Malaysia-based Pioneer Bio Industries Corp Sdn Bhd claims it will be able to produce a startling 1.7 billion gallons - roughly equal to 780,000 barrels of oil equivalent per day - of nipah (a.k.a. nypa fruticans or mangrove palm) palm ethanol per year when its planned refineries in Malaysia’s North-Western Perak State begin operations in 2009.

Ethanol can be obtained from fermenting the sugar-rich nipah sap that can be tapped continuously from the trees’ inflorescence, and nipah has a very high sugar-rich sap yield.  Some studies estimate potential ethanol yields to be as high as 20,000 liters once plantation management is optimised.  The tapping technique, however, is labor-intensive and it remains a question whether production can be scaled up that easily.

At a media briefing, the “National Biofuel Project based on Ethanol from Nypa Palm - Industrial Project Investment and Solution for Solving Global Warming,” Pioneer Bio Indistries chairman Md Badrul Shah Mohd Noor put the venture into a larger perspective, indicating that U.S. ethanol demand alone stood at 22 billion liters last year, and that the biofuel is forecast to provide 30% of global energy by 2020, up significantly from only 2% last year.

Giving details about the nipah project, Badrul Shah said the Perak state government has awarded the company the rights to harvest nipah sap on 10,000 hectares of land, for which it has to pay 324 million ringgits (€70/US$94 million) per year.  PBIC, a subsidiary of Pioneer Vaccination Biotech Corp Sdn Bhd, holds the patent to produce ethanol from nipah palm sap.  Badrul Shah said the company will sign a multi-billion dollar contract with a major international company in July to supply nipah-based ethanol over a five-year period.

Try not to laugh, but, according to UK publication the Guardian, Cuban and Venezuelan heads of state have recently slandered the biofuels industry, warning that the U.S.-backed rush towards ethanol will worsen global hunger and poverty. 

 
Cuban President Fidel Castro wrote two newspaper articles, voicing alarm at the prospect of countries boosting sugar and corn crops to make ethanol, the Guardian reports.  For the Cuban Communist party’s official newspaper, Granma, Castro wrote that by diverting crops to feed cars (as opposed to feeding people), the price of food would rise, and the world’s poor would go hungry.

 
Venezuelan president Hugo Chavez was quoted by the Guardian: “When you fill a vehicle’s tank with ethanol, you are filling it with energy for which land and water enough to feed seven people have been used.”  It remains unclear, the paper reported whether Venezuela would go ahead with sugar mills and ethanol plant investments.  Last month, Dow Jones Newswires reported that Cuba has plans to build eight new ethanol distilleries and export roughly 200 million liters of biofuel by 2011.

President Bush and Brazilian president Luiz Inacio Lula da Silva met at the Camp David presidential retreat this weekend(for the second time in three weeks) to discuss trade and ethanol.

Pres. da Silva hopes to advance a biofuels alliance and help break a deadlock in world trade talks known as the Doha Round, which were launched in 2001 and stalled last year.  Developing countries were upset because rich nations wouldn’t make significant cuts in farm subsidies and demanded greater access to markets in the developing world.  No major breakthrough on those talks was expected at Camp David.

“What the two presidents want to review is where we are and what needs to be done and what President Bush and President Lula can do to move forward,” said Dan Fisk, the National Security Council’s senior director of Western Hemisphere affairs. 
The two leaders’ talks on ethanol was expected follow up a memorandum of understanding to promote international ethanol that the two nations signed when Bush visited Brazil on March 9.  Fisk said the two hoped to announce a handful of Caribbean and Central American nations that will be the beneficiaries of pilot programs for biofuels development.
Last Friday, Silva reiterated Brazil’s position that the alternative fuel will not gain traction worldwide unless the U.S. drops a 53-cent-per-gallon tariff on Brazilian ethanol: “The subsidies provided under America’s corn-based ethanol program have spurred an increase in U.S. cereal prices of about 80%,” Silva wrote in The Washington Post. “This hurts meat and soy processors worldwide and threatens global food security.”
The promotion of ethanol could eventually help wean the U.S. off its need for foreign oil, officials say, lessening the energy dependence on volatile Middle Eastern nations and Venezuela, whose President Hugo Chavez has long been a political thorn in the Bush administration’s side.
Teaming up with Brazil on the promotion of ethanol, however, hasn’t pleased everyone.  U.S. Corn farmers don’t like the idea of the government helping Brazil’s industry, which they see as a competitor.  Lawmakers from corn-growing states have registered their complaints with Bush.

Farias, a major northeast Brazil sugarcane group, has signed a protocol of intentions with Chinese investors to build ethanol mills that could process up to 10 million metric tons of sugarcane per harvest, according to a report in local Valor Economico newspaper on Monday.

The Chinese companies interested in investing in Brazilian ethanol mills could be Jilin Fuel Ethanol, Henan Tianguan, Anhui Fengyuan Bio-Chemical and Heilongjiang China Resources Jinyu, which together produce 1 billion liters of ethanol per year, said the report. Possible investments could hit 1.2 billion Brazilian reals, with two greenfield projects currently being analyzed in the northeast state of Maranhao, said the report.

The Farias group currently has five operational mills and a new Goias mill expected to enter operation for the 2007-08 harvest. The group crushed roughly six million metric tons of cane last season, and by 2010, the Farias group plans to hit a crush capacity of just under 15 million metric tons; by 2015, the group plans to process 32 million ton of cane.

Brazil’s Agricultural Minister Luis Carlos Guedes Pinto said yesterday that if Japan guarantees purchases of Brazilian ethanol, Brazil will guarantee a long-term supply.  Ethanol supply contracts with Japan could be long-term, stretching over about ten years, said Guedes Pinto, who is scheduled to travel to Japan next weekend to participate in the Foodex food fair.

 
Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, for the past few years has been in talks with Japan, a major oil importer, about long-term ethanol export contracts, but Japanese officials have delayed sealing any deals as they wait for more guarantees that Brazil will be able to furnish ethanol without weather hitches or supply problems.

 
If a contract is closed, Petrobras has estimated that Japan could import between 1.8-6 billion liters of ethanol a year, depending on whether the government mandates a 3% to 10% mix of ethanol in its gasoline.  Last year, Brazil exported a total of 3.4 billion liters, of which less than 7% went to Japan, according to Agricultural Ministry data.

 
Petrobras and the Japanese Mitsui & Co. last week signed a memorandum of understanding to study the construction of an ethanol pipeline network in Brazil. The companies plan to study the technological and economic viability of a pipeline network aimed at exporting ethanol from Brazil to Japan and other markets, Petrobras said in a release.

 
Petrobras, and the Japan Bank for International Cooperation also signed a memorandum of understanding on biofuels on Monday, and the companies plan to evaluate financing possibilities for biofuel projects to be developed jointly by Petrobras and Japanese companies, both inside and outside Brazil.  Projects to be evaluated include the production and sale of ethanol and biodiesel, electric power plants using sugar cane bagasse as raw material.

Brazil President Luiz Inacio Lula da Silva said yesterday that he will push President Bush to reduce the United States’ $0.54/gallon ethanol import tariffs at a meeting later this week in Sao Paulo, where the two presidents are expected to sign an accord to spread the use of ethanol in the region during the visit. 

 
“High tariffs placed by the U.S. on Brazilian ethanol make no sense,” Lula said during his biweekly radio program.  “I think that we are close to an accord (in the Doha round) which could favor agricultural nations - principally those that don’t have the chance to compete globally,” said Lula, who also added that Bush is key to progress in the talks.

 
Sergio Gabrielli, the chief executive of Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, said yesterday his company won’t export ethanol to the U.S. if the import tariff remains in place: “The U.S. has the world’s biggest ethanol production and its biggest gasoline consumption…But it’s practically impossible to do business in ethanol with the currently existing tariff.”  Petrobras produces ethanol and also sells it domestically and to Venezuela and Nigeria; Petrobas is also in talks about major ethanol exports to Japan.

Abengoa Bioenergy, a unit of Spain’s Abengoa SA and Europe’s biggest producer of ethanol, said that it wants to build a $200 million ethanol plant in Madison, IL, that, with the necessary permits, could be operational by 2009. 

 
Speaking of permits, Abengoa already has a permit to build an ethanol plant in Indiana, which would join Albenoga ethanol plants in  Nebraska (a second Nebraska plant is being built too) and Kansas.

 
The Illionios ethanol plant would reportedly employ 50-60 people and produce 88 million gallons of ethanol per year.

Michael Yost, the head of the U.S. foreign agriculture service, said African and U.S. farmers both stood to profit from the growing demand for grains that can be converted to ethanol or biodiesel, two clean burning substitutes for gasoline and normal diesel fuel.

 
“The advent of renewable energy is global,” he said in an interview. “I think it could be the biggest paradigm shift we have seen in a long, long time in agriculture.”

 
Kenya’s minister for trade, Mukhisa Kituyi, told the U.S.-East Africa Region Agribusiness Trade and Investment Mission conference that African governments recognize that agriculture is their strongest industry and that Africa wanted to move from producing raw materials to processed goods.

 
Kituya also said the economics and politics of global trade in cereals has been turned upside down by the rising price of oil, global warming, and new interest in biofuels produced from grain. “The fact that there is now an insatiable market in converting cereals into biodiesel not only escalates the prices of cereals around the world, but threatens to take food out of vulnerable mouths,” he said. “A new opportunity has been created.” He said if managed properly, African farmers could see a greater market for their goods and less competition from farmers in developing countries.

 
U.S. and European leaders are concerned about global climate change and dependence on Middle East oil, and have set high targets for increasing the use of biofuels. Some experts question whether farmers in those regions can meet the demand, possibly creating a market for African farmers.

 
Yost said in less than a year, the U.S. government has been able to drop all trade-distorting subsidies for grains and oil seeds because of the increased demand for biofuels. “We’ve had discussion today with different African agribusiness’ and they are looking for technology, they are looking for know-how,” he said. “With the rising demand for renewable energy, I see it raising prices and raising interest, raising the investment potential around the world, everywhere.”