Biomass pellets revolution in Austria: 46% less costly than heating oil; most efficient way for households to reduce carbon footprint

Biomass pellets are taking Austria by storm, as they are by far the cheapest energy source on the heating market and reduce CO2 emissions more efficiently than any other alternative. Credit: proPellets Austria.

As part of Austria's Energy Efficiency Day [*German], Austrians enjoy the opportunity to learn about renewables and climate change. One form of energy has taken absolute center stage because it represents a sustainable alternative to fossil fuels, allows large carbon reductions and has become the most competitive of all renewables: biomass pellets. In Austria, the biofuel used for heating is currently a whopping 46 per cent less costly than heating oil and 30% less costly than natural gas - which explains its soaring popularity. Moreover, a recent study comparing strategies with which households can reduce their carbon footprint, shows biomass is the least costly and most efficient way of all.

Austria's demand for biomass pellets, made from forestry residues and wood, stands at 400,000 tonnes so far this year. But production has risen to 750,000 tonnes in 2007. Next year, producers are expected to manufacture more than 1 million tonnes. This would meet rapidly rising demand, and leave room for exports. After a sharp increase at the beginning of the year, prices have stabilized since April and are currently almost half those of heating oil on an energy equivalent basis (graph, click to enlarge).

For the average Austrian household, this makes a very significant difference. The yearly heating bill (24,000 kWh per year) costs around €2000 when heating oil is used. Heating with natural gas will cost a family around €1800 per year. With biomass pellets the bill can be reduced to €1100. Heat obtained from pellets thus costs around 3,8 eurocent/kWh, against 6 eurocent/kWh for gas and 6,7 eurocent/kWh for heating oil.

No wonder last year in Austria three times more biomass systems were installed than heating oil systems. In 2006, some 21,300 small (100kW) pellet heating boilers were built, which have saved the country some 80 million liters of heating oil and 80 million cubic meters of natural gas. In the same year, some 777 medium scale (100-1000kW) systems were installed, a 19% increase compared to 2005.

According to Christian Rakos, director of proPellets Austria, the sector's umbrella organisation, the advantages of biomass pellets are obvious: they are carbon-neutral, can be used in modern boiler systems as a ready alternative for heating oil and gas, and their price is completely independent of fossil fuel prices, which guarantees stability, an important advantage for households.

Strongest weapon against emissions
The Salzburger Institute for Urbanisation and Housing (SIR) released a study for the Energy Efficiency Day which showed biomass pellets offer households the most efficient way of reducing their carbon footprint. By switching from a heating oil system to a pellet heating system, the average Austrian household can avoid up to 10,000 kilograms of CO2 emissions. This is more than the emission reduction potential of all other renewables and efficiency measures.

Using highly efficient insulation materials throughout the home, which would cost on average 4 times more than a biomass heating system, would only offer CO2 savings of around 3300kg.

Geothermal heating systems are an attractive alternative to heating oil, but they too perform weakly compared to biomass. This is due, the SIR says, to their reliance on relatively large amounts of electricity - which, in Austria's electricity mix, is obtained mostly from fossil sources:
energy :: sustainability :: renewables :: biomass :: bioenergy :: biofuels :: wood :: pellets :: heating oil :: natural gas :: geothermal :: climate change :: Austria ::

Moreover geothermal can only be used for floor and wall heating systems. But most houses in Austria use central heating systems that give off their heat via radiators. Geothermal systems can not deliver the high initial temperatures needed to operate radiators. Finally, geothermal heat pumps have the disadvantage of requiring very costly boreholes.

Other strategies with which households can reduce their carbon footprint include a switch of all lighting systems to efficient lamps. This has a potential for saving only around 100 to 300 kg of CO2 per year.

In short, biomass pellets for heating are unsurpassed in their capacity to reduce household emissions in a cost-effective manner.

Energy security
Biomass pellets were promoted at the Energy Efficiency Day for another reason. The latest study by the International Energy Agency (July) was highlighted, as it offered a grim outlook of both oil and gas price evolutions. Biomass already being much less costly than heating oil, its prospects become even brighter in light of this energy outlook. The study warns for a possible oil and gas crisis, because output in producing countries is growing much less than expected.

Biomass production is fully independent of oil and gas prices. Austria has the capacity to utilize its vast forestry resources in a sustainable manner and can meet increasing demand with ease. Imports of pellets can supply the country at a later time. In this sense, the biomass sector - which relies on fuels that can be traded physically - plays a key role in providing energy security not only to states, but to the average Austrian household.

Translated by Jonas Van Den Berg & Laurens Rademakers for Biopact.

Picture & graph credit: proPellets Austria.

References:
Salzburger Nachrichten: Pellets erweisen sich als sehr kostengünstig und verlässlich - October 6, 2007.

Salzburger Nachrichten: Holzpellets sind aktuell um 46 Prozent günstiger als Heizöl - October 6, 2007.

Salzburger Nachrichten: Tag der Energie-Effizienz - October 6, 2007.

ProPellets Austria, the umbrella of the biomass pellet sector.

Salzburger Institut für Raumordnung & Wohnen - SIR.

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US DOE announces final rule for loan guarantee scheme for advanced energy technology projects - biomass tops list of selected projects

The U.S. Department of Energy (DOE) announces it has issued the final regulations for the loan guarantee program authorized by Title XVII of the Energy Policy Act of 2005 (EPAct). DOE’s action paves the way for federal support of clean energy projects using innovative technologies and will spur further investment in these advanced energy technologies. The final rule is the culmination of a long public rulemaking process.

DOE's announcements build on months of action to implement its loan guarantee program. In August 2006, DOE issued a solicitation inviting pre–applications for up to $2 billion in loan guarantees. By the December 31, 2006 deadline for this solicitation, DOE received 143 pre–applications requesting more than $27 billion in loan guarantee protection (for project costs estimated at more than $51 billion)

Out of these 143, DOE invited 16 project sponsors who submitted pre-applications last Fall, to submit full applications for the loan guarantees. These projects include advanced technologies involving the uses of biomass (6 projects), fossil energy (3), solar (2), industrial energy efficiency (2), electricity delivery and energy reliability (1), hydrogen (1), and alternative fuel vehicles (1). Projects supported by loan guarantees will help fulfill the goal of reducing America's reliance on imported sources of energy by diversifying its energy mix and increasing energy efficiency.

The following is a summary of the 16 projects and sponsors invited to submit full applications.

Advanced biomass projects:

• Alico, Inc.: Florida is the proposed location for this project, which plans a first-of-a-kind commercial-scale cellulosic ethanol plant that would use multiple feedstocks and produce multiple products.
• Blue Fire Ethanol, Inc.: California is the proposed location for this project, which plans to build a commercial-scale cellulosic ethanol plant using an array of low-cost feedstocks.
• Choren USA: Southeastern, U.S. is the proposed location for this project, which plans to construct an industrial-scale biomass gasification facility for clean synthetic diesel fuels in the United States.
• Endicott Biofuels, LLC: Virginia is the proposed location for this project, which plans to construct a second generation biodiesel and bio-derived products plant that would feature a high level of feedstock flexibility allowing for the production of a broad range of biodiesel fuels.
• Iogen Biorefinery Partners, LLC: Idaho is the proposed location for this project, which plans to build a biorefinery to produce ethanol from a wide range of cellulosic feedstocks and to produce other byproducts of value to several industries.
• Voyager Ethanol, LLC: Iowa is the proposed location for this project, which plans to build a cellulosic ethanol plant that can accommodate multiple feedstocks in the production of ethanol and higher value byproducts.

Advanced solar energy projects:

• Luz II: Nevada is the proposed location for this project, which plans to develop a highly efficient large-scale power project using concentrated solar-thermal technology.
• Solyndra, Inc.: California is the proposed location for this project, which plans to manufacture highly efficient thin-film photovoltaic modules.

energy :: sustainability :: renewables :: biomass :: bioenergy :: biofuels :: solar :: hydrogen :: efficiency ::

Advanced hydrogen project:

• Bridgeport Fuel Cell Park, LLC: Connecticut is the proposed location for this project, which plans to build the largest single-site installation of fuel cells in the world.

Industrial energy efficiency projects:

• GR Silicate Nano Fibers and Carbonates: Washington is the proposed location for this project, which plans a highly energy efficient process for manufacturing paper.
• Sage Electrochromics: Electrochromic Window Manufacturing Project: Minnesota is the proposed location for this project, which plans to develop a manufacturing facility that would produce energy-efficient windows for the commercial and residential building sectors.

Electricity delivery and energy reliability project:

• Beacon Power: Massachusetts is the proposed location for this project, which plans to develop a system that will enhance peak performance of electric generation over the power grid.

Alternative fuel vehicle project:

• Tesla Motors: New Mexico is the proposed location for this project, which plans to build a battery-electric powered vehicle with enhanced range that can be produced for the consumer market.

Advanced fossil energy project:

• Mesaba Energy Project (MEP-I, LLC): Integrated Gasification Combined Cycle (IGCC) Plant: Minnesota is the proposed location for this project, which plans to build a state-of-the-art IGCC plant that would allot space in its design for CO2 capture and storage. This project would allow for potential CO2 capture in the future, would provide state-of-the-art emission controls far exceeding the emission level requirements specified in Section 1703 of the Energy Policy Act of 2005 and would help reduce cost and increase fuel flexibility of IGCC technology.
• Mississippi Power Company: IGCC Plant: Mississippi is the proposed location for this project, which plans to build an IGCC plant that would commercialize a first-of-its-kind application. This project would allow for potential CO2 capture in the future, would provide state-of-the-art emission controls far exceeding the emission level requirements specified in Section 1703 of the Energy Policy Act of 2005 and would help reduce cost and increase fuel flexibility of IGCC technology.
• TX Energy, LLC: Coal to Synthetic Gas IGCC Plant: Texas is the proposed location for this project, which plans to commercialize a new polygeneration gasification facility that can isolate a significant concentrated stream of CO2 while producing large amounts of power and methanol.

Loan guarantees aim to stimulate investment and commercialization of clean energy technologies to reduce our Nation’s reliance on foreign sources of energy. Finalizing this regulation for the Department’s Loan Guarantee program puts Americans one step closer to being able to use new and novel sources of energy on a mass scale to reduce emissions and allow for vigorous economic growth and increased energy security. - U.S. Energy Secretary Samuel Bodman

The final regulation provides that the Department may issue guarantees for up to 100% of the amount of a loan, subject to the EPAct limitation that DOE may not guarantee a debt instrument for more than 80% of the total cost of an eligible project. Under the final rule, if DOE issues a guarantee for 100% of a debt instrument, the loan must be issued and funded by the Treasury Department’s Federal Financing Bank. While Congress must provide authority in an appropriations act for the loan guarantees that the Department will issue, DOE’s intent is to only issue loan guarantees if borrowers and project sponsors pay the “credit subsidy cost” for any loan guarantee they receive. Therefore, DOE does not plan to use taxpayer funds to pay for the credit subsidy costs of these loan guarantees.

The final regulation also provides for the following:

• The Title XVII loan guarantee program will be implemented through a series of solicitations. The solicitations may target specific technology areas or be general;
• Eligible projects must employ new or significantly improved technologies that avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases as compared to commercial technologies in service in the United States at the time the loan guarantee agreement is executed;
• The guaranteed portion of a partially guaranteed loan may be separated from or "stripped" from the non-guaranteed portion, except in cases where the guarantee exceeds 90 % of the loan amount;
• In the event of a loan default, DOE will have a superior lien on all project assets pledged as collateral for the guaranteed loan; however, the final rule allows for the possibility in a default situation that lenders and holders of the non-guaranteed debt could share proportionately with the Department in proceeds from the sale of project assets pledged as collateral. A pari passu structure will not be permitted to override the Department’s superior right to project assets;
• The Secretary of Energy must determine that there is a “reasonable prospect” of repayment of the guaranteed debt before a loan guarantee may be issued;
• DOE must charge and collect fees sufficient to cover applicable administrative expenses;
• Borrower–paid Credit Subsidy Costs and administrative fees paid to DOE may not be included within total project costs for the purposes of determining the amount of guarantees that DOE can issue for a project;
• A project’s receipt of other governmental assistance does not disqualify a project from receiving a Title XVII loan guarantee; however, when evaluating a project’s application for a Title XVII loan guarantee, DOE will consider the extent to which a project will receive other governmental assistance, (e.g., grants, tax credits, other loan guarantees);
• The borrower must have a significant equity stake in a project, and proceeds from guaranteed or non-guaranteed debt, and the value of government grants and other assistance, will not be counted as “equity.”

The final rule is the culmination of a public rulemaking process, which began with a Notice of Proposed Rulemaking published May 16, 2007. DOE reviewed and carefully considered all comments it received on the proposed rule.

Congress currently is considering the Department’s Fiscal Year (FY) 2008 Budget request for $9 billion in loan guarantee authority and $8.4 million to run the Loan Guarantee office. Both of these actions are important for the successful execution of this program. DOE’s issuance of additional loan guarantee program solicitations is dependent on receiving adequate additional authorization from the Congress and funding for the operation of its Loan Guarantee program office.

DOE's nnouncements build on months of action by DOE to implement its loan guarantee program. In August 2006, DOE issued a solicitation inviting pre–applications for up to $2 billion in loan guarantees. By the December 31, 2006 deadline for this solicitation, DOE received 143 pre–applications requesting more than $27 billion in loan guarantee protection (for project costs estimated at more than $51 billion).

The 16 pre-applicants invited to submit full loan guarantee applications for review must inform DOE by October 30, 2007 if they plan to submit a full application. The applications received will undergo disciplined and rigorous reviews, necessary to take proper account of the potential risks of a project. The full application review will be subject to the final regulations issued today. The decision to issue loan guarantees will depend on the merits and benefits of particular project proposals and their compliance with statutory and regulatory requirements. The pre-applicants not selected to submit full applications from this solicitation can reapply for future solicitations, for which their project is eligible.

Following funding and authorization for the program in February 2007, DOE has established a Credit Review Board to make recommendations to the Secretary of Energy on loan guarantees; named an office director and technical and financial experts to work in the Loan Guarantee program office; and developed guidelines for the financial and technical review of loan guarantee applications.

References:
U.S. Department of Energy: DOE Announces Final Rule for Loan Guarantee Program - October 4, 2007.

U.S. Department of Energy: Final Rule - Loan Guarantees for Projects that Employ Innovative Technologies [*.pdf].

U.S. Department of Energy: Loan Guarantee Program website.

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Centre for European Economic Research survey: experts see rising prices for all energy commodities over the next five years

A great majority of experts questioned in the course of the authoritative ZEW Energy Barometer [*.pdf/German] compiled by the Centre for European Economic Research (ZEW) expect rising prices for all energy commodities - electricity, natural gas, crude oil and coal - for industrial clients over the next five years. This means bio-based alternatives, capable of covering all commodity categories, are likely to become more attractive.

An overwhelming majory of the more than 200 leading experts questioned [*.German] by the ZEW expect energy prices to rise in the long run (graph, click to enlarge).

• Electricity: 84% think that prices for electricity will increase over the next five years. About 13% believe that prices will stay at their current level and just 3% forecast prices to fall.
• Natural gas: approximately 84% of those questioned think that prices for natural gas will increase; a minority of 9% believes that prices will stop rising and remain stagnant. The percentage of experts who forecast prices to fall in the long run is even smaller at about 7%.
• Oil: 82% expect prices for oil to keep rising over the coming five years; a small minority of 11% believes prices may stagnate; a fall in oil prices is predicted by 7% of the experts.
• Coal: 65% of experts expect rising prices, 30% believe that by the year 2012 the coal price could be at a similar record level as that of 2007 (earlier post), and 5% think coal prices could fall below this year's level.

Even though the ZEW Energy Barometer is seen as authoritative, caution is urged, especially when it comes to short-term prognoses. Half a year ago, a majority of experts had predicted energy prices to fall considerably, but the opposite was true:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: coal :: oil :: natural gas :: electricity ::

In the course of the current survey just 49% of experts think that electricity prices will stagnate over the next six months (in the first half of 2007 about 57% thought so). Just 2% expect prices to fall (as compared to 6% in the first half of 2007). On the other hand, 49% now believe that electricity prices will increase over the six months to come.

Experts' view on the short-term development of oil and gas prices is also far more critical than six months ago. Thus, a narrow majority expects stagnating prices (about 47% for oil and 50% for natural gas). Approximately 45% of experts, however, think that oil prices will increase and 40% believe so with regard to natural gas. About two thirds of experts predict coal prices to remain constant, about 30% believe that they will rise and just 3% forecast coal prices to fall in the next six months.

The ZEW Energy Barometer is compiled twice a year based on a survey conducted among 200 energy experts from both the scientific as the economic sectors (utilities, traders, service companies, think tanks, analysts) who are questioned as to their expectations about market developments over both the short (6 months) and long term (5 years).

The ZEW (Zentrum für Europäische Wirtschaftsforzung) is a leading European economic research institute. It works in the field of user-related empirical economic research. In this context it particularly distinguished itself nationally and internationally by analysing internationally comparative issues in the European context and by compiling scientifically important data bases. The ZEW is a non-profit economic research institute associated with the University of Mannheim and supported by the government of the federal state of Baden-Württemberg.

The ZEW is a member of the "Leibniz-Gemeinschaft", one of Germany's largest scientific organisations comprised of 84 non-university research institutes and service facilities.

References:
Zentrum für Europäische Wirtschaftsforschung, Mannheim: Schwerpunkt Energiemarkt - September 2007.

Zentrum für Europäische Wirtschaftsforschung, Mannheim: ZEW-Energiemarktbarometer - Experten erwarten keine Entspannung bei Energiepreisen - October 2007.

Biopact: Coal prices hit records too - time for biomass? - October 03, 2007

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POET receives $80 million grant for cellulosic ethanol project

POET and the U.S. Department of Energy (DOE) announce that they have signed a cooperative agreement for a commercial cellulosic ethanol project in Emmetsburg, Iowa. The agreement finalizes the first phase of a DOE award that was announced in February and will govern all aspects of the project leading up to construction. With the agreement in place, POET will move forward on project preliminary design and engineering, environmental engineering, biomass collection and other activities.

According to the cooperative agreement, phase one of the project will last approximately 20 months. A subsequent phase two agreement will then be negotiated to cover construction which is expected to take two years. Following construction, facility operation is expected to begin in 2011.

Along with five other companies, POET was selected in February by the DOE to negotiate a joint funding relationship to construct a commercial cellulosic ethanol production facility. POET's award is up to $80 million and can�t exceed 40 percent of the project's total cost.

Project Liberty, POET's cellulosic project, will convert an existing 50 million gallon per year (mgpy) dry-mill ethanol plant in Emmetsburg, Iowa into an integrated corn-to-ethanol and cellulose-to-ethanol biorefinery. Once complete, the facility will produce 125 million gallons per year and show the following efficiency increases:

• delivering 11 percent more ethanol from a bushel of corn
• reaping 27 percent more ethanol per acre of corn
• reducing natural gas consumption in the plant by 83 percent
• reducing water consumption by 24 percent

Twenty-five percent of the output will be from cellulosic corn fiber and corn cobs. Once the transformation is complete, the facility will also produce corn germ meal and corn oil, as well as 80,000 tons of Dakota Gold Corn Germ Dehydrated and 100,000 tons of Dakota Gold HP (a high protein distillers grain feed product) annually as animal feed co-products.

The bioconversion process to be used at the cellulosic ethanol plant draws on two technologies:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: cellulose :: hydrolysis :: biorefinery ::

1. 'BFRAC', an advanced corn fractionation process which separates the corn into three fractions including fiber, germ and endosperm. The endosperm is then fermented to create ethanol while the remaining fractions are converted into new value-added co-products, including POET's trademarked Dakota Gold HP, trademarked Dakota Bran cake, corn germ meal and corn oil. In addition to these high value co-products, the process also results in increased plant throughput and decreased energy consumption.
2. 'BPX', a patent-pending raw starch hydrolysis process which converts starch to sugar, which then ferments to ethanol without heat. The BPX process not only reduces energy costs, but also releases additional starch content for conversion to ethanol, increases protein content and quality of co-products, increases co-product flowability, potentially increases plant throughput and significantly decreases plant emissions.

In June, POET announced that Jim Sturdevant, a 22-year veteran of the US Geological Survey, will serve as director of the project and that they had successfully produced cellulosic ethanol from corn cobs. POET has purchased additional land adjacent to their Emmetsburg production facility in order to accommodate construction of the cellulosic facility.

POET, the largest dry mill ethanol producer in the United States, is an established player in the biorefining industry through project development, design and construction, research and development, plant management, and marketing. Formerly known as Broin, the 20-year old company currently operates 21 production facilities in the United States with six more in construction or in the midst of expansion. The company produces and markets more than 1.1 billion gallons of ethanol annually.

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World Bank to provide $5 million for biogas plants in rural Nepal

The World Bank has agreed to provide $5 million in assistance to co-finance the setting up of 37,000 biogas plants in rural areas of Nepal. The World Bank administered Global Partnership on Output Based Aid (GPOBA) has signed a grant agreement with the Nepalese government under the fourth phase of the Biogas Support Program (BSP-IV). The Project will be implemented by the Alternate Energy Promotion Center (AEPC). The grant is co-funded by the United Kingdom 's Department for International Development (DFID).

The project aims to replace traditional energy sources used by the rural population, such as fire wood and kerosene, with modern biogas plants. Biogas digesters use anaerobic decomposition of organic material to produce a methane-rich which can be used for cooking and light. GPOBA’s grant will sponsor new biogas plants ranging in capacity from 4m3 to 10m3. Even the smallest plants with a 4m3 capacity produce enough gas to run a cooking stove for nearly 2.5 hours daily.

Switching to biogas has multiple social, economic and environmental advantages:

• use of the biofuel reduces carbon emissions
• it decreases the pressures leading to deforestation by relying on household and farm waste instead
  
• decreases the frequency of respiratory infections that result from burning sooty fuels in poorly ventilated households - a killer in the kitchen claiming approximately 2 million lives each year (earlier post)
• in the particular context of rural Nepal, the Community Development Carbon Fund estimates that families will save approximately three hours of labor per day from the switch from gathering fuel wood to biogas - quite an impressive change in the life of these people
  
• considerable financial savings occur from not purchasing fuels like kerosene
• biogas production yields an organic fertilizer; families save by not spending on synthetic fertilizer

Women and girls, who are traditionally responsible for running the household, colleting firewood and cooking, will be among the project's primary beneficiaries. Furthermore, access to biogas will enable families to use gas lanterns after sunset to provide light for children's studies or other household activities:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: anaerobic digestion :: biogas :: deforestation :: World Bank :: Nepal ::

The Biogas Support Program was started in 1992 by the Netherlands Development Organisation (SNV) together with the Government of Nepal to promote environmentally friendly and affordable energy to remote rural areas. The project has also received substantial funding from KfW. Since 2006, the BSP-IV is benefiting from funding form the World Bank's Community Development Carbon Fund in exchange for reductions of emissions of greenhouse gases.

Since 1992 the Biogas Support Program has helped to install 150,000 biogas plants in rural Nepal. The local non-governmental organisation Biogas Sector Partnership – Nepal (BSP-N) is serving as project implementing agency.

The Global Partnership on Output-Based Aid (GPOBA) is a multi-donor trust fund established in 2003 to develop output based aid (OBA) approaches across a variety of sectors including infrastructure, health and education. OBA subsidies are performance based and are designed to create incentives for efficiency and the long term success of development projects. GPOBA’s current donors are DFID, IFC, the Directorate-General for International Cooperation of the Dutch Ministry of Foreign Affairs (DGIS) and AusAid of Australia.

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Philippines in cooperation agreement with India's Praj Industries to develop biofuel sector

The Philippine Department of Agriculture (DA) sealed an agreement with India-based bioenergy company Praj Industries to help develop the country's nascent biofuels industry. Under a Memorandum of Understanding both parties will team up for feedstock development and setting up biofuel production plants.

The biofuel sector will be promoted through the propagation of new farming technologies and investments in the planting of sweet sorghum, cassava and sugarcane to be used as feedstock and in the production of bioethanol and jatropha for biodiesel. Praj will provide assistance and extend its knowledge in identifying varieties of sweet sorghum and jatropha for cultivation trials.

Praj will also provide the design, engineering and supply the biofuel production plants to potential investors in the biofuel sector based on mutually agreed terms and conditions on a case-to-case basis.

For its part, the DA will identify land for feedstock development; encourage and assist farmers in cultivating sweet sorghum, sugarcane, cassava or jatropha; and help in attracting investments for commercial scale feedstock production and construction of biodiesel and bioethanol plants.

The Philippine government expects the ever-growing global demand for crops-based alternative clean fuels to energize Philippine farms, increase the profitability of small holders in the agriculture sector, and reduce the country's dependence on imported energy sources. Last January, President Arroyo signed into law Republic Act 9367 or the Biofuels Act, which aims to ease the country's imports on petroleum products, which are dollar-draining and pollution-generating.

The DA is now in the process of identifying for private sector investments more than 400,000 hectares of land to plant crops that would be used as feedstock and for biofuels production. Of these, about 90,000 hectares are located in the North Luzon Agribusiness Quadrangle; 10,000 hectares in Central Philippines; and 300,000 in Agribusiness Mindanao:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: biodiesel :: sugarcane :: cassava :: jatropha :: sweet sorghum :: Philippines ::

The lands being processed so far already represent 78 per cent of the 600,000 hectares targeted for development this year. These lands would be planted to cassava, oil palm, coconut, sugarcane, jatropha, and other crops used as feedstock for projects that would be set up by private investors cashing in on the biofuels boom in the global market.

Investors are planning to set up plants in the Ilocos region, Cagayan Valley, Western Visayas, Zamboanga Peninsula, Northern and Central Mindanao, and the Davao region either through straight purchases, lease arrangements, contract growing or joint ventures.

In all these arrangements, farmers stand to earn more through profit sharing, guaranteed income packages or straight purchases of harvested crops, and benefit from new planting technologies that would create more jobs and boost production.


Praj is a publicly listed company in the Bombay Stock Exchange and the National Stock Exchange in India. It has provided distillery and brewery wastewater treatment and utilization solutions to over 35 countries worldwide. The company now has diversified its range of solutions such as in fermentation systems that include technology packages for multiple feedstock including cane-molasses, cane juice and filtrate, starch-based raw materials like corn, sorghum, wheat, tapioca, tropical sugar-beet, among others.

References:
Philippines News Agency: RP inks biofuels deal with India-based company - October 5, 2007.

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The bioeconomy at work: Meredian Inc. acquires PHA technology from Procter & Gamble

Meredian, Inc. announced the acquisition of an extensive intellectual property portfolio from Procter & Gamble relating to Polyhydroxyalkanoate (PHA) technology. Procter & Gamble developed the technology through more than a decade of research, resulting in a highly functional and cost effective material.

Meredian will use the technology to manufacture new biopolymers using renewable resources, further reducing the global dependence on petroleum products in the production of plastics.

Polyhydroxyalkanoates are naturally-occurring polymers produced by bacteria. A variety of bacterial species produce PHAs by fermenting biomass under nutrient-limiting conditions. These water-insoluble storage polymers are biodegradable, exhibit thermoplastic properties and can be produced from renewable carbon sources found in plants (schemtic, click to enlarge).

PHA based polymers can be used in many applications, including molded goods, paper coatings, non-woven fabrics, performance additives. As a family of biopolymers, they have functional properties sufficient to replace a significant portion of the 300 billion pounds of petroleum-based plastics used worldwide today.

Meredian expects to begin construction in 2008 on the first of four planned production facilities; the first will be located in the Southeastern United States. Meredian plans to produce over 600 million pounds of biopolymers annually.

Meredian polymers work well in many traditional plastic applications by retaining product quality and convenience while reducing the burden on landfills. Meredian polymers will biodegrade either aerobically or anaerobically. This means the material will be quickly reabsorbed into the natural environment with no adverse ecological or health affects. Degradation occurs in septic systems, commercial waste water treatment systems, composting environments or even cold ocean waters. In these environments, naturally occurring bacteria use Meredian polymers as a food source and accelerate degradation:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: biopolymer :: bioplastic :: biodegradable :: PHA :: bioeconomy ::

S. Blake Lindsey, President of Meredian, says that given the unique physical property range of existing Meredian biopolymers - DaniMer and Seluma - the company expects to see a wide array of applications, from highly flexible films and fibers to rigid packaging, including many single-use food service and liquid packaging applications.

The combination of biopolymers will enable the company to provide synergies within the technology platforms and will result in one of the world's most versatile biopolymer product lines.

P&G was seeking an enthusiastic company that could efficiently commercialize its intellectual property on polymers. Meredian was selected because of its dedication to biopolymers and ability to take the development work to the next level - delivering finished products to the market.

References:
U.S. Department of Energy, Energy Efficiency and Renewable Energy: Biomass Program - Production of Polyhydroxyalkanoate Polymers.

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Scientists propose artificial trees to scrub CO2 out of the atmosphere - but the real thing could be smarter

Some scientists suggest the threat of climate change has become so great, that we must begin to consider 'geo-engineering' the planet to mitigate global warming. Several futuristic proposals are on the table, but many of these have been dismissed as too risky (previous post). Two broad categories can be distinguished: geo-engineering 'mirrors' that reflect sunlight back into space to cool the planet, and options based on capturing and storing CO2.

Amongst the first series the following ideas have been suggested: emulating the cooling effects of a large volcanic eruption by filling the atmosphere with sulphur particles (dismissal here), making clouds more reflective by pumping fine salty water particles into them, and building a giant space mirror by launching billions of thin glass plates into space to reflect sunlight away from Earth (which would be absurdly costly).

Carbon capture ideas include the proposal to 'fertilize' the oceans with iron to induce algae blooms that capture CO2 (critique here), and building 'synthetic trees' that suck CO2 out of the atmosphere with the gas consequently stored deep under ground (earlier post).

Artificial trees
The latter idea is now becoming a reality. Frank Zeman at Columbia University believes CO2 could be efficiently extracted from the atmosphere using a relatively simple chemical process involving pumping air from the atmosphere through a chamber containing sodium hydroxide, which reacts with the CO2 to form sodium carbonate. This carbon-containing solution is then mixed with lime to precipitate powdered calcium carbonate – a naturally occurring form of which is limestone. Finally, the 'limestone' is heated in a kiln releasing pure CO2 for storage.

The 'artificial tree' concept is discussed in an article in the current online edition of Environmental Science & Technology. Zeman calculates that one carbon atom would need to be expended as fuel – to pump air and heat the process – in order to capture four carbon atoms from air.

Zeman has no commercial plans for his idea, but Klaus Lackner, a former colleague at Columbia who originally developed the concept, has meanwhile set up a private company called Global Research Technologies to explore the possibilities of making money out of it.

Real trees and carbon-negative energy
According to Jon Gibbins, an expert on energy technology at Imperial College in the UK, Zeman and Lackner's idea faces two major problems: (1) it could provide a justification for continuing to burn fossil fuels, and (2) it does not present a clean energy system as it merely removes carbon dioxide from the atmosphere. There is however a concept that performs the same function as Zeman's idea but delivers renewable, ultra-clean carbon-negative energy at the same time, which allows us to move away from fossil fuels. This concept, known as 'Bio-energy with Carbon Storage' (BECS) is based on real trees designed to capture and store more carbon, and on advanced bioconversion concepts:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: carbon dioxide :: carbon capture and storage :: bio-energy with carbon storage :: geo-engineering ::

Gibbins believes it makes more sense to use carbonaceous fuels to generate electricity, capture the CO2 at the power plant, and use the resulting electricity to power cars and trains.

Is it better to burn fossil fuels and capture the carbon dioxide from air, or to decarbonise the power first and put that into transport? If we bite bullet and move on to electricity then we can use electricity from anywhere, including renewable sources. - Jon Gibbins, Imperial College

If the fuels in question are renewable biomass - real trees - the electricity produced becomes carbon-negative. Such BECS systems perform the same function as Zeman's idea, but are more efficient and allow us to make a transition towards carbon-negative electricity for transport, away from fossil fuels.

Zeman claims that his process does not use any more energy than decarbonising emissions straight from power plants. But Gibbins points out that much of Zeman's process is run on electricity, while carbon capture at (biomass) power plants relies on waste heat, making the system potentially more efficient.

The BECS concept offers the possibility to couple biomass production and trade to a global transition to carbon-negative electricity. Unlike other renewables like wind or solar - which are carbon-neutral and merely prevent emissions from occuring in the future - BECS systems take emissions from the past out of the atmosphere and can take us back to lower CO2 levels far more quickly.

Scientists who developed BECS concepts within the context of 'Abrupt Climate Change' (ACC) scenarios, project that the systems can reduce atmospheric CO2 levels rapidly, safely and without the need for alternative and risky geo-engineering interventions. If implemented on a global scale, BECS can bring atmospheric CO2 back to pre-industrial levels by mid-century (earlier post and especially here).

The prospects for BECS systems are looking good. Recently the UNFCCC announced it would include carbon storage into the Clean Development Mechanism (CDM), but only in developing countries where more than 50% of all electricity is generated by coal. Many of these countries have a large potential to produce sustainable biomass close to geosequestration sites. Its inclusion into the CDM means the BECS concept will be eligible for carbon credits which would make it more feasible.

Moreover, recent advances in plant biology have seen scientists designing fast-growing trees with enhanced carbon capturing capacities. A hybrid larch tree with 30% greater carbon sink capacity was developed (previous post), as well as an eucalyptus with 15% increased carbon capturing capacity (more here). Such trees would be used as primary carbon capture 'machines', then transformed into bioenergy (bio-electricity or biofuels) and the carbon captured and geosequestered.

Finally, a major advantage of BECS is that it can be implemented in a decentralised way, increasing its safety (one of the major risks with geosequestration is the potential for CO2 leakage). Geosequestration sites can be selected far away from inhabited regions; there, biomass would be grown and converted into the carbon-negative biofuel, which would then be shipped to power stations there where electricity is needed. If the biomass is converted by using synthetic fuel production methods (gasification coupled to Fischer-Tropsch synthesis), the carbon-negative fuels later used in cities would be ultra-clean and emit virtually no harmfull emissions. Recently a project in this sense was started, initiating the transition to BECS. It is based on producing synthetic fuels from a mixture of coal and biomass, with CO2 emissions sequestered (earlier post). When the coal is left out, a full BECS-system emerges that results in ultra-clean, carbon-negative fuels that can be used for transport, or for the production of electricity.

Image: rendering of a synthetic tree used by the BBC in a documentary about geo-engineering options, which included a discussion of Lackner's idea. Credit: BBC.

References:
Frank Zeman, "Energy and Material Balance of CO2 Capture from Ambient Air", Environmental Science & Technology, ASAP Article, September 26, 2007, doi:10.1021/es070874m

Biopact: Capturing carbon with "synthetic trees" or with the real thing?- February 20, 2007

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

Biopact: Carbon-negative energy gets boost as UNFCCC includes CCS in CDM mechanism - September 19, 2007

Biopact: Japanese scientists develop hybrid larch trees with 30% greater carbon sink capacity - October 03, 2007

Biopact: Scientists develop low-lignin eucalyptus trees that store more CO2, provide more cellulose for biofuels - September 17, 2007

Biopact: Simulation shows geoengineering is very risky - June 05, 2007

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Study: tariff reductions in the Doha Round will erode border protection for EU agricultural products

Agriculture is at the centre of the multilateral round of trade negotiations under the World Trade Organization (WTO), the so-called 'Doha Round'. The Global South wants both the United States and the European Union to decrease farm subsidies and abandon tariffs for agricultural products. The developing countries stand united in the G-20, but are confronted with an ongoing dispute between the EU and the US, which holds back progress (earlier post). Market access compared to export competition and domestic support is the most difficult of the three pillars to negotiate. The US is aggressively demanding for significant reductions in tariffs, but the EU is unable to do so because further tariff reductions will erode border protection for some of its important agricultural products.

MTT Agrifood Research Finland has completed an interesting study [*.pdf] to reveal the sensitive agricultural products in the EU due to further tariff reductions in the projected Doha Round. The EU agricultural products are examined by tariff lines at eight digit level. These products are butter, skim milk powder, beef meat, poultry meat, pig meat, white sugar, wheat, barley, and maize. The sensitivity of EU agricultural products to the fluctuation of exchange rates from USD 0.90 per Euro to USD 1.50 per Euro is analysed in conjunction with the different tariff reduction formulas according to the EU proposal, WTO draft proposal, and US proposal for tariff-cuts.

Out of the many proposals submitted to the WTO for the tariff reduction formula, the US proposal is the most extreme and the EU proposal is the most lenient with the G-20 proposal and the WTO draft proposal being in the middle. Naturally, the projected results show that the EU proposal will generate a lower number of sensitive products compared to the WTO draft proposal, and the US proposal will generate the highest number of sensitive products:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: agriculture :: trade :: tariffs :: subsidies :: Doha :: WTO ::

The results reveal that poultry meat has the lowest border protection among the examined EU agricultural products, followed by butter. Poultry meat is sensitive to the tariff reduction formula under the WTO draft proposal in almost all the exchange rate scenarios, except when the Euro is very weak (USD 0.90 per Euro). Likewise, butter is sensitive to the tariff reduction formula under the US proposal in almost all the exchange rate scenarios with the exception of a very weak Euro – USD 0.90 per Euro.

On the other hand, EU cereals such as wheat, barley, and maize are the most resilient to the erosion of border protection due to further reduction in tariffs in the projected Doha Round, followed by skim milk powder in the EU dairy sector. Border protection for cereals remains intact even after implementing the tariff reduction formulas from all the three proposals. In addition, border protection for cereals is not affected by a variety of exchange rate scenarios.

As the second most resilient product, skim milk powder is only sensitive to the tariff reduction formula under the US proposal and when the Euro is very strong – USD 1.50 per Euro. The results also demonstrate that EU agricultural products are very sensitive to the fluctuations of exchange rate. There are no sensitive agricultural products under any of the tariff reduction proposals if the Euro is very weak – USD 0.90 per Euro. On the contrary, a very strong Euro (USD 1.50 per Euro) will create the highest number of sensitive products in the projected Doha Round.

WTO members are entitled to select and designate an appropriate number of sensitive products. Proposals have extended from as little as one percent to as much as fifteen percent of tariff lines. The WTO draft proposal estimated that the number of sensitive products may be between four to eight percent of all agricultural tariff lines. Therefore, the EU may be eligible to designate between 88 to 176 tariff lines as sensitive products. This study has analysed only nine tariff lines out of the 2200 tariff lines for EU agricultural products. The examined EU agricultural products may represent other tariff lines in the same product category, but potential sensitive products at eight digit level have to be analysed individually in order to choose the correct and exact number of sensitive products for the EU.

References:
Ellen Huan-Niemi, "Market access under the World Trade Organisation: Identifying sensitive products in the EU" [*.pdf], MTT Working Papers 146, 23 pages - October 2007

Biopact: Latest Doha talks collapse again, agriculture remains stumbling block - June 21, 2007

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Thermoelectric devices could save energy by tapping waste heat

Energy lost from hot engines and combustion systems could save billions of dollars if it could be captured and converted into electricity via thermoelectric devices, Clemson University physicist Terry Tritt told scientists gathered in Dallas for the NanoTX ’07 conference. Tritt delivered an address at the Alan MacDairmid Memorial Nano Energy Summit on challenges in alternative energy, specifically thermoelectricity used to generate electrical energy from waste heat.

Thermoelectric generators are based on materials that are special types of semiconductors. When coupled, they function as a heat pump: a temperature gradient is applied across a sample, electrons diffuse from the hot to the cold part due to the larger thermal speed of the electrons in the hot region, a charge difference then builds up between the hot and cold region, creating a voltage and producing an electric current (schematic, click to enlarge).

Thermoelectric materials can be used for either cooling or power generation. Although current devices have a low conversion efficiency of around 10 per cent, they are strongly advantageous as compared to conventional energy technologies. The converters have no moving parts and are therefore both reliable and durable.

Such waste heat recovery technologies could increase the efficiency of small bioenergy power systems and even of ordinary biomass cooking stoves (an example of research in this context). Large biomass power systems allow for polygeneration and the use of heat in distributed (district) heating and cooling systems. But small biomass power systems generate equally large amounts of waste heat that can not always be used in such a straightforward way. Thermoelectric generators could recover this waste heat and convert it into more electricity.

Many more applications can be envisioned. One of the more interesting ones involves capturing waste heat from cars' internal combustion engines.

Thermoelectric generators are currently used in NASA’s deep-space probes to convert the heat of radioactive elements to electrical energy, powering these systems for over 30 years. Thermoelectric energy conversion is a solid-state technology that is environmentally friendly. One of the more promising ‘down-to-earth’ applications lies in waste-heat recovery in cars. - Terry Tritt, Clemson University

More than 60 percent of the energy that goes into an automotive combustion cycle is lost, primarily to waste heat through the exhaust or radiator system. Even at the current efficiencies of thermoelectric devices, 7 to 8 percent, more than 1.5 billion gallons of diesel could be saved each year in the U.S. if thermoelectric generators were used on the exhaust of heavy trucks. That translates into billions of dollars saved:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: combustion :: heat recovery :: thermoelectricity :: nanotechnology ::

Clemson research focuses on developing higher-efficiency thermoelectric materials that could increase savings significantly. Research on the electrical and thermal properties of new materials could reduce the world’s reliance on fossil fuels and has shown promise with two classes of materials: low-dimensional systems for enhanced electrical properties and increased phonon scattering that leads to inherently low thermal conductivity.

Tritt heads up the Department of Energy’s Center of Excellence in Thermoelectric Materials Research at Clemson, one of the leading laboratories for thermoelectric materials in the world. The national center focuses on the next generation of thermoelectric materials for power conversion and refrigeration. Researchers in physics, materials science and chemistry screen promising new classes of materials in order to achieve higher-performance thermoelectric materials. DOE recently renewed the program with more than $1 million a year in research funding for the next three years.

NanoTX, presented by Semiconductor Industry Association, highlights advances in nanoscience and explains how nanotechnology is being used today and how it will impact a broad range of industries tomorrow, including electronics, energy, aerospace, defense, biomedicine, robotics, chemicals and more.

References:
Clemson University: Clemson physicist addresses international forum on thermoelectric energy - October 4, 2007.

Thermoelectric News: US DoE awards $3 Million to Clemson - September 29, 2004.

NanoTx '07 conference & expo.

An older but good introduction to the topic of thermoelectric material science can be found in: Terry M. Tritt, "Thermoelectric materials: Holey and Unholey Semiconductors", Science 5 February 1999: Vol. 283. no. 5403, pp. 804 - 805, DOI: 10.1126/science.283.5403.804

C. Lertsatitthanakorn, "Electrical performance analysis and economic evaluation of combined biomass cook stove thermoelectric (BITE) generator", Bioresource Technology, Volume 98, Issue 8, May 2007, Pages 1670-1674, doi:10.1016/j.biortech.2006.05.048

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MyFuel to build two large palm oil biodiesel plants in Malaysia

Malaysia-based MyFuel Ltd plans to invest some 160 million ringgit (€33.2/US$46.9 million) to set up two biodiesel facilities at the Port Klang Free Zone, one of the main ports of Malaysia, located south of Kuala Lumpur. MyFuel has been granted the license to set up the biodiesel plants and expects them to be completed in June of next year.

The palm oil-based methyl ester plants, to be built on a 3.2 hectare factory site on a 30-year lease, will have an output of 100,000 and 250,000 metric tonnes a year. Group managing director George Joukado told Malaysia's state news agency Bernama the plants will be equipped with process equipment from European supplier Desmet Ballestra.

At full production the plants will create annual turnover and spin-offs estimated to exceed 1 billion ringgit (€208/US$293 million).

The extraordinarily high palm oil prices, choppy international biodiesel market conditions and the rise in fossil fuel prices certainly pose a challenge. However, they will not unduly upset the long-term prospects and viability of biodiesel. - George Joukador, managing director MyFuel

According to Joukador, the company has signed supply arrangements with reputable palm oil suppliers and has signed agreements with third parties for marketing and sales to ensure the reliable supply of feed stocks and pre-marketing of end-products:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: biodiesel :: palm oil :: Malaysia ::

It has inked a marketing and distribution agreement with biodiesel brand leader World Energy Alternatives (WEA) under which all WEA purchases of biodiesel from Asia Pacific will be supplied by MyFuel.

MyFuel has two subsidiaries for the Malaysian operation - Biodiesel SP Sdn Bhd and Biodiesel LD Sdn Bhd.

Surging feedstock prices have prompted Malaysia, the world's leading palm oil producer, to put on hold the implementation of a biofuel act aimed at facilitating the commercialization of Malaysian-made palm oil-based biodiesel. However, prices are expected to decrease as new production comes online.

References:
Bernama: MyFuel To Invest RM160 Mln In Biodiesel Facilities - October 3, 2007.

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IISD report challenges EU biofuel subsidies, calls for end to tariff

A new report gives yet another boost to the idea of a Biopact, which consists of wealthy countries in the North importing efficient and sustainable bioenergy and biofuels made in the South, as a way of creating a new trade relationship in which development, poverty alleviation and energy security take center stage. In order for such a pact to succeed, trade reform is needed and subsidy schemes in the EU and the US must be changed.

The European Union's support for biofuels may not be the most cost-effective way for the 27-country bloc to tackle climate change, the new study concludes. Its lead author argues that the EU better import sustainable biofuels made in poor countries like Brazil, because they are highly energy efficient, reduce greenhouse gas emissions far more and are highly competitive compared to biofuels made in the EU. The same researchers, working for the Global Subsidies Initiative (GSI), earlier analysed biofuel subsidies and their trade distorting effects in the US and came to similar conclusions (previous post).

Last year EU governments spent at least €3.7 billion ($5.2 billion) on subsidising biofuel production. Such support is likely to grow in the coming years because the Union has set a strategy of raising the quantity of road fuel generated from biofuels from its present level of 2 percent to 10 percent by 2010.

But the International Institute for Sustainable Development (IISD) in Geneva has queried if allocating large amounts of public funds to EU biofuels is desirable. In a study titled Biofuels At What Cost? Government Support for Ethanol and Biodiesel in the European Union [*.pdf] it calculates that the cost of using ethanol from sugar beet to avoid emitting one tonne of carbon dioxide (CO2) - the main gas blamed for climate change - ranges from slightly less than €600 to €800 ($760 to $1,000).

Producing biofuels from crops grown in the EU is generally an energy-intensive business, which in itself makes use of considerable quantities of fossil fuels. As a result, the study says, the overall saving of fossil fuels brought by biofuels may be low, and introducing carbon or pollution taxes may prove more effective.

Generally, biofuels made from high-sugar crops such as sugar cane or high yielding oil crops like palm oil can contribute to higher savings on fossil fuels than those made from oilseeds or grains. More than 90 percent of the 6 million tonnes of biofuels produced in the EU during 2006 was made from rapeseed oil.

Ron Steeblik from the GSI urged the Union to eliminate tariffs on imported ethanol, a fuel made from sugar. Ethanol with an alcohol content of 80 percent is subject to a tariff of 19.20 euros (27 dollars) per 100 litres. 'Denatured' alcohol, which has a lower content, is taxed at just over half that level.

These taxes are inimical to poor countries like Brazil. This is contrary to the EU's general policy of trying to reduce tariffs. It is far higher than any tariff on industrial goods and is an old-fashioned instrument for protecting agriculture.

Import tariffs on ethanol from Brazil, one of the most efficient producers of biofuels, reduce the amount of sales that can be made by a developing country. The EU's policy is incoherent. If biofuels are so good, why is it taxing them so heavily at the border? - Ron Steenblik, lead author, Global Subsidies Initiative

The EU executive, the European Commission, is expected to propose a new law setting down the criteria for supporting biofuels by the end of this year:
energy :: sustainability :: ethanol :: biodiesel :: biomass :: bioenergy :: biofuels :: subsidies :: trade :: tariff :: EU ::

Officials are examining how to prevent support for biofuels in cases where their production involves the emission of more greenhouse gases than would eventually be saved by using them instead of pure fossil fuels.

However, there are some who support biofuel subsidies. Lena Ek, a Swedish Liberal member of the European Parliament (MEP), said that "biofuels will be there as part of the solution" to global warming. She asked, therefore, if subsidising them is "really a bad thing."

Ethanol has proven economically beneficial to Brazil, she added. "Brazil has got out of the fossil economy," she noted. "Last year it paid off the debt it owed to the World Bank."

Swedish conservative MEP Anders Wijkman said: "We need subsidies if we want new energy in the market place. But the question is how do we lock ourselves into a production scheme that is really feasible. The logical question is how to ensure the end result really eliminates carbon dioxide."

A European Commission official said that there is a "serious misunderstanding" about the factors motivating biofuels policy in the Union. One widely held view, he said, is that the principal objective is to support the income of crop farmers. "It has nothing to do with that," the official said.

The real issue for the Union, according to the official, is having a "policy in place" to meet an increased demand for biofuels.

But Ron Steeblik said that high subsidies for biofuels "could potentially create a lot of instability for other markets, including the agriculture market."

His colleague at the Global Subsidies Initiative David Runnalls said that the EU should beware of aping the support system for biofuels in the U.S. He argued that it is preferable to support research into biofuels, as has been done in Canada, than to link support for them to the level of production, the method favoured in Washington.

In some parts of America, he said, subsidies account for 2.40 dollars of the price of a three-dollar gallon of biodiesel.

"There is a potentially distorting effect of biofuels wrongly applied in the wrong place and the wrong time," said Runnalls. "We are not opposed to subsidies. What we are opposed to is governments spending them in an ill-advised fashion."

References:
IISD: International Institute for Sustainable Development's Global Subsidies Initiative releases Biofuels – At What Cost? Government support for ethanol and biodiesel in selected OECD countries - October 3, 2007.

Global Subsidies Initiative: Biofuels At What Cost? Government Support for Ethanol and Biodiesel in the European Union [*.pdf] - October 3, 2007?

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

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The bioeconomy at work: farming diatoms for the next generation of paints, cosmetics and holograms

A plant-like micro-organism mostly found in oceans could make the manufacture of products, from iridescent cosmetics, paints and fabrics to credit card holograms, cheaper and greener. The tiny single-celled ‘diatom’, which first evolved hundreds of millions of years ago, has a hard silica shell which is iridescent – in other words, the shell displays vivid colours that change depending on the angle at which it is observed. This effect is caused by a complex network of tiny holes in the shell which interfere with light waves.

UK scientists working on a project titled 'Optics via cell culture' have now found an extremely effective way of growing diatoms in controlled laboratory conditions, with potential for scale-up to industrial level. This would enable diatom shells to be mass-produced, harvested and mixed into paints, cosmetics and clothing to create stunning colour-changing effects, or embedded into polymers to produce difficult-to-forge holograms.

Manufacturing consumer products with these properties currently requires energy-intensive, high-temperature, high-pressure industrial processes that create tiny artificial reflectors. But farming diatom shells, which essentially harnesses a natural growth process, could provide an alternative that takes place at normal room temperature and pressure, dramatically reducing energy needs and so cutting carbon dioxide emissions. The process is also extremely rapid – in the right conditions, one diatom can give rise to 100 million descendants in a month.

It’s a very efficient and cost-effective process, with a low carbon footprint. Its simplicity and its economic and environmental benefits could in future encourage industry to develop a much wider range of exciting products that change colour as they or the observer move position. What’s more, the shells themselves are completely biodegradable, aiding eventual disposal and further reducing the environmental impact of the process life cycle. - Professor Andrew Parker, leading researcher

Diatoms are classified as eukaryotic algae and represent one of the commonest types of phytoplankton. Each diatom is encased in a silica frustule, or cell wall. Alth