Nirmal Ghosh, Straits Times 19 Apr 08;
BANGKOK - BIOFUEL'S short honeymoon is over.
Some countries - like China - are scrambling to readjust policies in response to high food prices, driven in part by diversion of food crops to biofuel production.
But most governments remain behind the curve in realising that biofuels can create more problems than they solve, said Dr Ifzal Ali, chief economist of the Manila-based Asian Development Bank (ADB).
The rush to switch to biofuels to mitigate climate change is not helping to curb global warming, Dr Ali told The Straits Times, citing Indonesia as a stark example.
Cutting down forests to produce palm oil-based biofuels in Indonesia was harming the environment and pushing the price of edible oils to 'stratospheric levels', he said.
It is estimated that plantations are able to store only about 20 per cent of the carbon that old- growth tropical forests can store.
'The price of edible oil has gone from US$85 (S$115) a tonne to US$1,400 a tonne in just over one year. Part of the reason is conversion to biofuels. But what is that doing to the consumer?' Dr Ali said in a phone interview.
'We need some rethink on biofuels in terms of cost-benefit to find out whether they are worth it.'
Dr Achim Dobermann, head of research at the International Rice Research Institute (IRRI) at Los Banos in the Philippines, added: 'The concern is that some South-east Asian governments may rush into biofuels without aclear understanding of the environmental and economic consequences in terms of food security.'
The head of the International Monetary Fund, Mr Dominique Strauss-Kahn, yesterday joined those urging caution, saying that he would support a possible moratorium on biofuels made from foodstuffs.
'When we make biofuels from agricultural products not used for food, that is fine. But when they are made from food products, this poses a major moral problem,' he told Europe 1 radio station.
The growing concern comes amid rising food prices and surging inflation, threatening social unrest in many countries where food bills are a hefty percentage of living expenses, especially for the poor and lower-middle class.
Inflation in China, for example, is now at its highest in more than a decade.
The worldwide surge in corn-based ethanol production has led to a doubling of corn prices over the past 15 months, forcing Beijing to readjust its policies.
China had aimed to produce 15 million tonnes of biofuels such as corn-based ethanol by 2020, replacing almost 10 per cent of its petrol demand. Last July, however, the Chinese authorities said they would shift from the use of corn to non-grain sources like sorghum, cassava and sweet potato for biofuel production over the next five years.
This is in line with global advice, as such commodities, while edible, are not staple foods and are thus less likely to affect inflation.
Many governments will have to learn to strike a balance, said analysts.
Thailand's target is to introduce 10 per cent biofuel in diesel by 2012. The government recently announced a massive loan scheme for farmers to grow biofuel crops, with a target of expanding palm oil production for biofuel by up to 160,000ha by 2010.
But apart from the south, where palm oil is being diverted to biofuel production - contributing to the edible oil price problem - most other biofuel projects remain in the experimental stage, and government policy remains uncertain, a senior plant scientist engaged in biofuel research told The Straits Times.
'Yields (from crops other than oil palm) are not yet optimal in many cases,' said the scientist, who did not want to be named.
Similarly, under the Philippines' Biofuels Act, non-diesel petroleum products must contain a 10 per cent sugar ethanol blend by 2010. The level for diesel is a 2 per cent blend of coco methyl ester by 2009.
In March, the Philippines signed a US$200 million agreement with a California-based company to plant 100,000ha of land in Bukidnon province with jatropha.
But Dr Dobermann remains sceptical.
'I have not seen a convincing study on jatropha-biodiesel systems and its potential implications for energy efficiency, sustainability, greenhouse gas emissions and the economy,' he told The Straits Times.
'Before governments decide to put 500,000ha of land under jatropha, these should be done.'
Malaysia, the world's largest producer of palm oil, has issued licences to 91 companies to set up biofuel manufacturing plants. The country wants to be the world's largest exporter of palm oil-based biodiesel.
Malaysia and Indonesia account for 85 per cent of the world's production of palm oil.
Malaysia produced 15.8 million tonnes of palm oil last year, using 4.3 million ha of land. Government officials have said they want to divert up to one million tonnes of production to biofuel.
President Luiz Inacio Lula da Silva of Brazil - the world's biggest exporter of sugar cane-based ethanol - last Thursday told reporters in the Netherlands: 'Don't tell me biofuels are causing inflation.
'Today, there are more people who eat. The Chinese eat, the Indians eat, the Brazilians eat... and people live longer,' he added, pointing the finger at population growth.
'I ask the whole world to produce more.'
Experts in Asia concur to a degree, noting that flat yields on the back of neglecting agriculture have also contributed to the food price crisis.
It is possible for the biofuel sector and food sector to co-exist - 'provided there is a quantum leap in productivity' of food, said Dr Ali.
ADDITIONAL REPORTING BY ALASTAIR McINDOE, SALIM OSMAN, VINCE CHONG AND REME AHMAD
RICE TO JATROPHA
Plenty of potential but where's the demand?
Nirmal Ghosh, Straits Times 19 Apr 08;
BANGKOK - A BIOFUEL experiment in the fertile Mae Lao valley, 60km south-east of Chiang Rai, has produced mixed results.
Sritoy, a sub-district there, is home to around 6,000 people. About 100 households grow jatropha - which produces a nut that is processed into biofuel.
Mr Srituan Wongkammoon, 56, vice-president of the Sritoy Subdistrict Administrative Organisation, has already allocated his own 0.8ha to grow jatropha.
Its office, on a plot the size of half a football field, was converted into a pilot jatropha biofuel operation three years ago after a local politician took farmers to a jatropha research station, and they came back enthused.
They are among the first in Thailand to grow jatropha and convert it into biofuel to meet their own energy needs. But the machinery is basic and the yields are not very high.
One tree yields around 5kg of nuts. About 4kg of nuts produce one litre of oil. The oil works well in tractor engines, and Mr Srituan has modified his own truck engine to run on it.
'We spend so much money, nearly 20,000 baht (S$860) per year for petrol, but I am now able to save,' he said.
Seeing the inherent difficulties in terms of scale and technology, the farmers are willing to persevere, but do not want to grow more jatropha until there is a stable market for it.
Until then, the biofuel will certainly save them money, but will not make them any.
WITH REPORTING BY KRIS DHIRADITYAKUN FROM MAE LAO
CARROT TO CASSAVA
Price surge leads farmer to switch crops
Salim Osman, Straits Times 18 Apr 08;
SUKABUMI (WEST JAVA) - SWITCHING from planting carrots to growing cassava is a big risk for farmer Uyuh, 63.
'I hope the prediction that my singkong will be in greater demand for the bahan bakar nabati is true,' he said in the Sundanese dialect at his plot in Cicurug village near Sukabumi town.
Mr Uyuh is among a growing number of farmers in the village who began growing singkong, or cassava, for biofuel, known here as bahan bakar nabati, early this year. 'We were told that our singkong can fetch a higher price now because there is a demand for the crop to be processed into fuel,' he said as he cleared his tiny plot, which is the size of two basketball courts.
Several years ago, he had planted cassava to feed his family of four and to sell to factories that made the local snack tapai (fermented tapioca cake) or crackers. But he stopped growing it as he could not sell it for more than 70 rupiah (1 Singapore cent) per kg.
'Now, some of my neighbours are selling their cassava at between 500 rupiah and 700 rupiah per kg,' he said.
Their buyers include traders who resell the cassava to ethanol producers and snack factories.
A plant has already been set up nearby by a Jakarta businessman to produce ethanol which, Mr Uyuh said, is being sold as premium petrol to motorcyclists in the village.
'I hope to sell my crop to this plant when it is ready for harvest later this year,' he said.
China's ethanol factories feel the pinch
Vince Chong, Straits Times 19 Apr 08;
BEIJING - MR WU Junhe, who owns a grain depot in Nong An county in Jilin province, north-east China, expects to sell less corn to factories that produce ethanol, now that China has restricted such activities.
The government has slashed subsidies that were previously aimed at encouraging biofuel production. Therefore, such factories, Mr Wu said, are now offering 'a lot less' than 1,470 yuan (S$280), which is the price per tonne of corn.
A surge in the prices of staple items such as grain and soya beans has led the authorities to go in the opposite direction by discouraging the use of corn for making biofuel.
'Since the second half of last year, subsidies for ethanol factories have dropped to 1,800 yuan per tonne, from 3,800 yuan previously,' Mr Wu told The Straits Times. 'And I have since heard that this has been scrapped altogether.'
Depot owners like Mr Wu are typical in rural China, where farmers would rather go through a middleman, who pays up promptly, than sell directly to factories.
He usually buys 60,000 to 70,000 tonnes of corn from farmers every year, a quarter of which is sold to ethanol plants.
The rest are bought by factories that make animal feed, which are still paying their usual rate of 1,420 to 1,450 yuan for each tonne of corn.
The ethanol plants, Mr Wu said, will probably have to evaluate their business model if they want to continue operations.
'They will have to try to remain competitive with the feed market without their subsidies,' he said.
'But the biofuel initiative is a good one, and I hope prices can come down soon so China's renewable energy plans can continue smoothly.'
Environment-friendly energy source
Straits Times 19 Apr 08;
# What is biofuel?
BIOFUELS are any kind of fuel made from living things or from the waste they produce, such as cow manure.
They are a renewable energy source, unlike fossil fuels such as petroleum and coal.
# Sources of biofuel
Agricultural products specifically grown for use as biofuel include corn and soya beans, primarily in the US; flaxseed and rapeseed, primarily in Europe; sugar cane in Brazil and palm oil in South-east Asia.
Biodegradable outputs from industry, agriculture, forestry and households can also be used to produce bio-energy. Examples include straw, timber, manure, rice husks, sewage, biodegradable waste and food leftovers.
# Kinds of biofuel
In recent years, biofuel has come in the form of ethanol and biodiesel.
Yeast fermentation is used to produce ethanol from crops such as corn and sugar cane. Biodiesel is made through a variety of chemical processes.
# Uses of biofuels
They are alternative energy sources to power motor engines.
One advantage of biofuel over most other fuel types is that it is biodegradable, and thus relatively harmless to the environment.
