The Biodiesel World News

Fresh Updates and News on Bio Diesel and Renewable Fuel Products and Industry

Philippines - April coconut oil exports fall 72.6 pct

According to industry sources, Philippine coconut oil exports slid 72.6 percent in April from a year earlier, marking its 10th consecutive month of decline, Reuters reports.

Shipments from the Southeast Asian producer, the world's biggest exporter of the commodity, slumped to 31,638 tonnes last month from 115,632 tonnes in April 2008, the United Coconut Associations of the Philippines Inc (UCAP) said in a report.

That brought exports for the first four months of the year to 134,438 tonnes, down 62.9 percent from the same period in 2008.

The Philippines expects exports of coconut oil, to dip to 835,000 tonnes this year from 847,626 tonnes in 2008, on soft global demand as well as its increasing use as feedstock by local bio-diesel producers.

The bio-fuels arm of the state-owned Philippine National Oil Co. (PNOC) has signed deals with three groups to start jatropha plantations in Biliran, Aklan and Iligan, BusinessWorld reports.

PNOC-Alternative Fuels Corp., will fund 200 hectares owned by the San Juan Capenyahan Producers Cooperative in Biliran, 450 hectares of the Malagsum Highlands Multi-Purpose Cooperative in Iligan, and 1,000 hectares of RSL Agro-Trade Company, Inc. (27 May 2009)

Brazil - Glencore to manage financially-troubled Agrenco

Creditors of Brazilian agribusiness group Agrenco Limited gathered in a general assembly approved importing and exporting company Glencore to manage the company's assets in Brazil, on a three-year mandate, Agência Estado reports. Agrenco has been under a judicial recovery plan since March.

Further, Agrenco said creditors approved the sale of its bio-diesel plant in the state of Paraná to bio-diesel producer Bsbios. US second-generation biofuel developer Amyris Biotechnologies has bought out Crystalsev's stake in a joint venture owned by both companies to produce diesel from cane in Brazil and aims to establish its own mill to guarantee its own cane supply, Reuters reports.

Amyris will look for partnerships with other Brazilian groups, and is now in talks with several to install industrial-scale plants next to existing mills. It plans to produce ethanol at its mill initially, converting the mill to cane diesel later in order to start producing diesel from 2011-2012. (27 May 2009)

Philippines – $475 mln renewable energy projects

Two South Korean firms, Eco Solutions and Enviro Plasma, are planning to invest up to USD475 million in renewable energy projects in the Philippines, Dow Jones reports. Eco Solutions is interested in building a jatropha-based bio-diesel plant while Enviro Plasma is keen on an ethanol refinery using sugarcane as a feedstock.

Enviro Plasma is interested in a 500,000-liter refinery, which could cost up to $300 million, in Tarlac province in northern Philippines, said the president of the Philippine Agriculture and Development Corp.

Enviro Plasma will provide 70% of the project cost while its local partner Central Luzon Bioenergy Corp will contribute the remaining 30%. Eco Solutions is considering a bio-diesel processing plant with a daily capacity of 100,000 litres. The project, to be located in General Santos City in southern Philippines, will require an investment of $175 million. (26 May 2009)

Brazil- Interest from Turkey in biofuels

During the visit of the Brazilian President to Turkey last week, his Turkish counterpart expressed interest in cooperating on new energy technologies and the production of ethanol and biodiesel, Efe reports.

The Brazilian leader proposed that Turkey and Brazil invest in biodiesel and ethanol production in African countries. AFP reprots that the G8, the EU, Brazil, China and Mexico signed an agreement to exchange information and experience on energy efficiency over the weekend. This may include technologies for low carbon dioxide emission and investment in construction and transport.

Dow Jones reports that the recovery of the international agricultural commodities markets and renewed interest in Brazilian farmland from foreign buyers has supported land prices in the country between March and April, an analyst at AgraFNP said. The average price for a hectare stood at R$4,393 between March and April, when foreign buyers started purchasing land, compared with R$4,373 per ha between January and February. AgraFNP said that the
average price for a hectare has risen 2.5% over the past 12 months to R$4,287.

Launched to coincide with next week’s Ethanol Summit, the Economist has started an online debate over whether the cars of the future will run on bio-fuels or electricity, Udop reports. (At present the voting is favouring the latter). You can join in on: (26 May 2009)

US – Bio-diesel plant back at work

SeQuential Pacific Biodiesel is rehiring workers after closing down a month ago, World Link reports. Oregon’s largest bio-diesel plant in Salem was built to produce 5.8 Mmgy. But owners could not run the plant at capacity because of a lack of buyers, and had to store 250,000 gallons in early spring until it could find markets.

The manager said that the plant has begun to run at half capacity. “We need the market to grow before we can get at full production,” he said. Portland’s Water Bureau fleet, for example, moved from a 20% bio-diesel blend to a 99% bio-diesel blend on April 15.

A Minnesota Soybean Processors bio-diesel plant was rocked by a fire and explosions, Bloomberg reports. While the fire was contained, residents nearby were evacuated, and people within a one-mile radius were told to leave their homes, according to the report. The plant in Brewster, Minnesota, processes 50,000 bushels of soybeans a day and makes about 30 Mmgy of fuel.

OriginOil, found its technology the centre of discussion before the Senate Subcommittee on Environment and Public Works in Washington this week, TheBioenergySite News reports. During the session, the President of Sapphire Energy, commented on the many benefits of using algae as the foundation for a new generation of renewable and low carbon transportation fuels.

"Growing algae, and converting it into plastics, fuels, and or secondary feedstock, could significantly help mitigate greenhouse gas emissions, reduce energy price shocks, reclaim wastewater, conserve fresh water (in some scenarios), lower food prices, reduce the transfer of US wealth to other nations, and spur regional economic development." Her testimony also named OriginOil as one of the prominent algae-based fuel companies to develop "fascinating algae-based biological carbon capture and beneficial reuse applications". (26 May 2009)

World – Clean energy investment to create jobs

Hoping to create a global carbon market, the organizers of the World Business Summit on Climate Change said that 2 million new jobs would be created in the US alone if it increased its reliance on cleaner sources of energy, Green Momentum reports.

The Copenhagen Climate Council study said the United States would gain that many jobs if its electricity use grew by just half of 1% a year and a quarter of its electricity came from wind energy and other renewable sources.

The EU Commission President told the CEOs of major international corporations that similar investments could produce a million new jobs in European Union countries. The International Energy Agency's (IEA) chief economist said that oil prices may return to "significantly higher" levels because companies have cut investment in the new production needed to match demand from fast-growing China and India. The IEA chief economist said that oil companies have cancelled at least $170 billion of planned investments - including $100 billion this year - as they seek to save money amid the financial and economic crisis. That's equivalent to 2 million barrels of oil per day, and a further 4.2 million barrels per day of future oil-supply has been delayed by at least 18 months, he said. Oil companies are likely to announce even more cutbacks in oil and gas production investments in coming months, he said. (26 May 2009)

EU – Largest renewable diesel plant in Rotterdam

Neste Oil laid the foundation stone for its renewable diesel plant in the Port of Rotterdam, Market Wire reports. Upon completion, the plant will be the largest renewable diesel plant in Europe with an annual production capacity of 800,000 mt.

The investment cost of the plant is estimated to be EUR 670 million, and it will create over 100 jobs. "With this plant in the Netherlands, Neste Oil will become the leading renewable diesel producer supplying Europe from the Netherlands. Our investment also signals Neste Oil's commitment to driving forward latest innovation with our NExBTL technology in Europe", said the President and CEO of Neste Oil.

Oil company Preem is planning to increase its production of bio-fuels significantly, Esmerk reports. The Head of Development expects the production of alternative fuels to total about 400,000-500,000 cu m within four-five years, up from current small volumes Swedish venture capital company Acap Invest is planning to sell bio-fuel technology company TPS, a former subsidiary of Talloil acquired by Acap Invest two years ago following Talloil's bankruptcy, Esmerk reports. Acap Invest has not managed to increase turnover of TPS fourfold to SEK 1billion as intended. TPS rebuilds oil- and gas-fuelled heating plants into bio-fuel based plants. (26 May 2009)

China – Algae bio-fuels commercialization

PetroSun, Inc announced the recent meetings held in Shanghai between PetroSun and Shanghai Jun Ya Yan Technology Development Co, Ltd resulted in the completion of an agreement to move the parties into the initial stage of the commercialization of the algae-to-bio-fuel industry in China, Market Wire reports.

Viaspace Inc, a company that commercialises space and defence technologies from NASA and the US Department of Defense, announced it has planted 1.2 million seedlings of its proprietary fast-growing China Giant King Grass near the IPA factory in Guangdong province, Market News Publishing reports. Giant King Grass is a natural hybrid perennial grass which is propagated from seedlings rather than seeds and was developed as an animal feed and as a feedstock for production of cellulosic ethanol, methanol, bio-crude and green gasoline. In tropical and subtropical areas such as Southern China, it can yield four crops per year and up to 156 mt of grass per acre per year. (11 December 2008)

Philippines – Bio-fuel investments

A senior government official said the Philippines expects to generate around PHP80 billion ($1.66 billion) in bio-fuel investments over the next two years, Dow Jones reports. The head of the Sugar Regulatory Administration and vice-chair of the National Biofuels Board said next year, about PHP4 billion worth of investments are expected to be realized as three to four bio-fuel refineries are likely to come on stream.

Indigenous women leaders from Mindanao said the expansion of jatropha plantations in Sarangani and in other provinces in Mindanao has displaced traditional food crops, which forced members of the B'laan tribe to go hungry, Philippine Daily Inquirer reports. (11 December 2008)

World – Airlines need more time to go green

The Cathay Pacific's general manager for environmental affairs said the airline industry will not be able to make itself sustainable for up to 20 years, Media reports. He said airlines needed to look at more than just the most efficient and effective bio-fuel, but also aircraft upgrades and technology, navigation and improved infrastructure.

Scientists around the globe have been researching viable alternative energy sources for some time now, NoticiasFinancieras reports. Brazil, which stood out in 1975 with its National Fuel Alcohol Programme and in 2005 for its pioneering National Bio-diesel Programme, is wielding new strategies in its global offensive for fuels based on distilled agricultural products.

Scientific progress is opening space for agro-fuels to become a new commodity to conquer the global market. To achieve this, Brazil is investing in research that could be the answer to concerns about the negative effects of crop-based fuel production on food supplies and prices, and on the conservation of its Amazon forests. (27 November 2008)

In Search of the Perfect Biofuel -- and Financing to Bring It to Market - Reuters

22/05/2009 (Reuters) - Funny thing about the biofuels business. Roughly 200 companies are pursuing the perfect biofuel -- as cheap as fossil fuels, adaptable to today’s infrastructure, low-carbon, sustainable and no threat to the food supply or to tropical forests. But even cutting-edge startups that say they have the puzzle just about solved can’t raise the money they need to get into commercial production.

“Everyone wants to be the first to finance the second plant,” says Arnold Klann, the CEO of biofuels firm Blue Fire Ethanol. “No one one wants to be first to finance the first one.”

“Banks are not willing to lend,” Klann said. “They’re risk averse.” The industry needs the support of banks or the public markets because a commercial scale will cost upwards of $100 million, more than the venture capitalists now financing the industry want to put at risk. Publicly-traded Blue Fire makes ethanol from wood wastes, urban trash, rice and wheat straws, and it was awarded a $40 million U.S. Department of Energy grant, but it has been slow to get to commercial production and investors are skeptical. The firm’s market capitalization is only about $25 million.

Biofuels are on my mind because I spent the day at BIO International, a sprawling (14,000 attendees) biotech industry convention in Atlanta. I’ve written very little about biofuels, mostly because the science of turning plants into fuel is quite complicated, and so it’s hard to separate companies with a shot at making it big from those with no hope. That’s not just a challenge for me -- the corn ethanol industry has destroyed many millions of dollars of capital from investors who rushed in too quickly.

Still, there are strong forces driving biofuels, most of them emanating from Washington where Congress has adopted biofuels mandates. The historic Waxman-Markey climate change bill just passed by the House energy committee will, if it becomes law, provide another boost to biofuels by raising the price of gasoline and diesel fuels.

At BIO, Laurence Alexander, the managing director of investment bank Jefferies & Co., moderated an excellent panel that taught me a bunch of things. Some highlights:

It takes a lot of feedstock to make biofuels. For ethanol to account for 5 percent of U.S. gasoline use, it would require turning 33 percent of the U.S. corn crop into ethanol. Globally, it would take 100 percent of the soy, rapeseed and palm oil production to produce 10 percent of the global supply of diesel. That’s at current yields, of course, which is why it’s so vital to drive up yields.

Biofuels have an image problem. “Glib critics,” Alexander said, “could shift the policy debate.” The industry needs to prepare to answer tough questions, even if they are only loosely based on reality: How many children did you starve to drive to work today? Can we run out of arable land? Will biofuels drain the acquifers?

Not all feedstocks are created equal. I knew that, of course, but the variations in productivity are dramatic. In terms of gallons of fuel that can be produced per acre, according to Aristides Patrinos, the president of a company called Synthetic Genomics, sugar cane (800) and switchgrass (500) outperform corn (375) and jatropha (202). Still, his company, which was started by Craig Venter, is excited about jatropha because it yields a high quality oil, grows in poor soils and can live in semi-arid regions. “That’s in our view an ideal fuel because it doesn’t really compete for the same land where you can grow food,” Patrinos said. It’s ripe for significant genetic modification to improve yields. “We’ve just recently announced the sequencing of the jatropha genome,” he said. Who knew?

Two well-funded startups delivered impressive presentations. One was Amyris Biotechnologies, which I knew about. A fascinating company, backed by Kleiner Perkins, that first produced a low-cost anti-malaria drug for the Gates Foundation and is now making diesel fuel at a pilot plant in Northern California. (Jack Newman, a co-founder, has twice been a popular speaker at FORTUNE’s Brainstorm Green.) The other was Solazyme, another Bay Area firm that uses algae to convert cellulosic feedstocks into fuel. Harrison Dillon, the president and chief technology officer, who also happens to be a patent lawyer, said the firm is able to make oil-based fuels at a commercial scale but that its cost are still higher than fossil fuels.

Because of capital constraints, it may be that well-established players will have to enter the market to take biofuels to scaleor . DuPont and Genencor, a division of a Danish firm called Danisco, formed a joint venture last year to develop a cellulosic ethanol business using corn stover or switchgrass in Tennessee, which has provided grants to the plant and pays farmers to plant switchgrass. (It takes three years to develop the first group) DuPont -- whose Pioneer division hired me to moderate a panel at BIO -- and Genencor have committed to a three-year investment of $140 million. They obviously have the capacity to invest more if needed.

They’ve also got a track record. DuPont and Genencor got together nearly 15 years ago to research the process that now produces a renewable material known as bio-PDO, which is made from corn starch, that goes into carpets, textiles and shampoos. It’s one of the big successes of the bio-materials biz.

Malaysia: No Plan To Reduce B5 Mandate - Bernama

25/05/2009 (Bernama), Kuala Lumpur - There is no plan to reduce the current biodiesel mandate of five percent despite the high feedstock cost, Deputy Minister of Plantation Industries and Commodities, Datuk Hamzah Zainudin said today.

He said the government encouraged the use of biodiesel in the country, although it was not as yet mandatory.

"We would like to encourage its use because we are a party to the Kyoto Protocol. If the policy is to move in the direction of biodiesel usage, we need to follow.

"It is not mandatory yet because the price of raw materials is very high at present," he added.

He was speaking at a media conference at the Palm International Nutra-Cosmeceutical Conference (PINC) 2009 here today.

The Kyoto Protocol is a protocol of the United Nations Framework Convention on Climate Change (UNFCCC or FCCC), an international environmental treaty.

It is a treaty intended to achieve the stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent anthropogenic interference with the climate system.

Last October, Malaysia implemented the mandate of a five percent palm-fuel blend with fossil diesel, gradually starting with government vehicles this year before extending it to the industrial and transportation sectors in 2010.

Asked as to the projection of crude palm oil prices this year, Hamzah said:"We hope that this year, the average price could be about RM2,500-RM2,800 per tonne."

Meanwhile in his speech, Hamzah said the palm oil industry is now an important pillar of the country's economy.

He said the sector had contributed significantly towards providing a continuous flow of foreign earnings through the export of palm oil and value-added products to the global market.

"In 2008, palm oil contributed RM65.2 billion or US$18.1 billion in export earnings, which marks another significant year of contribution from the palm oil industry," he said.

He said besides contributing to the nation's economic development, the contribution of Malaysian palm oil to the world's oils and fats market was also very significant.

He noted that the palm oil production of 17.73 million tonnes by Malaysia in 2008, accounted for a 11.1 share of the global production of 160 million tonnes of oils and fats.

According to Hamzah, Malaysian palm oil commanded a 26 percent share of the export trade in oils and fats as well as a 46 percent share of global palm oil trade while being consumed in more than 150 countries worldwide.

"All these were carried out utilising only 4.5 million hectares of land or less than 1.9 percent of the global area under oilseeds covering 233 million hectares," he said.

He added Malaysia is now focusing on increasing productivity through among others, in the upstream sector, which includes increasing oil yields from the current average of four tonnes per hectare annually to eight tonnes per hectare by using genome sequencing.

"By this approach, we hope to continue to be a major supplier of global palm oil needs, without having to open new areas," he said.

No brainer of the day: Making biodiesel at home is dangerous

While fuel prices are nothing like they were last summer (but they are climbing), there are still plenty of reasons to want to make your own biodiesel. Homebrew biodieselers are, on the whole, a careful bunch and there are plenty of classes available to make sure your mixing of vegetable fat, lye and methanol goes smoothly. Not everyone does it right every time, though, and the Associated Press has found a few incidents of biodiesel makers setting garages and backyards on fire in at least five states (Washington, Arizona, Colorado, Massachusetts, and Oregon). These fires have not caused any deaths, yet, but at least one home was destroyed - and rebuilding must cost way more, environmentally and financially, than was saved by going bio.

There are few rules against making biodiesel at home, but more might be coming. In Phoenix, Arizona, for example, you need to be on a property that is at least one acre so you're not endangering a lot of neighbors. Just a reminder to be careful out there.

[Source: Associated Press]

But if you want to try making your own biodiesel, I suggest you get this course for at least you know the safety precaution and risk involved before you actually start the process. Read here for more information.

Palm Oil Based Biofuel Dilemma

Original text: De-linking NGOs Concerns over Deforestation and Palm Oil
Author: Tan Sri Dr Yusof Basiron, CEO, Malaysian Palm Oil promotion Council (MPOPC)

1. A few years ago when oils and fats were cheaper than petroleum, the EU and USA rushed to promote the use of biofuels for various reasons. One not-so-frankly-revealed reason was that oilseed farmers will benefit from the new market outlets and the increase in prices. The governments also benefited from this strategy because agricultural subsidies would be reduced if prices of soybean and rapeseed were high and price support subsidies would not be needed. In addition, it makes good political statements to say that biodiesel will help reduce global warming through reduced green house gas emissions, and also enable the countries to be less dependent on imported petroleum fuels.

2. Diverting a major portion of rapeseed and soy oil supply and stocks for biodiesel did result in increasing prices which benefited the EU and US farmers tremendously between 2004 and the middle of 2008. During this time, it became obvious that palm oil was a potentially good raw material to participate in the biodiesel industries in both the EU and USA as it is generally cheaper than soyabean or rapeseed oil. This resulted in increasing concern amongst the EU biodiesel lobbies who are integrated with the rapeseed industry over the potential competion from palm oil and they tried to prevent it from being imported for biodiesel production and use in the EU. This was also to ensure that biodiesel subsidies are not shared with competing imported oils.

3. Various trade barriers were set up by the goverments. For example, biodiesel standards were developed in the EU to disqualify palm oil biodiesel from being accepted. The cold flow plug point(CFPP) standard was introduced to ensure palm oil did not meet the required test and the anti palm oil lobby was relieved at the new arrangement. However, the Malaysian Palm Oil Board (MPOB) announced that palm oil biodiesel methyl esters can be processed with a new technology that would overcome the CFPP problem. Furthermore, if the blending of biodiesel is only at 5%, the CFPP value of palm oil biodiesel methyl esters becomes irrelevant as the 5 parts of palm biodiesel is totally dissolved by the 95 parts of petroleum diesel giving an acceptable blend. However, unknown to many, tallow produced in the EU and used for biodiesel would also fail the CFPP test and this would not go well with the local tallow lobbies.

4. EU farmers continue to question the reason for an imported commodity such as palm oil biodiesel to be accorded biofuel subsidy which is meant for local oilseed farmers. The outcries became louder as some power plants began to use palm oil as biofuel and enjoyed the subsidies and the cheaper prices. The rapeseed lobbies were worried that by allowing cheaper palm oil for use as biofuel in vehicles and power plants, it will eventually affect the demand for local oils, and create a substantial outflow of subsidies.(This narrow view ignores the fact that Malaysia imports large amount of EU and US goods and needs market access for its exports in order to remain a valued trading partner.)

5. A new import barrier for palm oil was subsequently introduced arising from the view of the former Dutch Environmental Minister who argued that if palm oil is encouraged for use as biofuel it would stimulate an increase in production leading to the opening of forest land. This apparently will affect the environment, animal habitats and biodiversity. He was able to introduce the fear factor of what could happen in the future if palm oil demand undergoes a rapid increase.

6. The environmental NGOs were quick to sieze on the opportunity to harp on the fear of potential deforestation, and started to report on orang utan habitat loss and global warming effects of oil palm cultivation on peat. The change in focus from deforestation due to logging to now oil palm plantation became a refreshing rallying point for NGOs perpetual campaigns. Afterall palm oil has more money to offer than the logging industry which has over the years witnessed a decline.

7. Once the issues of deforestation and palm oil fell into the hands of NGOs like FOE and Green Peace who use unscrupulus methods to attack their target victims, the whole issue of biodiesel development and protection of subsidies was totally forgotten. The farmers in the EU and USA who are worried by palm oil invasion for the new found application of their oils and fats as biodiesel are totally served by the NGOs who gladly run the anti-palm oil campaign while pocketing huge amount of funds. The collusion to get the NGOs to campaign against palm oil was cleverly disguised. It was reported for example, that the Dutch Lottery money of a staggering US$2 million was instrumental in financing Green Peace to carry out a blockade of a ship carrying palm oil from leaving an Indonesian port to sail to Europe in 2007.

8. It is clear that the fear factor used is based on the assumption that if demand for biofuel is increased, more oil palm cultivation will occur thus causing deforestation. Fortunately, Malaysia has consistently proven the assumption as baseless and wrong.

9. Let me debunk the various fallacies that are often cited to paint a bleak picture of the ever popular oil palm.

Fallacy 1 Oil palm plantations are claimed to be the cause of deforestation. Palm oil producing countries such as Malaysia have permanent forest reserves which take up to 55% of the country's total land area. Laws are in place to disallow these permanent forest areas to be converted to other uses including for agriculture or growing of oil palm. The remaining forest areas are meant for conversion into other uses, including agriculture. Some of these conversion forest areas are already alienated to individuals or organisations although the land may still not yet be converted and remain under forest cover. NGOs like Green Peace argue that these unconverted areas should be declared as forest through a moratorium on deforestation which essentially means a stop to a developing country like Malaysia from using its potential agricultural land to improve the life of its farmers. It is equivalent to asking the EU farmers to reforest back some 50 % of their agricultural land to help prevent global warming and preserve biodiversity. In all fairness, Greenpeace should agressively campaign for reforesting 50 % of agricultural land of the UK and EU and if successful, Malaysia should have no problem following the standard set by the EU in terms of land use ratio for agriculture.

There are also calls by NGOs for the Prince Chales Conservation fund to compensate developing countries for conserving more forests. Logically, these funds would be better used to reforest the over extended and over deforested agricultural areas in the UK. Most agricultural land can be easily reforested if so desired. The slogan "Plant Thy Own Forest" and "Stop Envying Thy Poor Neighbours Green Backyard" can be adopted. Otherwise Green Peace is cunningly introducing double standards where the EU can deforest and develop these areas into agricultural land, while the developing countries farmers are comdemmed to perpetual poverty by preventing them from exercising their sovereign rights to develop their agricultural land.

Fallacy 2 -It is often claimed that the expansion of oil palm cultivation will affect the habitats of the orang utans in Sabah and Sarawak. A recent study revealed that orang utan population is Sabah has not declined because the permanent forest area ( the favourite habitat of the orang utans that was surveyed five years ago) has not changed over the last five years. The study further revealed that the orang utan population in the non-permanent forest areas is increasing based on the survey of nesting sites. More surprisingly, orang utans living near oil palm plantations were observed to regularly visit the plantations to feed on loose oil palm fruitlets and benefit from an all year round availability of a healthy food source which is naturally rich in vitamin A and E, giving the orang utans a healthy shining coat. This suggests that development of the oil palm as a crop and conservation can successfully operate side by side.

Fallacy 3 The third fallacy is linking oil palm to deforestation and attributing this to global warming. The oil palm planted area of 4.3 million hectares in Malaysia represents a mere 0.09% of the world agriculture land. Assuming these areas were originally forests, Malaysia's share of deforestation for world food production is 0.09 %. I wait to see the NGO global warming scientists' prediction on the rise in global temperature caused by oil palm cultivation in Malaysia that resulted in 0.09 % of total deforestion via agricultural development. Even doubling the oil palm area may not add substantially to the world deforestation total. However, expanding oil palm may save deforestation by curtailing the rapid expansion of other inefficient land-use oil seed crops which need to be grown otherwise to overcome world shortages.

Cultivated Area of Oil Seeds in the World
Cultivated Area of Oil Seeds in the World | Click here to view the full resolution

Fallacy 4Potraying palm oil as inferior to soyabean or rapeseed oil in global warming debate. Oil palm in Malaysia and Indonesia is an agricultural crop which is grown mainly for the export market. We are the only two major net exporter countries (Argentina is a distant third) for vegetable oils and fats. The rest of the world are mostly net importers. It implies that if palm oil supply is reduced in the future, ten times more forest areas will need to be converted to agriculture to meet the shortages by growing soyabean or other annual oilseed crops compared to the area needed to grow oil palm to produce the targeted quantity of oil.

Mileage per hectare per year
Mileage per hectare per year - Based on a new VW Polo | Click here to view the full resolution

Recently, it was revealed that new varieties of oil palm are capable of increasing the yield by 3 times more and if further research to stabilise this yield potential is undertaken through international collaboration, palm oil can be a sound candidate to help solve not only future food shortages but also the biofuel need of the world. In simple terms, it has been calculated that a hectare of oil palm will potentially produce oil sufficient to fuel a VW Polo car 400,000 km of travel per year including the use of the methane fuel generated by the oil palm mill effluent, while a hectare of soya bean can fuel only 8,000 km of travel by the same car as a comparison. The irony is that the EU and USA are gladly promoting the most inefficient bio fuel derived from soyabean and rapeseed sources ,which can only mean massive deforestation possibly in Agentina, Brazil or where ever soyabean and rapeseed can be grown. The opportunity for oil palm to serve as an efficient fuel source and to save more forests from being converted into soyabean and rapeseed farms is sadly overlooked and we can only blame this on the manupulative science which is used by NGOs to raise emotions and blur the truth from reaching the attention of decision and policy makers in the EU and USA.

Japan- Mitsubishi boosts renewable business

Nikkei Report writes that Mitsubishi Corporation will ramp up its renewable energy business worldwide and expects each of the new energy business to grow significantly over the medium- and long-term.

Its new energy division is largely classified into electricity generation using solar and wind energies; bio-fuel and other alternative energy sources; and environmental treatment of water and sewage.

On April 1st, Mitsubishi reorganized the new-energy and environment-related division as a ‘corporate development section,’ under the direct executive control of the firm’s president. (May 21, 2009)

Brazil-Help for family farmers

Petrobras has confirmed that despite a lack of castor oil, it still plans to expand Biodiesel Quixada in Ceara state by 40%, the Dairio de Nordeste reports. The plant is currently using soy and cotton oil.

This week, the president of Petrobras Biofuels signed contracts with six cooperatives in Ceara and Piaui states to offer technical guidance on castor growing to 31,450 small farmers in the region.

Petrobras expects Brazil’s bio-diesel output to rise from 1.2 billion litres to 1.6 billion before the B4 mandate comes into effect. Gazeta Mercantil adds that the company will also help the farmers with storage and transportation, and will ensure the purchase for a five-year period of their crops for prices previously set with the cooperatives. (May 21, 2009)

Canada- Funding for clean energy

The Canadian Renewable Fuels Association has welcomed the Canadian government’s announcement of a new $1 Billion Clean Energy Fund and the $200 million set aside for demonstration projects of renewable and alternative energy technologies, Market Wire reports.

CRFA said that the $200 million set aside for smaller-scale demonstration projects of renewable and alternative energy technologies would help Canada take part in developing even better and more advanced renewable fuels. (May 21, 2009)

Europe- Worries over sustainability issues

The EU bio-diesel industry is currently in ‘political no man's land’ while it waits for a European biofuel sustainability and greenhouse gas certification scheme expected from the Commission later this year, according to the head of the European Biodiesel Board, Platts reports.

Meanwhile the head of the ILUC team at the European Commission for transport and energy said that the team is trying to understand the underlying drivers of land use change, using different models, but has no answers yet.

An official at the Commission’s environment directorate said the EU is in a dialogue with California about its sustainability standards and is considering the ILUC models used there.

Separately, France has mandated a B7 biodiesel blend with 7% FAME (fatty-acid methyl ester), but the mix has already caused serious problems with some motorists by clogging up fuel filters during the winter months, according to French car maker Renault. Renault’s fuels affairs manager said that a lack of EU conformity and sufficient specifications to control cold flow properties and oxidization of the new bio-fuel blends have led to the recent problems.

According to oil refiner Total, different national bio-fuel mandates across the EU are complicating the production, blending, distribution and marketing of bio-fuels across borders.

Calling investment and operations planning ‘a real nightmare,’ Total's marketing head of strategy and regulations said there has been an ‘incredible impact’ of bio-fuels on blending in the logistic system, including higher volumes in pipes, increased difficulty of processing, the need for better cleaning of rail cars and separate storage for exports.

Swiss bio-diesel maker Biopetrol Industries posted sales of 296.0 million euros in 2008, up 35.7% from 218.1 million the previous year despite sales of bio-diesel grinding to a halt in Germany and the economic recession, Ad-hoc News reports. Of its sales, 51.1% were made to Germany and 48.9% mainly to other European countries. Biopetrol said it was able to exploit the logistical advantages of its seaport locations at Rostock and Rotterdam to strengthen its international trade in biodiesel and biodiesel components. However it reported a negative Ebitda of 11.8 million euros, compared with a positive 8.3 million euro the year before.

The company is building a plant in Rottterdam with an annual capacity of 400,000 tonnes of biodiesel and 60,000 tonnes of bioglycerine. This will more than double its capacity to a total of 750,000 tonnes. World Energy adds that Biopetrol may idle its 400,000 mt/year biodiesel plant in Rotterdam for up to 18 months as it waits for conditions to improve. The company will also sublease its Rotterdam tanks while rates are high.

Dutch producers of biodiesel say they are unable to compete with imports of US product, Radio Netherlands reports. They say the US has managed to circumvent the extra EU duty by exporting to Europe through Canada. (May 21, 2009)

US- Bid to ban ILUC defeated in committee

A bill that would have banned the EPA from taking into account the impact of indirect land use changes in bio-fuel emissions was defeated by 36-20 by the House Energy and Commerce Committee on Wednesday, Dow Jones reports.

A Republican Representative for Nebraska had tried adding the measure to a climate change bill that appears likely to be passed by the Committee. “There's no way you can reasonably say that bio-fuels production and the effect on a forest in South America or Indonesia or anywhere else is related,” he said.

Meanwhile, the Chairman of the House Agriculture Committee said adding an ILUC ban to the climate change bill is unlikely to work as it would probably be taken out before the final legislation is passed, Congress Daily reports. He expects the climate change bill to be sent to his panel in June but reiterated that he has a long list of issues that must be addressed before he would consider backing climate change legislation, and top of his list is passage of a renewable fuel standard measure he introduced last week to repeal the provision on ILUC impact on bio-fuel emissions.

Inside EPA Weekly Report adds that the industry is pushing amendments to the House climate bill to boost the use of bio-fuels and wants to add the ILUC ban. The industry also intends to push the bill (HR 2409) sponsored by the House Agriculture Committee Chairman (mentioned above).

There is a suggestion that bio-fuel producers could use a cap and trade system, enabling them to qualify for allowances or offsets if they use biotechnology that reduces their carbon emissions.

Ambassadors from the EU, Canada, Brazil and Chile called on US Congress to close immediately a US tax loophole used by paper makers that distorts world pulp markets and violates trade rules, Reuters reports. A tax credit designed to boost bio-fuel use has been an unintended windfall for US paper manufacturers, who stand to receive up to US$8 billion in 2009, the ambassadors said. “From a legal perspective, it is clear that this tax credit amounts to an actionable subsidy and that any adverse effects ... could be subject to remedies in the (World Trade Organization) or through domestic countervailing duty investigations,” they warned. At issue is a by-product called "black liquor," produced when wood is processed into pulp to make paper: last year, paper makers started to add small amounts of diesel to it and to claim the bio-diesel tax credit.

A new study has found that Styrofoam can be used to increase bio-diesel power output, New Zealand Transport Intelligence Briefing reports. Iowa State University researchers found that by dissolving polystyrene packing peanuts in bio-diesel, scientists were able to increase the power output of the fuel, while finding a solution to disposing of the material at the same time. They dissolved Styrofoam into bio-diesel at a concentration of 2 to 20%, and discovered that while plastic does not break down easily in petroleum-based diesel, it breaks down almost instantly in bio-diesel. When they tested the polystyrene-bio-diesel blend in a tractor engine, they found power output increased as polystyrene concentrations increased up to 5% but tailed off after that.

New Generation Biofuels Holdings, Inc has signed a bio-fuel sales contract with the Tri Gas and Oil Co Inc of Federalsburg, Maryland, to market and distribute NGB bio-fuel, PR Newswire reports. Under terms of the contract, Tri Gas and Oil will endeavour to sell up to 1 million gallons in the first year of a three-year contract.(May 21, 2009)

Brazil – Petrobras aims to be global bio-fuels player

Petrobras aims to be a global player in bio-fuels, in which it plans to invest $3.3 billion between 2009 and 2013, said the Petrobras Biocombustíveis director, AE Brazil- Financial and Corporate News reports. Of that total, 80% will be invested in ethanol.

According to him, Petrobras is getting ready for "a world without oil" and the company aims to be among the top-five global bio-fuel leaders by the end of 2020.

He also said Petrobras has been in talks for a bio-diesel production project in Africa and noted the company has ethanol projects under development in some Latin American countries. "Petrobras' strategy is to be a global player, with a relevant role in the world markets for bio-diesel and ethanol," said the executive. (19 May 2009)

Australia- “1st integrated soybean processing and bio-diesel plant”

The go ahead has been given for a $243 million soybean processing and bio-diesel production facility at Port Kembla, ABC News reports.

New South Wales’ Minister for Lands, said: "This is the first integrated soybean processing and bio-diesel production facility in Australia and is a major boost to the Illawarra. The project is expected to generate $977 million in revenue and in addition to the 235 new permanent full-time jobs, will provide approximately 725 jobs in related industries and a further 500 jobs during construction of the facility. The plant will produce 288 million litres of bio-diesel a year; along with 850,000 tonnes of soy bean meal for poultry and livestock feed”."

In July 2007 the NSW Government implemented legislation to mandate the blending of all diesel fuel blended with 2% bio-diesel, the mandate will increase from two per cent to five per cent in 2011," he added. (19 May 2009)

EU – Duties on US bio-diesel likely to be extended

A European official said that the European Commission is proposing to place multi-year duties on bio-diesel shipped from the US to offset a subsidy the US government gives to bio-diesel producers, Dow Jones reports. The proposal will extend temporary duties the European Union imposed in March on US bio-diesel. Final duties imposed by the EU typically last for five years.

The Commission is proposing changes to the bio-diesel duties: US agriculture giant Archer Daniels Midland (ADM) will face a duty of EUR359 per mt of bio-diesel, up from the temporary duty announced in March of EUR261/mt, the European official said.

ADM's rival Cargill will have to pay EUR213.80/mt, down from the duty announced in March of EUR275/mt. Imperium Renewables will have to pay EUR293/mt. Green Earth Fuels will pay EUR284/mt, and World Energy Alternatives EUR294/mt, according to the proposal. Fifty-three companies that cooperated with the EU's investigation will have to pay EUR335/mt, including Louis Dreyfus Agricultural Industries, Vitol Inc, and US Biofuels Inc. Peter Cremer North America LP and all other companies will have to pay EUR409/mt, down slightly from the temporary duty of EUR419/mt. The duties must be approved by EU governments at the European Council.

Biofuels Journal highlights the EU’s Biocoup programme which aims to develop a chain of process steps that would effectively allow biomass feedstock to be co-fed to a conventional oil refinery with energy and oxygenated chemicals as co-products and is currently working on a laboratory scale.

Supported by the European Commission through the Sixth Framework Programme for Research and Development with a grant up to 7.6 million euros, Biocoup began in 2006 and will run until 2011. The EU says Biocoup and other projects are necessary because the EU and member states have agreed on the need to increase the amount of bio-fuels for transportation to both reduce CO2 emissions, and to develop a European bio-fuel industry to reduce dependency on imported fuels. (20 May 2009)

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