Biodiesel’s performance is similar to that of conventional diesel in automobile engines, while emitting 85-99% less GHGs, depending on the feedstock. 

‘This is a milestone day for home grown renewable biodiesel in Canada.

Biodiesel is a better way to drive and an innovative way to fuel our economy,’ states Gordon Quaiattini, president of the Canadian Renewable Fuels Association (CRFA). ‘Biodiesel is a cleaner alternative to conventional diesel. It will help moderate price by adding to all our fuel supply, create new jobs and benefit farmers and drivers alike.’ 

To date Canadian biofuels production plants have generated around $3 billion (€2.2 billion) in economic activity. 

‘Today’s announcement sets the stage for Canada to become a world leader in advanced biofuels,’ Quaiattini continues. ‘ The production and the commercialisation of next generation advanced biofuels using state-of-the-art technology and a wide variety of feedstocks is underway. Thanks to the entrepreneurial spirit of our biofuel pioneers and a stable policy environment the future is now for advanced biofuels in Canada.’

SOURCE: BIOFUELS NEWS

As Indonesia is today the world’s largest producer of crude palm oil (CPO) — a desirable feedstock for biodiesel production — it has the potential to grow into a world biodiesel leader and a model for plantation sustainability.

Biodiesel has the potential to become a significant industry sector in Indonesia, supported by two of its most valuable assets: its oil palm plantations, and more importantly, its people. Indonesia currently produces approximately 20 million tons of CPO per year from 7 million hectares of oil palm plantation, of which approximately 80 percent  is exported. 

In terms of revenue, CPO exports provide Indonesia with its biggest non-petroleum source of export income, and this is expected to grow in the future. 

Beyond revenue generation, oil palm plantations also currently provide a livelihood for more than three million Indonesian families.  This, too, is also expected to grow in the future.

By 2015, the area of Indonesian oil palm is expected to increase to 10 million hectares, of which three million hectares have already been approved. 

Studies have shown that the total amount of land that is suitable for growing oil palms, but which has not yet been approved, may be as high as 44 million hectares. 

Using conservative yield estimates, this area of oil palm plantation would produce 145 billion litres per year of biodiesel, or 10 percent  of current fossil diesel demand.  Beyond this significant biodiesel potential is the possibility of providing income to an additional 19 million Indonesian families. 

While these 44 million hectares are considered suitable for oil palm plantations, it is imperative to consider the long-term environmental consequences — including the overall, or life-cycle carbon dioxide emissions — before pursuing any development.

Conscious of the potential environmental impact of oil palm plantation development, new crops which grow on marginal land are being investigated. This greatly reduces the required land-clearing and concomitant “carbon dioxide debt” from the forest destruction. 

One example of such a crop is Jatropha, which has been studied extensively by the Indonesian Center for Estate Crops Research and Development.  Recent estimates from the Indonesian National Team for Biofuel Development suggest that as much as 15 million hectares of land in Indonesia are suitable for Jatropha plantations. 

With conservative yield estimates, this land would produce 40 billion litres per year of biodiesel.

From a feedstock perspective, Indonesia certainly has the potential to become a world biodiesel hub, but there are two additional elements that need to be in place — sufficient biodiesel processing capacity and adequate demand, either domestically or internationally.

As with any other investment, biodiesel processing capacity will only develop if it results in a profitable business.  With the spot price of CPO close to US$700 /t, it is not currently economical to produce biodiesel, explaining the large proportion of idle capacity in Indonesia’s current biodiesel production capacity of nearly 3 billion litres per year.

Feedstock cost represents the majority of biodiesel production costs and is the only lever for affecting significantly the profitability of biodiesel production. Securing feedstock supply contracts is an option to lower feedstock cost but prices will still be subject to market volatility, and will also include some margin for the plantation.

Even with a profitable biodiesel business in place, sufficient demand must exist for any biodiesel that is produced. Current demand is driven largely by government biofuel blending mandates, which are currently set at 2.5 percent.  This demand will increase only if the government accelerates the biodiesel blending mandate, or if crude oil prices increase relative to CPO prices, which is unlikely given the recent high correlation between the two.

A third way to accelerate domestic short- to mid-term biodiesel demand while also increasing biodiesel export demand, however, does exist.  Recent advances in biodiesel processing technology have made it possible to use CPO to produce so-called “green diesel” which has superior fuel properties compared to both biodiesel and fossil diesel.  This technology uses a hydrogenation process, similar to that found in modern oil refineries, to upgrade vegetable oil to green diesel.

The superior fuel properties of green diesel means that it can be used as a blending agent to upgrade the quality of the fossil diesel pool at a traditional refinery, and this allows for the possibility of increasing the overall refinery margins in some cases.  Domestically, this means that green diesel can be used in large quantities in place of fossil diesel, thus reducing Indonesia’s dependence on fossil diesel imports.  The implementation of increasingly stringent Euro IV and Euro V fuel specifications in Europe also increases the possibility for the export of green diesel as a blending agent.

While Indonesia has great potential to become a major world player in biodiesel, it is unlikely to be fulfilled unless sustainable plantation practices are followed.  The location where palm plantations are established and the manner in which new palm plantation land is cleared, have a large effect on life-cycle carbon dioxide emissions.

Indonesia is in a strong position to further develop its already significant CPO production into a much larger and more profitable biodiesel industry.

The combination of a rich natural resource base, a dedicated and knowledgeable people and recent advances in biodiesel technology, combine to form a strong base on which to develop Indonesia as a major world player in biodiesel. 

Dr. Bernd Waltermann is a BCG senior partner and managing director and Dr. Henning Streubel is a BCG partner and managing director. Both are based in Southeast Asia.

Source: The Jakarta Post

Turbulence in biofuels, according to the author, is no stranger to the international crisis and requires to lay the foundation to diversify the energy matrix, to grow in a rational manner, at sustained long-term rates, and without damaging the environment.

About a year ago, the nominal prices of soybeans, corn and wheat on international markets reach historic highs of USD600, USD300 and USD500 per tonne and the cost of food derived from these primary products increased at a staggering pace. At the same time, the barrel of crude oil was breaking historic threshold reaching USD149.-. This significant event took countless analysts to predict a world with crude oil at USD 200 a barrel.

The high prices of oilseeds, grains and petroleum, which were the largest in history in real terms, had immediate repercussions on the entire agro-production chain, increasing the costs of production, transport, distribution and consumer prices of food.

Not many analysts and recognized international organizations foresee a food crisis and attributed to the production of biofuels such increase in prices and a potential food crisis worldwide. Meanwhile, it was argued that Argentina, one of the world’s major food producer, either by internal policy or barriers to trade, was unable to increase the exportable supply of grains and food that would have otherwise helped to alleviate this “potential food crisis”.

The origins and causes of the crisis have left uncovered that the prices of grain and oilseed were mainly influenced by the high prices of oil and its derivatives, due to the productive dependence than those have on these, but at the same time, these commodities and particularly oil (or derivatives) were the reflection of a speculative bubble of unknown dimensions fueled by the abundant global liquidity, excessive transfer of risk in a context of low interest rates, the creation of sophisticated instruments for their coverage, not regulations or inadequate supervision of certain actors in the financial and commodities markets and the belief that economic cycles were a thing of the past.

This bubble was in correlation with a cheap dollar, validating the belief that expensive oil and food increasingly scarce had come to stay. Of course, one can not ignore that the Chinese eat more soy, that supply has grown less than the demand in specific cases and that climatic factors have affected agricultural production in different areas of the world. However, it has been clearly shown that biofuels in the ongoing development of its production, were only marginally affected in most cases. The dynamics of prices of primary products and commodities and, more importantly, the cost of oil and their derivatives, together with structural factors of supply and demand, are the drivers of these prices.

There has been discussion about the costs and benefits of producing biofuels. Reason indicates that the private and social benefits of such fuel is clearly positive. And its production can be sustainable in an environmental viewpoint, strengthening agricultural value chains, which generate more foreign exchange by exports, which reduce the energy dependency of fossil fuels (Brazil) in its overall energy balance is positive not necessarily diminish the food supply. However, if it is granted that biofuels entails net benefits to society as a whole, what should be the premisses and bases for a policy that favors the development of the sector in Argentina, with clear comparative advantages?

A sectoral policy must coordinate very well action between areas of state to avoid overlapping in the allocation of public resources and to recognize these factors are assumed: 1) Biofuels can not replace fossil fuels, but in the margin. 2) The development of the industry can not be subject to the vagaries of oil prices, as the experience of Brazilian long-term shows. 3) The world, the EU in particular, will be importers of biofuels in a few years and Argentina could provide large volumes of biodiesel (Europe to tariff subsidized exports by the U.S.). 4) The internal market must be served and promoted by improving the law 26,093 to to reach a development like Brazil. 5) The investments are capital intensive and require predictability as any investment, from any source. Again, improving the regulatory framework is indispensable.

6) The retentions over the exports of biofuels should have variable aliquots, but now, back to levels prior to 2008 (5% to 20% today). 7) SMEs should have a place in the chain, encouraging them to form partnerships to obtain leading-edge technology and overcome the typical problems of scale. 8-We must invest in the long term by promoting scientific and technical research for the development in the sector, in new technologies like crop improvement to diversify the sources of raw materials. 9) Channels should be created for long-term financing at competitive conditions, as the BNDES in Brazil does. 10) The expansion of agricultural zones should be planned and cultural practices monitored, to be sustainable on technical, economic, environmental and social.

Today’s biofuel industry sector is going through a period of turbulence and is not alien to the context of international crisis. Failure to provide the basis for achieving diversification of the energy matrix will make impossible to grow in a rational and sustained long-term rates, while our environment will suffer serious damage.

Claudio Molina. Executive Director of the Argentine Association of Biofuels and Hydrogen.

Source: Clarín Rural / Diario Clarín

It seeks to generate 4.500 employments in Castile and León.Â

It wants to achieve energy and raw material sales of 600 and 400M€ per year. Ical/ Valladolid.

The Bioenergy Plan of Castile and León 2008-2020 foresees investments for the value of 1.300 million Euro, to generate 4.500 employments and to reach at the end of the period an annual commercialization of raw materials for the generation of this type of energy of 400 millions and the sale of 600 millions per year of finished products (electricity, heat and biofuel).

The document establishes that the plan, next to other national and European policies, will mobilize investments of 700 millions in electric generation plants, 300 millions for the biocarburants production with advanced technology, 50 for pellets factories (solid bioFUEL starting from biomass) and 250 millions in domestic boilers.Â

The concrete challenges are in valorising biomass equivalent to 2.000 ktep (1.000 equivalent tons of petroleum); reaching an installed electric power of 250 megawatts, supplying with electricity to 450.000 homes; providing heating to 250.000 people, and fulfilling the commitment of the EU for biocarburants, being able to substitute 10% of the fossil fuel used in transport, by others of renewable origin.Â

Their challenge, to reach an installed electric power of 250 megawatts to supply 450.000 homesÂ
In this sense, the program hopes to have enough forest resource offers to supply the thermal demand of 80.000 houses, the starting up of big scale generating plants, to incorporate the bioenergy to the electricity generation structure and to end up producing 200.000 tons of pellets per year with regional resources that will substitute nearly 86.000 annual tons of gasoil for heating.Â

For type of used biomass, the plan specifies that 1.100 ktep should be reached with agricultural waste, 400 with the forest ones, 320 with the industrial ones, 100 with the livestock ones, and 80 with the urban ones.Â

In tons of annual production this is translated into 3,25 million tons of agricultural biomass, 2,4 millions of livestock, 1,75 millions forests, an industrials million and 600.000 urban tons.Â

These data suppose that hardly the 12,6% of the potential for the bioenergy in Castile and León that it can generate 15.800 ktep will be reached (8.750 agricultural, 5.500 forest, 700 livestock, 650 industrials, and 200 urban).Â

“The bioenergy is presented in Castile and León as a great energy alternative thanks to the potential with which the Community counts with”, points out the text, where it is determined that “at the moment only 25% of the environmentally sustainable is used in forest biomass (65% in the EU).”Â

The Bioenergy Plan of Castile and León designs a strategy with more than 60 concrete measures in terms and budget, organized in eight programs and diverse performance lines.Â

The document has been elaborated with the participation of the Consejería de Medio Ambiente, the Ente Regional de la Energía (ERE) and the Instituto Tecnológico Agrario de Castilla y León (ITACyL), next to 105 entities related with the bioenergy sector.

Source: El Mundo/España/Spain