Wednesday, October 31, 2007

[PBN] Second Generation biofuel developments in Singapore


Singapore strives to lead next round of biofuels race
By Sonia Kolesnikov-Jessop
Published: October 29, 2007

SINGAPORE: Second-generation biofuels, made from products like waste
from agriculture and forestry, may not yet be a commercial reality, but
that is not preventing Singapore from trying to position itself to
become a major processing and trading hub in Asia for new clean energies.

"We feel that if we're going to focus on a sustainable type of activity
we need to look beyond first-generation biofuels: Those made from food
crops," Julian Ho, executive director for energy, chemical and
engineering services at Singapore's Economic Development Board, said.

Singapore does not believe that diverting food crops to create fuels
will be sustainable over the long term, Ho said. "Right now, everybody
in the region seems to focus more on first-generation biofuels, but what
we really want is to be the leading place for second-generation biofuels
in Asia."

Although definitions vary, first-generation biofuels are generally
regarded as those made from food crops like sugar cane, corn and palm
oil, and are used commercially as ethanol and bio-esters. Up to 10
percent of ethanol can be blended with standard fuel in the United
States, and up to 5 percent in Europe, while bio-esters can be mixed
with diesel.

Second-generation biofuels are those made from nonfood feedstocks, like
jatropha, wood chips, and cellulose. Using gasification technology,
clean fuels can be produced for pure use, unblended with hydrocarbons.
If used at 100 percent concentration, second-generation biofuels could
reduce production-to-driving carbon dioxide production by up to 90
percent, according to Royal Dutch Shell, which has been researching
second-generation fuel development since 2002.
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So far, however, only a handful of international companies have succeed
in developing the technologies needed for second-generation biofuel
production, and their commercial viability remains to be proven.

Among the leaders in the development effort, Iogen, a Canadian company
in which Shell has a stake, has developed a processing technology that
uses enzymes to make cellulose-based ethanol from straw. But Iogen has
yet to build a commercial cellulose ethanol plant.

Choren Industries, in Germany, is scheduled to bring a first
industrial-scale plant into production in mid-2008 that will convert
biomass to liquid fuel. The plant, in Freiberg, will use gasification
technology to convert a woody feedstock into high-quality synthetic fuel.

In Finland, Neste Oil, a refining and marketing company that focuses on
producing clean transport fuels, inaugurated a first biodiesel
production line at its Porvoo refinery on May 31. The €100 million, or
$140 million, plant is now running at its normal capacity of 170,000
tons a year following a start-up period of several months, said Sami
Oja, Neste's manager for marketing and sales.

Ho, of Singapore's Economic Development Board, said that while the
industrialization of second-generation biofuel was still at a very early
stage, it had growth potential. "And while first-generation biofuel is a
resource play, second-generation biofuel is a technology play and
technology is what Singapore prides itself at being good at."

Moving into biofuel is a natural extension for the island state.
Although it has no oil sources, it is already the world's third-largest
refining center and a major petrochemicals hub, with the oil industry
accounting for 5 percent of its GDP. "Our location in a resource rich
region also gives us easy access to raw materials," Ho said.

Singapore has yet to announce a major second-generation biofuel project.
"We're talking to various companies and we hope to have a significant
announcement in the next six months," Ho said. But first-generation
biodiesel manufacturing is already under way.

Continental BioEnergy, a Singapore company, opened a biodiesel plant in
September 2006, with production capacity of 150,000 tons a year, while
Peter Cremer, a German company based in Hamburg, is building a Singapore
plant with planned annual output of 200,000 tons. Construction should be
completed early next year.

Both sites will convert palm oil, drawing on supplies from neighboring
Malaysia and Indonesia, which together produce 85 percent of global palm
oil supplies.

Natural Fuel, a renewable-energy company in Perth, Western Australia,
has also chosen Singapore for a $130 million, state-of-the-art biodiesel
production refinery, which is expected to be the largest such facility
in the world when production begins in the first quarter of 2008. The
refinery's three units will each produce 200,000 tons a year, initially
from palm oil and soya oil. Jatropha could be added when sufficient
supplies are available, a spokeswoman for the company said.

Production from the plant is destined to be sold initially in the United
States and Europe, with Asian markets developing progressively as
mandatory blending regulations in the region start to kick in.

"Singapore made a lot of sense when we were looking for a development
site," said Larry Tan, chief executive of the company's local unit,
Natural Fuel Singapore. "Biodiesel is best when it is blended with
petroleum diesel so it makes good economic sense for the company to
build its plants near or within major oil trading centers with a
well-established logistics infrastructure."

Biodiesel production in Singapore could exceed a million tons a year by
2010, and reach three million tons by 2015, S. Iswaran, the minister of
state for trade and industry, forecast recently.

To remain competitive, the government in May committed to spending 350
million Singapore dollars, or $240 million, in the next five years to
help make Singapore a world leader in clean energy production, including
both solar power - the government's main focus - and biofuels. Singapore
intends to market itself as a research and development center, a global
testing ground and a site for early adoption of clean energy solutions.

Nine industry players, including DaimlerChrysler and Shell Eastern
Petroleum, have already started a Singapore biodiesel testing project
for the evaluation of biodiesel in modern diesel-powered cars. The
project aims to improve the use of methyl esters from palm oil in motor
fuels in Southeast Asian climates.

Meanwhile, Temasek Life Sciences Laboratory, a nonprofit bio-research
organization linked to two local universities, is exploring the
molecular enhancement of second-generation biofuels, and the Singapore
Institute of Chemical and Engineering Sciences is carrying out research
and development in areas like lubricants, process optimization and
catalyst development for clean fuel.

"We are investigating improved ways of gasification of biomass,
developing improved catalysts for the Fischer-Tropsch process, but also
looking at the conversion of syngas to chemicals as well as fuels," said
Keith Carpenter, executive director of the institute.

The Fischer-Tropsch process is a chemical reaction in which carbon
monoxide and hydrogen are converted into liquid hydrocarbons. Syngas is
synthetic gas.

"We are also investigating the production of biogas from biomass waste
and the subsequent conversion to chemicals, and the conversion of the
glycerol byproduct to other chemicals," Carpenter said."
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[PBN] Biodiesel in Mali from Jatropha


Mali leads the pack in biodiesel production Print E-mail
Written by Dominique Patton
A jatropha plantation
October 30, 2007: A Dutch-backed start-up in Mali could be the first in
Africa to produce biodiesel from jatropha on an industrial scale.

Proponents of the plan say it is likely to become a model for biodiesel
production on the continent, if it succeeds.

Mali Biocarburant is ahead of other companies in the race to produce
fuel from jatropha because it is not relying on new plantations to
source its raw material.

Instead it is buying up jatropha nuts already available from the
estimated 20,000km of living jatropha fences that cover Mali, used by
farmers to protect other crops and stop soil erosion. The firm is also
giving farmers seeds to increase crop output for the future.

"It's a big risk but we believe we have the right set-up. In one year's
time, I will be able to say if my business model works out. And if it
does, it will be really revolutionary for Africa," says chief executive
of the firm Hugo Verkuijl.

With oil trading at more than $90 a barrel, the potential to extract
alternative fuel out of the oily jatropha plant is highly attractive,
especially for non-oil producing countries like Mali and Kenya. But with
no firms yet at production stage of this novel fuel, the jury is still
out on the best route to market.

Mr Verkuijl admits that under his business model, the logistics and
supply chain will be a major challenge. While processing jatropha nut
oil into biofuel does not require advanced technology, there must be a
ready supply of jatropha nuts with a high enough oil content to embark
on significant production.
But by bringing farmers on board as owners, he hopes to guarantee a
steady supply.

"It's important to make sure that farmers are selling the nuts to my
company. By making them shareholders and showing that it pays dividends,
we can make it work."

Mali Biocarburant also has financial backing from the Dutch government,
the tropical institute KIT and investors like SPF, a major pension fund
of the public railways in Holland.

Rather than setting up large plantations, the venture is promoting
jatropha as a means of diversification for farmers, encouraging its
integration alongside millet, sorghum or maize. It has grown an
additional 600 hectares since the start of the year, with about two
thirds intercropped with local food crops.

This kind of intercropping has been used in Mali for more than 20 years.
But the area planted is far from the thousands of hectares being
freshly planted by large-scale firms in other countries.

"If you have to own the land yourself as a foreign company, that's a
very big risk. In our case, the only risk is that farmers have a bit
less land available. We pay for the seeds," says Mr Verkuijl.

Plantations would not only mean lesser financial benefits for farmers,
but they could also lead to an invasion of agricultural land, putting
food security at risk, he adds.

biodiesel rich nuts
This would compromise the single most important characteristic of
jatropha for African biofuel producers. The plant's ability to grow on
wasteland, rather than requiring fertile land, has been lauded by
environmentalists, keen to limit the impact of other biofuels such as
corn-derived ethanol on rising food prices.

This in turn has triggered investment in jatropha plantations. But some
say that large companies' desire to enhance output of the crop may drive
them onto more fertile land. While jatropha does not need much water, it
does much better when it has some.

The Dutch venture also wants to keep profits from the biodiesel,
including the carbon credits it generates, inside Mali. "I believe in
small-scale, decentralised biodiesel plants, where there is local
production of jatropha nuts to minimise transport. I will be producing
for Mali and not exporting to Europe. I don't need to contribute to the
already high GDPs in Europe," says Mr Verkuijl.

The first test runs of Mali Biocarburant's small-scale biodiesel plants
will take place in January 2008. Samples of its biodiesel have been
tested in German labs with high standards and are found to be "almost
comparable to ordinary diesel", according to Mr Verkuijl.

He is aiming to produce about 6 million litres of biofuel in Mali in
five years time.

There is still a lot of uncertainty about the project's viability.

"It's a new market and a new crop and refining jatropha oil to
biodisesel has not been done on commercial scale anywhere. The challenge
will be to extract the oil at a profitable rate," says Mr Verkuijl.

Currently the nuts being produced in Mali have an oil content of 35-36
per cent and an extraction rate of 30 per cent per kilo.

Mr Verkuijl's business plan says he can achieve profits at this level
but the large companies like D1Oils setting up plantations in other
parts of the continent are investing in sophisticated breeding science
and crop management to improve overall ouput before starting biofuel

"You can get higher yields but when you work with farmers you need to be
realistic about their opportunities. A farmer doesn't have the money to
invest in water, irrigation and fertiliser."

Check for earlier Pacific Biofuel posts:

[PBN] Cassava for ethanol in Philippines


Philippines cultivates cassava for ethanol

Filed from Singapore 10/29/2007 11:15:26 AM GMT


PHILIPPINES: Filipino Eastern Petroleum and Chinese Guanxi Estates plan
to invest US$30 million in an ethanol plant that will produce 200,000
litres of the biofuel from cassava in the southern Saranggani province,
according to media reports. The partners will sign a joint venture
agreement for the plant soon. Construction on the new plant will begin
in the last quarter of 2008, with the aim of commencing commercial
production in 2010.

Fernando Martinez, president of Eastern Petroleum, said the two
companies have already developed 4,942 acres of cassava plantation in
Saranggani province. Martinez is encouraging the other countries in the
East Asian Growth Area, including Indonesia and Cambodia, to cultivate
cassava in order to secure a stable supply of the feedstock.

The requirement for ethanol, according to Martinez, is only 60 million
litres of ethanol, "but by 2009, we will need 300 million litres of
ethanol," he said. "So we will just need filling around 20 per cent or
less of the market. We have to put it there, including the ethanol
plant. It does not make sense that we just import the feedstock."

The Philippines in 2006 passed a law requiring that all liquid fuels for
engines to contain some locally sourced biofuel within two years. Local
oil retailers complain that the country does not produce enough biofuel
to meet the law's requirement.

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Tuesday, October 30, 2007

[PBN] Caribbean nations grapple with biofuel issues


Caribbean nations grapple with biofuel issues
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By Paula Lavigne, The Des Moines Register
Omar Bros' hope for his country lies in an oily seed and a dying
sugarcane industry.

Bros, an agronomist and civil engineer in the Dominican Republic, is
betting on biofuels. And his country's effort is just part of a global
awakening to renewable energy.

The Caribbean, which includes the Dominican Republic and Central
America, offers examples of the uncertainty many regions face in the
global energy grid. If those regions have the resources, they have to
ask whether biofuels are worth the investment.

"The other question is, 'Do I want to produce ethanol for the domestic
market, or do I want to export it?' " said Sergio Trindade, director of
science and technology for International Fuel Technology in St. Louis
and former assistant secretary general for the United Nations Science
and Technology Committee. "It is a question whose answer depends on time."

In the United States, experts debate whether biofuel growth in the
tropics will cut into profits for Midwest producers. Special free-trade
agreements with those countries can make it less expensive to ship
ethanol from there to the U.S. coasts.
FIND MORE STORIES IN: Brazil | Caribbean | Dominican Republic | Central
America | Caribbean countries | Central American countries | Bros

"I don't think there is an answer right now," said Douglas Newman, who
studies ethanol for the U.S. International Trade Commission. "As far as
the Caribbean being a threat, it's been around for a long time, but it's
never amounted to much and the demand has been there."

Investors from Brazil, Europe and United States are already buying into
the biofuels industry in the Caribbean and Central American countries. A
recent pact between Brazil and the United States helps some of these
smaller countries get technology and know-how to make ethanol and biodiesel.

Growing, producing and using renewable fuels can help Caribbean
countries become less dependent on imported oil, said Johanna Mendelson
Forman, senior associate with the Center for Strategic and International
Studies in Washington, D.C.

Much of that region's oil is supplied by Venezuela, where President Hugo
Chavez is known for his animosity toward President Bush. Caribbean
countries have been supportive of U.S. policies, and the United States
doesn't want them to start siding with Chavez instead, Forman said.

"Chavez is trying to seek friends and allies. ... The Caribbean has 22
votes at the U.N. If you get some kind of dependency with a country, you
have other ways with sticks and carrots of using your dependency,"
Mendelson Forman said.

But Bros, the agronomist in the Dominican Republic, isn't working for
politics. He's working to improve incomes and lives. Bros is gathering
support for growing sweet sorghum and jatropha hedges, whose oily seeds
can be used for biodiesel. And he's hoping an ethanol plant can revive
the island's dormant sugar fields.

"We are babies in this process," Bros said. "It's going to be a long
road to make this work."

Most ethanol plants in the Caribbean and Central America don't make
ethanol. They merely take sugarcane ethanol from Brazil, suck out the
water and send it to the United States, where it's blended with
gasoline. Plants shut down when profit margins disappear and ramp up
when prices make it worth their while.

These dehydration operations exist to take advantage of a free-trade
agreement the United States has with the Caribbean and many Central
American countries.

Ethanol from those countries isn't subject to the 54-cent per-gallon
extra charge tacked on to direct exports from Brazil, the world's
second-largest ethanol producer. The extra charge, or tariff, prevents
foreign ethanol from getting the 51-cent federal subsidy that supports
U.S. producers.

However, ethanol from Brazil can be sent into the United States without
the tariff if it is exported and processed through a free-trade country
such as Jamaica or El Salvador.

Last year, when ethanol imports were at an all-time high, ethanol coming
into the United States under the Caribbean or Central America duty-free
quota peaked at 206 million gallons. That was about 75% of such imports
allowed through those countries last year. Trade rules allow
pass-through ethanol to equal no more than 7% (268 million gallons) of
U.S. ethanol consumption.

Some ethanol workers say that's an unfair loophole stealing the subsidy
advantage from U.S. producers.

"If you're importing energy through a loophole in another part of the
world, you're bypassing the intent," said James Redding is vice
president of external relations for Aventine Renewable Energy, an
ethanol producer that also sells ethanol for Iowa plants he said. "Is it
a threat? Sure, it's a threat."

Others say it's more of an annoyance.

"We do not see it as a threat," said Bob Dinneen, president of the
Renewable Fuels Association, noting that U.S. producers are sitting on
an annual capacity of 6 billion gallons.

Check for earlier Pacific Biofuel posts:

[PBN] UN rapporteur calls for biofuel moratorium


October 11, 2007 - 9:30 PM
UN rapporteur calls for biofuel moratorium
More and more corn is being used for biofuel at the expense of food,
according to Jean Ziegler

Image caption: More and more corn is being used for biofuel at the
expense of food, according to Jean Ziegler (Keystone)

The United Nations Special Rapporteur on the Right to Food is demanding
an international five-year ban on producing biofuels to combat soaring
food prices.

Switzerland's Jean Ziegler said the conversion of arable land for plants
used for green fuel had led to an explosion of agricultural prices which
was punishing poor countries forced to import their food at a greater cost.

"232kg of corn is needed to make 50 litres of bioethanol," Ziegler said
on Thursday. "A child could live on that amount of corn for a year."

Using land for biofuels would result in "massacres", he said, predicting
a reduction in the amount of food aid sent to developing countries by
richer ones.

"It's a total disaster for those who are starving."

Ziegler's proposal for a five-year moratorium, which he plans to submit
to the UN General Assembly on October 25, is aiming to ban the
conversion of land for the production of biofuels.

Ziegler said he hoped that by the time the moratorium was lifted science
would have made sufficient progress to be able to create "second
generation" biofuels, made from agricultural waste or from
non-agricultural plants such as jatropha, which grows naturally on arid

Taking Brazil as an example, Ziegler said he deplored the fact that
sugar cane plantations, whose products were used for biofuels, were
spreading at the expense of food-producing land.

He said ten hectares (100,000 square metres) of food-producing land
could sustain an average of seven to ten farmers, whereas the same area
could only produce enough sugar cane for one farmer.

Threat to poor

Only two years ago, with the twin spectres of peak oil prices and
climate change looming, biofuels seemed the ideal alternative energy.

Now it is the poor who have to contend with the flip side of biofuels:
spiralling cereal prices, say experts.

"The days of cheap food are over," said Joachim von Braun, director of
the International Food Policy Research Institute, in an article for the
Swiss Agency for Development and Cooperation (SDC) in September.

Over the past decade, while production of biofuels using corn,
sugarcane, soybean and other staples has risen dramatically,
malnutrition has continued. Nearly 900 million people worldwide suffer
hunger, 70 per cent of them food producers, peasants and rural dwellers.

Von Braun warns this figure could hit one billion in just a few years
and that rising demand and increased bioenergy costs are affecting food

"The bioenergy market receives considerable state funding and is
dominated by the heavyweights in the oil, cereal and automobile
industry," he said.

"Barring technological progress and enactment of regulations based on
transparent standards, we are looking at a 20-40 per cent increase in
food prices between now and 2020. And the poorest, some of whom live on
50 cents a day, will be unable to foot the bill."

Environmental impact

A study commissioned by the Swiss authorities in May also concluded that
biofuels might not be the panacea for the world's fossil-fuel woes.

Such fuels, touted as an ecologically friendly source of energy, might
be more harmful for the environment than their fossil counterparts, it said.

According to the authors, while it was true that biofuels might emit
less greenhouse gases than fossil fuels when consumed, producing them
was generally more stressful on the environment.

Growing and processing crops for energy purposes or feedstock can have
the heaviest environmental impact, as soil quality can be affected
adversely, for example through fertiliser overuse.

swissinfo with agencies

The Age (Australia)


Biofuel crops a 'crime against humanity'

Philip Hopkins
October 29, 2007
Crime: A child under 10, like this one, dies from hunger or disease
related to malnutrition every five seconds.

A PROMINENT United Nations activist against famine has demanded a
five-year moratorium on biofuels as a new report showed Australia could
use its sugar to become a major global provider of ethanol.

The UN Special Rapporteur on the right to food, Jean Ziegler, said it
was a "crime against humanity" to convert food crops to fuel, driving up
food prices when there are 854 million hungry people in the world.

Dr Ziegler said a child under 10 dies from hunger or disease related to
malnutrition every five seconds.

A study by global consulting group Accenture found Australia could
become a big ethanol producer if all our sugar exports were converted to

The report compared six big sugar cane-producing countries — Australia,
Thailand, Guatemala, South Africa, Colombia and Argentina — in 2005 and
found that Australia had the biggest volume of exports.

Thus, Australia had the highest level of potential ethanol production —
more than 3000 million litres of ethanol, Accenture said.

However, Australia was falling behind most of the big players in the
global ethanol market in terms of industry maturity and production. The
leaders are Brazil, the United States, China, Spain, Poland, France,
Sweden and Ukraine.

Australia was also being disadvantaged by only operating in the domestic
biofuels market, the study said.

Sugar won out as the best feedstock for ethanol against all comers.
Criteria included production costs, fossil energy balance, land
availability and the size of the global feedstock market.

For biodiesel, results were mixed, based on feedstocks such as soybeans,
rapeseed, jatropha, coconut oil and palm oil.

"Soy-based biodiesel and jatropha are becoming increasingly important as
sustainability issues challenge the future of palm oil," the report said.

The study, which compared 20 countries, said several factors would
influence the success of the biofuels market.

These included the emergence of second-generation technologies, the
development of the hybrid automobile market, and what key
energy-consuming nations such as China, India and Japan do.

Other factors were companies' ability to gain feedstock, and lower
transport and production costs; pressure from governments to achieve
energy security; policies favouring agriculture in almost all countries;
and regulations encouraging biofuel use to reduce carbon dioxide
emissions. "We believe that biofuels will experience a cycle similar to
that of the internet during the dot-com bubble," said Melissa Stark, a
senior executive in Accenture's Energy industry group.

"Initially there will be a boom followed by a downturn as the realities
of practically scaling this market become more apparent."

The study found that incentives would encourage new entrants to the

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[PBN] Tough Times for Ethanol in Brazil


Poor ethanol margins delay Brazil mill projects
Fri Oct 26, 2007 9:13pm BST

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By Inae Riveras

SAO PAULO, Oct 26 (Reuters) - Tight profit margins in Brazil's ethanol
and sugar industry this year have led to delays in the projected startup
of new plants that were scheduled to come on line in the next few years,
specialists said.

The sector's largest groups say they are maintaining investment and
construction plans despite low sugar and ethanol prices with long-term
perspectives still promising. Equipment suppliers say that sales are
still heated.

However, many industry newcomers or companies which depend on their own
cash flow to build new mills are preferring to postpone or even abandon

"Investments will slow down until a signal of market recovery appears,"
said Antonio de Padua Rodrigues, technical director from the Sugar Cane
Industry Union (Unica).

In 2006, international interest to adopt ethanol as a fossil fuel
substitute, strong sugar prices and growing demand for the biofuel in
Brazil from a growing flex-fuel car fleet caused a flood of new plant

But with ethanol and sugar prices below production costs in Brazil, the
world's most competitive producer, investors' ambitions have cooled off.

"The future pace of investments will depend on domestic demand for
ethanol, its price and on how logistics will improve to make biofuel
exports viable, especially in Goias and Mato Grosso (states in Brazil
center-west)," Padua said.

Around 138 projects were announced to come on stream in the coming years
in the center-south, according to analyst Datagro. But about 30 of them
are unlikely to materialize.

"In general terms, there was a one-to-two-year delay in the
development of these projects due to lower prices," said Datagro's
president, Plinio Nastari.

But most of the announced projects are expected to become reality,
specialists said.

Datagro says 79 projects out of the 138 scheduled are "highly probable."
They would represent an additional cane crushing capacity of 30.8
million tonnes in the center-south region by 2008. This would then rise
to 162.5 million tonnes by 2018.

"Prices influence those companies that depend on their existing mills'
cash flow to invest in new ones ... Large groups' projects, some of them
financed by funds, are not set by current prices," Padua said.

Brazil's largest sugar and ethanol producer, Cosan (CSAN3.SA: Quote,
Profile, Research) is one of the companies which is maintaining its
investment plans despite low margins.

Cosan raised about $1 billion through an initial public offering in New
York and Sao Paulo in August to fund expansion, and intends to invest
$1.7 billion in four years to build new mills and expand existing ones.

"Our investments will continue. We already have the money to do so, and
market perspectives remain very positive," Cosan's President Rubens
Ometto said.

Equipment sales to mills have been on a scale not seen since the
launching of the government's Pro-ethanol Program in the 1970s,
according to suppliers. But clients appear to be increasingly cautious.

"We haven't had any impact in terms of sales yet, (but) some clients did
comment... If ethanol prices continue at these low levels, we believe
new projects, newcomers will slam on the breaks," said Jose Francisco
Davos, Dedini's business vice president.

Dedini supplies nearly all mills in Brazil with milling and cogeneration
equipment as well as technical assistance.

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[PBN] Tough times for Jamaican Ethanol Industry


Jamaica Broilers keeps faith with ethanol project
Al Edwards
Friday, October 26, 2007

Jamaica Broilers' foray into the ethanol market has hit a snag with the
company facing a number of start-up challenges, most notably a breach of
contract with its purchaser of ethanol, Integra Ltd.

Jamaica Broilers had agreed to sell ethanol to Integra Limited at a
fixed price when the biofuel was fetching US$2.10 per gallon on the
world market. The company, headed by Robert Levy, had calculated that
its ethanol operations would net it US$4 million per year, which
converts to US$1 million per quarter.

However, with a proliferation of suppliers and US midwest farmers
turning to corn ethanol production, world ethanol prices began to fall

With the price of ethanol falling to US$1.70 per gallon, Integra opted
to renege on its agreement with Jamaica Broilers, forcing the company to
resort to the open market.
This resulted in it racking up a loss of US$1.93 million. Last month,
Integra agreed to settle with Jamaica Broilers for 75 per cent of the
loss that cemented to US$1.45 million, which served as a reprieve of
sorts but no doubt has hurt the group's financial performance for the
second quarter. Last year, the group projected a profit before interest
of J$800 million. With its ethanol operations coming on stream for
2007/08, the group projected a profit before interest of J$1.065
billion, a difference of J$265 million or US$3.9 million (at an exchange
rate of J$68 to US$1).

Jamaica Broilers invested J$1.1 billion on an ethanol production plant
with a rated capacity of 60 million gallons per year (mgpy). With plant
downtime (delays, plant maintenance), raw materials arriving late and
other challenges, the group projected that its plant rated capacity
would be revised to two thirds that sum, which translates to 40 mgpy.
This would give it a net operating margin of US$0.10 a gallon.

The second quarter has proven to be a roller coaster. In July, its
profits were negatively impacted by a late plant start-up of six weeks
and it having to pay late penalty charges. August saw it renegotiating
contract terms, but the impact of Hurricane Dean at the end of the month
further prohibited the operations of the plant. Exacerbating matters
further was a 35 per cent reduction in the quantity of ethanol
contracted as well as a four per cent reduction in the price of the ethanol.
At that time Jamaica Broilers was looking at profit for that quarter of
just US$250 million, a far cry from the projected US$1 million for the
period under review.

September proved a better month for the Jamaican outfit. After
renegotiating contracts and tightening its operations, the company is
projected to make US$750,000 for September.

Having got back on track, Jamaica Broilers ran into a firestorm
concerning its executive incentive programme (a payment of 5.7 million
shares to executives) and share trading, which caused a few eyebrows to
be raised. At a shareholders briefing held earlier this month, it sought
to set the record straight and strenuously refuted that anything
untoward took place. Jamaica Broilers' vice- president for finance &
corporate planning, Ian Parsard, said that over the last two years
Jamaica Broilers has issued to executives approximately 13 million
shares (part of the incentive programme) of which eight million has been
traded over the same period. The group's chairman, Danny Williams,
speaking with Caribbean Business Report, said: "Of all the companies
that I have been involved with over the years, I can tell you that
Jamaica Broilers exhibits the highest standards of transparency,
corporate governance and moral propriety. Nothing untoward took place
here and I am sure that the Jamaica Stock Exchange knows this."

Despite the trying times, Jamaica Broilers has reposed much faith in its
ethanol operations. Group CEO Robert Levy said: "We had a spare J$2
billion available to us and we wanted to utilise that. Now it would have
been easy for us to just sit on it, or put it on government paper, but
no, we are producers and when the idea of going into ethanol production
came up, we immediately saw its potential and how it could bolster the
group. Jamaica Broilers Ethanol Limited is a subsidiary that brings
value added to the entire group."
So why ethanol?

With emerging economies hungry for energy sources to boost their
ever-growing economies, the US now looking to cleaner fuels and the
Caribbean desperately in need of cheaper energy which does not impose
too heavily on its foreign reserves, an investment in ethanol seems a
good bet.
Fuel ethanol consumption has grown significantly in the past several
years and it will continue to grow with the establishment of renewable
fuels standard in the Energy Policy Act of 2005. This standard requires
US gasoline to contain a minimum amount of renewable fuel, including

US domestic refiners producing ethanol from American corn supply most of
the US market. However, imports do play a role, albeit small, in the US
markets. One reason for the relatively small role is a 54 cent per
gallon tariff on imported ethanol. This tariff offsets an economic
incentive of 51 cents a gallon for the use of ethanol in gasoline.

However, to promote development and stability in the Caribbean region
and Central America, the Caribbean Basin Initiative (CBI), allows the
imports of most products, including ethanol, duty free. This convinced
Jamaica Broilers it is in close proximity to the world's biggest market
and gets a duty waiver.

Ethanol entering the US under the CBI is generally produced elsewhere
and reprocessed in CBI countries for export to the US.

To promote its use, ethanol-blended gasoline is granted a significant
tax incentive. However, this incentive does not recognise point of
origin, and there is a tariff on most imported ethanol fuel to offset
the exemption. But a limited amount of ethanol may be imported under the
CBI duty free, even if most of the steps in the production process were
completed in other countries.

According to the US International Trade Commission, roughly one-half of
all fuel ethanol imports to the US came through CBI countries between
1999 and 2003. In 2004, imports from Brazil to the US grew dramatically,
but in 2005, CBI imports again represented more than half of all US
ethanol imports.

In total, imports play a relatively small role in the US ethanol market.
Total ethanol consumption in 2005 was approximately 3.9 billion gallons,
whereas imports totalled 180 million gallons, or about five per cent.
Imports from the CB1 totalled approximately 2.7 per cent.

Last year, when ethanol imports were at an all-time high, ethanol coming
into the US under the CBI duty-free quota peaked at 206 million gallons.
That was about 75 per cent of such imports allowed through those
countries last year.
Trade rules allow pass-through ethanol to equal no more than seven per
cent (268 million gallons) of US ethanol consumption. This leaves plenty
of room for Jamaica Broilers to net US$4 million a year from its ethanol
Brazil has largely attained energy self-sufficiency as a result of cane
ethanol production. It has spent billions of dollars over decades of
research to develop the technology to mass-produce ethanol from the
millions of cane acres spread along the South American landscape.

Ethanol accounts for 40 per cent of total fuels used by
non-diesel-powered vehicles in Brazil and represents a 30 per cent
reduction of greenhouse gas emissions from the transport sector, the
Brazilian cane industry association (UNICA) said.

"In 20 years, I doubt there will be a gasoline car on the Brazilian
market. They will all be powered by ethanol," UNICA President, Eduardo
Pereira Carvalho, said during a Reuters Global Biofuel Summit last week.

Brazil began its ethanol programme 30 years ago when it was importing
nearly 90 per cent of oil needed for domestic use.

UNICA estimates that Brazilian cane ethanol on average yields more than
eight times more energy than is used in the production process, compared
with US corn ethanol production that yields between 1.1 and 1.7 times as
much energy. This advantage should improve with the use of
state-of-the-art technologies in Brazilian mills.

The European Union, which has proposed the use of 10 per cent biofuels
for transport by 2020, signalled it will demand proof from suppliers
that the product was made in a sustainable manner, a requirement that
may rule out US ethanol.

In the US, experts debate whether biofuels growth in the Caribbean and
Brazil will cut into profits for Midwest producers, particularly with
the Caribbean's special free trade agreements which makes it less
expensive to ship the product to the US coasts.

"I don't think there is an answer right now," said Douglas Newman, who
studies ethanol for the US International Trade Commission.

"As far as the Caribbean being a threat, it's been around for a long
time, but it's never amounted to much and the demand has been there."

Under the stewardship of Robert Levy, Jamaica Broilers, renowned for its
chicken operations, has become a Jamaican company looking for
opportunities in the 21 century. Many local companies continue to be
left behind because of a reluctance to adapt to and embrace the modern
era. Jamaica Broilers has boldly respended to the demand for cheaper
energy. It is unfortunate that as world ethanol prices decline, oil
prices are racing to US$90 a barrel. This may well prove a temporary
aberration with ethanol prices staging a rebound. What cannot be doubted
is the need for alternative fuels, and with Brazil unable to profit from
the CBI breaks, an operator like Jamaica Broilers stands to do well.

The last few months have been challenging, but as Jamaica Broilers
attains experience in this new business, its decision to become an
energy provider should pay off. Last Thursday, Jamaica Broilers' share
price stood at J$4.04. Yesterday it climbed marginally to J$4.11.

Check for earlier Pacific Biofuel posts:

Monday, October 29, 2007

[PBN] Rotuma Biofuel Feasibility Study

As part of the Pacific Islands Energy Policy and Strategic Action
Planning( PIEPSAP) project, a comprehensive study on biofuel from
coconut resources in Rotuma has been published.

A soft-copy can be downloaded from:

Hard-copies can be sent at request to:

Check for earlier Pacific Biofuel posts:

Thursday, October 25, 2007

[PBN] HECO Biodiesel plans on track


Hawaiian Electric Company Pursues 150 Million Gallon Biodiesel Agreement
Honolulu, Hawaii []

Hawaiian Electric Company recently filed an application for approval of
an anticipated 5-12 million gallon biodiesel supply contract for its new
110 megawatt (MW) Campbell Industrial Park generating station.

"We look forward to helping the state of Hawaii reduce its dependence on
petroleum and achieve a more sustainable and self-sufficient energy future."

-- Martin Tobias, CEO and Chairman of Imperium Renewables, Inc.

Imperium Services, LLC will supply Hawaiian Electric's total fuel
requirements for the Campbell generating station. Biodiesel, a
clean-burning renewable fuel, can be made from a variety of vegetable
oils and other feedstocks and can be used in most diesel engines with no
significant engine modifications.

"We look forward to helping the state of Hawaii reduce its dependence on
petroleum and achieve a more sustainable and self-sufficient energy
future," said Martin Tobias, CEO and Chairman of Imperium Renewables, Inc.

Imperium will work with Hawaiian Electric and others to promote the
development of a local agricultural energy industry to supply
Hawaii-grown feedstock.

According to a report from the Hawaii Agricultural Research Center,
Hawaii could produce more than 150 million gallons of biodiesel per year
from local feedstock. Actual construction of the 110-MW simple-cycle
combustion turbine-generating unit is expected to begin in early 2008
and is planned to be in service by mid-2009.

Imperium's planned 100-million gallon per year biodiesel plant will be
on land leased from the state Department of Transportation at Kalaeloa
Harbor. The company has completed its environmental assessment and found
no significant impact and will continue to pursue necessary permits.

Check for earlier Pacific Biofuel posts:

Monday, October 22, 2007

[PBN Venzuela steps onto Pacific stage


1424 FJT
Monday, October 22, 2007

Update: 2.24pm THE Venezuela Government of international pariah Hugo
Chavez has signalled a challenge to Australia's influence in the Pacific
with an aggressive diplomatic push based on cheap fuel for island states.

Speaking on the sidelines of the 38th Pacific Islands Forum in Tonga
last week Venezuela's Vice-Minister of Foreign Affairs for Asia, Middle
East and the Pacific, Vladimir Poljak, said his Government was ready to
help end the West's 'domination' in the region.

In a further challenge to Australia - one of the region's biggest aid
donors - Mr Poljak said Venezuela did not need the 'permission' of
bigger countries to establish contacts in the Pacific.

Oil-rich Venezuela was granted observer status at the forum by host
nation Tonga, despite international disquiet over Mr Chavez's ties with
Iran and communist-controlled Cuba.

Mr Poljak seized the opportunity to court influence among the 15 nations
represented at the forum.

''I really want you to rest assured Venezuela has a very aggressive
energy-(linked) political philosophy,'' he said.

''Venezuela wants to end the use of fuel as a weapon of domination over
smaller countries.''

Since coming to power in 1998, Mr Chavez has embarked on a program of
populist Left-leaning economic policies that challenge US pre-eminence
in Latin America and now, apparently, the Pacific

The Chavez Government's decision to nationalise most of Venezuela's oil
industry has led to prices there falling as low as 9c a litre, making it
among the cheapest in the world, according to a Pacnews report.

Asked how Venezuela might be able to help Pacific states, he suggested
moves to tie them to the Chavez Government through cheap fuel.

''We can say our oil in Venezuela is used as an instrument of liberation
because our oil policies are truly independent,'' he said.

''We have two choices: either we use it and be selfish about it or we
use it and help others with it. We've used our oil to fund schools,
health and research for the people. So I think our presence here at this
forum really shows the true interest Venezuela has towards the Pacific.''
Check for earlier Pacific Biofuel posts:

[PBN] OECD Biofuels report

Please find a very interesting and thorough report on Biofuel
Developments by the OECD Sustainable Development Roundtable.

Check for earlier Pacific Biofuel posts:

[PBN] EU will not save sugar industry: Academic


Sunday October 21, 2007

A university academic says European Union subsidies can not save Fiji's
ailing sugar industry and the government should focus on agriculture

In his preview of the 2008 National Budget (to be announced late next
month), Professor Duncan, the executive director, Pacific Institute of
Advanced Studies in Development and Governance at the University of the
South Pacific says the sugar industry was never going anywhere but
downhill, even when it had the full benefit of European Union (EU)

"So it is hard to argue that EU subsidies can save it," he said. The EU
has promised millions of dollars of aid to reform Fiji's sugar industry
to make it more efficient, but this was stalled after the December coup.
Aid is to be restored once the interim government makes a commitment to
bring Fiji back to parliamentary democracy.

Professor Duncan went on to say that the sugar industry should not
receive any assistance other than to help farmers move into other
farming activities, and to rationalize the milling sector down "to no
more than two mills".

Fiji currently has four sugar mills: Lautoka, Labasa, Rarawai and
Penang. Finance and Sugar Minister Mahendra Chaudhry last month
highlighted the possibility of a fifth sugar mill in Seaqaqa, Labasa
(Fiji's second biggest island). He is also pushing for the processing of
ethanol from molasses.

Professor Duncan does not believe ethanol production is going to save
the sugar industry.

"Whether the mills are producing sugar or producing ethanol, the
inefficient costs of cutting, transport and milling will still be there.

"He says the World Bank had told (Laisenia) Qarase (Fiji's deposed prime
minister) this in no uncertain terms "but he was not inclined to listen".

Regarding agriculture, Professor Duncan says in that in order to make it
successful, many major obstacles have to be overcome, including
quarantine barriers for exports, poor quality of local horticultural
products, difficulties in securing good access to land and finance, and
difficulties in establishing commercial activities in the indigenous
village sector.


Check for earlier Pacific Biofuel posts:

Friday, October 19, 2007

[PBN] Bioenergy Australia newsletter October 2007

The latest bioenergy Australia newsletter can be downloaded from:

Check for earlier Pacific Biofuel posts:

Thursday, October 11, 2007

[PBN] Food vs Fuel debate in Philippines


Hunger in Philippines to rice as gov't prioritizes fuel over food

Published on October 3, 2007 at 1:49 pm | Email · Share · Digg · Print

Environmental activists today warned of " hunger rates hitting
near-famine levels if the Arroyo administration continues to
prioritize fuel over food by aggressively promoting the massive
conversion of agricultural lands into plantations for biofuel
production ."

Kalikasan People's Network for the Environment (Kalikasan PNE) sounded
the alarm after the recent Social Weather Stations (SWS) surveys again
indicated a record-high peak in national hunger rates, where
3.8-million families (21.5 percent) experienced "involuntary hunger"
at least once in the last three months. This figure is higher than the
hunger rates recorded in November 2006 and February 2007.

" It's ironic that millions of Filipino families have literally
nothing to eat, while millions of hectares are being cordoned off by
the government to grow crops for fuel," Kalikasan PNE National
Coordinator Clemente Bautista Jr. Bautista said today in a statement.

"The current administration is auctioning off more and more
agriculturally-productive lands as prime lots to biofuels investors
and foreign mining giants. This only means that there will be even
less land for Filipino farmers to grow food," Bautista said.

"We demand that the Arroyo administration quit sacrificing Philippine
food security over a few sweet biofuels deals it has entered into. The
administration is apparently greenwashing its anti-people projects
while neglecting the issue of food security for the Filipino people ,"
Bautista said.

Bautista noted that in addition to such controversial contracts with
foreign firms such as the NBN ZTE deal, the Arroyo administration and
local bioethanol producers also signed four joint venture deals with
Chinese partners for domestic bioethanol production involving hundreds
of thousands of hectares of agricultural lands.

These include the (a) MOAs between the Nanning Yongkai Industry Group
and B.M. SB Integrated Biofuels Company on joint venture to establish
bioethanol plants in the country, (b) MOA between China National
Constructional and Agricultural Machinery Import and Export
Corporation (CAMCE) and Palawan Bio-Energy Development Corp, (c) MOA
between One Cagayan Resource Development Center Inc. and the Nanning
Yongkai Industry Group to develop bio-ethanol plants that would each
have a capacity to produce at least 150,000 liters a day, and (d)
Memorandum of Agreement Negros Southern Integrated Biofuels Company
and Nanning Yong Kai Industry Group Co., Ltd.

Bautista also noted that the state-run Philippine National Oil
Co.-Alternative Fuels Corp. (PNOC-AFC), which was revitalized in 2006
to accelerate the utilization and commercialization of alternative
fuels in the country, is eyeing some 1.2 million hectares of land in
Mindanao for a P5-P10 billion jatropha production project.

"The current hunger rates recorded by the SWS are already alarming. We
in Kalikasan PNE are alarmed because in the next few years, even less
land will be made available for food to feed Filipino families because
these will be reserved for biodiesel crop production ," Bautista said.

Bautista said that biofuels production was an inadequate environmental
response if it would only generate grave domino effects on
biodiversity, agricultural production, and the people's food security.

"A balance between food and biofuel production must be attained.
However, it is hard to imagine the Arroyo administration of being
capable of this vision. As many of its controversial deals such as the
NBN ZTE deal shows, our current government officials being interested
in the kickbacks and windfalls of projects rather than in their
long-term and widespread benefit to the people ," Bautista said. ###

[PBN] NZ: Greens plead for biofuel sustainability standards


Biofuel change ensures food not taken from hungry
Tuesday, 9 October 2007, 4:13 pm
Press Release: Green Party
9 October 2007
Green biofuel change ensures food not taken from the hungry

The Green Party has negotiated a very important amendment to the
Biofuel Bill tabled in Parliament today to ensure production of the
fuel does not impact food supply and the environment.

To qualify to meet the biofuel sales obligation, fuel will have to
meet a sustainability standard, prescribed by Order in Council,
showing that it does not impinge on food production or cause undue
environmental harm.

"Biofuel could make a worthwhile contribution to New Zealand's efforts
to reduce dependence on oil and to reduce carbon emissions," Co-Leader
Jeanette Fitzsimons says.

"However not all biofuels are environmentally sound. The Green Party
is totally opposed to the clearing of old growth tropical rainforest,
the last refuge of many endangered species such as the orangutan, to
plant oil palm trees for biodiesel, as is happening in South East

"We are also deeply concerned at the use of food grains such as corn
to make ethanol. This is already forcing up the price of food in poor
countries and will lead to even worse starvation in Africa.

Just last week the United Nations warned that international wheat
prices had hit record highs during the past three months pushing the
domestic price of bread and other basic foods in poor countries beyond
the reach of many locals.

"In a competitive market, the motor vehicles of the developed
countries will always be able to outbid the stomachs of the very
poor," Ms Fitzsimons says.

"I am delighted that the New Zealand Government has agreed not to go
down that path.

"In the end, there is a limit to how much one limited resource, oil,
can be replaced by another, namely high quality food producing land.
The most sustainable sources of biofuel in New Zealand will be first
of all wastes or low value by-products, such as tallow and whey, and
then second generation biofuel such as cellulosic ethanol from wood,
which can be grown on second class land without extra water or
nitrogen, or biodiesel from algae grown on sewage ponds," Ms
Fitzsimons says.



Challenges for producers, households under energy plan
By VERNON SMALL - The Dominion Post | Thursday, 11 October 2007

The Government has outlined its long-term plan for energy generation
and efficiency, including restrictions on fossil fuel generation,
gas-guzzling cars, and moves to make homes warmer and drier.
Energy plan short circuits Rodney project

Energy Minister David Parker said the strategy responded to two
challenges - to fight climate change emissions and secure clean and
affordable energy.

Ministers would tell state owned generators there was no need for new
baseload fossil fuel generation for the next ten years. They would
also consider regulations under the Electricity Act to apply the ten
year limit to private companies, such as Contact Energy, as well.

"The Government expects all generators ... to take its views into
account when considering new generation investments and the Government
will advise state-owned enterprises that it expects them to follow
this guidance," the strategy states.

A national policy statement on renewable energy would be developed in
2008 that would give guidance on resource consents but not make it
mandatory to approve renewable projects.

He said renewable generation plans should not go ahead at any cost,
and he foresaw more wind generation and geothermal power rather than
new hydro development.

Rules would be put in place on the importation of new and used cars to
ensure they are 25 per cent more fuel efficient by 2015 than those
imported at present.

It would see a large increase in the number of diesel vehicles and is
expected to save motorists 4.8 billion litres of fuel by 2025.

That would see efficiency gains of 7.4 litres per 100 kilometres
travelled by petrol cars and 6.5 litres per 100km for diesel vehicles.

Funding already included in the last Budget will see 180,000 homes get
insulation, clean heat and solar hot water upgrades.

The total plan is expected to lead to cumulative savings on energy
bills of $2.7 billion by 2025.

Thought is also going into banning landlords from renting properties
without adequate insulation and heating.

The energy efficiency strategy is expected to deliver non-transport
energy savings of 30 petajoules a year by 2025 - the same as the
electricity used by 30 cities the size of Nelson.

Ms Fitzsimons said the plans outline would help families, business and
travellers to save energy, money and emissions.

"On top of that, it will deliver significant health and environmental
benefits. The time for writing strategies is over - now its time for

Prime Minister Helen Clark said by developing a secure energy system
based on renewable, low-emission generation "we can improve the
quality of life for new Zealand families, drive the transformation of
our economy and cement in sustainability as a core part of New
Zealand's identity and value system".

National's energy spokesman Gerry Brownlee said there was a huge gap
between the Government's rhetoric and its record.

"Under Labour, the amount of renewable energy generated in New Zealand
has reached an all time low of 62 percent, while the amount of
electricity generated from coal has climbed from 4 percent to 12
percent," Mr Brownlee said.

Greenpeace were more welcoming of the strategy saying it was "a
massive stride in the right direction".

New Zealand First energy spokesman Peter Brown welcomed some of the
proposals but said he was concerned that electricity costs might rise
too high.

- with NZPA

[PBN] Biofuel Overview: An African perspective


Namibia: Plant Oil for Vehicles

New Era (Windhoek)

28 September 2007
Posted to the web 28 September 2007

Prof Monish Gunawardana

International University of Management - Namibia Oil contributes
immensely to the human advancement. Furthermore, oil keeps our
automobiles, trains, ships, airlines and entire civilization on the

However, the world's oil wells are going to dry within a few decades.
Meanwhile, new economic giants -- Brazil, China, India, wealthy
America, Japan, and some European countries - are prepared to buy oil
at any price.

Therefore, to survive and thrive, the developing countries should
consider diverse energy options. This article appraises the
practicability of another energy resource - bio-diesel - that can
contribute to the national energy mix.


Bio-diesel refers to fuel that originates from biological sources such
as vegetables or plants such as soya, corn, maize, rice, cassava, palm
fruits, sugarcane, sunflower seeds and jathtropa seeds. Bio-diesel can
be used in unmodified diesel. On August 10, 1883, Rudolf Diesel in
Augsburg used peanut oil to power his engine. In remembrance of this
technological breakthrough, 10th August has been declared
International Bio-Diesel Day.

With greater confidence in the future of vegetable oil, in 1912 Rudolf
Diesel said: "The use of vegetable oils for engines may seem
insignificant today, but such oils may become, in the course of time,
as petroleum and coal-tar products of the present time."

Presently, the renowned German automobile manufacturer Volkswagen is
working with researchers on the next generation of bio-diesel that
would emit less carbon dioxide and make automobile engines more

Research Progress

In 1977, Brazilian scientist Expidito Parento's discovery helped to
produce bio-diesels by converting (trans-esterification) ethanol. In
addition, Parento's bio-diesel is validated by international
automobile manufacturers.

Currently, Parento's Tecbio Bio-diesel Company is conducting research
with the National Aeronautical Space Agency (NASA) and Boeing Airbus
Company in the USA on another product known as bio-kerosene, produced
by Parento.

In 2005, global bio-diesel production was 3.8 million tons and
currently it is used to power automobiles.

Bio-diesel can also be utilized to heat household and industrial
boilers. Andrew Robertson, during 'Bio-diesel Expo -2006' in the
United Kingdom, tabled a research paper that explained the process of
converting exiting boilers to operate by bio-diesel.

Asian Trends

To deal with energy security, since 2002 China has been promoting a
fuel-ethanol programme that mandates the use of a 10% blend of

Chinese ethanol facilities use vegetable sources such as corn,
sorghum, rice and cassava.

Malaysia is the world's largest palm oil exporter in the world. The
country has produced 200 million litres of bio-diesel in 2006.
Malaysian palm oil has become a key raw material for European
bio-diesel stations. I am of the opinion, that by 2010, Malaysia will
become the main bio-diesel producer in the world.

Bio-ethanol contributes moderately to Japan's national energy mix. The
country imports vast volumes of bio-ethanol from Brazil. Currently,
Japan is planning the 'E-3 Program' that promotes the use of a 3%
blend of bio-ethanol to petrol countrywide in 2012.

The government of Indonesia has planned to obtain 17% national energy
supply from renewable sources including bio-diesel that has already
attracted US$12 billion foreign investment and US$3 billion domestic

Chinese state-owned National Offshore Oil Corporation, Hong Kong
Energy Company, Japanese Mitsubishi and Brazilian Petrobas are key
investors in Indonesian bio-dieses ventures.

Inadequate power across the continent has created debilitating effects
on the economies of African countries. To face the threat of oil
crises and reinforce the national energy mix, now they are leaning
towards bio-energy.

Duelco, a South African renewable energy company, has signed a
memorandum of understanding with Petromac, a state oil company, to
establish a bio-diesel project.

Bob Geldof, a Western poverty reduction activist, has established 400
hectares of jathropa plantation, which is situated 200 km from the
capital city of Swaziland. To add bio-fuels to the national energy
mix, a few months ago Namibia imported seeds from India to promote
jathropa plants among farmers in the northern regions.

Dangote Sugar Company in Nigeria that owns the largest sugar factory
complex has expressed its willingness for an ethanol plant. Ernest
Janovsky, head of the agricultural unit of the First National Bank in
Johannesburg, is of the opinion that African countries within the high
rainfall belt, such as Angola, Zambia and Mozambique, own huge
potential to produce crops that are suitable for bio-diesel.

Feedstock Yield

The plant-based raw materials used to produce bio-diesel are known as
feedstock. The feedstock-yield efficiency per hectare is a key factor
that decides the cost-effectiveness of bio-diesel as an energy source.
With the current technology, 0.4 hectare of soya beans can produce 375
litres of clean-burning bio-diesel fuel.

Algae give the highest yield of feedstock - 250 times of bio-diesel
litres per hectare than soya beans.

A New Zealand company uses municipal sewerage waste to culture algae
to produce bio-diesel. Micheal Briggs, an American scientist, believes
that oil-rich algae can be grown in sewerage ponds at municipal
wastewater treatment facilities.

The feedstock yield (litres of oil per hectare) of some crops are as
follows: Algae=>47, 500,Palm Oil=>5,950,Coconut=>2689, Jathropa
seeds=>892, Peanuts=>1,059, Sunflower seeds=>952,Pumpkin
seeds=>534,Soya beans=> 446,Cotton seed=>325, Corn (maize)=>172.

Some Arguments

Many African countries cannot allocate adequate arable lands for
bio-fuel plantations without jeopardizing the national food supply.
For instance, the bio-farm boom can threaten food security on the
African continent.

According to Nampa/Reuter, in South Africa, the prices of staple maize
have risen around 40% this year.

Land occupied by Malaysian palm oil plantations have raised from 54 00
hectares in 1975 to 4 million in 2004 and encroached on thousands of
hectares of tropical forests.

Rising palm oil prices have increased the food prices in Malaysia and
Indonesia, punishing the poor. Moreover, the world sugar price is
predicted to increase with the expanding use of sugarcane for

Fossil fuels - coal, natural gas and oil - have been the energy
workhorses that have powered modern civilization for the last 100
years and will continue to play a decisive role in the next 100 years

In relation to fossil fuels, renewables can help to reduce global warming.

Nevertheless, with our current technological knowledge, renewables
energy sources like bio-diesel could never replace conventional fossil
fuel entirely. However, bio-diesel can be a considerable part of the
energy mix.

For earlier posts of Pac Biofuel, check

[PBN] Philippines: Biofuel Program Virtues Not Clear


Bio-fuel for your car engine, anyone?

By Euan Paulo C. Añonuevo and Likha C. Cuevas-Miel, Reporters

WITH crude oil prices scaling new highs in the international market,
the promise of bio-fuels has never shone brighter. But risks lurk
behind the Philippines' recent decision to require t he shift to
alternative fuels, ranging from farmland inflation to food scarcity,
according to pundits.

Early this year, the government began implementing the Bio-fuels Act
of 2006, the first legislation of its kind in Asia. The law mandates a
minimum blend of locally sourced bio-fuels into all regular vehicle
fuels. Starting with 1 percent blend in all diesel products this year,
and 5 percent in all gasoline products by 2009, the required mix will
be increased in subsequent years.

Bio-fuels are relatively cleaner substitutes for regular gasoline and
diesel. However, locally available feedstock is limited to coconut for
bio-diesel and sugarcane for bio-ethanol. Since the crops targeted for
bio-fuels production are used to feed the population, some quarters
have raised concerns about the potential impact that demand for the
alternative would have on local pump prices and food supply.

"For now bio-diesel, unless subsidized, is more expensive to make than
diesel," Peter Lee, dean of the University of Asia and the Pacific
School of Economics, said.

While bio-ethanol is cheaper, "its downward effect on oil prices may
not be significant enough," he said.

Proponents of the Bio-fuels Act have claimed that based on last year's
average oil prices and foreign-exchange rate, about P35 billion will
be saved each year from the full shift to bio-fuel.

"Ethanol is cheaper as long as oil is pegged at $40 a barrel. But it
has not gone down beyond this," Lee said.

Global shift needed

Industry officials agree that bio-diesel derived from coconut is about
P0.30 per liter more expensive than diesel, adding it would take a
global shift toward bio-ethanol use before the alternative can pull
down world oil prices, which last week rose to fresh records above $82
a barrel.

An alternative and cheaper feedstock that the government is pushing
through state-owned Philippine National Oil Co.-Alternative Fuels
Corp. (PNOC-AFC) is the jatropha plant. PNOC-AFC is looking to plant
over 700,000 hectares of the shrub and set up bio-diesel refineries
under a five-year program. The catch is it would take PNOC-AFC two
years to grow and harvest the shrub.

Industry estimates show local coconut production can meet demand for
bio-diesel but it would need government support to rehabilitate crops
damaged earlier by storms to maximize yields.

Bio-ethanol remains a concern because of fears it may affect the
country's food chain despite its being one of the world's top producer
of the sweet commodity.

"Food versus fuel is a recognized issue that is included as a concern
in the road map for bio-fuel development that needs to be addressed,"
Rafael Coscol-luela, Sugar Regulatory Administration (SRA)
administrator, said.

Only a trickle of investments

SRA is part of an inter-agency body, the National Bio-fuels Board
(NBB), which is mandated to oversee the implementation of the law.
Tasked to ensure the supply and quality of bio-fuels, and to recommend
changes in the volume to be blended with regular fuel products, the
NBB however has a measly budget of only P90 million for next year.

Observers say the body would require more if it were to exercise its
authority and boost production to meet the law's blending schedule.

"Our situation is more complicated because of the difficulty of
putting contiguous areas under one ethanol plant. We're struggling
with complying with setting up new ethanol projects because we have to
match investors with feedstock developers," Coscolluela said.

For 2009, the country's demand for bio-ethanol is seen to reach 300
million liters per day and in 2011, rise to 600 million. Because of
this projected growth in demand for bio-ethanol, the country would
need 15 to 20 processing plants.
So far, only two plants are under construction with a combined
capacity of 75 million liters per year. The San Carlos and the First
Bukidnon facilities are expected to start commercial operations next
year and by 2009, respectively.

No less than the law's principal author scored the Department of
Energy for not having a clear program of implementation, which saw
only a trickle of investments flow into the fledgling bio-fuels

Coscolluela warned that if local bio-ethanol production does not catch
up with demand, the country would have to import from other countries
which would defeat one of the law's objectives; that is, cutting down
on fuel import costs.

Escalation in farm prices

Even if a strong push is made for bio-fuels use, the Philippines may
see another risk in the form of an escalation in prices of prime
agricultural land over the long run.

Rick M. Santos, CB Richard Ellis Ltd. managing director, said there is
a big possibility that prices of farm land may go up as demand for
bio-fuels like
ethanol grows.

"You've seen [prices] of farmland in the US drive up because of
ethanol. The Philippines has a lot of agricultural land and China
needs a lot of food and fuel. It could be a positive upside," Santos

He however rules out any possible conflict among the industrial,
residential and agricultural sectors with regard to land use,
especially in the countryside.

"I see the things work hand-in-hand as you graduate from raw land to
agricultural to industrial," he said.

Liborio S. Cabanilla, University of the Philippines-Los Baños College
of Economics and Management dean, said the upward pressure on land
prices due to bio-fuel demand is an "over-reaction."

"What happened in the US is that they have planted corn [a source of
ethanol] in areas where it has not been planted before. In the
Philippines, the sugar plantations remain sugar plantations. It's just
that the end-product has changed. There is no land substitution so to
speak," the agricultural economist said.

Besides utilizing existing sugar plantations, other sources of
bio-fuel like cassava and jathropa do not require prime land.

Based on initial data gathered by Cabanilla, the plantation owners and
investors are looking for marginal areas like hillsides and other
unproductive land not used for growing food crops.

"If there is any impact on land prices, it would not be significant.

[Still], we are conducting further studies on this to verify [earlier
projections]," he said.

With the law's implementation in full swing, the government has a lot
to do to address the concerns plaguing its implementation. But time
may no longer be crucial if too much demand for too little oil again
throws the global economy into recession and sends the price of crude
plummeting. By then, bio-fuels would prove to be too expensive, and
its promised benefits too late.


[PBN] Pacific Islands look to coconut power


14 Sep, 2007, 0044 hrs IST, AGENCIES

MAJURO: The first thing you notice about a diesel engine running on
coconut oil is the smell. "It smells sweet. You can put your nose
right up to the exhaust," says Witon Barry, assistant manager of the
Tobolar Copra processing plant in the Marshall Islands capital of
Majuro. Smelling just like coconut biscuits straight out of the oven,
the exhaust is a big improvement on an old diesel engine belching
acrid black smoke.

All over the Pacific power authorities, private companies and
entrepreneurs have been experimenting with coconut oil as an
alternative to diesel fuel for vehicles, power generators and even

"The idea goes right the way back to Mr Rudolf Diesel. He invented the
combustion engine to use peanut oil," says Jerry Kramer, chief
executive of Pacific International, a company pioneering the use of
coconut oil in the Marshall Islands.

The use of coconut oil received a boost in the last couple of years as
oil prices hit record heights and coconut oil fell to around $550 a
ton in the volatile world commodity markets.

Coconut trees are found everywhere in the Pacific's tropical islands.
The dried white flesh, known as copra, from six to 10 coconuts
produces a litre of oil, making the substitution for expensive diesel
seem a no-brainer.

But ironically the growth in the use of biofuels worldwide has helped
push the price of crop oils higher and coconut oil now fetches nearly
1,000 dollars a ton.

"There is strong demand for vegetable oils, there is a huge demand in
the US and Europe," says Jan Cloin, the energy advisor at SOPAC, the
secretariat of the Pacific Islands Applied Geoscience Commission based
in Suva.

"The Pacific island countries could get into a situation where they
cannot afford to use the oil themselves and would profit more by
sending their oil to other countries." Kramer's company exports most
of the oil from the Tolobar mill it operates for the Marshall Islands
government and its coconut oil fuel projects have recently taken a
back seat. "At the peak we used 100% coconut oil in ships with 1,000
horsepower engines and all the way down to five horsepower
generators," he said. But he remains committed to the idea, especially
using coconut oil to generate electricity in remote islands, where
diesel is particularly expensive.

Coconut oil was used as a substitute for diesel in the Philippines
during World War II when diesel was scarce but it is only in recent
years the idea has taken off.

The rising cost of oil, worries that oil will run out and increasing
concerns about the environmental impact of fossil fuels have all
boosted attempts to find alternative energy sources. In the Marshall
Islands, Kramer has been experimenting for several years with trying
pure coconut oil in some of his vehicles, as well as heavy machinery
and even tug boats and a cargo ship.

Some modern diesel engines are less tolerant of pure coconut oil.
Another problem is that coconut oil starts to solidify below 25
degrees celsius — but that is not a problem on many tropical islands.

Kramer found carefully filtered coconut oil with excess moisture
removed worked perfectly in many diesel engines.

"With some of our trucks we run, we've been running on coconut oil for
years and we haven't had a problem after four or five years." But for
many engines, a blend with diesel worked best.

"We did blends anywhere from 10% to 90% with diesel and found the most
tolerance for all types of engines was a 50-50 blend."
Australian-born entrepreneur Tony Deamer has also been experimenting
in Vanuatu, running some vehicles from his own hire car and car
dealership on pure coconut oil.

He has also sold a blend of 80% coconut oil and 20% kerosene as a
diesel alternative under the Island Fuel brand.
Island Fuel has been on hold recently due to some equipment problems
but Deamer says it will be up and running again soon.
Experiments with power generators have also been successful. In
Vanuatu, electricity company UNELCO has been using diesel blended with
coconut oil to run a large four megawatt generator.

Deamer says they are gradually increasing the proportion of coconut
oil, which is 15% now, to see how the generator performs.
On Savaii island in Samoa, the electricity company has been running
one generator on a coconut oil blend with success.
Deamer says substituting coconut oil for diesel will boost the
declining copra industry.

"My motivation is partly trying to keep some money going overseas here
in the country instead, and keep some employment in rural areas," he
said. "I think it still has a future, I think we can make it happen."

Cloin says the economics of using coconut oil for fuel are marginal,
although the copra industry is already subsidised in many island
countries, making diesel substitution more viable.

Earlier posts of Pacific Biofuels can be found at:

[PBN] Wheat prices hit record-high levels according to FAO


Posted by Giles Clark, London

Monday, 08 October 2007

International wheat prices have increased sharply since June, hitting
record highs in September in response to tightening world supplies,
historically low levels of stocks and sustained demand, according to
FAO's latest rop Prospects and Food Situation report, issued last week
(5th October).

The combination of higher export prices and soaring freight rates is
pushing up domestic prices of bread and other basic food in importing
developing countries, hitting the group of Low-Income Food-Deficit
countries (LIFDCs) particularly hard and causing social unrest in some
areas, the report said.

The total cereal import bill of the LIFDCs is forecast to increase
considerably for the second consecutive year, reaching an all-time
high of US$28 billion in 2007/08, up roughly 14 percent from last
year's already high level. Overall, developing countries are likely to
spend a record US$52 billion on cereal imports, according to the

Maize prices are also well above last year's levels, despite the
bumper crop materializing this year, mainly reflecting continued
strong demand from the biofuel industry, the report said.

In the United States, the world's largest producer of maize, output is
forecast to increase 26 percent from 2006 to an all-time high.
According to the report, record maize harvests are also expected in
South America, with production in Brazil increasing by one-quarter
from last year's good level, and in Mexico, the largest producer in
Central America.

Cereal stocks – particularly wheat – at historic lows
"On current indications, this year's cereal harvest would only just
meet expected utilization levels in the coming year, which means that
stocks will not be replenished," said Paul Racionzer from FAO's Global
Information and Early Warning System. "We anticipate cereal stocks to
remain at very low levels for the foreseeable future."

The report calls the situation of wheat stocks "worrying". Sustained
demand amid insufficient increase in production this year, especially
among the major exporting countries, which are also among the leading
stock holders, is expected to result in at least a 14 million tonne
drawdown of world inventories to 143 million tonnes, the lowest in 25

Earlier posts of Pacific Biofuels can be found at:

Friday, October 5, 2007

[PBN] Brazil courting Jamaica as ethanol hub


published: Wednesday | September 19, 2007

John Myers Jr., Business Reporter

The ethanol plant operated by Pertrojam Ethanol Limited in partnership
with Brazil's Coimex.

Brazil's Petrobras is in talks with Petrojam on the possibility of using
the refinery's Kingston port as a hub for the distribution of ethanol to
other Caribbean and Central American countries.

Refinery boss Winston Watson said Petrojam was open to the partnership
with Petrobras, but noted that the discussions were still at the
preliminary stage.

Brazil's Ambassador Cezar Amaral told Wednesday Business that the
distribution hub was among the issues discussed by his country's
president, Luiz Inacio Lula da Silva during his state visit to Jamaica
last month.

The cooperation agreement between the two countries expires at the end
of September.

"They negotiated a new one that included cooperation for construction
and technology for the regasification of liquefied natural gas (LNG) and
also the proposal to PCJ to constitute here in Kingston for the
distribution of ethanol," said Amaral.

Cautious tone

Petroleum Corporation of Jamaica (PCJ), the parent company to Petrojam,
has also struck a cautious tone on the deal, though it has signalled
that it considers it a 'good idea'.

"The idea was introduced to us by Petrobras and this is something that
we will now have to get some further (details on) to see what volumes we
are talking about, what land (space) will be required," said PCJ group
managing director Dr Ruth Potopsingh.

"We need some more details. It is a good project idea, and I believe
that it is something that we could look forward to in the future."

Wednesday Business understands that the idea was first mooted about
three years ago, but was only put forward formally during Lula's visit
in August.

Biofuel hub viable

Ambassador Amaral said the biofuel hub was potentially viable given
Jamaica's proximity to the United States; existing infrastructure in the
form of a modern port and facilities at the Petrojam refinery; as well
as the local thrust into ethanol production.

He said that the rising price of oil on the international market — which
climbed to a new high above US$81 per barrel on Tuesday — would make
ethanol a cheape energy source for countries in the region.

Ethanol prices on the world market are running just above US$1.60 per
U.S. gallon.

"I think that the (market) potential is much bigger than the present. It
could be multiplied by 20 because the difference in price between
ethanol and oil is so immense," Amaral said.

"We consider Kingston a very strategic place, considering the broader
markets for the United States, Central America and the Caribbean."

Petrojam, which is government-owned, is also involved in ethanol
production and export.

It has an existing partnership with the Brazils' Coimex, through
Petrojam Ethanol Limited (PEL) to manufacture and sell ethanol to the
United States under the Caribbean Basin Economic Recovery Act which
allows Jamaica to export the biofuel duty free.

PEL produces 20 million gallons of ethanol per year on average — half
the plant's capacity — from feedstock supplied by Coimex.

Brazil is the world's largest producer of ethanol, outputting some 21
billion litres of fuel grade ethanol annually, which it hopes to double
to 44 billion litres by 2016.

Jamaica is also building up its sector, with the newest entrant being JB
Ethanol Limited, a subsidiary of poultry producers Jamaica Broilers
Group, whose 60-million plant at Port Esquivel was commissioned in July.

JB Ethanol, PEL and another player, Jamaica Ethanol Processing Limited
have a combined capacity of over 150 million gallons annually.

PEL has generated US$92.5 million ($6.29 billion) in sales from export
of 45.2 million gallons of ethanol since the processing facility was
established in 2004. The venture, according to its owners, has proven to
be profitable and there are plans to add another 60-million-gallon plant
to boost production capacity to about 100 million gallons annually.

Newcomer, JB Ethanol - which was officially opened by Brazil's President
Lula on August 9 - has already exported its first shipment to the US.

Another company, Global Energy Ventures Limited, has been granted a
permit to construct a new 60 million gallon plant at Port Esquivel.

Petrobras is among the top 20 largest oil companies in the world, and is
recognised for having some of the most advanced technologies in deep
water oil exploration and extraction.

According to 2002 figures, the Brazilian owned company generated
revenues in excess of US$22 billion annually, with daily crude oil
production reaching 1.53 million barrels and 44 million cubic metres of
natural gas.

Jamaica's participation in the sector is fairly recent, dating back to 2004.

With the new hub, Ambassador Amaral said the Kingston harbour would have
to be dredged to accommodate the huge tankers that are expected to sail
in and out of the port.

The deal would require Petrojam to upgrade its facilities, said Amaral.

Check for earlier Pacific Biofuel posts:

[PBN] Philippines: Jatropha: Too much hype on little known plant



I am getting a little nervous at the great amount of hype being poured
on jatropha by our government officials. I googled jatropha and it seems
the excitement over the bush is worldwide. But little is known about the
commercial possibilities of the plant because it had not yet been grown
and its nuts processed in a large scale basis.

The Philippine Star

I am getting a little nervous at the great amount of hype being poured
on jatropha by our government officials. I googled jatropha and it seems
the excitement over the bush is worldwide. But little is known about the
commercial possibilities of the plant because it had not yet been grown
and its nuts processed in a large scale basis.

I e-mailed an old associate who was head of our technical staff at
Petron when I was there during the 80s in an attempt to find out a
little more about the potentials of jatropha as an alternative fuel. He
confirmed the potentials of jatropha but cautioned that there are still
many issues to be resolved before it becomes an energy product of
commercial value as diesel fuel replacement.

Dodo Galindo should know. Now in retirement, he is still involved in
developing coco-diesel and during our time working together, he was the
technical guy on top of alcogas and the early attempts at coco-diesel.
Anyway, Dodo's comments about jatropha gained additional credibility for
me after I also came across the comments of a group of Los Baños
scientists on jatropha as published in a scientific journal.

Here's what Dodo had to say: "Firstly, it contains a high degree of
unsaturated components, which means, its oxidation stability is
relatively low. Additionally, because of the lack of current local
harvests in commercial quantity, reliable data such as average
production per hectare for different regions in the Philippines is not
yet available. The oil's performance after its conversion to biodiesel
is yet to be proven in long term tests and accepted by different engine
manufacturers. Even the Department of Energy announced it had "stopped
testing jatropha as feedstock for biofuels due to lack of fuel samples."

Dodo wrote me that "in summary, jatropha is a future energy product
worthy of consideration, but unless all the major issues like stability,
engine performance, effect on engine emissions, etc. are resolved, we
should not rush into incorporating the product into our energy mix.
Otherwise, it may just end up like our cocodiesel and ethanol programs
of the past and affect whatever good experience we have so far with our
current biodiesel program using coconut methyl ester."

The Los Baños scientists, Professors Ted Mendoza, Oscar Zamora and Joven
Lales faculty members of Crop Science, College of Agriculture, UP Los
Baños, on the other hand, point out that jatropha becomes a viable
source of biodiesel if diesel is retailed at P40 per liter; if the crop
has a high fruit yield of 36,000 kilogram per hectare (ha); if it has a
high rate of oil extraction (34 percent and 38 percent); and if
byproducts are included and provide 50-percent additional income from
the oil revenue.

Those are tough assumptions which, the scientists point out, may be
difficult to meet from what we know now. "Can we achieve a high yield of
36,000 kg/ha and high oil content (34 percent and 38 percent) under
Philippine conditions? No jatropha variety is grown in the Philippines
that yields 34 percent oil," the scientists say. "The current laboratory
oil extraction is in the range of 28 percent to 32 percent."

They surmise that at a low-yield level (12,000 kg/ha), jatropha becomes
profitable for farmers growing it if the diesel price increases to about
P140 per liter at a 30-percent rate of oil extraction (revenue is from
oil alone). And that estimate excludes processing and marketing costs.
Current estimates put the processing cost at P12/liter. Then, the price
of biodiesel from jatropha becomes P152/liter [P140 + P12].

And contrary to the impression being made, specially by Ate Glue in her
SONAs, that all it takes is for government to jumpstart the planting of
jatropha and the miracle product will be available in the market, the
scientists say "it takes five years before some considerable quantity of
jatropha seeds will be available throughout the country and 35 years
before a real high yielding hybrid can be developed."

The scientists think "three or five years after planting jatropha is too
short a time to expect commercialization. Are the processing plants
ready by that time?" Furthermore, they say there is a need to quickly
acquire the know-how "to accelerate the optimization of processing raw
oil into trans-esterified oil before it can be used as biodiesel oil,
and processing of byproducts (press cake and/or glycerol) into
high-priced products be acquired soon."

Anyway, the message of the scientists to those who may have been enticed
by government press releases to get in the jatropha bandwagon is for
them to review the numbers. In fact, even government should perhaps
review their numbers too and not get carried away by the fad-like
enthusiasm for the plant. According to the New York Times, "farmers in
India are already expressing frustration that after being encouraged to
plant huge swaths of the bush they have found no buyers for the seeds."

While it is right to invest some money in finding out more about the
plant, it is another thing altogether to throw money into it as if it is
a proven thing. As it is, government is ready to invest billions of
pesos in setting up plantations and processing plants probably without
realizing that the promise of jatropha is still to be proven anywhere in
the world. The folks at PNOC Alternative Fuels Corp. should crunch their
numbers well and proceed only with their eyes fully open to the
possibility that jatropha may not live up to the hype.

As with any alternative fuel, its economics versus petroleum must be
there before serious money is committed to its development. Hopefully,
jatropha lives up to its promise but hold the press releases and the
enthusiastic endorsement of the President in her SONAs until we know
more about it.

Check for earlier Pacific Biofuel posts: