Asian biofuel trading to grow fast, as Indonesia goes ahead with bioenergy program
Despite criticism by NGOs from the West, Indonesia's massive biofuel development program (earlier post) will go ahead as planned, director of the Energy and Mineral Resources Ministry's research and development unit, Nenny Sri Utami has announced. The project is expected to turn the country into one of the biggest biofuel producers in the world, as it involves five million hectares of land set aside for growing tropical feedstocks. Indonesia's priority is to export biofuels to prosperous markets. Until recently, the obvious focus was on Europe, the single largest biofuel market. But more and more, Indonesia is looking East, towards rapidly growing economies in the Asia-Pacific region.
Over the coming decades, it is precisely there that energy demand will increase sharply: the region is set to drive 75% of all the growth in the world's fuel demand by 2030. And according to Jeffrey Skeer of the U.S. Department of Energy (DOE), who chairs the Asia-Pacific Economic Cooperation's (APEC) recently strengthened Biofuels Task Force (earlier post), it is therefor logical to expect biofuel trading in this market to grow along. Commercial imports by Japan, which have already commenced, will help the market to take off.
Unlike biofuels made from crops grown in temperate climates, green fuels made from tropical crops, such as sugarcane, sweet potatoes, palm oil, sweet sorghum and cassava, can compete with crude oil at US$50 a barrel, said Skeer at an industry conference in Tokyo:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: biofuels trade :: Asia-Pacific :: APEC :: Indonesia :: Japan ::
Biofuels are expected to be produced in larger volumes in several years from various crops, such as sugar cane and palm, in Asian countries like Malaysia and Indonesia at different harvest timings and costs, while corn is the main source of biofuel in the United States now.
"Cost differentials can mean big trade opportunities in the APEC region as biofuel markets grow over time," Skeer said.
Japan's role
Skeer pointed out that the start of the imports by Japan would provide a significant support for the biofuel trading market in Asia to take off. "Japan is pretty big. Imports will go slow but there is a good potential there," Skeer said on the sidelines of the conference.
Japan is seen as a potential big market of ethanol producers as it is the world's third-largest oil market and the only Asian country with a U.N carbon emission cap.
It also has ambitions to replace about a fifth of its auto fuels with biofuels or gas-to-liquid (GTL), but technically there is no commercial retail distribution of such fuel.
Japan's high dependence on imported food and the decline of its agricultural sector have also delayed the introduction of biofuel to its retail market.
The Japanese oil industry has this year opted to import ethyl tertiary butyl ether (ETBE) from France ahead of a test retail distribution of bio-gasoline starting in April, citing a lack of sufficient facilities for direct ethanol blending and issues related to petroleum product sales tax.
Imports from Brazil, South East Asia
But the industry has said it would shift to imports of ethanol from such countries as key exporter Brazil, and refiners, led by top refiner Nippon Oil Corp., set up a joint venture to import ETBE and ethanol in January.
The global biofuel industry is quickly developing amid growing concerns over climate change as biofuels emit less greenhouse gases than conventional fossil fuels as well as because of high oil prices.
U.S. President George Bush's speech in January that the states would sharply boost use of biofuels to reduce its fossil fuel consumptions by the world's largest energy market might speed up the pace of the industry growth.
The Japanese oil industry has also said costs to produce and import ethanol or ETBE is more expensive now, but DOE's Skeer said biofuels can be competitive with current oill prices.
"At world crude oil prices above US$50 per barrel, biofuels from a wide variety of crops are cost-competitive with petrol and diesel as fuels for transport," he said.
International benchmark U.S. crude prices have fallen sharply from a record above US$78, but still holding around US$50-55 levels.
Article continues
Over the coming decades, it is precisely there that energy demand will increase sharply: the region is set to drive 75% of all the growth in the world's fuel demand by 2030. And according to Jeffrey Skeer of the U.S. Department of Energy (DOE), who chairs the Asia-Pacific Economic Cooperation's (APEC) recently strengthened Biofuels Task Force (earlier post), it is therefor logical to expect biofuel trading in this market to grow along. Commercial imports by Japan, which have already commenced, will help the market to take off.
Unlike biofuels made from crops grown in temperate climates, green fuels made from tropical crops, such as sugarcane, sweet potatoes, palm oil, sweet sorghum and cassava, can compete with crude oil at US$50 a barrel, said Skeer at an industry conference in Tokyo:
ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: energy :: sustainability :: biofuels trade :: Asia-Pacific :: APEC :: Indonesia :: Japan ::
Biofuels are expected to be produced in larger volumes in several years from various crops, such as sugar cane and palm, in Asian countries like Malaysia and Indonesia at different harvest timings and costs, while corn is the main source of biofuel in the United States now.
"Cost differentials can mean big trade opportunities in the APEC region as biofuel markets grow over time," Skeer said.
Japan's role
Skeer pointed out that the start of the imports by Japan would provide a significant support for the biofuel trading market in Asia to take off. "Japan is pretty big. Imports will go slow but there is a good potential there," Skeer said on the sidelines of the conference.
Japan is seen as a potential big market of ethanol producers as it is the world's third-largest oil market and the only Asian country with a U.N carbon emission cap.
It also has ambitions to replace about a fifth of its auto fuels with biofuels or gas-to-liquid (GTL), but technically there is no commercial retail distribution of such fuel.
Japan's high dependence on imported food and the decline of its agricultural sector have also delayed the introduction of biofuel to its retail market.
The Japanese oil industry has this year opted to import ethyl tertiary butyl ether (ETBE) from France ahead of a test retail distribution of bio-gasoline starting in April, citing a lack of sufficient facilities for direct ethanol blending and issues related to petroleum product sales tax.
Imports from Brazil, South East Asia
But the industry has said it would shift to imports of ethanol from such countries as key exporter Brazil, and refiners, led by top refiner Nippon Oil Corp., set up a joint venture to import ETBE and ethanol in January.
The global biofuel industry is quickly developing amid growing concerns over climate change as biofuels emit less greenhouse gases than conventional fossil fuels as well as because of high oil prices.
U.S. President George Bush's speech in January that the states would sharply boost use of biofuels to reduce its fossil fuel consumptions by the world's largest energy market might speed up the pace of the industry growth.
The Japanese oil industry has also said costs to produce and import ethanol or ETBE is more expensive now, but DOE's Skeer said biofuels can be competitive with current oill prices.
"At world crude oil prices above US$50 per barrel, biofuels from a wide variety of crops are cost-competitive with petrol and diesel as fuels for transport," he said.
International benchmark U.S. crude prices have fallen sharply from a record above US$78, but still holding around US$50-55 levels.
Article continues
Tuesday, February 06, 2007
Malaysia to use waste biomass from palm oil as a renewable energy resource
Palm oil producing countries have no tradition in applying similar methods, though. But given high energy prices, this is changing rapidly. In Thailand, the government is encouraging the use of palm oil mill effluents for the production of biogas, whereas in Malaysia, an experimental palm processing plant that has been using biomass residues since 2003, showed such encouraging results that the country's Deputy Prime Minister, Datuk Seri Najib Tun Razak, now calls on the project managers to study the implementation of the method on wider use at every level of the country's industrial sector. The minister said the move was crucial as this type of biomass energy was not only cheaper but also more efficient and environment-friendly than the use of fossil fuels. Moreover, its use brings additional incomes to the palm industry, which might change the prevailing logic which consists mainly of expanding plantation areas.
Vast amount of 'waste' biomass for energy
The biofuel in question consists of 'empty fruit bunches' (EFB) and fiber-rich press cake, which result from processing palm fruits. A palm oil plantation yields a staggering amount of harvesteable biomass (some 50 to 70 tons per hectare per year), and only 10% of this total results in the finished products: palm oil and palm kernel oil.
Until recently, the remaining 90% (empty fruit bunches, fibers, fronds, trunks, kernels, palm oil mill effuent) was discarded as waste, and either burned in the open air or left to settle in waste ponds. This way, the palm oil processing industry's waste contributed significantly to CO2 and methane emissions.
The waste biomass is now seen as a valuable energy resource and as a feedstock for bio-based products (bioplastics, fiber-board). Malaysia alone produces some 168 million tons of this waste annually, representing roughly 2 exajoules of energy, the equivalent of around 330 million barrels of oil. No wonder the Malaysian government is looking at using the resource as an alternative to costly fossil fuels:
biomass :: bioenergy :: biofuels :: energy :: sustainability :: oil palm :: waste :: efficiency :: co-generation :: Malaysia ::
The Felda plant
Felda Palm Industries Sdn Bhd (FPISB), which operates the first 7.5MW integrated biomass co-generation plant at its palm processing facility, is encouraged by the government to invest R&D efforts and to study the feasibility of applying the model throughout the country's industrial sector. Construction of the 38 million ringgit (€8.4/US$10.9 million) Felda Sahabat biomass plant started in August 2003 and began operations in October 2006.
Deputy Prime Minister Najib: "I'm aware the government is encouraging renewable energy sources. Hence, Felda should invest in this sector so that it can complement the government's plan to expand electricity production using renewable energy sources. This power plant in Felda Sahabat here, the first to be built by Felda, produces electricity using the biomass method."
The Felda management had two options whether to use diesel or biomass for the power plant. They opted for the more economical and cheaper biomass method," he told reporters after opening the power plant at Felda Sahabat, about 100km from here, Tuesday.
Najib called for more research and development in biomass-based power generation as it was not only new in Malaysia, it was also in line with the country's emphasis on renewable energy sources.
"I hope we can build more biomass-powered new power plants like the biomass power station in Felda Sahabat which is cheaper, efficient and more competitive," he said.
Asked on the possibility of building more biomass-powered power plants nationwide in future, Najib said it would depend on the research findings and the price offered.
"If Tenaga Nasional Berhad offers a lower price from the rate quoted for power generated from biomass-fuelled plants, surely it is not economical," he said.
Asked whether Felda would take in new settlers, Najib said though the agency's decision to freeze settlers' intake since 1990 was still in force, it was prepared to reconsider if there were suggestions from any state to alienate land for Felda estates.
Earlier, in his speech, Najib said it was time Felda set up a subsidiary to focus on research and development of biomass-based products. "I'm very happy with Felda's overall achievements and in particular the Felda Sahabat biomass power plant which uses waste products to give returns. "I hope Felda will continue to diversify the use of every energy source to its optimum," he said.
Global warming, Kyoto, Clean Development Mechanism
On global warming, Najib said it was a universal problem that needed to be jointly addressed.
"The floods that lashed our country recently were said to be caused by global warming. Many conferences have been hosted and various organisations have been set up to find solutions to this problem," he added.
Najib said the latest United Nations report revealed the warming level to be increasing every year and the main cause of global warming was the use of fossil-based fuel for energy production.
"The Kyoto Protocol declaration had underlined measures to reduce global warming through three flexible mechanisms -- joint implementation, clean development mechanism and international emission trading. "Malaysia recognises the Kyoto Protocol to fulfil the global commitment in the interests and safety of future generations."
Recently, several companies have started implementing so-called Clean Development Mechanism (CDM) projects in Malaysia's and Indonesia's palm oil sectors. The CDM allows industrialised countries to offset some of their CO2 emission reduction obligations under the Kyoto Protocol by investing in clean energy and efficiency projects in the developing world for which they receive CO2 credits.
One example is that of Japan's Chubu Electric Power, which has decided to participate in a new project to generate power from oil palm empty fruit bunch biomass in Malaysia. This project will develop small-scale 10,000 kW power plants using empty fruit bunches as fuel in two locations in the eastern portion of the state of Sabah, on Malaysia's Borneo Island. From the power plants in these two locations, reductions of CO2 emissions are expected to reach nearly 2 million tons by the year 2012. To start, the first power plant is slated to begin operations in March of 2008, with construction breaking ground in August of this year.
Picutre: Deputy PM Datuk Seri Najib Tun Razak is given a briefing on biomass-based electricity generation after opening the power plant at Felda Sahabat. Also present is Felda Chairman Tan Sri Dr Yusof Nor (left). Courtesy: BERNAMA.
More information:
Article presenting the feasibility of the Felda plant: M. Z. Abdulmuin, T. M. I. Alamsyah and D. Mukhlishien, An alternative energy source from palm wastes industry for Malaysia and Indonesia, Energy Conversion and Management Volume 42, Issue 18 , December 2001, Pages 2109-2118.
BERNAMA: Invest In Biomass-based Power Generation R&D, Felda Told - Feb. 6, 2007.
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posted by Biopact team at 4:04 PM 1 comments links to this post