SABLs gave away $23 billion in carbon trading rights

HAMISH MCDONALD | Sydney Morning Herald

THE FORMER SOMARE GOVERNMENT in Papua New Guinea introduced a controversial concession that allegedly accelerated deforestation of its tropical forests and gave away a potential $23 billion in carbon-trading rights to foreign interests, according to a Greenpeace report released yesterday.

The political time-bomb that awaits PNG's new government details how a new type of concession introduced by the Somare government in 2003 called Special Agricultural and Business Leases has hastened the deforestation of the country.

Immediately after he ousted predecessor Sir Michael Somare from the prime ministership last August, Peter O'Neill, initiated a commission of inquiry into controversial forestry concessions granted over the previous decade when Sir Michael held power.

The commission's report was completed in May and will be tabled in the new parliament. It is believed to include damning criticisms of the granting of a new form of lease for more than 5 million hectares of forest owned by locals under traditional title.

With results of the recent election expected this week, Mr O'Neill is almost certain to lead the new government, but with Sir Michael and his party members as part of the governing coalition.

The Greenpeace report says that since 2003, 72 ''special'' leases have been granted, in many cases to Malaysian and other foreign logging companies in alliance with dummy landowner companies or cooperatives.

PNG log exports grew almost 20% in 2011 due almost entirely to logging within these special leases, Greenpeace said in the report, entitled Up for Grabs.

The conversion to palm oil plantation of the cleared land is increasing the felling rate. In many cases, loggers pay for forestry and other officials to carry out compliance inspections.

''In one case, they even paid police to intimidate and brutalise landowner opposition to their land being stolen,'' Greenpeace said.

The group has obtained expert analysis saying that the forests covered by the leases contain about 12% of the nearly 7 billion tonnes of above-ground carbon stored in Papua New Guinea's forests.

As well as selling off forests and land for little return to government revenue or local landowner income, the Somare government gave away the potentially more lucrative sale of 630 million tonnes of carbon rights, worth up to $23 billion.

Australia's Algae.tech latest

Investor Update 7 August 2012 ALGAE.TEC ANNOUNCES COMMISSIONING OF ADVANCED ALGAE TO BIOFUELS FACILITY Nowra, New South Wales, Australia - The Algae.Tec advanced engineered algae to biofuels facility Shoalhaven One was officially opened last week by the New South Wales Minister for Resources and Energy the Honourable Chris Hartcher, MP. (See Algae.Tecwebsite for links to all news reports.)  Click to view the ABV TV News Report: Resources and Energy Minister Hartcher and Algae.tec Exec. Chairman Roger Stroud at the Launch. A VIP crowd including executives from the University of Wollongong, the Manildra Group, the renewable energy investment community, shareholders and coal and biofuels association representatives attended the official ceremony at Nowra south of Sydney. Shoahaven One commissioned. Click the image for the full report in The Australian/Wall Street Journal. Algae.Tec (ASX:AEB, FWB:GZA:GR, OTCQX :ALGXY) is an advanced algae to biofuels company with a high-yield, enclosed and scalable algae growth and harvesting system. The showcase facility is connected into the Manildra Group waste carbon dioxide, which is used in the algae growth process. To officially commission the facility, Minister Hartcher activated the hi-tech lighting system that delivers the Algae.Tec super yield capabilities. Roger Stroud with Dr Pia Winberg from Wollongong University who has been closely involved in Shoalhaven One. Click image for full report from South Coast Register. More images available here.  Algae.Tec Executive Chairman Roger Stroud said Algae.Tec offers NSW and Australia energy security at a time when traditional fossil fuel companies are leaving the local market. "Algae.Tec offers the promise of home grown transport fuels (aviation and diesel), which is the number one energy security priority for countries like the USA and increasingly Australia." Algae.Tec announced that leading inspection, verification, testing and certification services company SGS will now undertake the third party yield validation process. Algae.Tec has recently recruited biofuels and aviation fuels specialist engineer Colin McGregor as General Manager Project Operations. Algae.Tec is working with Lufthansa and has projects with Holcim Lanka, joint venture discussions in China, and a manufacturing base in Atlanta, Georgia (USA). The Company is also in talks with relevant firms in NSW, Brazil and the United States.

Is the Renewable Fuels Standard Withering on a Vine?: a special report on next-gen biofuels

Jim Lane | August 3, 2012

In North Carolina, Raymond James analyst Pavel Molchanov published his most extensive analysis on next-gen biofuels in the past year. Titled “Is the Renewable Fuels Standard Withering on a Vine?,” the report looks at declining U.S. oil demand, surging liquids production from onshore shale plays, and a thesis that the is moving towards oil independence by 2020.

“Whereas there is inherent uncertainty in forecasts for the rig count and well productivity, Gen2 biofuel production – at least in theory – should be set in stone,” Molchanov writes. “This is because of the Renewable Fuels Standard (RFS), passed in 2007 and extending through 2022.  However, as we detail today, the RFS has become virtually irrelevant when it comes to providing visibility on scale-up of Gen2 biofuels, particularly cellulosic biofuels.  Due to a combination of financing constraints and (to a lesser extent) technical hurdles, the industry is far behind on meeting its targets – and getting further behind by the year.”

“The good news is that there are signs of progress as a wide variety of Gen2 biofuels approach commercialization, and companies start to “graduate” from the pre-revenue stage to commercial operations.  Still, it is difficult to avoid the conclusion that the RFS has failed in stimulating the market forces required to bring online the envisioned Gen2 volumes over the next decade.”

The complete Molchanov analysis, which incorporates analysis based on the latest release of the Advanced Biofuels Project Database, is available here.

Advanced biofuels, chemicals capacity to reach 5.89B gallons by 2017

Jim Lane | July 27, 2012

Advanced Biofuels & Chemicals Project Database; 278 projects now tracked; 157 project updates, 29 countries in the July 2012 release; free download.

In Florida, Biofuels Digest is reporting that global advanced biofuels and renewable chemicals capacity will reach 5.89 billion gallons by 2017, up from 5.11 billion gallons by 2016 reported in the November 2011 release, 4.37 billion reported in May, and 3.95 billion gallons reported in January, based on company announcements to date and Digest estimates.

Today, the Digest released the latest version of its free Advanced Biofuels Project Database, which tracks advanced biofuels and renewable chemicals capacity for the 2011-2017 period. Previously the Database tracked projects through 2016.

Both pure-play biofuels and renewable chemicals projects are include, plus integrated biorefineries that are capable of producing food, feed, fiber, fuels and chemicals.

The overall Database is available free to the 49,000 registered subscribers to the Digest’s online publications, and the download links are contained in the daily Biofuels Digest and 3X weekly BioBased Digest newsletters.

Key projects and capacities

The database now tracks 278 advanced biofuels and biomaterials projects, up from 207 in November 2011 and 128 in May 2011.

The database includes the project capacity, location, feedstock, product(s), processing technology and project notes.

Overall, the compiled data indicates that advanced industrial biotech capacity will reach 1.15 billion US gallons by in 2012, 1.55 billion in 2013, 2.54 billion by 2013, 4.15 billion by 2015, 5.50 billion by 2016 and 5.89 billion by 2017.

This compares to 1.21 billion gallons in 2012, 2.15 billion by 2013, 3.24 billion by 2014, and 5.11 billion by 2015.

The May 2011 release showed a projected 1.577 billion gallons by 2012, 2.574 billion by 2013, and 3.283 billion gallons by 2014 in the May projection.

Enhanced database released in September 2012

An enhanced edition of the database will be released in September 2012 with enhanced project details, including key personnel, cost and margin analyses, strategic and supplier partners, financing and risk analysis. This release will be available to the 1,000 members of the Digest’s TAKEOFF community; delegates to the upcoming Advanced Biofuels Markets in San Francisco will receive a complimentary 12-month membership in TAKEOFF.

The next release of the overall Advanced Biofuels Project database is scheduled for December 2012, and will remain free to Biofuels Digest newsletter subscribers, which is available free via BiofuelsDigest.com.

154 project updates; projects in 29 countries

The new database includes updates on 154 new projects, and includes projects in 9 countries, including Australia, Austria, Brazil, Chile, China, Denmark, Germany, Norway, Sweden and the US.

Project timelines and capacities have been revised for Abengoa, ALgae.Tec, Algenol. Amyris, Beta Renewables, BioAmber, Blue Sugars, Butamax, Coskata, Dupont, Enerkem, Genomatica, Gevo, Green Biologics, Joule, KiOR, LanzaTech, Myriant, POET-DSM, Rentech, Solazyme, Solaena Fuels, Sundrop, TerVIva, Virdia and ZeaChem, among many others.

In adding projected capacities through 2017, the Digest produced estimated project development timelines based on known partners and capacity goals. In particular, the estimates for companies with more than 4 commercial projects through 2017, incuding Gevo, Butamax, Solazyme, and POET-DSM among others, are subject to partner agreements and project announcements that will come at a later date; and should be properly viewed as Digest estimates based on broad company targets and/or sector growth; actual project timelines, locations and volumes are subject to market forces.

More about the Database

The database tracks what are broadly referred to as “next-generation” technologies and feedstocks; the production of biofuels using traditional technologies, and traditional crops such as cane, corn, and soybeans is not tracked here, even though some of these fuels (such as Brazilian sugarcane ethanol and most forms of biodiesel) qualify as “advanced biofuels” under EPA rules that govern the US Renewable Fuel Standard.

“Advanced, next-gen biofuels are now on track to become a $20 billion global business by 2017,” noted Biofuels Digest editor & publisher Jim Lane, who complies the database. “However, let’s focus on the positive trend, while exhibiting caution on the numbers, given the great deal of policy and financial uncertainty.”

Lane noted the emergence of the strategic investors as drivers of the sharp growth rates in the sector. “It is worth noting that giant companies are backing these projects, in addition to the start-ups and venture-backed firms that have been in the game for several years.” Lane said.

BP, Shell, Total, Chevron, Petrobras, Petronas, Marathon, DuPont, Dow, BASF, Bao Steel, Roquette, PTT Chemical, FHR, Valero, Waste Management, and INEOS are among those investing in the commercialization of advanced industrial biotechnology, as well as airline giants such as British Airways and Qantas who are seeking alternative sources of fuel.

Maple Energy brings 37MW ethanol and electricity power plant project online in Peru

24 July 2012

Maple Energy, an integrated energy company with assets in Peru, has announced that its Ethanol Plant is now complete and producing both ethanol and electricity.

Commercial operation of the US$280 million 37MW power plant, located in the Piura Region on the north coast of Peru, had originally been planned for 2011, but was delayed to this year due to a dispute with third-party providers. A dispute with one third-party provide is still ongoing, but the plant has finally been completed and is generating electricity, Maple said.

The company expects to gradually increase the amount of electricity produced during the third quarter of 2012 - eventually providing sufficient power to satisfy the requirements of the ethanol project, while enabling Maple to begin selling excess electricity production to the national power grid by the end of the third quarter of 2012.

Penta Tanks Terminals S.A. completed the installation and commissioning of the ethanol storage, loading, and shipping facilities near the port of Paita. The loading and shipping facilities, which form part of the Penta Facilities, are expected to be operational during August.

First ethanol export

In anticipation of these facilities being placed into operation, Maple has been storing a substantial portion of the fuel-grade ethanol produced from the ethanol project in the storage tanks at the Penta Facilities. The Company expects to export its first shipment of ethanol in August.

Over 165,000 tonnes of sugar cane have been harvested and processed by the company since it began processing sugar cane at the end of March 2012. Maple expects to increase the amount of sugar cane it harvests and processes per day as the company continues to “ramp up” the processing of sugar cane and the production of ethanol during its initial phase of operations, it said. It expects to harvest and process around 900,000 tonnes of sugar cane from its plantation during 2012.

Maple “continues to be engaged in a dispute with one of its third-party providers” for the project, the firm added. In 2012 arbitration proceedings were initiated by this party as a result of the dispute. In addition, the firm is seeking to implement certain interim remedies through the Peruvian court system. “Although no assurance can be given, Maple believes it has meritorious defenses to the claims brought by the provider, and the company intends to defend its position vigorously,” Maple said. 

Cellulosic ethanol in Germany soaring

Clariant opens Germany’s biggest cellulosic ethanol plant

Meghan Sapp | July 23, 2012

In Germany, Clariant inaugurated Germany’s biggest pilot plant for the production of cellulosic ethanol from agricultural waste. Located in Straubing, Bavaria and supported by the Bavarian government and the Federal Ministry for Education and Research, the project will produce up to 1,000 tons of cellulose ethanol from around 4,500 tons of wheat straw based on the sunliquid® technology developed by Clariant. It represents an investment of around $34 million.

Biofuels is policy now: Mandated and seriously growing

Replacing the Whole Barrel of Oil and the Need for Biobased Chemicals Policy Now

Jim Lane | July 23, 2012

Post Kitty Hawk: 2012 and Beyond: Overwhelming Evidence in Support of Replacing the Whole Barrel of Oil and the Need for Biobased Chemicals Policy Now

by Stephen J. Gatto

Chairman & Chief Executive Officer, Myriant Corporation

Special to the Digest

We in the biobased chemicals industry have had our Kitty Hawk moment.

What that means is: we have proven the thesis that biobased chemicals can be produced, brought to commercial scale and quickly sold to a receptive, growing and eager marketplace. We have also demonstrated that sustainable chemicals can be made here in America at a cost that is lower than anywhere else in the world which results in a product-pricing model that, even without subsidies, is competitive with petroleum-based chemical manufacturing processes.

These factors in the aggregate suggest the time has long since come and gone to ask why biobased chemicals should be included in a national energy policy or why anyone would want to invest in the industry.  The question now must be, ‘Why Not?

Given the national and global opportunities presented by biobased innovation, now is the time to recognize the value of policies and programs in support of accelerating commercialization and advancing the nation’s market leadership in the biobased chemicals industry.

Election Year, Rejection Year, Politics

For at least some people with legislative power and influence, election year politics may be justifying rejection year politics. But when it comes to now proven technologies and commercial scale operations coming on line for biobased chemical production, it’s time the associated evidence of the national and global benefits trumps party lines. A clearer or more compelling case cannot be made that now is the time when the right thing to do should transcend the self-interested preferences of regional constituencies. Now is time for a lasting and all-inclusive policy, versus another round of poll-icy-driven actions or worse… inactions.

The Immense Risk of Waiting and Debating the Obvious and Proven

A failure to establish a durable U.S. energy policy that includes incentives for the production and commercialization of biobased chemicals carries significant national and global implications. The international leadership opportunity within our grasp, supported by the fact that we can be, right now, the lowest cost producer of biobased chemicals among all nations will be lost to countries with more resolve and a better understanding of the stakes.

Lost time invites the heightened risk of continued manipulation of petroleum supply and demand. Inaction risks lapsing into yet another century of fossil-fuel-based dependency, resulting in a nation held hostage to its habitual default position in favor of the familiar: fossil fuel. Moreover, a failure to support proven innovations that hold the key to our emancipation from fossil-fuel-based products risks nothing less than planetary non-sustainability.

The 90%-Plus Solution

Approximately 90% of all chemicals produced today from petroleum can be produced biologically in an organism. But that fact alone does not, nor should it, lead to an automatic conclusion in favor of full speed ahead. Prudent people examine the practical matters and raise thoughtful questions associated with innovation. Some answers:

Ongoing Innovation

Breakthroughs in synthetic biology, genetic engineering, biomass yield, plant genomics and microbiology are leading the rapid development of high-performing products that can be true drop-in substitutes for petroleum-based chemicals.

Scalability

The integration, optimization and rapid acceleration from lab to commercial-scale is proving the power of these advanced technologies. Many of these biobased chemical technologies and processes are cost-advantaged over petroleum-based products, even without government subsidies.

The Global Economic Impact

Independent and industry-led analysis and projections point to a marketplace that is on a growth trajectory to achieve more than $500 billion by 2025. The World Economic Forum predicts that the biobased economy has the potential to generate $230 billion to the global economy by 2020. In the United States, bio-refineries that process sustainable biomass can/will generate $88.5 billion in economic activity according to USDA projections. Myriant’s focus alone represents a market opportunity in excess of $40 billion.

Jobs Creation

The biobased products industry employed more than 50,000 people as of 2010, according to an Iowa State CIRAS study. This same study points to the fact that the biobased industry can generate a minimum of 100,000 jobs annually.

The Existential Threat to Planet Earth via ‘Business as Usual’

Today’s world population is approximately 6.5 billion, growing to an estimated 9.2 billion individuals by 2050—all using and depleting natural resources. This isn’t sustainable or affordable, especially considering the price spikes in oil, particularly over the last three years.  It is time to integrate feedstocks processes that are stable, predictable and renewable worldwide.

It’s Time for a Final Up and Down versus Back and Forth

The biobased chemicals industry has justified its case before the legislative bodies. The logic and benefit of a national energy policy inclusive of biobased chemicals could not be clearer. To build a robust bio-based economy, U.S. policies should provide technology-neutral support to all biobased products. Biobased chemicals and products companies need and deserve stable, long-term, forward-thinking policies to bridge the risk gap for investors. Specific policies should include:

A Renewed Farm Bill Inclusive of Biobased Chemicals

A Farm Bill that includes both inclusion of and parity for  biobased chemicals with biofuels, as well as mandatory funding of key Farm Bill key energy title programs, including BCAP and Bio-refinery assistance programs. Recent actions in the Senate to move a bi-partisan bill that defines and includes renewable, biobased chemicals and provides $800 million mandatory funding over five years for energy titles is to be applauded.

It’s incomprehensible that the House Farm Bill supports only discretionary spending on energy programs, while cutting $500 million from the funding level in the 2008 Farm Bill. Further, the Bill is silent on the inclusion of biobased chemicals. Is this a signal that the Republican-controlled House does not endeavor to see our Nation reduce its dependence on fossil-fuels, create jobs or drive economic development?

While the House can argue that advanced biofuels has had its day in the sun, why wouldn’t they strive to reduce consumption of petroleum-derived products by promoting the commercialization and use of chemicals and products made from renewable resources?  It’s time for the House to focus on replacing the “whole barrel of oil.”

Expanding Public/Private Partnerships

Governments and private industry are partnering to invest in technological processes and strategies that will further advance the low-cost production and wide-spread propagation of economical biomass feedstocks. Federal loan guarantees and grants in support of new refinery construction, as well as plant retrofits, are necessary signals to private investors that the Government will continue to support commercialization of biomass-based products.

Tax Codes that Extend and Support Reward Investment and Innovation in Industrial Biotechnology

Less than 4% of U.S. chemical sales are biobased today but a recent USDA analysis shows that the potential market share could be in excess of 20% by 2025 with adequate policy support. One example is proposed legislation,S.1764, “Make It in America Tax Credit Act of 2011” that serves to extend and modify advanced energy investment project credits and also enables qualifying biobased products and other alternatives to petrochemicals to qualify for investment tax credits.

Now, all eyes are focused on our Nation’s elected leadership and their ability to put progress ahead of politics and get the job done. In short, to use a common, if not soon to be outdated expression, it’s time, in more ways than one, for Congress to step on the gas.