Biofuels have turned into a "green goldrush"

4 May 2007

The March 10 2007 issue of the economics-based Dutch weekly Fem Business has Jacco Neleman digging into the 'rush' regarding the rise of biofuels in the Netherlands and abroad.

Besides first generation bio-ethanol, produced from crops that could serve as food or feed as well (wheat, sugarcane and corn), the development of second generation bio-ethanol is gaining speed. In the town of Sas van Gent the company Nedalco is building a plant based on technology developed by Delft Technical University/The Kluyver Center. Straw, chipped wood and other difficult to digest waste, like from silage maize and corn production, are turned into bio-ethalol by a genetically modified version of a yeast isolated from elephant dung. Nedalco has plans for a second plant connected to 2 sugar factories their holding company Cosun runs in Groningen, in the Northeastern part of the country. These 2 plants together can cover 80% of the expected national demand for bio-ethalol, according to factory director Ger Bemer. The article lists a number of advantages of second generation bio-ethanol plants:

• cheaper
• a CO2 reduction of 50-80% can be achieved, as compared to 30-50% with first generation bio-ethanol production,
• no competition for raw material versus food and feed use, thus less price increase.

Ger Bemer and Technical University of Delft professor Karel Luyben are both proud that, after 5 years of preparations, the new factory is under construction.

Elsewhere in the world comparable initiatives take shape. Shell and Iogen Energy togethered opened a pilot plant 3 years ago in Ottowa, Canada. Volkswagen is investigating possibilities to start a bioethanolplant in Germany.

Because investments are lower and the expected difference between supply and demand is bigger, there are even more plans for production facilities for biodiesel. Biovalue expects, after an experimental phase starting May 2007 to become fully operational in September 2007. Other initiatives like Argos in Rotterdam and Greenmills in Amsterdam are expected to follow one year later. With biodiesel, however, another problem becomes eminent. If demand for it increases as expected, will raw material availability become a problem? Susan Hansen, head of the Clean Technology research departnebt of Rabobank expects that the need for oilseed rape will exceed what is produced in Europe. The Greenmills initiative is less vulnerable in this respect: they intend to use frying oil waste from fast food restaurants. 

Apart from the article, one has to mention that, regardless of all environmental considerations, an important factor for investing in, and production of, biofuels, not mentioned in the article, remain crude oil prices.

source: FEM Business, March 10, 2007, Jacco Neleman