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Better Sugarcane Initiative |
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South China's Guangxi Zhuang Autonomous Region became the 10th Chinese locality to have replaced gasoline and diesel oil with bioethanol fuel on Tuesday out of environmental and energy efficiency concerns, according to Xinhua news agency.
Petrol stations in all the 14 cities of Guangxi began to sell bioethanol fuel on Tuesday and in two weeks, traditional petrol and diesel oil will be phased out, said Fu Jian, an official in charge of transport with the regional government.
Fu said about 350,000 motor vehicles and more than 3 million motorbikes will have their tanks cleaned up for the fuel change.
Presently nine other Chinese provinces are using ethanol fuel including Jilin, Liaoning and Heilongjiang provinces in the northeast, Henan and Hebei provinces in the north, Anhui, Shandong and Jiangsu provinces in the east and the central Hubei Province.
Guangxi is the first Chinese locality to commercially produce ethanol fuel with cassava instead of grain. The region produces 7.8 million tonnes of cassava a year, more than 60% of China's total.
It is home to China's first bioethanol fuel production base that went into operation in December in the coastal city of Beihai. The base is designed to produce 200,000 tonnes of biofuel annually out of about 1.5 million tonnes of cassava.
China banned the use of grain for ethanol production last year to ensure sufficient food supplies, and biofuel manufacturers have since turned to sweet potatoes, sorghum and straw stalks instead.
Ethanol fuel is believed to help ease China's energy supply bottleneck. Customs statistics say China's net crude oil import climbed at least 12 percent year on year to reach 160 million tonnes in 2007, and the country's reliance on crude oil import is at least 46%.
Chinese officials said the country's ethanol fuel sales will reach 30 million tonnes in 2010 to make up half of the total gasoline supplies.
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Australia's sugar industry is trying to transition into electricity co-generation but is having problems getting off the ground, according to Australia's Grafton Daily Examiner newspaper.
The New South Wales Sugar Milling Co-operative and the State Government-owned Delta Electricity have joined for the A$200 million (US$181.9 million) project that will convert sugar cane to electricity at the co-op's Broadwater and Condong mills from June.
The co-op comprises 600 cane growers from Grafton to the Queensland border with New South Wales.
Under the plan, waste from sugar cane crops, previously burnt-off, will be used to generate enough electricity to power 20,000-30,000 North Coast homes. But some growers are concerned the transition to renewable energy production has been mismanaged.
Vince Castle, president of the New South Wales Canegrowers Association, said he understood the anxiety some farmers felt about the plan, but asked them to give the project time to work efficiently. "It is understandable how farmers feel," he said. "This is the first project of its type. When we didn't get away to a good start, some growers became apprehensive," he said. "However, we are yet to have a fair run at seeing how the project operates over a period of time.
Empire Vale grower Arthur Felsch said co-generating electricity and sugar production was a great idea, but not enough research was carried out before the co-op decided to go ahead with the plan. Consequently, Felsch said, it had become a financial disaster for cane growers. He cites a 2006 Australian sugar industry publication stating the Queensland Maryborough sugar mill's top priority in 2004/05 for diversification was co-generation. A year's research by a team including CSIRO officers found the costs were far greater than the potential financial gains from a co-generation venture.
The project did not proceed.
Increased costs associated with the co-generation project come from upgrading equipment to allow the entire cane crop to be used.
NSW Sugar CEO Greg Messiter is confident growers will ultimately benefit from the changes.
"The industry is diversifying its income into sugar refining and renewable electricity with a view to making the industry more economically viable and also more environmentally viable," he said.
"The vast majority of our farmers would agree we need two things to become viable: to diversify our income and to stop cane burning. We've proven through trials that, yes, there were some difficulties, but it can be done in the majority of cases. We're trying to add value by paying for fibre and we believe the price paid for fibre will more than cover the additional cost of whole cane harvesting," he said.
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AGRANA's bioethanol plant in Pischelsdorf / Lower Austria will be started up on schedule in May with the first bioethanol produced on June 7, 2008, according to Dow Jones.
Following pilot production runs in the fourth quarter of 2007, the commissioning of the plant was suspended due to the excessively high wheat prices prevailing at the time.
The plant will operate primarily on the basis of maize. The Pischelsdorf bioethanol plant, in which AGRANA holds a 74.9% interest, the remaining 25.1% being held by Austrian sugarbeet growers, was constructed so as to allow the flexible use of raw materials.
In recent months, a series of contracts have been concluded as the basis for supplying the plant with feedstock. Price quotations for maize of the new crop 2008 are currently at a level which makes it commercially viable to operate the Pischelsdorf facility. Furthermore, typical maize harvests in Central Europe are generally sufficient to ensure a surplus. The suspension of the 10% set-aside scheme for 2008 by the EU Commission, combined with declining sugarbeet production as a result of the review of the EU sugar regime, will lead to an increase in available arable land in Europe over the coming months.
The sale of the premium quality animal feed Actiprot, a by-product of bioethanol production, will also contribute to making the Pischelsdorf plant more efficient in commercial terms. This protein-based feed can serve as a replacement for expensive imports of soya following recent increases in soya prices on global markets. Parallel rises in the price of sugar on global markets are also expected to ultimately trigger higher prices for bioethanol.
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The Indian Oil Corporation is conducting feasibility study to become an ethanol producer rather than being a buyer, according to RTT News.
The company is foreseeing both organic and inorganic prospects for expanding its business in the biofuel category.
The IOC's Director for Planning and Business Development, B.M.Bansal said that the company plans to get advise from experts on whether to purchase sick sugar mills or to set up new projects.
Presently, IOC is buying ethanol from other suppliers to sell 5% ethanol-blended petrol. The government made 5% blending of ethanol mandatory in notified states and union territories and 10% blending is become mandatory from October this year.
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Despite recent controversies over biofuels, the production boom in the US is having the effect of lowering gasoline prices at the pump, according to Reuters.
The ethanol boom comes just as US oil refiners, which had been struggling for years to keep up with rising fuel demand in the world's largest energy consumer, begin to catch up by adding surplus capacity.
Together, these factors could help reverse gasoline supply tightness that has driven fuel prices higher, particularly during the petroleum rally of the last five years.
"Ethanol blending could help ease US refining bottlenecks and that could be ultimately reflected in lower prices at the pump," said Eric Wittenauer, an analyst at AG Edwards in St. Louis.
Monthly US ethanol output through November 2007, the last data available, averaged nearly 12.7 million barrels, or 64% higher than average monthly production in 2005, according to the Energy Information Administration, the statistics arm of the US Department of Energy.
Ethanol production this year is expected to rise 130,000 barrels per day (bpd) -- or the amount of gasoline a medium-sized oil refinery puts out -- to 550,000 bpd, according to the EIA.
And US imports of sugar-based ethanol, a fuel much lower in carbon emissions, from Brazil and producers in the Caribbean and Central America, increased 300 per cent from 2005 to 2006, the EIA said.
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Bulgaria's biofuel producers say the cabinet remains inactive and delays legislative changes that would bring life to the market, according to the Sofia News Agency.
The government does not have the will to cope with the problems, which are mainly legislative, thus making investments in biofuel production futile, producers declared Tuesday at a discussion organised by the National Biofuels Association in Bulgaria.
According to the current biofuel law, retailers are required to mix mineral fuels with 5% biofuel but there is no institution to control the implementation, producers said, adding that this prevents them to sell fuel at the local market.
Nearly one-third of Bulgaria's agricultural lands are currently not cultivated but the government refuses to stimulate growing energy crops for biofuels, producers said.
Local company Petrol and Russian Lukoil are the only two retailers offering biofuels at their stations across the country, experts said. Other major players such as Shell, OMV and Eko Elda reportedly do not offer biofuels due to the lack of quality certification for biofuels in Bulgaria.
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Royal Dutch Shell PLC said it was developing sugar biofuels suitable for standard car engines with a US fuel technology company, in its latest move to bring new energies closer to mass consumption, according to Dow Jones.
Shell said it had started a joint research and development effort with Virent Energy Systems, Inc., a Madison, Wisconsin, company to convert plant sugars directly into gasoline and gasoline blend components, rather than ethanol.
It said Virent's technology uses catalysts to convert sugars into hydrocarbon molecules like those produced at a petroleum refinery, instead of fermenting and distilling them. The new molecules produced as a result can be blended seamlessly to make conventional gasoline.
The companies have so far collaborated for one year on the research. The news comes after last year Shell announced it was teaming up with US biotech company HR Biopetroleum to grow marine algae and produce vegetable oil for conversion into biofuel in a Hawaii-based project.
It also signed a deal with another US company, Codexis Inc. to develop new "super enzymes" that can convert a range of raw materials into high-performance fuels. Shell is diversifying into biofuels as crude prices - which jumped over US$100 a barrel this year - squeeze refining margins and hurt its profits.
The oil giant says biofuels will represent 5% to 7% of global transport fuel demand by 2030 compared with 1% now.
But Shell said the sugars can be sourced from non-food sources like maize stover, switch grass, wheat straw and sugarcane pulp.
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The United States will need to import more sugarcane-based ethanol to meet renewable energy mandates, a top US official said, but he stopped short of recommending that a controversial ethanol tariff be lifted, according to Reuters.
"If our goal is to reduce hydrocarbon usage and to increase ethanol usage, that is going to happen through cane-based production," Tom Shannon, the top US official for Latin America, said in the Reuters Latin America Investment Summit on Friday.
"Even with all the production happening in the United States, we won't be able to fill our demands, so it's going to require the importation of biofuels," he said.
But Shannon, the assistant secretary of state for Western Hemisphere affairs, stopped short of saying the tariff -- 54 cents on every gallon of imported ethanol -- should be abandoned when it expires at the end of the year.
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China’s National Development and Reform Commission has endorsed proposed plans by five provinces to build plants using sweet potatoes, sweet sorghum or cassava, according to Reuters.
The announcement did not approve any specific plants, but invited the provinces of Hubei, Jiangsu, Jiangxi and Hebei, as well as Chongqing, to finalize plans for such projects and make a formal proposal.
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Staple food prices will rise for some years, but should eventually fall to historical averages as harvests increase, according to Reuters.
Stephane Delodder, managing partner of Netherlands-based consultancy iFuel Corporate Advisory, told a conference the problem of rising food prices would persist for some years.
Market forces should eventually help rebalance supply and demand, especially in markets which are not highly regulated, but this could take some time.
"(It could be) a few years at most before the situation returns to normal," Delodder said.
He said grains and oilseed futures markets, which have corrected down recently after meteoric rises, may already be signaling that supply will rise as farmers raise plantings.
Delodder said that as farmers planted more crops in response to rising prices, prices were likely to revert eventually to their historical mean levels. "Prices tend to go back to their long-term averages."
Victor Deike, biofuels development manager with Belgium-based Novus Europe, an animal nutrition company, agreed. "Big harvests would put less pressure on prices."
But he said food production faced structural problems and climate change could drag on food production, adding to upward price pressure.
"If there's no water, and crops are not irrigated, yields are disastrous," he said.
Jean-Marc Jossart, secretary-general of the Belgium-based European Biomass Association (AEBIOM), said opinion was divided over whether second-generation biofuels could take the pressure off food prices.
"Second-generation biofuels might reduce the competition for food," he said. But he said crops such as miscanthus could also reduce the availability of land that could be used for food.
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India is readying a national biofuel policy, which aims to set a target of meeting about 10% of total transport fuel with biofuels by 2017, according to the Times of India newspaper.
The policy is open to changes, but estimates suggest that 12 million hectares of land would have to be brought under biofuel crops to meet the target.
A Group of Ministers, headed by agriculture minister Sharad Pawar, is expected to finalise the policy by the end of May after being under discussion for almost a year.
Unlike the US and southeast Asian countries, the policy will push for only non-edible crops to be used for manufacturing biofuels. With the diversion of corn by US and palm in southeast Asia being partially blamed for a global food crisis, the stipulation on using non-edible plants is also a devise to deflect criticism of encouraging biofuels.
India already has 600,00 hectares under jatropha plantations in AP, Rajasthan, MP and Chhattisgarh, which could provide 03-0.5 billion litres of biodiesel. The policy would also create a National Biofuel Board to spearhead the development of these fuels.
A subsidy for biofuel growers could be a part of the policy, sources said. The policy also contemplates a subsidy structure to keep biofuels at parity with other fuels by adjusting excise and VAT. The government is also keen on keeping the biofuel sector completely domestic — it will not be open to export and import which is seen as a measure to protect farmers from volatile international oil markets.
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