Bio Products Opportunity

New Zealand is well on its way to becoming one of the most environmentally friendly nations on the planet, especially if its government has its way. The small nation has a plan to half its transport emissions by 2040 by using biofuels, hybrids and electric vehicles, according to an energy strategy released by Prime Minister Helen Clark. The government hopes that battery-electric vehicles will make up 60 per cent of the market share by 2040, and that hydrogen-powered vehicles make up 25 per cent by 2050. The move is aided by New Zealand’s already largely clean electricity, 65 per cent of which is produced by renewable means (a figure they want to increase to 90 per cent by 2025).

However, the media and private companies aren’t quite as sold on electric cars as the government just yet. EVs have copped considerable criticism from New Zealand’s Dog and Lemon Guide, an influential car magazine. Author Clive Matthew-Wilson attacked the cars for being high cost, range-limited and in constant need of recharging. The author also said that the light-weight materials used for EVs such as carbon fibre, also used in a number of conventional vehicle components such as spoilers, were expensive to make and “incredibly toxic”. The comments (however questionable they may be) have prompted Meridian Energy, a power company that was planning to import a small number of electric cars for a trial, to review the plan, though it currently has no intentions to scrap the trial entirely.

NZ Energy Minister, David Parker, has rejected the claims of Dog & Lemon, saying that much of the technology going into electric vehicles is already used in conventional cars and that the energy used to power them would be largely renewable.

“The Prime Minister recently announced a target of 90 per cent renewable energy in the electricity sector by 2025, so we are set to see amounts of renewable electricity available increasing over time,” he said.

“New Zealand is fortunate to have so much renewable energy available at economic prices; the uptake of technologies such as electric cars will see an increasingly sustainable transport fleet.”

(Sources: NZ Herald, The Age)

Algae could potentially be used to create more than just biodiesel, if one Australian researcher has his way. Associate Professor Ben Hankamer, from the Institute for Molecular Bioscience at the University of Queensland, is leading an international consortium which is focused on generating fuels such as methane, biodiesel and hydrogen from algae and sunlight.

The Solar Bio-Fuels Consortium is a collaborative research effort by academics from the University of Queensland,&nbspas well as&nbspnumerous universities&nbspin Germany and Imperial College in London, England,&nbspwith the aim of developing methods of renewable biofuel production that do not suffer from the drawbacks of traditional crops such as corn. The group conducts “bio-discovery, structural biology, molecular biology, microbiology, genomics, transcriptomics, proteomics, metabonomics, culture optimization and bioreactor scale-up within a coordinated research program”, according to their website.

Algae naturally capture sunlight and use its energy to split water (˒O) into hydrogen and oxygen, however this process is not efficient enough to make it commercially viable.

The Consortium uses this natural reaction, but is developing ways of enhancing its efficiency to a level where the process will be economically viable. This will be done with the help of a $286 000 Australian Research Council grant received last week.

“We have conducted detailed feasibility studies that show that, once key technical milestones are overcome, this technology could achieve economic viability, which will increase further with the introduction of carbon trading schemes and the predicted rise in the oil price,” Associate Professor Hankamer said.

“We have focused on micro-algae as a source of hydrogen because they have several advantages over traditional bio-fuel crops.”

The concept may also prove beneficial for Australia as a desalinising method to provide clean water to drought-stricken parts of the country. Algae that can feed on salt water produces hydrogen and oxygen, which can then be combusted and condensed to clean water without the salt content, combining clean water production with carbon-neutral electricity generation.

The technology could also be used in conjunction with existing coal-fired power plants to absorb much of the carbon dioxide emitted, feeding the algae and effectively “reusing” the greenhouse gas. The algae can then be used to generate hydrogen with no carbon emissions, as well as other biofuels. This process is a substantial improvement from current hydrogen generation methods, which use methane as a feedstock and generate carbon dioxide.

(Source: UQ News)

Today the New York times has an article on the collapse in Ethanol prices. The article is a well written overview of the industry and the current impact and reasons for a collapse in the prices. I’m not going to go through all the points the article makes, go read it here — its really worth it. I’m going to talk about what I think is the most important challenge facing the ethanol industry, the federal government and the farmers who are growing the corn and producing the ethanol.

First off most people don’t understand how fragmented the industry is. Most ethanol producing plants, or at least a good majority of them, are owned and operated by farmer cooperatives. This means that the industry has a lot of room to consolidate which will lead to larger margins and less volatility. In the past 2 years, ethanol plants have sprouted (pun) up in hundreds of places throughout the midwest — these plants are relatively inexpensive to build and the technology is well tested. The real issue however is one of transportation. As you can see production is not a problem — there is lots of corn out there for ethanol and there are lots of people turning it into ethanol, but there are not a lot of people getting it from point a to point b. Ethanol, unlike oil and Natural Gas, is difficult to transport — its an organic good and has a sort of sell by date by which it has to be blended into oil if that is the final destination.

Interestingly this transport issue is a common one in the Energy industry. The electrical grid is suffering from the same lack of underinvestment. Why does this dilemna exist? Well most transport networks — for ethanol (pipelines), for electricity (transmission lines), require massive amounts of capital expenditure, with a lot of sunk costs. I’m not sure about this, but as we saw with the bridge collapse this summer in Minnesota, the federal government has stepped back on its responsibility to build and maintain our networks (roads, grids…).

The article makes an interesting point about the likelihood of the federal government having to expand its subsidies to ethanol farmers to protect them during this glut in the market — maybe instead of funding the expansion of an industry already in an overproduction stage, maybe they could pour that money into getting rid of the transport bottleneck. This will allow ethanol to reach end users for its traditional uses of being blended into oil or as a substitute for MBTE, and potentially allow for continued expansion of our inclusion of ethanol into other energy systems.

Ah but what about the effects of increased ethanol production of food prices? on the environment? I’ve already written about my dislike of ethanol as the ’solution’. I don’t think its a solution, i think its a delay mechanisms, but I also see that if we can leverage ethanol through an improved transportation network then people can be allowed to be more creative with the uses and applications of ethanol. Its a complicated situation for sure, but the federal government will continue to be involved and I just hope its in a more constructive way then just giving farmers a check because the market for their product isn’t strong.

It might not strictly be Australian, but our trans-Tasman neighbours deserve some credit for this: Boeing, Air New Zealand and Rolls-Royce have announced a partnership to demonstrate the ability of biofuels to be used in passenger aircraft next year.

Exact details are somewhat limited at the moment and are expected to come out closer to the date, but the demonstration flight is scheduled for the second half of 2008 using one of Air New Zealand’s Boeing 747-400 aircraft, outfitted with Rolls-Royce gas turbine engines. One of the engines will be specially modified to take the biofuel, with the other three running on standard jet fuel.

“Bio-jet” fuels, as Boeing is referring to them, are likely to come from second-generation feedstocks such as cellulosic ethanol or algae biodiesel, though the exact fuel to be used has not been specified. The graph above, from Green Car Congress, shows the relative carbon dioxide emissions when compared to the currently used Jet-A fuel, which is derived from crude oil. Bio-jet fuel is expected to emit only 40% of the CO2 emissions of standard jet fuel, though the graph includes only exhaust emissions, and does not include upstream absorptions and emissions.

Air NZ CEO Rob Fyfe said that the test marked a “significant step” in making his airline as environmentally friendly as possible:

“Simply, we are taking the first step on what promises to be a defining and inspiring journey,” he said.

“It’s hard to believe that as little as a year ago, biofuel seemed like pie in the sky and was being written off by many commentators in terms of aviation application.

“But it is now becoming a genuine possibility and the technology is moving so fast that it may become commercially viable in a much shorter time frame than we previously thought.”

(Sources: The Australian, Green Car Congress)

With the Australian Ethanol and Biodiesel conference happening this week in Brisbane, biofuel user groups Biodiesel Association of Australia and Renewable Fuels Australia are joining together to form the Biofuels Association of Australia (BAA Inc).

The move to merge the two prominent biofuel lobbies was prompted by a perceived need to more heavily promote the use of renewable fuels in Australia and push for greater government support in light of the upcoming federal election.

“This is a bold step as it challenges both ethanol and biodiesel to work for the common good of biofuels, as well as those vested interest factors that distinguish ethanol and biodiesel as cleaner burning renewable fuels,” said Bob Gordon, executive director the Australian Renewable Fuels Association. “Australia’s role in [the global biofuel market] has yet to be determined, and every effort has to be made of the opportunity of the federal election to effectively get this message across to both the Coalition Government and the Kevin Rudd Labor Party alternative.”

(Sources: North Queensland Register, Biofuels Australasia)

A lack of support from state and federal governments is putting Australia at risk of falling well behind the rest of the world in biofuel research and production, according to one researcher.

Dr Stephen Clarke, a chemistry lecturer at Flinders University who is currently attempting to set up a national biofuels research facility in South Australia, says that research is accelerating quickly in the United States thanks to strong influence from state and federal governments.

“There are 148 major biodiesel plants operating in the U.S. and by 2012, 50 per cent of all new vehicles produced in the US will run on biofuel - E85 and biodiesel - with 20 per cent of expensive, imported petroleum fuels being replaced with biofuels grown and manufactured in the USA,” Dr Clarke said.

Currently Australia has a goal of 350 ML of biofuels being produced by 2010, which amounts to just one per cent of total fuel consumption. Dr Clarke hopes that his research, which involves the conversion of animal fat to biodiesel, has received funding from private institutes such as Meat and Livestock Australia but has not yet received a positive response from his proposals to government.

Biodiesel from animal fat, also known as tallow, is recognised by reports on the Australian Greenhouse Office’s website as one of the least polluting biofuels due to much lower upstream emissions, requiring relatively few fossil fuels in its production when compared to plant-based biofuels.

(Source: Adelaide Now)