions from bioenergy on the horizon - January 23, 2008

Biopact: The strange world of carbon-negative bioenergy: the more you drive your car, the more you tackle climate change - October 29, 2007

Biopact: "A closer look at the revolutionary coal+biomass-to-liquids with carbon storage project" - September 13, 2007

Biopact: New plastic-based, nano-engineered CO2 capturing membrane developed - September 19, 2007

Biopact: Plastic membrane to bring down cost of carbon capture - August 15, 2007

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

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The bioeconomy at work: Cereplast introduces first-ever freeze-tolerant compostable bioplastic

Cereplast, Inc., manufacturer of bio-based, sustainable plastics, extended the range of applications for biodegradable, compostable plastic with the introduction of the first-ever freeze-tolerant resin, CP-INJ-13. The newest addition to the Cereplast Compostables resin family retains structural rigidity in freezing temperatures, ideal for frozen food applications, such as ice cream containers, and all applications requiring resistance to low temperature and/or high flexibility.

The new polylactic acid (PLA)-based resin exhibits superior flexibility compared to other PLA-based products, allowing it to withstand sub-zero environments. CP-INJ-13 provides structural integrity in temperatures as low as -35 °C, compared to about -20 °C for standard PLA-based plastic. In addition, tensile elongation is approximately 10 times greater (284 per cent for CP-INJ-13 and typical 25 per cent or less for neat PLA as measured by ASTM D638) and the notched IZOD impact measures 2.5 lb-ft/in. at 23 C compared with 0.5 lb-ft/in with traditional PLA-based plastic.

The new addition to our product lineup is a direct result of customer demand for freeze-capable bioplastic products. We are constantly working with our customers to find solutions to their needs, and therefore expanding the applications of biodegradable, compostable plastic. - William Kelly, Cereplast Senior Vice President, Technology.

Cereplast Compostables resins are renewable, ecologically sound substitutes for petroleum-based plastic products, replacing nearly 100 per cent of the petroleum-based additives used in traditional plastics. Cereplast Compostables resins are starch-based, made from corn, wheat, tapioca and potato starches:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: bioplastics :: biodegradable :: compostable :: bioeconomy ::

All Cereplast Compostables resins are certified as biodegradable and compostable in the United States and Europe, meeting BPI (Biodegradable Products Institute) standards for compostability (ASTM 6400 D99 and ASTM 6868), and European Bioplastics standards (EN 13432).

Scientists analysing the production of green bulk chemicals from plants - from which countless products including bioplastics can be made - recently found that they can in some cases constitute a more efficient use of land compared with the transformation of biomass into liquid fuels. The research also showed such bio-based platform chemicals can reduce carbon emissions by up to 1 billion tons by 2020, by replacing petroleum and natural gas based chemicals (previous post). The findings are a boon to the bioplastics industry.

Cereplast designs and manufactures proprietary bio-based, sustainable plastics which are used as substitutes for petroleum-based plastics in all major converting processes -- such as injection molding, thermoforming, blow molding and extrusions -- at a pricing structure that is competitive with petroleum-based plastics. On the cutting-edge of bio-based plastic material development, Cereplast now offers resins to meet a variety of customer demands. Cereplast Compostables resins are ideally suited for single use applications where high bio-based content and compostability are advantageous, especially in the food service industry. Cereplast Hybrid Resins products combine the high bio-based content with the durability and endurance of traditional plastic, making them ideal for applications in industries such as automotive, consumer electronics and packaging.

References:
Cereplast: Cereplast Expands Bioplastic Applications with Freeze-Tolerant Compostable Resin - January 22, 2008.

Biopact: Researchers find bio-based bulk chemicals could save up to 1 billion tonnes of CO2 - December 17, 2007

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Coskata forms strategic alliance with ICM to build commercial syngas-fermentation ethanol plant

Coskata, Inc., an innovative developer of next-generation ethanol, today announced a strategic alliance with ICM, Inc. to design and construct a commercial ethanol plant using Coskata’s hybrid syngas-biofermentation technology.

Coskata is the second-generation biofuel developer that recently entered a partnership with General Motors, announcing its breakthrough process makes cellulosic ethanol for under a dollar a gallon a reality. The highly efficient gasification-fermentation process can use practically any source of biomass as a feedstock (previous post). Many analysts believe the arrival of this type of cellulosic biofuels ends the food versus fuel debate.

The new alliance brings in ICM, North America’s leading ethanol plant design, engineering and support firm. ICM's patented proprietary process technology is responsible for approximately 50 percent of North American ethanol production from plants constructed by Fagen, Inc. and ICM.

The first Coskata plant, expected to open in late 2010, will be the staging ground for the world’s first mass-produced next-generation ethanol. The location of Coskata’s first facility will be announced at a later date.

Coskata and ICM will speed the commercialization of a process that will convert biomass into advanced biofuels from a number of renewable materials, at a production cost of less than $1 a gallon. Aligning with ICM on one of our first commercial plants is a natural choice because of their unrivaled biofuels technical knowledge and ability. This strategic alliance moves us a step closer to the arrival of Coskata’s next-generation ethanol in the marketplace. - Bill Roe, president and CEO of Coskata

Using patented microorganisms and efficient bioreactor designs, Coskata uses a unique three-step conversion process that turns virtually any carbon-based feedstock, including biomass, municipal solid waste, bagasse, and other agricultural waste into ethanol (schematic, click to enlarge). The technology is globally applicable. The process is environmentally sound, reducing carbon dioxide emissions by as much as 84 percent compared to gasoline, as well as generates up to 7.7 times as much net energy as is required to produce the ethanol, according to Argonne National Laboratory:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: cellulosic :: syngas :: gasification :: fermentation :: efficiency ::

In addition to ICM’s own research and development efforts, ICM evaluated other potential cellulosic ethanol technologies to identify commercially viable processes. Coskata’s thermal biomass conversion process offers promising technology. It has always been ICM’s mission to help sustain agriculture through innovation. Coskata’s production process makes them a valuable ally as we continue to pursue advancements in renewable technology towards the creation of advanced and cellulosic biofuels as directed by the recent Energy Bill. - Dave Vander Griend, president and CEO of ICM

Under the new Energy Bill, the U.S. is set to become a biofuelled nation. The law raises the Renewable Fuel Standard to 36 billion gallons (136 billion liters) by 2022, roughly the equivalent of between 1.8 and 2 million barrels of oil per day. Of that, corn ethanol production is capped at 15 billion gallons per year starting in 2015 (56.8 billion liters), a three-fold increase of current production levels; the remainder is expected provided by 'advanced biofuels', the majority of which are cellulosic biofuels. In the final year of the standard (2022), cellulosic biofuels should contribute more (16 billion gallons) than does corn ethanol (15 billion gallons).

Coskata is a biology-based renewable energy company that is commercializing technology to produce biofuels from a wide variety of feedstocks. Using proprietary microorganisms and transformative bioreactor designs, the company projects that it will be able to produce ethanol for less than $1.00 per gallon almost anywhere in the world from a wide variety of feedstocks, based upon continued successful future development. Coskata has compiled a strong IP portfolio of patents, trade secrets, and know-how and assembled a first-class team for the development and commercialization of its compelling syngas-to-ethanol process technology.


References:
BusinessWire: Coskata, Inc. Forms Strategic Alliance with ICM to Design and Build Commercial Ethanol Plants - February 6, 2007.

Biopact: GM and Coskata claim cellulosic ethanol has arrived: gasification-fermentation process yields biofuel for under $1 per gallon - January 15, 2008

Biopact: US becomes biofuel nation as Congress approves Energy Bill - December 19, 2007

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Two sugarcane ethanol plants for the Dominican Republic: biofuels reanimate sugar sector

The recently incorporated company Bio E Group today announced the construction, together with other foreign investors, of two ethanol plants in the Dominican Republic. The distilleries come at a cost of US$300 (€205) million, and will produce 35 million gallons (13.2 million liters) of ethanol and 30 megawatts of renewable electricity each per year. The feedstock for the biofuel is sugarcane, the residues of which (bagasse) will be used to feed the cogeneration units. The biofuel projects contribute to the revival of the sugar sector, which has been in decline since the 1980s.

After Cuba, the Dominican Republic is the second-largest Caribbean producer of sugarcane, the nation's most important commercial crop. But low world prices since the 1980s have ruined the sector, pushing countless farmers out of work and into poverty. Many of the state-owned sugar mills, who accounted for half the production, closed down. Production of sugarcane rose from 8.6 million tons in 1970 to 1.1 million tons in 1983 after which decline set it. In 2006, the country produced a mere 500,000 tons (graph, click to enlarge).

The biofuels opportunity is now set to revive the sugar sector and is expected to boost the island state's rural economy, which employs 17 percent of its work force and contributes more to its GDP than any other economic sector, around 11 per cent.

The announced ethanol plants will be located in the townships Bayaguana, Monte Plata province (east) and Quisqueya, San Pedro province (east). Bio E Group president Alfonso Fermín Balcácer said the two partner companies will generate an estimated RD$900 million (€18.1/US$26.6 million) per year in the zones where they will operate.

At a press conference organized by the National Energy Commission (CNE), Balcácer said the projects will provide 12,000 direct jobs. The large number of jobs is projected because the biofuel consortium will not produce its own sugarcane but will buy it from local farmers at a fair price:
energy :: sustainability ::biomass :: bioenergy :: biofuels :: ethanol :: bagasse :: cogeneration :: efficiency :: rural development :: Dominican Republic ::

According to Balcácer, the international companies Tomsa Destil (from Spain) and Biotech will share ownership of the distilleries. Both companies supposedly have more than 100 years combined experience in ethanol and sugar production and have erected or managed 400 distilleries around the world.

The president of the National Commission of Energy, Arístides Fernandez Zucco, who represented the State in the presentation of the projects, said that the government guarantees a climate of confidence for the investments, through a legal framework. He clarified that the State does not have any participation in the activities, "because this is a business for the private sector."

The ethanol to be produced will have a purity of 99.8 percent, making it readily blendable with gasoline. The dehydrated ethanol could be exported to the U.S., because the Dominican Republic does not fall under the ethanol tariff regime imposed on other producers.

Besides ethanol, both projects will generate electricity from two 30MW cogeneration units. The feedstock is bagasse, the abundant biomass residue from sugarcane processing.

The utilization of bagasse for energy makes sugarcane ethanol a fuel with a very strong energy balance (energy inputs needed to produce the fuel, versus energy contained in the fuel; also called 'net energy return' or 'energy return on energy invested' - EROEI). For Brazilian ethanol, the EROEI is between 8 and 10 to 1. This compares favorably to most other biofuels (e.g. corn ethanol has a net energy return of 1.2 to 1.5 to 1).

According to Bio E Group, the projects have received approval under the new Renewable Energy Law, which provides the legal framework for the biofuels sector.

No date was provided for the start of the operations of production at the plants, but the company said feasibility studies and agronomic assessments had already been completed or are to be finalised within the next three months.

References:
El Caribe: Instalarán dos destilerías - Producirán 70 millones de galones de etanol al año - February 6, 2007.

El Dinero: Inversionistas extranjeros invertirán US$300 MM en dos destilerías para producir etanol - February 6, 2007.

FAOStat production data for sugarcane.

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Bush budget does not change ethanol import tariff - Brazil disappointed

U.S. Energy Secretary Sam Bodman hinted last week the Bush administration might address cutting back the 54-cent-per-gallon import tariff on ethanol in its 2009 budget. But the budget has been sent to Congress and did not propose any changes to the tariff that is set to expire this year. Brazil is disappointed and says the tariff blocks U.S. consumers from using more efficient and environmentally friendly biofuels, such as ethanol based on sugarcane.

The Bush administration said it would discuss with lawmakers later this year what should be done when tariff is set to expire at the end of December 2008, which falls during the 2009 budget year that begins October 1.

The tariff is designed to protect U.S. corn-based ethanol makers from cheaper imports, mainly from Brazil and other developing countries that make ethanol in a far more efficient way from highly productive crops like sugarcane.

But numerous social, environmental, development and energy think tanks have called for the complete abandonment of all EU and US tariffs and trade barriers on biofuels because they distort trade and are responsible for increased food prices: from the IEA and the World Bank, to the IMF, the IISD, the OECD and the FAO - all have warned that these measures deny poorer countries market access, limit the availability of the most efficient biofuels, and could have detrimental effects on the environment.

Just recently, the OECD repeated that the tariffs are 'wasteful' and 'distorting'. And according to the IMF, biofuels are not to blame for food price increases, but these protectionist measures are - the fund called for their abolishment. For once, free trade could help developing countries, many of who have a large sustainable biofuels production potential that can be tapped in a highly efficient and competitive way. According to many food and agriculture experts, freely traded biofuels could help fight hunger and poverty (more here, here and here). All of this, however, requires an abandonment of protectionist measures.

Amongst those in favor of phasing out the 54-cents-per-gallon tariff is Energy Secretary Bodman who had indicated last week while speaking at the U.S. Chamber of Commerce that he favored eliminating or cutting it back:

I would just say I think that there are advantages to having had the kind of both subsidies and tariffs that have helped protect this industry. I believe that, the best I can tell, this industry is pretty close to being able to stand on its own. - Samuel Bodman, U.S. Energy Secretary

Subsidies that support corn-based ethanol production have been blamed for soaring feed grain costs that have greatly increased the cost of meat production. According to the Global Subsidies Initiative, biofuel support in the U.S. amounted to $5.6 billion in 2006, and could be higher this year (previous post):
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: efficiency :: trade :: subsidies :: tariff :: Brazil :: United States ::

Developing countries in the South, where biofuels can be produced more efficiently and competitively, have argued that these subsidies and the import duty distort trade. They have hinted at possible legal action at the World Trade Organisation.

Some U.S. farm-state congressmen, however, support the subsidies, and presidential candidates have campaigned on the issue, saying they support them too . What is more, U.S. ethanol blenders get a separate 51-cent-a-gallon tax credit that runs through 2010, a measure that was included in the Senate farm bill, which is now in conference committee with the House.

Commenting on the Energy Department's new budget and its lack of a call to phase out the tariff, Deputy Energy Secretary Clay Sell said:

I think it's very important that we pursue a policy which gives the U.S. industry appropriate time and protection to develop.

Brazil sugar cane sector has meanwhile reacted and expressed its disappointment over the fact that the administration did not use the new budget to modify the U.S. ethanol import tariff.

The continuing ethanol tariff runs counter to America's open and fair trade rhetoric. It is shocking that developed countries such as the United States continue to tax renewable biofuels from reliable democratic partners while encouraging tariff-free imports of petroleum from unstable regions of the world. - Marcos Jank, president of the Brazilian Cane Sugar Industry.

However, the Renewable Fuels Association, which represents U.S. ethanol producers, said the import tariff is needed to encourage investment in the U.S. to develop cellulosic ethanol made from wood chips, switchgrass and other farm and forest waste.

"By removing the tariff ... you will cool the kind of investment you have seen in the industry," said RFA spokesman Matt Hartwig.


References:
Reuters: Bush budget doesn't alter ethanol import tariff - February 4, 2008.

Facts about ethanol: DOE Secy Bodman hints FY09 budget may propose changing ethanol tariff - January 30, 2008.

Biopact: World Bank chief calls on U.S. to remove ethanol tariffs - March 14, 2007

Biopact: IEA chief economist: EU, US should scrap tariffs and subsidies, import biofuels from the South - March 06, 2007

Biopact: Worldwatch Institute: biofuels may bring major benefits to world's rural poor - August 06, 2007

Biopact: IFPRI report: more free trade needed to tackle rising food prices; small farmers could benefit - December 04, 2007

Biopact: IMF chief economist: biofuels could help cut farm subsidies, protectionism main cause of high food prices - December 06, 2007

Biopact: OECD calls biofuel tariffs "wasteful" and "destorting"; calls for open markets - January 14, 2008

Biopact: Paper warns against subsidies for inefficient biofuels in the North, calls for liberalisation of market - major boost to idea of 'Biopact' - September 11, 2007

Biopact: FAO chief calls for a 'Biopact' between the North and the South - August 15, 2007

Biopact: Subsidies for uncompetitive U.S. biofuels cost taxpayers billions - report - October 26, 2006

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Leading banks establish "Carbon Principles" to strengthen environmental and economic risk management for investments power sector

Three of the world’s leading financial institutions have announced the formation of "The Carbon Principles", climate change guidelines for advisors and lenders to power companies in the United States. These Principles are the result of a nine-month intensive effort to create an approach to evaluating and addressing carbon risks in the financing of electric power projects. The need for these Principles is driven by the risks faced by the power industry as utilities, independent producers, regulators, lenders and investors deal with the uncertainties around regional and national climate change policy.

The Principles were developed in partnership by Citi, JPMorgan Chase and Morgan Stanley, and in consultation with leading power companies American Electric Power, CMS Energy, DTE Energy, NRG Energy, PSEG, Sempra and Southern Company. Environmental Defense and the Natural Resources Defense Council, environmental non-governmental organizations, also advised on the creation of the Principles.

This effort is the first time a group of banks has come together and consulted with power companies and environmental groups to develop a process for understanding carbon risk around power sector investments needed to meet future economic growth and the needs of consumers for reliable and affordable energy. The consortium has developed an Enhanced Diligence framework to help lenders better understand and evaluate the potential carbon risks associated with coal plant investments.

The Principles recognize the benefits of a portfolio approach to meeting the power needs of consumers, without prescribing how power companies should act to meet these needs. However, if high carbon dioxide-emitting technologies are selected by power companies, the signatory banks have agreed to follow the Enhanced Diligence process and factor these risks and potential mitigants into the final financing decision.

There was full and frank dialogue around the table. There was a remarkable amount of debate and exchange of information and views among the banks, power companies and environmental organizations. The dialogue resulted in a rigorous analysis of the carbon risks in power investments, and sets the stage for further discussion. - Matt Arnold, director of Sustainable Finance

Citi, JPMorgan Chase and Morgan Stanley have pledged their commitment to the Principles to use as a framework when talking about these issues with clients. This effort creates a consistent approach among major lenders and advisors in evaluating climate change risks and opportunities in the US electric power industry. The Principles and associated Enhanced Diligence represent a first step in a process aimed at providing banks and their power industry clients with a consistent roadmap for reducing the regulatory and financial risks associated with greenhouse gas emissions.

The Principles are:
energy :: sustainability :: bioenergy :: biofuels :: biomass :: renewables :: carbon emissions :: climate change :: investing :: United States ::

Renewable and low carbon distributed energy technologies. Renewable energy and low carbon distributed energy technologies hold considerable promise for meeting the electricity needs of the US while also leveraging American technology and creating jobs. The signatories will encourage clients to invest in cost-effective renewables and distributed technologies, taking into consideration the value of avoided CO2 emissions. They will also encourage legislative and regulatory changes that remove barriers to, and promote such investments (including related investments in infrastructure and equipment needed to support the connection of renewable sources to the system). Futhermore, they will consider production increases from renewable and low carbon generation as part of the Enhanced Diligence process and assess their impact on proposed financings of certain new fossil fuel generation.

Energy efficiency. An effective way to limit CO2 emissions is to not produce them. The signatory financial institutions will encourage clients to invest in cost-effective demand reduction, taking into consideration the value of avoided CO2 emissions. They will also encourage regulatory and legislative changes that increase efficiency in electricity consumption including the removal of barriers to investment in cost-effective demand reduction. The institutions will consider demand reduction caused by increased energy efficiency (or other means) as part of the Enhanced Diligence Process and assess its impact on proposed financings of certain new fossil fuel generation.

Conventional and advanced generation. In addition to cost effective energy efficiency, renewables and low carbon distributed generation, investments in conventional or advanced generating facilities will be needed to supply reliable electric power to the US market. This may include power from natural gas, coal and nuclear technologies. Due to evolving climate policy, investing in CO2-emitting fossil fuel generation entails uncertain financial, regulatory and certain environmental liability risks. It is the purpose of the Enhanced Diligence process to assess and reflect these risks in the financing considerations for certain fossil fuel generation. The signatories will encourage regulatory and legislative changes that facilitate carbon capture and storage (CCS) to further reduce CO2 emissions from the electric sector.

Leading utilities and financial institutions understand that the rules of the road have changed for coal. These principles are a first step in facilitating an honest assessment of electric generation options in light of the obvious and pressing need to substantially reduce national greenhouse gas pollution. - Mark Brownstein, managing director of business partnerships for Environmental Defense

Dale Bryk, senior attorney at the Natural Resources Defense Council added, that exxpectations are rising fast for the energy industry. Global warming is changing the competitive landscape. Clean power is the name of the game today. Conventional coal facilities are already facing intensive scrutiny. The Natural Resources Defence Council think the serious money is increasingly going to be on clean, efficient solutions.

References:
Morgan Stanley: Leading Wall Street Banks Establish The Carbon Principles - February 4, 2008.

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