Brazil opens first hybrid ethanol-biodiesel plant
Brazil's recently reelected president Luiz Inacio Lula da Silva showcased his country's prowess in the biofuels industry today when he opened Barralcool, the world's first integrated biofuels plant that will produce cane-based ethanol and biodiesel from oilseeds in a highly efficient and streamlied process.
Brazil, with its huge agricultural potential, has for decades had the world's most advanced biofuels market. After the oil crisis in the early 1970s, it launched the ProAlcool ethanol programme to lighten dependence on crude imports. Now that this program has become a major success, the country is embarking on the development of an innovative biodiesel program (ProBiodiesel) in which poverty alleviation and rural development take center stage.
The Barralcool plant is located in the city of Barra do Bugres, in the interior of Mato Grosso state, one of Brazil's poorest regions. Mato Grosso has been producing ethanol from surrounding cane fields for over 20 years, bringing employment to thousands. The 27 million reais (€9.6/$12.5 million) integrated biodiesel plant, built by Dedini, will prodive many more jobs, and has the following capacities [*.Portuguese]:
Commenting on the benefits of the integrated plant, Ronaldo Knack, president of consultants BrasilAgro, which will host the International Agroenergy and Biofuel Fair in Brasilia on November 27-29, says: "Having the two plants together will provide major infrastructure and energy savings." Brazil's sugarcane ethanol already has a very positive energy balance (of around 8 to 1, with some producers achieving a balance of 11 to 1) and analysts expect this balance to become even stronger in the near future due to technological advances, equalling or even surpassing the energy balance of conventional petroleum production (earlier post). The highly efficient integrated plant is a first demonstration of the fact that these projections are not too far-fetched:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: social development :: Mato Grosso :: oil independence :: ethanol :: biodiesel :: Brazil ::
According to Paulo Gaiad, operations manager at Dedini, Brazil's leading provider of sugar-ethanol, biodiesel and cogeneration plants in Brazil, there are currently some 300 sugar-ethanol mills in operation in Brazil and another 60 under construction.
But despite the ethanol success story - based on rising demand for biofuels, as consumers worry about global warming and instability in oil exporting countries - Brazil's oilseed sector is in its worst crisis in decades due to the strong real against the dollar and high production costs. Multinationals such as Archer Daniels Midland and Bunge have closed several soy crushing plants in the past year or so.
Towards full oil independence
With the advent of the ProBiodiesel program "the worst of this crisis is now over," President Lula told hundreds of onlookers at the inauguration of the Barralcool plant. Analysts like BrasilAgro estimate that Brazil will invest over US$15 billion in bioenergy in the next five to six years:
The Lula government recently passed legislation that will mandate a 2 per cent blend of biodiesel from oilseed crops like soybean, sunflower or castor bean in all commercial sales of petroleum diesel by 2008 and 5 per cent by 2013. A few hundred filling stations already blend it. Brazil has about 14 biodiesel plants in operation and another 40 or so in construction, according to consultants Enerbio.
Now, about half of Brazil's massive cane crop has gone to ethanol production with the rest being refined into sugar. The more recent spike in world oil prices has turned an already thriving industry into a gold mine. Today, motorists can choose to fill up with 100 per cent ethanol at half the price of petrol at over 30,000 filling stations nationwide or opt for petrol which is blended with 20-25 per cent ethanol. Ethanol accounts for 40 per cent of all non-diesel fuel consumption and its market share is growing.
President Lula stresses that both the ethanol and biodiesel strategies of Brazil are not only directed at local consumption, but that the growing international market for biofuels must be an equally important target. Because Brazilian plants can switch between producing liquid fuels or sugar/crushed oilseeds, the country can now play on four markets at the same time, allowing great strategic flexibility and planning: (1) the (inter)national sugar market, (2) the (inter)national oilseeds and oilseed meal market, (3) the international ethanol market, (4) the international biodiesel market. This flexibility is now available at the very level of the integrated biofuel factories of the future, of which the Barralcool plant is a first example.
Lula insisted also that "with the advent of the production of biodiesel, we [with Petrobras] are now genuinely en route towards full oil independence".
More information:
Primeira Hora: Biodiesel será um dos pilares da economia mato-grossense, diz Maggi - 22 Nov. 2006
Noticias da Hora: Primeira usina integrada de biodiesel e álcool é inaugurada no Mato Grosso - 22 Nov. 2006
Diario News: Biodiesel é uma das revoluções de um Brasil maduro e soberano, diz presidente - 22 Nov. 2006
Article continues
Brazil, with its huge agricultural potential, has for decades had the world's most advanced biofuels market. After the oil crisis in the early 1970s, it launched the ProAlcool ethanol programme to lighten dependence on crude imports. Now that this program has become a major success, the country is embarking on the development of an innovative biodiesel program (ProBiodiesel) in which poverty alleviation and rural development take center stage.
The Barralcool plant is located in the city of Barra do Bugres, in the interior of Mato Grosso state, one of Brazil's poorest regions. Mato Grosso has been producing ethanol from surrounding cane fields for over 20 years, bringing employment to thousands. The 27 million reais (€9.6/$12.5 million) integrated biodiesel plant, built by Dedini, will prodive many more jobs, and has the following capacities [*.Portuguese]:
- an ethanol to biodiesel production ratio of roughly 3 to 1, with the production of 150 million liters of sugarcane based ethanol, 57 million liters of sunflower and soybean based biodiesel and 40,000 tonnes of raw sugar per annum
- the amount of energy contained in the liquid fuels that will leave the factory each year is around 900,000 barrels of oil equivalent
- the plant will co-generate electricity and steam to power its own operations, and feed excesses into the national grid
- besides producing separate biofuels, the plant will also mix ethanol and biodiesel in new formulations; recently, 1700 buses in São Paulo have started utilizing such blends and several trials are underway to find suitable blends for different engine technologies
- in a first phase, the project will involve the cooperation of 14 municipalities and will bring new jobs to 600 rural families
Commenting on the benefits of the integrated plant, Ronaldo Knack, president of consultants BrasilAgro, which will host the International Agroenergy and Biofuel Fair in Brasilia on November 27-29, says: "Having the two plants together will provide major infrastructure and energy savings." Brazil's sugarcane ethanol already has a very positive energy balance (of around 8 to 1, with some producers achieving a balance of 11 to 1) and analysts expect this balance to become even stronger in the near future due to technological advances, equalling or even surpassing the energy balance of conventional petroleum production (earlier post). The highly efficient integrated plant is a first demonstration of the fact that these projections are not too far-fetched:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: social development :: Mato Grosso :: oil independence :: ethanol :: biodiesel :: Brazil ::
According to Paulo Gaiad, operations manager at Dedini, Brazil's leading provider of sugar-ethanol, biodiesel and cogeneration plants in Brazil, there are currently some 300 sugar-ethanol mills in operation in Brazil and another 60 under construction.
But despite the ethanol success story - based on rising demand for biofuels, as consumers worry about global warming and instability in oil exporting countries - Brazil's oilseed sector is in its worst crisis in decades due to the strong real against the dollar and high production costs. Multinationals such as Archer Daniels Midland and Bunge have closed several soy crushing plants in the past year or so.
Towards full oil independence
With the advent of the ProBiodiesel program "the worst of this crisis is now over," President Lula told hundreds of onlookers at the inauguration of the Barralcool plant. Analysts like BrasilAgro estimate that Brazil will invest over US$15 billion in bioenergy in the next five to six years:
The Lula government recently passed legislation that will mandate a 2 per cent blend of biodiesel from oilseed crops like soybean, sunflower or castor bean in all commercial sales of petroleum diesel by 2008 and 5 per cent by 2013. A few hundred filling stations already blend it. Brazil has about 14 biodiesel plants in operation and another 40 or so in construction, according to consultants Enerbio.
Now, about half of Brazil's massive cane crop has gone to ethanol production with the rest being refined into sugar. The more recent spike in world oil prices has turned an already thriving industry into a gold mine. Today, motorists can choose to fill up with 100 per cent ethanol at half the price of petrol at over 30,000 filling stations nationwide or opt for petrol which is blended with 20-25 per cent ethanol. Ethanol accounts for 40 per cent of all non-diesel fuel consumption and its market share is growing.
President Lula stresses that both the ethanol and biodiesel strategies of Brazil are not only directed at local consumption, but that the growing international market for biofuels must be an equally important target. Because Brazilian plants can switch between producing liquid fuels or sugar/crushed oilseeds, the country can now play on four markets at the same time, allowing great strategic flexibility and planning: (1) the (inter)national sugar market, (2) the (inter)national oilseeds and oilseed meal market, (3) the international ethanol market, (4) the international biodiesel market. This flexibility is now available at the very level of the integrated biofuel factories of the future, of which the Barralcool plant is a first example.
Lula insisted also that "with the advent of the production of biodiesel, we [with Petrobras] are now genuinely en route towards full oil independence".
More information:
Primeira Hora: Biodiesel será um dos pilares da economia mato-grossense, diz Maggi - 22 Nov. 2006
Noticias da Hora: Primeira usina integrada de biodiesel e álcool é inaugurada no Mato Grosso - 22 Nov. 2006
Diario News: Biodiesel é uma das revoluções de um Brasil maduro e soberano, diz presidente - 22 Nov. 2006
Article continues
Wednesday, November 22, 2006
Analysts see Africa as a potential global leader in biofuel production
For a number of reasons, including an agricultural sector that enjoys relatively low land and labor costs and that has tremendous potential for productivity increases, many see sub-Saharan Africa as well suited to pioneer the development of biofuels as an alternative energy source for the continent and the world as a whole. Scientists have calculated that under optimal conditions, the continent could produce some 410 Exajoules of renewable bioenergy, sustainably, without threatening the food security of growing populations, and without damaging the environment, including rainforests and other fragile ecosystems. 410 Exajoules is more energy than the entire planet consumes today from all energy sources combined (coal, natural gas, oil, nuclear). The technical potential is clearly there (earlier post).
Significant biofuel production could mean a boost for sub-Saharan economies by both providing new income to the state, to millions of the rural poor and by reducing the continent's reliance on imported fossil fuels.
Oil dependence, a heavy economic burden
For many countries in Africa, oil makes up a significant portion of gross imports, a drain on their economies. In Kenya, for example, the cost of oil imports are equal to the value of its annual trade deficit. Countries like Namibia, Ghana, and Zambia are in a similar situation. Biofuel could change this equation, say its advocates. "In the long run, this money will stay in the country and will end up in the hands of the growers and manufacturers," said Gregor von Drabich-Waechter of Green Power East Africa Ltd., a biodiesel producer in Kenya.
"Energy is Africa's and the world biggest debt burden. Once we are out of this cycle we are in a better position," said Edward Okello of Biodiesel Technologies, another Kenyan company specializing in automotive biodiesel. Biofuel could not completely replace petroleum fuels, says von Drabich-Waechter, but could offer the continent an alternative that, in addition to being environmentally friendly, would improve farmers' lives.
Proponents agree Africa is well suited for biofuel production because of its vast uncultivated land base, its low-cost agriculture and because the majority of Africans makes a living off the land and would gladly see their incomes increase by cultivating energy crops:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: social development :: rural development :: poverty alleviation :: Africa ::
Fifty-five percent of the African population ekes out a living from agriculture. Agriculture contributes 40 percent of the continent's gross product and 60 percent of its export income. However, the agriculture sector so far has not succeeded in transforming the lives of African farmers.
Investing in agriculture
For one reason, African produce is usually in unprocessed form, which commands lower world market prices. In addition, African agricultural productivity is low, averaging one ton of produce per hectare per year, in comparison to three and five tons in Asia and Western Europe, respectively.
According to the African Union's New Partnership for Africa's Development, Africa's agriculture sector would require an investment of $251 billion to begin transforming living standards on the continent.
Actis, a British investment fund operating in emerging markets, is keen to be part of the solution. The company recently announced a $1 million African agriculture fund, most of which will be invested in the production of biofuel.
Actis Partner Michael Turner confirmed that the project is targeting a trend toward increased global biofuel consumption, driven by initiatives such as the European Union's goal to switch 20 percent of its fuel consumption to biofuel by 2020.
"This is a great opportunity," said Turner. "The EU has no vast lands to grow the required crops from which this fuel will be extracted. We believe Africa has the potential to be a major producer."
Brazil's success with biofuel production could be a model for Africa. According to a United Nations Development Programme study, ethanol production in Brazil has helped reverse migration to large urban areas and increased the quality of life for rural Brazilians.
While many factors work in favor of biofuel production in Africa, some emphasize that there is a need to ensure the continent's rural population benefits from the nascent industry.
Multinational corporations are already investing in Africa's land and, with their ability to influence policy, individual farmers risk being left out of the production process, Okello says.
African oil: blessing or curse?
Meanwhile, the development of the oil industry in Africa continues apace. Nigeria, Algeria, Libya, Angola and Egypt are Africa's top oil producers, accounting for 80 percent of the continent's production, according to the Africa Development Bank. Joining them are Sudan, Uganda, Equatorial Guinea, Gabon, Chad, and Cameroon, among others, who have commercially viable deposits.
But while some African countries, like Libya, will enjoy an oil boom for the next 70 years, others, like Angola, have less than 20 years worth of reserves.
Catholic Relief Services (CRS), a humanitarian relief organization, estimates that sub-Saharan African governments will receive more than $200 billion in oil revenues over the next decade. But historically, petrodollars have not helped developing countries reduce poverty and oil revenues have actually exacerbated the problem in many cases, the group warns.
Most of Africa's oil producing nations have failed to diversify their economies or prepare for a post-oil future, and they are characteristically authoritarian regimes.
Boost to the rural poor
The big question is whether biofuel could help change this. Agricultural economist Peter Kegode, an authority on sub-Saharan Africa's agricultural development strategies, believes so. Because African farmers will be key raw material suppliers in a biofuel industry, and because most of the continent's farmers are small scale, the industry's benefits will be widespread, he said. "Farmers will also have an option of using their harvest to boost food security or sell to energy producers, whichever pays better," he said.
What's more, because the sector will have wide participation, corrupt governments won't be able to misappropriate revenues, as they have historical done with oil proceeds. "Because the politicians will not directly access this money to carry on their authoritarian adventures, you can expect [demands] for better governance from economically empowered citizens," said Rachael Achieng, a Nairobi-based political scientist.
More information:
-World Politics Watch: Africa seen as potential leader in biofuel production - November 21, 2006
-Biopact: A look at Africa's biofuel potential - July 30, 2006
-The New Partnership for Africa’s Development (NEPAD), website.
Article continues
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