Rabobank committed to playing a key role in financing bioenergy industry
Quicknote bioenergy finance
The Frankfurter Allgemeine Zeitung reports that Rabobank has entered into a long-term commitment in relation to the development of sustainable energy solutions, both in the developed as well as in the developing world. The bank seeks to play a leading role in financing and stimulating clean energy. This commitment is stated in the Rabobank report entitled 'Financing and the emerging bio-energy markets' [*.pdf]. Rabobank and Robeco also employ the report to announce the launch of a new investment fund for clean technology. The fund is called Robeco Clean Tech Private Equity II and will contain approximately 500 million U.S. dollars.
The 'Financing and the emerging bio-energy markets' report was presented in Singapore in conjunction with the annual meeting of the IMF and the World Bank. The report puts forward recommendations for a transition to a more sustainable energy supply. This development is necessitated by sustained supply uncertainty and energy price fluctuations on the one hand and the growing threat of climate change on the other. The report looks specifically at the fast-growing market for bio-energy. A key conclusion of the report is that agriculture and forestry could play a key role in the near future with regard to supplying clean, more sustainable and more renewable energy:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: finance :: investing ::
Biomass production must, however, be carried out in a responsible and sustainable manner. This market provides opportunities for both Rabobank customers and for Rabobank itself. Especially now that the prices of fossil fuels are rising, the alternatives are becoming increasingly more attractive and profitable.
Rabobank already has extensive activities in this area Rabobank invests in numerous projects, products, services and alliances that are aimed at improving the environment. The bank also encourages its customers to invest actively in energy, environmental and climate solutions. Rabobank furthermore employs non-financial criteria in its credit lending process, issues green bonds and develops sustainable investment funds in association with Robeco. The bank also trades in CO2 emission rights and develops sustainable real estate projects.
Developing countries are also not forgotten. Rabobank has confirmed its long-term commitment to the development of sustainable energy solutions and agriculture in developing countries where millions of people do not or virtually do not have access to energy. In dialogue with other NGOs and government agencies, the bank will continue to explore opportunities for implementing best practices in the field of sustainable agriculture and energy production.
We will be looking at this report in depth soon, together with another such report prepared by Swiss bank Sarasin, and analyse how these European banks define 'sustainability'. As may be apparent by now, the Biopact stresses social sustainability and not merely environmental durability. Both concepts have to be weighed off against each other.
As has often been suggested, chances are that European and American banks, NGO's, and governments will use the notion of environmental sustainability as a protectionist tool, to close off their markets for competitive biofuels from the developing world.[Entry ends here].
Article continues
The Frankfurter Allgemeine Zeitung reports that Rabobank has entered into a long-term commitment in relation to the development of sustainable energy solutions, both in the developed as well as in the developing world. The bank seeks to play a leading role in financing and stimulating clean energy. This commitment is stated in the Rabobank report entitled 'Financing and the emerging bio-energy markets' [*.pdf]. Rabobank and Robeco also employ the report to announce the launch of a new investment fund for clean technology. The fund is called Robeco Clean Tech Private Equity II and will contain approximately 500 million U.S. dollars.
The 'Financing and the emerging bio-energy markets' report was presented in Singapore in conjunction with the annual meeting of the IMF and the World Bank. The report puts forward recommendations for a transition to a more sustainable energy supply. This development is necessitated by sustained supply uncertainty and energy price fluctuations on the one hand and the growing threat of climate change on the other. The report looks specifically at the fast-growing market for bio-energy. A key conclusion of the report is that agriculture and forestry could play a key role in the near future with regard to supplying clean, more sustainable and more renewable energy:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: finance :: investing ::
Biomass production must, however, be carried out in a responsible and sustainable manner. This market provides opportunities for both Rabobank customers and for Rabobank itself. Especially now that the prices of fossil fuels are rising, the alternatives are becoming increasingly more attractive and profitable.
Rabobank already has extensive activities in this area Rabobank invests in numerous projects, products, services and alliances that are aimed at improving the environment. The bank also encourages its customers to invest actively in energy, environmental and climate solutions. Rabobank furthermore employs non-financial criteria in its credit lending process, issues green bonds and develops sustainable investment funds in association with Robeco. The bank also trades in CO2 emission rights and develops sustainable real estate projects.
Developing countries are also not forgotten. Rabobank has confirmed its long-term commitment to the development of sustainable energy solutions and agriculture in developing countries where millions of people do not or virtually do not have access to energy. In dialogue with other NGOs and government agencies, the bank will continue to explore opportunities for implementing best practices in the field of sustainable agriculture and energy production.
We will be looking at this report in depth soon, together with another such report prepared by Swiss bank Sarasin, and analyse how these European banks define 'sustainability'. As may be apparent by now, the Biopact stresses social sustainability and not merely environmental durability. Both concepts have to be weighed off against each other.
As has often been suggested, chances are that European and American banks, NGO's, and governments will use the notion of environmental sustainability as a protectionist tool, to close off their markets for competitive biofuels from the developing world.[Entry ends here].
Article continues
Tuesday, September 19, 2006
The spirit of Rudolf Diesel: peanuts and socialism
For biofuel advocates, Diesel has become somewhat of a symbol, but for rather humble reasons: at the Exposition Universelle of 1900 in Paris, he demonstrated his revolutionary engine by using pure peanut oil as fuel. His own words have inspired many biodiesel enthusiasts eversince: "The use of vegetable oils for engine fuels may seem insignificant today. But such oils may become in the course of time as important as the petroleum and coal tar products of the present time" (1912).
Wealth, socialism, energy, engines and peanuts. A bizarre combination. But one that might work in the future. Suppose we were to take Diesel's vision of peanut-oil fueled engines seriously, then the question obviously becomes: where will all the peanuts come from? The answer immediately takes us to the sub-tropics, and in particular to the Sahel in Africa.
Peanuts, an important oil crop
Peanuts or groundnuts (Arachis hypogaea L.) are a nitrogen-fixating legume that is cultivated in over 100 countries in the global south [overview at the International Crops Research Institute for the Semi-Arid Tropics]. It is the 13th most important food crop of the world. Today, groundnut is the world's 4th most important source of edible oil and the 3rd most important source of vegetable protein. Groundnut seeds contain high quality oil (50%), easily digestible protein (25%) and carbohydrates (20%).
The nut is currently grown on 26.4 million ha worldwide with a total production of 36.1 million metric tons, and an average productivity of 1.4 metric tons per hectare. Major groundnut producers in the world are: China, India, Nigeria, USA, Indonesia and Sudan. Developing countries account for 96% of the global groundnut area and 92% of the global production.
Globally, 50% of groundnut produce is used for oil extraction, 37% for confectionery use and 12 % for seed purpose. Groundnut haulms (vegetative plant parts) provide excellent hay for feeding livestock. They are rich in protein and have better palatability and digestibility than other fodder. The production of groundnuts is concentrated in Asia and Africa, where the crop is grown mostly by smallholder farmers under rain-fed conditions with limited inputs.
Groundnut as a biofuel feedstock
Groundnut is an interesting energy crop for several reasons:
- it grows well in semi-arid regions and requires limited fertilizer and water inputs
- therefor it does not cause any pressures on rainforest ecologies, a critique often raised against other tropical energy crops (most notably palm oil)
- the regions where groundnut thrives are populated by the world's poorest people (especially Sahelian countries, like Mali, Niger, Mauritania, Chad, the Central African Republic, Sudan -- who all rank at the bottom of the scale of, for example, the Human Development Index)
- many non-commercial and non-edible varieties with high yields can be developed and improved (with several such varieties being tested in Georgia, U.S. - see below)
- In contrast to other energy crops which thrive well in semi-arid regions, such as the perennial shrubs jatropha curcas and pongamia pinnata, groundnut can be harvested mechanically
All of the crop's parts can be used as bioenergy feedstocks:- the nuts themselves have a high oil content (around 50%) and one hectare of groundnut yields around 1000 litres of oil; the oil has a relatively low melting point, a medium iodine value and a high flash-point - characteristics which make it a suitable oil for biodiesel production
- the groundnut has a residue-to-product ratio (earlier post) of around 0.5-1.2 for pods and 2.2-2.9 for straw; this means that for every ton of nuts produced, 500 to 1200kg of shells become available and 2.2 to 2.9 tons of straw residue are harvested; in total groundnut yields between 3.7 and 5.1 tons of biomass per hectare
- these residues offer an interesting solid biofuel, with a relatively high energy content of 16Mj/kg for shells and 18Mj/kg for straw - with advanced bioconversion technologies (cellulosic ethanol or dry pyrolisis) this 'waste' biomass can be turned into liquid fuels and bioproducts; alternatively, it could be densified and used in biomass (co-firing) power plants
As can be seen from the AEZ map above (very large version here, 4mb), sub-Saharan Africa has the largest potential suitable land base for rainfed cultivation of groundnuts. The main areas where the crop thrives are the vast Sahel region, the Central-African sub-Congo basin's 'groundnut belt' and in Southeastern-Africa. In total, there are some 200 million hectares of moderately to highly suitable land for the nuts in the Sahel, some 80 million in the sub-Congo basin belt, and another 100 million in East Africa.According to the African Groundnut Council, there are several projects underway with peanut oil as a biodiesel feedstock (in Europe and Brazil) and the nut's byproducts make it a crop with potential applications outside biodiesel production. The use of compacted groundnut shells in the form of 'bio-coal' (fuel briquettes) may save millions of hectares of woodlands which are under pressure because they are a source of firewood. This could be a very effective strategy for tackling desertification in the Sahel:
biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: Sahel :: briquettes :: peanuts :: groundnut :: diesel ::
Peanut economics
The major hurdle facing the adoption of groundnut as an energy crop, is the economics of groundnut oil. As such, peanut oil is one of the more expensive vegetable oils on the market, often fetching twice the price of palm oil.
But the trend could quickly be reversed if the global biofuels industry keeps growing as it is doing today, with multi-feedstock biodiesel plants searching for and processing any a diversity of vegetable oils. Moreover, planting and harvesting alternative energy crops grown in semi-arid regions, like jatropha and pongamia, requires vast amounts of manual labor, whereas peanuts do not. They can be planted and harvested mechanically, which allows for a very rapid expansion of the hectarage. Finally, land prices in these Sahelian countries are the lowest in the world, whereas prices for land suitable for tropical biofuel crops (like sugar cane or oil palm) are considerably higher. When the biofuels industry expands, land (lease) costs and harvesting costs might become very important business factors. And on both, groundnuts have a competitive advantage.
The best bet however is to use and develop non-commercial varieties of the nut, with higher yields. These varieties exist but have so far not been cultivated because they cannot be sold on the edible oils market. This is where farmers and agronomists from Georgia come in.
Tests are under way at the University of Georgia to develop non-edible peanuts that are high in oil, and could be grown specifically for biodiesel production. These varieties are higher in oil content than currently grown runner and Virginia type varieties and would not compete on the world market with peanuts grown for food and commercial cooking oil products.
Georgia Brown is a commercially grown peanut that is high in oil content, but not good for commercial oil. Georganic is a test variety that is high in oil, low in input costs and not suitable for commercial use. Georganic, or similar varieties will likely be the future of peanut biodiesel, according to Daniel Geller, a research engineer at the University of Georgia.
“Running peanut biodiesel cleans residue from a diesel engine. This can be good and bad, because the particles tend to clog up the filter on an engine. After cleaning the filters a few times, peanut biodiesel actually runs much cleaner than diesel,” Geller explains.
Worldwide, the demand for alternative fuels is huge. In the U.S. the demand is critical. The U.S. has roughly six percent of the world’s population, but consumes nearly 25 percent of all the fossil fuel produced worldwide. Whether biodiesel from peanuts becomes a popular alternative to fossil fuel depends on the economics of peanut oil worldwide.
More information:
Diesel, The Man and the Engine. Morton Grosser. New le der Erstausgabe von 1913 mit einer technik-historischen Einführung. Moers: Steiger Verlag, 1984.
International Crop Research Institute for the Semi-Arid Tropics (ICRISAT), groundnut information.
African Groundnut Council: Groundnuts, an alternative source of energy for transportation.
African Groundnut Council: New Source of Energy From Groundnut - combatting desertification through groundnut shell briquettes
Farm Press: Georgia working with peanuts as biodiesel source - Sept.11, 2006
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posted by Biopact team at 7:14 PM 0 comments links to this post