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    Brazilian based Infinity Bio-Energy has signed a term sheet to formalize a Joint Venture with Biotenol Boca Chica S.A. in the Dominican Republic to produce ethanol and construct a plant with a capacity to process 2.5 million tons of sugarcane. The plant will produce 210 thousand cubic metres per year and dehydrate 400 thousand cubic metres of alcohol fuel. Market Wire - July 11, 2007.

    BioDiesel International AG has acquired 70 per cent of the shares in Lignosol, a Salzburg based company that is making promising progress in Biomass-to-Liquids conversion techniques. The purchase price is in the single-digit million Euro range. ACN - July 10, 2007.

    Gay & Robinson Inc. and Pacific West Energy LLC announced today a partnership to develop an ethanol plant in Hawaii based on sugarcane feedstocks. The plant's capacity is around 12 million gallons (45 million liters) per year. The partnership called Gay & Robinson Ag-Energy LLC, will also ensure the continuation of the Gay & Robinson agricultural enterprise, one of the oldest in Hawaii. Approximately 230 jobs will be preserved, and a large area of West Kauai will be maintained in sustainable agriculture. Business Wire - July 10, 2007.

    Water for Asian Cities (WAC), part of UN-Habitat, is extending partial financial support for the construction of several biogas plants across the Kathmandu valley and develop them as models for municipal waste management. The first biogas plants will be built in Khokna, Godavari, Kalimati, Patan, Tribhuvan University premises, Amrit Science College premises and Thimi. The Himalayan Times - July 09, 2007.

    EnviTec Biogas's planned initial public offering has roused 'enormous' interest among investors and the shares have been oversubscribed, according to sources. EnviTec has set the IPO price range at €42-52 a share, with the subscription period running until Wednesday. EnviTec last year generated sales of €100.7 million, with earnings before interest and tax of €18.5 million. Forbes - July 09, 2007.

    AthenaWeb, the EU's science media portal, is online with new functionalities and expanded video libraries. Check it out for video summaries of the latest European research activities in the fields of energy, the environment, renewables, biotech and much more. AthenaWeb - July 04, 2007.

    Biopact was invited to attend a European Union high-level meeting on international biofuels trade, to take place on Thursday and Friday in Brussels. Leaders from China, India, Africa and Brazil will discuss the opportunities and challenges arising in the emerging global biofuels sector. EU Commissioners for external relations, trade, energy, development & humanitarian aid as well as the directors of international organisations like the IEA, the FAO and the IFPRI will be present. Civil society and environmental NGOs complete the panorama of participants. Check back for exclusive stories from Friday onwards. Biopact - July 04, 2007.

    China's state-owned grain group COFCO says Beijing has stopped approving new fuel ethanol projects regardless of the raw materials, which has put a brake on its plan to build a sweet potato-based plant in Hebei. The Standard (Hong Kong) - July 03, 2007.

    Blue Diamond Ventures and the University of Texas A&M have formed a biofuels research alliance. The University will assist Blue Diamond with the production and conversion of non-food crops for manufacturing second-generation biofuels. MarketWire - July 03, 2007.

    African Union leaders are to discuss the idea of a single pan-African government, on the second day of their summit in Accra, Ghana. Libya's Colonel Muammar Gaddafi is championing the idea, but many African leaders are wary of the proposal. BBC - July 02, 2007.

    Triple Point Technology, a supplier of cross-industry software platforms for the supply, trading, marketing and movement of commodities, announced today the release and general availability of Commodity XL for Biofuels™. The software platform is engineered to address the rapidly escalating global market for renewable energy fuels and their feedstocks. Business Wire - July 02, 2007.

    Latin America's largest construction and engineering firm, Constructora Norberto Odebrecht SA, announced plans to invest some US$2.6 billion (€1.9 billion) to get into Brazil's booming ethanol business. It aims to reach a crushing capacity of 30 million to 40 million metric tons (33 million to 44 million tons) of cane per harvest over the next eight years. More soon. International Herald Tribune - June 30, 2007.

    QuestAir Technologies announces it has received an order valued at US$2.85 million for an M-3100 system to upgrade biogas created from organic waste to pipeline quality methane. QuestAir's multi-unit M-3100 system was purchased by Phase 3 Developments & Investments, LLC of Ohio, a developer of renewable energy projects in the agricultural sector. The plant is expected to be fully operational in the spring of 2008. Market Wire - June 30, 2007.

    Siemens Energy & Automation, Inc. and the U.S. National Corn-to-Ethanol Research Center (NCERC) today announced a partnership to speed the growth of alternative fuel technology. The 10-year agreement between the center and Siemens represents transfers of equipment, software and on-site simulation training. The NCERC facilitates the commercialization of new technologies for producing ethanol more effectively and plays a key role in the Bio-Fuels Industry for Workforce Training to assist in the growing need for qualified personnel to operate and manage bio-fuel refineries across the country. Business Wire - June 29, 2007.

    A paper published in the latest issue of the Journal of the American Ceramic Society proposes a new method of producing hydrogen for portable fuel cells that can work steadily for 10-20 times the length of equivalently sized Lithium-ion batteries. Zhen-Yan Deng, lead author, found that modified aluminum powder can be used to react with water to produce hydrogen at room temperature and under normal atmospheric pressure. The result is a cost-efficient method for powering fuel cells that can be used in portable applications and hybrid vehicles. More soon. Blackwell Publishing - June 29, 2007.

    An NGO called Grains publishes a report that highlights some of the potentially negative effects associated with the global biofuels sector. The findings are a bit one-sided because based uniquely on negative news stories. Moreover, the report does not show much of a long-term vision on the world's energy crisis, climate change, North-South relations, and the unique role biofuels can play in addressing these issues. Grain - June 29, 2007.

    Researchers at the Universidad de Tarapacá in Arica plan to grow Jatropha curcas in the arid north of Chile. The trial in the desert, is carried out to test the drought-tolerance of the biodiesel crop, and to see whether it can utilize the desert's scarce water resources which contain high amounts of salt minerals and boron, lethal to other crops. Santiago Times - June 28, 2007.

    India and Thailand sign a Memorandum of Understanding (MoU) that envisages cooperation through joint research and development and exchange of information in areas of renewable sources of energy like, biogas, solar-thermal, small hydro, wind and biomass energy. Daily India - June 28, 2007.

    Portucel - Empresa Produtora de Pasta e Papel SA said it plans to install biomass plants with an expected production capacity of 200,000 megawatt hours per year at its paper factories in Setubal and Cacia. The European Commission gave the green light for state aid totaling €46.5 million, contributing to Portucel's plans to extend and modernise its plants. Forbes - June 28, 2007.

    Petro-Canada and GreenField Ethanol have inked a long-term deal that makes Petro-Canada the exclusive purchaser of all ethanol produced at GreenField Ethanol's new facility in Varennes, Quebec. The ethanol will be blended with gasoline destined for Petro-Canada retail sites in the Greater Montreal Area. Petro-Canada - June 27, 2007.

    According to a study by the Korean Energy Economics Institute, biodiesel produced in Korea will become cheaper than light crude oil from 2011 onwards (678 won/liter versus 717.2 won/liter). The study "Prospects on the Economic Feasibility of Biodiesel and Improving the Support System", advises to keep biodiesel tax-free until 2010, after which it can compete with oil. Dong-A Ilbo - June 27, 2007.

    Kreido Biofuels announced today that it has entered into a marketing and distribution agreement with Eco-Energy, an energy and chemical marketing and trading company. Eco-Energy will purchase Kreido Biofuels’ biodiesel output from Wilmington, North Carolina, and Argo, Illinois, for a minimum of 3 years at current commercial market prices, as well as provide Kreido transportation and logistics services. Business Wire - June 27, 2007.

    Beijing Tiandi Riyue Biomass Technology Corp. Ltd. has started construction on its new fuel ethanol project in the county of Naiman in Inner Mongolia Autonomous Region's Chifeng City, the company's president told Interfax today. Interfax China - June 26, 2007.

    W2 Energy Inc. announces it will begin development of biobutanol from biomass. The biofuel will be manufactured from syngas derived from non-food biomass and waste products using the company's plasma reactor system. Market Wire - June 26, 2007.

    Finland based Metso Corporation, a global engineering firm has received an order worth €60 million to supply two biomass-fired power boilers to Portugal's EDP Producao - Bioeléctrica, S.A. The first boiler (83 MWth) will be installed at Celbi’s Figueira da Foz pulp mill and the second boiler (35 MWth) at Caima’s pulp mill near the city of Constância. Both power plants will mainly use biomass, like eucalyptus bark and forest residues, as fuel to produce together approximately 40 MWe electricity to the national grid. Both boilers utilize bubbling fluidized bed technology. Metso Corporation - June 26, 2007.

    Canada's New Government is investing more than $416,000 in three southern Alberta projects to help the emerging biofuels industry. The communities of Lethbridge, Drumheller and Coalhurst will benefit from the projects. Through the Biofuels Opportunities for Producers Initiative (BOPI), the three firms will receive funding to prepare feasibility studies and business plans to study the suitability of biofuels production according to location and needs in the industry. MarketWire - June 26, 2007.

    U.S. Energy Secretary Samuel Bodman is expected to announce today that Michigan State and other universities have been selected to share $375 million in federal funding to develop new bioenergy centers for research on cellulosic ethanol and biomass plants. More info soon. Detroit Free Press - June 26, 2007.

    A Kerala based NGO has won an Ashden Award for installing biogas plants in the state to convert organic waste into a clean and renewable source of energy at the household level. Former US vice president Al Gore gave away the award - cash prize of 30,000 pounds - to Biotech chief A. Saji at a ceremony in London on Friday. New Kerala - June 25, 2007.

    AltraBiofuels, a California-based producer of renewable biofuels, announced that it has secured an additional US$165.5 million of debt financing for the construction and completion of two plants located in Coshocton, Ohio and Cloverdale, Indiana. The Coshocton plant's capacity is anticipated to reach 60million gallons/year while the Cloverdale plant is expected to reach 100 million gallons/year. Business Wire - June 23, 2007.

    Brazil and the Dominican Republic have inked a biofuel cooperation agreement aimed at alleviating poverty and creating economic opportunity. The agreement initially focuses on the production of biodiesel in the Dominican Republic. Dominican Today - June 21, 2007.

    Malaysian company Ecofuture Bhd makes renewable products from palm oil residues such as empty fruit bunches and fibers (more here). It expects the revenue contribution of these products to grow by 10% this year, due to growing overseas demand, says executive chairman Jang Lim Kuang. 95% of the group's export earnings come from these products which include natural oil palm fibre strands and biodegradable mulching and soil erosion geotextile mats. Bernama - June 20, 2007.

    Argent Energy, a British producer of waste-oil based biodiesel, announced its intention to seek a listing on London's AIM via a placing of new and existing ordinary shares with institutional investors. Argent plans to use the proceeds to construct the first phase of its proposed 150,000 tonnes (170 million litres) plant at Ellesmere Port, near Chester, and to develop further plans for a 75,000 tonnes (85 million litres) plant in New Zealand. Argent Energy - June 20, 2007.


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Wednesday, July 11, 2007

Ethanol tariffs and subsidies force Italians to spend more on pasta

From Italy comes an interesting case study showing the need for countries in the North to import biofuels from the South. Italian food manufacturers have warned that the price of pasta, one of the country's staple foods, will go up by about 20% in the coming months. Global warming and the growing use of durum wheat as a biofuel feedstock are blamed. But the deeper reason lies with European and American tariffs on imported ethanol, which allow durum wheat to be used as a raw material for ethanol in the first place.

Italian pasta tastes good because it is made from durum wheat, of which Italy is one of the world's main producers. But with strong demand at home and a growing export market, Italians are increasingly forced to import high quality durum wheat from abroad.

Much comes from Canada and Syria but, according to Mario Rummo, president of the Italian pasta manufacturers association, the Canadians have said they have no more durum wheat for sale until November, because much of it has been sold for the production of ethanol. Syria, meanwhile, has just banned the export of grain. The result will be a price hike of 20% for spaghetti and fettuccine by the autumn for Italians who have long been accustomed to cheap pasta in their supermarkets.

Don't blame biofuels, blame your trade negotiator
Mainstream media now paint this story with headlines such as 'Italians face tough choice: spaghetti or ethanol', 'Spaghetti is the latest victim of the biofuels boom' or 'Cheap biofuels, or dear pasta?', perpetuating the food versus fuel myth. Notice the 'or', as if we are faced with a choice between food 'or' fuel. We all know, of course, that we can have both food and biofuels (earlier post).

If the EU and the US were to drop their high import tariffs on ethanol, the problem would solve itself at once.

Brazil and other countries in the South would compete durum wheat - which makes for a very mediocre bioethanol feedstock - out of the market swiftly, by selling their much more efficient and competitive sugar cane ethanol. The Swedish government has understood this, and has launched an offensive to get rid of tariffs and subsidies that keep European consumers paying way too much for biofuels, and that perpetuates this false dilemma between food and fuel.

It's simply absurd to see that durum wheat is being used to make ethanol, while there are alternatives that are many times more energy efficient and environmentally friendly. The energy balance of durum wheat based ethanol is below 2 to 1, and the fuel obtained from it doesn't reduce greenhouse gases very much. Moreover, durum based ethanol is costly, and only possible with hefty subsidies and protectionist trade barriers.

Sugar cane ethanol's energy balance is between 8 to 1 and 10 to 1, competitive without subsidies and reduces greenhouse gas emissions by up to 80%. Clearly, there is no match.

In short, headlines should read: 'EU tariffs force Italians to spend more on spaghetti' or 'Arrivederci, farm subsidies', 'European consumers hijacked by unfair trade rules which make both food and fuel more expensive, and which keep millions of poor farmers in eternal poverty' or 'Don't blame biofuels, blame your trade negotiator':
:: :: :: :: :: :: :: :: :: ::

Canadian production of durum wheat has soared in recent years, but it is increasingly being sold as a biofuel to make ethanol which is why the wholesale price is going up. Global warming appears to be one of the main reasons for a decline in production in some traditional durum wheat-growing areas in the Mediterranean.

At present, Italy imports 40% of the durum wheat used to make pasta.

The country's expertise in the selection and blending of grains is the reason pasta manufacturers here give for the superiority of their product and their flourishing export trade.

Picture
: durum wheat, a crop that can only be used as an ethanol feedstock if it enjoys heavy subsidies and is protected by ethanol import tariffs. From a purely technical and environmental standpoint, durum wheat makes no sense as an ethanol crop: the energy balance of the fuel obtained from it is too low, and it doesn't reduce greenhouse gas emissions in any significant way.

References:
BBC: Italians facing pasta price rise - July 10, 2007.

Gristmill: Cheap biofuels, or dear spaghetti? - July 10, 2007.


2 Comments:

rufus said...

First tortillas, then pork, then milk - all, eventually, debunked.

NOW, it's all that "Canadian" ethanol made from wheat. Huh?

Let's just say, "I'm Skeptical." I think I'll wait for the re-write.

4:28 PM  
Anonymous said...

Common, this is a no-brainer: corn gets fat money and corn ethanol would simply not survive if subsidies and protectionist measures were removed.

Let's do it. Let's remove these barriers. Anyone can see that those who want ethanol will spontaneously import from Brazil (whose ethanol costs 2.5 to 3 times less than corn ethanol).

No corn would be used any longer for biofuels, and there would be no tortilla crises.

This is all very logical.

Brazil can replace all gasoline with sugarcane ethanol if it wants to, without threatening its own food supplies.

The media must focus much more on the effect of trade distortions.

Biofuels as such are not at all to blame for increased prices of some foodstuffs.

Really, it's a no-brainer.

6:11 PM  

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