Indonesia to Switch 10 Pct Petroleum to Biofuel

PlanetArk 15 Jan 08;

JAKARTA - Indonesia plans to substitute around 10 percent of its fossil fuel transport consumption with biofuel products by 2010, a senior government official said on Monday.

The resource-rich tropical nation has been pushing the use of biofuels made from various resources such as palm oil, sugar cane and cassava to cut the use of costly petroleum products.

The move aims at easing burden of hefty subsidy on petroleum products without raising the price of subsidised fuel sold on domestic market.

"We can't increase prices of subsidised fuel as it will hurt consumers. But we may be able to cut consumption and replace it with biofuel," Evita Legowo, secretary at the National Biofuel Development Team said at the Reuters Global Agriculture and Biofuel Summit.

By 2010, biofuel products are expected to account for 3.8 million kilolitres of total petroleum consumption for transportation at estimated 34.75 million kilolitres.

Indonesia is Asia Pacific's only OPEC member but it is one of the smallest producers in terms of production and relies on fuel imports as it has failed to tap new oilfields fast enough.

The country has to spend billions of dollars on oil subsidies and importing oil products.

For that, the government plans to increase bioethanol blend in gasoline to 5 percent by 2010 from 3 percent, using cassava and cane molasses--thick syrup produced from sugar cane during the sugar extraction process--as feedstock, she said.

Production capacity for bioethanol using both cassava and cane molasses is expected to reach 3.77 million kilolitres per year, from 135,000 kilolitres per year by the end of December 2007, data from the biofuel team showed.

As for biodisel, Legowo said the government may keep the biodiesel blend in diesel oil at 2.5 percent due to soaring palm oil prices while trying to boost output of jatropha, a non-edible oil that grows in arid land and needs little care.

"Biodiesel blend will stay at 2.5 percent..maybe less because we are still waiting for jatropha that we planted last year," Legowo said.

Indonesian state-owned oil firm Pertamina which retails biodiesel at home, has cut the biodiesel blend in diesel fuel to 2.5 percent as rising palm oil prices and lack of incentives cut margins.

Malaysian crude palm oil futures hit a record on Monday with the benchmark March contract ending at 3,414 ringgit a tonne after hitting 3,420 ringgit, surpassing a high of 3,280 ringgit reached on Friday.

Palm oil prices, up nearly 12 percent since the start of the year, were also supported by prospects of Malaysia introducing palm oil-blended diesel at home this year and Indonesia's plans to double biodiesel production.

There are also plans for 12 special biofuel zones by 2010 where investors could develop an integrated biofuel industry, if approved by the government, said Legowo.

Indonesia is developing other raw materials to ensure feedstock supplies for biodiesel and biofuel production. It plans to plant 5.25 million hectares of unused land with palm oil, jatropha, sugar cane and cassava by 2010.

By that time, biofuel products will account for 2 percent of the country's total energy mix of 5.29 million kilolitres.

(For summit blog: http://summitnotebook.reuters.com/)

(Editing by Peter Blackburn)

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Biofuels 'are not a magic bullet'

Richard Black, BBC News 14 Jan 08;

Biofuels may play a role in curbing climate change, says Britain's Royal Society, but may create environmental problems unless implemented with care.

In a new report, the Society suggests current EU and UK policies are not guaranteed to reduce emissions.

It advocates more research into all aspects of biofuel production and use.

The report says the British government should use financial incentives to ensure companies adopt cutting-edge and carbon-efficient technologies.

"Biofuels could play an important role in cutting greenhouse gas emissions from transport, both in Britain and globally," said Professor John Pickett from Rothamsted Research, who chaired the Royal Society's study.

"But it would be disastrous if biofuel production made further inroads into biological diversity and natural ecosystems.

"We must not create new environmental or social problems in our efforts to deal with climate change."

Variable savings

Biofuels - principally ethanol and diesel made from plants - are one of the few viable options for replacing the liquid fuels derived from petroleum that are used in transport, the source of about one quarter of the human race's greenhouse gas emissions.

Vehicles, and the infrastructure for delivering fuel through filling stations, can be modified at marginal cost - certainly compared with the price of a large-scale switch to hydrogen or electric vehicles, even if they were to prove technologically and economically worthwhile.

Hence the adoption by Europe and the US of policies to stimulate biofuel production and use.

But a number of recent scientific studies have shown that the carbon savings from using biofuels compared with petrol and diesel vary hugely, depending on what crop is grown and where, how it is harvested and processed, and other factors.


There are also concerns that widespread planting and use of biofuel crops would threaten natural ecosystems and raise food prices.

Policymakers are increasingly aware of such concerns. Before the Royal Society launched its report, European Environment Commissioner Stavros Dimas told the BBC that the EU had not foreseen all the issues thrown up by its target of providing 10% of Europe's transport fuel from plants.

Launching the Royal Society report, Professor Pickett noted that current EU and US policies did not mandate that biofuels should achieve any carbon saving.

The report said that the UK government's Renewable Transport Fuel Obligation (RTFO), which mandates that 5% of fuel sold on filling station forecourts by 2010 must come from renewable sources, suffers from the same flaw, though changes are being discussed in Whitehall.

As a result, the report concludes, these policies "will do more for economic development and energy security than combating climate change".

Next generation

On the UK policy front, the Society advocates:

* extending carbon pricing to transport fuels
* providing specific incentives for innovative approaches to fuels and vehicles
* extending the RTFO to 2025

More generally, it says research into new biofuel technologies should be encouraged through financial incentives.

Of particular interest are ways of processing lignocellulose, the material which makes up the bulk of many plants and trees. Learning how to convert this easily and cheaply into ethanol or other biofuels would make refining much more efficient, and vastly expand the range of crops that could be used.


"What we have to do is to undertake research and development in such a way that we can unlock the tremendous potential that nature has provided us with in terms of getting enzymes to degrade cellulose and make ethanol," said Professor Dianna Bowles from the University of York, another member of the Royal Society's study group.

"Nature has provided countless potential solutions in organisms as diverse as cows and microbes, and that offers tremendous hope."

But alongside this technology-focussed research, said Dr Jeremy Woods of Imperial College London, should go programmes aimed at measuring the true environmental and social impacts of different approaches.

He gave the example of African nations such as Tanzania, where various parties including the government, local entrepreneurs and multinational companies are exploring the potential of biofuel crops.

"Tanzania is quite likely to start indigenous biofuel production," he said, "and if they do it in a good way, they could improve food production and preserve biodiversity."

He suggested establishing some sort of certification scheme for biofuels, similar to ones already in existence for timber and fish, to show which are produced sustainably.

But, he said, there was a need to keep problems in perspective, particularly the idea that rainforest-destroying palm oil plantations were being established all over southeast Asia simply to provide biodiesel.

"Only about 0.7% of palm oil used in the EU is used for biofuel production," he said.

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UK throws away £8bn of food each year, study claims

The Telegraph 14 Jan 08;

A staggering £8billion-worth of food is thrown away in Britain every year - a third of everything we buy, according to campaigners.

And most of the 6.7 million tons of food we discard from our homes each year - enough to fill Wembley Stadium eight times - could have been eaten, according the Government-funded Waste and Resources Action Programme (Wrap).

And the startling figures refer only to waste from households - when waste from businesses is included the numbers will be considerably higher.

For every three bags of shopping brought home, one ends up in a landfill. Experts said too much food was being thrown away because consumers let it go off in the fridge or cupboard, or portions are too big and leftovers are simply binned.

Wrap estimated that if households cut out such waste it would save 15 million tons of carbon dioxide - the equivalent of taking one in five cars off the road.

The figures come after a Christmas period in which 230,000 tons of food worth around £275 million was thrown away. But a poll found nine in 10 people do not have a clue how much they throw away.

As well as the cost, the wasted food is a major contributor to the production of greenhouse gases. Most of the food thrown away ends up in landfill, where it produces methane, a potent greenhouse gas.

And campaigners say energy used to produce, package, transport and deliver the food to our homes produces the equivalent of at least 15million tons of carbon dioxide every year.

Wrap has launched a campaign - Love Food Hate Waste - in an attempt to raise awareness about just how much food Britain wastes, with a website giving advice on how to be more food efficient.

Richard Swannell, the director of retail and organics programmes at Wrap, said food wastage was a "very major problem" with financial and environmental implications.

He said: "We throw away 6.7million tons - if we ate it all we would save a staggering amount of money, and reduce our impact on the environment."

Mr Swannell said nearly all ages and social classes were culpable, apart from some people over 60. He added that the causes of the problem could be put into two categories.

"First, we let too much food go off in the fridge and in the cupboard," he said. "And the other is we cook too much food and don't get portioning right, so people get full up and leave stuff and it goes in the bin."

But Mr Swannell admitted Wrap faced a difficult task getting the message about wastage across, as so much of the country was in the dark about the problem.

He said: "There is a huge mountain to climb. But one of the easiest things people can do to help the environment is throw away less food."

Unwanted gifts worth £50m are binned
The Telegraph 14 Jan 08;

Wasteful Britons have binned unwanted Christmas presents worth almost £50 million, according to new research.

The study on behalf of Surrey county council found that the nation's least-loved gifts were toiletries, with a quarter of those asked claiming to have received unwanted soaps and perfumes.
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The survey found that 3.1 per cent of people threw their unwanted gifts straight in the bin.

An average cost of £10 per gift adds up to £48 million destined for the tip.

An enterprising 8.5 per cent turned their disappointment into profit by selling unwanted gifts on eBay or advertising locally.

A third of respondents said they would give their unwanted presents to charity shops, while 20 per cent confessed to saving them to give back to friends and family.

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California Turns to Holland for Flood Expertise

Joe Palca, NPR 14 Jan 08;

"They're actually cognizant that they're on a trajectory of change. And they're trying to adapt to that change. Rather than simply trying to make it work for today, they're trying to make it work for tomorrow as well,"

When you live near the water and below sea level, you had better be sure your flood defenses are in good shape. Holland is a country that knows this well; more than half of the country is below sea level, and throughout history the Dutch have constructed dikes and barriers to keep back the sea.

So it's natural that when policymakers in California looked for inspiration about what to do with their low-lying, flood-prone regions, they looked to the Dutch.

And now, Holland and California share another concern: Global warming is ratcheting up the risk of catastrophic floods.

California's water problems are largely focused in an area called the Sacramento Delta. It's a flood-prone triangle of land just northeast of the San Francisco Bay area. Climate change is going to make flooding worse, but deciding on a plan to do something won't be easy. Part of the reason is that there are a lot of federal agencies with opinions.

Phil Isenberg, a veteran California politician, has tracked water issues for decades. According to Isenberg, between federal agencies and state agencies, "any decision that gets taken in the delta in one sense or another involves over 200 different government agencies."

There are also environmentalists, agribusiness companies, developers and cities in the mix, all at odds about what to do. Jeffrey Mount, a geologist at the University of California, Davis, says California can't possibly make everyone happy.

"You have this situation in California where we are a bunch of consensus wimps," says Mount. "And frankly this is one of those problems where there'll be winners and losers, and we're never going to come up with consensus in this."

Mount says building higher walls to keep back the flood waters won't work. It would be ruinously expensive and is probably not the way to keep up with the sea level rise climate change is bringing. In considering solutions, California could benefit from the example of the Netherlands.

"They're actually cognizant that they're on a trajectory of change. And they're trying to adapt to that change. Rather than simply trying to make it work for today, they're trying to make it work for tomorrow as well," Mount says. "We haven't got there yet."

About 5,500 miles from the delta, Eric Boessenkool sits in his office at the Dutch Water Ministry in The Hague. His agency is in charge of Holland's aggressive strategy to keep climate change from swamping the country.

The Dutch federal government has concluded that it can no longer keep up with sea-level rise by building higher dikes. So it's considering innovative alternatives, such as building barrier islands in the North Sea. And it's trying to reduce the pressure on the dikes by allowing controlled flooding in certain areas.

But that can also mean forcing people to relocate.

"Of course, it's difficult to come in and say well, '30 years ago we wanted you to live here, to be a farmer, but now we want you to move out to keep the system safe,'" Boessenkool says.

Other flood-control projects are going on throughout the country, and they're just the start. Piet Dircke, an executive with the water engineering firm Arcadis, says the Dutch are considering their options for the next several centuries.

"Dealing with climatic changes," he says, "is a flexible process that will never end any more. We will have to adapt again and again."

And for the Dutch, adapting isn't something to debate about; it's something to do. Now.

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Manila creates green courts for environmental cases

Reuters 14 Jan 08;

MANILA (Reuters) - The Philippine Supreme Court will designate special courts to speed up a backlog of environmental cases and ensure polluters are penalized for breaking the law, a spokesman confirmed on Monday.

Manila's decision came as experts from the Asia-Pacific region began a conference in Bangkok aimed at improving enforcement of environment laws.

Illegal mining, logging and overfishing are serious problems in the Philippines but few violators are punished either because they pay off officials or because overworked judges tend to prioritize civil and criminal cases over environmental disputes.

"We want to come out with decisions so that we can set an example that environmental cases are really being prioritized and so we can enforce these environmental laws properly," said Jose Midas Marquez, the chief justice's head of staff.

"It seems that many of the violators don't really care because no one gets penalized. If we have cases clearly penalizing violators this might serve as a wake-up call."

Water pollution, poor sanitation and air pollution cost the Philippines around 14 billion pesos ($350 million) a year, according to a recent study by the World Bank.

Antonio Oposa Jr., an environmental lawyer who has fought several high-profile lawsuits, hoped the new courts would trigger more cases against polluters and raise awareness of environmental laws in his country.

Only one percent of environmental laws were enforced in the Philippines, he said, blaming ignorance or a lack of political will to enforce them.

"Many of these local governments are hardly aware of these laws," he told reporters on the first day of a U.N.-sponsored environmental conference in Bangkok.

Some 80 judges, prosecutors and legal experts from 40 Asia-Pacific nations are attending the three-day "Greening the Bench" conference, which aims to boost enforcement of environmental laws in the region.

Environmental courts and tribunals have been established across the region, including Australia, Bangladesh, New Zealand, Thailand, Pakistan and India.

But they do little good if laws are not enforced, experts say.

India has more than 200 environmental laws on the books, "but compliance is not there," environmental lawyer M.C. Mehta said.

"There is no enforcement. It is an appeasement policy towards the polluters," he said, adding that India's push for economic growth often came at the expense of the environment.

India has set up an environmental tribunal, "but it is totally headless in the sense that there is no judge heading it," Mehta said, adding the job offered fewer perks and less independence than other judicial positions.

In Thailand, more than 1,000 environmental cases have been brought to "green" benches since they were set up in 2004, but most of those cases are still winding through the system.

In Manila, Marquez said about 150 courts would be designated as environmental courts within the next two weeks and guidelines for hearing the cases would then be issued. Judges would have to attend training seminars.

($1 = 40.585 pesos)

(Reporting by Carmel Crimmins; Additional reporting by Darren Schuettler in Bangkok; Editing by Sanjeev Miglani)

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Sierra Leone bans timber exports

Reuters 14 Jan 08;

FREETOWN (Reuters) - Sierra Leone's government has banned the exportation of timber after "indiscriminate destruction" by Chinese and other foreign businessmen, a senior official said on Monday.

Hassan Mohammed, deputy director of the forestry ministry, said Chinese loggers had wreaked havoc in the savannahs of northern Sierra Leone by chopping down fire-resistant trees for export.

The Pterocarpus erinaceus, also known as barwood, is valued by Asian woodcarvers but is becoming increasingly rare in West Africa.

"Because of the indiscriminate destruction by some Chinese businessmen and other foreign nationals, the government has banned the exportation of timber from Sierra Leone," he told Reuters in an interview.

Local tribal authorities had collaborated with the Chinese businessmen in the logging, which had driven off wild animals from the area and provoked a creeping desertification.

"We are now expecting that inhabitants living around the area will have to move to secured towns and villages as displaced," Mohammed said.

Without tree roots to bind the earth, erosion had swept away most of fertile top soil, making it impossible for local pastoralists to graze their livestock.

Mohammed said the government was looking at changing forestry legislation for both Sierra Leoneans and foreigners seeking to exploit the West African country's timber resources, often by illegally logging trees and smuggling the wood across the Guinean border.

Accurate figures for lumber exports are not available due to the prevalence of illegal logging, Mohammed said.

Sierra Leone's environment was badly damaged during a 1991-2002 civil war during which many jungle species, particularly apes and monkeys, were hunted nearly into extinction for bush-meat.

(Reporting by Christo Johnson, writing by Daniel Flynn, editing by Mary Gabriel)

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Biofuel impact on farm prices overplayed

Sybille de La Hamaide, Reuters 14 Jan 08;

PARIS (Reuters) - The recent price rally in farm commodities such as grains, oilseeds and sugar beet can be attributed partly to higher biofuel demand but their share of the blame has been exaggerated, a top official of the Organisation for Economic Cooperation and Development (OECD).

Loek Boonekamp, a division head in the Agro-food Trade and Markets Division at the Paris-based OECD, said the surge in farm product prices -- with cereals more than doubling last year -- would have happened even without the rise in biofuel production.

"Closing your eyes and blaming the current high prices to biofuels is just too simplistic," he told the Reuters Global Agriculture and Biofuel Summit.

Boonekamp said a sharp drop in supply mainly due to adverse weather conditions in top producing countries such as Australia, tight stocks worldwide and higher demand for food in developing countries were playing the biggest role in the rally.

"We think that there are enough elements in current commodity markets that resulted in very high prices for cereals and oilseeds and even they would have happened without this hike in biofuel production," he said.

He stressed that the supply shortfall in the main grain producing countries -- the United States, Canada, Australia and the European Union -- had been of 60 million tons, four times as large as the increase in demand (for biofuels).

Biofuels have become a major issue on global commodities markets over the last years as they are increasingly put forward as politically, environmentally and economically friendly alternatives to fossil fuels.

HIGH PRICES IN NEXT DECADE

Made of grain, oilseeds and sugar, the so-called "green" fuels are expected to lower dependence on fossil fuels, cut carbon dioxide emissions -- one of the main causes for climate change -- and raise farm revenues.

But many observers have pointed to their fast development to explain the rally in farm prices, notably for wheat, corn and soybeans whose prices surged in the past year, leading to higher food prices and raising inflation worries.

An OECD study released last year also stressed that the cure may be worse than the disease, saying doubts remained whether biofuels could still be considered "green" when all elements, including the energy and pesticides used to produce feedstock, are included in the balance.

Boonekamp said prices for agricultural commodities on international markets would remain high in the next decade, buoyed by biofuels but also higher food demand and high oil prices.

For grains, oilseeds and sugar beets alone, Boonekamp pegged the average rise in prices at between 10 to 40 percent compared to the previous decade's average.

In July last year a joint study by the OECD and the United Nations Food and Agriculture Organisation (FAO) had predicted a rise of 20 to 50 percent in the next 10 years but Boonekamp said the projection was for all agricultural commodities.

The OECD expects the global biofuel production to reach 125 billion liters of ethanol and biodiesel by 2016 compared to under 50 billion liters currently, a rise of around 160 percent.

"That is of a major impact for agricultural markets (...) because if you want to produce a large amount of biofuels it would require a large share of the crop and an enormous amount of land," he said.

If indeed there was a 160 percent rise in biofuel output by 2016, it would take up about one third of cereal land in the United States and in Canada and about half of the cereal, oilseeds and sugar beets land in the European Union, he said.

"That is translated into a fundamental new demand for agricultural commodities, a demand that did not exist five years ago, even three years ago. We expect that sort of demand to have a major impact on agriculture commodities prices," he said.

LOWER PROFITABILITY

Boonekamp stressed that this rise in feedstock prices could have a direct impact on the profitability of the sector because their share represented between 50 and 90 percent of biofuel production costs depending on the region and the feed used.

"So when these feedstock prices increase you have a very large share of your total costs part of the production that is increasing," he said.

For U.S. ethanol, which is mainly made from corn (maize), he said returns on operation costs were at 40 cents per liter during the 2005/2006 season, 25 cents in 2006/2007 and just one cent in December 2007 due to higher prices.

Since December, U.S. corn prices continued to surge, breaking 11-year records this month.

"The increase in wheat and corn prices have drastically reduced the profitability of the (biofuel) industry," he said, adding that oil prices also impact profitability as fossil fuel was widely used at all stage of biofuels production.

"The only ethanol production where the total net costs, taking account of the sale of by-products etc, is below the current oil price is in Brazil," Boonekamp said.

"None of the other countries even with the higher oil prices have a production situation where ethanol and biodiesel is competitive on a cost basis with fossil fuels."

(Additional reporting by Tamora Vidaillet; editing by Michael Roddy)

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UK biofuels push lacks greenhouse targets

Reuters 14 Jan 08;

LONDON (Reuters) - A government directive requiring fuel suppliers to use more biofuels will do little to combat climate change because the measure lacks targets to reduce greenhouse gas emissions, British scientists said on Monday.

In a report focusing on the British directive set to take effect in April 2008, the Royal Society said biofuels should play an important role in cutting greenhouse gas emissions linked to global warming.

The Renewable Transport Fuel Obligation requires transport fuel suppliers to ensure that 5 percent of all fuels come from a renewable resource by 2012. The requirement is part of a wider European Union biofuels directive.

"The government must ensure that the (requirement) promotes fuels with the lowest emissions by, for example, setting a greenhouse gas reduction target," John Pickett, who led the Royal Society's biofuels study.

"Without a target we risk missing opportunities to stimulate exciting innovations that will help us cut our spiraling transport emissions."

Biofuels, mainly produced from agricultural crops such as maize, sugarcane and vegetable oils, are seen by many as a way to cut emission of greenhouse gases and to boost energy security at a time when oil output may be at or near its peak.

The British report said both the EU and the government's requirements would do more to boost economic development and create energy security than fight climate change.

It also urged the government to extend the fuel transport requirement for 20 years in order to stimulate long-term investment to nurture a strong British biofuels industry.

"In designing policies and incentives to encourage investment in and the use of biofuels, it is important to remember that one biofuel is not the same as another," Pickett said.

"Indiscriminately increasing the amount of biofuels we are using may not automatically lead to the best reduction in emissions."

(Reporting by Michael Kahn; editing by Chris Johnson)

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OECD wary on biofuel policies

Tamora Vidaillet, Reuters 14 Jan 08;

PARIS (Reuters) - Governments may be getting a clearer picture of the shortcomings of current biofuel policies but the likelihood they can remedy any wrongs looks far from certain, a senior OECD official said on Monday.

Loek Boonekamp, a division head in the OECD's Agro-food Trade and Markets Division, singled out price-supporting trade barriers, erected by Europe and the United States, as one example of "wasteful" and "distorting" steps taken to date.

But even governments aware of policy weaknesses would find it very hard to backtrack on such supportive policies in the face of powerful lobby groups.

"I'm not very optimistic that because we say that the policies are bad and wasteful that governments will go away and do something else," he told the Reuters Global Agriculture and Biofuel Summit in Paris.

"Support policies generate vested interests...once these vested interests are there and these support policies are well entrenched, it is incredibly difficult to get rid of this," he said.

Governments need to free up trade conditions for biofuels and the ingredients used to make them to ensure production on a global scale makes more economic sense, he said.

SECOND GENERATION

They should also spend less public funds on supporting the development of traditional biofuels, made of grain, oilseed and beets, because they contribute to lofty food prices and have adverse impact on the environment.

"It might be better use, once everything is said and done, of government funds to stimulate the research and development of second generation technologies," he said.

Second generation biofuels involve the breakdown of non-edible crops and even municipal waste by enzymes to create liquid motor fuel.

That would be better than investing in first generation technology which soon could be out of date, he said.

It was not a given that second generation biofuels would be a force to be reckoned with in the next 10 years, he said, adding that what was needed was to find more rapid and less expensive ways to break down the enzymes.

Debate also needed to focus more on the demand side of the energy picture than on looking to biofuels as a solution, with the OECD believing bigger gains could be secured at lower cost through other means.

Greater efforts to develop fuel efficient cars and the introduction of an energy tax on all fuels would do more to address imbalances on energy markets than by mandating the use of biofuels in transportation, he said.

In September, the OECD published a report suggesting that biofuels had far fewer environmental and economic benefits than many people think.

Titled "Biofuels: Is the cure worse than the disease?", the report called into question the extent to which biofuels can increase the security of energy supplies and pointed to their role in pushing up food prices.

(Additional reporting by Sybille de La Hamaide; editing by Michael Roddy)

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EU rethinks biofuels guidelines: "Did not forsee the problems"

Roger Harrabin, BBC News 14 Jan 08;

Europe's environment chief has admitted that the EU did not foresee the problems raised by its policy to get 10% of Europe's road fuels from plants.

Recent reports have warned of rising food prices and rainforest destruction from increased biofuel production.

The EU has promised new guidelines to ensure that its target is not damaging.

EU Environment Commissioner Stavros Dimas said it would be better to miss the target than achieve it by harming the poor or damaging the environment.

Clampdown promised

A couple of years ago biofuels looked like the perfect get-out-of-jail free card for car manufacturers under pressure to cut carbon emissions.

Instead of just revolutionising car design they could reduce transport pollution overall if drivers used more fuel from plants which would have soaked up CO2 while they were growing.

The EU leapt at the idea - and set their biofuels targets.

Since then reports have warned that some biofuels barely cut emissions at all - and others can lead to rainforest destruction, drive up food prices, or prompt rich firms to drive poor people off their land to convert it to fuel crops.

"We have seen that the environmental problems caused by biofuels and also the social problems are bigger than we thought they were. So we have to move very carefully," Mr Dimas told the BBC.

"We have to have criteria for sustainability, including social and environmental issues, because there are some benefits from biofuels."

He said the EU would introduce a certification scheme for biofuels and promised a clampdown on biodiesel from palm oil which is leading to forest destruction in Indonesia.

Some analysts doubt that "sustainable" palm oil exists because any palm oil used for fuel simply swells the demand for the product oil on the global market which is mainly governed by food firms.

US expansion

Mr Dimas said it was vital for the EU's rules to prevent the loss of biodiversity which he described as the other great problem for the planet, along with climate change.

On Monday, the Royal Society, the UK's academy of science, is publishing a major review of biofuels. It is expected to call on the EU to make sure its guidelines guarantee that all biofuels in Europe genuinely save carbon emissions.

In the US the government has just passed a new energy bill mandating a major increase in fuel from corn, which is deemed by some analysts to be useless in combating rising carbon dioxide emissions.

The bill also foresees a huge expansion in fuel from woody plants but the technology for this is not yet proven.

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Philippines bans building to preserve tourist spot

Yahoo News 14 Jan 08;

The Philippine government Monday imposed a six-month building ban on the resort island of Boracay, famed for its powder white sand and crystal clear waters.

The tiny island in the central Philippines draws more than half a million tourists each year, or more than one-sixth of last year's record arrivals in the country, according to official data.

However, the 10.32 square-kilometre (3.98 square-mile) island has drawn bad publicity in recent years due to sewerage contamination of the sea and the dumping of garbage in an open pit near the beach.

Environment and Natural Resources Secretary Joselito Atienza said all construction permits would be withheld until the end of June.

"Rapid growth threatens the viability of Boracay as a tourist destination," Atienza said in a statement.

Aside from the nagging problems of the lack of clean drinking water, overcrowding and waste disposal, the problem of flooding now also haunts Boracay."

He said uncontrolled development was to blame.

"Even the forests in Boracay have been depleted and several residential and tourism facilities have been constructed on mountain slopes. These activities will eventually compromise public safety," Atienza said.

Over the next few months, the department will consult with experts and Boracay stakeholders to craft a master environmental plan that would guide future building activity, he said.

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Asia biodiesel plants idle as costs soar

Naveen Thukral, NDTVProfit.com 14 Jan 08;

KUALA LUMPUR (Reuters) - For many of southeast Asia's struggling biofuel makers, the global debate over using crops for food or as transport fuel is irrelevant -- a surge in palm oil prices has brought the industry to a standstill.

Even oil prices at $100 a barrel aren't helping companies who have invested tens of millions of dollars into plants that convert Indonesian or Malaysian palm oil into near zero-pollution diesel -- at a cost some 30 percent higher than regular diesel.

Over a dozen biodiesel plant projects have been delayed, while many of those already built are operating at a fraction of their capacity, according to a survey conducted ahead of the Reuters Global Agriculture and Biofuels Summit on Jan. 14 and 15.

Economics aren't the only factor: demand from Europe has been hurt by accusations that farmers are clearing large swathes of tropical forests to make way for plantations; governments have dragged their heels on policies that would require large-scale biodiesel use in domestic fuel.

The halcyon days of 2005, when vegetable oil-based green fuels were cheaper than crude petroleum and Europe made big plans to use biofuel, are now a distant memory.

"The prospects of the biodiesel industry are very slim, unless feedstock prices come down and we see mandates and subsidies in place," said Singapore-based biofuels analyst Chris de Lavigne at consultancy Frost and Sullivan.

Malaysia, the world's second-largest palm oil producer, took the lead three years ago, licencing more than 90 companies to set up biodiesel projects with a capacity of nearly 10 million tonnes, or some 200,000 barrels per day (bpd) in oil terms.

Today, the country has just 7 plants running, most of them below capacity, with 2008 output likely to be less than 100,000 tonnes, according to a Reuters survey of biodiesel projects in Malaysia, Indonesia and Singapore.

The survey showed 14 projects with a combined capacity of more than 2 million tonnes have either been shelved or delayed.

At least 1 million tonnes in biodiesel capacities sit idle -- an estimated $250 million in investment, based on estimates that each 100,000 tonnes of capacity costs about $25 million to build.

In Singapore, Australia-based Natural Fuel's 600,000 tonne plant is running at just 10 percent of the capacity as surging raw material prices have turned margins negative, a market source close to the company told Reuters.

"I don't see any point in going ahead with biodiesel. We lose money," said an official of a Malaysian plantation company which has shelved plans to build a biodiesel plant.

PRICES SURGE

Palm oil, which soared by more than 50 percent last year, has extended gains to new records in recent weeks thanks to a cocktail of booming demand from the food sector in Asia, lower output in Malaysia due to flooding and surging global crude and vegetable oil markets.

Crude palm oil, the main ingredient for biodiesel, now costs just over $1,000 a tonne, while petroleum-based diesel fuel trades at about $780 a tonne in Singapore.

That grim reality made Finnish refiner Neste Oil's announcement in November that it would build the world's largest biodiesel unit in Singapore all the more surprising, especially as it plans to use mainly palm oil for feedstock.

"The bottom line is that biodiesel is much more expensive than diesel, and I don't see much activity at the regulatory level," said Peter Cockcroft, a regional energy expert.

While some consumer nations like South Korea have pushed through small mandates that require domestic fuel to contain a certain percentage of bio-material, major producers have proven surprisingly reluctant to stimulate local demand.

Malaysia, which heavily subsidises domestic retail fuel thanks to hefty oil and gas export revenues, has indefinitely put off plans to introduce palm-blended diesel in the domestic market as the country would rather make more money selling palm oil to the food industry.

On top of this, palm oil, which was once considered an answer to the world's growing appetite for alternative fuels, faces questions about sustainability.

In Europe, policy makers and environmentalists consider the rapid expansion in Southeast Asia's palm estates responsible for the destruction of tropical forests and wildlife. Malaysia's palm oil sales to Europe from January to November were down a fifth from a year ago.

Nevertheless, many investors are sticking with it in hope that prices and policy will turn in their favour.

"We believe that you don't build a commodity business according to the cycle, you go in for long-term strategy," said Nathan Mahalingam, managing director of Australia-listed Mission Biofuels, which is building a second plant in Malaysia.

But he said: "It is a ridiculous price situation to be in and times are going to be challenging."

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