Driving the Poor to starve - Redux

We posted " Driving the Poor to starve" on Saturday May 12th 2007 and now we read in the Sunday Telegraph today "The Great Biofuels Con" , By Christopher Booker and Richard North

So it is probably worth re-posting.... If you want to see the very many post on the subject simply search on "biofuels"

“How Biofuels Could Starve the Poor" C. Ford Runge and Benjamin Senauer ,Foreign Affairs May/June 2007

C. Ford Runge is Distinguished McKnight University Professor of Applied Economics and Law and Director of the Center for International Food and Agricultural Policy at the University of Minnesota. Benjamin Senauer is Professor of Applied Economics and Co-director of the Food Industry Center at the University of Minnesota. If you read nothing else about ethanol - read this.

The authors demonstrate how Washington's fixation on corn-based ethanol has distorted the national agenda and diverted its attention from developing a broad and balanced strategy to energy independence.

Because of current high oil prices and hefty production subsidies, corn-based ethanol is promoted as a major step in increasing national energy independence in the US. Reliance on high input corn crops drives up prices (corn peaked Feb US$4.37 a bushel, trading today US$3.90 dropped 4% in last 4 weeks) and pushes up grain prices worldwide - the price of grain fed protein sources, poultry, pigs and beef is shooting up as well as secondary markets such as milk and eggs. A bad, cold, wet spring has delayed planting and with 40 million acres of corn to plant in the weeks ahead reduced yields could push prices up further gain later in the year.

Filling the 25-gallon tank of an SUV in the US with pure ethanol would require over 450 pounds of corn -- which contains enough calories to feed one person for a year. It requires a US$13 Federal subsidy to the ethanol refiner, protected by a 51 cents a gallon tariff barrier - if the entire corn crop in the United States were used to make ethanol, that fuel would replace only 12 % of current U.S. gasoline use.

Direct subsidies to corn growers of the mid-west were $8.9 billion in 2005 - which will fall as producer prices soar.

2.1 billion bushels of corn grown 78 million acres produced ethanol at 106 plants nationwide this is expected to grow to 3.5 billion bushels ( U.S. Department of Agriculture showed 15 percent more corn planted than 2006, some 90.4 million acres) this year as corn output jumps to benefit from the US$4 a bushel price ( US$2 only 2 years ago). Farmland devoted to other crops is also being diverted. Cotton acreage this year in the US will drop 14 % on 2006, according to the National Cotton Council. Soybeans, wheat, barley, oats and alfalfa are also being displaced.

The biofuel industry has long been dominated not by market forces but by politics and the interests of a few large companies. In the United States, at least, corn and soybeans have been used as primary inputs for many years thanks in large part to the lobbying efforts of corn and soybean growers and Archer Daniels Midland Company (ADM), currently the biggest ethanol producer in the U.S. market.

ADM started making ethanol and other products resulting from the wet-milling of corn in the 1970's , such as high fructose corn syrup and grew to be a major player in the feed market and key force in driving ethanol use. By 1980, ADM's ethanol production had reached 175 million gallons per year, and resultant high fructose corn syrups had become a ubiquitous sweetening agent (and alternative to much criticised raw sugars) in processed foods. ByIn 2006, made just over 1 Bn gallons of ethanol and was the major US producer 4 times the size of , VeraSun Energy (as corn cost rose Vera Sun posted a loss after in Q1 2007). Last year they planned to increase investment in ethanol from $700 million to $1.2 billion in 2008 and increase production by 50%, or close to 500 million gallons, by 2009.

Legislators such as Vice President Hubert Humphrey the Minnesota senator promoted special subsidies , as did Bob Dole (R-Kans.) - critics have pointed out that nearly half of ADM's profits have come from products that the U.S. government has subsidized or protected.

Now protection has gone down the food chain and the 51 cents a gallon subsidy is augmented by a further 10 centsa gallon tax reduction on the first 15 million gallons produced. Many states (Indiana is notable) also provide all sorts of tax breaks on new built plants.

The poor are faced not only with higher energy costs but a resultant rise in food costs - none more dramatically recently than in Mexico earlier this year who import 80% of their corn from the US .Late 2006, the price of tortilla flour doubled . mexican tortillas are made of home grown white corn and the price rose as feed producers swapped supplies from US$4 a bushel corn to cheaper white corn - speculation and hoarding pushed prices even higher.

With about half of Mexico's 107 million people living in poverty and relying on tortillas as a main source of calories, the public outcry was fierce with food riots erupting. In January this year , Mexico's new president, Felipe Calderón, was forced to cap the prices of corn products.

Mark Rosegrant, a director of The International Food Policy Research Institute, in Washington, D.C., projects that given continued high oil prices, the rapid increase in global biofuel production will push global corn prices up by 20 percent by 2010 and 41 percent by 2020. The IFPR calculate that ...

The price of oilseeds, (soybeans, rapeseeds,sunflower )to rise 26% by 2010 and 76% by 2020
Wheat prices by 11 % by 2010 and 30 % by 2020 (which probably undersestimates Australian and Indian drougths this year and rising demand in Egypt)

In the poorest parts of sub-Saharan Africa, Asia, and Latin America, where cassava is a staple (and is being tested as an ethanol crop) , its price is expected to increase by 33 percent by 2010 and 135 percent by 2020.

The United Nations Millennium Development Goals of 2000 to halve the world's chronically underfed population from 16% in 1990 to 8% in 2015 will never be met as biofuels use supplant food use and world hunger grows. There is only one result when you spend 50-80% of household income on food and the staple crops double in price.

Of course the drive for food based fuels rests on a hidden but unwelcome truth - ethanol is neither fuel efficient nor environmentally friendly - Argonne National Laboratory and the National Renewable Energy Laboratory have calculated that the net energy ratio of gasoline is 0.81, a result that implies an input larger than the output. Corn-based ethanol has a ratio that ranges between 1.25 and 1.35, which is better than breaking even. Petroleum diesel has an energy ratio of 0.83, compared with that of biodiesel made from soybean oil, which ranges from 1.93 to 3.21. (Biodiesel produced from other fats and oils, such as restaurant grease, may be more energy efficient.)

Comaring biofuels gasoline such as greenhouse gas emissions shows that the complete cycle of the production and use of corn-based ethanol releases less greenhouse gases than does that of gasoline, but only by 12 to 26 %. The production and use of biodiesel emits 41 to 78 percent less such gases than do the production and use of petroleum-based diesel fuels.

Even worse is relative fuel efficiency. Using gasoline blends with 10 percent corn-based ethanol instead of pure gasoline lowers emissions by 2 percent. If the blend is 85 percent ethanol (which only flexible-fuel vehicles can run on), greenhouse gas emissions fall further: by 23 percent if the ethanol is corn-based and by 64 percent if it is cellulose-based. Likewise, diesel containing 2 percent biodiesel emits 1.6 percent less greenhouse gases than does petroleum diesel, whereas blends with 20 percent biodiesel emit 16 percent less, and pure biodiesel (also for use only in special vehicles) emits 78 percent less. On the other hand, biodiesel can increase emissions of nitrogen oxide, which contributes to air pollution. In short, the "green" virtues of ethanol and biodiesel are modest when these fuels are made from corn and soybeans, which are energy-intensive, highly polluting row crops.

Ethanol made entirely from cellulose fibre from wood by product, special grasses, field crop residues has an energy ratio between 5 and 6 and emits 82 to 85 percent less greenhouse gases than does gasoline. As corn grows scarcer and more expensive, enzyme technology is improving (To learn more search through this site for Novozymes) and novel closed cycle gasification technologies offfer a promising source of biofuel in the future but significant industrial scale production is at least a decade away. Key technologies are currently not owned by US companies.

Some of the problems are simply logistical one calculation shows that fueling an ethanol plant with switchgrass, a much-discussed alternative, would require delivering a semitrailer truckload of the grass every six minutes, 24 hours a day.... every day.

If you want to drive ... someone somewhere will starve.

Two billion people suffer from hunger daily. The struggle against hunger is made harder as agrifuels for the rich supplant food crops for the hungry. Hunger is a universal scourge - the rapid transformation of agriculture to feed the apparently insatiable and irrational demand for fuels will drive food prices, impact on water resource, adding even more pressures to the overpopulated and underfed.

There is a choice.

D1 bio fuels in serious trouble.

There was much excitement, flag waving and children were given a day off school in Liverpool on October 16th last year when glamorous Angela Eagle, Exchequer Secretary to the Treasury ( and significantly MP for Wallasey) , opened the D1 £7m bio-diesel refinery , built on the Lubrizol site, at Bromborough which had created 40 jobs.

Designed to produces oils from inedible raw material Jatropha curcas, a crop which D1 are growing in tropical zones , immediately faced compeitition from the tax boondoggling US "dash'n'splash " trade ,giving producers of the so called B 99 biodiesel fuel a US$1 a gallon subsidy. 80% of of US produced biodiesel reaches Europe.

D1 managers took the chance to tackle Angela Eagle about this "double dip" subsidy regime for US producers and the EU subsidy at the pump. She was reported to say at the time (Liverpool Post) “We are currently taking the necessary steps for the issue to be taken up by the European Trade Commissioner under the World Trade Organisation procedures. This is an important new industry and we need to ensure there is free trade and fair competition.”

Now 6 months later CEO Elliott Mannis has announced that the company has started a "consultation" process with it's employees at both its Middlesbrough and Bromborough sites prio to reducing the workforce.

At the same time founder and first Chairman, Karl Watkin, has resigned as a Non-Executive Director of the Company - he owns some 5% of the shares. On March 20th Watkin said he was ``evaluating all options'' including ``an increase or decrease in his interest, and whether or not to make an offer for the company,'' he said in a statement distributed by the Regulatory News Service today. The Times today note that UBS, the company's biggest shareholder, sold some of its stake.

At the time of his departure Watkin (whose Just2Clicks dot com failed) was highly critical of the City. He said that he had become “increasingly frustrated” over the past year by “the inability of the investment community, governments and NGOs to differentiate D1's strategy from that of the suppliers of palm, soya and rapeseed whose biodiesel products have been well documented as being environmentally unsustainable”. (What also differentiated the company was the ability to hoover up large sums of money and produce zero profits.)

He also complained about the shorting of the stocks which was a feature of illiquid AIM stocks ..."“The majority of companies on AIM have had the stuffing kicked out of them,” he said. “People have been kicking the shit out of the stock.”


See : Tuesday, October 02, 2007 Boondoggling biodiesel - How Uncle Sam subsidises the EU motorist
Wednesday, December 05, 2007 Peter Mandelson makes some slippery remarks about US biofuel boondoggle - fist fight in sight ?

The D1 share price tells the tale.... Down 2.4 p yesterday = 5.4% to 43.5 p

Boondoggling biodiesel - How Uncle Sam subsidises the EU motorist

A shipload of biodiesel derived 100% from palm oil arrives at a Texan or Georgia port, Houston or Savannah - it holds say 9 million gallons , add , say 9,000 gallons (0.1% of the total) of traditional diesel (1 US gallon =3.8litres) what they call in this grubby trade "splash and dash" and it is transformed into B99 biofuel blend. Hey presto! The entire load is eligible for the Federal US blenders tax credit.

The US importer of the load applies to the Internal Revenue Service for the credit – a dollar for each of the 9 million biodiesel gallons (approx Euros 20 cents per litre) and then the ship hightails it for Rotterdam. (Guess it gets well mixed at sea)

European biodiesel manufacturers complained in March about these heavily subsidized imports and the US biodiesel industry complained a month later and the House Ways and Means Committee, is ...er ... looking into it.

The origins of this crazy anomaly result from the US JOBS Creation Act which President Bush signed into law in October 2004 - which inlcuded a biofueld tax incentive - due for expiry on 31st December 2006 - however as part of the Energy Bill of August 2005 the federal excise tax credit was extended until 2008.

Raffaello Garofalo, Secretary General of the European Biodiesel Board, wrote a letter on March 19th to the European Trade Commissioner a man wholly unacquainted with graft, the twice sacked and disgraced Mr Peter Mandelson.

"In Jan 2007 the amount of B99 biodiesel imported into the EU has risen to approx 30,000 tonnes per month. In most cases B99 blends are then sold in the market as "pure biodiesel". If B99 import acceleration coninues throughout the year it may lead to over half a m illion tonnes of B99 imports by end 2007"..."This competition is price setting and is preogressively disrupting the margins of EU biodiesel producers, putting out of business manu EU biodiesel prodcuers..."

This absurd subsidy has ballooned so much that that Europe is now awash in US biodiesel. Now a third form of imported biodiesel is reportedly hitting European shores – at US taxpayer expense. European biodiesel producers themselves are shipping fuel to US ports to get the US blenders credit and then bringing it back to Europe for sale.

But US biodiesel manufacturers and Congress may not be in a hurry to close the loophole, some insiders say. That's because the blenders credit not only benefits splash-and-dash traders, it also gives US producers of soybean-based biodiesel a distinct export advantage, industry insiders say.

Also there is a stand off between those who want to close a tax credit loophole and those responsible for trade issues.

Currently everything is being debated under the Energy Bill and the Farm, Nutrition and Bioenergy Act of 2007, commonly called the Farm Bill which will make many changes to the way federal taxes are pumped into the US biofuels industry - at present nothig is resolved and it is even uncertain that President Bush will veto the Bill.

How much is this boondoggling worth ?

Keeping track of the tax dollars involved is not easy the US Department of Agriculture does track exports of US vegetable and animal oils, a category that is mostly biodiesel, experts say. In 2005 9 Mn gallons were exported, 2006 it had jumped 4 fold to 36 Mn gallons - if biodiesel is 80% of that then the uS taxpayer has subsidised the EU motorist by US$30Mn. in 2006 alone.

The European Biodiesel Board, has tracked 50-plus shipments from the US to Europe totaling about 60 million gallons in the first four months of 2007. Most of those shipments originated in Houston; Savannah, Ga.; or New Orleans and arrived in the ports of Rotterdam, Netherlands; Bilbao, Spain; or Hamburg, Germany.

What is good news for motorists is bad news for the new and growing European biodiesel producers - subsidized fuel is flooding their markets, cutting into their domestic biodiesel business and lowering prices. See post on Biopetrol last week and the sad tale of Hull based Biofuels plc. - all that is green is not golden.

Argentine - not just good at Rugby

If this wasn't bad enough the Argentinians also distort the market as they impose import taxes of 25% or more on soya beans and meal, but not on biofuel derived from soya, a sort of B99 blend that creates effectively an export subsidy, contrary to WTO rules agreed at Hong Kong. The impact on the EU market is small currently but helps in keeping biofuel prices down for EU producers.

It does however have an impact on the US bio-diesel in dustry -the 19 percent Differential Export Tax (DET) provides an incentive worth 43 cents per gallon for Argentina’s soybean processors to convert soybean oil into biodiesel prior to export. “The whole bean is taxed more than double what biodiesel is in Argentina,” says Rick Ostlie, a Northwood, N.D., farmer and member of the American Soybean Association (ASA). “They're building plants all over the place, really trying to grow their industry.”

Novozymes agree to supply enzymes for Brazilian bagasse - bioethanol process - and Brazilian Politics dirty dancing

Novozymes has concluded a development agreement with CTC, (Centro de Tecnologia Canavieira)the Brazilian sugar cane industry’s technical center. Under this agreement Novozymes will contribute enzyme technology for developing bioethanol from bagasse.

Novozymes and CTC are collaborating on a research project to produce bioethanol from bagasse – the fibrous waste celulose residual product of sugar production from sugar cane.

When fully deeloped the process will provide higher ethanol yield in the production process from sugar cane, reduce energy inputs, optimize the process economy and energy balance. This will make less damnds on land use and reduce even further the emissons from ethanal production of the so called "greenhouse" gases.

This is seen as a landmark agrement and will be signed today the presence of Brazilian president Luiz Inácio Lula da Silva (1st Braz. Pres. to make it to Denmark ***) and Danish prime minister Anders Fogh Rasmussen.

Brazil is the world’s largest producer of biofuel almost all of that from sugar cane and Lula is on a trip to get tariffs cut or removed. (See IHT report) Almost 40% of Brazil’s gasoline consumption is now covered by bioethanol, and the country also exports a large proportion of its production - which of course atracts a 62 cents a gallon import duty into the US and the EU has tariffs. (see Miami Herald report on WTO case by Brazil)

Prs. Lula had spent 2 days in sweden as a guest of Parliamentary President Per Westerberg and Prime Minister Fredrik Reinfeldt who announced the intention of removing their special tax on imported ethanol.

Sweden was the second stop on Lula's Nordic tour that began in Finland on Monday where Tarja Halonen, the Finnish president, said Brazil deserved a seat on the UN security council.

He landed in Denmark Wednesday evening and with his wife, Marisa Leticia was met by Queen Margrethe (in red hat) and was heading for Norway later in the day and then travelling on to Spain to meet Spanish Prime Minister Jose Luis Rodriguez Zapatero and King Juan Carlos.

Brazil and Nordic bloc trade increased by 80% since 2003 and reached (€2.8 billion) in 2006 claims the Brazilian Foreign Ministry.

CTC, located in Piraciciba in Sao Paulo, is supported by 160 companies producing sugar and alcohol who deal with 12,000 sugar cane suppliers. They have 300 employees in nationwide experimental stations.

The centres undertake research in logistics, and agronomy, including mechanic planting and harvesting, biotechnology, biological pest control, healthy seedlings, geoprocessing, satellite images, production environment charts, sugar and alcohol production, and power generation.

*** Pres. Lula's friend and ally, President of the Brazilian Senate, Renan Calheiros, has narrowly survived a vote today (behind closed doors and thanks to six vital abstentions) to expel him from office . This follows a lengthy corruption scandal in which had denied accepting bribes from a lobbyist in exchange for government contracts - but did admit using the lobbyist to pass on child support payments to his former mistress and his 2 year old daughter.

It got a bit rough inside and outside and a few punches were thrown and the un gentmanly Renan shouted at his former fellow Senator Heloísa Helena that she was a constant tax avoider to evade taxes taxes. She shouted back that he had never done such a thing and that Renan should wash his mouth out with disinfectant before he spoke of her.

Iowa - protecting the farmer's fuels and the Smithsonian

They were dancing in the streets of Des Moines, Iowa (pic) when US Senators Jeff Bingaman (D-NM) and Pete Domenici (R-NM), respectively chairman and ranking member of the Senate Energy and Natural Resources Committee, introduced the Biofuels for Energy Security and Transportation Act of 2007” (S.987). Thus effectively putting a floor under the price of corn, farmers earnings, land values, and boosting the US agrochemical industry and the farm machinery makers.

Following on POTUS's call in the State of the Union speech for the use of 35 billion gallons of alternative fuels by 2017 they have framed a requirement that increases the required renewable fuel standard from 8.5 billion gallons in 2008 to 36 billion gallons in 2022 which they place a national upper limit on the use of corn for ethanol of 15 billion gallons and remainder from biomass such cellulosic ethanol, biobutanol and other fuels derived from unconventional biomass feedstocks - crop residue, switchgrass and forestry waste.

Whilst they have stretched the POTUS's time frame by 5 years they do not include coal derived fuels, as he suggested.

Naturally the far sighted farmers of the mid-west have more immediate concerns such as the extending the tax credits that subsidize ethanol and biodiesel and increasing the number of service stations that actually sell the finished product - vehicle fuels with 15% ethanol, or E85 - not that they intend to pay for them - they expect the mineral oil distillers and refiners to sell the stuff in competition to their gasoline.

Corn growers naturally see a 15 Billion gallon limit as unhelpful - "Over the long haul, to say that once we get 15 billion gallons (of corn ethanol) we really don't want any more is not a good thing to do," Monte Shaw, executive director of the Iowa Renewable Fuels Association said on hearing the details of the proposed bill.

Sen. Charles Grassley, R and Sen. Tom Harkin, D both representing Iowa ,being good country farmer boys were cautious and protective , Sucking on a corn stalk , "Any focus on making our country less dependent on foreign sources of oil is beneficial as long as it doesn't harm or handcuff the existing industry that is making great strides toward energy independence," said Grassley .

Tom Harkin likes the idea but wants more folks selling the stuff and the car industry (if there is any left by 2017 ) should be made to build more flex-fuel vehicles. Judging by the way they have refused to cut fuel consumption of new vehicles for the last 20 years , he is SOL on that one.

Don't expect this one to swish through on the nod ...there are lots of vested interests at work here, oil, coal, agriculture to name the smaller ones - as well as the Indiana boondogglers building ethanol refineries like Levittowns.

Small problem at the Smithsonian

It's good to see Charles Grassley in the news again - last week he got the Senate to freeze a $17 million Smithsonian budget increase (70% of their funding is federal - US$715 Mn. last year) when he exposed their spending habits , in a report which he had demanded as chairman of the Senate Finance Committee;

Lawrence M. Small, who was previously an executive at Citibank and Fannie Mae, is only the second non-scientist to serve as Smithsonian secretary in the organization's 160 years. On appointment, the Board of Regents said, " his business acumen would help improve the organization's finances."

Well certainly Small saw his finances improve , he saw his salary raised from U$330,000 to US $915,968 (more than the President of Harvard which has endowments 30 times the size of the Smithsonian) and received hundreds of thousands of dollars in reimbursements for personal expenses, revealed by Inspector General, A. Sprightley Ryan .These included chandelier cleaning and pool heating at his home, payments for a notional mortgage on his home (he owned it outright) chartered jet travel, his wife's trip to Cambodia, hotel rooms, luxury car service, catered staff meals and expensive gifts adn meals a deux with his wife at NY's swanky Cosmos Club . He also received US$1.15 million for making his house available for official functions.

4 days later, on Monday, Small.. er..resigned and Smithsonian Regent Patricia "Patty" Stonesifer, who is also co-chairwoman of the Bill and Melinda Gates Foundation, and like her husband an ex-Microsoft employee, will head the new Smithsonian governance committee.

PS. "Women of Biofuel" the 2007 calendar still available here BUY NOW (pictures unsuitable for this blog! -WARNING)

Novozymes / Abegnoa - Biofuels market expanding worldwide

Lord Patel has frequently directed his readers to the premier position that Novozymes (and Abegnoa) have in supplying essential enzymes for preparation of biomass feedstocks for fermentation to produce ethanol for fuel for internal combustion engines either raw or mixed with mineral based fuels.

Novozyme shares (NZYM B and the ID code/ISIN DK0010272129) quoted in Copenhagen jumped 20 DKK nearly 5% today on release of Q1 2006 figures which show ;

1. Sales rose by 11% ,Operating profit rose by 14% and operating profit margin was up to 19.2%, compared with 18.6% in 2005

2. Earnings per share (diluted) rose by 5% to DKK 2.97.

Readers are encouraged to read a helpful essay on their website about bio-fuels and Novozymes role as a major supplier to world wide growth in producing so called bio-fuels by Larry Peckous, a principal scientist in Customer Solutions at Novozymes in Franklinton, USA.

"Where will fuel ethanol plants pop up next?"

Briefly ;

Europe

Whilst maize (corn) is a the most widely used ethanol feedstock in the USA, in Europe other traditional grains are used and Novozyme have produced Viscozyme® Wheat, Viscozyme Barley and Viscozyme Rye for more Euro specific cereals.

The EU has set targets of 5.75% of energy consumption in the transport sector by 2010 and 20% by 2020. Sweden, Germany, France and Spain are among the European countries that have come furthest towards meeting the targets.

10 fuel ethanol plants where enzymes are used in the process are in production , 7 use wheat, 2 use rye and 1 uses barley. Many large-scale dedicated fuel ethanol plants planned or under construction, which takes some 18 months.

The major player and bio-fuel pioneer is Abengoa, a Spanish company will operate the first plant (180 MN Euro investment) using maize (plus wine alcohol) is under construction (May '06) at Lacq in the south of France capable of producing 200,000 tons of fuel ethanol per year by 2008. The French Government having awarded an overall tax relief on 100,000 tons. Abengoa Bioenergy own 56 % of the operators AB Bioenergy France and the remaining shares are held by Aquitaine Industrie Innovations, Euralis, Etablissements Lacadée, Lur Berri, Maïsadour, Vivadour and Agpm.

Abengoa S.A. is a listed company based in Seville ((ABG.MC) Euro 22.00 close today up from Euro 13.35 over last year = 65%), they have 3 bioethanol facilities in Spain - Ecocarburantes Españoles and Bioetanol Galicia, and Biocarburantes de Castilla y Leon - with an overall installed capacity of 550 million liters per year and export ethanol.

Abengoa Bioenergy is also the fifth largest ethanol producer in the United States with an installed capacity of 365 million liters. (i.e 1 Mn litres per day.) As starch to ethanol conversion efficiencies have improved, Abengoa have lead in the utilisation of soluble co-products (i.e high protein biomass wastes) as animal feedstock has also been improved so improving the unvestment return on installed plants.

Eastern Europe

Interest in biofuels is growing in Eastern Europe , there is a plant under construction in Slovakia. Projects are under consideration in Bulgaria, Croatia, Hungary, Poland, Romania and the Ukraine, as well as in oil rich Kazakhstan and in Russia.

South Africa

Construction started on the first (of seven planned) maize based plant South Africa in May this year which will use surplus food capacity.... as millions starve in Zimbabwe.

Australia

Manildra are the largest ethanol producers with their Nowra plant in NSW using wheat and sorghum. two other Queensland plants in Queensalnd use Molasses from the sugar industry. Total production is an annual 90 million litres.

The Australian federal government’s target for 2010 is a production of 350 million litres. Four new plants are planned in Australia to process wheat and sorghum.

Manildra US produces industrial alcohols at its facility in Hamburg, IA. USA.

China

China leads Asia in etahnol production with an output of 3.8 billion litres in 2005 from 4 maize based plants and there are plans for rice straw biomass plants.

In June 2006, Novozymes announced a three-year cooperation agreement with CRAC (China Resources Alcohol Corporation) ( See Lord Patel's report ) to conduct research into developing this new technology based on the enzymatic conversion of cellulose.

Thailand

The fastest emerging market for fuel ethanol in Asia is Thailand. The Thai government’s goal is to use ethanol to replace the additive MTBE in gasoline.

The Gubment have a fuel excise tax exemption for ethanol and an income tax waiver for investors for the first eight years. Current plans are for 1 million litres of fuel ethanol per day in 2006 2011 target of 3 Mmn litres p, day) , their are 2 cassava root plants and 4 using using molasses. A third cassava plant will come in stream in December 2006.

Licences have been granted for building at least 14 plants using molasses and four new plants using cassava.

High gravity fermentation

There is increasing interest in so called high gravity fermentation. This technology allows less water to be used and as a result less energy is needed for cooling, heating and evaporation which means more compact, less costly plants. Where Novozyme have especial expertise)

Fuel from the Sun

Farming the World's Energy by Christian Wüst, a Der Spiegel special report, is an excellent crash course in the practicalities of growing crops to directly convert solar energy to produce energy useful liquids - rapeseed, corn etc. and the use of raw biomass as an energy feedstock, straw, woodchip etc., in Europe.

A recommended read.