Inter-American Institute for Cooperation on Agriculture (IICA

Inter-American Institute for Cooperation
on Agriculture (IICA)
Strategy For The Development Of An
Agro-Energy Program For The Caribbean
Region
Prepared by:
Al Binger, PhD
July 2006
1
TABLE OF CONTENTS
Acknowledgements
Abbreviations and Acronyms
Tables & Figures
Executive Summary
ST
1.0
BACKGROUND: ICCA & ITS MISSION IN THE 21 CENTURY
1.1
IICA - Innovator & Promoter of New Thoughts in Agriculture & Rural
Development
1.2
IICA’s Unique Strengths and Assets
1.3
IICA’s Challenges and Opportunities
1.4
IICA’s Vision
1.5
Objectives of the Strategy Document
1.6
Methodology
2.0
THE CHANGING CONTEXT OF DEVELOPMENT IN THE CARIBBEAN
2.1
Emerging Issues & Challenges Facing the Caribbean
2.2
Caribbean Agriculture Sector - Overview & Outlook
2.2.1 Positioning Agriculture as a Source of Energy for Sustainable
Development
2.2.2 Land Use and Crops Production in the Caribbean
2.3
Global Energy Sector – Overview and Outlook
2.4
Caribbean Energy Sector – Overview and Outlook
2.4.1 Energy Use and Production in the Caribbean
2.4.2 Overview National Energy Situations
2.4.2.1
Transportation
2.4.2.2
Electricity Generation and Use
2.4.3 Renewable Energy
2.4.4 Energy Resources
2.4.4.1
Fossil Fuel Resources
2.5
The Energy for Sustainable Development Challenges
3.0
RATIONALE FOR AGRO-ENERGY PROGRAMME IN THE CARIBBEAN
3.1
The Agro-Energy Option for Economic Renewable Energy
3.2
Biomass as a Feedstock for Energy for the Caribbean
3.3
Cost Benefits of Agro/Bio-Energy
3.3.1
Costs and Benefits of Biofuels Industries
3.4
Global Lessons Learned in the Production and Use of Biofuels
3.4.1 Brazil
3.4.1.1 Ethanol
3.4.1.2 Biodiesel
3.4.2 India
3.4.2.1 Ethanol
3.4.2.2 Biodiesel
3.4.3 Philippines
3.4.3.1 Ethanol
3.4.3.2 Biodiesel
3.4.3.3 Straight Coconut Oil
3.4.4 Pacific Island Countries
3.4.4.1 Fiji
3.4.4.2 Vanuatu
3.4.5 Australia
3.4.6 U.S.A.
3.4.6.1 Ethanol
3.4.6.2 Biodiesel
2
3.4.7
3.5
Cuba
3.4.7.1 Cogeneration from Sugarcane Biomass
3.4.7.2 Ethanol
3.4.8 Denmark
Challenges and Opportunities to Developing an Agro-Energy Industry
3.5.1 Institutional Relationships
3.5.2 National and Local Ownership
3.5.3 Raw Material Production and Transportation
3.5.4 Developing Capacity
3.5.5 Policy and Legislation
3.5.6 Decision Making
4.0
IICA’s STRATEGY FOR DEVELOPMENT OF BIOFUELS INDUSTRIES IN THE
CARIBBEAN REGION
4.1
Program Rationale
4.2
Program Outlines
4.2.1 Capacity Development
4.2.2 Biofuels for Transportation
4.2.2.1 Ethanol Production
4.2.3 Biodiesel Production
4.2.4 Biofuels for Electricity Generation
4.2.5 Development of Small and Medium Size Biofuels Enterprises
4.3
Development of the Caribbean Biofuels Industry
4.3.1 Liquid Biofuels Industries
4.3.2 Solid Biofuels Industries
4.4
Requirements for Implementation
4.4.1 The Challenges
4.4.1.1 Production
4.4.1.2 Utilization
4.5
The Benefits of Biofuels Industries for the Region
4.5.1 Socio-economic Benefits
4.5.2 Environmental Benefits
4.6
Public Outreach/Communication
4.7
Partnerships
5.0
STRATEGIES & PROGRAMMES
5.1
Strategic Element 1:
Become the Leading Strategic Institution on Agro-energy
in the Caribbean:
Goal 1:
Introduce program to strengthen linkages between agriculture and
energy sectors in order to increase opportunities for agro-energy in the
Caribbean
Goal 2: Stage series of Regional and National Consultations and Dialogue with
Caribbean sugar cane and electric utility representatives about the
potential of Biofuels
Goal 3: Introduce program for development of emerging technologies,
practices and business opportunities in the agro-energy industry
Goal 4: Introduce Bi-Annual Caribbean Region Agro-Energy Conference
Goal 5: Introduce Public Awareness & Education Program – Biomass as a
source of Energy for the Caribbean
5.2
Strategic Element 2:
Promote Agro-energy in the Caribbean as an
economically viable source of energy by introducing liquid and Solid Biofuels
Industries in sugar cane growing countries to produce liquid fuels and heat
and/or power through combustion:
5.2.1 Liquid Biofuels Industry:
Goal 1: Ethanol Production to Achieve 10 percent Blend in Gasoline
(20 Million Barrels) by 2010
3
Goal 2:
5.3
5.4
Ethanol Production to Achieve 25 percent Blend in Gasoline
(550 Million liters) by 2015
Goal 3: Production of 30 Percent of Regional Transportation Fuels
Need by 2020
5.2.2 Solid Biofuels Industries:
Goal 1: Development of 50 percent of the Viable Electricity Potential
from the Sugarcane by 2012
Goal 2: Development of Small and Medium Size Solid Biofuels
Enterprises
Goal 3: Development of 100 percent of the Viable Electricity Potential
from Sugarcane by 2020
Strategic Element 3:
Build the sustainability of IICA to support agro-energy
entrepreneurial activities of the economically disadvantaged that lead to
sustainable livelihoods and a healthy environment
Goal 1: Development of Small and Medium Size Liquid Biofuels Enterprises
Strategic Element 4: Build IICA’s organizational capacity to accomplish its
mission – The Role of IICA
Goal 1: To provide IICA with the tools necessary to effect proactive,
sustainable, agro-energy management and for IICA to formalize efforts
to train project officers in professional skills in energy planning and
policy, and engineering.
6.0
FUNDING THE STRATGEY AND ESTIMATED BUDGET
6.1
Potential Funding Sources
6.2
Estimated Program Budget
6.3
Investment Costs
7.0
CONCLUSION
7.1
Recommended Next Steps by IICA
REFERENCES
APPENDIX
Technical, Social & Economic Aspects of Agro-Energy:
Annex A – Technical Issues in the Production and Use of Liquid Biofuels
Annex B – Technical Aspects of Agro-energy
Annex C – Ethanol – A Major Biofuel
Annex D – Biofuels Production Potential for Caribbean Countries
4
ACKNOWLEDGEMENTS
5
ABBREVIATIONS AND ACRONYMS
ACP
ADB
AIDS/HIV
ALP
ARTI
ASEAN
AVF
Bbls
bcm
BECOL
BIG-GT
BIG-GTCC
BIG-STIG
BIG-ISTIG
BOD
BoE
BOI IPP
BOO
BOLT
BPOA
BTU
CABA
CARDI
CAREC
CARICOM
CARIFORUM
CARILEC
CBI
CCS
CDB
CDM
CECADI
CEHI
CEST
CFE
CHG
CHP
CI
CIDA
CIG
CITMA
CME
CMO
CNO
CO2
CO4
COD
COTED
CREDP
CRNM
CSME
CWA
DFID
African, Caribbean & Pacific
Asian Development Bank
Acquired Immunodeficiency Syndrome/ Human Immunodeficiency Virus
Alternative Livelihoods Project
Appropriate Rural Technology Institute
Association of Southeast Asian Nations
Barrels
Billion cubic meters
Belize Electric Company Limited
Biomass Integrated Gasifier - Gas Turbine
Biomass Integrated Gasifier - Gas Turbine Combined Cycle
Biomass Integrated Gasifier - Steam Injected Gas Turbine
Biomass Integrated Gasifier - Intercooled Steam Injected Gas Turbine
Biological Oxygen Demand
Barrels of Oil Equivalent
Build Own Operate
Build Own Lease Transfer
Barbados Program of Action
British Thermal Units
Caribbean Agribusiness Association
Caribbean Agricultural Research and Development Institute
Central American Renewable Energy Cleaner Production Facility
Caribbean Community
The Caribbean Forum of the African, Caribbean and Pacific (ACP)
States
Caribbean Electric Utility Services Corporation
Caribbean Basin Initiative
CARICOM Secretariat
Caribbean Development Bank
Clean Development Mechanism
Centro de Capacitación a Distancia
Caribbean Environmental Health Institute
Condensing-Extraction Steam Turbogenerator
Comisión Federal de Electricidad
CARICOM Heads of Government
Combined Heat and Power
Compression ignition
Coconut Industry Development Authority
Coal Integrated Gasifiers
Ministry of Science, Technology and Environment (Cuba)
Coconut Methyl Ester
Common Organization of the Market
Coconut Oil
Carbon Dioxide
Methane
Chemical Oxygen Demand
Council for Trade and Economic Development
Caribbean Renewable Energy Development Program
Caribbean Regional Negotiating Machinery
Caribbean Single Market and Economy
Caribbean Week of Agriculture
UK Department for International Development
6
DME
d/na
DIY
E5
E10
E25
E85
EBA
EC
ECLAC
EDF
EGS
EGSB
EIA
EJ
EPA
EPA
EPACT
EPCC
ESCOS
EU
EUR
FAO
FAOSTAT
FEA
FFA
FFV
FOB
FSJ
FTAA
Gtons
G2G
GCNA
GDP
GHG
GJ/ha
GJ/ton
GWh
Ha
HFO
HOID
HRSG
IABA
IC
IDB
IEA
IICA
IMF
IMTF
IPPC
KOH
Kwh
LDCs
LPG
3
M
Direct Micro Expelling
Data not available
Do-it-yourself
5 Per cent Ethanol Blend
10 Per cent Ethanol Blend
Minimum 25 per cent Ethanol Blend
86 Per cent Anhydrous Ethanol and 15 per cent Gasoline
Everything But Arms
European Commission
United Nations Economic Commission for Latin America and the
Caribbean
European Development Fund
Environmental Goods And Services
Expanded Granular Sludge Bed
Energy Information Administration (US)
Exajoules
Economic Partnership Agreement
Environmental Protection Agency
Environmental Protection Act
Ethanol Program Consultative Committee
Energy Service Companies
European Union
Euros
Food and Agriculture Organization
Food and Agriculture Organization Database
Fiji Electricity Authority
Free Fatty Acid
Flex-Fuel Vehicle
Free on Board
Fiji Sugar Corporation
Free Trade Areas of the Americas
Giga tons
Government-to-Government
Grenada Cooperative Nutmeg Association
Gross Domestic Product
Greenhouse Gas
Gigajoules per hectare
Gigajoules per tons
Gigawatts per hour
Hectares
Heavy Fuel Oil
Hot Oil Immersion Drying
Heat Recovery Steam Generator
Inter-American Board of Agriculture
Internal Combustion Engines
Inter-American Development Bank
International Energy Agency
Inter-American Institute for Cooperation on Agriculture
International Monetary Fund
Inter-Ministerial Task Force
Intergovernmental Panel on Climate Change
Potassium hydroxide
Kilowatts per hour
Least Developed Countries
Liquid Petroleum Gas
Cubic Meters
7
MACC
MDGs
MFI
Mha
MIF
MJ/kg
ML
MRET
MSW
MTBE
MW
NaOh
NCIPP
NGO
3
Nm
NRI
OAS
OECD
OECS
OEM
OLADE
OPEC
PAHO
PAHs
PCA
PCA-DA
PJ/year
PPA
PPO
PRODAR
PV
RECs
RFS
RFS
RPM
Rs
SI
SIDALC
SIDS
SIDSNET
SMEs
SO2
SRC
STM
SVO
TTF
TWG
UASB
UK
UN
UNDESA
UNDP
UNEP
UNESCO
UNFCCC
Mainstreaming Adaptation to Climate Change
Millennium Development Goals
Micro-Finance Institutions
Million hectares
Multilateral Investment Fund
Megajoules per kilogram
Million liters
Mandatory Renewable Energy Target
Municipal Solid Waste
Methyl Tertiary-Butyl Ether
Megawatt
Sodium hydroxide
Nationwide Coconut Industry Promotions Program
Non-Governmental Organization
Cubic Nanometers
Natural Resources Institute
Organization of American States
Organization for Economic Co-operation and Development
Organization of Eastern Caribbean States
Original Equipment Manufacturer
Latin American Organization
Organization of the Petroleum Exporting Countries
Pan-American Health Organization
Poly Acrylic Hydrocarbons
Philippine Coconut Authority
(Philippines)
Petajoules per year
Power Purchase Agreements
Pure Plant Oil
Rural Agro-Industry Development Program for Latin America and the
Caribbean
Photovoltaic
Renewable Energy Certificates
Renewable Fuel Standard
Rural Financial Services
Revolutions per Minute
Indian Rupee (currency)
Spark ignition Engine
Sistema de Informacion y Documentacion Agropecuario de las AMericas
Small Island Developing States
Small Island Developing States Network
Small and Medium Enterprises
sulphur dioxide
Scientific Research Council
Sugar Technology Mission (Indian)
Straight Vegetable Oil
Energy and Environment Thematic Trust Fund
Technical Working Group
Up-flow Anaerobic Sludge Blanket
United Kingdom
United Nations
United Nations Department of Economic and Social Affairs
United Nations Development Programme
United Nations Environment Programme
United Nations Educational, Scientific and Cultural Organization
United Nations Framework Convention on Climate Change
8
UNCCD
UNCCBD
US
VAT
VPN
WEO
World Bank
WTO
United Nations Convention on Combating Desertification
United Nations Convention for the Conservation of Biological Diversity
United States of America
Value Added Tax
Virtual Private Network
World Energy Outlook
International Bank for Reconstruction and Development
World Trade Organization
9
TABLES & FIGURES
List of Tables
Table 2.2.1:
Table 2.2.2:
Table 2.4.1:
Table 2.4.2:
Table 2.4.3:
Table 2.4.4:
Table 2.4.5:
Table 3.1.2:
Table 3.2.1:
Table 3.3.1:
Table 3.5.1:
Table 4.0.1:
Table 4.1.1:
Table 4.2.1:
Table 4.2.2:
Table 4.2.3:
Table 4.2.4:
Table 4.2.5:
Table 4.2.6:
Table 4.3.1:
Table 4.3.2:
Table 4.3.4:
Table 4.5.1:
Table 5.2.1:
Table 5.2.2:
Table 5.2.3:
Table 5.2.4:
Table 5.2.5:
Table 5.2.6:
Table 5.2.7:
Table 5.2.8:
Table 5.4.4:
Table 6.2.1:
Land Use and Agriculture in the Caribbean: Total area, arable land and land
under permanent crops
Crop Production in the Caribbean
Liquid Petroleum Products Imports (000’s Bbls)
Electricity Prices For Select Caribbean Countries: Household and Industry
Quantities of Fuels for transportation 1985 thru 2004
Selected Indicators of the Electricity Sector in Select Caribbean Countries (2003)
Proven Reserves and Production of Oil and Natural Gas in the Caribbean
Value of 2004 sugarcane crop as a mix of sugar, ethanol and electricity
Land Resources available for production of Feedstock (000’s hectares) (select
Caribbean countries)
Biofuels: Current Costs and 2020 Projections (US cents/liter)
Potential Biofuels Feedstock Substitutes for Petroleum Fuels
Potential of Caribbean Countries as Biofuels Producers and Crop(s)
Regional Fuel Imports 2000 - 2004 (000’ bbl) (US$ 000’)
Regional Gasoline Consumption (000’s Barrels)
Regional Diesel Consumption (000’s Barrels)
Fuel Consumption by Electric Utilities up to 2025 @ 5% per annum growth
(million barrels)
Electricity from the Sugarcane Sector
Projected Production of plant oil from Jatropha Carcus
Value of Oil seed as substitute for Diesel Import based on 2004 Quantity
Estimated Cost of Ethanol Plants and operating costs
Biodiesel processing plant costs
Cost details of a 70,000 tons/yr Biodiesel Plant
Greenhouse gas mitigation by ethanol blends
Sugarcane yields, production and area cultivated (2005)
Sugarcane Production -- Five-Year Average and Percent Change
Quantity of Ethanol and Area producing Feedstock to substitute for Gasoline and
Diesel in 2020
Potential for electricity exports from bagasse based cogeneration
The Electricity Sector in Caribbean Countries (2003)
Potential of Electricity Generation from sugarcane and energy cane
Average Annual Wood Production and Derived Wood Products
Estimated Maximum Potential Power Generation from Sugar Cane Residues
Total Population, Agricultural Population and Rural Population
Estimated Budget
List of Figures
Figure 2.2.1:
Figure 2.2.2:
Figure 2.2.3:
Figure 2.2.4:
Figure 2.4.1:
Figure 2.4.2:
Figure 3.1.1:
Figure 3.2.1:
Dependence on Agricultural Export Earnings from a Single Commodity – 1997/99
Recent Trends in Sugar World Prices – 1961-2003
Agricultural Commodity Prices – 1961-2002
Average Annual Rate of Growth of Total Caribbean Agricultural Production
(1970-2002)
Percentage of export to pay for Fuel Import
Mean Growth Rate of Installed Capacity and Net Generation (1980-2002)
Sugar Prices versus Oil Prices: 1960-2005
Energy Input output ratio for Different Feedstock
10
EXECUTIVE SUMMARY
1.
The Energy for Sustainable Development Challenge in the Context of Sustainable
Agricultural Development, Food Security and Prosperity in Rural Communities
The Caribbean region faces huge challenges arising from modern globalization, declining
competitiveness, trade liberalization and eroding preferences, the rising cost of imported fuel, the
revolution in information technology, and, very high vulnerability to natural disasters. Additionally,
very high debt has placed 7 Caribbean countries amongst the 10 most indebted countries in the
1
world, and 14 among the top 30 . The region is also heavily dependent on fossil fuel combustion,
with petroleum products accounting for an estimated 93 per cent of commercial energy
consumption. The islands of the Caribbean are predominantly net energy importers, with the
exception of Trinidad and Tobago. Agriculture and natural resource extraction activities continue
to constitute the basis of Caribbean economies, though the tourism and service sectors are
growing.
Meeting energy demand in 2004 required the importation of more than 163 million barrels of
petroleum fuels raising concerns that continued high global oil prices with adversely affect efforts
at economic expansion. The consumption of fuels to meet the region’s energy needs in 2004 cost
in excess of US$6.5 billion. This represents the largest expenditure on imports by the region. In
response, some countries have been pursuing ways to better integrate their energy sector, with
the sugar industry in an effort to capitalize on an outstanding opportunity for development of
versatile indigenous renewable energy resources. Despite ongoing difficulties the sugar industry
continues to be the largest and most significant component in the Caribbean region’s agricultural
sector. Sugarcane has been cultivated in the Caribbean for over three centuries, mainly for its
commercial value as a sweetener. However, the experience from other countries indicates that
sugarcane must now be viewed as a bioenergy resource that might be as valuable as sugar.
The Caribbean region today derives less than 10 per cent of their Gross Domestic Product (GDP)
from the agriculture sector but similar to most Small Island Developing States (SIDS), that sector
accounts for approximately 31 per cent of employment. Agriculture GDP in fiscal 2005 fell slightly
to US$803 million (from US$807.7 the previous year). Although the agricultural sector is one of
the largest employers of labor and generator of foreign exchange from the exports of
commodities to the United States (US) and the European Union (EU) under special agreements,
the highest level of poverty is among workers in the agricultural sector.
Dominated by traditional agricultural commodities such as sugar, coffee and bananas sold to
historical markets, which are based on the region’s colonial history, the agriculture sector is now
in dire economic conditions in just about every country. It is worthwhile noting that the terms of
trade for the region’s historical commodities have changed significantly. For example, compared
to the early 1970s, when the region could sell a ton of sugar for approximately US$400, and
purchase approximately 100 barrels of oil, today, 10 barrels of oil for one ton of sugar is not
unexpected. While these terms of trade are unfavorable, they are consistent with the historical
trends and show the difficulty of governments to develop effective responses. As agriculture
declined, so too did the situation in rural areas.
1
World Bank Report, A Time To Choose: Caribbean Development In The 21st Century
11
Table 1:
Total Population, Agricultural Population and Rural Population (Select
Caribbean Countries)
Country
Total
Population
2
(millions)
Agricultural
Rural Population
4
Population Relative to Relative to Total (%)
3
Total (%)
Antigua and Barbuda
0.1
24
Barbados
0.3
4
48
Belize
0.3
30.3
52
Cuba
11.2
13.5
25
Dominican Republic
8.6
15.4
34
Guyana
0.7
16.9
62
Haiti
2.9
dna
63
Jamaica
2.6
20
43
Saint Kitts & Nevis
62
21.1
66
St. Lucia
St. Vincent and The
Grenadines
0.2
22.4
70
0.1
23.1
42
Suriname
0.4
19
24
Trinidad & Tobago
1.3
8.3
24
In order to continue to ensure that the Inter-American Institute for Corporation on Agriculture
(IICA) plays a strategic role in assisting the Member States in their search for progress and
prosperity through modernization of the agricultural and rural sectors, IICA will, among other
activities, promote the incorporation of new technologies to support and improve the profitability
of energy production in the agricultural sector. IICA recognizes that increasing energy prices
poses a threat to rural development by reducing access to energy services that are a prerequisite
for improving household income. Secondly, it takes increasing amounts of capital out of rural
areas. The prevailing high prices of petroleum products in the world will result in increased
interest in the production of agro-energy from agricultural products including sugar cane, fast
growing trees, and oil seeds. Agro-energy, based on the global experience creates new job
opportunities and has a positive impact on the environment
In pursuant of the development of Agro-energy the IABA, at its Thirteenth Regular Meeting, held
in Guayaquil, Ecuador, on August 30 - 31, 2005, agreed to the development of an hemispheric
Programme on Agro-energy, as set out in RESOLUTION No. 410, which mandated the:
• Establishment of a platform for hemispheric cooperation at IICA to Promote Bioenergy
• Convene a meeting to discuss the importance of agro-energy and bio-fuels and their
potentially favorable impact on agricultural development in and the economies of the
Member States;
• Task force comprising experts from the Member States appointed by the Ministers of
Agriculture, IICA personnel and strategic partners, and task them with drawing up a
hemispheric program on bio-energy and bio-fuels,
• A proposal to the Executive Committee, at its Twenty-sixth Regular Meeting, on the
resources required to support activities to be carried out under the aforementioned
Program.
2
Human Development Report 2005 (data for 2003)
Food and Agriculture Organization of the United Nations (FAO), 2004. FAOSTAT on-line statistical service. Rome:
FAO. Electronic Database available at: http://apps.fao.org.
4
FAO, Food and Agriculture Indicators 2003– Prepared by ESSA, October 2005.
http://www.fao.org/es/ESS/compendium_2005/pdf/ESS
3
12
In responding to the mandate given by the IABA, IICA undertook an evaluation of agro-energy as
a viable option for renewable energy, and established a clear direction for the future with the
formulation of a strategic plan for the development of an agro-energy program for the Caribbean
region. This Strategy Document, in addition to addressing the technical, economic and social
aspects of agro-energy, with recommendations for the development of liquid and solid biofuels
industries, also helps to promote and sustain IICA’s image as an innovator and promoter of new
thought, and the leading Institute for agriculture and rural development in the hemisphere.
2.
Objectives of the Strategy
The rationale for advocating greater investment in agro-energy is that this approach builds the
economic resilience of countries during a period where the international energy supply outlook
forecasts continued high and rising cost of petroleum fuels in the future. In addition, is represents
a potentially sustainable source of employment for workers with limited skills. The chief objective
of the Strategy Document is to guide IICA in its efforts to help the Caribbean establish an agroenergy program toward the development of biofuels to meet national energy needs, whilst at the
same time helping to modernize and diversify agriculture and rural sectors in the region, in order
to increase competitiveness.
The Strategy Document, based on the technical, social and economic aspects of agro-energy in
the hemisphere and beyond, for the development of an agro-energy industry in the Caribbean,
falls within one of the six thematic areas in IICA’s Technical Agenda for Cooperation in the
Caribbean, aimed at helping to reposition agriculture and rural life by developing sustainable
industries and viable rural enterprises. The strategy targets countries of the Caribbean region
that are members of the Small Island Developing States (SIDS), and are considered by the
United Nations Committee for Sustainable Development as being very vulnerable and includes:
Antigua and Barbuda, Bahamas, Barbados, Cuba, Dominican Republic, Dominica, Grenada,
Guyana, Haiti, Jamaica, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname,
and Trinidad and Tobago {with the exception of Cuba and the Dominican Republic}, which
constitute the Caribbean Community (CARICOM).
The Strategy Document provides a living document for action over the next three to six years, to
ensure progress in fulfilling IICA’s mission, and fits within CARICOM’s initiatives to formulate a
comprehensive policy on agriculture within the framework of the “Jagdeo Initiative” for the
strategic re-positioning of the region’s vital agriculture sector - an Initiative for giving important
effect to the Regional Transformation Programme for Agriculture which was approved by
Caribbean Heads of Government at their Sixteenth Inter-Sessional Meeting in Suriname, in 2005.
The agro-energy strategy focuses on the identification and consolidation of a set of
complementary activities that take advantage of ICCA’s current capacity and its experience in
agriculture and rural development, while taking its limitations into consideration. The strategy
includes a number of programs to support the development of biofuels industries across the
region, particularly the sugarcane producing countries. Core strategies identified that would lead
to the establishment of a successful and sustainable regional agro-energy program include:
1.
IICA becoming the leading strategic Institution on Agro-energy in the Caribbean.
2.
Promote Agro-energy in the Caribbean as an economically viable source of energy
by introducing Liquid and Solid Biofuels Industries in sugarcane growing countries to
produce liquid fuels and heat and/or power through combustion.
3.
Build the sustainability of IICA to support agro-energy entrepreneurial activities of the
economically disadvantaged that lead to sustainable livelihoods and a healthy
environment.
4.
Build IICA’s organizational capacity to accomplish its mission – the role of IICA.
The Strategy Document includes a program aimed at positioning ICCA to help strengthen
linkages between the agriculture and energy sectors in order to increase opportunities for energy
13
services in the Caribbean. IICA will assist countries in drafting integrated agro-energy policies to
provide a framework for meeting growing energy needs in an economically, socially and
environmentally sustainable manner. This would lead to identification of capacity needed for
planning and implementation of Agro-energy/Biofuels policy. IICA would also implement a
program to facilitate dialogue with the sugar industry leadership and electric utility representatives
about the potential of Agro-energy, as well as other stakeholders and civil society in order to
provide scientifically sound and politically unbiased analyses and conclusions needed for
strategic decisions related to research or policy issues.
Another program would be to provide countries with comprehensive information to assist with the
development and deployment of biofuels industries by providing information on the development
of emerging technologies, industry best practices and business opportunities in the agro-energy
industry. Development of small and medium size liquid and solid biofuels enterprises provides
an excellent opportunity for generating employment and revitalizing rural economies, as well as
improving diffusion of technologies. The development of small- and medium-scale size liquid and
solid biofuels enterprises would involve the provision of training to existing and prospective
entrepreneurs in starting and managing business activities relating to biomass-based energy
conversion, supply and maintenance services; providing training to other end-users in various
uses of biomass energy; interfacing with research and development institutions engaged in
biomass technology development, to provide ready access to relevant technological information,
and; interfacing between local governing bodies/representatives, suppliers of biomass-based
technologies, local financing institutions, entrepreneurs, and other end-users.
A program to educate consumers about the benefits of Agro-energy/Biofuels industries is
intended to help them make wise energy choices and to contribute to the effort as a whole. The
public education and awareness program proposed would educate key public officials and the
general public about biofuels and would also build regional and national coalitions that would form
the nuclei of support groups that would promote and eventually lead to biofuels production and
use nationally. Additionally, staging of a bi-annual regional conference would provide the
mechanism for the exchange new ideas, analyze strategies, and allow agriculture, environment
and energy professionals and other stakeholders within the Caribbean region to meet with each
other.
To achieve successful implementation of Agro-energy programmes at the national and local
levels will require IICA to ensure that it is proactive, and that it increases its capacity in agroenergy management by training its professionals located in the Institute’s member states. Given
the limited institutional capacity that exists in the energy sector in the majority of the countries
across the region, development of Agro-energy industries will require the provision of systematic
long-term technical assistance. This support function is critical and one that IICA, as discussed
earlier based on its institutional character is uniquely positioned to play. For IICA to play this
supportive role it will need to undertake institutional strengthening, adding professional skills in
energy planning and policy and strengthening information support capacity that allows IICA to
effectively support Member states program.
3.
Methodology
The methodology to achieve the above outputs included: (a) laying out a clear framework for
development of an Agro-energy program for the Caribbean Region; (b) discussions and
consultations with experienced professional in Brazil, Cuba, India and US; (c) review of country
experiences (Brazil, India, Philippines, Pacific Island Countries, Australia, United States, Cuba
and Denmark), and; (d) desk review of national and international reports, particularly in
sustainable development, energy, environment, and agriculture.
The first phase in developing the strategy consisted of an assessment of the technical, social and
economic aspects of Agro-energy/Biofuels. The assessment was based on the following
information:
14
1. Country experiences – developed and developing - on lessons learned in developing and
implementing biofuels programs.
2. Analysis of “Petroleum Energy Statistics in the Caribbean (16 Caribbean countries)
PETSTATS CD-ROM Series No.1, Caribbean Energy Information System 2004”;
3. Assessment of Caribbean countries Agro-energy/Biofuels production potential.
4. Assessment of the needs and priorities of the countries for meeting energy for
sustainable development objectives.
5. Interviews and other consultations to complete the information generated from the desk
reviews and country studies.
The output of this initial phase was the production of a Technical Report titled, “Technical, Social
and Economic Aspects of Agro-Energy.”
In phase two, the Technical Report provided the basis for developing the Strategy Document and
action plans and programs to address Agro-energy/Biofuels industries development needs of the
countries. The Strategy Document, “Strategy for the Development of an Agro-Energy Program
for the Caribbean Region” contains background on the IICA Agro-energy program, how it fits
within the institution’s established programs and how it would enable the Institute to become the
leading strategic Institution on Agro-energy in the region. The document lays out the background
to the IICA initiative and the rationale that:
• Helps explain why agro-energy is considered to be a sustainable option to help address
rural development and energy security;
• Provides information on the current status of Agro-energy development in the region and
beyond, to provide a proven basis for consideration by stakeholders in the countries that
are interested in exploring the potential.
• Identifies and analyzes challenges and opportunities for Agro-energy development in the
region especially those countries that have bananas and sugar as their major agricultural
commodities or countries with adequate land space, and;
• Recommends the proposed approach to the development of agro-energy industries in the
Caribbean region.
4.
Caribbean Agriculture and Potential of Agro-energy/Biofuels Industries
Agriculture, in general, and sugar in particular, is important in the economies in the region. Based
on the proportion of the population in agriculture, Haiti is the most agrarian with 62 per cent. The
least agrarian populations are found in Barbados (4 per cent) and Trinidad and Tobago (9 per
cent). Countries with intermediate agricultural populations are Cuba (16 per cent), Dominican
Republic (17 per cent), Jamaica (20 per cent) and St. Kitts and Nevis (24 per cent). The
contribution of the agricultural sector to GDP is largest in Haiti (29 per cent), the Dominican
Republic (11 per cent), roughly 6 per cent (in Barbados, Cuba, and Jamaica), and only 1 per cent
5
in Trinidad and Tobago .
Agricultural commodity prices generally remain close to historically depressed levels – and their
longer-term decline relative to the prices of manufactured goods continues. Caribbean countries
say they will lose US$100 million dollars annually, as a result of the EU’s decision to go ahead
with cuts in the price of sugar exported to Europe by African, Caribbean and Pacific (ACP) states.
Under proposals for the new sugar regime, the EU is proposing a 37 per cent price reduction for
sugar exports from CARICOM and other countries of the ACP group, over a three-year period
commencing in 2006. This assumes even greater importance because the EU sugar reforms will
jeopardize 68,300 jobs in six main sugar producing countries in the Caribbean: Jamaica, Trinidad
6
& Tobago, Guyana, Belize, Barbados and St. Kitts & Nevis. LMC International predicts that in a
5
IICA
The Impact of the Reform of the EU Sugar Regime on ACP Sugar Industries. Final Report. LMC International January
2006.
6
15
worst-case scenario the sugar industry will collapse in all but one of these six countries. This
represents a major survival challenge for many rural communities through the region
In relation to energy services, increasing oil prices are having a dramatic effect on Caribbean
economies. In September 2005, crude oil prices broke above $70 a barrel, approaching levels
not seen in real terms since 1980, the year after the Iranian revolution. At the end of January
7
2006, the price per barrel of oil was $67.92 . In April 2006, crude oil traded in the UK, hit a record
high of $74.22 a barrel which it set a new price peak, and in the US, oil prices leapt above $72 a
barrel also settling at a record high. According to the U.S. Energy Information Administration
(EIA), world crude oil prices are expected to stay high through 2007 because of strong petroleum
demand, limited surplus oil production and refining capacity and concerns about supply
8
disruptions due to geopolitical risks in countries like Iran .
The region’s consumption of petroleum fuel has increased from slightly over 116 million barrels in
1985, costing the region US$530 million, to over 160 million barrels in 2004, costing more than
twelve times the 1985 costs (more than US$6.5 billion). The increase in consumption is driven by
the expansion in population and economic growth. Clearly, a key goal of any sustainable
development strategy has to be reduction of the present high cost of energy services, relative to
the value of Caribbean exports of goods and services so that the countries can compete in the
global economy. Based on successes in other developing countries, where energy cost are
much lower than in the Caribbean, the potential for meaningful production of electricity from
biofuels points to the possibility of viable biofuels industries across the entire region.
One of the most promising ways to add value to sugarcane is to produce energy either as the
principal or co-product in the processing system. This approach is currently viewed as attractive
because of high energy prices, but the global experience shows that in many countries this
approach was viable even without recent increases in energy prices because of the combined
economic, social and environmental benefits. Sugarcane produces very large volumes of
biomass (60-80 tons per hectare) and that biomass can be used as a clean burning fuel. Biomass
provides an efficient and cost-effective way to collect and store solar energy in a solid form. It
can be burned to release the stored energy as heat, or it can be thermally, chemically or biochemically processed to convert it into liquid and gaseous fuels, or into other solid fuels.
Bagasse the fibrous residue remaining after juice has been extracted from the sugarcane stalk
has been used to power the sugar factories for decades, but it can also be used to produce large
quantities of electricity to meet a portion of the national demand. This is being done in some
countries (such as India and Mauritius), but not extensively in the Caribbean sugar-producing
countries (Belize and Guyana are reported to be considering such activities and Cuba has been
doing research).
Biofuels can help provide long-term term energy security through the use of locally produced
feedstock at relatively constant cost that is in many cases is already cheaper than the fossil fuels
they would substitute for. Moreover, because biofuels are locally produced by indigenous agroindustries, most of the money spent is retained within the national economy instead of going to
foreign multi-national oil companies. Import substitution will have direct and indirect effects on
GDP and the trade balance. The risks arising out of fluctuating crude oil prices adversely
affecting the costs of production and transport of goods in the country can be minimized if
indigenous agro-energy resources are used.
7
Energy Economics Newsletter, Crude Oil Futures Prices, NYMEX, January 31, 2006,
http://www.wtrg.com/daily/crudeoilprice.html
8
“High global oil prices seen through 2007,” Reuters, http://msnbc.msn.com/id/12613507/
16
Figure 1:
Sugar Prices versus Oil Prices: 1960-2005
9
Several studies by international institutions indicate that bioenergy will play a much larger role in
st
energy supplies during the 21 century. The contribution from biomass in the long-term given in
10
these studies vary from 100 to 300 exajoules (EJ) per year towards the total world energy
consumption, which is projected to rise to nearly 500 EJ per year in 2025, and 700 EJ per year by
11
2100. Interest in biomass is intensified by the fact that bioenergy is essentially carbon-neutral
and, unlike fossil fuels, it does not add to global warming. This is because the carbon dioxide
released while burning biomass is equivalent to that absorbed from the atmosphere when it
grows. Under the LESS constructions (Low CO2 Emitting Energy Supply Systems), the InterGovernment Panel on Climate Change (IPCC) explored five possible energy supply scenarios to
limit cumulative carbon dioxide emissions from 1990 to 2100, to 500 Gtons carbon. Biomass
forms an important part of all five scenarios. In the most biomass intensive scenario, biomass
supplies contribute 180 EJ/yr in 2050, which is nearly three times its present contribution and will
form one-third of the total global energy. Two-thirds of this biomass will come from energy
plantations and the other one-third will come from agricultural and agro-industrial residues. In this
scenario, the developing countries will get half their energy supply from biomass.
Advanced co-generation technologies like the “Biomass Integrated Gasifier - Gas Turbine
Combined Cycle” plants (BIG-GT CC) will make it possible to more than double the electricity
output from combustible biomass residues at a lower unit capital cost. In a United Nations
Development Program (UNDP) study on “Modernized Biomass Energy for Sustainable
Development,” Kartha and Larson (2000) estimate that residues from sugarcane (bagasse,
leaves and tops) have the potential to generate more than half the electricity consumption in the
Caribbean by 2025. Based on the historical relationship between sugar and oil prices which is
9
UNCTAD Secretariat
One Exajoule is equivalent to the energy content of 177,000 barrels of crude oil
11
(Johansson, 1993; Greenpeace, 1993; Shell, 1994; WEC, 1994; IPCC, 1996.
10
17
shown in Figure 1 above, the sugar industry transformed into an energy industry would have a
much brighter economic future, exerting positive influence on the economy.
Analysis of the 16 countries 2004 sugar production figures reveal that if the entire sugarcane crop
were converted to ethanol, the quantity of ethanol produced would be around 3,000 million liters,
which can substitute around 2,300 million liters of gasoline. The quantity of gasoline imported in
2004, was about 4,000 million liters, and the quantity of diesel 5,400 million liters. In addition to
sugarcane and coconut crops which are expected to be principal sources of raw material for
biofuels, given that these crops are already widely grown across the region, and have
successfully been used, there are other potential crops that could be grown for the production of
biofuels; these crops are listed in Table 3.1.1. In addition to these crops, there is also a range of
agricultural residue that is suited to the production of Agro-energy.
Based on the analysis of fuel imports and use, the Caribbean has potentially viable biofuels
industries in a number of countries, although with a different mix of products based on land
resource endowment and national policy. The principal physical determinant of the potential of
biofuels in any country is availably of land resources, labor force, and climatic conditions. The
principal economic determinant of feasibility is the technological package (from production to
processing), and the principal determinant of economic viability is government’s policy. The
potential Agro-energy industries that can be developed within the region were identified based on
the existing markets for petroleum products, which can be effectively and viably substituted with
biofuels. The identification of potential Agro-energy industries also includes the assessment of
the raw material potentially available; the cost and reliability of the technologies that convert the
biomass feedstock into intermediate form or final use form, and how these technologies impact
the viability of biofuels production and use; and the institutional capacity at the national level.
Further the potential industries identified for the Caribbean draws heavily on the success and
lessons from the:
• Brazilian ethanol/sugar program started in the early 1980s, and which is the largest in the
world; however, the US program is increasing rapidly and could equal or surpass Brazil in
the next couple of years.
• Mauritius sugar industry co-production of electricity for export to the national grid.
• Substitution of plant oils in compression ignition vehicles in a number of the Pacific
Islands, including Vanuatu, Samoa, Cook Islands, and the Marshall Islands.
• Production of solid biofuels from fast growing tree plantations in the Philippines and India.
• Swedish experience with public transportation using ethanol in compression ignition
engines and the development of ethanol turbines for power generation
The potential Agro-energy industries for the Caribbean are in two areas: liquid fuels for
transportation and, solid fuels for electricity generation. The availability of sugarcane and the
potential to produce even greater amount of biomass and the significantly amount of electricity
that could be generated is shown in Table 2 and provides the basis for the solid fuels.
18
Table 2:
Potential of Electricity Generation from sugarcane and energy cane
Installed
Power
Capacity
12
MW
Quantity of
Power
Generation in
2004
GWh
Electricity
generation from
Biofuels Potential
(sugarcane) *
GWh
Electricity
generation from
Biofuels Potential
(energy cane) **
GWh
Bahamas
325
149
11
22
Barbados
210
831
72
144
75
323
230
460
3,957
15,909
4,800
9,600
22
67
1
2
3,290
13,489
1,109
2,219
Grenada
39
126
1
3
Guyana
129
dna
52
600
1,200
512
216
432
767
2,974
420
840
35
14
39
77
40
107
4
7
444
178
24
48
Trinidad & Tobago
1,417
6,321
116
232
TOTAL
10,891
41,343
7,643
15,286
Island State
Belize
Cuba
Dominica
Dominican Republic
Haiti
Jamaica
Saint Kitts & Nevis
St. Vincent and
the Grenadines
Suriname
Liquid Biofuels industries will consist of ethanol for replacement of gasoline in spark ignition
engines and diesel in compression ignition engines, and biodiesel to supplement or replace diesel
fuels in transportation and electricity generation. The sugarcane growing countries have the best
potential to establish viable industries within the next three to five years. Preliminary assessment
shows that an even greater number of countries can produce biodiesel and biogas. The three
major goals of the Liquid Biofuels Industries Program are:
1. Ethanol Production to Achieve 10% Blend in Gasoline (550 Million Liters or 3.4 Million
Barrels) by 2010.
2. Ethanol production to achieve 25 per cent blend in gasoline (1,500 million liters or 8.5
million barrels by 2015.
3. Production of 30 per cent of regional transportation fuels (7,000 million liters or 43.5
million barrels) by 2020.
12
* Based on the 2004 crop yield and 100kwh/ton of cane milled
** Based on the use of energy cane rather than sugarcane on the same area of land.
19
Solid Biofuels industries most attractive market is for combined heat and power applications such
as industrial zones, institutions like hospitals and hotels, as well as in the production of sugar and
ethanol. Some countries, due to limited sugarcane production, may have to get supplemental
biofuels to have viable heat and power generation industries. The three major goals of the Solid
Biofuels Industries Program are:
1. Development of 50 per cent of the viable electricity potential from sugarcane by 2012.
2. Development of small- and medium-size biofuels enterprises by 2008
3. Development of 100 per cent of the viable electricity potential from sugarcane by 2020.
Potential Agro-energy industries include:
1. Ethanol production from sugarcane for gasoline substitution – for use in two types
of engines: Spark ignition (SI) engines that generally use gasoline/petrol as fuel - these
engines are used in automobiles, small boats, aircraft and small electricity generating
sets, and; Compression ignition (CI) engines that generally use diesel as fuel - these
engines are used in medium- and heavy-duty trucks and buses, boats and ships, and
diesel power plants; in the case of fuels for compression combustion engines, the use of
ethanol in diesel engines used for public transportation.
2. Production of plant oils/biodiesel for substitution of diesel oil in compression ignition
engines.
3. Electricity from different cogeneration technologies in sugar and sugar-ethanol
plants for export to national grid or for private use -- based on the use of advanced
cogeneration technology like the Condensing Extraction Steam Turbine (CEST) or the
Biomass Integrated Gasifier-Gas Turbine Combined Cycle (BIG-GTCC).
Plasma
Gasification which would allow the use of waste derived fuel to supplement baggase and
trash
4. Small- and Medium-Scale Liquid Biofuels Enterprises – the liquid fuels produced
would displace the use of petroleum liquid fuels for the production of heat, and/or the
generation of electricity in small and medium businesses and institutions. This industry
would provide alternate fuel and technology to help energy users replace diesel fuel in
small package boilers to provide steam, and as a drying medium in kiln drying,
generating off grid electricity for cooling and refrigeration, or metal fabrication. Institutions
such as hospitals and schools and penal facilities use energy for a range of purposes
including laundry, cooking, operation of equipment and appliances. They can obtain
biodiesel from energy entrepreneurs producing it from various oil seeds (coconuts,
castor, jatropha,), or from waste edible oils. The use of anaerobic fermentation for the
production of low calorie but easily upgradeable biogas is also feasible.
5. Small- and Medium-Scale Solid Biofuels Enterprises – a variation on the liquid fuels
enterprises in which solid biomass in the form of wood, bagasse, other agricultural
residues would be the feedstock. The small and medium scale industries would be
convert these feedstock into either producer gas or biogas, which in addition to being a
substitute for diesel fuel or heavy fuel oil, would also substitute for LPG and kerosene in
food preparation, and for electricity in providing lighting and operating water pumping
systems. Primary candidates would be small-and medium-size enterprises (SMEs),
institutions, and businesses that generate waste biomass such as furniture producers,
saw mills, and coconut processors.
Even though in certain circumstances biofuels may at present be more expensive than its fossil
fuel alternative, it still may make very good local and national sense to promote its production and
use because of its multiple socio-economic and environmental benefits. The development of an
Agro-energy/Biofuels industry can go a long way towards helping to meet basic developmental
needs of all segments of the population. For example there is significantly higher economic value
for sugarcane as an energy feedstock than as a sweetener. This is a result of the high energy
content of the cane stalk, and the availability of technology to convert the sugarcane into fuels
that displaces petroleum fuels, which are increasingly costly and volatile in price. The Technical
Paper, Appendix 1, presented in significant detail, the socio-economic benefits of Agroenergy/Biofuels industries based on the international experiences. These include:
20
•
•
•
•
•
Improved wages for agricultural workers
Sustainable employment generation
Improved outlook for the agriculture sector
Diversification of the national and regional economy
Enhanced energy security
There are three main challenges to the development of Agro-energy industry for the production of
biofuels to replace imported petroleum fuel in the region. They are: the development of the
institutional relationships between a number of state, private and community actors; ownership at
the national and local levels; sustainable production of feedstock/raw material and its effective
transportation; institutional capacity; supportive policies and legislation, and; decision making
process. Despite these challenges, research from the Technical Paper shows that Agro-energy
industries increases income generation opportunities at all stages of feedstock production,
transportation and plant operation.
Marginal and degraded lands could become more viable for sustained agricultural production
through the production of feedstock that would be sold as feedstock for additional income. Other
socio-economic benefits include support of traditional industries, rural economic diversification
and the economic development of rural communities. In some cases, the increased use of
th
biofuels can revive cultural traditions that were eclipsed by the fossil fuel era of the 20 century.
13
Environmental benefits of using biofuels include :
(a)
Reduced soil erosion and improved conservation of biodiversity.
(b)
Conservation of natural resources by reducing pressure on finite resources and
introduction of more sustainable agricultural systems.
(c)
Protection of fresh water supplies and reduced saline intrusion into ground water.
(d)
Increased terrestrial carbon sinks and reservoirs.
(e)
Reduced GHG emissions due to fossil fuel substitution.
(f)
Improvement in coastal ecosystem due to reduced deposition of sediments on reefs,
mangroves, and seagrass beds.
Biofuels therefore contributes to all the important elements of national and regional sustainable
development including reduction in the production of greenhouse gases. For example, the
blending of ethanol with gasoline and diesel for use in transportation, using 2004 as the baseline
year, would reduce carbon dioxide emissions by 3.9 to 11.8 million tons, as the ethanol blend
ratio rises from 10 per cent to 30 per cent. Some indicators of socio-economic sustainability of
Agro-energy/Biofuels/Bioenergy programs are given in the Table 3 below
Table 3:
Selected indicators of sustainability of bioenergy programs
Category
Impact
Basic needs
Improved access to
basic services
Income generating
Opportunities
Creation or displacement
of jobs, livelihoods
13
14
Quantitative indicators, based on
assessment of:
Families with access to energy services
(cooking fuel, basic services. pumped
water, electric lighting, milling, etc.),
quality, reliability, accessibility, cost.
Volume of industry and small-scale
enterprise promoted, jobs/$ invested,
jobs/ha used, salaries, seasonality,
accessibility to local laborers, local
recycling of revenue (through wages,
local expenditure, taxes), development of
markets for local farm and non-farm
For more details on cost benefits refer to the Technical Paper (Appendix 1)
S. Kartha, S. Larson, ED. (2000), Bioenergy Primer: Modernised Biomass Energy for Sustainable Development, United
Nations Development Program, New York
14
21
Gender
Impacts on labor, power,
access to resources.
Land use
competition and land
tenure
Changing patterns of land
ownership. Altered
access to common land
resources. Emerging
local and macroeconomic competition
with other land uses.
products.
Relative access to outputs of bioenergy
project. Decision-making responsibility
both within and outside of bioenergy
project. Changes to former division of
labor. Access to resources relating to
bioenergy activities.
Recent ownership patterns and trends
(e.g., consolidation or distribution of
landholdings, privatization, common
enclosures, transferal of land rights/tree
rights). Price effects on alternate
products. Simultaneous land uses (e.g.,
multipurpose co-production of other
outputs such as traditional biofuel, fodder,
food, artisanal products, etc.).
In addition to the benefits described above there are very special and unique benefits to the
countries in the Caribbean region. Most of these countries are Small Island Developing States
and face a number of challenges in pursuing sustainable development. The concept of
sustainable development has been endorsed by the leaders of SIDS, as the guiding principle for
planning their nations’ future development. Agro-energy industries producing biofuels would be
very beneficial to these countries, as it would address a number of cross cutting sustainable
development challenges such as:
• How to diversity the economy in a way that makes it more economically and
environmentally resilient;
• Identifying new, secure and significant size markets for goods and service to provide
employment and economic growth.
• How to develop new industries based on their natural resources within the existing WTO
rules, and that is resilient to the projected hazards of global climate change including
tropical storms and hurricanes, floods and droughts.
• Mobilizing the necessary resources for implementation.
An enlightened political leadership seeking to implement sustainable development would realize
that many of the obstacles to new initiatives posed by international agreements, for example, on
the export of agricultural goods and services, restrictions on incentives for the development of
new export industries such as textiles do not apply to agro-energy industries. First, since there
are no international agreements on how nations can provide energy services or the prices at
which they provide these services, governments have a lot more latitude in deciding how energy
investments occur and what interests are paramount. Second, the net foreign exchange earning
potential of biofuels for most countries is significant, which makes the economy more resilient
with agro-energy industries than without them. Third, a number of the international environmental
agreements would be addressed through the implementation of biofuels production; these would
the United Nations Framework Convention on Climate Change (UNFCCC), United Nations
Convention on Combating Desertification (UNCCD) and the United Nations Convention for the
Conservation of Biological Diversity (UNCCBD).
22
Table 4:
Potential of Selected Caribbean Countries as Biofuels Producers and
Crop(s)
Excellent Potential
Lead Crop(s)
Biofuels Market
Belize
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Transportation Fuels
Power Generation
Sugarcane
Guyana
Cuba
Dominican Republic
Good Potential
Barbados
Jamaica
Trinidad
Tobago
Suriname
and
Some Potential
St. Kitts and Nevis
St. Lucia
Dominica
Haiti
Grenada
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
2004 Imported
Petroleum
Products
(US$000’s)–
{Potential
Biofuels Market}
73,185
Transportation Fuels
Power Generation
169,004
Transportation Fuels
Power Generation
1,449,014
Transportation Fuels
Power Generation
1,712,591
Transportation Fuels
Power Generation
Transportation Fuels
Power Generation
209,451.3
928,646.2
Transportation Fuels
1,258,352.8
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Transportation Fuels
Power Generation
162,381.4
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Transportation Fuels
Power Generation
26,668.7
Transportation Fuel --Diesel
Power Generation
82,884.9
Transportation Fuel
Diesel
Power Generation
14,686.4
--
Transportation Fuels
Power Generation
Transportation
23
Fuel
-
--
29,282.7
Antigua
Barbuda
and
St. Vincent and
Grenadines
Limited Potential
Montserrat
5.
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Diesel
Power Generation
Transportation
Fuel
Diesel
Power Generation
Transportation Fuel
Diesel
Power Generation
Fast
Trees
Power generation
Growing
--
75,088.2
--
23,136.8
3,154
Conclusion
Biofuels can provide a long-term energy alternative to petroleum by using locally produced
feedstock at relatively constant cost. Moreover, because biofuels are locally produced by
indigenous agro-industries, most of the money spent is retained within the national economy
instead of going to foreign multi-national oil companies. Import substitution will have direct and
indirect effects on GDP and the trade balance. The risks arising out of fluctuating crude oil prices
adversely affecting the costs of production and transport of goods in the country can be
minimized if indigenous agro-energy resources are used.
Based on the analysis of the regional energy market, the condition of the agriculture sector,
countries institutional capacity, national resources endowment, proven technology, and the
proven ability for viable production of feedstock and subsequent conversion and efficient
distribution, the establishment of agro-energy industries to produce biofuels for use in
transportation and electricity generation represents the best options. Research and analysis, as
well as lessons learned from other countries with agro-energy industries, indicated that biofuels
has the potential to minimize the socio-economic consequences of the current energy situation
and at times reverse this situation, and in the process address a number of social and
environmental issues.
Funding for program implementation, with initial focus on the sugarcane producing countries, is
estimated to cost approximately US$48.8 million, over the period 2007-2012. In all the sugarproducing countries, there are either projects being proposed or under implementation to derive
electricity from bagasse. In addition, a number of countries are exploring the viability of producing
ethanol for use as transportation fuel. In these countries, IICA’s role would be more in a capacity
development and support role – providing information, facilitating exchange of experience and
expertise, technology transfer, and research and development. In the other countries where there
are no activities focused on the production of energy by the agricultural sector, then IICA’s role
would have to also include sensitization, demonstration, and public education. A number of
funding opportunities have been identified in the Strategy Document to provide support to the
agro-energy program, including from the EU, UNDP, IDB, CDB, bilateral donors including
Canada, China, UK, USA, Japan, France, Germany and Norway, as well as the private sector.
Significant investments will be required over the next five years if the agro-energy program is to
be successful. The potential for electricity exports from sugar mills would require investments
estimated between US$1.3 billion and US$2.3 billion depending on the choice of technology. The
level of investment required for the production of ethanol is in the range of about US$ 34 Million
for a plant with capacity of 57 million liters. The level of investment required for the population to
get their energy for cooking needs from agro residues is over US$1 billion dollar. Utilizing 50 per
cent of the total agro residues, or producing an equivalent amount and installing around 20,000
gasifiers, serving 100 households each, an estimated 12 million people living in 2.0 million
households could get piped cooking gas. The total investment required to achieve this is over a
billion dollars ($1,008 millions) that works out to US$85 per person. By using only one-sixth of
the total agro residues in Guyana, and one quarter in Suriname, 100 per cent of the population of
24
these two countries can get piped cooking gas. To provide 20 per cent of the population of the 16
countries with compact biogas plants, around 1.4 million biogas plants are required. Nearly
seven million persons would be able to cook on biogas at a total investment of US$210 million.
The total quantity of feedstocks required will be around one millions tons of agricultural waste and
crop rejects and waste. .
Funding for investment in the development of agro-energy is a major challenge as economic
globalization and changes in donor agencies mandates require government to explore different
financing mechanism. This may in some case require reforms to the existing investment
environment to make attractive to local and foreign investment. However, a significant amount of
finances are spent annually, to obtain energy supplies. In addition, national governments invest
annually a substantial portion of its budget in agriculture and rural development. Therefore,
national governments have significant amounts of financial resources to invest in developing
agro-energy.
Analysis of the imports of gasoline and diesel shows that in 2004, the region spent more than
US$6.5 billion dollars for the importation of some 163 million barrels of petroleum fuels. Based
on a projected average consumption and prices for these products increasing at the 2000 to 2004
rate, the region in 2010 is projected to spend in excess of US$14.9 billion. By 2015, the cost
would have increased to US$29.9 billion. It should be pointed out that the assumed cost of crude
is significantly below what is being forecasted by the International Energy Agency (IEA). The
substitution of ethanol for gasoline at various levels of blends would create a significant demand
across the region; this would in turn make a major contribution to the prospects for a viable
agricultural sector which is critical to the region’s future development and in particular to the sugar
industry.
An equivalent amount of energy substituted by biofuels has a national economic value that is
greater than the avoided cost of the imported fuel. Further, the transfer of the payment to the rural
community instead of foreign suppliers support to socio-economic development, and additionally
the payment in local currency rather than hard currency reduces the economic vulnerability of the
country, and helps promote sustainable development which is supposed to be the guiding
development paradigm of these countries, based on the Barbados Program of Action and the
Mauritius Implementation Strategy for Development of SIDS. If the strategy is successfully
implemented and the required level of investments are made, then based on analysis of 16
Caribbean countries 2004 sugarcane crop production figures, if all the sugarcane crop were
converted to ethanol, the quantity of ethanol produced would be around 3,000 million liters, which
can substitute around 2,300 million liters of gasoline.
The quantity of gasoline imported in 2004, was about 4,000 million liters, and the quantity of
diesel 5,400 million liters. The maximum ethanol production from the average cane production
for the period 2003-2005 is slightly more than 2,700 million liters, which would be significantly
less than the 5,500 million liters estimated need in 2010. The projected demand for transportation
fuel in 2010 is estimated at 81.3 million barrels at a 5 per cent per annum growth. Production
capacity is estimated at some 19.2 million barrels of ethanol, if all the sugarcane grown were
used for ethanol, from an estimated 894,500 hectares of land. If the varieties of sugarcane were
changed from high sucrose to high fiber, high yielding cane then ethanol production potential
would be increased to 38.4 million barrels. Further, the average production during 2003-05 of
coconuts in the region was 600,000 tons per annum could produce enough coconut oil to
substitute 109 million liters of diesel, and enough residues (shells & husk) to substitute for 132
million liters of diesel in power generation. The foreign exchange savings from the diesel
substituted by the coconut oil and residues is US$160 million at a crude oil price of US$70 per
barrel and US$229 million at US$100 per barrel.
The report on the technical, social and economic aspects of agro-energy, with accompanying
annexes, will provide a wealth of information in helping countries to prepare project proposals for
funding national agro-energy programs, inclusive of information on the technical issues in the
25
production and use of liquid biofuels, the technical aspects of agro-energy, ethanol as a major
liquid biofuel, as well as specific data for 10 Caribbean countries that includes:
• Agriculture and land use;
• Bioenergy potential from agricultural residues;
• Ethanol production potential from sugarcane;
• Jatropha cultivation for diesel substitution, and;
• Potential to expand biofuels production from sugarcane.
• National Biofuel production potential assessment
The international experiences documented shows that establishment of national agro-energy
programs is very challenging, requiring a degree of inter-governmental cooperation and
partnership with the private sector and supportive national policies and capacity development to
achieve success. Research shows that Caribbean countries that are or were sugar producers
have the potential to provide significant amounts of gasoline substitute and power for export to
the grids; some countries have more potential than their domestic markets, making the trade of
liquid biofuels a possible commodity for the CSME. Within recent weeks, Indonesia, an oil
producing state, has moved to implement a national biofuels program to address rural poverty.
Most of the social and rural development benefits of these industries are due to the increased
employment and income generation opportunities provided by the production of agro-energy
crops, or by products and their conversion in local industries. Higher agricultural production
resulting from the production of biofuels is a labor-intensive activity in most developing countries,
so it increases employment and wages in the rural population. The result is increased disposable
income, communities with more money positively impacts on the rural economy. As the industry
develops, there is increased usage of residues from food crops which helps improve the food
security of communities. The complimentarity of the production of biomass for fuel and food crop
production holds significant promise for improved efficiency and sustainability in the way land is
used. However, without leadership from IICA and/or other regional institutions, this potential will
be very slow in coming, if at all.
To achieve the positive impact would require implementation of the four core strategies
mentioned above, involving programs focusing on liquid biofuels industries that would produce
liquids fuels from varying feedstocks using a range of technologies from fermentation to
distillation, and; solid biofuels industries program focusing on the conversion of biomass to heat
and/or power through different forms of combustion. These two biofuels programs would be
complimented by other programs that would strengthen the linkages between the agriculture and
energy sectors, promote agro-energy entrepreneurial activities, and strengthen IICA’s
organizational capacity to accomplish its mission, making it the leading institution on agro-energy
in the Hemisphere.
The development of biofuels industries will represent a new endeavor for the countries. The
closest experience for liquid biofuels is the production of potable alcohol (rum that is widespread
across the region. The production of rum is a very profitable activity for a number of producers;
indeed, the region boasts a number of world-renowned brands. However, the development of
liquid biofuels industries implies a relatively steep learning curve, but starting off with valuable
experience with agronomic and conversion aspects of ethanol production. In the case of
biodiesel, the relevant experience comes from the production of copra and coconut oil. In the
case of the production and processing of solid biofuels, the regional experience is in the forestry
sector, where is sometimes limited relevant experience with charcoal production.
Recommended Next Steps by IICA
The potential contribution of biofuels to the region’s sustainable development goal is based on
potential benefits that are very substantial as shown; however there are significant challenges.
The multiplicity of the challenges lies in the characteristics of biofuel production and use. IICA
would need to:
26
1. Undertake a landscaping exercise at the country level to gather baseline information on
the following:
• Ongoing national strategies to address the changes in the agricultural sector in
response to the new European Union policy for agricultural imports from the ACP.
The new policy affects in particular raw sugar and banana imports to the EU.
• Land resources previously allocated to the production of export crops that could
potentially be used as biofuels raw material production.
• Land resources that are suffering environmental degradation as a result of current
uses that have potential for biofuels raw material production.
• Land resources that are currently un- or underutilized for agricultural purposes that
potentially could be used for biofuels.
• Water resources availability and future demand and supply options.
• Approaches to waste management.
• Strategies to address the increasing cost of petroleum imports and its impact on
economic growth.
• Electricity supply plans for meeting future demand as well as replacement of existing
capacity.
• Existing energy policies, pricing regime for fuels, and energy tariffs structures.
• Existing agricultural and industrial and financial markets polices and incentives.
• Priority environmental and social issues in the country and the sustainable
development strategies.
This exercise will provide valuable information from which IICA will be able to identify
Agro-energy Industries that are best suited in the national context.
2. Assessment of ongoing regional initiatives in agricultural diversification, renewable
energy development and energy efficiency improvements, mitigation and adaptation to
climate change, and energy resources development. This exercise will help IICA map
the activities and identify where there is potential for collaboration in developing biofuels
industries as part of ongoing or planned initiatives.
3. Identify regional investment sources and mechanisms that are now supporting agriculture
and energy projects. As discussed, investment is a major constraint of on the agricultural
sector; it is therefore necessary to both document sources as well as the experience of
these investors, as a perquisite to the planning of activities. Unlike agriculture there has
been encouraging signs for renewable energy investment. The two most recent cases
are wind farms in Jamaica, and the sugar factory co-generation project in Belize.
4. Dialogue with National and Regional Institutions working on aspects of sustainable
development to determine potential synergy between those goals and biofuels
production. There are now are number of regional projects being implemented with
funding from the Global Environmental Facility (GEF) focused on helping the region to
address barriers and or threats to sustainable development. These include an Integrated
Coastal Water Quality improvement program being implemented on behalf of the GEF by
Caribbean Environmental Health Institute (CEHI); the Caribbean Renewable Energy
Development Program (CREDP) and the Mainstreaming Adaptation to Climate Change
(MACC) both implemented by the CARICOM Secretariat.
5. Dialogue with the sugarcane and electric utility representatives about the potential of
biofuels -- the six sugarcane CARICOM countries are significant. Based on current
sugarcane area, a flexible mixed sugar-ethanol production system, that could be adapted
to produce between 70 % sugar/30% ethanol, and 30 per cent sugar/70 per cent ethanol,
could produce between about 900 and 2,100 million liters per year. If all the current
sugarcane area were dedicated to ethanol, up to about 3,000 million liters of ethanol
could be produced with an economic value of US$2.06 billion. The residual bagasse
27
could be used to produce up to about 7,600 GWh of electricity equivalent to 15.4 million
barrels of diesel having an economic value of US$1.6 billion at a crude oil price of
US$70/bbl. It would also thereby reduce the exposure of the region to the current
unacceptable high levels of energy insecurity such as fuel supply and price shocks. For
instance, in 2003, Barbados spent over US$130 million on the importation of petroleum
products. This translates into approximately 9 per cent of its foreign exchange earnings.
Similarly, in 2003, Jamaica imported 27 million barrels of oil valued at US$813 million.
This was an increase in volume of 7.5 per cent and value of 27 per cent over the
preceding year. In 2004, Jamaica’s oil import bill was US$950 million or 12 per cent of
GDP (25 per cent of imports).
6. Engaging in the widest possible private sector dialogue with the following potential
stakeholders: producers, transporters, equipment suppliers, technical service providers,
financing sources ranging from commercial banks, cooperative credit union, retirement
funds, building societies, to get the private sector interested. As discussed previously,
this will be critical to the establishment and growth of National Biofuels Programs.
28
CHAPTER 1
BACKGROUND: ICCA & ITS MISSION IN
THE 21ST CENTURY
29
1.0
ST
BACKGROUND: ICCA & ITS MISSION IN THE 21
CENTURY
The Inter-American Institute for Cooperation on Agriculture (IICA) is the specialized agency for
agriculture of the Inter-American system, linked to the Organization of American States (OAS).
Founded over 63 years ago, the current objectives of the Institute are to promote sustainable
agricultural development, food security and prosperity in the rural communities of its 34 Member
States in the Americas. The Institute is governed by the Inter-American Board of Agriculture
(IABA), which is made up of the ministers of agriculture of the Institute’s Member States. In
addition, there are 18 Permanent Observers, including several European countries, and Spain as
an Associate Member.
In response to the mandates of the Summit process, and following lengthy discussions and
consensus building among the 34 member countries of the Institute, the Ministers of Agriculture
signed the “AGRO 2003-2015 Plan of Action for Agriculture and Rural Life in the Americas,” a
hemispheric strategic framework to be used in drafting and implementing national and regional
strategies. The Heads of State and Government endorsed the Plan at the Special Summit held in
Nuevo Leon, Mexico, in January 2004.
For the 21st century, IICA has embraced a new style of technical cooperation that emphasizes
operational efficiency, prudent financial management, better use of human resources, expanded
international strategic partnerships and a new relationship with Member States based on
participation, transparency and accountability. This integrated, results-based management
framework allows IICA to help the countries implement their respective work programs under the
AGRO 2003-2015 Plan of Action. As part of this effort, IICA now permanently monitors the State
of Agriculture and Rural Life to provide a point of reference and input for national, regional and
hemispheric strategies and actions.
The efforts to create an institute that would seek to solve the region’s problems and foster mutual
understanding among the leaders of agriculture got under way at the end of the first decade of
the twentieth century, when the Pan-American Union – now the Organization of American States
(OAS) – undertook the important task of promoting agricultural development. Whilst the Institute
has achieved much in implementing given mandates from the Member States in Quebec, Bavaro,
Panama, Monterrey, Guayaquil and Mar del Plata, the last 63 years brought tremendous
challenges for the region, which saw the Institute having to respond in new and innovative ways,
including changes in its management style and its operations. The management model which
emerged during the process of leading change and institutional reform at IICA between 2002 and
2005, is a process that will be consolidated in coming years, and is documented in the October
2005 IICA publication, “10 Keys to Modernization of an International Organization, The Case of
IICA, Characteristics of a Modern Institution.”
Under the new model, IICA attaches special importance to information, communication and the
projection of its institutional image in order to position itself as an international development
agency that is recognized and respected as a strategic partner, one that is capable of making a
key contribution to the development of agriculture and the rural milieu in the Americas. It was
therefore agreed that in the 2002-2006 Medium-Term Plan, ICCA should consolidate its role as a
major player in the promotion of the sustainable development of agriculture, food security and the
prosperity of rural communities in the Americas. The specific thematic initiatives to implement the
plan were classified in the following strategic areas:
• Agribusiness Development
• Trade Policies and Negotiations
• Technology and Innovation
• Agricultural Health and Food Safety
• Sustainable Rural Development
• Information and Communication
30
•
Education and Training.
Based on the modern use of strategic planning tools as a process of institutional repositioning,
the Institute undertook the preparation of technical cooperation agendas at the national, regional
and hemispheric levels. This process, which included directly approaching Member States, has
led to a higher standard and quality of the delivery of service resulting in IICA becoming a
“partner of choice” for Member States and clients. This new results-based management style
adopted by IICA’s Administration to approach its Member States, and its decision to develop a
proactive agenda of mutual interests reflects, in many ways, the new vision required to face the
challenges of agriculture and rural life in the 21st Century. The driving force behind this new IICA
model is a commitment to lead and manage a process for the creation and sharing of knowledge
about agriculture and rural life in the Americas, and to consolidate in the Institute a culture of
excellence that results in the provision of information, knowledge, leadership and delivery of
technical cooperation that is more closely related to the needs and priorities of the Member
States.
In this respect, IICA is focused on becoming a more modern and business-oriented organization
that is driven by the needs of the Member States, and where technical excellence, full
participation, financial prudence, transparency and accountability, and working together with
strategic partners are emphasized. The management model implemented reflects the vision first
presented in 2002, to the Institute’s Member States in the document, “Repositioning IICA to Meet
the Challenges of the 21st Century.” The reform process was based on the need for the Institute
to maintain its place of technical excellence and technical leadership in the agricultural
community of the Americas. The Institute took the view that organizations such as IICA must
assume a higher responsibility of service to stakeholders and social responsibility to society.
In order to continue to ensure that the Institute plays a strategic role in assisting the Member
States in their search for progress and prosperity through modernization of the agricultural and
rural sectors, IICA will, among other activities, promote the incorporation of new technologies
such as biotechnology and agro-energy in the agricultural sector. IICA recognizes that increasing
energy prices poses a threat to rural development by reducing access to energy services that are
a prerequisite for improving household income. Secondly, it takes increasing amounts of capital
out of rural areas. The prevailing high prices of petroleum products in the world will result in
increased interest in the production of agro-energy from agricultural products including
sugarcane, grains and oil seeds. Agro-energy use will have a positive impact on the environment
and will create new job opportunities. The experience of Brazil in the production of alcohol as a
15
fuel for motor vehicles will become of increasing interest to many countries of the Hemisphere .
In pursuant of the development of an agro-energy industry, the IABA, at its Thirteenth Regular
Meeting, held in Guayaquil, Ecuador, on August 30 - 31, 2005, agreed to the development of an
Hemispheric Program on Agro-energy, as set out in RESOLUTION No. 410, which mandated the:
• Establishment of a platform for hemispheric cooperation at IICA to Promote Bioenergy;
• Convene a meeting to discuss the importance of agro-energy and bio-fuels and their
potentially favorable impact on agricultural development in and the economies of the
Member States;
• Task force comprising experts from the Member States appointed by the Ministers of
Agriculture, IICA personnel and strategic partners, and task them with drawing up a
hemispheric program on bio-energy and bio-fuels,
• A proposal to the Executive Committee, at its Twenty-sixth Regular Meeting, on the
resources required to support activities to be carried out under the aforementioned
Program.
15
Address by the Director General of IICA at the Caribbean Agriculture Week, Basseterre, St. Kitts & Nevis, October 5,
2005 http://www.iica.int/DirectorGeneral/Discursos/2005/CaribbeanWeekofAgriculture.pdf
31
Agro-energy has the potential to minimize the current energy situation and at times reverse this
situation, and in the process address a number of social and environmental issues. As a first
step in implementing this mandate, the Institute has developed a Strategy Document, based on
the technical, economic and social aspects of agro-energy in the hemisphere, for the
development of an Agro-energy Industry in the Caribbean, which falls within one of the six
thematic areas in IICA’s Technical Agenda for Cooperation in the Caribbean, aimed at helping to
reposition agriculture and rural life by developing sustainable industries and viable rural
enterprises. The countries of the Caribbean region (Antigua and Barbuda, Bahamas, Barbados,
Dominica, Grenada, Guyana, Haiti, Jamaica, St. Lucia, St. Kitts and Nevis, St. Vincent and the
Grenadines, Suriname, and Trinidad and Tobago {with the exception of the Dominican Republic})
constitute the Caribbean Community (CARICOM), and all are members of CARIFORUM, an
entity that supervises relations with the European Union. The administrative structure is headed
by the Conference of Heads of Government (CHG), with support from several sectoral ministerial
committees. One of these, the Council for Trade and Economic Development (COTED), is made
up of the Ministers of Agriculture and Trade.
In a general sense, IICA is convinced that even though agriculture will remain important as a
producer of food, it can also contribute very significantly to the economic production of non-food
items along with developing much stronger linkages to other sectors of the economy, such as,
energy and tourism. This broader scope of agriculture would make agriculture a much more
sustainable sector that would allow it to attract financial and political capital. This is particularly so
for the Caribbean, where traditional agricultural food commodities such as sugar and bananas are
under severe threats.
1.1
IICA - Innovator and Promoter of New Thoughts in Agriculture and Rural
Development
IICA has long recognized that innovation is a major driver for economies, and that the factors that
lead to innovation in agriculture are critical to policy makers. In order to sustain its image as an
innovator and promoter of new thoughts in agriculture and rural development, IICA will continue
to focus on emerging technologies, practices and business opportunities. IICA has a track record
of organizational innovation, notably the establishment of the IABA in 1979, as well as the
establishment in 1999, of the Centro de Capacitacion a Distancia (CECADI), IICA’s Hemispheric
Network of Distance Education and Training, as its dynamic and innovative response to the
16
ongoing search for state-of-the-art technologies, methods and systems of training . It’s most
recent dynamic and innovative thoughts are encapsulated in “10 Keys to Modernization of an
International Organization, The Case of IICA, Characteristics of a Modern Institution.” These
innovative and strategic tactics have now positioned the Institute as an international development
organization that is recognized and respected as a reliable strategic partner that can make a
major contribution to the development of agriculture and rural life in the Americas.
1.2
IICA’s Unique Strengths and Assets
IICA’s greatest strength lay in its acceptance of responsibility to help reduce the inequality and
social injustice that prevails in so many countries across the hemisphere. Modern agriculture and
rural development are keys to poverty reduction because the majority of the poor live in rural
areas. IICA’s current administration is conscious that only by pursuing policies of inclusion,
policies of equity and transparency, policies that promote education and a culture of
17
entrepreneurship and innovation that the war against poverty will be won .
ICCA’s 63 years of experience in agriculture and rural development, its culture of excellence, and
its new model for providing technical cooperation are among the Institutes greatest assets.
16
http://www.iica.int/comuniica/n_14/english/art.asp?art=10
Inaugural Address, Chelston W.D. Brathwaite, Director General of IICA, January 20, 2006, Coronado, San Jose, Costa
Rica
17
32
Decades of experience have shown the need for and the advantages of cooperation among
national and international, public and private organizations that work with agriculture and rural life
and whose actions complement those of the Institute. The Institute is convinced that the IICA
approach known as, “working together,” is crucial to reaching its objectives. “Working together”
with other development partners has allowed IICA to forge closer relations with the Member
States. For example, the Institute has established a Directorate of Strategic Partnerships in
Washington, DC to bolster relations with the Inter-American System, the Pan-American Health
Organization (PAHO), the Inter-American Development Bank (IDB), the International Bank for
Reconstruction and Development (World Bank), the United Nations Economic Commission for
Latin America and the Caribbean (ECLAC), the United Nations (UN), the Food and Agriculture
18
Organization (FAO) and other organizations . Key internal factors that supports IICA’s new
model for technical cooperation includes monitoring, supervision, evaluation and follow-up
system, which links planning, programming, budgeting, implementation, monitoring, evaluation
and follow-up activities within the Institute. Additionally, IICA Offices in the countries and relevant
Directorates and Units at Headquarters are expected to work in an integrated and holistic fashion.
Most recently, IICA and the FAO signed a groundbreaking agreement in Venezuela, in April 2006.
The accord will boost the strategic partnership between the two institutions, something the
th
hemisphere’s ministers of agriculture were eager to see happen. During the 29 FAO Regional
Conference for Latin America and the Caribbean, held in Caracas, Venezuela, IICA and the FAO
signed an agreement under which the two organizations will pool efforts on food security and the
improvement of agriculture and rural prosperity. The two partners decided to strengthen ties on
issues related to each organization’s mission and thus beef up their resources and the
cooperation they provide to countries in the hemisphere, in line with the eighth Millennium
Development Goal (MDG), which calls for a global partnership for development. IICA and the
FAO will also be helping the countries to implement the AGRO 2003-2015 Plan, prepared and
approved by the hemisphere’s ministers of agriculture.
Since IICA was created, agriculture in the Americas has been strengthened through hemispheric
cooperation. Over the past 63 years, the Institute has accumulated a wealth of knowledge
regarding agriculture and the rural sector, the diversity of peoples and cultures, and the agroecological diversity of the hemisphere, all of which are important for crafting creative solutions to
a wide variety of problems and challenges. IICA’s presence in all of the Member States gives the
Institute the flexibility it needs to move resources between countries and regions, in order to
design and adapt cooperation initiatives intended to address national and regional priorities,
facilitate the flow of information and improve the dissemination of best practices. Today, 34 IICA
offices, the length and breadth of the hemisphere, are working to meet the needs of the countries
in areas such as: trade and agribusiness development; sustainable rural development;
agricultural health and food safety; technology and innovation; education and training; and
information and communication.
1.3
IICA’s Challenges and Opportunities
The problems that hinder agricultural and rural development in the Americas are so vast and
complex that they surpass the efforts and capabilities not only of national governments, but also
of any single development agency or international organization. This is why international
organizations and agencies must combine their capabilities and experience with those of their
allies and partners in order to optimize contributions and bring solutions that have real impact on
the Community of Agriculture and Rural Life of the Americas. In its 2005 Report of the State of
and Outlook for Agriculture and Rural Life in the Americas, IICA identified four main challenges
that need be taken into account in determining the strategic actions for the 2006-2007
Hemispheric Agenda and the regional and national agendas:
18
“A 21st Century Model for Technical Cooperation - Leading Change and Institutional Reform at IICA: Support for a
Common Hemispheric Agenda for Agriculture and Rural Life in the Americas;” Address by the Director General of IICA,
Dr. Chelston W.D. Brathwaite, Eleventh Regular Meeting of IABA, Bravo, Dominican Republic, November 2001.
33
1. Producing for the Market. The actors in agri-food production chains must stop focusing
on supply and begin to base production on demand.
2. Riding the wave of the technological revolution. Producing for the market also means
3.
4.
that agriculture and rural areas must embrace the technological revolution.
Reducing poverty and improving income distribution. It is necessary to create decent
employment opportunities in agricultural and non-agricultural activities in rural territories,
and to promote the adoption of a national development model that views rural issues as
strategic issues and is aimed at eliminating poverty and inequity.
Fostering the development of the capabilities of the actors in the chains and rural
territories. This challenge is instrumental in creating the conditions needed to tackle the
first three successfully.
In relation to the Caribbean and it progress toward meeting targets of Millennium Development
Goals (MDGs), IICA’s challenge is to see how best it can assist the region in its efforts towards
economic integration in the context of the Caribbean Single Market and Economy (CSME). In
1989, at Grand Anse, Grenada, CARICOM Heads of State took the decision to establish the
CARICOM Single Market and Economy (CSME). CARICOM is trying to bring the CSME up to
speed in order to facilitate economic development of the Member States in an increasingly
liberalized and globalized international environment. The CSME, which entered into force on
January 1, 2005, is intended to create a single, enlarged economic space that would support
competitive production in CARICOM for both the intra- and extra-regional markets. It aims to
increase regional employment, improve standards of living and work, coordinate and sustain
economic development, increase economic leverage and expand trade and production.
IICA will also need to assist countries with capacity building in negotiation skills and help advance
their participation on the world stage of agricultural trade negotiations. Poor outcomes in trade
negotiations could result in severe negative impact on natural resources, further increasing
vulnerability, as the trend has been over the last couple of decades. Member States must be
able to analyze contemporary issues in international affairs, have knowledge of the institutional
design of the system of global negotiation, and within that the politics of the atmosphere.
Countries must be able to understand the institutional context in which diplomacy and negotiation
takes place.
Financing sustainable agriculture and rural development in the Caribbean is also another
challenge for IICA, as along with its partners, it will need to help countries identify options for
generating resources and put forth suggestions on how the private sector, donors and multilateral
financial institutions can contribute to the same objective.
1.4
IICA’s Vision
IICA’s vision is to transform the Institute into a development agency designed to promote
sustainable agricultural development, food security and prosperity to the rural communities of the
Americas. IICA’s 2002-2006 Medium Term Plan constitutes the Institute’s hemispheric agenda,
providing a framework for all its actions. IICA’s vision is composed of three basic elements:
(i) Promotion of the sustainable development of agriculture
In pursuit of the sustainable development of agriculture, it is necessary to have a vision
of agriculture as a productive, efficient, competitive and environmentally sensitive sector
capable of preserving the social fabric of rural communities for future generations.
(ii) Promotion of food security
Food security is understood not so much as a condition of national self-sufficiency but
rather as a condition in which human beings have physical and economic access to a
safe and nutritional diet that enables them to meet their food needs and live their lives in
a productive and healthy manner.
(iii) Promotion of rural prosperity.
34
Economic growth and market improvement should provide benefits to all strata of society
so that economic prosperity, human progress and sustainable development can be
achieved in a harmonious and balanced manner.
1.5
Objectives of the Strategy Document
In phase two, the Technical Report provided the basis for developing the Strategy Document and
action plans and programs to address Agro-energy/Biofuels industries development needs of the
countries. The Strategy Document, “Strategy for the Development of an Agro-Energy Program
for the Caribbean Region” contains background on the IICA Agro-energy program, how it fits
within the institution’s established programs and how it would enable the Institute to become the
leading strategic Institution on Agro-energy in the region. The document lays out the background
to the IICA initiative and the rationale that:
• Helps explain why agro-energy is considered to be a sustainable option to help address
rural development and energy security;
• Provides information on the current status of Agro-energy development in the region and
beyond, to provide a proven basis for consideration by stakeholders in the countries that
are interested in exploring the potential.
• Identifies and analyzes challenges and opportunities for Agro-energy development in the
region especially those countries that have bananas and sugar as their major agricultural
commodities or countries with adequate land space, and;
• Recommends the proposed approach to the development of agro-energy industries in the
Caribbean region.
The Strategy Document provides a living document for action over the next three to six years, to
ensure progress in fulfilling IICA’s mission, and fits within CARICOM’s initiatives to formulate a
comprehensive policy on agriculture within the framework of the “Jagdeo Initiative” for the
strategic re-positioning of the region’s vital agriculture sector - an Initiative for giving important
effect to the Regional Transformation Programme for Agriculture which was approved by
Caribbean Heads of Government at their Sixteenth Inter-Sessional Meeting in Suriname, in 2005.
The agro-energy strategy focuses on the identification and consolidation of a set of
complementary activities that take advantage of ICCA’s current capacity and its experience in
agriculture and rural development, while taking its limitations into consideration. The strategy
includes a number of programs to support the development of biofuels industries across the
region, particularly the sugarcane producing countries. Core strategies identified that would lead
to the establishment of a successful and sustainable regional agro-energy program include:
• Become the leading strategic Institution on Agro-energy in the Caribbean.
• Promote Agro-energy in the Caribbean as an economically viable source of energy
by introducing Liquid and Solid Biofuels Industries in sugarcane growing countries to
produce liquid fuels and heat and/or power through combustion.
• Build the sustainability of IICA to support agro-energy entrepreneurial activities of the
economically disadvantaged that lead to sustainable livelihoods and a healthy
environment.
• Build IICA’s organizational capacity to accomplish its mission – the role of IICA.
The Strategy Document includes a program aimed at positioning ICCA to help strengthen
linkages between the agriculture and energy sectors in order to increase opportunities for energy
services in the Caribbean. IICA will assist countries in drafting integrated agro-energy policies to
provide a framework for meeting growing energy needs in an economically, socially and
environmentally sustainable manner. This would lead to identification of capacity needed for
planning and implementation of Agro-energy/Biofuels policy. IICA would also implement a
program to facilitate dialogue with the sugar industry leadership and electric utility representatives
about the potential of Agro-energy, as well as other stakeholders and civil society in order to
provide scientifically sound and politically unbiased analyses and conclusions needed for
strategic decisions related to research or policy issues.
35
Another program would be to provide countries with comprehensive information to assist with the
development and deployment of biofuels industries by providing information on the development
of emerging technologies, industry best practices and business opportunities in the agro-energy
industry. Development of small and medium size liquid and solid biofuels enterprises provides
an excellent opportunity for generating employment and revitalizing rural economies, as well as
improving diffusion of technologies. The development of small- and medium-scale size liquid and
solid biofuels enterprises would involve the provision of training to existing and prospective
entrepreneurs in starting and managing business activities relating to biomass-based energy
conversion, supply and maintenance services; providing training to other end-users in various
uses of biomass energy; interfacing with research and development institutions engaged in
biomass technology development, to provide ready access to relevant technological information,
and; interfacing between local governing bodies/representatives, suppliers of biomass-based
technologies, local financing institutions, entrepreneurs, and other end-users.
A program to educate consumers about the benefits of Agro-energy/Biofuels industries is
intended to help them make wise energy choices and to contribute to the effort as a whole. The
public education and awareness program proposed would educate key public officials and the
general public about biofuels and would also build regional and national coalitions that would form
the nuclei of support groups that would promote and eventually lead to Biofuels production and
use nationally. Additionally, staging of a bi-annual regional conference would provide the
mechanism for the exchange new ideas, analyze strategies, and allow agriculture and energy
professionals and stakeholders within the Caribbean region to meet with each other.
To achieve successful implementation of Agro-energy programmes at the national and local
levels will require IICA to ensure that it is proactive, and that it increases its capacity in agroenergy management by training its professionals located in the Institute’s member states. Given
the limited institutional capacity that exists in the energy sector in the majority of the countries
across the region, development of Agro-energy industries will require the provision of systematic
long-term technical assistance. This support function is critical and one that IICA, as discussed
earlier based on its institutional character is uniquely positioned to play. However, for IICA to play
this supportive role it will need to undertake institutional strengthening, adding professional skills
in energy planning and policy and information support capacity that allows IICA to effectively
support Member states program.
1.6
Methodology
The methodology to achieve the above outputs included: (a) laying out a clear framework for
development of an Agro-energy program for the Caribbean Region; (b) discussions and
consultations with experienced professional in Brazil, Cuba, India and US; (c) review of country
experiences (Brazil, India, Philippines, Pacific Island Countries, Australia, United States, Cuba
and Denmark), and; (d) desk review of national and international reports, particularly in
sustainable development, energy, environment, and agriculture.
The first phase in developing the strategy consisted of an assessment of the technical, social and
economic aspects of Agro-energy/Biofuels. The assessment was based on the following
information:
• Country experiences – developed and developing - on lessons learned in developing
and implementing biofuels programs.
• Analysis of “Petroleum Energy Statistics in the Caribbean (16 Caribbean countries)
PETSTATS CD-ROM Series No.1, Caribbean Energy Information System 2004”;
• Assessment of Caribbean countries Agro-energy/Biofuels production potential.
• Assessment of the needs and priorities for meeting energy for sustainable
development objectives.
• Interviews and other consultations to complete the information generated from the
desk reviews and country studies.
36
The output of this initial phase was the production of a Technical Report titled, “Technical, Social
and Economic Aspects of Agro-Energy.”
In phase two, the Technical Report provided the basis for developing the Strategy Document and
action plans and programs to address Agro-energy/Biofuels industries development needs of the
countries. The Strategy Document, “Strategy for the Development of an Agro-Energy Program
for the Caribbean Region” contains background on the IICA Agro-energy program, how it fits
within the institution’s established programs and how it would enable the Institute to become the
leading strategic Institution on Agro-energy in the region. The document lays out the background
to the IICA initiative and the rationale that:
• Helps explain why agro-energy is considered to be a sustainable option to help address
rural development and energy security;
• Provides information on the current status of Agro-energy development in the region and
beyond, to provide a proven basis for consideration by stakeholders in the countries that
are interested in exploring the potential.
• Identifies and analyzes challenges and opportunities for Agro-energy development in the
region especially those countries that have bananas and sugar as their major agricultural
commodities or countries with adequate land space, and;
• Recommends the proposed approach to the development of agro-energy industries in the
Caribbean region.
37
CHAPTER 2
THE CHANGING CONTEXT OF
DEVELOPMENT IN THE CARIBBEAN
38
2.0
THE CHANGING CONTEXT OF DEVELOPMENT IN THE CARIBBEAN
Land, agriculture and rural society are fundamental to an understanding of history and
development in the Caribbean. Although there are wide disparities in size, population, and per
capita income amongst Caribbean countries, as well as differences in language and identity,
geography, history and culture, and politics and economics, the 14 Caribbean Member States of
IICA (Antigua and Barbuda, Bahamas, Barbados, Dominica, Dominican Republic, Grenada,
Guyana, Haiti, Jamaica, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname,
and Trinidad and Tobago) share a history of European colonization and similar development
challenges.
Evolution around the middle of the seventeenth century of a sugar plantation society based on
slave labor was an important watershed in Caribbean history. In terms of agriculture, the islands
changed from small farms producing cash crops of tobacco and cotton with the labor of a few
servants and slaves, to large plantations requiring vast expanses of land and enormous capital
outlays to create sugarcane fields and factories. By 1770, the export of sugarcane and its
associated by-products - rum and molasses - accounted for 81% of exports of the British
19
Caribbean . Sugarcane had become the most important crop in the world.
From the 1930s to the early 1970s, and particularly after World War II, the majority of countries in
the region followed a growth strategy known as “import substitution industrialization”. The main
idea was that in order to achieve economic progress, developing countries should shift their focus
from agriculture to manufacture. The main tools in this process, which was accompanied by
agrarian reforms, were import-licensing, tariffs, direct public investment in key industries, low
interest rates and easy access to credit under soft monetary regimes. This period saw several
of the islands experiencing a major debt crisis that crippled the economies of these small island
states. It also became evident that economic independence did not follow political independence
but instead the Caribbean continued to depend on their colonizers for their exports, imports,
capital and technology. Imports cost more than exports, creating negative trade imbalances,
thereby worsening their respective debt crises.
Two oil crises, one in 1973-74, and the other in 1978-79, also negatively impacted Caribbean
economies. All countries except Trinidad and Tobago are oil importers and so were vulnerable to
the oil shocks of the seventies. By the 1980s, referred to as the “lost decade,” the region
experienced widespread economic stagnation. Partially prodded by the imperatives of structural
adjustment agreements with the International Monetary Fund (IMF), most of the Caribbean in the
1990s implemented various forms of privatization, deregulation, and market liberalization.
The twenty-first century finds the Caribbean pursuing regional integration through the
establishment of the CARICOM Single Market and Economy (CSME) in order to achieve
sustained economic development based on international competitiveness, coordinated economic
and foreign policies, functional co-operation and enhanced trade and economic relations with
third States. Regional integration has been a major plank of Caribbean policy, as exemplified in
the 1989 amendment establishing the CARICOM Single Market and Economy. While
commitments on the CSME are extensive, implementation has lagged. The commitment to free
trade in the region has made progress, but exceptions still remain, including quotas as well as
allowed tariffs on some agricultural and other products. Some progress has been made on trade
in labor services, to allow free movement for graduates, media workers, musicians, artists and
sportspersons.
Jamaica, Barbados, Belize, Guyana, Suriname, and Trinidad Tobago, the six CARICOM member
states that adopted the Single Market in January 2006, signed the formal declaration signaling
the region-wide launch of the CARICOM Single Market (CSM), in Jamaica. Member countries of
the Organization of Eastern Caribbean States (OECS), Antigua and Barbuda, Dominica,
19
Knight, Franklin W. 1990. “The Caribbean - The Genesis of a Fragmented Nationalism.” Oxford Press, New York
39
Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines, also signed
declarations signaling their intent to join by the end of June 2006. The adoption of the CSM
makes CARICOM the newest trading bloc to join the approximately 194 other trade blocs on the
world market. Jamaica, Trinidad and Tobago and Barbados have ratified early implementation of
some aspects of the CSME, including extending free movement of labor to architects and
engineers. The full CSME is scheduled to come on stream in 2008, with the eventual goal of
20
complete dismantling of restrictions on labor movement within CARICOM .
2.1
Emerging Issues & Challenges Facing the Caribbean
There is no doubt that the Caribbean region faces huge challenges arising from modern
globalization, declining competitiveness, trade liberalization and eroding preferences, the rising
cost of imported fuel, the revolution in information technology, and, a very high vulnerability to
natural disasters. Additionally, very high debt has placed 7 Caribbean countries amongst the 10
21
most indebted countries in the world, and 14 among the top 30 .
Caribbean countries face unique development challenges arising from their small size and
vulnerability to natural disasters as well as the resulting economic volatility. They also continue to
confront a changing international environment, with a significant transformation in the production
structure of most economies, away from traditional agriculture. According to a recent World Bank
22
report, “A Time to Choose: Caribbean Development in the 21st Century,” the Caribbean region
faces a number of challenges which threaten to undermine the remarkable health and education
indicators attained in the post-independence period. Unemployment, particularly of youth, is
increasing; inequities are emerging, productivity is falling, and all are contributing to stagnant or
declining economic activity. Without remedial action, the report notes, per capita growth is
expected to reach only 2.3 per cent for 2001-2010, compared to 4.3 per cent in the 1970s.
Caribbean Governments will also have to address the high debt levels that have grown from a
regional average of 67% in 1997, to 96% in 2003, against a backdrop of declining aid flows.
CARICOM, up to the mid-1980s, a net food-exporting region, is now a net food importer. High
cost of imported energy and a rapidly rising food import bill are among the key contributing
factors. Aid flows fell faster than the 50 per cent reduction experienced by all Small Island
Developing States (SIDS) between 1994 and 2002. Moreover, to conform to new security
standards demanded by the developed world and international institutions, CARICOM countries
23
have also been forced to divert significant resources to meet those requirements .
In a global system that has intensified the economic and social exclusion of the majority of the
globe’s population, rural communities have become some of the most excluded. According to a
recent report by ECLAC, Latin America and the Caribbean continue to be a region of social
inequality where the richest 10 per cent receive 50 per cent of national income and the poorest 10
24
per cent only 1.6 per cent . However, distributional inequality is a relatively less influential
contributing factor to extreme poverty in most Caribbean countries than it is in Latin America. As
in Latin America, poverty rates in the Caribbean are higher in rural areas than in urban areas. In
Jamaica, for example, the rural poverty rate is three times as high as the urban poverty rate,
while in Guyana, almost the entire rural population is poor. The situation is similar in Belize,
Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. In
Barbados, on the other hand, the available data indicate that poverty rates are higher in urban
areas than they are in rural zones. However, exogenous natural or economic shocks - such as
an increase in oil prices - are jeopardizing the Caribbean’s chances of meeting Target 1 of the
Millennium Development Goals (MDGs).
20 World Bank Report, A Time To Choose: Caribbean Development In The 21st Century
21 World Bank
World Bank
23
http://www.un.org/smallislands2005/coverage/statements/sids050114carribean.pdf
24
“Meeting the Millennium Poverty Reduction Targets in Latin America and the Caribbean, UNDP, ECLAC, IPEA, 2002
22
40
Clearly, formidable challenges lie ahead. While poverty in the Caribbean has declined in the past,
it remains high in many countries, including Haiti, Guyana, and the Dominican Republic, and
several OECS countries. Increasing rates of AIDS/HIV – the Caribbean has the second highest
prevalence of AIDS/HIV in the world, behind Sub-Sahara Africa - and migration of skilled
professionals are major issues, as well as unemployment, particularly of youth; it has severe
implications for poverty and the income distribution, as well drug trafficking and addiction. All this
means that improving the rate and quality of growth is crucial, given the linkages between propoor growth and poverty reduction and employment. Still another challenge is reducing crime,
which is affecting the larger islands and increasingly the smaller ones; it impacts the social fabric
as well as investment and growth, and contributes to increased migration. Of growing concern is
the case of climate change and sea level rise that is anticipated to result in the Caribbean
diverting resources intended for social investment into minimizing damages to economic and
social assets. Meeting these challenges is complicated by the massive increase in public debt in
the last few years.
Another challenge is coping with natural disasters and economic volatility. The Caribbean region
as a whole (particularly the rural areas) is highly vulnerable to exogenous factors - some events
have been truly devastating, affecting the population of an entire country and causing damage
exceeding 100 per cent of annual gross domestic product (GDP). Economic growth in the
Caribbean countries was undermined by the natural disasters that hit in the second half of 2004.
The impact, measured in terms of GDP, is quite severe in most cases, with the only major
exception being the Dominican Republic, where damage and losses represent less than 2 per
cent of that country’s current GDP. In Grenada, it amounts to 212 per cent of GDP, and in the
Cayman Islands, it totals 138 per cent. Although the figures for Jamaica (8 per cent) and the
Bahamas (7 per cent) are lower, they nonetheless represent a significant burden for the
25
economy. Assessments and analyses, conducted by ECLAC and the OECS, estimate the value
of damages and losses at more than US$5 billion, meanwhile, economic losses had been
estimated at US$37.4 million in the agricultural sector.
A most serious and urgent challenge includes the rising cost of energy imports that is putting a
severe drain on the limited financial resources of many Caribbean islands. The financial stress
imposed by high energy imports have often been worsened as a consequence of the economic
devastation wrought by the adverse effects of global climate change, namely the increased
incidence of hurricanes. Increasing oil prices are having a dramatic effect on Caribbean
economies. In September 2005, crude oil prices broke above $70 a barrel, approaching levels
not seen in real terms since 1980, the year after the Iranian revolution. At the end of January
26
2006, the price per barrel of oil was $67.92 . In April 2006, crude oil traded in the UK, hit a
record high of $74.22 a barrel which set a new price peak, and in the US, oil prices leapt above
$72 a barrel also settling a record high. According to the U.S. Energy Information Administration
(EIA), world crude oil prices are expected to stay high through 2007 because of strong petroleum
demand, limited surplus oil production and refining capacity and concerns about supply
27
disruptions due to geopolitical risks in countries like Iran . Clearly, a key goal of any strategy
has to be reduction of the present high cost of energy services, relative to the value of Caribbean
exports of goods and services, so that the countries can compete on relatively equal terms in the
new global economy.
The loss of preferential access under the European Union’s (EU’s) Sugar Protocol presents a
serious challenge to the sugar producers of the Caribbean who are mostly high-cost producers
who will find it difficult to compete in the world market. Sugar still accounts for more than 20 per
cent of the merchandise exports of Belize and Guyana, and roughly 10 per cent of employment in
these countries. It occupies an average of 31 per cent of the cropland in the region and more than
25
The 2004 Caribbean Hurricane Season: Facts, Figures, Preliminary Conclusions And Lessons Learned,
http://www.eclac.cl/publicaciones/DesarrolloEconomico/5/LCG2265PI/Chapter_4.pdf
Energy Economics Newsletter, Crude Oil Futures Prices, NYMEX, January 31, 2006,
http://www.wtrg.com/daily/crudeoilprice.html
27
“High global oil prices seen through 2007,” Reuters, http://msnbc.msn.com/id/12613507/
26
41
60 per cent of the cropland in Barbados and Trinidad and Tobago. It provides jobs to the rural
poor who often lack the skills or training to find employment in other sectors. Earnings for the
Caribbean region still averaged US$406 million during 1999-2001, and 60 per cent of these
28
earnings were due to preferential access to the EU and U.S. sugar markets .
One of the most promising ways to add value to sugarcane is to produce energy as a by-product.
This is currently viewed as attractive because of high energy prices, but it may be viable even
without recent increases in energy prices because of the combined economic and environmental
benefits. Sugarcane produces very large volumes of biomass (60-80 tons per hectare) and that
biomass can be used as a clean burning fuel. It has been used to power the sugar factories for
decades, but it can also be used to produce surplus electricity to meet a portion of the national
electricity demand. This is being done in some countries (such as India and Mauritius), but not
extensively in the Caribbean sugar producing countries (Belize and Guyana are reported to be
considering such activities).
Most of the Caribbean sugar industries will need to be restructured, and some will need to be
closed. For example, the 2005 sugar crop brought to an end the production of sugar in St. Kitts
and Nevis. International agencies assisted St. Kitts and Nevis with the transition through the
provision of technical assistance and other resources. The role of IICA was highlighted in the St.
Kitts and Nevis Parliament for its assistance, from the very outset, in providing the country with
the team leader for the Transition Management Team and other resources for feasibility studies.
In December 2005, in an address delivered in Parliament, Prime Minister and Minister of Finance,
the Hon. Dr. Denzil L. Douglas, announced that St. Kitts had reached the stage where sugar
production accounted for about 2.5 per cent of GDP, and that the country can still look forward to
increased economic activity in 2006, the first year during which there will be no sugar production
in St. Kitts.
In 2003, the Government of Trinidad and Tobago began a major restructuring and privatization
program of the state-owned sugar company, Caroni (1975) Ltd., which had never made a profit in
30 years of operation. Other sugar producers of the Caribbean will need to become more
competitive by reducing costs and adding value to their sugar industries through cogeneration of
energy and other activities. Those that cannot reduce costs sufficiently will need to diversify into
other crops, such as fruits, vegetables, and meats, for the growing local demand, the tourist
industry or export. International assistance will be important to help countries with these
29
adjustments and the European Union has already proposed an adjustment program .
The Heads of State and Government of the Americas have recognized that agriculture and rural
life have a key role to play in reducing poverty and fostering integral development in the
countries. Taking into account this strategic role of agriculture, and current trends in the world
economy, the Institute has been assigned a leadership role in the institutional architecture taking
shape in the Americas to contribute to achieving the Millennium Development Goals, especially
that of reducing poverty and hunger by 2015, and to support the Summit of the Americas process.
Agro-energy is considered to be a sustainable option for addressing rural development and
energy security and provides an exciting option for diversification of the sugar industry. Energy
services are essential in helping to facilitate economic development by underpinning industrial
growth, enhancing productivity, and providing access to global markets and trade. Energy’s
crucial role in enabling development makes the provision of adequate, affordable, and reliable
energy services absolutely necessary in order to achieve the MDGs.
28
World Bank, Mitchell
World Bank, Development Prospects Group; Sugar in the Caribbean: Adjusting to Eroding Preferences, Vol. 1 of 1;
Mitchell, Donald, World Bank Policy Research Working Paper 3802, December 2005. http://wwwwds.worldbank.org/servlet/WDS_IBank_Servlet?pcont=details&eid=000016406_20060109154228
29
42
2.3
Caribbean Agriculture Sector - Overview & Outlook
Whilst the outlook of the agricultural sector in the Caribbean region will be partly determined by
the macroeconomic environment, the phenomenon of globalization has the potential to
dramatically change the Caribbean landscape, forcing the traditionally agriculture-based society
to diversify and become more competitive. Trade liberalization and the globalization of
agriculture will determine the long-term projections for the agriculture sector in the region, and
highlights the challenges of rural development and its place in international trade negotiations.
There is pressure on arable lands, fragility of ecosystems, brain-drain in the agriculture sector,
low investment in agricultural research, and as traditional markets for crops such as sugar,
bananas, coffee, cocoa and rice decreases under global competition and WTO rules, bilateral
and regional trade agreements such as the EU-ACP, the CSME and the Free Trade Area of the
Americas (FTAA), farmers are finding it difficult to remain competitive. Additionally, the decline of
the plantation sectors has led to migration of labor out of agriculture and as a result, the
30
population involved in agriculture is declining and aging .
Tourism has displaced agriculture as the dominant sector in the Caribbean economy, but
agriculture is still a significant export earner and means of livelihood in several countries, with
sugar and bananas being the most important agricultural products. The Caribbean recorded a
decline in economic activity during 2005, due particularly to a weaker performance in the tourism
sector. Tourism, which has transformed a number of islands into tourism-dependent economies,
is now a major economic sector in most of the Caribbean states, and accounts for between 25
and 35 per cent of the total economy of the region. It is also the major foreign exchange earner in
the region, accounting for one-quarter of foreign exchange earnings, and one-fifth of all jobs.
According to the Caribbean Development Bank (CDB), the spill over from the 2004 hurricane
season and rising oil prices were other significant factors for the slow growth of the Caribbean
economy in 2005; agriculture and manufacturing registered declines, while construction grew
rapidly both in the residential and public sectors.
Although the agricultural sector is one of the largest employers of labor and generator of foreign
exchange from the exports of commodities to the United States (US) and the EU under special
agreements, the highest level of poverty is among workers in the agricultural sector. Dominated
by traditional agricultural commodities such as sugar, coffee and bananas sold to historical
markets, which are based on the region’s colonial history, the agriculture sector is now in dire
economic conditions in just about every country. It is worthwhile noting that the terms of trade for
the region’s historical commodities have changed significantly. For example, compared to the
early 1970s, when the region could sell a ton of sugar for approximately US$400, and purchase
approximately 100 barrels of oil, today, 10 barrels for one ton of sugar is not unexpected. While
these terms of trade are unfavorable, they are consistent with the historical trends and show the
difficulty of governments to develop effective responses. As agriculture declined, so too did the
situation in rural areas.
31
The Caribbean islands are among the most susceptible to the likely impacts of climate change.
Most Caribbean island states possess limited arable land, mainly concentrated near the coasts.
Changes in the height of the water table and soil salinity as a consequence of sea-level rise
would be stressful for many important crops. Non-irrigated subsistence farming of roots and
tubers, peas and maize is widespread. A vast majority of the region’s population depends on
subsistence agriculture for at least a part of their livelihood. Many of the short-term crops (corn,
pigeon peas, sweet potatoes and vegetables) are seasonal, and any significant shifts in climatic
conditions such as increased temperatures, more frequent or more intense droughts, and any
changes in mean rainfall, could have adverse effects on production and food supply. This type of
farming is also particularly vulnerable to droughts, pests and diseases. Changes in climate could
30
31
FAO
Inter-Governmental Panel on Climate Change (IPCC) Third Assessment Report (TAR)
43
create more frequent drought situations and increase the incidence of losses by pests and
32
diseases .
While agricultural products and food dominate exports they also dominate the region’s imports.
33
Currently, the region’s food import bill is approximately US$3 billion . There is a select group for
whom imported food is an especially important commodity: Antigua and Barbuda, Grenada, Haiti,
St. Lucia, St. Vincent and the Grenadines, and the Bahamas. This reliance on imported food
34
stems from limited domestic agricultural production that relies upon single commodities . The
FAO reports that as many as 43 developing countries depend on a single commodity for more
than 20 per cent of their total revenues from merchandise exports – six of those listed are
Caribbean countries: Guyana, Belize and Cuba (sugar); Dominica, St. Lucia and St. Vincent
35
(bananas) .
Figure 2.2.1:
Dependence on Agricultural Export Earnings from a Single Commodity –
36
1997/99
The Caribbean region today derives less than 10 per cent of their GDP from the agriculture sector
but similar to most SIDS, that sector accounts for approximately 31 per cent of employment.
Agriculture GDP, in fiscal 2005, fell slightly to US$803 million (from US$807.7 the previous year).
Agriculture, in general, and sugar in particular, is important in the economies in the region. Based
on the proportion of the population in agriculture, Haiti is the most agrarian with 62 per cent. The
least agrarian populations are found in Barbados (4 per cent) and Trinidad and Tobago (9 per
cent). Countries with intermediate agricultural populations are Cuba (16 per cent), Dominican
Republic (17 per cent), Jamaica (20 per cent) and St. Kitts and Nevis (24 per cent). The
contribution of the agricultural sector to GDP is largest in Haiti (29 per cent), the Dominican
Republic (11 per cent), roughly 6 per cent (in Barbados, Cuba, and Jamaica), and only 1 per cent
37
in Trinidad and Tobago .
Up to 2000, agriculture was not explicitly recognized in the Summits. However, in 2001, at the
Third Summit of the Americas, IICA spearheaded an initiative to include agriculture in Summit
discussions. This received strong support from the Heads of State and Government, and this
was articulated in the Declaration of Quebec City and the Plan of Action of the Third Summit.
Recognition of agriculture’s strategic importance for integral development of the countries was a
32
Caribbean Climate Change Report, UNEP
http://www.caricom.org/jsp/pressreleases/pres16_06.jsp
Caribbean Development Bank, 2005 Annual Report, March 9, 2006
35
State of Agricultural Commodity Markets, FAO,
36
State of Agriculture Commodity Markets, FAO
37
IICA
33
34
44
significant political achievement. It also places agriculture within the context of the long-term
objectives of the Summits process and the international development goals set for 2015. Thus, in
following up on the mandate from the Third Summit, at their First Ministerial Meeting on
Agriculture and Rural Life, in November 2001, held in the Dominican Republic, the Ministers of
Agriculture signed the Ministerial Declaration of Bavaro for the Improvement of Agriculture and
Rural Life in the Americas, and made major progress developing the “Strategic Guidelines for a
38
Shared Agenda for the Community of Agriculture and Rural Life in the Americas.”
This fits within CARICOM’s initiatives to formulate a comprehensive policy on agriculture - The
Regional Transformation Program in Agriculture - developed in 2000, and in keeping with the
provisions of Part Two of the Revised Treaty of Chaguaramas, establishing the Caribbean
Community including the CARICOM Single Market and Economy. This was done under the
guidance of the President of Guyana, Bharrat Jagdeo, who is the Lead Head of Government with
responsibility for Agriculture within the CARICOM Quasi-Cabinet. As a follow up, CARICOM
Heads of Government, at their July 2004 Summit in Grenada, endorsed the preparation of a
working document from the President of Guyana. The “Jagdeo Initiative” for the strategic repositioning of the region’s vital agriculture sector is an Initiative for giving important effect to the
Regional Transformation Program for Agriculture which was approved by Heads of Government
at their Sixteenth Inter-Sessional Meeting in Suriname, in 2005. The Initiative seeks to strengthen
Regional Agriculture and its contribution to the regional economy and lessen the region’s reliance
on imported food.
Agriculture Outlook
Agricultural commodity prices generally remain close to historically depressed levels – and their
longer-term decline relative to the prices of manufactured goods continues. Caribbean countries
say they will lose US$100 million dollars annually, as a result of the EU’s decision to go ahead
with cuts in the price of sugar exported to Europe by ACP states. Under proposals for the new
sugar regime, the EU is proposing a 37 per cent price reduction for sugar exports from CARICOM
and other countries of the ACP group, over a three-year period commencing in 2006. CARICOM
leaders are calling for a staggered eight-year introduction of the new policy, arguing that it
deviates from the original agreement that guaranteed the region’s full access to the European
market at negotiated prices. CARICOM is, “…arguing for a position that is more reasonable, fair
and equitable,” while alluding to what is regarded to the EU’s moral and legal obligation to honor
commitments under the Sugar Protocol.
Figure 2.2.2:
Recent Trends in Sugar World Prices – 1961-2003
38
39
Reflections on the future of agriculture and cooperation: On the Road to 2015, IICA, Editors: Lizardo De las Casas,
Javier Gatica. – San José, C.R. : IICA, 2003
39
State of Agriculture Commodity Markets, FAO
45
The banana industry is also experiencing a similar market security crisis. From January 1, 2006,
the quotas controlling import volumes of “third country” (almost exclusively Latin American)
bananas coming into the EU, 25 have been eliminated. Importers are now only required to pay a
tariff of 176 euros/ton and a small guarantee of 15 euros/ton. Import licenses have also been
removed but an import certificate is still required. The EU, under the British Presidency, agreed to
retain a duty-free quota of 775,000 tons per annum for bananas from Africa and the Caribbean,
although this may not be for much longer. Until March 2006, import licenses for ACP bananas are
still issued according to historical trading patterns. From that date however, 50 per cent of the
licenses will be issued according to the principle of “first-come-first-served”, rising to 100 per cent
over an unspecified period.
The Caribbean rice industry, which is largely located in Guyana, performed relatively well in 2004,
sustaining its dramatic growth trends of the 1990’s. Seventy per cent of Guyana’s total rice
production is exported, accounting for 4 per cent of total GDP, about 14 per cent of total exports
40
and approximately 11 per cent of foreign exchange earnings . However, major flooding in late2004 and 2005 will reverse these gains. The major external trade issues confronting the
Caribbean rice industry relate to the reforms of the EU’s Common Organization of the Market
(CMO) for rice and the impact of the Everything But Arms (EBA) initiative under which Least
Developed Countries will have both duty-free and quota-free access to the EU market by 2007. It
is estimated that CMO reforms could result in a fall in internal prices by more than 40 per cent by
2009, with EU producers insulated through an increase in direct aid. This issue, which forms an
integral part of the Economic Partnership Agreement (EPA) negotiations between the EU and
CARIFORUM countries, holds significant implications for the future of the Guyana and Suriname
41
rice industries .
In terms of other traditional exports, nutmeg in Grenada continued to battle decreasing levels of
production efficiency in the context of increasing competition in the global commodity market. The
passage of Hurricane Ivan in 2004, which left an estimated 90 per cent of nutmeg trees uprooted,
is having serious implications for the Grenada Cooperative Nutmeg Association (GCNA). Citrus
also faced its share of challenges as the prospect of deeper regional integration would allow for
increased access to lower-cost citrus from the Dominican Republic and Cuba. The Dominican
Republic had already started to export duty-free citrus to Barbados under the trade pact. The
CARICOM market is seen traditionally as the most stable and lucrative market for citrus growers
42
in those countries, particularly Jamaica .
The performance of non-traditional exports continued to be mixed in 2004. Hot peppers,
mangoes, citrus and avocadoes featured prominently in the non-traditional export mix, largely to
extra-regional markets. For some countries, non-traditional exports expanded, as was the
situation for Grenada and Guyana, with Canada featuring as a major trading partner, particularly
for mangoes from Guyana. For Guyana, organic heart-of-palm and organic pineapples to
European destinations continued to improve. However, for several countries, the performance of
non-traditional agriculture was still a long way off from filling the vacuum created by declining
43
traditional exports .
The concept of “from-the-farm-to-the-table” is now shaping the way we look at agriculture, with
regulations on food safety standards and the implications for international trade posing a major
threat to the sector. The standards are increasingly complex, stringent and geared toward quality
control, process verification, labeling and traceability. These developments, along with the
increased role of private standards, have significant cross-border and international trade
implications. Moreover, it is impossible to ignore the existence and influence of powerful forces
in the environment surrounding agriculture that must be taken into account in efforts to bring
about prosperity in rural communities, with agriculture as the driving force behind development in
40
GINA, Government of Guyana
41 Economic Survey of the Caribbean 2004-2005, ECLAC
42 Economic Survey of the Caribbean, ECLAC
43 Economic Survey of the Caribbean ECLAC
46
rural territories. Some of the forces at work in the environment are globalization, the efforts to
construct an international institutional framework for trade, the pressure of a growing population,
changing consumer preferences, governance and the emergence and convergence of new
44
technologies that can be applied to agriculture.
Over the last four years, IICA has promoted the view that the agriculture sector is a strategic
sector whose overall importance in development, in most countries in the Hemisphere, has been
underestimated.
Although official statistics show agriculture as contributing single digit
percentages to GDP, recent work undertaken by IICA has shown that when all the backward and
forward linkages in the commodity chain are considered, agriculture’s contribution to national
development is 3 to 7 times higher than the percentages reported in national statistics. Input
supplies, transport, storage, agribusiness, contribution to exports, agro-industry, and financial
services are part of the expanded agricultural sector. For example, studies undertaken by IICA,
shows that in Argentina, the official statistics indicate that agriculture’s contribution to GDP is 4.6
per cent, but when all the backward and forward linkages are considered this figure increases to
32.2 per cent. In Brazil, the figure grows from 4.3 per cent to 26.2 per cent, in Chile from 5 per
cent to 32.1 per cent, in Mexico from 4.6 per cent to 24.5 per cent, and in Costa Rica from 11.3
per cent to 32.5 per cent. In the Dominican Republic, Belize, Jamaica, and Trinidad and Tobago a
45
similar trend has been recorded. ICCA is currently carrying out a similar study in the Caribbean .
Figure 2.2.3:
2.2.1
Agricultural Commodity Prices – 1961-2002
46
Positioning Agriculture as a Source of Energy for Sustainable Development
The development of an agro-energy industry in the Caribbean is in keeping with the trend that
pertains in other countries’ energy strategies that could provide an alternative for farmers facing
cuts in subsidies and preferential treatment. High oil prices have catalyzed the cultivation of
44 Reflections on the future of agriculture and cooperation: On the Road to 2015, IICA, Editors: Lizardo De las Casas,
Javier Gatica. – San José, C.R. : IICA, 2003
45 Address by Dr. Chelston Brathwaite, Director General, IICA – “IICA’s Contribution to Caribbean Agriculture: 20022004,” Ministers’ Forum of the Caribbean Alliance for Sustainable Development of Agriculture and the Rural Milieu
(Alliance), Port of Spain, Trinidad, June 15, 2004.
46
State of Agriculture Commodity Markets, FAO
47
homegrown energy services that is now a major priority, globally. In the case of the US, in 2005,
some 70 agriculture and forestry groups and companies endorsed a campaign dubbed, 25x25,
which advocates that 25 per cent of energy in the US come from, “America’s working lands,” by
2025. The project has two primary goals: to help leaders unite behind a common vision for
energy production from America’s farms, ranches, forest land and horticultural industry, and to
develop a comprehensive strategy to bring this vision to life. The project is also exploring the
feasibility of creating a new public/private sector partnership or coalition to provide strategic
leadership in mobilizing the agricultural and forestry sectors to embrace and work proactively in
support of new energy solutions. There are 16 ethanol production plants under construction in
47
the US, and once completed should bring to 100, the number of plants .
China has already built the world’s biggest ethanol plant, and plans another as big. Germany, the
big producer of biodiesel, is raising output 40-50 per cent a year. France aims to triple output of
the two fuels together by 2007. Even in Britain, a smallish biodiesel plant has just come on
stream, and another as big as Europe’s biggest is being built. Also, after long research, a
Canadian firm has plans for a full-scale ethanol plant that will replace today’s grain or sugar
48
feedstock with straw .
In the Caribbean, two CARICOM countries – Trinidad and Tobago and Jamaica - have built
ethanol plants, while Guyana, Barbados, Antigua and Barbuda, Belize, and St. Kitts and Nevis
are all seriously looking at proposals for the utilization of the sugarcane plant for the production of
ethanol. With world demand for ethanol expected to reach 130 billion liters by 2020, Caribbean
countries have an opportunity for increasing the diversity of products from sugarcane. The
Caribbean, as a beneficiary of the Caribbean Basin Initiative (CBI) and the African, Caribbean
and Pacific countries (ACP) agreements, would be allowed to export any ethanol produced in
excess of the 10 per cent domestic substitution market to the USA and the EU, duty-free.
Ethanol produced in Caribbean countries, unlike Brazil, will avoid US import duty of US$0.59 per
gallon. Although all feedstock for the plants in Trinidad and Tobago and Jamaica are supplied by
Brazil, medium- to long-term plans will see domestic sugar industries profiting from the refineries both countries will plant additional hectares of sugarcane.
IICA is committed to helping Caribbean countries strengthen the linkages between the energy
and agriculture sector, and its proposed strategy for the development of an agro-energy industry
in the Caribbean brings together the agricultural and energy sectors. With continuing erosion of
preferential markets for the region’s traditional crops, Management of Economic Diversification in
the Caribbean is one of IICA’ seven Priority Areas of Strategic Focus, aimed at:
• Promoting diversification to favor the production of goods with high added value;
• Engaging the entire rural community in the process of directed diversification,
including the entire natural resource base;
• Creating economic linkages with agro-ecological tourism, and;
• Promoting and protecting traditional knowledge as a tool to facilitate traditional and
commercial management of natural biodiversity.
The Caribbean region is heavily dependent on fossil fuel combustion, with petroleum products
accounting for an estimated 93 per cent of commercial energy consumption. The islands of the
Caribbean are predominantly net energy importers, with the exception of Trinidad and Tobago.
Agriculture and natural resource extraction activities continue to constitute the basis of Caribbean
economies, though the tourism and service sectors are growing. In recent years, the Caribbean
countries have been worried that higher global oil prices will impair their efforts to expand
economically. In response, the island nations have been discussing ways to better integrate their
energy sectors, with the sugar industry providing an outstanding opportunity for energy
resources, as the sugar industry continues to be the largest and most significant component in
47
48
Biodieselnow.com, Biodiesel article in Economist, http://forums.biodieselnow.com/topic.asp?TOPIC_ID=6553
Biodieselnow.com
48
the Caribbean region’s agricultural sector. New and innovative ideas will have to be employed as
the region seeks alternative solutions, and in relation to this, IICA is committed to assisting the
Caribbean, as part of the Hemispheric Program for Bioenergy and Biofuels in the Hemisphere. In
addition to support in this new area, IICA continues to provide support to the Caribbean in the
following areas:
• Support to the Caribbean Regional Negotiating Machinery (CRNM)
• Signatory to a new agreement to the Caribbean Agricultural Research and
Development Institute (CARDI)
• Support for Caribbean Agribusiness Association (CABA)
• Support to the Caribbean Network of Rural Women Producers
• Signatory to an agreement with CARICOM
• Promotion of a regional program for agro-tourism
• Establishment of a new Office for Trade and Agribusiness in Miami, US.49
IICA has positioned the Institute to assist Member States of the Caribbean with the development
of an agro-energy industry. Agro-energy, based on agricultural and agro-industrial activities, is a
matter of interest to the Ministers of Agriculture of the Hemisphere, who, at the meeting in August
2005, in Guayaquil, asked IICA to develop a program for horizontal cooperation in this field.
Caribbean Ministers also held further discussions on the topic of agro-energy, at the recent “5th
Caribbean Week of Agriculture (CWA)”, held in St. Kitts and Nevis, in October 2005, where they
met to discuss areas that are of critical importance to the development of the agriculture sector. It
is anticipated that new and innovative agro-energy use will have a positive impact on the
environment and will create new job opportunities.
2.2.2 Land Use and Crops Production in the Caribbean
The contribution of agriculture to GDP, not including value generated by agro-industry and other
agricultural production linkages, ranges from 3 per cent in Trinidad and Tobago to 31 per cent in
Guyana. Agriculture is the mainstay of the economy in four countries: Dominica, Dominican
Republic, Haiti and Jamaica, and the main agricultural products are bananas, sugar, rice
50
(considered traditional goods) and tropical fruits . The land resource base in the Caribbean is
limited. Table 2.2.1 below shows that in 2002, the total land area of the Caribbean is
approximately 23 million hectares (ha) and only a small portion, 4.9 million ha, can be considered
arable land – with half the arable land under permanent crops. Further, as shown in Figure 2.2.4,
since 1970, the annual average rate of growth of agricultural production has been declining, from
1.3 per cent during the period 1970-80, to -0.1 per cent during the period 1990-2002.
Table 2.2.1:
Year
1980
1990
Total
Area
23
23
51
Land Use and Agriculture in the Caribbean : Total area, arable land and
52
land under permanent crops
Arable
Land
Land Under
Permanent
Crops
(Million ha)
4.9
1.7
5.4
1.8
Arable
Land Over
Total Area
(%)
20.8
23.2
49
Total
Area
Arable
Land
Land Under
Permanent
Crops
Share in Total World (%)
0.2
0.4
1.7
0.2
0.4
1.6
“IICA’s Contribution to Caribbean Agriculture: 2002-2004,” Dr. Chelston Brathwaite, Director General, IICA; Ministers’
Forum of the Caribbean Alliance for Sustainable Development of Agriculture and the Rural Milieu (Alliance), Port of Spain,
Trinidad, June 15, 2004.
50
The Regional Agendas for Technical Cooperation: Caribbean Regional Agenda, Executive Summary, IICA, November,
2003, http://www.iica.int/Documentos/Regional_Agendas.pdf
51
FAO Country Group Composition: Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, British Virgin Islands,
Cayman Islands, Cuba, Dominica, Dominican Republic, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, Montserrat,
Netherlands Antilles, Puerto Rico, St. Kitts and Nevis, St. Lucia, St. Vincent/Grenadines, Trinidad and Tobago, Turks and
Caicos Islands, US Virgin Islands
52
Summary of World Food and Agriculture Statistics 2004, FAO, Rome, 2004
49
2002
23
4.9
2.2
21.0
0.2
0.4
1.7
The region is characterized by a high percentage of sloping lands with Dominica, St. Vincent and
the Grenadines, and Grenada recording over 50 per cent of very steep slopes (> 20 degrees) and
53
Antigua and Trinidad recording over 20 per cent gently to strong sloping lands . Inappropriate
use of land for rapid and unplanned urbanization has led to the irretrievable loss of valuable land
that should have been kept for agriculture, watershed protection and biodiversity conservation.
Many countries lack sound land use policies, which has contributed to loss of prime agricultural
lands and improper agricultural practices on steep, marginal hillside lands. As reported by the
IDB in 2004, few countries have national water policies in place. Human settlements, agriculture,
commerce, industry and tourism development have historically been the major competing uses
for limited land resources in most of the islands. As human needs and populations grow the
pressure on land and other natural resources continue to increase. Increased demand for
monetary income has led to greater production of cash crops for export and to inappropriate
tourism development. For agriculture, this has meant increased areas under cultivation and more
mechanized production systems.
Figure 2.2.4:
Average Annual Rate of Growth of Total Caribbean Agricultural Production
54
(1970-2002)
Average Annual Rate of Growth of Total Caribbean Agricultural Production (1970-2002)
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
1970-1980
1980-1990
1990-2002
-0.2%
Agricultural systems in the region vary considerably. Larger farm units with mechanization can be
found in Guyana, Belize, Trinidad, Jamaica and Suriname. Agriculture in Guyana and Suriname
is carried out primarily in the flat, coastal lands along the Atlantic Ocean that are below the
normal sea level, and therefore have to be protected from inundation. The predominant crops in
Guyana and Suriname are rice and sugarcane. The agriculture of these two countries is
53
IICA
“Summary of World Food and Agriculture Statistics 2004,” Food and Agriculture Organization (FAO) of the UN, Rome
2004
54
50
nevertheless quite diversified, with various types of fruit and vegetable production. Belize also
has large expanses of rice, sugarcane, citrus and banana producing lands. Agriculture in Jamaica
and Trinidad is on a somewhat smaller scale than the above three countries. Sugarcane is a
predominant crop in both countries, with some rice production. There is also extensive vegetable
production in both countries, but this drops in the dry season, due to lack of intensive irrigation.
Jamaica, Belize and the Windward Islands are the main banana exporting countries.
Table 2.2.2:
ISLAND STATE
#
Crop Production in the Caribbean
Sugarcane Coconuts
(Mt / yr)
(Mt / yr)
Cereals
55
(Mt/yr)) (Mt / yr)
Antigua &
1 Barbuda
-
58
372
2 Bahamas
55,500
350
1,018
3 Barbados
385,264
1,800
258
3,780
4 Belize
1,124,066
989
51,558
3,619
5 Cuba
19,800,533
115,955 1,004,647
1,790,39
2
6 Dominica
4,400
11,500
5,177,807
179,729
7,200
6,500
300
4,065
3,000,000
45,000
505,500
40,300
10 Haiti
1,070,000
24,500
377,333 753,500
11 Jamaica
2,133,333
170,000
995 214,215
162,000
1,000
-
1,013
-
14,000
631
11,189
14 Grenadines
13,318
2,556
2,667
13,810
15 Suriname
120,000
9,000
194,630
706,002
17,500
Dominican
7 Republic
8 Grenada
9 Guyana
Saint Kitts &
12 Nevis
13 Saint Lucia
St. Vincent & The
Trinidad &
16 Tobago
TOTAL
33,759,424
180
Vegetabl Fruits excl.
es&
melons
melons
(Mt/yr))
(Mt / yr) (Mt / yr) (Mt/yr))
Roots &
Groundnuts Pulses
Tubers
3,082
9,975
123
25,026
28,667
47
1,106
13,875
3,388
79
7,191
9,446
388,262
10,000 131,633 4,099,834
2,823,911
26,720
80
6,630
63,490
627,840 259,099
2,937 50,144
380,637
1,248,368
595
2,649
16,830
1,300
41,800
68,371
21,333 64,967
201,150
994,050
1,900
3,402
5,040
196,531
468,237
31
210
684
1,300
40
1,000
157,924
312
347
4,301
57,382
5,350
260
160
22,048
72,482
5,980
8,861
80
3,560
23,596
66,692
600,028 2,772,928
3,137,30
4
40,381 266,496 5,032,288
6,469,328
In the OECS countries, and Barbados to some extent, agriculture is mainly carried out by small
farmers occupying land holdings of one hectare or less. Sugarcane is predominant in Barbados
and is undertaken by larger landowners. Bananas are predominant in St. Lucia, St. Vincent, and
Dominica. Grenada has a more diversified agricultural system that includes nutmeg and cocoa.
Sugarcane, which was once the dominant crop in St. Kitts, is now in decline. It is worth noting that
most, if not all, of the Caribbean countries were originally built around the sugar industry, to
55
Source: FAOSTAT; Note: Average production for last 3 years (2003-05);
51
supply the European markets during the colonial period. As for the other islands, small farmers in
Barbados and the OECS countries produce vegetables, primarily for the domestic market.
However, vegetable production declines in the dry season, due to lack of irrigation. Most of the
small farmers in the OECS countries are located on the steeper, more marginal lands, without
access to water and other facilities. The larger landowners occupy the more fertile flatter lands,
either in the river valleys, or close to sources of water.
2.3
Global Energy Sector – Overview and Outlook
The world is facing major challenges in providing energy services to the future needs of the
industrialized countries and the growing needs of developing countries in particular. These
challenges are exacerbated by the need to provide energy services with due respect to Energy
56
Security; Energy and Development; and Energy and Climate Change . The outlook for the
57
developing world includes :
•
•
•
•
World Primary Energy Demand - Gas grows fastest in absolute terms and non-hydro
renewables fastest in percentage terms, but oil remains the dominant fuel in 2030;
Regional Shares in World Primary Energy Demand – 62 per cent of the increase in
world demand between 2000 and 2030 comes from developing countries, especially in
Asia;
Increase in World Primary Energy Production - Almost all the increase in production
occurs outside the OECD, up from 60 per cent in 1971-2000; and
Energy Investment by Region - Almost half global energy investment will be needed in
developing countries, primarily in electricity
58
The World Energy Outlook (WEO-2005) expects global energy markets to remain robust
through 2030. If policies remain unchanged, world energy demand is projected to increase by
over 50 per cent between now and 2030. World energy resources are adequate to meet this
demand, but investment of US$17 trillion will be needed to bring these resources to consumers.
Oil and gas imports from the Middle East and North Africa will rise, creating greater dependence
for International Energy Agency (IEA) countries and large importers like China and India. Energyrelated CO² emissions also climb - by 2030, they will be 52 per cent higher than today. According
to the report, world primary energy demand is projected to expand by more than half between
now and 2030, an average annual growth rate of 1.6 per cent. By 2030, the world will be
consuming 16.3 billion tons of oil equivalent – 5.5 billion more than today. More than two-thirds of
the growth in world energy use will come from the developing countries, where economic and
population growth is highest.
Most economists expect prices to stay high in the near future, as demand from expanding
economies, like China, devours a stretched supply. All relevant expert sources on energy costs
and projections of trends indicate that oil prices will continue to remain at the present high levels.
A combination of the re-assessment of existing oil fields, the costs of opening new fields, the
rising demand for oil in some developing countries, geopolitical uncertainties caused by wars and
civil unrest, have all contributed to the rise in oil prices. A recent study by the University of
59
Uppsala sought to estimate when the world will run short of oil on the basis that one needs to
know how much oil there is overall. In principle, this should be easy to calculate: geologists know
56 World Bank,
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/WBEUROPEEXTN/DENMARKEXTN/0,,contentMDK:207795
25~menuPK:394044~pagePK:64027988~piPK:64027986~theSitePK:394038,00.html
57 Global Energy Outlook and Future Challenges inthe Developing World” - The World Bank’s Energy Week, Washington,
DC, 8 March 2004. Claude Mandil, Executive Director, International Energy Agency.
http://iris37.worldbank.org/domdoc/PRD/Other/PRDDContainer.nsf/All+Documents/85256D2400766CC785257000006FD
C2A/$File/Mandil_EW04.pdf
58
World Energy Outlook 2005: IEA Projects Growth in Middle East and North Africa Oil and Natural Gas Sectors through
2030 but a Lack of Investment would Push up Prices and Depress GDP Growth
http://www.iea.org/Textbase/press/pressdetail.asp?PRESS_REL_ID=163
59
Need Source
52
which kinds of rocks are likely to hold oil and they know where these reservoirs are and how big
they are. Oil companies keep detailed information about individual basins secret, but most of the
educated guesses made over the past few decades fall close to the same estimate: the world'
s oil
reserves began with a total of about 2 trillion barrels, of which some 900 billion have now been
exhausted.
The 1.1 trillion barrels that remain represent about a 40-year supply at current consumption levels
of about 25 billion barrels per year. At first glance, this seems a comfortable cushion, but there
are questions as to whether there would even be a chance to use it all, at anything like our
present rate. In recent years, oil demand has been increasing rapidly although not steadily
because of changes in the world economy. Much of the increase in oil demand is due to the fast
growth in the economies of South East Asia, including China and India. In fact, since 1990, oil
demand in the Asia-Pacific region has grown by 8 million barrels per day, which is almost
equivalent to the oil production of Saudi Arabia.
World oil demand at about 80 million barrels per day in 2004 reached such a high level that
annual increases of 2-3 per cent required new oil supplies of 1.6-2.4 million barrels per day. Up
to now, non-OPEC countries have been producing at maximum capacity while the Organization
of the Petroleum Exporting Countries (OPEC) member countries have acted as marginal
producers providing whatever balance was required, despite their vast oil reserves and much
lower costs of production. OPEC countries often had to restrict their production through a quota
system in order to maintain oil prices and prevent their collapse. Unexpected crises resulting in
oil production losses because of war, political instability, sanctions, terrorism, strikes, and even
adverse weather, could be made up by the use of excess production capacities in OPEC
countries.
2.4
Caribbean Energy Sector – Overview and Outlook
The Caribbean region is heavily dependent on petroleum products for more than ninety per cent
of commercial energy consumption. Conventional methods of electricity production through fossil
fuel plants are among the most significant contributors to air, land and water pollution in the
region. They are the primary source of greenhouse gas (GHG), and a major cause of balance of
payments problem. At the same time, difficulties in increasing electricity supplies to meet the
growing demand for cost effective and reliable power is a constraining factor in the economic
development of the region.
2.4.1
Energy Use and Production in the Caribbean
As shown in the Table 2.4.1 below, the region is a major importer of energy sources to meet
energy needs. Major imports of energy sources range from gasoline and diesel for transportation
uses, and fuel oil for power generation and shipping, jet fuel for aviation, and Liquid Petroleum
Gas (LPG) for domestic and some commercial applications. Meeting energy demand in 2004
required the importation of more than 163 million barrels of petroleum fuels.
Table 2.4.1:
Liquid Petroleum Products Imports (000’s Bbls)
COUNTRY/YEAR
ANTIGUA And BARBUDA
60
1985
1990
1995
2000
2001
2002
2003
2004
847
1,441
1,300
1,435
1,448
1,506
1,611
1,720
Bahamas
3,130
4,268
5,186
7,014
6,944
7,221
7,127
7,855
Barbados
2,051
2,146
2,426
3,650
3,809
4,079
7,625
7,265
1,018
1,607
1,627
1,671
1,223
1,274
Belize
60
Petroleum Energy Statistics in the Caribbean (16 Caribbean countries) PETSTATS CD-ROM Series No.1, Caribbean
Energy Information System 2004”; Scientific Research Council, Jamaica.
53
B.V.I
170
262
317
472
507
528
609
640
Cuba
37,310
97,288
76,878
41,270
41,481
37,757
45,308
31,925
Dominica
112
179
220
317
340
353
316
291
Dominican Republic
d/na
d/na
d/na
d/na
d/na
d/na
43,297
42,277
Grenada
181
333
419
623
613
647
525
537
Guyana
3,358
2,782
3,624
3,957
3,940
4,044
4,981
3,898
Jamaica
8,583
11,266
21,078
23,399
24,140
24,569
26,610
25,870
Montserrat
52
56
66
55
59
61
54
59
St. Kitts/Nevis
132
217
265
337
437
525
438
418
St. Lucia
391
666
867
1,007
1,030
1,236
1,260
1,246
St. Vincent
149
233
363
420
430
477
532
562
0
0
3,661
5,238
5,719
5,918
5,494
4,299
161
6,794
9,833
35,184
33,381
40,057
31,406
27,482
Suriname
Trinidad/Tobago
Turks & Caicos
TOTAL
d/na
116,605.5
d/na
d/na
d/na
d/na
107,521.5 91,911.1 126,195.8 122,180.5
d/na
295
285
138,200.4 165,327.6 163,287.6
It should be pointed out that in addition to liquid fuels for transportation, electricity generation and
domestic uses, the region also imports a significant portion of coal, primarily for use in cement
production, in Jamaica, Dominican Republic and Cuba. While there is some experience with the
use of biofuels in cement production it is not considered as a viable aspect of the program for the
Caribbean given more potentially economic beneficial applications offered by transportation and
power generations.
2.4.5
Overview National Energy Situations
The national energy situations across the region are characterized by a national electric utility that
is sometimes privately owned, sometimes public and sometimes a mix. These power companies
use either bunker or diesel fuel to produce power. As shown below the cost of electricity is, on
average, among the highest in the world primarily a result of the very high cost of transportation,
associated with the relatively small quantities of fuel delivered to the various countries.
Table 2.4.2:
Electricity Prices For Select Caribbean Countries: Household and
61
Industry
COUNTRY
Barbados
Cuba
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Suriname
Trinidad & Tobago
1996
0.151
0.126
0.084
0.193
0.079
0.102
0.139
0.171
0.029
HOUSEHOLD62
1997 2003
0.167 0.188
0.128 0.137
0.082 0.107
0.193 0.221
0.078 0.059
0.096 0.060
0.135 0.169
0.171 0.171
0.028 0.036
61
2004
0.188
0.138
0.150
0.221
0.059
0.060
0.187
0.129
0.036
1996
0.157
0.079
0.101
0.163
0.105
0.098
0.106
0.131
0.024
INDUSTRIAL
1997 2003
0.174 0.197
0.072 0.081
0.098 0.106
0.163 0.188
0.104 0.078
0.103 0.085
0.105 0.115
0.131 0.131
0.023 0.035
2004
0.197
0.078
0.120
0.188
0.078
0.085
0.130
0.123
0.037
“The Potential of Renewable Energy Technologies – Diversifying Dominica’s Energy Supply, 2002”. Prepared by Al
Binger, PhD and Earl Sutherland, University of the West Indies Centre for Environment and Development (UWICED),
Mona Campus, Kingston, Jamaica.
62
Prices in U.S. Dollars per Kilowatt hour
54
Another characteristic of the national energy situation across the region is the high inefficiency in
the use of energy resources. It is estimated that the region wastes more than half the available
energy in the imported fuels - this make for very high energy per unit of GDP as shown in Figure
2.4.1 below. A major contributor to the poor energy efficiency is the relatively high percentage of
private automobiles that consume significant amounts of fuel while sitting in traffic jams and the
poor maintenance practices on vehicles. With the exception of the Bahamas, Jamaica, Guyana,
and Barbados (where there is a national oil company that is primarily responsible for imports of
petroleum fuels), in the rest of the countries petroleum fuels imports are controlled by the
international companies.
The institutional environment in the majority of countries across the region is one in which there is
limited capacity for the management of the energy sector. An examination of the titles of the
various government portfolios across the region reveal that at present, only a few countries have
energy as part of the name of any portfolio. The policy environment is better developed in the
larger countries compared to the smaller countries. For example there is no energy policy in a
number of the OECS countries. Energy policies are also missing in bigger countries like Belize
and Guyana. The limited capacity for energy planning and policy making in the majority of
countries is a major institutional obstacle to bring about changes in the energy sector becoming
consistent with the goals of sustainable development.
63
Figure 2.4.1: Percentage of Export to Pay for Fuel Imports
Fuel Cost Export Ratio
70%
60%
50%
40%
30%
20%
10%
0%
rdos
Baba
e
Beliz
p
inica
n Re
Dom
inica
Dom
eda
Gren
n
Guya
a
2003
2.4.2.1
ica
Jama
it
St. K
ts
ucia
St. L
in
St. V
cent
ame
Suri n
ad
Trinid
2004
Transportation
The regional demand for transportation fuel is driven by the increasing population, economic
growth, and limited investment in public transportation. As shown below, fuel consumption has
increased by some 46 million barrels between 1985 and 2004 (Table 2.4.3). While there is no
national database on the types of automobiles and the numbers, visual observation shows that
the majority of vehicles in the region are more than four years old. In the majority of countries
there is no policy for importation of automobiles beyond age of vehicles in some instances, and
the duty, based on the size of the engine.
63
GDP data is taken from World Bank World Development Indicators 2006.
The 2003 export and import data for Barbados, Belize, Grenada, St. Lucia and Suriname was used as a proxy for the
2004 data.
55
Table 2.4.3:
Quantities of Fuels for Transportation (1985 – 2004)
1985
TOTAL
Barrels
(000’s)
1990
1995
2000
2001
64
2002
2003
2004
116,605.5 107,521.5 91,911.1 126,195.8 122,180.5 138,200.4 165,327.6 163,287.6
2.4.2.2 Electricity Generation and Use
Figure 2.4.2 below shows that over the period 1980-2002, the Dominican Republic exhibited the
highest mean annual growth rate of installed capacity (5.8%), followed by Haiti (3.8%), Jamaica
(3.6%), Trinidad and Tobago (3.2%), Barbados (2.8%), Cuba (2.3%) and St. Kitts and Nevis
(1.5%). As expected, Cuba and the Dominican Republic accounted for 42 per cent and 27 per
cent, respectively, of the installed capacity of the group, reflecting their relatively larger
populations. For the corresponding period, Jamaica registered the highest mean annual growth
rate of net electricity generation (7.3%), followed by St. Kitts (6.4%), Dominican Republic (5.9%),
Trinidad (5.1%), Barbados (4.4%), Haiti (3.7%) and Cuba (1.8%).
In 2001, over 86 per cent of Cuba’s electricity generation capacity was oil-fired. Currently, Cuba
produces 50 per cent of the oil it uses for domestic consumption. However, it is still a net importer
65
of oil as consumption averaged an estimated 209,000 bbl/d. Accordingly, Cuba has to meet its
shortfall of oil and petroleum products from other countries; and similar to some other countries in
the region, Cuba, through the Caracas Accord, purchases some 78,000 bbl/d of crude oil and
petroleum products from Venezuela (the other 50 per cent was imported mainly from Venezuela,
under an agreement (Caracas Agreement) that expired in 2005). Cuba is the largest producer of
renewable energy in the Caribbean. At present, the national grid covers 96 per cent of total
population while the uncovered 5 per cent is located in remote locations, mainly in the eastern
province. Electricity tariff for the household sector and agriculture is highly subsidized by the
Government. In 2002, CITMA reported that Cuba’s electric generating capacity was dominated by
fuel oil (85.5%), natural gas (8%), biomass (6 %) and hydro (0.5%).
Figure 2.4.2:
Mean Growth Rate of Installed Capacity and Net Generation (1980-2002)
8.0
7.0
Percent
6.0
5.0
4.0
3.0
2.0
1.0
Net Elect Generation
64
65
Installed Capacity
SRC PETSTATS
OLADE, 2004
56
Trinidad
St. Kitts
Jamaica
Haiti
Dom Rep
Cuba
Barbados
0.0
In the case of Jamaica, in 2004, 91
per cent of its commercial energy
was from imported oil. The three
largest consuming sectors are
transport, electricity, and bauxite. In
the Dominican Republic, 84 per
cent of its power generating
capacity is based on fossil fuels
(coal, fuel oil and natural gas) and,
to a lesser degree, on hydropower
(534 MW, or just under 16%). In
1999 about 23 per cent of the
country’s export earnings had to be
used for buying oil and petroleum
products. This heavy dependence
on fossil fuels, all of which have to
be imported, places a heavy burden
on the trade balance of that country.
In a 2004 publication, the EIA estimated that in 2002, as much as 88 per cent of the primary
energy consumption of Trinidad and Tobago was derived from natural gas while 11.8 per cent
was from petroleum. Trinidad is a net exporter of both oil and natural gas. As shown in Table
2.4.4 below, the Dominican Republic has the largest installed generating capacity of 5,530 MW,
compared to 224 Megawatts (MW) for Haiti, which has a somewhat similar population. The
installed electricity generation capacity in the OECS countries is less than 250 Megawatts.
However, in terms of the ratio of electrical power production per unit of installed capacity, the
Dominican Republic and Haiti were the least efficient, Jamaica being the most efficient, and
Barbados, Cuba and Trinidad and Tobago approximately similar in efficiency.
Trinidad and Tobago exhibited the lowest average internal electricity rate of 3.9 US cents/kwh.
Industrial customers are billed at the highest rate of 4.6 US cents/kwh, commercial customers are
in the middle paying 3.7 US cents/kwh, and residential customers pay the lowest rate of 3.3 US
cents/kwh. Barbados had the highest average internal electricity rates of 19.5 US cents/kwh, with
commercial customers paying the highest tariff of 20 US cents/kwh, and residential customers
paying the lowest rate of 18.8 US cents/kwh. Jamaica recorded the second highest average
internal electricity tariff of 14.7 US cents/kwh, with residential customers paying the highest rate
of 17.4 US cents/kwh, and industrial customers paying the lowest rate of 11.6 US cents/kwh.
Energy use measured in terms of kilograms of oil equivalent shows that on average, energy use
per capita in Trinidad and Tobago is 4.3 times higher than Jamaica, 5.5 times greater than Cuba,
7.0 times more than the Dominican Republic, and 25 times higher than Haiti.
The installed power generating capacity for the public grid in the Dominican Republic totals 5,530
MW (as of July 2003), and relies largely on fossil fuels (coal, fuel oil and natural gas, totaling
84%) and, to a lesser degree, on hydropower (just under 16%). This heavy dependence on fossil
fuels, all of which have to be imported, poses a heavy burden on the trade balance of the
Dominican Republic. In mid-2003, only 2,145 MW of the total capacity was reliably available. The
maximum anticipated demand for power in 2003 was forecast at 1,950 MW. Despite the existing
technical reserve, an average of 15 per cent of the potential power demand could not be
delivered in 2002.
Belize has an aggregated generating capacity of almost 348 MWh, and sells almost 308 MWh of
electricity yearly. Peak demand is about 63 megawatts (MW). Generating capacity consist of 32
MW of hydro provided by two facilities (one 25 MW the other 7 MW); 20 MW of high speed diesel
turbines, located at the West Lake Generating Plant and Substation; another 15 MW of diesel
distributed in a couple of locations for strategic reasons. In 2005, the Belize Electric Company
Limited (BECOL) purchased approximately 50 per cent of electricity from Comisión Federal de
Electricidad (CFE), Mexico’s national utility. The cost of imported electricity was in the region of
US$30 million. It has the third lowest rates compared to utilities in the Caribbean Region,
measured in the 2002 Caribbean Electric Utility Services Corporation (CARILEC) Rate Survey.
The Jamaican electricity system is estimated to have a generating capacity of 811 MW (most of
which is heavy fuel oil {HFO} and diesel). Based on the nation’s projected economic growth, it is
estimated that approximately 200-400 MW of new generating capacity will be required over the
next 5-10 years. This will offer opportunities for the participation of the private sector, since
government policy is mainly privatization and liberalization of the electricity sector over the longterm, with new generation capacity to be added by the private sector.
Haiti is a net importer of fossil fuels, and would be the greatest beneficiary of any regional energy
integration initiative. According to the most recent evaluation, the percentage of homes with
electricity was 34 per cent, and thus it was the least electrified country in the target group. At the
moment, Haiti suffers from extreme deforestation, as the population depends heavily on firewood
as a cheap source of fuel. The country also imported some 11,100 bbl/day of petroleum products
66
in 2003 .
66
OLADE, 2004
57
Table 2.4.4:
Selected Indicators of the Electricity Sector in Select Caribbean Countries
67
(2003)
Units
Antigua &
Barbuda Barbados Belize
Installed
Generating capacity MW
Electrical Power
Production
GWh
Electrical
Production/Installed
Generating
Capacity
GWh/MW
Electrical Power
Consumption
by Final Users
GWh
Average Internal
Electricity
Prices (US cents) KWh
-Commercial (US KWh
cents)
-Industrial (US
KWh
cents)
-Residential (US KWh
cents)
Electrical Service
Coverage of Homes %
- Cities
%
- Rural Areas
%
2.4.6
St. Vincent
Dominican
& The
Trinidad
Republic Grenada Haiti Jamaica Grenadines & Tobago
Cuba
210
3,959
5,530
244
811
1,416
871
15,909
13,489
512
7,146
6,437
4.1
4.0
2.4
2.1
8.8
4.5
782
12,469
11,893
283
6,516
5,876
19.5
11.1
10.3
8.1
14.7
3.9
20.0
10.5
10.6
9.2
15.0
3.7
19.7
8.4
10.8
8.8
11.6
4.6
18.8
14.3
9.5
6.2
17.4
3.5
98
na
na
96
99
87
92
99
81
34
na
na
88
na
na
97
na
na
Renewable Energy
Despite the vast endowment of renewable energy sources within the region, the contribution to
the energy mix is insignificant in most countries. Countries that derive significant amounts of
energy services from renewable sources are Belize, in the form of hydro that provides some eight
percent of baseload; Cuba, that derives power from its sugar industry and from hydro; Dominica
which derives a significant portion of electricity from hydro, and; Haiti, also from hydro.
An example of wind derived energy services is the Wigton Wind Farm Project in Manchester,
Jamaica. This is a 10 MW facility selling power to the national grid as available. The US$26
million facility, financed with a US$7 million grant by the Netherlands Government, is expected to
displace annual emissions of up to 52,250 tons of CO2 that would otherwise come from fossil fuel
based electricity generating systems. In Haiti, the contribution of renewable energy is not very
significant, being limited to the exploitation of hydropower, biomass and solar energy, although
wind potential assessed with support from the Government of France is appreciable. In terms of
hydropower, in 2003, there was a reported generation of 197 GWh, from an installed capacity of
68
63 MW .
The solar water heater industry of Barbados is the best-known example of the exploitation of a
renewable energy technology in the Caribbean. Barbados possesses approximately 33,000 solar
67
68
Compiled from OLADE (2004)
OLADE 2004
58
69
water heaters. ” In Barbados, the solar hot water program started in the early 1970s, and is
estimated as saving the importation of some 227,000 barrels of oil for power generation. Cuba
has been utilizing cane residues including trash as fuel for over 10 years. For example, between
1983 and 2005, Cuba used as fuel more than 2 million tons of residues that substituted for 500
70
thousand tons of oil and prevented 1.5 million tons of CO2 emissions . However, this represents
only five per cent of its cane residue potential – indicating availability of supplemental fuel
sources to fuel power generation in the sugarcane off season for power production.
2.4.7
Energy Resources
The region has significant endowment of both fossil and renewable energy resources. However,
with the exception of few countries, these resources remain vastly unexplored.
2.4.4.1
Fossil Fuel Resources
In terms of fossil fuel production, Barbados, Belize, Cuba and Trinidad and Tobago are the only
Caribbean states with proven oil and natural gas resources (Table 2.4.5). Trinidad and Tobago is
the only significant exporter, it has become one of the major natural gas development centers in
the world, and is the world’s leading exporter of both ammonia and methanol.
Oil production in Barbados, in 2003, totaled 1,600 billion barrels per day. The country has no
refinery so its crude oil is refined in Trinidad, and then returned for domestic consumption. At the
end of 2002, the proven energy reserves in Barbados was estimated at 2.5 billion barrels of oil,
3
and 0.142 billion m of natural gas. In 2003, Barbados consumed 4.085 million barrels of oil
equivalent (BoE) but produced only 0.528 BoE. According to the Energy Division of the Ministry of
Public Utilities and Energy, around 75 per cent of the energy needs of Barbados are supplied
from petroleum-based fossil fuels, 85 per cent of which is imported. The Division also reported
that 23.5 per cent of Barbados’ primary energy is obtained from bagasse which is used to supply
energy for the sugar industry. The remaining 1.5 per cent is obtained from the solar water heating
industry, which provides virtually all of the local domestic hot water needs.
Table 2.4.5:
Proven Reserves and Production of Oil and Natural Gas in the Caribbean
Proven Reserves
Crude Oil
Natural Gas
Units
Barbados
Cuba
T&T
Total
Billion Barrels
2.5
75.0
990.0
1,742.5
3
Billion M
0.142
70.792
733.038
803.972
71
Production
Crude Oil 2003
Natural Gas
2002
3
000 bbl/day
Billion M
1.6
0.028
80.0
0.351
156.7
17.302
213.3
17.669
Cuba has been showing significant growth in crude oil production, which in 2003, reached 80,000
barrels per day. By the end of 2003, Cuba’s proven crude oil reserves were 75 billion barrels,
3
while its natural gas reserves were 70.792 billion m (bcm). There are plans for drilling off Cuba’s
northwest coast through Repsol-YPF. The results could change Cuba’s energy picture as a net
importer of oil, should there be any significant finds. Repsol-YPF is projecting to spend more than
US$40 million on the project in anticipation that a potential 1.6 billion barrels could be discovered
72
offshore.
69
SIDSNET, October 24, 2003, http://www.sidsnet.org/archives/energy-newswire/2003/msg00049.html
Douglas, Charles, June 2006.
Energy Information Administration (EIA) Country Analysis Briefs, Caribbean,
http://www.eia.doe.gov/emeu/cabs/Caribbean/pdf.pdf; and OLADE (2004).
72
OLADE 2004
70
71
59
In the case of Trinidad and Tobago, reserves are estimated at 990 billion barrels, while the
3
estimated quantity of natural gas is 803.972 billion m . Trinidad and Tobago produced 156,700
3
bbl/day of crude oil in 2003, and 17.302 billion m of natural gas in 2002.
2.5
The Energy for Sustainable Development Challenges
Based on ongoing exploration and identification of new reserves of oil and gas ranging from
Belize to Cuba, the region’s already significant energy resources (fossil and renewable) is
growing. This is a positive energy situation as on the global level energy resources, based on
levels of consumption, are considered as being or approaching peak supply. However, this
good news has a thorny side - adaptation to global climate change and sea level rise. According
73
to the Intergovernmental Panel on Climate Change (IPPC), climate change would impact
energy supply and demand. Increased cloudiness can reduce solar energy production. Wind
energy production would be reduced if wind speeds increase above or fall below the acceptable
operating range of the technology. Changes in growing conditions could affect the production of
biomass, as well as prospects for carbon sequestration in soils and forest resources.
The continued derivation of energy services from fossil means increased risk of natural disasters,
and natural disaster leads to significant reversals in standards of living for the general
74
populations . However, across the region, investments continue to focus on increasing the
availability of energy services from fossil sources. These investments are driven by the existing
development paradigm that more energy is always needed for growth – efficiency of use not
75
withstanding. Both internationally sponsored meetings on sustainable development of SIDS,
concluded that these countries, due to their isolation, small size and very fragile environmental
conditions, should adopt the paradigm of sustainable development as the guiding principle to
improve the lives of the population and provide for future generations. The recommended
paradigm of sustainable development is not consistent with the dominant approach now being
pursued. The strategy of increasing fossil fuel use to drive development is similar to that of China
and India.
Clearly, implementing the sustainable development paradigm is proving to be a major challenge
for Caribbean SIDS. A principal reason is that it requires the sustainability of the natural resource
base be factored into long-term decision-making such as the future of energy. The challenge
before the region is how to develop an energy strategy that promotes sustainable development
rather than one that just meets energy needs to run the today and tomorrow economy, but one
that will promote sustainable development so as to improve standards of living across
generations without destroying the natural resource base on which the vast majority of island
populations survival depends.
The energy sector, in the vast majority of countries, has a one-way or no relationship with other
sectors. The energy sector consists of the marketing companies for fuels and the electricity
generating companies that provide energy services. These companies depend on the national
economy – to which they are a major input provider generating the foreign exchange to pay for
their primary import and their profits. This makes these countries very economically vulnerable.
The sustainable development paradigm requires synergy between sectors. To successfully
address the energy for sustainable development challenges will require significant rethinking of
the nature and character of the energy sector, and to integrate climate change adaptation,
employment generation, and environmental protection, in addition to the economic feasibility.
The challenge of developing an energy sector that will promote sustainable development requires
the development of institutional capacity to plan and implement an energy strategy in an
integrated manner, as it requires transferring concepts of sustainable development at the global
73
Intergovernmental Panel on Climate Change (IPPC) Third Assessment Report: Climate Change 2001,
IPPC Third Assessment Report 2004
75
There have been two international meetings – the first in Barbados in 1994 and the second in Mauritius in 2005
74
60
level into livelihood activities at the local level. This is proving quite a challenge for donors as well
as the small island states. As discussed earlier, the present institutional capacity in energy is
very limited, at best, in the majority of countries. The current capacity that exists is in the
management of the power sector and the distribution of liquid fuels. This situation points to a
critical need for the development of institutional capacity in energy management and planning in
order to help the countries make their energy sectors contributors to sustainable development,
rather than one that is in the vast majority of circumstances increasing long-term economic
vulnerability of the countries.
Enhanced institutional capacity is also needed to formulate national and regional policies to
ensure that the appropriate national context is created where these energy strategies for
sustainable development can be implemented. It is ironic that there is no regional mechanism yet
established to address the region’s energy needs, although there have been a range of
approaches, from national explorations to identify potential petroleum resources, to bilateral
agreements for supplies, e.g., the Governments of Jamaica and Trinidad and Tobago for LNG,
beginning in 2009.
61
CHAPTER 3
RATIONALE FOR AN AGRO-ENERGY
PROGRAM IN HE CARIBBEAN
62
3.0
RATIONALE FOR AN AGRO-ENERGY PROGRAM IN THE CARIBBEAN
Several studies by international development assistance institutions indicate that bio-energy will
st
play a much larger role in energy supplies during the 21 century. The contribution from biomass
76
in the long-term given in these studies vary from 100 to 300 exajoules (EJ) per year, towards
the total world energy consumption which is projected to rise to nearly 500 EJ per year in 2025,
77
and 700 EJ per year by 2100 .
The Caribbean region has significant renewable energy resources ranging from wind to
geothermal. Among this wide array of renewable sources, biomass is by far the most developed
and longest used. In general, the renewable energy resources across the region are
undeveloped. Despite large endowments of renewable sources that could be used for electricity
generation, in the prevailing environment of the high cost of electric energy generated from
petroleum sources, renewable sources have not yet proved to be price competitive in the
provision of baseload power. However, the potential to produce baseload and even peak
electricity during the processing of sugarcane using advanced and high-energy efficient systems
represents options for a viable renewable energy industry.
In the area of fuel for transportation, the renewable sources are limited to biomass and
particularly sugarcane as its juice can be made into a substitute fuel or extender for use in
internal combustion engines. Based on this situation, the most economic option for a renewable
energy that is likely to be competitive in a number of countries is biomass as liquid fuel for
transportation as it also provides significant by-products for electricity generation – this is not a
new conclusion and it was the basis of the Brazilian decision to develop the ethanol program.
The by-product left over from ethanol is now a major source of fuel for process heat as well as
power generation. Thus, there is both market and production synergy in developing biofuels with
sugarcane as the lead crop.
3.1
The Agro-Energy Option for Economic Renewable Energy
In Section 2 above, the region’s agriculture was shown to be in a very unhappy state and in need
of new approaches to address the challenges of economic globalization and the high cost of
production. The region’s energy sector is a significant market for fossil fuel exporters, but is the
major contributor to the high level of economic vulnerability for the majority of countries in the
region. There is therefore a major opportunity for positive synergy between the energy and
agriculture sectors with potentially significant, if not unique national benefits, and the cost are not
different from what would have been spent otherwise on agriculture or energy from imported
sources. Figure 3.1.1, below, shows the relationship between sugar and oil prices for the period
1960 to 2005, and as can be seen, the energy prices have increased very rapidly relative to raw
sugar.
For sugar producing countries there is a unique opportunity to diversify away from the sweetener
market into the energy services market given the relative ease at which sugarcane feedstock can
be used for energy. The technical risks associated with this conversion are considered minimal
for a number of reasons (as discussed in the technical appendix to this document), including
proven technology and available examples to draw on. The economic risks would primarily be
based on whether the sweetener market could improve and become more profitable than fuel for
energy. This development is extremely unlikely for two primary reasons, first as discussed earlier
in Section 2, prices for petroleum is expected to continue to increases in the future in response to
demand and limits to supply; second, any increased demand for sweeteners will be met more
competitively from the large producers such as Brazil, Australia, Thailand, the EU and the US,
rather than the countries in the region that are with few exceptions high cost producers. Indeed, a
76 Exajoules equivalent to barrel of oil or liters of gasoline
77 Johansson, 1993; Greenpeace, 1993; Shell, 1994; WEC, 1994; IPCC, 1996
63
country like Brail and/or in combination with Australia and Thailand, can significantly alter the
global sugar supply and demand within a few years.
No similar situation exists to drastically alter the petroleum demand and supply situation. Such
impacts could only occur as the result of global scale natural disasters that significantly reduces
demand for energy. Given this situation and the experience gained from a growing number of
countries in the production of biofuels to meet national energy needs, the Caribbean’s interest in
exploring the development of biofuels industries, starting with the present sugar industry, is well
founded.
Further validation for the region to pursue development of biofuels is found in the long history in
producing agriculture commodities, manifesting the capacity for the reliable production of raw
material that is a necessity for successful biofuels enterprises. Despite the success in the
production of agricultural commodities the present global conditions are not benefiting the
economic status of most farmers particularly those who could most easily make the transition to
biofuels, such as those involved in sugarcane growing, and as shown in Table 3.1.2 below, the
economic value of sugarcane as feedstock for energy is significantly better than its use for
sweetener.
Figure 3.1.1:
Sugar Prices versus Oil Prices: 1960-2005
78
In the case of biofuels feedstock production, the obstacles that results in reduced ability to
compete at the global level for traditional agricultural exports are significantly reduce for the
following reasons:
78
The Secretariat of the United Nations Conference on Trade and Development (UNCTAD), Common Fund for
Commodities, New York and Geneva, August 2004.
http://www.unctad.org/Templates/webflyer.asp?docid=5221&intItemID=1397&lang=1&mode=downloads
64
1. There is no high cost incurred in transporting the product to distant foreign markets as the
product is for domestic consumption.
2. There is value being added along the production system - cane from production by the
framer - to final use in vehicles or in electricity generation.
3. For external producers to compete they now have to overcome the economic
disadvantages of high transportation cost - domestic production of energy therefore has a
comparative advantage for domestic farmers, and with the increasing cost of crude the
financial rewards will continue to improve.
As shown in Table 3.1.2 below, the use of sugarcane that returns the lowest economic value per
ton is its use for the production of raw sugar.
Table 3.1.2: Value of 2004 sugarcane crop as a mix of sugar, ethanol and electricity
79
UNITS
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
22
22 US$ per ton cane
2
2 US$ per ton cane
24
24 US$ per ton cane
Sugar
Molasses
TOTAL
VALUE of 2004 crop
(38.2 million tons cane)
917
917 Million US$
SUGAR & ELECTRICITY
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
40
57 US$ per ton cane
22
22 US$ per ton cane
2
2 US$ per ton cane
64
81 US$ per ton cane
Electricity
Sugar
Molasses
TOTAL
VALUE of 2004 crop
(38.2 million tons cane)
2,442
3,096 Million US$
SUGAR, ETHANOL & ELECTRICITY
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
40
57 US$ per ton cane
11
11 US$ per ton cane
1
1 US$ per ton cane
20
29 US$ per ton cane
72
98 US$ per ton cane
Electricity
Sugar
Molasses
Ethanol
TOTAL
VALUE of 2004 crop
(38.2 million tons cane)
2,754
ETHANOL & ELECTRICITY
79
Need source
65
3,738 Million US$
Electricity
Ethanol
TOTAL
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
40
57 US$ per ton cane
40
58 US$ per ton cane
80
115 US$ per ton cane
VALUE of 2004 crop
(38.2 million tons cane)
3,066
Assumptions:
Sugar production
Sugar price (fob)
Molasses production
Molasses price
Ethanol prod from sugars
1 liter ethanol equivalent to
Electricity production
Diesel consumption
Sugarcane production in 2004
0.110 tons / ton cane
200 US$/ton
0.05 tons / ton cane
40 US$ / ton
80 liters / ton cane
0.75 liters gasoline
200 kWh / ton cane
0.30 liters / kWh
38.2 M tc /yr
Crude oil price
Diesel cost
Gasoline cost
70
0.666
0.672
4,379 Million US$
100 US$ /barrel
0.951 US$ / liter
0.960 US$ / liter
Note: Diesel and Gasoline
costs includes 40% processing
& distribution costs but
excludes taxes & duties
Based on the information from the above table, if sugar is produced from the sugarcane juice and
the bagasse used to generate heat and electricity only to satisfy the requirements of the sugar
mill, then the value of the sugarcane is US$24 per ton of cane and the value of the 2004
sugarcane crop for the Caribbean countries (38.2 million tons cane) is worth US$917 million. If
all the sugarcane juice is used to produce sugar and the bagasse is used for export electricity,
then the value of the sugarcane is US$64 per ton cane at a crude oil price of US$70 per barrel,
and US$81 at US$100/barrel, under these conditions the total value of the 2004 crop is US$2.4
billions at $70 per barrel and US$3.1 billion at US$100 per barrel.
If half the sugarcane juice is used to produce ethanol instead of sugar then the value of the
sugarcane increases to US$72 and US$98 per ton cane at crude oil prices of US$70 and US$100
per barrel respectively. If ethanol is produced from the sugarcane juice and electricity from the
bagasse then the value of the cane increases to US$80 and US$115 per ton cane for crude
prices of US$70 and US$100 per barrel respectively; the total value of the regions 2004
sugarcane is now US$3.1 billion at US$70 per barrel and US$ 4.4 billions at US$100 per barrel.
Making the necessary investment to extract maximum value for farmers’ crops is a proven
approach to improving the well being of farming households. As discussed earlier, the failing
agriculture situation is a result of a number of reasons – but the coming to force of a number of
World Trade Organization (WTO) rules and economic globalization is resulting in more
competition in the domestic market, as agricultural products of the industrialized countries are
less costly than those produced by local farmers. Regional farmers are loosing markets due to
high production costs, linked to economies of scale in production, high cost of transportation
related to the export of goods, and the import of raw materials and inputs.
66
The development of biofuels industries will help to strengthen the national and regional
economies, particularly in the area of balance of payments through the reduction of the quantum
of foreign exchange required to pay for the importation of energy resources. In addition, the
development of National Biofuels Program will provide the impetus for investment in education
and research to provide the needed capacity to support continued development of biofuels.
3.2
Biomass as a Feedstock for Energy for the Caribbean
The weather and climatic conditions across the region is very supportive of year-round plant
growth (biomass production). The most efficient converter of solar energy into biomass among
currently commercial agricultural crops is sugarcane. Sugarcane has been cultivated in some
countries in the region for more than four hundred years for the production of sugar and rum.
Other crops grown for long periods, such as coffee, cocoa, and spices, while producing significant
quantities of biomass over the life are not very rapid producers and hence do not have individual
biomass potential as annual sources of feedstock. However, these crops do have value when
they are no longer producing beans as they represent feedstock for biofuels.
The main physical determinant of the feasibility of producing biomass for use in energy is land
availability. The available land and degree of utilization shows that there is significant amount of
land resources that is currently available for the production of biomass raw material. Using Table
3.2.1 below as an example, all the countries in the region, with few exceptions, have land
resources available for biofuels production. It is to be noted that Barbados, the country with the
highest population density, has allocated almost 10,000 hectares of prime agricultural land for the
production primarily of energy in the form of electricity and ethanol, as well as limited amount of
sugar and molasses from sugarcane. The decision by Barbados would make them the region’s
most technologically advanced in the production and conversion of biomass into energy and other
co-products, and, as with solar energy for water heating, provides the region with another
innovate approach to the development of renewable energy industries.
Table 3.2.1:
Land Resources available for production of Feedstock (000’s hectares)
80
(select Caribbean countries)
Country
Land Area Arable
Arable Land
('000 ha) Land ('000 as % of Total
ha)
Land Area
Arable Land per
Capita
Antigua and
Barbuda
Barbados
Belize
Cuba
44
43
2,280
10,982
8
16
70
3,630
18.2
37.2
3.1
33.1
d/na
0.1
d/na
0.3
Dominican Republic
Jamaica
Guyana
Haiti
4,838
1,083
19,685
2,756
1,088
174
496
780
22.5
16.1
2.3
28.3
0.1
0.1
Saint Kitts/Nevis
36
7
19.4
0.2
St. Lucia
61
17
6.5
d/na
0.1
80 Extracted from FAO (2004); World Development Indicators 2002, World Bank; CIA World Fact Book,
https://www.cia.gov/cia/publications/factbook/index.html; Earthtrends, World Resources Institute (WRI),
http://earthtrends.wri.org/pdf_library/country_profiles/agr_cou_028.pdf.
67
St. Vincent and the
Grenadines
39
11
18
d/na
Suriname
15,600
67
0.4
d/na
Trinidad & Tobago
513
75
14.6
0.1
As shown in the graph below in Figure 3.2.1, the amount of energy input for the production of
ethanol, different crops have different capacity for the production of biofuels. Countries that are
sugarcane growers have an advantage, as the crop has the highest energy input to output ratio.
Figure 3.2.1: Energy Input output ratio for Different Feedstock
3.4
81
Cost Benefits of Agro/Bio-Energy
Electricity generation and transportation are the two major uses of biofuels, globally. In
comparing the cost of biofuels used to generate electricity with the alternatives - other renewable
energy sources (wind farms, grid connected photovoltaics (PV) and tidal/wave power), fossil fuels
(natural gas and coal) and nuclear power - biofuels cost less. As discussed in Section 1.4 of the
Technical Paper (Annex 1), for electricity generation, using solid biofuels for co-fueling with coal
at US$0.25 to US$0.50/kWh is cheaper than the other renewables (PV, tidal, wind) and is similar
in cost to fossil fuel alternatives (combined cycle gas turbines, coal in thermal power plants).
Biofuels used directly for electricity generation and in combined heat and power applications at
US$0.05 to US$0.15/kWh, is more expensive than natural gas, coal and on-shore wind farms,
around the same cost as off-shore wind farms, and cheaper than tidal and PV.
The two main fossil fuels used in the transportation sector are gasoline and diesel. These can be
substituted by liquid biofuels such as ethanol produced from sugars and carbohydrates, and
biodiesel produced from plant oils. Both biofuels can be produced from several different plant
sources as discussed in the Appendix 1. The cost of producing ethanol from sugarcane, corn,
grain and cellulosic crops, and producing biodiesel from rapeseed is compared with gasoline and
diesel in Table 3.3.1. Also given is the cost of synthetic biodiesel produced from biomass-derived
synthesis gas.
81
Source – Jose Moreira
68
Table 3.3.1:
Biofuels: Current Costs and 2020 Projections (US cents/liter)
Technology
Gasoline / (diesel) cost
for oil crude @ c.
$50/barrel (FOB Gulf
cost)
Ethanol
from
sugarcane (Brazil)
Current
costs
US cents/l
[$/GJ]
0.34/(0.37)
[10.4/(10.0)]
2020
Projections
US cents/l
[$/GJ]
0.29
[13.5]
82
Comments
Dependent upon oil supplies
Commercial ethanol production in
Southern Brazil. Some scope for cost
reduction.
Ethanol from corn (US)
0.29 – 0.32
[13.5– 14.9]
Commercial ethanol production in
US. Some scope for cost reduction.
Ethanol from grain
United Kingdom (UK)
0.38 – 0.65
[18.0– 30.6]
Commercial ethanol production in
UK. Some scope for cost reduction.
Ethanol from cellulosic
crops (UK)
Biodiesel
rapeseed (UK)
from
F-T
diesel
coppice (UK)
from
0.31 – 0.73
[14.4 – 34.2]
0.59 – 1.48
[18.0– 45.0]
Cost projection for commercial plant
based on engineering analysis.
Commercial biodiesel production in
UK. Some scope for cost reduction.
0.58 – 0.97
[16.2 – 27.0]
Cost projection for commercial plant
based on engineering analysis.
.
The cost benefits of biodiesel manifest themselves in many forms. As petroleum prices continue
to increase it becomes more competitive on a price basis, and also with demand increasing. Up
to this point, low consumer confidence, high commercial risk, price and availability were major
market barriers, but those are changing dramatically
3.3.1
Costs and Benefits of Biofuels Industries
Even though biofuels may be more expensive than its fossil fuel alternative, as shown in Table
3.3.1, it still makes very good local and national sense to promote its production and use because
of its multiple socio-economic and environmental benefits. The development of a biofuels
industry can go a long way towards meeting the basic developmental needs of segments of the
population that are consistently at the bottom of the socio-economic ladder. As discussed earlier,
substituting the use of imported fossil fuels with locally produced biofuels channels cash back into
the rural economy benefiting the poorest farmers.
Research from the Technical Paper (Appendix 1), shows that agro-energy industries increases
income generation opportunities at all stages of feedstock production, transportation and plant
operation for the equipment manufacturers and for maintenance. Marginal and degraded lands
could become more viable for agricultural production, and farmers could sell biofuel feedstock for
additional income. Other socio-economic benefits include support of traditional industries, rural
diversification and the economic development of rural communities. In some cases, the
82
Gross and Bauen, 2005
69
increased use of bioenergy can revive cultural traditions that were eclipsed by the fossil fuel era
th
83
of the 20 century. Environmental benefits of using bioenergy include :
(g)
Reduced soil erosion and improved conservation of biodiversity.
(h)
Conservation of natural resources by reducing pressure on finite resources and
introduction of more sustainable agricultural systems.
(i)
Protection of fresh water supplies and reduced dry-land salinity and erosion.
(j)
Increased terrestrial carbon sinks and reservoirs.
(k)
Reduced GHG emissions due to fossil fuel substitution.
(l)
Improvement in coastal ecosystem due to reduced deposition of sediments on reefs,
mangroves, and seagrass beds.
3.4
Global Lessons Learned in the Production and Use of Biofuels
3.4.1
Brazil
By far, the leading country in the world in terms of biofuels, Brazil has over the last few decades
served as an example of the associated cost and benefits of biofuels
3.4.1.1
Ethanol
Brazil was an oil importer and the two oil shocks of the 1970s and 80s had an enormous impact
on the Brazilian economy. In order to make fuel prices less susceptible to international petroleum
price oscillations and reduce petroleum imports, the Federal Government started the “Proalcool”
program in 1975, to produce ethanol from sugarcane juice and use it for two different
applications: a) to introduce gasoline blended with ethanol in the market, and; b) to promote the
development of pure ethanol-fueled vehicles. Now, thirty years later, the Brazilian alcohol
program is the world’s largest commercial biomass program, and Brazil has a complete mastery
over the whole alcohol production and consumption chain. In a similar way to the sugarcane
industry, Brazil has reached a high level of technology for establishment, management and
utilization of eucalyptus forests. Advanced technologies such as gasification and combined
cycles for electricity and hydrolysis and fermentation for ethanol production has made it possible
for Brazil to produce some of the cheapest bioenergy in the world both from sugarcane and
eucalyptus.
All gasoline sold in Brazil is blended with 20 to 26 per cent ethanol (anhydrous) on a volume
basis and is called gasohol. Ethanol production has increased from around 0.5 billion liters in
1975, to over 16 billion liters in 2005, and comprises of 14.8 per cent of transportation fuels
(gasoline and diesel), with hydrous ethanol having a market share of 6.3 per cent, and anhydrous
ethanol blended with gasoline having 8.5 per cent. Ethanol is used both as an octane enhancer
in vehicles, replacing lead and/or Methyl Tertiary-Butyl Ether (MTBE), and as a fuel substitute for
gasoline. At current production costs, ethanol is cheaper than gasoline if oil prices are above
US$35 per barrel.
Currently, the ethanol-fueled vehicle fleet in Brazil is composed of: a) 15.5 million gasohol-fueled
vehicles; b) 2 million hydrated ethanol-fueled vehicles; c) 606,000 flex-fuel vehicles; and d) 3.5
million motorcycles. Hydrated ethanol vehicles run only on a 95 per cent ethanol – 5 per cent
water mix, but cannot run on gasoline alone or gasohol, while gasohol vehicles cannot run on
hydrated ethanol. A few years ago, there was a shortage of ethanol that put some vehicle
owners in a tight spot. To increase the range of fuels that a vehicle can run on, Brazilian car
manufacturers developed the flex-fuel vehicle (FFV) that can run on ethanol, gasoline or any
blend of the two, and launched it in March 2003. FFV vehicles have changed the fuel market by
introducing full flexibility for the consumers to decide the fuel they want to buy at the gas station
based mainly on the fuel price even though they are aware that ethanol is better for the
environment. Currently, Volkswagen, General Motors, Ford, Renault, Peugeot and Fiat
83
For more details on cost benefits see Section 1.4 of the Technical Paper (Appendix 1)
70
manufacture FFVs and in May 2005, FFV sales exceeded gasoline-fueled vehicle sales, 49.5 per
cent against 43.3 per cent. In 2006, cars manufacturers will produce around of 70 per cent of
FFV in Brazil, and by 2010, FFVs will comprise 25 per cent of the fleet. Future developments will
include a Flex-Fuel Engine that can run on 3 fuels: gasoline, alcohol and natural gas
In 2004, Brazil produced 350 million tones of cane; the sugarcane agro-industry generated
around 700,000 direct jobs and about 3.5 million indirect jobs. The rapid growth of this industry
has been characterized by fast transition to commercial energy plantations, lower domestic
utilization and improvement in transportation and industry. By 2010, this industry will provide
direct employment to 840,000 persons with over 50,000 additional jobs being created every year.
The success story of the Brazilian ethanol industry is the result of a long road that began with first
experiences with alcohol-fueled automobiles in the country in 1912. By 1925, there were ethanolfueled vehicles on the roads. The year 1931 saw the beginning of five percent (5%) anhydrous
ethanol blends with gasoline and the Brazilian Government made this compulsory in 1938.
In 1966, the blend ratio was increased up to 10 percent on a voluntary basis. However, rapid
progress started only after 1975, when the Federal Government launched the Proalcohol
Program in response to the first oil shock. The first commercial ethanol-fueled vehicle was
introduced in 1979. The ethanol blend ratio in gasoline was increased from 15 per cent to 20 per
cent also in 1979, and this was raised to 25 per cent in 2003. At present the total ethanol
consumption at some 30,000 gas stations is 200,000 barrels per day of equivalent gasoline, and
the sugarcane industry is strong enough to operate without governmental subsidies. By building
up the capability to produce either ethanol or sugar, the sugarcane mills can produce the best mix
of these two products depending on the world market prices.
Brazilian ethanol produced from sugarcane is much more effective in mitigating climate change
than ethanol produced from corn as in the US. Each unit of fossil energy used to produce ethanol
results in 8.3 units of biomass energy if it is produced from sugarcane, whereas it results in only
1.34 units of biomass energy if it is produced from corn. The ethanol production of over 16 billion
liters in 2005 was responsible for mitigating around 40 million tons of carbon dioxide emissions.
Brazilian ethanol’s contributions to reducing global warming can be replicated in other tropical
countries by using appropriate plants and procedures.
One important lesson that can be learnt from the path-breaking Brazilian ethanol experience is
that a properly planned and executed government program for supporting the development of a
biofuels industry can produce substantial benefits at the local, regional, national and global levels
and lead the industry to a state where it can survive without special governmental incentives.
Many aspects of the Brazilian experience could be very relevant to countries going in for ethanol
production and usage in the transportation sector. The main barriers to fuel ethanol production,
use and trade were found to be: a) land use change to a combination of food, feed, fiber, fuel; b)
national agricultural interests; c) production and freight costs; d) taxation; e) export and import
infrastructures; f) sustainability of supply; g) resistance of OEMs in certain markets; and i)
resistance of oil marketers.
The main drivers of fuel ethanol production, use and trade have been oil import dependence,
switching from oil to ethanol imports, improving local and global environments, developing nonfood markets for agriculture, creating jobs along the productive chain, adding value to the rural
economy, and fuel ethanol mandates and/or fiscal incentives. Strategic benefits include
increasing the energy security by reducing reliance on fossil fuel and diversifying the energy
matrix. Social benefits include the recovery of large deforested areas by biofuels crops and
significant increase in employment opportunities, mainly in rural areas.
Environmental benefits include reduction of atmospheric automotive emissions from alcohol
vehicles that have almost zero greenhouse gas emissions, a sustainable production cycle for
ethanol from sugarcane by controlling the use of fertilizers in sugarcane fields and replacing it
with by-products of industrial production (vinasse and filter cake), and a reduction in the use of
71
pesticides and their environmental impacts by development of disease-resistant species.
Environmental legislation in Brazil specifies that it be forbidden to engage in any type of
deforestation; consequently, sugarcane plantations have expanded mainly in areas previously
used for cattle. Environmental regulations also require the gradual introduction of green cane
harvesting to allow the recovery of sugarcane trash (leaves and the tips of the plant) and
significantly increase the biomass available for energy production.
Brazilian experience also shows that vehicle adjustments are not necessary if blends of up to 10
percent ethanol in gasoline are used, but transport and storage tanks need to be cleaned
properly. For blends with more than 10 percent ethanol the current vehicle fleet need
modifications or else vehicles manufactured for running on such blends must be used. The
environmental benefits of using up to 10 percent ethanol blends include reductions of: a) 20 to 30
per cent in 7 per cent in CO2 emissions; b) toxic compounds (benzene) and sulphur oxides
proportional to the mixture level. However, these blends will increase emissions of: a) nitrogen
oxides by 10 percent, and; b) aldehydes by 30 per cent.
3.4.1.2
Biodiesel
The developments in producing biodiesel and blending it with diesel fuel are only very recent.
Even though first experiences began in 1970, high vegetable oil prices prevented further
development. In 1980, the first biodiesel patent in the world was awarded to the Federal
University of Ceará. However, it was only as late as 2002 that biodiesel came into the
Government Agenda and a Working Group was formed. In December 2003, an Inter-Ministerial
Executive Committee was constituted and a Management Group was made responsible for
program implementation.
The Brazilian “ProBiodiesel” Program was finally launched in
December 2004, with the academic, industrial and government sectors working together to define
the proportions, routes and technologies to be employed. The basic objectives of the Biodiesel
Program are: a) to reduce oil dependency, b) to produce environmental gains, and c) to introduce
family agriculture into the raw material production process. A Regulatory Framework is being
consolidated that will: a) allow blends up to 2 per cent, b) make a 2 per cent blend compulsory in
2008, c) increase the blend ratio to 5 per cent by 2013, and d) give priority to North and Northeast
regions for palm and castor cultivation. A 2 per cent blend will require production of 800 million
liters of biodiesel per year.
Brazil has also started a new National Program of Incentive to Electric Energy from Alternative
Sources called “ProInfa,” that will guarantee the purchase of 3,300 MW from small hydro,
biomass and wind power plants. A minimum of 60 per cent of national equipment is to be
employed in the first phase, and 90 per cent in the second. ProInfa will diversify the Brazilian
energy matrix and stimulate the national engineering industries.
3.4.2
India
India’s import of crude oil is expected to go up from 85 million tons in 2001 to 147 million tons by
2007. Overall transport crude oil demand was more than 50 million tons in 2001 with nearly 80
per cent in the form of diesel. Domestic supply can presently satisfy 22 per cent of demand and
dependence on crude oil imports amounting to more than 8 billion US$ per annum is increasing
since there is a growing demand gap between production and consumption. Indian petrol
reserves are expected to last only another 20 years. Rising and volatile crude oil prices and its
foreign exchange costs are one of the main risk factors of the Indian economic and social
development prospects. In addition to reducing this risk, local production of bio energy is
projected to have a broad range of positive economic, social and environmental implications. The
Indian national program on biofuels (mainly ethanol and biodiesel) aims to stop soil and forest
degradation and its environmental implications, generate employment for the poor, in particular
for women, reduce greenhouse gas emissions and improve energy security.
72
3.4.2.1
Ethanol
The Indian fuel ethanol industry began during World War II with, “The Power Alcohol Program,”
when a large number of distilleries began to manufacture ethanol for mixing with petrol, as there
was an acute shortage of petroleum products. After the ‘oil shock’ of the 1970s, extensive field
trials were conducted by the research and development department of the public sector Indian Oil
Corporation, in collaboration with the Indian Institute of Petroleum. These trials were carried out
within cities, on the highways, on hilly terrain and in all types of weather conditions, employing a
variety of vehicles including two-wheelers and cars using 10 per cent and 20 per cent blends. The
Program was highly successful and no problems were encountered but the technical report
concluded in its last portion that there was an inadequate availability of ethanol without studying
the matter in detail, and so the Ethanol Program was forgotten for more than a decade. In the
mid-1990s, the Bureau of Indian Standards brought out standards for petrol which permitted the
use of 5 per cent ethanol as an oxygenate. Another set of blending trials was also conducted in
Delhi, with government vehicles, which again proved to be highly successful from the point of
view of environment and fuel efficiency, etc.
According to a study by the Federation of Indian Chambers of Commerce and Industry, the
country has the potential to save nearly 800 million liters of gasoline annually, if the transport
sector blends 10 per cent ethanol with gasoline. Assuming a yield of 225 liters per ton of
molasses, the potential production of ethanol from molasses in 1999/2000 would be 1.8 billion
liters. Even after accounting for the estimated normal requirement for industrial and beverage
purposes of 1.193 billion liters, the country would still have a potential ethanol surplus of 607
million liters that could be used for blending with petrol. If other raw materials are used for ethanol
production as well, total surplus alcohol production could reach almost 800 million liters.
Considering that India’s current annual petrol consumption exceeds 8 billion liters, the present
installed ethanol capacity could easily meet the petrol demand of the transport sector, if the
government decided to introduce gasohol with a 10 per cent alcohol content.
A fuel ethanol program is of particular interest to the sugar industry because of a sugar glut (part
of which the industry has been trying to export) and increasing supplies of molasses. The sugar
industry has therefore lobbied the government to embrace a bio-ethanol program for several
years now. The industry emphasizes that producing fuel ethanol would absorb the sugar surplus
and help the country’s distillery sector, which is presently burdened with huge overcapacity, and
also allow value addition to by-products, particularly molasses and bagasse.
Realizing the huge potential benefits of ethanol blending for the country, the Petroleum Ministry
started projects at three depots in April 2001, to blend 5 per cent ethanol with petrol. This
provided an opportunity to the stakeholders to identify the barriers in implementation of the
program including archaic laws and procedures dating back to the 18th century. Encouraged by
the results of the pilot projects, the Government announced in December 2001, the decision to
start 5% blending in eight states in Phase I, enhance blending to 10 per cent at the three pilot
projects and initiate research and development programs for ethanol blending with diesel. An
Inter-Ministerial Task Force (IMTF) was set up and concessional finance was to be made
available to the ethanol/sugar industry. The 5 per cent blend would require around 330 million
liters of ethanol per year in Phase I. A concessional excise surcharge on petrol "doped with 5%
ethanol" was also proposed. The Indian Parliament approved these provisions.
Other opportunities announced by the government in parliament were: a) At present, for a 10 per
cent blend with petrol and diesel, the ethanol requirement is 6 billion liters per year requiring
nearly 90 to 100 million tons of additional sugarcane (30 per cent of total sugarcane crop). This
84
will provide an additional income of Rs. 65 billion per year to an estimated 10 million farmers
and provide direct employment to about 50,000 in the plants; b) US$1 billion in foreign exchange
can be saved and energy security of the nation will be enhanced; d) Carbon emission reductions
84
Indian Rupee (currency)
73
will amount to nearly 5 million tons per year giving an additional income of $ 100 million from
international carbon trading; f) The turnover of the alcohol industry, which operates at 40 per cent
capacity utilization at present would increase by around Rs. 100 billion.
In order to realize these opportunities, a number of challenges have been identified for the main
actors involved - the central and state governments, the ethanol industry, the petroleum
companies and the automobile industry. The Central Government needs to:
a) Make ethanol blending mandatory in a phased manner, with a detailed time schedule of
implementation so that distilleries have adequate time to set up ethanol dehydration
facilities;
b) Announce dates for taking up the 10 per cent blending program in good time so that
additional distillery capacity can be created;
c) Allow market forces to determine prices and allow imports of ethanol or molasses, if
required;
d) Notify the tax break proposed in the budget at the earliest;
e) Bring clarity to the excise laws;
f) Reduce duties and taxes and give incentives similar to those already being provided to
other renewable sources of energy in the initial stages;
g) Promote research and development in new biomass substrates for ethanol production.
h) Set up an institutional framework where all stake holders and key policy makers meet
regularly.
The state Governments also have a major role to play. They need to:
a) Immediately overhaul the laws relating to ethanol production for fuel;
b) Eliminate levies, charges, fees etc., and reduce permissible taxes to encourage this
industry.
c) Permit alcohol industry and entrepreneurs to set up ethanol plants without any licensing
procedure as per the guidelines of various Supreme Court rulings;
d) Limit the role of the state excise department to ensure that denaturant is added to the
ethanol and then treat ethanol like any other chemical;
e) Remove all restriction for the use of any biomass substrates for production of ethanol.
The Ethanol Industry needs to:
a) Implement capacity building and select the best technology, plant size, and increase
efficiency to reduce production costs;
b) Employ latest technology in cultivation of crops so that lowest raw material prices can be
maintained;
c) Make sure there is adequate raw material available by shifting to new feed stocks;
d) Undertake research and development in biomass to ethanol technology so as to increase
the potential for ethanol production from these new feedstocks.
Oil Industry needs to:
a) Make buying procedures simple and transparent, and pay a fair price on time;
b) Remember ethanol is an oxygenate and an octane improver use these properties cost
effectively;
c) Carry out research into renewable fuels including ethanol diesel blends and bio-diesel;
d) Assist the Bureau of Indian Standards to make 10 per cent blend norms at the earliest;
e) Build up capacity to store and blend ethanol at all depots.
3.4.2.2
Biodiesel
Biodiesel is produced in India, mainly from Jatropha curcas and, to a lower extent, from other
non-edible virgin oils (in particular Pongamia pinnata, called honge or pinnata, as well as Neem,
and Mahua). Demand of edible oil is higher than production, so edible oils are much more
expensive, sometimes by a factor 3-5, in India. In April 2003, the Planning Commission of India’s
Committee on Development of Biofuels, recommended a major multi-dimensional program to
74
replace 20 percent of India’s diesel consumption. The Ministries of Petroleum, Rural
Development, Poverty Alleviation and Environment have been integrated for this program whose
objective is to blend 13 million tons of bio-diesel by 2013. A National Mission on Biodiesel has
been proposed in two phases: 1) Phase I consisting of a Demonstration Project to be
implemented by the year 2006-07, with an investment of Rs. 1500 crore ($300 million) on
400,000 hectares; 2) As a follow up of the Demonstration Project, Phase II will consist of a selfsustaining expansion of the program beginning in the year 2007, leading to production of
Biodiesel required in the year 2011-12. Jatropha curcas is considered the most suitable tree,
based non-edible oilseed, since it uses lands that are largely unproductive for the time being and
are located in poverty-stricken and watershed areas and degraded forests.
In Phase I, Jathropa demonstration projects will be implemented on 400,000 hectares of land in
eight states. These demonstration plots will allow the viability of all components to be tested,
developed and demonstrated by the Government, including linkages with different parts of the
country, sufficient production of seeds, and to increase the awareness and education of potential
participants and stakeholders to allow for a self-sustained dissemination in the subsequent
phases. Each state will have one esterification plant of around 80.000 tons per year of bio-diesel
that is expected to process jatropha seeds from some 50,000 to 70,000 hectares. Compact areas
in each state will be further subdivided into 2000 hectares blocks of plantation to facilitate supply
of planting material, procurement of seed and primary processing through expellers. Expected
outputs from 400,000 hectares are meant to be 0.5 million tons of bio-diesel, compost from the
press cake, and massive generation of employment (16 million days/year) for the poor. The
program will improve degraded land resources and provide income to 1.9 million poor families.
Phase II, beginning in 2007, is meant to bring the process forward to a market based, selfsustained mode. The National Biodiesel Mission wants to make it into a mass movement and
mobilize a large number of stakeholders including individuals, communities, entrepreneurs, oil
companies, businesses, industry, the financial sector as well as Government and most of its
institutions. A total land area of 13.4 million hectares has been identified for jathropa cultivation;
this includes forest areas (3.0 Mha); agriculture boundary plantation (3.0 Mha); agriforestry (2.0
Mha); cultivable fallow lands (2.4 Mha); wastelands under integrated watershed development (2.0
Mha); and strip lands such as roads, railways, and canal banks (1.0 Mha). A scheme of margin
money, subsidy and loans is planned. Expansion of processing capacities will be supported by 30
per cent subsidy, 60 per cent loan, and 10 per cent private capital basis. Additional support is
being sought from International Funding Agencies, since the program addresses global
environmental concerns and contributes to poverty alleviation.
Instruments to promote non-edible oils will include buy-back arrangements with oil companies
and mandatory use of bio-diesel blends. The jatropha program is being combined with other
programs of the Ministry of Rural Development to attract growers, entrepreneurs and financial
institutions so that a self-sustaining program of expansion takes off on its own, with the
Government playing mainly the role of a facilitator and provide only marginal financial support.
The rural community will have the first right of access to the oil for its own use. Responsibility for
availability of sufficient processing units will be with the Ministry of Petroleum. The direct and
indirect impact of bio-diesel, e.g., employment generation, balance of trade, emission benefits
etc., will be considered while fixing the duty structure so that the price of bio-diesel will be slightly
lower than that of imported petro-diesel.
A number of research and development needs have been defined by the program: a) genetically
improved tree species, to produce better quality and quantity of oil; b) technology practices for
adoption at grass root level; c) research on inter-cropping for agriculture, agro-forestry and
forestry application; d) processing techniques including bio-diesel and uses of by-products; e)
utilization of different oils and oil blends including potential additives needed; f) blending, storage
and transport of bio-diesel; g) engine development and modification; h) marketing and trade; i)
efficient water utilization techniques.
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3.4.3
3.4.3.1
Philippines
Ethanol
The Bioethanol Initiative in the Philippines began only in March 2004, when the sugar industry
created the Ethanol Program Consultative Committee (EPCC) to “supervise the conduct and
review of studies pertaining to the viability of ethanol production from sugarcane” but, spurred on
by the rapidly rising oil prices that have crossed US$70 per barrel, events started unfolding quite
rapidly after that. The EPCC is composed of the Sugar Regulatory Administration (representing
the government), planters group, and millers group. The sugar industry also created a Technical
Working Group (TWG) composed of technical staff from the offices of EPCC members to “provide
technical know-how and assistance”. In July 2004, the TWG presented its first report on,
“Production Phase of Ethanol”. The report: a) showed the capability of the Philippine sugar
industry to meet requirements of a nationwide National Fuel Ethanol Program; b) showed the
bioethanol volume requirement at 5 percent and 10 percent can be supplied by the projected
surplus production of sugarcane, starting in 2008; c) provided information on criteria for canebased substrates, logistic and investment requirements, and sugar/ethanol dynamics, and; d)
noted that other feedstock options should be explored, such as corn, cassava, and sweet
sorghum in order to support feedstock supply if the ethanol blend is further increased.
Several important events took place in August 2004, to move the bioethanol initiative forward.
Firstly, the Philippine Fuel Ethanol Alliance was created in order to coordinate efforts of the
stakeholder industries by way of information sharing and regular dialogues. The Alliance was
composed of the Sugar Regulatory Administration; Sugar Master Plan Foundation, Inc.;
Philippines Sugar Millers Association; Center for Alcohol Research and Development, and; the oil
company Petron Corporation. Secondly, the “Bioethanol Bills” were filed in the House of
Representatives and the Senate with the aim of promoting the use of ethanol as an alternative
transport fuel by establishing a National Fuel Ethanol Program. Thirdly, senior officials from the
government, sugar industry and the oil company visited Thailand, to meet with the heads of
petroleum company PTT, Thai Ministry of Energy and others, to discuss possible cooperation
between Thailand and the Philippines in an Association of Southeast Asian Nations (ASEAN)
Fuel Ethanol Initiative.
In September 2004, the Department of Energy adopted Bioethanol as a part of its agenda
towards Energy Independence and officially presented its Alternative Fuels and Energy
Technology Program, which included plans to implement bioethanol production and utilization A
mandate for bioethanol use began to take shape in November 2004, when the Thai Prime
Minister Thaksin Shinawatra advised President Gloria Macapagal Arroyo to adopt a mandated
policy on bioethanol use. The Second Pacific Ethanol and Biofuels Conference, held in Bangkok,
in December 2004, was attended by a multi-sectoral delegation from the Philippines. The main
objectives of the visit to Bangkok were to study and learn about developments regarding fuel
ethanol in other countries, and to meet with representatives of the Thai Ministry of Energy, Cane
and Sugar Board, and petroleum company PTT, to obtain information on the legislative
framework and technical considerations related to the implementation of the Thai Fuel Ethanol
Program.
In February 2005, Congress began discussing bioethanol in the Lower House, and the House
Committee on Energy created its own Technical Working Group to put flesh into the Bioethanol
Bills. The Chamber of Automotive Manufacturers of the Philippines approved the 10 percent
ethanol-gasoline blend as provided in the World Fuel Charter. In March 2005, the Ethanol
Alliance worked with different government agencies on specific provisions of the Bioethanol Bill,
and discussions were held with the Environmental Management Bureau to classify ethanol
distillery effluents, also called vinasse, as liquid organic fertilizer.
In May 2005, President Arroyo launched the Philippines’s National Bioethanol Program during the
signing of contracts for the country’s first ethanol plant, with a capacity of 25 million liters per
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year, using 300,000 tons of cane. Construction of the plant will begin in the first quarter of 2006,
and operations will start in the second half of 2007. Construction of a second ethanol plant with a
capacity of 38 million liters per year is expected to begin in June 2006. A website has been
created to provide online information dissemination and education on ethanol and the sugar
industry. The government is now formally committed “to pursue a policy towards energy
independence consistent with the country’s sustainable economic growth that would expand
opportunities for livelihood, with due regard to the protection of public health and the environment
by mandating the use of bioethanol as motor fuel as a measure to mitigate toxic and greenhouse
gas (GHG) emissions; to provide indigenous renewable energy sources to reduce dependence
on imported fuel oil, and; to increase rural employment and income.”
3.4.3.2
Biodiesel
Since 1983, several government and private institutions in the Philippines have conducted
research and development experiments on the fuel application of Coconut Methyl Ester (CME).
These included technology transfer of CME to Dahitri Plantation in 1991, and evaluation of a
claimed “cold process” transesterification technology, at PCA Zamboanga Research Center in
1995. The general objective of these experiments was to establish the viability of CME as a
substitute for petroleum diesel fuel. These studies concluded that it is technically viable to
substitute petroleum diesel with 100 per cent CME directly fed to diesel transport vehicles, but not
economically viable due to high cost of coconut oil. When the price of Coconut Oil (CNO)
increased, or when the price of petro-diesel decreased to a level much lower than that of CNO,
the promotion tended to be discontinued because of economic viability issues which failed to
attract local and foreign investors.
When the Philippine Clean Air Act (RA 8749) was enacted in 1999, the law provided a window of
opportunity for CME as a petro-diesel quality enhancing additive, as CME has demonstrated that
it is a cost-effective solution for complying with the smoke emission specifications/standards of
the Clean Air Act. PCA-DA launched a Biodiesel Development Project in May 2001, with
issuance of DA Special Order no. 176, series of 2001. PCA set-up a Coconut Biodiesel Pump
Station at its Quezon City compound for promotional utilization of CME and conduct of scientific
validation testing and research and development activities. The general objective was to
establish the viability of CME as a petro-diesel quality enhancer for the reduction of air pollution,
for better engine performance, and for increased utilization of CNO in the domestic market.
Smoke emissions of 15 PCA vehicles without any engine modifications were tested with one
percent CME blend. The test results showed a reduction of around 50 per cent on their smoke
emissions. Further engine performance and emission tests with CME were undertaken by
Interagency and Multi-sectoral cooperation, in 2003. This study established the cost-benefits of
using Coco-Biodiesel. Actual road run testing showed an average increase of more than 17 per
cent kilometers for every liter of diesel consumed was recorded, and dynamometer test results
showed a torque increase of 2.5 percent to 3.2 percent for CME blends compared to Low Sulphur
Diesel.
Standards for pure CME (Philippine National Standard 2020:2003) were promulgated in May
2003, and in February 2004, President Arroyo signed the Memorandum Circular No. 55, directing
all Departments, Bureaus, Offices and Instrumentalities of the Government, including
Government-owned and controlled Corporations to incorporate the use of one percent, by
volume, Coconut Methyl Ester in their diesel requirements by July 2004. M.C. 55 made the
Department of Energy as the lead implementing agency and also specified the responsibilities of
the other agencies that would ensure security of CME supply, monitor and test vehicle emissions
standards, provide an inventory of diesel vehicles, support research and development activities,
develop fiscal and non-fiscal incentives, and provide incentives under the BOI IPP.
In April 2004, President Arroyo launched the Coco-Biodiesel Program. She said the program was
a) renewable; b) indigenous, thereby reduces dependence on imported fuel; c) supports
government’s poverty alleviation program, and; d) directly affects the lives of about 3.1 million
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farmers and 25 million Filipinos dependent on the coconut industry. The coconut industry, at its
present production levels, can supply enough coconut oil for 10 per cent CME blending. The
current coconut oil production is nearly 1,400 million liters, of which 500 million liters caters to
local demand leaving 900 million liters for biodiesel production. Since the present petro-diesel
demand is 7 billion liters, only 700 million liters is required for a 10 per cent blend.
3.4.3.3
Pure Coconut Oil
Another interesting development is a series of tests conducted by the Philippine Coconut
Authority (PCA) on the use of filtered coconut oil to substitute diesel without esterifying it to
biodiesel. Initial results in running several PCA vehicles, shallow tube well pumps, and other farm
equipment on 100 percent coconut oil for about two months, show that it really works. Coconut
oil is cheaper than coco-biodiesel. PCA says that a one-ton mini oil mill, organized by the
farmers themselves under various cooperatives, could now manage the production of filtered
coconut oil that could supply the fuel requirements of their farms and their community. If this
would be realized, PCA said it would have great impact on the lives of the coconut farmers, to the
industry and the country. In order for these potentials to materialize, there must be cooperation of
other government agencies and institutions like the Department of Science and Technology,
Department of Energy, University of the Philippines and the Local Government Units. PCA said
that a filtered coconut oil protocol must be established immediately so that the dissemination of
the process and technology of producing filtered coconut oil could be started to fully develop this
biofuel alternative to petro-diesel.
The Biofuels Act
After being passed by the House of Representatives in November 2005, the Biofuels Bill was
approved by three Senate Committees in April 2006: the Energy, Finance and Food and
Agriculture Committees. The Bill will now be put forward for approval by the Senate plenary,
when session resumes in May 2006. Once the bill becomes a law, a Philippine Biofuel Board
would be created to oversee production and use of alternative fuels according to the bill. The
Biofuels Act will mandate the use of biofuels in a phased manner, with a minimum of one percent
biofuel mix for all diesel fuel sold in the country, for the first two years. This would be increased
to two percent biodiesel in diesel fuel and five percent ethanol in gasoline after two years, and to
10 percent after four years. The bill also calls for:
a) Zero value-added tax (VAT) on biofuels; regular gasoline at present is subject to a 10percent VAT;
b) Government financial institutions like LandBank, Development Bank of the Philippines
and Quedancor, to provide easier financial assistance to local biofuel producers;
c) A wide range of fiscal and non-fiscal incentives including exemption from tariff duties on
importation of equipment and machinery to encourage entry of new investors in the
biofuels sector;
d) Classification of all ethanol production and blending investments as "pioneering" or
"preferred areas of investment," which would entitle them to financial incentives;
e) Tariff Commission to create a tariff line for bio-ethanol fuel;
f) Department of Agriculture, through its relevant agencies, to develop a national program
for the production of crops for use as feedstock including but not limited to sugarcane,
cassava, sweet sorghum and corn to ensure availability of feedstock for production of
bioethanol for motor fuel;
g) Gradual phasing out of the use of harmful gasoline additives and/or oxygenates to begin
within six months, such that within three (3) years from the effect of this Act, such harmful
gasoline additives and oxygenates shall have been totally phased out nationwide.
3.4.4
Pacific Island Countries
The Pacific Island Countries are heavily dependent on imported petroleum products for
transportation and electricity. The main biomass resources that can substitute gasoline and
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diesel are coconuts, found all over the Pacific, and sugarcane produced only in Fiji. Fiji happens
to be the largest country in the south Pacific, and in this section we examine Fiji’s sugar and
coconut industries. We also look at some pioneering work being done in Vanuatu, on using
coconut oil to run diesel vehicles without converting it to biodiesel; this has tremendous
implications for all coconut growing countries searching for a more profitable use for coconut oil.
3.4.4.1
Fiji
Sugar continues to be a major export commodity, accounting for around 19 percent of total
exports in 2003. Unlike most sugar growing countries, over 21,000 independent growers grow
nearly all of Fiji’s sugarcane on farms averaging four hectares. However, the future of sugar
exports and the sugar sector as a whole is uncertain because the current industry structure is not
viable and a restructure is essential to address the industry’s problems. Preferential prices offered
by the EU has led to the gradual decline of Fiji’s sugar industry into its present state of crisis,
characterized by high incidences of cane burning, low sugar quality, low yields, high costs due to
antiquated, inefficient sugar mills, an inefficient rail transport system, a land tenure system that
lacks incentives to improve, and politics that make reform difficult. The recent WTO ruling that
will force the EU to withdraw subsidies it extends to Fiji and other ACP countries by 2007, is
forcing the sugar industry to go through a very difficult period of adjustment.
Two studies completed recently have recommended measures to address problems in different
segments of the industry: “Intermediation of the Sugar Sector Restructuring” by the Asian
Development Bank (ADB), 2003; and “Revival of the Sugar Industry,” by an Indian Technical
Team, in 2004. The ADB study focused on providing alternate livelihoods to sugarcane farmers
and cane cutters forced out by expiry of the land leases and restructuring. The Indian study
came up with a plan to revive the sugar industry by increasing the productivity of the sugarcane
crop and the efficiency of the sugar mills, and to produce higher quality sugar. Both studies have
been received positively by most of the Fijian stakeholders and their implementation has started.
For reviving the Fijian sugar industry the Technical Team from the Indian Sugar Technology
Mission (STM) has proposed upgrading of the four sugar mills using higher-pressure boilers to
increase efficiency of steam usage and several other measures. The F$86 million required for
implementing the Indian proposal is being given as a Government-to-Government (G2G) soft loan
by the Government of India. In 2005, the Fiji Sugar Corporation (FSC) floated tenders for the
equipment, and has placed orders for the equipment that will be installed and commissioned
before the crushing season of 2007. Training of field and factory personnel at sugar mills in India
has already commenced. In addition, a human resource development program for training and
carrier enhancement will also be implemented in Fiji, to meet the higher professional
requirements.
The Indian team also proposed increased cogeneration capacities at two of the largest sugar
mills so that more electricity can be exported to the Fiji Electricity Authority (FEA) grid, on the
island of Viti Levu. Additional turbo-generator capacities of 20 MW will be installed at the two
biggest mills that process a total of two million tons of cane per year. The F$60 million required
for this will be raised from national financial institutions. The cogeneration plants proposed will
use bagasse during the crushing season and coal during the off-season. FEA and FSC have
signed a power purchase agreement for sale of the cogeneration electricity.
An Asian Development Bank (ADB) study on “Intermediation of the Sugar Sector Restructuring”
in 2003, led to a F$40 million loan being approved by the ADB for the Alternative Livelihoods
Project (ALP), that started in May 2005. The main goal of the ALP is to create increased and
diversified on- and off-farm livelihood opportunities for people in rural areas to offset adverse
effects of sugar restructuring and lease expiry, and to support poverty reduction. The project
comprises four components to be implemented over six years: (i) Agricultural Diversification; (ii)
Off-farm Livelihoods; (iii) Rural Financial Services, and; (iv) Savusavu Port.
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The Agricultural Diversification component aims at maintaining a viable and healthy agriculture
sector and ensuring there are viable farming alternatives to sugarcane farming. It consists of
three sub-components: a) Industry Organization and Market Access; b) Commercial Farming
Capacity, and; c) Technology Development and Transfer. The Off-Farm Livelihoods component
aims to generate sustainable off-farm employment and self-employment for people exiting the
sugar sector and other poor in the project areas. Particular emphasis will be placed on promoting
income generating livelihood activities, such as handicrafts and small-scale agro-processing for
women household members in both farming communities and indigenous Fijian villages. This will
be implemented through two sub-components addressing needs for advisory services and
vocational training: a) Small and Micro Enterprises Promotion, and; b) Vocational Training.
The Rural Financial Services (RFS) component aims to develop and establish RFS which can
efficiently provide access to funds, both savings and credit, for farming and non-farming rural
communities, including traditional village communities and women, to facilitate their livelihood
activities and improved quality of life. This will be done primarily by supporting development of
community based Micro-Finance Institutions (MFI) which are better able to address rural market
needs than the formal, commercial financial system. The objective of the Savusavu Port
component of the ALP is to develop infrastructure critical to the ability of Vanua Levu’s people to
participate in the project through development and diversification of the island’s economy,
improving living standards for indigenous Fijian and Indo-Fijian communities, and reducing
migration to Viti Levu and out of Fiji. The ADB study had found that the level of socio-economic
development on Vanua Levu depends largely on having a direct access to international markets.
An all-weather, deep-water international port will be constructed at a total cost of US$22 million.
Coconut
Fiji’s coconut industry has been declining over the last 40 years because of low productivity, low
prices and competition from other edible oils sold on the world market. The soybean industry in
the US contributed to this by spreading a lot of misinformation about the ill effects of using
coconut oil for cooking, on cholesterol levels. Although there have been some efforts in the last
four decades to revive the industry, the lack of a sustained long-term national policy for
development of the coconut sector has made it difficult to reverse the decline. In the early 1960s,
copra production was over 40,000 tons/yr; now it is less than 15,000 tons/yr. Moreover, about
two-thirds of the trees will go out of production over the next 20 years. The older trees need to be
replaced soon otherwise the industry will decline further and the rural people dependent on the
industry will migrate to urban areas looking for alternative livelihoods adding more pressure on
the limited resources of the urban centers. The rural population could also react by resorting to
more unsustainable use of natural resources for livelihood such as “ slash and burn”.
In response to this problem, the Fijian Government created the Coconut Industry Development
Authority (CIDA) under an Act of parliament, in November 1998, with a mandate to revitalize the
industry. CIDA has drawn up a 25-year Coconut Industry Master Development Plan that includes
a Nationwide Coconut Industry Promotions Program (NCIPP). CIDA aims to restructure the
coconut industry, register 20,000 coconut growers and establish a network of Coconut Planters
Associations throughout the coconut growing areas. This will assist the Extension and Research
and Development Divisions to achieve their targets for the planting of six million trees and the
rehabilitation of another two million trees. The Taveuni Coconut Center, with its four seed
gardens, will be provided financial, manpower and logistical support to play a key role in this
campaign. A manpower development plan and increasing public awareness through posters in
schools, restaurants, hotels, public markets and government offices, etc., are also being planned.
CIDA aims to increase the production of copra, coconut oil and tender nuts for the local and
export markets. Product diversification, intercropping practices, wholenut purchase centers and a
centralized copra drying facility are envisaged together with a large number of mini-mills and two
big coconut oil (CNO) mills. CIDA wants to improve the quality of life of 100,000 rural people
involved in the coconut sector, empower women, reduce poverty and improve the education of
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rural children. Other ambitious targets of CIDA include export of coconut timber and production
of biodiesel to replace 10% of imported diesel.
3.4.4.2
Vanuatu
One of the pioneers in using coconut oil in diesel vehicles is Tony Deamer, who lives in Vanuatu,
in the south Pacific. For several years he has been experimenting with usage of coconut oil to
run diesel automobiles and has now arrived at a mix that he sells under the name of “Island Fuel,”
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which can be used in diesel engines without any modifications. Deamer started by using normal
factory produced coconut oil that contains around four percent water and 2-3 per cent Free Fatty
Acids (FFAs). He found that these contaminants cause the oil to solidify when the temperature of
the oil drops below 22°C, which is quite common during winter in the South Pacific. One way
around this problem is to blend the oil with some diesel fuel to prevent solidification. The
presence of the diesel fuel also aids cold starting when the ambient temperature is below 20°C.
The other problem was that the FFAs blocked the fuel filter when the fuel system was cold. This
was overcome by fitting a small heat exchanger in the fuel line to warm the fuel prior to the fuel
filter. The water for the heat exchanger was taken from the thermostat bypass circuit so that it
was warm with a minute or so of the engine starting. This eliminated the fuel filter blockages.
Tony Deamer now uses a proprietary process that removes both the water and the FFA from the
coconut oil. The fuel is then filtered through a three-micron filter. The removal of water and FFAs
eliminates the solidification of the fuel and gives the fuel greater calorific value. Moreover, after
the water and FFAs have been removed from the oil, it has been found that the fuel pre-heater is
not required.
Deamer has been operating his fleet of vehicles on various blends of coconut oil and diesel in
several ratios, and also on a coconut oil and kerosene mix. He even tried five percent methanol
for a time, but found it evaporated out too quickly, so in the end he decided to stick with the
proven 15 per cent kerosene blend. Tony Deamer’s “Island Fuel” made in Vanuatu, contains 85
per cent of the purified and filtered coconut oil blended with 15 per cent kerosene. No
modifications are required in the diesel engines that use Island Fuel; however, engine pre-heaters
are recommended for colder areas. Tony Deamer says that this fuel has been tried and tested
over many years, and is now ready for retail sale. Unfortunately, the laws of Vanuatu do not
allow the sale of Island Fuel, so he sells only the coconut oil to interested car owners. The
minibus fleet in Porta Vila has tried out Island Fuel for over six months, and the bus operators are
completely satisfied with using it and find that they are getting more kilometers per liter.
Based on his experience with producing fuel-grade coconut oil and blends, and in using them as
86
fuels in all his vehicles, Tony Deamer has found that :
a) Coconut oil has better lubricating qualities than other fuels for diesel engines so it causes
less wear on internal engine parts and prolongs engine life.
b) Coconut oil burns slower than other diesel fuels so it pushes the piston all the way down
the cylinder instead of a rapid explosion at the top of the stroke, resulting in an even
power release, less fuel use, less engine wear and a quieter running engine.
c) Coconut oil fuelled diesel engines run cooler due to less internal friction and the slower
burn rate.
d) Coconut oil is not an ideal sub-tropical fuel, as it will solidify overnight if temperatures
drop below 14 degrees Celsius. However, the gel point (the point at which it becomes
solid) can be greatly reduced by mixing the coconut oil with kerosene or by keeping the
fuel heated using heating accessories commonly found on generators, boats and
transport vehicles.
e) Coconut oil based fuels yield over 10 percent more kilometers per liter (km/l) used than
petroleum diesel. Data collected over a 20,000 km, 6-month test on an Isuzu Direct
85
86
Deamer et al, 2005
Deamer et al, 2005
81
injection 2.5ltr 4JAI diesel motor in a pickup, that was giving less than 12 km/l diesel,
showed that it had improved to approximately 13.5 km/l on "Island Fuel 60".
f) A noticeable torque increase is felt with Island Fuel. It was noticed that a change down to
the next gear was often not required as the engine keeps pulling at the lower RPM. This
is easily explained by the fact that the coconut oil burns slower than diesel.
g) The exhaust fumes from coconut oil are less harmful than mineral based fuels. When
burnt in a diesel engine, coco diesel emits 50 percent less particle matter (black smoke)
and less sulphur dioxide (SO2). Exhaust from coconut oil contains no poly acrylic
hydrocarbons (PAHs) -- the main cancer- causing component of mineral diesel fuel
exhaust.
h) Coconut oil is non-toxic and fully biodegradable. It is safe to store and to transport. Oil
spills on land or water are harmless and there is a reduced risk of fire. No chemicals are
required to produce the fuel so there are no harmful by-products.
i) The entire process of making coconut-based fuel for diesel engines can be done in the
islands creating jobs and stimulating the economy. All the income from the production
and sale of coconut oil stays in the islands instead of going overseas. A high percentage
of the income from coconut-based fuels will go to the local farmers in rural areas.
j) All the steps in the production of coconut oil can be fuelled by coconut oil or coconut
residues so there is no addition to green house gases during the production of the fuel
product.
On the negative side, some drivers and passengers of the coconut oil blend powered vehicles
have reported headaches if the exhaust gas leaks into the passenger compartment. The Motor
Traders fleet has made changes to the exhaust system to clear the exhaust gases from the
vehicle. The nature of the headache causing agent needs to be determined and if a greater
number of vehicles are operating in an urban area it will need to be determined if this agent will
cause problems for the general public.
3.4.9
Australia
Bioenergy is relatively well established in some sectors in Australia. The installed electricity
generating capacity at Australia’s 30 sugar mills, using bagasse, totals 369 MW. Australia is a
leader in capturing and using landfill gas. Some 29 projects across Australia, up to 13 MW in size,
have a total installed capacity of close to 100 MW. There are also 11 wastewater treatment plants
around Australia that capture biogas for producing 24 MW of electricity. In addition, six to seven
million tonnes of firewood are used in Australia every year. In recent years, there has been
increased interest in the development of bioenergy to meet government greenhouse gas
reduction targets. In April 2001, Australia’s Mandatory Renewable Energy Target (MRET) came
into force. The Target requires an additional 9,500 GWh of new renewable electricity to be
generated per year, from sources such as bioenergy. It is set to raise Australia’s renewable
energy proportion from 10.5 percent in 1997, to approximately 12.5 percent by 2010.
The MRET has provided a stimulus for bioenergy in Australia. For instance, Australia’s oldest
sugar mill, the Rocky Point Mill in South Eastern Queensland, has been upgraded to 30 Mwe, for
year-round operation, using wood waste in the non-crushing season. Australia’s first large-scale
anaerobic digester (82,000 tons per year), fed by food and other organic wastes, is currently
being commissioned near Sydney. This will generate 3 MW of electricity, enabling it to acquire
Renewable Energy Certificates (RECs) under MRET. Co-firing biomass with coal has also
become a commercial proposition at a number of power stations. Bioenergy is also geared up to
help address one of Australia’s major environmental challenges – dryland salinity caused by
rising water tables from earlier land clearing. This is being dealt with in part by the planting of
deep-rooted oil mallee eucalyptus trees. Some 22 million oil mallees have recently been planted
in Western Australia. A pilot plant is under construction to convert coppiced oil mallee to
87
eucalyptus oil (as an industrial solvent), activated carbon and renewable electricity .
87
Schuck, 2003
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In its 2001 election policy, Biofuels for Cleaner Transport, the Australian government set a target
of producing 350 ML of liquid biofuels by 2010. In 2003, the long-term costs of meeting this target
were studied and in 2005, the Biofuels Taskforce examined whether the 2010 target can be met
by studying the factors preventing achievement, actions that can be taken to help, the costs and
the benefits. It was found that there are inter-related commercial risks that are impeding the
350 ML target by preventing an operating mainstream market for fuel ethanol blends, including:
a) Oil companies in a highly competitive market, with no forcing regulation or long-term
economic incentive, have no commercial reason to surrender market share to others –
whether to other oil or biofuels suppliers;
b) There is almost no consumer demand for ethanol blends, other than in minor market
segments supplied by independents and small market trials by the oil majors;
c) Consumer confidence remains poor following the events of 2002–03. Automobile
associations and vehicle manufacturers generally have been cautious about giving
unequivocal messages of confidence in a 10 percent ethanol blend (E10). However, the
Taskforce considers that the low level of consumer confidence is not justified by the facts.
Almost all post-1986 vehicles on Australian roads can use E10 quite satisfactorily.
d) Under current market conditions, and with no consumer demand, oil majors have little
commercial incentive to promote ethanol blends as a bulk fuel. But without contracts for
sales to oil majors, new ethanol producers cannot invest in bulk fuel ethanol production.
e) The first mover into bulk mainstream ethanol blend retailing faces considerably higher
commercial risks than later entrants since they:
(i)
Would incur infrastructure and marketing start up costs;
(ii)
May need to discount prices;
(iii) May not attract new customers – and so may only move current customers away
from a fuel type with higher commercial returns;
(iv) May be unable to secure reliable and sufficient ethanol at competitive market
prices unless E10 is included in the shopper docket programs;
(v)
Would face a discounting price gap that will be difficult to bridge. Should the first
mover fail to develop a retail market, it may face significant commercial losses –
including wider loss of brand reputation.
The oil majors cannot collude to avoid these first mover risks, even if they want to assist in
meeting the 350 ML target. In addition, the policy settings for biofuels are complex and have
undergone significant changes over recent years. Given the intense public debate around
ethanol, there is sovereign risk in being the first mover to make investments. Also, until 1 July
2011, domestic ethanol producers will be protected from international competition. Current fuel
ethanol costs of production in Brazil are around Aus$0.20/litre; Australian producers have much
higher costs of production. In 2011, Australian oil companies will have access to fuel ethanol at
world parity prices, and so may have an incentive to wait until closer to that time if they do make
strategic decisions to move into ethanol blends. Raising capital for ethanol plants in Australia will
become more difficult as 2011 approaches and competition looms.
The Taskforce suggested some actions that could readily be taken to help address this impasse
without affecting key policy settings or distorting markets:
a) The government mandated ethanol-blend labeling standard could be modified. The
Taskforce sees no need to label up to five percent ethanol blends. Suppliers would then
be able to use ethanol in the mix up to five percent according to commercial
requirements, including where it cost-effectively contributes to octane levels. For 5–10
per cent ethanol blends the label does not have to appear like a warning label. It could
simply inform. For example, ‘E10’ or ‘Contains up to 10 per cent ethanol’.
b) Information on vehicle/fuel compatibility could be provided to consumers in a more
accurate and user-friendly way than the Federal Chamber of Automotive Industries’
current listing. For example, labels on fuel-filler caps and forecourt pamphlets with simple
tick boxes could be used.
83
c) Consistency with world’s best practice can be demonstrated. For example, the industry
and government could highlight that European fuel standards include up to five percent
ethanol in petrol without labeling.
d) Submissions have raised program options that the government could consider, to
demonstrate confidence in E10. For example, opening procurement guidelines for its
vehicle fleet and fuel supply to E10, or providing a limited number of competitive
infrastructure grants for small business service station owners to lessen the risk of
entering an embryonic E10 market.
e) Consumer confidence, and health outcomes, could be improved by increasing the level of
compliance inspections for fuel quality standards. This could be complemented by
supporting information provided to industry participants on ethanol blend housekeeping.
The Taskforce estimated that the costs to the economy of the current policy settings, driven by
the biofuels excise advantage, to be around $90 million in 2009–10, reducing to $72 million a
year (2004–05 dollars) in the long-term (post 2015). It was noted that most overseas production
of biofuels is subsidized by governments, with the driver generally being agricultural support. The
benefits were estimated to be:
a) Meeting a 350 million liters (ML) target by 2010 under current policy settings could
involve investment in new ethanol plant capacity (grain and C molasses based) and
biodiesel capacity. Modeling suggested this could provide some 648 direct and indirect
jobs regionally, although these would not be net gains to employment nationally.
b) There would be some greenhouse gas emission benefits, of the order of $7 million a
year, which could vary greatly depending on plant design and feedstock. On their own,
these are not sufficient to warrant significant policy intervention, given that cheaper
carbon reduction options are readily available.
c) There may be potential for significant air-quality benefits from fuel ethanol use,
emphasizing that considerable uncertainty remains. Benefits cannot reasonably be
costed at this time due to uncertainty, but the potential for these to be substantial in the
context of ethanol’s long-term fuel-excise concession underscores the need for urgent
scientific and technical research.
d) There is prima facie evidence that there may be potential for significant reductions in
fine-particle emissions from the use of E10 in place of neat petrol. A comprehensive
scientific and technical research is needed to assess and quantify this in Australian
conditions for both E5 and E10. The government could consider tightening the
framework of air quality–fuel quality–vehicle particulate emission standards, with the
objective of gaining public health benefits, but this should take place within the general
policy framework of harmonizing with world automotive and fuel markets. In turn, tighter
particulate standards may create significant market demand for fuel ethanol without
requiring additional subsidies or interventions.
3.4.10 U.S.A.
Transportation fuel demand in the US is increasing at a rate of 1.5 to 2.3 percent per annum
mostly in diesel consumption. In 2004, biofuels represented about 3 percent of total current US
transportation fuel consumption. US refineries are operating at or near capacity and the demand
for biofuels has been increased by environmental protection regulations. For example, air quality
regulations have been a major stimulus for ethanol and biodiesel, alternative-fueled vehicle
requirements for government and state motor fleets increase demand and production, and the
banning of MTBE has stimulated ethanol demand.
Policy and legislation has been widely used by the US government, as instruments to increase
the production and usage of biofuels. Recent biomass legislation includes the Biomass Research
and Development Act of 2000, Farm Security and Rural Investment Act of 2002, American Jobs
Creation Act of 2004, and Energy Policy Act of 2005. The Farm Bill funds Grants for bio-based
procurement, bio-refinery grants, public education, and hydrogen and fuel cell technology, and
new programs to help farmers, ranchers, and rural small businesses purchase renewable energy
84
systems and make energy efficiency improvements. The Jobs Creation Act offers several tax
incentives for ethanol producers and blenders, allows tax credit to be passed through to the
farmer/owners of a cooperative, and allows the tax credit to be offset against the alternative
minimum tax.
The Energy Policy Act aims to enhance the national security of the US, by providing for the
research, development, demonstration, and market mechanisms for widespread deployment and
commercialization of bio-based fuels and bio-based products. This Act extends the Renewable
Fuel Standard (RFS), until 2012. The RFS, to be implemented and enforced by the
Environmental Protection Agency (EPA), specifies that: a) at least 4 billion gallons of ethanol and
biodiesel must be used in 2006; b) ramps up about 700 million gallons per year, up to 7.5 billion
gallons in 2012; c) regulations apply to refiners, blenders, and importers, and; d) cellulosic
ethanol qualifies for enhanced credit (1 gallon = 2.5 gallon credit).
The 2005 Transportation Bill provides funding for the National Biodiesel Board, for biodiesel
testing in new clean diesel engines, and $10 million per year, four years, for five Sun Grant
centers. The Sun Grant Initiative of January 2004, is a concept to solve America’s energy needs
and revitalize rural communities with land-grant university research, education and extension
programs on renewable energy and bio-based, non-food industries. The mission of this initiative
is to: a) enhance America’s national energy security; b) promote diversification and environmental
sustainability of America’s agriculture; c) promote opportunities for economic diversification in
America’s rural communities, and; d) expected to provide significant funding for competitive
university-based grants.
3.4.10.1
Ethanol
The ethanol industry has been developing in U.S. for the last 25 years, as compared to 30 years
for Brazil. Since 1990, the ethanol industry has been the fastest growing industry in rural
America, and in 2005, the industry will add 13,000 jobs to America’s manufacturing sector and
will be responsible for over 147,000 jobs in all sectors of the economy. It will also reduce
greenhouse gas emissions by 7 million tons, decrease petroleum imports by 143.3 million barrels,
decrease the U.S. trade deficit by $5.1 billion, and give $1.3 billion of tax revenue for the federal
government, and $1.2 billion for State and Local governments.
The fuel ethanol capacity in 2004 was 15 billion liters, and the industry opened 12 new state-ofthe-art production facilities during the year. The potential capacity in 2025 is estimated to be 100
to 110 billion liters that is roughly 15 percent of U.S. fuel demand. Ninety percent (90%) of the
ethanol is made from corn. New ethanol capacity will include grain sorghum, straw, so-called
“waste” materials, cellulose, municipal solid waste (MSW), etc. There are over three million
ethanol flex-fuel vehicles operating in the U.S.
The main uses for fuel ethanol are: a) gasoline octane component (up to 10vol%); b) E85 - an
alternative fuel (85vol% ethanol); c) E diesel - an ethanol-diesel blend (up to 15vol% ethanol in
additized diesel fuel), and; d) Fuel cell energy source (under development). The main limitations
of ethanol are: a) reduced emissions benefits (in gasoline, E85); b) evaporative emissions (in
gasoline), and; c) long supply lines and transportation cost.
An important part of the ethanol program is the federal tax incentive, where petroleum refiners
receive a US$0.51 tax credit on each gallon of ethanol blended with gasoline domestic or
imported. To ensure that the US taxpayer does not subsidize imports, a secondary tariff of
US$0.54 per gallon is levied on ethanol imports. However, unilateral trade preference programs,
such as the Caribbean Basin Initiative and the Andean Trade Preference Act, allows duty-free
ethanol imports from those countries as long as the ethanol is produced from within their own
country. The purpose of this program is to encourage economic development in the Andean and
Caribbean region, and thereby help fight poverty and drug trafficking, but to date, these trade
agreements and preference programs have not led to significant ethanol imports to the U.S.
85
3.4.10.2
Biodiesel
The biodiesel industry has been developing in the U.S. since 1991. Biodiesel production capacity
in 2004 was 100 to 110 million liters. The potential capacity in 2030 is estimated to be 20 to 40
billion liters. Most of the biodiesel is made from soybean oil. Other current and emerging
feedstocks include recycled vegetable oil (restaurant grease), canola oil, tallow, yellow grease,
trap greases, etc.
The main uses for biodiesel are: a) conventional diesel fuel lubricity additive (up to 2.0vol%) for
Ultra Low Sulfur Diesel; b) “B20” - an EPACT alternative fuel equivalent (20vol% biodiesel) for
AFV fleet acquisition credits; and c) “B100” - a clean fuel for niche markets (e.g., marine, home
heating oil, etc.). Its main limitations are: a) increased NOx exhaust emissions; b) Limited overall
emissions benefits (at B20 and higher); c) quality control, cold weather operability, and; d) limited
supply and high cost of production.
The American Jobs Creation Act of 2004 included the first biodiesel tax incentive policy in the US.
A Federal excise tax credit of about US$0.01 per percentage point of agri-diesel, blended with
petroleum diesel, is expected to increase demand from 30m gallons/yr to more than 124 million
gallons/yr. The tax credit is effective for 2005 and 2006, and it is estimated that every 100 million
gallons of biodiesel demand increases soybean prices by about US$0.10 per bushel.
3.4.11 Cuba
At one time, Cuba was the world’s most important sugar producer and exporter. Production has
fallen from over 80 million tons cane in 1990, to 35 million in 2002, 24 million in 2004, and around
15 million tons cane in 2005, due to a series of hurricanes and droughts that have devastated its
crop area. In addition, a lack of investment in infrastructure has forced the closing of many mills.
Since 2002, the government has tried to restructure the industry, closing 71 of the 156 mills, and
reallocating 60 percent of the planted area to develop different agricultural products for the
internal market, to boost forests and fruit trees as well as other agricultural activities. This effort
has failed to improve the industry and some observers believe that only 40 to 50 mills will be
operational next year.
3.4.11.1
Cogeneration from Sugarcane Biomass
The total primary energy supply in 2002 was 6.9 million tons of oil equivalent of which 64 percent
came from crude oil, 26 percent from sugarcane bagasse, 6 percent from gas, 3.3 per cent from
wood and 0.1 per cent from hydropower. Eighty-six percent (86%) of the total electricity
consumption of 15,700 gigawatt-hours came from oil, 7 per cent from gas, and only 0.7 percent
from hydropower. Electricity from sugarcane biomass based cogeneration can supply over 25
per cent of Cuba’s electricity demand. Using steam saving measures and high pressure boilers
with condensing extraction steam turbines it is possible to export 100 kilowatt-hours of electricity
per ton of cane throughout the year, from bagasse and sugarcane trash (leaves and tops). The
total electricity consumption of 16,000 gigawatt-hours will require 40 million tons cane per year to
supply 4,000 gigawatt hours to the grid, and this level of sugarcane production can be easily
regained.
The first demonstration cogeneration project was installed at the Hector Molino sugar mill in 2000,
with assistance from Global Environment Facility (GEF). This sugar factory mills nearly 900,000
tons cane per year. The main objectives of the project are to reduce fossil fuel-based carbon
emissions in order to mitigate climate change by exporting a significant quantity of electricity to
the national grid to replace imported fossil fuel consumption. The main features of the ‘‘Héctor
Molina’’ project are: a) high pressure steam boiler (82 bar, 525ºC); b) condensing-extraction
steam turbogenerator (CEST); c) operation 8,000 ha/year; d) consumption of sugarcane crop
residues (trash) and bagasse as fuel, to be supplied by the Héctor Molina sugar mill (capacity
7,000 tons of milled cane/day); e) low consumption of process steam at the sugar mill (340 kg
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steam/t of milled cane), and; f) 155 kWh gross cogenerated electricity/tn of milled cane, and 109
kWh exported electricity/tn of milled cane.
The power plant at Hector Molino operates 8,000 h/year and supplies 97.3 GWh to the grid in the
sugarcane season, and 166.1 GWh during the off-season, thereby decreasing carbon emissions
by 600,000 tons C, over the 25-year lifetime of the plant. The project cost was US$1,725/kWe, of
which 70 per cent was the ‘‘turnkey’’ cost of the power plant. The 25-year levelized cost of the
electricity production is estimated to be 6.6¢/kWh (without taxes). This corresponds to the project
having an internal rate of return of 12.5 percent over 15 years. It is anticipated that the replication
of the project will further reduce the levelized electricity cost to 5.6¢/kWh.
The replication of the project to 34 Cuban sugar mills, that have been identified as able to support
similar projects, will increase the installed generation capacity to 1,000 megawatts, the energy
production to over 3000 GWh/year, and reduce emissions by more than 700,000 tons Carbon
annually. The projects being planned will consume only biomass as a fuel and operate
throughout the year; they are of two types: a) energy efficiency and increased cogeneration
capacity in the sugar mill, and; b) new cogenerating power plants annexed to sugar mills.
Funding sources for these projects are estimated to be of the credits-to-exports and commercial
types. New cogeneration power plants projects may be implemented via foreign investment. As
a next stage, the executing entities have considered undertaking feasibility studies that will allow
decisions to be made on the continuation of arrangements with possible funding entities or
negotiations with foreign investors interested in project development.
3.4.11.2
Ethanol
Sugarcane based ethanol is being given high consideration and focus within Cuba’s national
energy policy, since it would: a) create considerable economic benefits in new investments and
employment creation; b) support the sugarcane industry, preserving a large number of
agricultural jobs, that otherwise would have been lost, and; c) support the national balance of
payments by reducing the demand for imported oil and creating a new export revenue source.
Cuba has the sugarcane production capacity to compete with Brazil as a major exporter, and its
proximity to the US gives it a price advantage over Brazil.
During Brazilian President da Silva’s visit to Cuba, in 2003, a $20 million fuel ethanol production
agreement was signed between Brazil and Cuba. This aid financed the planting of approximately
400,000 tons of sugarcane and the construction of a 100,000-liters per day ethanol processing
plant. Used as a 10 percent blend, this quantity of ethanol represents a six percent reduction in
the imported gasoline demand of 1.7 million liters of gasoline per day. Ethanol production is
being seen as a one of the new initiatives aimed at the reviving the sugar sector, reducing oil
import bills, reducing carbon emissions and providing energy security in a sustainable way.
3.4.12 Denmark
Energy production from renewable resources has been an important component of Denmark’s
energy supply since the 1970’s oil crisis. At that time, Denmark was totally dependent on
imported coal and oil. The use of renewable energy has contributed to security of supply, and to
better management of environmental pollution. Furthermore, the development and practical
application of renewable energy technologies in Denmark has promoted growth through exports
and new jobs. From 1992 to 2005, energy equipment exports increased their share of total
exports by a factor of 10. Exports of energy equipment are currently valued at DKK$30 billion per
year.
While wind energy dominates the renewable energy electricity supply (which is 25 per cent of the
total domestic electricity consumption), biomass is the single most important source of renewable
energy in Denmark, contributing 12 per cent of the total energy consumption. The development of
biomass capabilities started in the 1980’s, when farmers were prohibited from burning the large
87
amounts of surplus straw in the fields. The straw became a commodity and the fire was ‘moved’
into the boilers of 120 district heating plants for cities and villages, and into 100,000 smaller boiler
installations for households, enterprises and institutions. Wood is also widely used. The need for
space-heating dominates due to Denmark’s northern hemispheric location. Danish biomass
sources are now mostly straw from agriculture, wood from forestry, waste wood from industry, the
biodegradable part of municipal solid waste (MSW), and to a lesser extent, biogas from manure
from pig and cattle farming. Consumption of biomass for energy production in Denmark more
than tripled between 1980 and 2005, and it is now 100 PJ/year, which is two-thirds of the total
technical potential of domestic biomass resources.
The extensive and advanced use of biomass has been facilitated to a large extent by the Danish
Parliament'
s “Biomass Agreement” of 14 June 1993, according to which the big power plants are
to use 1.2 million tons of straw, and 0.2 million tons of wood chips, annually, for combined heat
and power (CHP) production. Biomass, and in particular straw which has become a Danish
‘specialty’, is a more difficult fuel for power production than coal, oil and natural gas. Under the
Biomass Agreement, the Danish utility companies have conducted a comprehensive research
and development program to handle the biomass challenge. As a result, 15 biomass-based CHP
plants of up to 40MW electricity are in operation today, and straw and wood now contribute five
percent of the total Danish electricity consumption.
The public framework for the promotion of bioenergy use comprises exemption from various fuel
taxes when used for heating. For electricity production based on biomass, there is a substantial
element of public support in the form of an additional ‘green’ reward on top of the core market
price per KWh, as specified in the Electricity Supply Act. Within the public applied-energy
research and development programs, biomass has in recent decades been the largest single
focus area. Denmark will increasingly focus its research and development efforts on the
development of liquid biofuels, in synergy with the development of new technologies for the
transformation of biomass into heat and power. The goal is to further integrate the supply of
88
energy for all sectors in line with the Danish tradition for holistic technological solutions.
3.5
Challenges and Opportunities to Developing an Agro-Energy Industry
There are three main challenges to the development of agro-energy industry for the production of
biofuels to replace imported petroleum fuel in the region. They are: the development of the
institutional relationships between a number of state, private and community actors; ownership at
the national and local levels; the production of raw material and its effective transportation;
capacity; supportive policies and legislation, and; decision making process.
3.5.3
Institutional Relationships
Developing biofuels industries in the countries will require a more synergistic working relationship
between a number of institutions in the public and private sectors. Public sector institutions will
have to work in an integrated manner to drive the development of the local market for biofuels
and in so doing address the growing economic vulnerability of the economy to agricultural
commodity and petroleum price increases. Private sector participation will be critical in all areas
but especially in transportation fuel production and distribution. Several Government Ministries
and Departments will have to work closely to address the diverse nature of the biofuels
production and usage process including those dealing with Lands and Agriculture, Energy,
Finance, Transportation, Industries, Power and Petroleum, Environment and Water.
Inter-sectoral policies that create linkages between the energy sector and those that impact upon
the production are necessary and will prove quite challenging in light of prevailing vested
interests. Effective working relationships will be required between these entities to ensure that
the land resources be made available and use monitored. Significant production of biofuels
88
Bünger, 2005
88
would likely impact on government revenues, if no corresponding tariffs are placed on locally
produced biofuels.
The Finance portfolio must, therefore, be fully onboard in order to have smooth implementation.
In the majority of cases, the roles required by the institutional shareholders in the development of
national biofuels industries are significantly different from normal business. The reduction in
revenue should be more than compensated for by the increased money in circulation and
available for taxation.
3.5.4
National and Local Ownership
From the initial stages of the development of a biofuels industry, it is important to involve the
stakeholders in the process. A sense of ownership gives the initiative greater chances of
success. The local rural population has to be involved in the planning and implementation so that
stakeholder feedback is incorporated into project deign from the beginning. It is also necessary
that local stakeholders derive maximum benefits from the project. Involving women in villagelevel biofuels projects are more likely to benefit them.
Wide public dialogue, demonstration for education and outreach are important to achieve wide
possible public understanding about the cost and benefits of biofuels. Tough financial issues such
as pricing for raw material and percentages of profits shared among the direct production by
stakeholders (land owners, workers, and transport and factory operators) needs to be addressed
through participatory processes. National ownership will help make the political environment more
conducive to the effective use of appropriate lands for biofuels production. National dialogue will
also provide baseline information to help in the formulation of policies on land use for biofuels
production, the kinds of incentives and disincentives that will be necessary to ensure that land
use is sustainable and there is maximum use of suitable land for biofuels production.
3.5.5
Raw Material Production and Transportation
Key requirements for sustainable and reliable production of raw material are technology, research
and development coupled to good extension, financial benefits linked to a secure market, and
adequate land resources. Labor issues and transportation management are key challenges that
will have to be addressed through public dialogue. Incentives to encourage good worker attitude
and productivity need to be devised to ensure adequate supply of raw material to the biofuels
industry. Biofuels production requires significant transportation of raw material to the production
facilities and economic and reliable transportation systems.
There are a number of potential crops that can be cultivated by farmers to provide raw material
for biofuels production. The most well-known worldwide is sugarcane, and several trees such as
eucalyptus and leucaena. The land resource base is suitable to a range of crops as shown in
Table 3.5.1 below. Each crop does, however, have its differences in terms of labor requirement,
inputs, and nature of the raw material produced. The major differences between agro-energy
crops and conventional food crops include tolerance to adverse climatic and weather conditions
as well as relatively non-perishable compared to food crops, for example. This characteristic of
the raw material is very attractive given that vulnerability to weather and post-harvest losses are
significant reducers of the economic benefits derived by farming households on their investments.
89
Table 3.5.1:
Potential Biofuels Feedstock Substitutes for Petroleum Fuels
Crop/Plant
Petroleum product
Substituted
Seed
bearing
shrubs -Jatropha C
Castor
Cassava
Diesel for Transport or
for generation
Coconut
Oil Palm
Fast
Growing
Trees
Fast
Growing
Legumes
trees
Sugarcane
Energycane
3.5.6
89
Primary
Biomass
Yield
Seeds
Secondary
Biomass
Yield
None of
Consequence
Farmers
Experience
with Crop(s)
Very limited
Gasoline
Starch tubers
Diesel for transport
Diesel
for
power
generation
Diesel for transport
Diesel
for
power
generation
Diesel or Fuel Oil
Power generation
Oil
None of
Consequence
Shells
Grown traditionally
for food
Grown widely
Oil
Shells
No experience
Wood
None
Very limited
Diesel or Fuel Oil
Power generation
Liquid Petroleum Gas
Leaves
Wood
Very limited
Gasoline
Diesel for transport
Diesel or fuel oil for
power generation
Gasoline
Diesel for transport
Diesel or fuel oil for
power generation
Sucrose
Fibers and
Trash
Fibers and
Trash
Sugars
Long experience
Very limited
Developing Capacity
The high oil prices during the 1980’s was a catalyst for a number of biofuels initiatives – most
notable were the Philippines program for decentralized power generation from fast growing tree
plantations, and the Brazilian program for the production of ethanol from sugarcane. While there
are many explanations for the significant difference in the results of both programs, the most
relevant to the development of biofuels in the Caribbean are: the choice of market; the best-suited
crop(s); and the land resource requirements and availability. Brazil chose to produce fuel for
internal combustion engines – Henry Ford had designed his car for ethanol before John D.
Rockefeller unlocked oil-refining technology more than a century ago. In Brazil, the raw material
was to come from sugarcane, a crop that is part of the history of Brazil from it beginnings.
The Philippines, on the other hand, chose a much more risky path. Despite having the option to
duplicate Brazil, the Philippines chose to try and implement a program with a crop that had no
history of cultivation, a technology whose efficiency for converting the woody biofuel produced to
electricity was very low, but additionally, was even lower as the plants were small scale. Brazil
had significant national capacity and was able to efficiently develop its ethanol program. The
Philippines, on the other hand, depended significantly on external capacity and was not as
successful.
89
Need Source
90
Developing biofuels industries will require putting in place a dedicated capacity Implementing a
biofuels program will require putting in place a dedicated capacity development strategy that
provides the individual and institutional capacity necessary to plan and manage the energy sector
and sustainable production of biofuels raw materials by the agricultural sector. There are a
number of critical technical skills that are essential for the implementation of a successful biofuels
program. Trained technical personnel are required for:
a)
Breeding high yielding, disease resistant varieties for particular agronomic
environments and the development of environmentally benign pest management
technologies;
b)
Research and extension services to monitor the performance of selected varieties
under field and processing conditions, to enable pests and diseases to be identified
and controlled before they become a serious problem, and to inform the plant breeders
and farmers;
c)
Operating, maintaining and managing a modern, sophisticated ethanol plant optimally;
d)
Designing and implementing environmental best practices to protect the environment
and for the long-term sustainability of the industry;
e)
Downstream activities including transport, storage, blending and distribution, and;
f)
Other activities associated with ethanol production such as infrastructure, logistics, land
use, plant configurations, the use of co-products, and disposal of wastes.
g)
Management of other activities associated with biofuels production such as
infrastructure, logistics, land use, plant configurations, the use of co-products, and
disposal of wastes.
Capacity development is also needed on the part of governments to be able to have the requisite
planning capacity to put in place policies and the legal framework necessary to support the
industry development. In many cases, based on existing agreements on the sale of fuels and/or
electricity, new legislation may be required such as power purchase agreements that provide the
macro-economic framework to catalyze non-traditional investment in electricity generation.
There is sufficient experience with some of the biofuels in developing countries, such as Brazil,
India, Mauritius and Cuba, for much of the capacity building required to take place under SouthSouth cooperation agreements.
3.5.5
Policy and Legislation
The development of natural resources based industries requires supportive policy and effective
legal framework to drive the process and to provide comfort to the private sector. Biofuels
industries need supportive energy, agricultural, and environment policies that view each barrel of
oil imported for land transportation or electricity generation as a loss of income to farmers. The
energy policy should support, as first priority, maximum energy from biofuels in the transportation,
electricity generation and domestic sectors. Private sector participation in electricity generation
will require policies to promote power purchase agreements between the utilities and the
producers of biomass based power.
National investment policies should be formulated to encourage industry workers to be
shareholders. Policy and legislation actions will be necessary to establish raw material prices,
linked to certified land use to ensure environmental sustainability. Land utilization policies should
give priority to identifying lands that are suitable for sustainable biofuels production. Where such
lands are not in managed production, they should be made available to interested private sector
parties with an interest in production of raw materials or biofuels. Agricultural research policy
should give priority focus to building capacities in crop varieties with a high biomass yield such as
“energy cane,” higher copra producing coconut varieties, fast growing trees and grasses, etc.
Vehicle import policy will be a major determinant of the success of biofuels for transportation fuel,
and tariff instruments have to be used to favor the importation of biofueled vehicles. Product
91
standards need to be developed and enforcement procedures need to be incorporated in the
legal framework of the country. A regulatory framework has to be put into place that can
determine and implement a pricing system for biofuels based on the energy value of the raw
material and linked to the international price of oil.
3.5.6
Decision Making
The increasing interest in the trade of carbon emissions represents one potential mechanism
where farmers may be able to get additional financial benefits from biofuels production. This
could serve as a first step to farmers getting financial rewards for sound land use. Such rewards
would provide additional incentive to get farmers on very fragile lands who now tend to grow
short-term cash crop, to produce biofuels feedstock.
The key requirements for biofuels production begins with clear, identifiable and quantifiable
markets; the availability of land resources which would not bring about competition with domestic
food production; appropriate weather and climate regime; proven experience with the production
of the crop(s) by local farmers; conversion and end use, at least at commercial demonstration
scale; commitment on the part of government to enact and enforce requisite policies and
associated laws to ensure that the market is developed for biofuels. Based on the requirements,
not all countries in the region are currently positioned to pursue biofuels industries.
92
CHAPTER 4
IICA’S STRATEGY FOR DEVELOPMENT
OF BIOFUELS INDUSTRIES IN THE
CARIBBEAN REGION
93
4.0
IICA’s STRATEGY FOR DEVELOPMENT OF BIOFUELS INDUSTRIES IN THE
CARIBBEAN REGION
Agro-energy is based on the conversion of biomass produced by the interactions of vegetation,
solar radiation, water and nutrients into energy. The conversion of biomass into energy services
can be done through different processes, such as fermentation or thermal conversion as
discussed in the Technical Paper (Appendix 1). The principal users of biomass for energy are
poor rural households, where it is used for cooking and/or heating. The high energy prices for
petroleum in the early 1980s, catalyzed interest in the derivation of energy from the dedicated
production of crops such as sugarcane and fast growing forestry species. The return to lower oil
prices, a decade later, resulted in the lessening of interest and in many cases, abandonment of
biomass for energy projects.
IICA, with a mandate for the promotion of rural development, recognizes that increasing energy
prices poses a threat to rural development by reducing access to energy services that are a
prerequisite for improving household income. Secondly, it takes increasing amounts of capital out
of rural areas. Agro-energy has the potential to minimize this situation and at times reverse this
situation, and in the process address a number of social and environmental issues. As a first
step in implementing this mandate, the Institute has developed a strategy document for a bioenergy program for Latin America with a focus on the Caribbean.
Based on the lessons learnt from successful and not so successful biofuels programs in
developing and developed countries, the socio-economic and environmental challenges facing
the Caribbean countries, the current and projected global and regional energy situation and, the
existing capacity of the countries, IICA’s Regional Biofuels Industries Development Initiative will
be comprised of four programs:
(i) Capacity Development and Public Education;
(ii) Catalyzing the Production of Biofuels for Transportation;
(iii) Catalyzing the Production of Biofuels for Electricity Generation;
(iv) Development of Small and Medium Biofuels Enterprises.
IICA will give priority attention to countries where the potential is considered to be excellent or
good for biofuels development as shown in Table 4.0.1.
Table 4.0.1:
Crop(s)
Potential of Selected Caribbean Countries as Biofuels Producers and
Excellent Potential
Lead Crop(s)
Biofuels Market
Belize
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Transportation Fuels
Power Generation
Guyana
Cuba
2004 Imported
Petroleum
Products
(US$000’s)–
{Potential
Biofuels Market}
73,185
Transportation Fuels
Power Generation
169,004
Transportation Fuels
Power Generation
1,449,014
94
Dominican Republic
Good Potential
Barbados
Jamaica
Trinidad
Tobago
Suriname
and
Some Potential
St. Kitts and Nevis
St. Lucia
Dominica
Haiti
Grenada
Antigua
Barbuda
and
St. Vincent and
Grenadines
Limited Potential
Montserrat
4.1
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Transportation Fuels
Power Generation
1,712,591
Sugarcane
Transportation Fuels
Power Generation
Transportation Fuels
Power Generation
209,451.3
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
928,646.2
Transportation Fuels
1,258,352.8
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Transportation Fuels
Power Generation
162,381.4
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Sugarcane
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Oil Seeds and
Fast
Growing
Trees
Transportation Fuels
Power Generation
26,668.7
Transportation Fuel --Diesel
Power Generation
82,884.9
Transportation Fuel
Diesel
Power Generation
14,686.4
Fast
GrowingTrees
Power generation
--
Transportation Fuels
Power Generation
Transportation
Fuel
Diesel
Power Generation
Transportation
Fuel
Diesel
Power Generation
Transportation Fuel
Diesel
Power Generation
-
--
29,282.7
--
75,088.2
--
23,136.8
3,154
Program Rationale
The United Nations Development Programme (UNDP) report on Vulnerability of Small Island
Developing States, published in August 2002, identifies dependence on imported energy sources
as a major reason for the high economic vulnerability of small island states. As shown in Table
4.1.1, the region imported a total of 44 million barrels of fuel for use predominantly for
transportation and electricity generation, costing some US$6.5 billion. A significant percentage of
the region’s land resources is being used unsustainably resulting in growing flooding and
95
damages to property, and there is a growing need to reverse this trend; this will require fiscal
incentives and stable markets.
The ongoing degradation of the natural environment is in part a result of increasing numbers of
the population depending on the environment’s resources for survival. This results in poor land
use as well as poor fishing practices. This trend has to be reversed if the land and coastal
resources are to be protected for future generations. The Caribbean SIDS cannot achieve
sustainable development if they continue the trend of degrading critical ecological assets like land
and biodiversity and coastal ecosystems. Reversing this trend requires the generation of
sustainable rural employment to replace those being lost in export agricultural commodities biofuels production represents one proven option.
The high degree of vulnerability of the Caribbean SIDS, to the projected impacts of climate
change, will, according to the IPPC, require the regions’ agricultural sector to adapt to different
weather conditions. One of the main challenges to adaptation will be adjusting to the predicted
highly variable rainfall patters in the future. Increased variability in rainfall will represent a
significant challenge for farmers without access to irrigation. This will require the transitioning of
agriculture to more resilient crops. Among the most resilient crops with which the regional farmers
have familiarity and knowledge are sugarcane and palms. These crops are, however, being
grown in declining quantities due to poor markets; these crops, however, represents the future of
agriculture as part of adaptation to climate change. Biofuels represents both mitigation and
adaptation options for global climate change. Production of feedstock for biofuels is significantly
less sensitive to rainfall variations than the current crops produced by the majority of small and
medium-size farmers. Biofuel feedstock production therefore represents reduced vulnerability for
agriculture in the climate regime dictated by global warming.
Table 4.1.1:
Regional Fuel Imports 2000 - 2004 (000’ bbl) (US$ 000’)
90
Gasoline
2000
15,754.1
2001
15,753.0
2002
17,508.2
2003
24,859.5
2004
26,279.4
Diesel
24,851.4
25,236.6
28,089.1
33,771.8
34,511.8
Total
Gasoline &
Diesel (000’
bbl)
Total Cost
(US$) Gasoline &
Diesel
40,605.5
40,989.6
45,597.3
42,989.7
44,550.7
3,731,042.21
3,258,426.17
3,851,725.25
5,432,383.62
6,501,131.93
4.2
Program Outlines
4.2.1
Capacity Development
As discussed in the international experiences with the production of biofuels, the development of
biofuels programs at the national level has tremendous capacity development requirements
ranging from information support systems to technical assistance, coordination, and training for
the development of the range of skills needed to undertake biofuels, from the agricultural
production to the conversion and distribution and use. However, a lot of these skills and capacity
exist at the national level, like Brazil, but the challenge is to integrate them. This will be a major
focus of the IICA strategy implemented through a series of partnerships descried in Chapter 5 of
this document
90
Need Source
96
4.2.2
Biofuels for Transportation
The second component of IICA’s biofuels strategy for the region is based on the increasing
quantities of petroleum imported for transportation. Based on the historic trend, the region’s
consumption of liquid fuel for transportation in the form of gasoline and diesel is projected to
continue increasing in the future, however, the rate of increase will be influenced by the prices.
Even if there is no increase in the quantities of imported oil and gas, the cost will increase
significantly, further improving the already solid prospects for viable biofuels industries for
transportation fuels and in particular ethanol and biodiesel.
4.2.2.1
Ethanol Production
As detailed in Appendix 1, the region’s sugar producing countries have significant production
potential, and already some countries are beginning the process of using a mix of ethanol and
gasoline for spark ignition vehicles. Although this use is based on ethanol as an octane enhancer,
replacing MTBE, it is putting in place valuable experience in the use of alternate fuels for
transportation. As documented in the Technical Paper, the use of ethanol in the anhydrous form
comprising a blend of up 25 per cent with gasoline has been used as transportation fuel for
decades in spark ignition vehicles in Brazil.
In other countries, new formulation such as E85, a blend of 86 per cent anhydrous ethanol and 15
per cent gasoline, is used in the new generation of spark ignition vehicles in the US and Brazil. In
Brazil, ethanol with about four per cent water is used as the fuel in a growing number of vehicles.
In 2004, nearly half the cars sold in Brazil were 100 per cent ethanol fueled. Experience from
Sweden, over more than a decade, is also proving the technical feasibility of using ethanol in
compression ignition. Based on the quantities of gasoline imported, as shown below in Table
4.2.1, there is a large market to drive the development of ethanol production, and consequently
will be the major biofuels industry promoted by IICA.
Table 4.2.1:
Regional Gasoline Consumption (000’s Barrels)
Country
Antigua
Bahamas
Barbados
Belize
B.V.I
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Jamaica
Montserrat
St. Kitts And Nevis
St. Lucia
St. Vincent
Suriname
Trinidad/Tobago
Turks & Caicos
91
2001
252.9
1,603.0
722.2
687.4
211.1
3,085.1
132.1
d/na
180.5
749.0
4,167.7
15.0
106.3
345.7
140.0
587.0
2,768.1
0.0
2000
253.4
1,622.0
700.8
716.5
185.8
3,200.9
119.9
d/na
156.9
717.0
4,164.5
14.8
98.2
336.6
72.1
574.0
2,820.7
0.0
Need Source
97
91
2002
263.0
1,667.1
750.3
677.9
219.5
3,702.1
137.4
d/na
187.7
723.5
4,519.5
18.0
127.6
414.8
168.0
610.0
3,321.7
0.0
2003
304.5
1,875.0
776.6
381.7
242.6
3,737.8
115.4
7,777.3
183.7
717.3
4,388.4
15.9
100.6
345.4
162.0
721.6
2,887.8
125.9
2004
304.5
1,692.0
811.7
354.7
268.1
4,447.6
106.4
8,446.4
163.4
747.5
4,398.0
18.5
132.1
351.4
167.3
634.6
3,101.3
133.9
TOTAL
4.2.3
15,754.1
15,753.0
17,508.2
24,859.5
26,279.4
Biodiesel Production
Unlike the substitution of ethanol for gasoline in spark ignition engines, there is no large-scale
substitution for diesel fuel in compression ignition vehicles. However, there are a number of
small-scale successes in the use of plant oils in the form of refined coconut oil, as well as
processed waste edible oil and oil from the seeds of plants such as Jatropha and oil palm,
referred to as biodiesel. The region with the most experience in the production and use of
coconut oil for fuel in diesel engines is the islands of the Pacific, and was catalyzed by the poor
prices for copra. As pointed out in the Technical Paper, a number of other countries including the
US, Latin America and European countries are also producing biodiesel.
Table 4.2.2:
Regional Diesel Consumption (000’s Barrels)
Country
Antigua
Bahamas
Barbados
Belize
B.V.I
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Montserrat
St. Kitts
St. Lucia
St. Vincent
Suriname
Trinidad/Tobago
Turks & Caicos
Total
92
2000
291.8
2,687.0
550.6
529.0
164.5
11,649.8
115.6
d/na
307.7
1,950.9
2001
281.0
2,832.0
550.4
609.5
171.1
11,056.5
128.9
d/na
309.7
1,997.2
2002
292.2
2,945.3
537.0
709.4
177.9
13,267.8
134.1
d/na
322.1
1,997.5
2003
315.5
2,606.0
614.7
572.4
231.3
10,725.7
157.8
7,619.0
242.7
2,292.8
2004
386.4
2,966.0
673.0
651.3
231.8
11,548.1
147.5
7,543.2
281.9
1,911.5
2,440.6
29.2
202.6
384.0
191.6
1,516.4
1,840.2
d/na
24,851.4
3,334.7
30.4
278.1
425.9
200.1
1,600.0
1,431.1
d/na
25,236.6
3,227.3
31.6
333.7
511.1
222.1
1,664.0
1,716.0
d/na
28,089.1
3,923.7
33.7
283.1
541.8
324.1
1,255.0
1,913.1
119.4
33,771.8
3,979.0
37.3
229.3
582.4
343.6
945.8
1,936.7
117.0
34,511.8
In looking at crop production across the region, there is very limited cultivation of coconut and
there is no commercial growing of either palm oil or Jatropha across the region. Research on the
regional experience in Latin America and the Caribbean shows only one commercial scale
attempt at biodiesel production using oil seeds; this was in Nicaragua, and involved the growing
of Jatropha Carcus L. Given the nature of land resource endowment in the majority of the
countries and the climatic conditions, there are two potential crops that can produce raw material
for the production of biofuels. Based on the information from the Nicaraguan experience, and as
shown in Table 4.2.5 below, the region has significant potential for production biodiesel. It is
projected that at half the yield levels for Jatropha oil seeds achieved in Nicaragua, ten per cent of
the regional land area would produce about 50 per cent of the diesel fuel used in 2004.
While the production of ethanol from sugarcane will, to a large extent, represent a transformation
of the sugar industry, the development of biodiesel industries will be developed from a much
lower base. As pointed out earlier, with the exception of a few countries that are still domestic
92
Need Source
98
coconut oil producers, there is no substantial existing capacity or infrastructure on which to build.
The strategy will therefore focus on the development of small- and medium-size enterprises
located in rural areas where farmers will be provided with incentives for producing the feedstock
using either coconut or Jatropha Carcus. National strategies will be developed for each interested
country with IICA playing the catalytic role - providing planting material, and establishing research
and demonstration activities in collaboration with national governments.
4.2.4
Biofuels for Electricity Generation
The production of biofuels for power generation is the third component of the IICA’s strategy for
development of regional biofuels industries. This component of the strategy will target the
substitution of fuels for power generation that in 2004 represented some 29 million barrels of fuel
as shown in Table 4.2.3. Unlike transportation fuels where there are very specific requirements as
to the type of feedstock to produce the biofuels that will be able to replace gasoline and diesel, in
the case of power production there are a number of fuels that can be used for the production of
power. The range of feedstock includes bagasse, wood, biogas, producer gas, and plant oils.
This wide range of feedstock means that all countries in the region have some potential to
implement activities to produce biofuels for power generation.
The type of feedstock to be used in each country will depend on the availability and nature of the
land resources and rainfall regime, as well as the kind of power generation system that exist.
Most popular systems for power generation is diesel generator sets, these are used in all the
93
smaller countries where the total installed generating capacity is less than or in the region of
100 megawatts. In the larger countries, steam turbines and slow and medium speed diesel
engines are preferred with back up and peak diesel generator sets. Substituting for diesel or
heavy fuel oil in generator sets can be done either with plant oils or using either thermal
conversion technology to make producer gas or anaerobic fermentation to make biogas. The
choice of which technology to use depends on the type of feedstock. If the feedstock is in solid
form like wood, the producer gas technology would be used; for non-wood material such as
animal waste, anaerobic fermentation would be used. Information on these conversion
technologies are discussed in the Technical Paper (Appendix 1).
Table 4.2.3:
Fuel Consumption by Electric Utilities up to 2025 @ 5% per annum growth
94
(million barrels)
Island State
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
93
94
2004
2010
2015
2020
2025
Million
Barrels
0.56
4.75
1.24
0.14
13.69
0.07
0.20
0.74
6.23
0.19
Million
Barrels
0.75
6.37
1.66
0.19
18.35
0.10
0.27
1.00
8.34
0.25
Million
Barrels
0.96
8.12
2.12
0.24
23.42
0.13
0.35
1.27
10.65
0.32
Million
Barrels
1.22
10.37
2.71
0.31
29.89
0.16
0.44
1.62
13.59
0.41
Million
Barrels
1.56
13.23
3.46
0.40
38.15
0.21
0.56
2.07
17.35
0.52
These countries include all the OECS countries.
Author’s own calculations based on data from SRC PETSTATS. Note: d/na – data not available
99
Saint Lucia
St.Vincent and
the Grenadines
Suriname
Trinidad & Tobago
TOTAL
0.46
0.61
0.78
1.00
1.27
0.16
0.49
0.02
28.95
0.21
0.66
0.03
38.79
0.27
0.84
0.03
49.51
0.34
1.08
0.04
63.19
0.43
1.37
0.05
80.64
For the countries that are sugar producers the strategy would be to implement more efficient
production of combined heat and power. The amount of power that could be produced is
estimated in Tables 4.2.4, which shows estimated power production from bagasse using systems
of different efficiencies. Bagasse will only be available during the sugarcane harvest period for
these facilities to provide year-round capacity and thereby derive maximum benefits;
supplemental fuel would also be needed. As discussed above, these supplemental fuels can
take a number of forms as steam boilers are being utilized. Supplemental fuels can come in the
form of cane trash which is usually left or burnt-off in the field, and wood from fast growing tree
plantations established on lands marginal for food crops or sugarcane production. Supplemental
fuel could also be produced in the form of plant oil (liquid biofuels) from coconut or Jatropha
Carcus plantations. As shown in the Table 4.2.3, it is estimated that based on a five per cent
annual increase in demand for power that, by 2020, the demand for fuel to generate electricity will
more than double providing the foundation for the development of biofuels for power industry.
Table 4.2.4:
Country
Barbados
Belize
Guyana
Jamaica
Saint Kitts &
Nevis
Trinidad &
Tobago
Total
Electricity from the Sugarcane Sector
95 96 97
Electricity generation [GWh]
423,940
1,109,484
3,000,000
1,999,667
176,965
10.60
27.74
75.00
49.99
4.42
19.08
49.93
135.00
89.99
7.96
31.80
83.21
225.00
149.98
13.27
55.11
144.23
390.00
259.96
23.01
Current
generation from
fossil fuels
819
112
724
6,585
103
976,746
24.42
43.95
73.26
126.98
6,076
7,688,803
192.22
346.00
576.66
999.54
12,662
Sugarcane
20 bar
31 bar
45 bar
*
Production [t] & 325 ºC & 440 ºC & 440 ºC
82bar
& 525 ºC
Developing biofuels industries for power production would require new relationships between the
energy sector and the sugar industry for the purchase of power on terms beneficial to both
parties; this will require new policy and legislation in the majority of countries.
4.2.5
Development of Small and Medium-Size Biofuels Enterprises
The development of small- and medium-size enterprise is intended to minimize the negative
economics associated with the transportation of the relatively low energy density inherent to the
raw material for biofuels production, when not produced over contiguous large areas of land with
friendly terrain where mechanized systems of production, harvesting and transportation is
possible. The small- and medium-size biofuels enterprises will utilize three primary sources of
raw materials: woody biomass, biomass waste and plant oils. The applications will be fuels for
95
Extracted from DIFID study – page
FAOSTAT
97
E4tech analysis on data from the 3rd CARENSA Workshop, November 2004, by Vikram Seebaluck and R. Mohee,
University of Mauritius; US Department of Energy, Energy Information Administration
96
100
engines used for irrigation or small-scale power production in rural areas, lighting and cooking,
and as a substitute for diesel fuel in compression ignition engines
Table 4.2.5:
Projected Production of plant oil from Jatropha Carcus
Island State
Diesel
consumption
2004
M litres /yr
Antigua & Barbuda
Bahamas
61
472
Barbados
107
Belize
104
Cuba
Dominica
Dominican Republic
1,836
23
1,199
Grenada
45
Guyana
304
Haiti
Jamaica
for 10% diesel
substitution
43
2,269
10,982
75
4,838
34
21,497
2,756
Saint Kitts & Nevis
36
36
Saint Lucia
93
62
55
39
Suriname
150
16,382
Trinidad & Tobago
308
513
5,426
for 50% diesel
substitution
Jatropha
Jatropha
Area Jatropha Area /
Area Jatropha Area /
Area Jatropha Area /
required Total Land Area required Total Land Area required Total Land Area
%
000'ha 000'ha
%
000'ha
%
000'ha
3.3
7.5%
6.7
15.1%
16.7
37.7%
44
25.6
1.8%
51.2
3.7%
127.9
9.2%
1,387
1,083
TOTAL
for 20% diesel
substitution
Land
Area Jatropha
633
St.Vincent and
the Grenadines
98
62,041
5.8
13.5%
11.6
27.0%
29.0
67.5%
5.6
0.2%
11.2
0.5%
28.1
1.2%
99.6
0.9%
199.2
1.8%
497.9
4.5%
1.3
1.7%
2.5
3.4%
6.4
8.5%
65.0
1.3%
130.1
2.7%
325.2
6.7%
2.4
7.1%
4.9
14.1%
12.2
35.3%
16.5
0.1%
33.0
0.2%
82.4
0.4%
-
-
-
-
-
-
34.3
3.2%
68.6
6.3%
171.6
15.8%
2.0
5.5%
4.0
11.0%
9.9
27.5%
5.0
8.1%
10.0
16.1%
25.1
40.4%
3.0
7.6%
5.9
15.3%
14.8
38.2%
8.2
0.0%
16.3
0.1%
40.8
0.2%
16.7
3.3%
33.4
6.5%
83.5
16.3%
0.5%
294
589
0.9%
1,471
2.4%
The principal crops for providing raw material for small- and medium-size enterprises will either
be Jatropha or fast growing tress such as Leucaena, Acacia, or Eucalyptus depending on soil,
climate and market demand. The principal crops that are proposed is Jatropha which can be
cultivated by farmers in small plantations or as a mixed crops at the edge of farmlands or areas
prone to soil erosion. Farmers in the designated areas for production of raw material will have
the option of producing these crops as part of their existing agricultural systems either as
plantations or intercropping. As shown in Tables 4.2.5, 4.2.6, and 4.3.4, the economic and
environmental benefits at different levels of production are significant.
Based on international experience 62 per cent of the expenditure on plantation establishment is
estimated to be in the form of direct wages for unskilled labor. Employment generated is in the
region of 311 man days per hectare of plantation by the time seed production starts. Seed
collection is again labor intensive, and after the plantation has been established it will need 40
99
person days of labor per hectare . One hectare of Jatropha plantation will create employment
during the implementation of the project (first three years) of 311 person days and of 40 man
days per year, on a long-term basis. Apart from generation of employment in plantation and seed
collection there would be employment generation in storage of seed and oil extraction. Details of
employment generation on various components of plantation activities and expenditure on them
98
99
Assumption Jatropha yields: Dry seeds 5 tons/ha, Oil 1.7 tons/ha based on the Nicaragua experience.
Report of the Committee on Development of Biofuels, Planning Commission of India (2003)
101
are given in Annex 4. In the case of fast growing trees, Leucaena, Acacia, or Eucalyptus, a fullygrown energy plantation of 50 hectares can provide employment to around 40 persons on a
100
sustainable basis.
Table 4.2.6:
Value of Oil seed as substitute for Diesel Import based on 2004 Quantity
Diesel substitution
Diesel saved, M litres
Economic value
@ 70 $/bbl, M $
CO2 equiv. M tons
4.3
10%
543
364
1.47
20%
1,085
50%
2,713
727
2.93
1,818
7.33
Development of the Caribbean Biofuels Industry
The consumption of fuels to meet the region’s energy needs in 2004 cost in excess of US$6.5
billion. This represents the largest expenditure on import by the region and a major new market
for the region’s agricultural sector, as petroleum prices reach new highs in response to strong
demand and limited supply. Biofuels, in addition to being a potential replacement for petroleum
fuels and major product of the regional agriculture, will also help address a number of prevailing
environmental challenges. The analysis of fuel imports and use in the various countries show
that all countries with an active agricultural sector have potentially viable biofuels industries,
although with a different mix of products based on land resource endowment and national policy.
Biofuels industries can be classified as Liquid and Solid Biofuels Industry. The classification is
based on the form that the biomass is converted into for final use: Liquid Biofuels Industries
produce liquid fuels from varying forms of raw material using a range of technologies from
fermentation to distillation; and Solid Biofuels Industries where the biomass is converted to heat
and/or power through different forms of combustion. The conversion of the biomass feedstock is
necessary to overcome the major disadvantages of biofuels, which is that the raw material
contains inherent high quantities of water, and therefore low energy density compared to crude
oil. This means that there is relatively high transportation cost associated with moving the raw
material over distances. This is addressed by locating processing and/or conversion facilities
within determined distances of feedstock production. The conversion of raw material into biofuels
and then in electricity for export or consumption on site, or into ethanol/alcohol for export to
foreign markets, or for local fuel stations, represents the transformation of the low energy density
biomass into a high energy carrier. In this transformation, significant added value occurs, in the
area, boosting the local and adjoining economies.
4.3.1
Liquid Biofuels Industries
Liquid Biofuels industries will consist of ethanol for replacement of gasoline in spark ignition
engines and diesel in compression ignition engines and, biodiesel to supplement or replace diesel
fuels in transportation and electricity generation. The sugarcane growing countries have the best
potential to establish viable industries within the next three to five years. Preliminary assessment
shows that an even greater number of countries can produce biodiesel and biogas. The level of
investment is shown in Tables 4.3.1, 4.3.2 and 4.3.4.
100
“The Dendro Option for Future Energy Security of Sri Lanka”, Bio Energy Association of Sri Lanka, 2003
102
Table 4.3.1:
Estimated Cost of Ethanol Plants and operating costs
Cost Item
Capacity
102
Plant Cost
Equipment & Buildings
Total Construction Costs
Annual Operating Costs
Administration & Maintenance
Total Running Costs
101
Unit
Maui
Kauai
Ml / yr
US$
US$
57
29,142,857
38
21,714,286
4,720,000
33,862,857
3,598,000
25,312,286
15,471,333
10,364,296
5,307,463
20,778,796
4,095,890
14,460,186
US$
US$
US$
US$
Capital costs of industrial scale, fuel grade biodiesel plants show significant economies of scale.
A plant with a capacity of 10,000 tons/yr has a capital cost of 0.500 US$/liter, whereas a plant
103
with 10 times its capacity (100,000 tons/yr) has a capital cost of only 0.202 US$/liter . This can
be seen in the capital costs for the processing plant provided by the Austrian company Energia,
shown in Table 4.3.1. Energia supplies the processing plant only, which is provided in modular
form, and leaves the provision of tankage, services, infrastructure and buildings to its clients.
These plants can process both vegetable oils as well as tallow.
Table 4.3.2:
Capacity
Tons/year
20,000
40,000
60,000
Biodiesel processing plant costs
104
Euro million
Euro/liter
0.167
0.095
0.075
Details of capital costs of a complete Modular Processing Plant are given in Table 4.3.4. In 2003,
the total capital investment needed for a 70,000 tons/yr biodiesel plant was US$20.8 million,
giving a specific capital cost of 0.30 US$/liter.
3.8
4.3
5.1
101
Economic Impact Assessment for Ethanol Production and Use in Hawaii, Energy, Resources and Technology Division,
Department of Business, Economic Development and Tourism, State of Hawaii, USA. November 2003
102
Main plant components are fermentation tanks, centrifuge, treatment tanks, distillation column and
rectifying column.
103
Duncan, 2003
104
Duncan, 2003
103
Table 4.3.4:
Cost details of a 70,000 tons/yr Biodiesel Plant
Process Plant
Plant installation, piping,
instrumentation
Plant buildings
Storage
Services
Civil Works
Spares
Unallocated
Contingency
Engineering
Total
4.3.2
105
Cost (Million NZ$)
Cost (Million US$)
10.9
1.6
7.63
1.12
0.5
3.4
1.7
2.4
0.6
1.5
2.2
5.0
29.7
0.35
2.38
1.19
1.68
0.42
1.05
1.54
3.5
20.79
Solid Biofuels Industries
The amount of bagasse generated from the estimated 38.2 million tons of sugarcane milled in
2004, if utilized in an energy efficient manner, could produce, depending on the choice of
technology for export to the national electricity grid, 3,800 Gigawatts hours per year if CEST (100
kWh/on of cane) is used, and 7,600 GWh/yr if BIG-GTCC (200 kWh/ton of cane) is used.
Development of 50 per cent of these electricity export potential will require an investment of
US$660 million for CEST, and US$1,150 million in the case of BIG-GTCC. The potential
development of combined heat and power from sugarcane processing should be viable in all
countries that currently have viable sugar industries. This industry should also be viable at low
cane production if there is also going to be production of ethanol for local consumption instead of
gasoline. Some countries, due to limited sugarcane production, may have to get supplemental
feedstock to have viable year-round power generation industry. The Technical Paper (Annex 1)
discusses in detail the electricity generation systems.
4.4
Requirements for Implementation
The major challenges to the development of a successful biofuels strategy based on the
international experiences and the existing economic, social and environmental conditions are:
• Policy makers will play a vital role in providing the right environment for all the factors
necessary to create a competitive and sustainable biofuels market. Experiences from
other countries can be valuable in defining policies to stimulate biofuels production.
Policies needs to be in place that nurtures the development of a viable industry,
particularly support to the development of domestic markets and ensuring the
sustainability of the industry in the long-term. Policy intervention should be aimed at
creating appropriate regulatory and legislative environments, promoting skills
development necessary to the industry’s development.
• In countries with successful biofuels industries, government policies and the regulatory
environment has played a leading role. Sustainable development agendas have steered
government energy policies towards increased diversity of sources and energy selfreliance, security of supplies and a cleaner environment. Governments have used a wide
range of policies and support mechanisms to address the technical, financial, institutional
and policy barriers that have prevented increased usage of biofuels and other renewable
sources of energy. These include research and development in new biofuels crops and
conversion technologies, demonstration and public awareness raising programs, soft
105
Duncan, 2003
104
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
loans, tax incentives and subsidies to encourage market penetration, development of
standards and certification, and training and capacity building at all levels. Policies and
regulations have to be continuously modified and adapted to evolving circumstances if
scarce national resources are to be used for maximum penetration of renewable fuels
into the energy supply matrix.
Secure access and availability of land resources and sustainable production as well as
land use polices that do not allow land suited for biofuels raw material production to
remain idle; enforces regulations of sound land use; and provide incentives based on
environmental benefits.
Capacity to plan and implement, monitor and make adjustments over time. This has to be
supported by information, technical assistance, and training and referrals that represent a
unique role for IICA to play.
Financial resources at concessionary terms may, in certain circumstances, be required to
make the activity economically feasible. A good example of this is the most recent
biofuels project in the Caribbean region, a 32.5W bagasse fueled Co-generation facility at
a sugar factory in Belize, costing US$47 million. The funding came from a variety of
sources in the form of loans and equity financing from different sources, including the
Caribbean Development Bank, and private financing. However, without the legislative
and legal framework that exists in Belize, such a private sector project would have been
impossible to fund, much less arrange the additional loan and equity financing needed
from other international players. Concessionary resources are also needed to assist in
the preparation of implementation documents that would make possible innovative
financing options such as private sector developed facilities under agreements like Build
Own Lease Transfer (BOLT).
Supportive and flexible policies and national government commitment, at the highest
levels, to maximizing synergy and linkages between sectors. The Belize example also
shows the critical need for supportive legislative and legal framework such as power
purchase agreements and utility pricing.
Ownership by the population -- public education and awareness -- Promote the industry
at home and internationally, possibly through the appointment of a high level “champion”;
An economic and social climate that is stable and attractive for long-term investments.
A robust regulatory and legal framework that facilitates the development of the industry.
Progress on cogeneration, for example, is often hampered through the lack of a suitable
regulatory framework for small producers to sell power to the grid at a fair price.
Harmonization of the tax regimes and customs procedures within the region.
Bringing together all stakeholders from relevant industries, research organizations,
government and civil society to promote the industry.
Developing partnerships with industries and markets worldwide.
Developing the skills base essential for the development and expansion of the industry,
including actively supporting exchange visits and placement for key personnel with
relevant organizations abroad.
Where necessary, strengthening research and extension facilities to provide the
necessary inputs to the industry. This in particularly important in the areas of plant
breeding and selection and integrated pest management;
Improving infrastructure, particularly transport and storage facilities.
Promoting biofuels procurement in government and other organizations.
Market-based mechanisms for stimulating biofuels in the domestic market, for example;
- Encouraging biofuels over fossil fuels through suitable tax regimes;
- Encouraging the replacement of MTBE with ethanol;
- Requiring a share of transport fuels to be provided by biofuels;
- Encouraging the sale of vehicles that can run on higher ethanol blends (E10 and
above).
Strong environmental regulations and laws to prevent pollution of water systems and
coastal zones, encourage biodiversity, promote sustainable farming practices and
prevent atmospheric pollution, all backed up by strong enforcement. These
105
•
considerations are particularly important in areas where tourism is an important economic
activity.
Adequate social regulations and laws that protect the rights of people associated with the
industry. Putting in place mechanisms to resolve conflicts between all sectors involved.
Disagreements between the sugarcane producers, sugar and ethanol producers, and
electricity companies can hamper the development of the industry.
The availability of a number of technical skills is critical in the workforce to maintain and run a
biofuels plant efficiently, and to the efficiency and sustainability of the entire system. Critical skills
for implementing successful Biofuels Programs include:
- Managers with a decade or more of experience. This is crucial for these modern
complex plants. Good managers cannot be produced quickly and their scarcity may be a
major constraint during the development phase of the industry. Skilled personnel are also
required for a number of downstream activities including transport, storage, blending and
distribution. Training may be required for countries with little experience in handling the
distribution liquids.
- While the sugar industry has developed a cadre of skilled technicians and engineers,
they will probably require additional training to run and maintain a modern, sophisticated
ethanol plant optimally.
- Technical capacity for research, development and demonstration is essential.
Experience from Brazil has shown that the development of a constant supply of
productive, disease resistant varieties for particular agronomic environments and the
development of environmentally benign pest management technologies are major factors
for increasing and maintaining feedstock productivity.
- Research and extension services are important to determine the performance of selected
varieties under field and processing conditions, to enable pests and diseases to be
identified and controlled before they become a serious problem, and to inform the plant
breeders and farmers.
- Awareness and training in relation to environmental best practice and its implementation
are important to protect the environment and to the long-term sustainability of the
industry. In many cases, environmental best practice has been shown to result in
106
economic benefits .
- The production of ethanol, sugar and electricity require multiple skills usually associated
with one industry. “System thinkers” are required to handle aspects of the production
chain that are not directly linked to ethanol production, including infrastructure, logistics,
land use, plant configurations, the use of co-products, and disposal of wastes.
4.4.1
The Challenges
4.4.1.1 Production
The development of biofuels industries will represent a new endeavor for the countries. The
closest experience for liquid biofuels is the production of potable alcohol (rum that is widespread
across the region. The production of rum is a very profitable activity for a number of producers;
indeed, the region boasts a number of world-renowned brands. However, the development of
liquid biofuels industries implies a relatively steep learning curve, but starting off with valuable
experience with agronomic and conversion aspects of ethanol production. In the case of
biodiesel, the relevant experience comes from the production of copra and coconut oil. In the
case of the production and processing of solid biofuels, the regional experience is limited to the
forestry sector with limited experience from charcoal production.
The Brazilian ethanol program has experienced an impressive learning curve during the last three
decades. As a result, production cost in 2004 was a quarter of what it was in the 1970s, reflecting
106
Environmental best practice guidelines developed by Noodsberg farmers in South Africa and by the South African
Sugar Association.
106
cumulative results of a large number of improvements both on the agricultural side (primarily from
increase in yields) and on the industrial one (primarily from economies of scale and process
improvements, but also from use of co-products and better infrastructures), as well as the
continuous development of the skills base. The availability of a number of technical skills is critical
to the establishment of a biofuels industry. A skilled workforce is critical to maintain and run a
plant efficiently, and to the efficiency and sustainability of the entire system. Critical skills required
are managerial and technical skills for the operation of ethanol plants, technical skills for the
development and management of sugarcane crops, skills in relation to environmental best
practice, policy-making skills, as well as a range of other skills needed to provide support services
to the industry will be major challenges at the national and local levels and will require IICA to
play a coordination and support function.
Countries like Brazil and India could contribute to the development of technical and managerial
skills, and knowledge in the areas of agronomy, waste management, downstream activities, and
systems thinking and integration of sectors. The region is well positioned through IICA to access
any benefits from this experience. Jamaica and Trinidad and Tobago were exporters of ethanol,
to the US, in 2005, representing experience in the handling of ethanol fuel. The major challenges
on the production side for biofuels are land access, labor and transportation cost, and quality
control.
The ongoing access to information on best practices at all levels across all sectors of the industry
is important for a sustainable and profitable industry. Best practices will differ according to
location, and evolve as informed by research and with the development of new technologies and
techniques. Best practices should apply to agronomic activities, environmental management, coproducts use, wastes disposal, stakeholder communication, and workplace activities.
4.4.1.2
Utilization
Utilization of liquid biofuels (ethanol and biodiesel) would require points of fuel production to be
connected to distribution outlets (gas stations). The physical connection include the necessary
modification to vehicles, as discussed in the technical aspects of biofuels (Technical Paper,
Annex 1), establishment of blending facilities, water tight storage and transport infrastructure.
These will have cost implications and thereby impact the financial viability of biofuels industries.
For example, the costs of transporting ethanol in the US, by tanker over less that 300 km, is
between US$0.01 to US$0.02 per liter, and by boat (ocean or inland), between US$0.01 and
107
US$0.03 per liter.
Some cost estimates are available for downstream infrastructure and
equipment:
- A 40 million-liter tank, required if storage tanks are not available, costs about
US$500,000.
- The associated splash blending systems, including the necessary modifications to have
an ethanol-compatible terminal are in the range of an additional US$500,000.
Despite these investments, if sales volumes are sufficiently high (i.e., 24 tank refills per year or
108
more), the impact on ethanol costs would be around $0.002 per liter of ethanol.
Overall, total cost for transporting, storing and dispensing ethanol ranges from about US$0.01 to
109
US$ 0.07 per liter .
107
“Biofuels for Transport: An International Perspective,” 2004, International Energy Agency (IEA). DiPardo, J., 2002,
Outlook for Biomass Ethanol Production and Demand, US Energy Information Administration, Washington DC; DA, 2002,
Infrastructure Requirements fro an Expanded Fuel Ethanol Industry. Downstream Alternatives Inc., Phase II Project
Deliverable Report, Oak Ridge national Laboratory Ethanol Project.
http://www.iea.org/textbase/nppdf/free/2004/biofuels2004.pdf
108
“Biofuels for Transport: An International Perspective,” 2004, International Energy Agency (IEA). DA, 2002,
Infrastructure Requirements for an Expanded Fuel Ethanol Industry. Downstream Alternatives Inc., Phase II Project
Deliverable Report, Oak Ridge national Laboratory Ethanol Project. Quoted in IEA, Biofuels for Transport: An
International Perspective, 2004.
109
DIFID Report
107
Utilization of solid biofuels would primarily be for the generation of electricity either for local
consumption or for export. Requirement for using solid biofuels would be linked to technology and
rules and regulations for the generation, transmission and distribution of electricity. Generation
of electricity for export to the grid would require agreements for power purchase with the national
utility, or for power-wheeling to other users. Implementing legislation for Power Purchase
Agreements (PPA) and appropriate regulatory reform (such as an independent regulatory for the
energy sector), and deregulation of the foreign exchange regime and privatization have been
successful in getting investments into power generation.
4.5
The Benefits of Biofuels Industries for the Region
The agricultural sector has been in decline for decades, and is experiencing negative growth as it
struggles to respond to economic globalization of agricultural commodities. A major determinant
of a successful response would be finding new markets that are viable for the high cost product it
produces, and/or significantly increasing productivity to better compete. The latter is very difficult,
given the high costs of inputs (chemicals, energy, and planting material), transportation, and
labour, and this is in addition to the low economy of scale. The current state of the region’s
agriculture sector prevents it from being a major generator of employment. Many countries are
also experiencing significant environmental degradation as a result of unsustainable land use
associated with crop production in certain areas. Capitalizing on the potential for biofuels
production by the sector would represent a sustainable diversification option, which could help
reverse the ongoing trend of decline and degradation of soil resources as well as reversing the
continuing decline in employment. The higher economic value of the sugarcane as an energy
raw material versus sweetener is based on the high energy content of the cane stalk, and the
availability at economic prices of technology to convert the sugarcane into electricity and alcohol.
4.5.1
Socio-economic Benefits
Table 3.0 shows that there is significantly higher economic value of the sugarcane as an energy
raw material versus sweetener is based on it high energy content of the cane stalk, and the
availability at economic prices of technology to convert the sugarcane into electricity and alcohol.
The Technical Paper, Annex 1, presented in significant detail, the socio-economic benefits of
biofuels industries based on the international experiences. These include:
• Improved wages for agricultural workers -- based on the existing wages in the sugar
industry and the greater economic benefits that will be generated from the production of
biofuels, farming households involved in the production of raw material is expected to
derive improved benefits. The degree of potential increased benefits of biofuels is,
however, significantly influenced by factors such as price paid for feedstock and the cost
of transportation.
• Sustainable employment generation -- this would result from the steady demand for
fuels and year-round operations. This would be very welcome in a number of countries
where a combination of household economic status and the public education system is
resulting in a large percentage of the young population leaving school with limited
education.
Biofuels plants producing ethanol, for example in Brazil, may require some
200 people to provide support services including agronomic inputs, spares and
maintenance.
• Improved fortunes for the agriculture sector – as it will help countries to overcome the
changes in export markets due to European Union changes in policies for export from the
ACP countries.
• Diversification of the national and regional economy – the majority of countries in the
region are very dependent on remittances and/or tourism. Notable exceptions are
Trinidad and Tobago, where petroleum fuels dominate the economy, Guyana and Belize,
where the agricultural sector plays a significant role. Overall, the economies of these
countries are very vulnerable because of the dependence on a few goods and/or service
for economic well being. Diversification of the fading agriculture sector into viable biofuels
industries would reduce vulnerability in different ways including:
108
4.5.2
Reducing the demand on the foreign exchange required to meet national local fuel
needs.
Promotion of regional trade and development of the CSME.
Improve the economics of rural communities minimizing dependence on government
support.
Minimize the inflationary pressures on the national economy that result for increasing
energy prices.
Helping to stabilize the cost of energy input into the national economy, helping
national economies stay competitive.
Environmental Benefits
As documented in both the Barbados Program of Action (BPOA) in 1994, and the Mauritius
Implementation Strategy for Sustainable Development of Small Island States and Low Lying
Coastal States, the major concern of these countries is climate change. Under international
agreements all states are required to take mitigation actions to reduce the emissions of
greenhouse gases, and implement adaptation option to minimize the projected impact of global
climate change. As shown in Table 4.5.1 below , the blending of ethanol with gasoline and diesel
for transport, using the 2004 year as the baseline, would reduce carbon dioxide emissions by 3.9
to 11.8 million tons, as the ethanol blend ratio rises from 10 per cent to 30 per cent.
Table 4.5.1:
Ethanol
Blend Ratio
10%
15%
20%
25%
30%
Greenhouse Gas Mitigation by Ethanol Blends
Ethanol required for both
Gasoline and Diesel
M liters
1,513
2,269
3,026
3,782
4,539
110
CO2 Emissions
mitigated
M tons
3.9
5.9
7.9
9.8
11.8
The development of biofuels industries addresses both the mitigation obligation of all countries
under the United Nations Framework Convention on Climate Change (UNFCCC), but it also
represents major adaptation approaches. Biofuels production uses crops that are much more
resilient to nature’s destructive forces such as tropical storms/hurricanes, floods, droughts, and
fires. Other crops grown for food or export such as vegetables, tobacco, bananas, coffee, and
spices are not as resilient, and therefore much more vulnerable to climate change. Additionally,
the production of raw material should result in improved land use, leading to reduced soil erosion
and improved raw water resources. These environmental benefits are significant and invaluable
for a number of countries if they are to successfully pursue sustainable development.
4.6
Public Outreach/Communication
The IICA message has been delivered to many communities throughout the Hemisphere. In order
to achieve the strategic goals of its agro-energy program, IICA must continue to enhance the use
of the media and Internet technology to carry the IICA message to the donors, beneficiaries and
the public at large. IICA will also make their actions more effective by better communicating
activities and accomplishments using a variety of media.
The Institute has also made a major effort in the field of agricultural and rural information and
knowledge management, striving to become the hemisphere’s benchmark platform by
modernizing its portal (www.iica.int). The Institute has also improved the technical content and
110
Need Source
109
increased the number of subscribers to the Infoagro information system (Trade, Infotec,
Agrosalud, Rural Development, PRODAR), revamped the SIDALC and made the library system
more visible, improved its publications management and strengthened the internal information
111
system (Intranet and VPN) .
A qualitative leap in the Institute’s communication with the countries was achieved thanks to the
increased coverage that IICA received in the media throughout the hemisphere and the constant
flow of information about its activities (IICAConnection). Two new technical products were created
for key target audiences. One was the ComunIICA online e-magazine, intended for decision
makers involved in agriculture and rural life, in which Institute specialists share their expertise.
The other was AgroEnlace, a biweekly radio magazine for small- and medium-scale agricultural
entrepreneurs, which is broadcast by Radio Nederland, Radio Exterior de España and a large
number of rural radio stations in the member countries.
4.7
Partnerships
IICA will magnify the effectiveness in achieving its goals by forming partnerships with other
national, regional and international organizations. By joining efforts with other rural development
organizations and stakeholders, IICA can provide standardized, high-quality data to inform the
decision-making process for rural development resources management.
In April 2006, IICA and the FAO entered into a new partnership in which the two organizations
decided to strengthen ties on issues related to each organization’s mission and thus beef up their
resources and the cooperation they provide to countries in the hemisphere, in line with the eighth
Millennium Development Goal, which calls for a global partnership for development. IICA and
FAO will also be helping the countries to implement the AGRO 2003-2015 Plan, prepared and
approved by the hemisphere’s ministers of agriculture.
The Institute played a coordinating role in its approach to assist key stakeholders in the region,
including the Ministers of Agriculture and their Ministerial Delegates, to engage in dialogue so as
to obtain a common vision and agreement on the Plan of Action. In the promotion of the Jagdeo
Initiative, IICA collaborated with the CCS and the FAO. IICA also played a major role in the
Alliance as part of the Secretariat, with CCS (CARICOM Secretariat) and FAO. In addition, the
Institute constituted part of the Core Group, along with the CCS, CARDI, CDB, CRNM, FAO and
the OECS Secretariat, appointed by the CHG for overseeing implementation of the Jagdeo
Initiative.
IICA also increased horizontal cooperation by encouraging the countries to share their experience
- Brazil in the area of agroenergy. The “Working together” approach was strengthened by means
of joint activities with organizations such as the WTO, ECLAC, the OAS, FAO, United Nations
Educational, Scientific and Cultural Organization (UNESCO), the International Labor Organization
(ILO), the IDB, the World Bank, CATIE, the CTA, PAHO, USAID, AECI and the GTZ. These joint
efforts yielded important results under our programs related to rural development, trade
negotiations, agricultural health and food safety, information, agribusiness promotion,
technological innovation, investment projects, environmental management and training.
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2005 Annual Report IICA
110
CHAPTER 5
STRATEGIES & PROGRAMS
111
5.0
STRATEGIES & PROGRAMS
The chief objective of the strategy is to guide IICA in its efforts to help the Caribbean establish an
agro-energy program toward the development of biofuels industries to meet national energy
needs, by modernizing and diversifying the agricultural sector to promote rural development and
increase global economic competitiveness. The agro-energy strategy focuses on the identification
and consolidation of a set of complementary activities that take advantage of IICA’s current
capacity and its experience in agriculture and rural development, while taking its limitations into
consideration. The strategy includes a number of programs to support the development of
biofuels industries across the region, particularly in the sugarcane producing countries, in the first
instance.
Core elements of the strategy identified that would lead to the establishment of a successful and
sustainable regional agro-energy program include:
1. IICA becoming the leading strategic Institution on Agro-energy in the Caribbean.
2. Promoting Agro-energy in the Caribbean as an economically viable source of energy by
introducing Liquid and Solid Biofuels Industries in sugarcane growing countries to
produce liquid fuels and power.
3. Build the sustainability of IICA to support agro-energy entrepreneurial activities of the
economically disadvantaged that lead to sustainable livelihoods and a healthy
environment.
4. Build IICA’s institutional capacity to accomplish its mission.
These elements of the strategy are intended to position IICA to help strengthen linkages between
the agriculture and energy sectors in order to increase opportunities for agro-energy in the
Caribbean, by assisting countries in drafting integrated agricultural and energy policies to provide
the framework for domestic energy production to help in meeting growing energy needs, in an
economically, socially and environmentally sustainable manner. IICA would also need to facilitate
dialogue with the sugarcane and electric utility representatives about the potential of biofuels. In
addition, IICA would also facilitate forums for stakeholders and civil society to dialogue in order to
provide scientifically sound and politically unbiased analyses and conclusions needed for
strategic decisions related to research or policy issues, and the identification of capacity that is
required for planning and implementation of agro-energy policies.
IICA would also have to support countries with comprehensive information to assist with the
planning and development of biofuels industries by providing information on the development of
emerging technologies, practices and business opportunities in the agro-energy industry.
Staging of a bi-annual conference would be an ideal way to exchange new ideas, analyze
strategies, or for agriculture and energy professionals and stakeholders within the Caribbean
region to meet and exchange ideas and experiences.
Citizen participation is an important element for a successful agro-energy program. Involving
citizens in the development and implementation of such a strategy helps them understand how
the strategy would benefit them as individuals and the communities they live in. It also
encourages input of citizen ideas and increases public confidence and support in the strategy.
Similarly, education can play a key role. Educating consumers about the benefits of biofuels
industries can help them make wise energy choices and to contribute to the effort as a whole.
The public education and awareness efforts are required to help educate key public officials and
the general public about biofuels. Public education and awareness to support building regional
and national coalitions that would form the nuclei of national support groups that would promote
and eventually lead to local biofuels production and use would also be needed to help the
population understand and appreciate how the development of national biofuels industry can help
meet the basic developmental needs of the country.
The core of the IICA strategy is the development of liquid and solid biofuels industries. The liquid
biofuels industry program would focus on the production of liquid fuels from varying agricultural
112
feedstock using a range of technologies from fermentation to distillation. The solid biofuels
industry program would focus on the conversion of solid feedstock to heat and/or power. The
strategy calls for ICCA to establish modalities and institutional capacity to sustain and support
agro-energy entrepreneurial activities that lead to sustainable livelihoods and a healthy
environment particularly for rural populations. Development of small- and medium-size liquid and
solid biofuels enterprises provides an excellent opportunity for generating employment and
revitalizing rural economies, as well as improving diffusion of technologies.
To develop small- and medium-scale size liquid and solid biofuels enterprises would involve
IICA’s provision of training to existing and prospective entrepreneurs in starting and managing
business activities relating to biomass-based energy conversion, supply and maintenance
services; providing training to other end-users in various uses of agro-energy; interfacing with
research and development institutions engaged in biomass technology development, to provide
ready access to relevant technological information, and; interfacing between local governing
bodies/representatives, suppliers of biomass-based technologies, local financing institutions,
entrepreneurs, and other end-users.
Given the limited capacity that exists in the energy sector in the majority of the countries across
the Caribbean, development of biofuels industries will require the provision of systematic longterm technical assistance. To ensure that it accomplishes its mission towards the development of
an agro-energy program, IICA must undertake institutional strengthening through modalities such
as cooperation agreements with other technical institutions/organization, adding professional
skills in energy planning and policy, and engineering, and partnerships with national and
international organization to improve information support capabilities that would be needed to
plan and implement the regional program.
5.1
Strategic Element 1: Become the Leading Strategic Institution on Agro-energy in
the Caribbean
IICA attaches special importance to information, communication and the projection of its
institutional image, in order to position itself as an international development agency that is
recognized and respected as a strategic partner, one that is capable of making a key contribution
to the development of agriculture and the rural milieu in the Americas. In this regard, the strategy
is intended to make IICA the preeminent regional institution assisting countries with the
development of biofuels industries to address energy needs of the Caribbean region, and
contribute to societal progress, especially in rural areas. This element of the strategy defines the
institution’s goals and objectives and provides the basis for systematic and continuous
improvement. IICA is employing good management practices, defining its mission and setting
measurable objectives
Goal 1:
Introduce program to strengthen linkages between agriculture and energy
sectors in order to increase opportunities for agro-energy in the Caribbean
Based on the global experience, development of successful biofuels industries need supportive
energy, agricultural, and environment policies that view each barrel of oil imported for land
transportation or electricity generation as a loss of potential income to farmers. The energy
policies implemented nationally should be based on special programs such as the IICA AgroEnergy Strategy. The ideal energy policy for agro-energy development would be to establish as a
first priority, maximum energy from biofuels in the transportation, electricity generation and
domestic sectors. Private sector participation in electricity generation and liquid fuel production
would require policies to promote power purchase agreements between the utilities and the
producers of biomass based power, and in the case of fuels, established pricing and guaranteed
markets.
IICA would assist countries to build capacity to formulate, analyze, and implement agro-energy
policies by providing the countries with the basic analysis tools on the functional characteristics
113
and performances of biofuels industries, the estimated level of demand for biofuels infrastructures
and services, and the way supply and demand reciprocally influence each other. IICA wouldl
provide examples of efforts to implement biofuels industries taken from the experiences and
activities in the US, Brazil, Australia, Cuba, India, the Philippines, the Pacific Islands, and
Scandinavian countries. These examples should provide guidance, stimulate ideas, and generate
new contacts from around the world on:
• Formulation and Implementation of Biofuels Policy – by providing tools for designing
and developing the processes necessary for biofuels policy formulation and
implementation.
• Guide for Policy makers – that provides the rationale for investing in biofuels industries
and presents guiding principles for biofuels industries policies, various policy options, and
elements of biofuels industries and gender-sensitive development policies.
• Advocating for Biofuels Industries – Tools to help countries advocate for a biofuels
industry, including steps in organizing campaigns and information on developing,
implementing, and evaluating a successful public education and advocacy strategy.
Goal 2:
Stage series of Regional and National Consultations and Dialogue with
Caribbean sugarcane and electric utility representatives about the potential of
Biofuels
IICA has drafted a multi-pronged strategy to counter the challenge of increasing energy prices,
and this strategy would include a conscious shift to promote public-private participation in biofuels
industries. In order to implement an agro-energy policy that is inclusive and encourages adoption
by stakeholders, there is an urgent need to consult and promote a dialogue to foster greater
understanding of the issues surrounding the production and use of biofuels and its implications
for the lives of the rural population. The purpose of the National Consultations and Dialogue is to
stimulate discussions among sugarcane and electric utility representatives on the potential of
biofuels industries. The goals of the Consultations and Dialogue are to:
• Provide a forum where stakeholders in sugarcane, coconut, and forestry sectors and
government officials in energy, agriculture, and environment, can discuss mutual interest
and benefits with: electric utility representatives about the potential of biofuels for
electricity generations; and with marketers of liquid petroleum fuels about the potential
benefits of biofuels and the challenges.
• Dissemination of ICCA’s Strategy for the Development of an Agro-Energy Program, and
the Technical Report on Biofuels – An Option For Economic Renewable Energy
Production By The Agricultural Sector, to these different stakeholders from each country.
• Achieve consensus on the development of biofuels industries to meet national energy
needs.
• Identify capacity that is required for planning and implementation of the biofuels policy.
Implementation would be through the establishment of a regional Steering Committee consisting
of representatives from the partner institutions and vested interest stakeholders like the electric
utilities, to oversee the planning of the consultations and implementation of the meeting and
drafting of a Technical Report, showing the national biofuels production potential and the
stakeholders position on the potential of a National Biofuels Industry.
The consultations would be based on the information from the Technical Report, showing how the
current area of sugarcane production could be adapted to different mixes of products, for
example, the use of sugarcane juice under scenarios such as 70 per cent sugar and 35 per cent
ethanol; half-and-half sugar and ethanol, and; 70 per cent ethanol and 30 per cent sugar. Such
modifications on a regional scale could produce between about 900 and 2,100 million liters of
ethanol per year. If all juice from current sugarcane areas were dedicated to ethanol, up to about
3,060 million liters of ethanol could be produced with an economic value of US$1.5 billion at a
crude oil price of US$70 per barrel, and US$2.1 billion at US$100 per barrel for crude oil. The
bagasse could be used to produce between 3,800 GWh per year (at 100 kWh per ton cane) and
114
7,600 GWh per year (at 200 kwh per ton cane) representing 19 per cent of regional power usage
in 2004. The quantity of power would be equivalent to 15.4 million barrels of diesel.
As discussed earlier, production of agro-energy will reduce the exposure of the region to the current
unacceptable high levels of energy insecurity, such as fuel supply and price shocks. For instance, in
2003, Barbados spent over US$130 million on the importation of petroleum products. This
translates into approximately 9 per cent of its foreign exchange earnings. Similarly, in 2003,
Jamaica imported 27 million barrels of oil, valued at US$813 million. This was an increase in
volume of 7.5 per cent and cost of 27 per cent over the preceding year. In 2004, Jamaica’s oil
import bill was US$950 million or 12 per cent of GDP (25 per cent of imports).
Goal 3:
Introduce program for development of emerging technologies, practices and
business opportunities in the agro-energy industry
The causes of the prolonged period of high oil and gas prices and level of proven oil and gas
reserves are now resulting in energy forecasters making predictions for crude oil prices to exceed
US$100 per barrel, in the not too distant future, and to stay above a ceiling of US$50 per barrel.
The international experiences with biofuels shows that the financial return to farmers from biofuel
feedstock varies with oil prices, however, at an oil price of US$50 per barrel or above, biofuels
production is economically viable in a number of cases. Using public policy, government can
create the enabling environment that provides the climate for development of biofuels, which
generated a number of economic opportunities at the national and local levels. As shown Annex
2, which discusses the biofuels potential of the various Caribbean countries, there are significant
opportunities for the feasible production of power and the provision of liquid fuels from agroenergy enterprises.
Government roles, as discussed previously, would be critical, but so too would be the role of the
private sector, and farmers who would have to be the main feedstock producers and converters
of feedstock into biofuels. The conventional energy sector has evolved the concept of energy
service companies (ESCOS). These companies are usually small in nature and provide energy
saving services. ESCOS therefore provides the business model of how IICA would proceed in
the development of small- and medium-size private companies that would be needed to provide
the different technical and management capacity required for sustainable production and use of
biofuels. ESCOS in countries such as Jamaica, St, Lucia, and Barbados now provide a range of
energy services ranging from access to technology, energy planning, energy audits, and
financing. Success in catalyzing the establishment of National Biofuels Program by national
governments would be a prerequisite for development of the private sectors.
IICA’s strategy for the development of emerging technologies, practices and business
opportunities in the agro-energy industry would therefore have its foundation in:
• Helping to establish an enabling environment at the national policy level for agro-energy.
IICA would establish partnerships through its network of national offices with a number of
key stakeholders including: climate change stakeholders, tourism, agriculture, energy,
environmental groups responsible for biodiversity, labor unions, and financial institutions.
The enabling environment would be characterized by appropriate policies and
commitment to capacity development. The promotion of a Regional Agro-energy Policy,
in line with its strategic objectives, is one of IICA’s key tasks.
• Promoting national biofuels production as a viable economic activity with multiple
benefits for those countries whose size and existing agricultural capacity is of such a
nature that they have proven capacity for sustained production. As part of this advocacy,
IICA would seek partners for annual media events to highlight research findings and
successful activities and to recognize through awards, exceptional achievements.
Possibilities include annual agricultural shows, and festivals.
• Supporting the development of small- and medium-scale entrepreneurs. The global
experience shows that businesses respond positively once they understand the
opportunities. IICA’s research and demonstration activities would have as its goal
115
helping to convey the economic opportunity represented by biofuels to businesses and
rural communities.
Goal 4:
Introduce Bi-Annual Caribbean Region Agro-Energy Conference
The Biofuels Production Potential of the various countries (Appendix 1) shows that based on the
existing agricultural sector, the majority of countries have significant production capacity based on
feedstock available relative to national energy demand; the majority of these countries therefore
have the potential to substantially reduce the amount of fuels imported. The bi-annual conference
is an ideal way to exchange new ideas, analyze strategies, or simply meet other agriculture and
energy professionals and stakeholders within the Caribbean region. IICA recognizes the strong
desire by Caribbean stakeholders for informal agro energy education and affiliation. As a result,
the conference is designed to provide agro-energy individuals with an opportunity to acquire areaspecific and general agro-energy information and to increase their knowledge of available
resources.
The Conference is intended to both promote and demonstrate IICA’s Agro-energy Strategy and
offers an ideal opportunity for:
• Education - informative sessions on agro-energy programs, agro-energy resources, and
topics of general interest;
• Networking - a social environment whereby participants can meet other stakeholders in
the region to exchange experiences and ideas;
• Community involvement - participation from all levels of agro-energy, especially
grassroots stakeholders and farmers.
• Information dissemination – to ensure that dialogue and decisions are made with current
knowledge.
Conferences would be organized in different countries with coordination from IICA’s network of
national offices and in partnership with private sector organizations, development partners,
government agencies, media organizations, financial institutions, and environmental groups.
Goal 5:
Introduce Public Awareness & Education Program – Biomass as a Source of
Energy for the Caribbean
The Public Awareness and Education Program will be based on the economic challenges facing
the countries, posed by increasing costly liquid petroleum fuels, the problems arising from the
decline of the agricultural sector, and the growing threat posed by global climate change which
require small island developing states to take adaptation measures in order to reduce
vulnerability.
The public awareness and education program is developed to communicate these main points
that are considered key issues to be addressed for the long-term viability of the majority of
countries in the region:
• Continued decline in the agricultural sector which is directly and indirectly contributing to
environmental degradation through increasing inappropriate use of land and destruction
of biodiversity; this will negatively affect water resources and environmental quality of
coastal areas.
• The decline in economic and social situations that would result from the projected
increases in fossil fuel prices. The importation of fuels to provide energy is requiring
increasing percentage of GDP, as well as increasing percentage of export earnings as
discussed earlier. This is troubling for these countries, as they have limited means to
generate foreign exchange and results the economies of the majority of these countries
112
becoming more vulnerable. .
112
Binger, Al. 2002. “Vulnerability and Small Island States,” UNDP Policy Journal, Vol. 1 (2002).
116
•
•
Many of the national economies have very heavy external and internal debts. Increased
demand for foreign exchange to import energy would worsen the existing balance of
payment situation and negatively impact the cost of living.
113
The 2004 report from the IPPC
stated that SIDS are considered as the most
vulnerable group of countries to the likely impacts of global climate change and sea level
rise. Appendix 1 discusses the likely impacts of climate change on the region’s
agriculture.
The public awareness and education program would focus on promoting agro-energy as a source
of energy for sustainable development of the Caribbean, and the pros and cons of agro-energy
compared to continued dependence on fossil fuels. Citizen participation is an important element
in the establishment and development of a successful agro-energy strategy. Involving citizens in
the development and implementation of such a strategy helps them understand how the strategy
would benefit them as individuals and the communities they live in. It encourages inputs of citizen
ideas and increases public confidence and support in the strategy. Educating consumers about
the benefits of national biofuels production, and how such industries help communities and the
country to sustainable development.
IICAs public education and awareness program would educate public officials and the general
public about biofuels, and would provide the context for building regional and national coalitions.
These coalitions would constitute the nuclei of national and regional advocacy capacity that would
promote and provide leadership for biofuels production and use. National program will be
developed in partnership with private sector, farmers associations; government agencies
responsible for public information and education; local media, tertiary educational institutions; and
with sponsorship from development partners, international funding agencies and local financial
institutions. Program will be implemented in cooperation with the national government as part of
national sustainable development strategy where possible.
5.2
Strategic Element 2: Promote Agro-energy in the Caribbean as an economically
viable source of energy by introducing liquid and Solid Biofuels Industries in
sugarcane growing countries to produce liquid fuels and heat and/or power
through combustion
IICA believes that it makes very good local and national sense to promote production and use of
biofuels because of its multiple socio-economic and environmental benefits. The development of
a biofuels industry in countries with feedstock production comparable to energy demand will
make a significant contribution to the developmental needs of the population. Substituting locally
produced biofuels for imported fossil fuels would channel cash back into the rural economy
benefiting agricultural workers. Increased income generation opportunities would be provided at
all stages of biofuel production from feedstock production and transportation and plant operation.
Marginal and degraded lands could become viable producers of feedstock, either as a primary or
secondary crop. Farmers would have land use options as to which crops are better for the
economy of the households.
5.2.1
Goal 1:
Liquid Biofuels Industry
Ethanol Production to Achieve 10 per cent Blend in Gasoline (3.4 million
barrels or 550 million liters) by 2010. .
A critical determinant of the viability of biofuels production, and ethanol in particular is plant scale.
Based on the Brazilian experience, a three-fold increase in plant capacity from 10Ml/yr to 30Ml/yr
114
could result in a 36 per cent reduction in production cost . The economies of scale are important
113
114
IPPC 2004
DIFID Report – for the Caribbean --
117
115
as the capital cost of ethanol plants
that represents the major capital investment in ethanol
production, and therefore significantly influences the price of the ethanol. Therefore establishing
the initial level of ethanol production is influenced by the quantities that would be needed based
on consumption, the availability of feedstock or the production potential, and the projected cost of
the biofuel at varying scale of production as discussed in the Technical Paper (Appendix 1).
Based on the global experience anhydrous ethanol can be used as an octane enhancer for
gasoline at up to ten per cent. In 2004, the region produced some 26 million tons of sugarcane for
the production of raw sugar, with value estimated at US$955 million. The 2004 gasoline
consumption represents a regional market of in excess of 34 million barrels of anhydrous ethanol.
Using sugarcane as the raw material, and using average yield of 60 tons per hectare (achieved
by the most efficient producers - Guyana and Haiti) would require 850 thousand hectares.
Table 5.2.1:
Sugarcane yields, production and area cultivated (2005)
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
24.7
53.8
48.1
31.3
20.0
38.1
45.0
61.2
60.0
47.5
55.6
-
Sugarcane
production
tons / yr
0
55,500
430,000
1,149,475
12,500,000
4,400
4,950,000
7,200
3,000,000
1,080,000
1,900,000
100,000
0
St. Vincent and
the Grenadines
Suriname
Trinidad & Tobago
Average / Total
25.0
40.0
51.2
42.9
20,000
120,000
665,000
25,981,575
Island State
Sugarcane Yield
(tons/Ha)
Area
cultivated
(hectares)
800
3,000
13,000
604,927
2,250
8,000
23,887
400,000
220
130,000
160
49,000
18,000
40,000
1,800
-
A significant quantity of the biofuels feedstock can be provided from the existing sugarcane crop
at increased economic benefits to the countries. The almost 26 million tons of sugarcane
produced in 2005 was used as feedstock and produced some of 3.8 million tons of raw sugar.
Based on prices for gasoline at crude of $70 per barrel, and sugar at US$250 per ton, the
economic loss form the conversion of the juice into ethanol instead of sugar would be would be
approximately US$955 million and the economic benefit of an estimated 14 million barrels (2,000
million litres) of ethanol would be US$2,000 million. Ethanol production based on sugarcane
production ranges from between 15 to 30 million liters for St. Kitts and Nevis, to over 375 million
liters for the Dominican Republic, based on using the juice from the average annual sugarcane
yield between 2001 and 2004, as shown in Table 5.2 below.
Based on the sensitivity to scale of anhydrous ethanol the first priority in achieving the production
of the 10 per cent of gasoline substitution is to determine the level of investment for putting in
115
Based on the Brazilian situation the smallest economic ethanol plant capacity is 60,000 litres per day
118
place the production infrastructure and the projected cost of fuel. Based on the assessment of
the Biofuels production potential the only country in the region growing sugarcane country that
would face the possibility of high cost ethanol would be St. Kitts and Nevis. The ethanol
production potential of the country is considered as being almost equal or greater that the
132,000 barrels gasoline imported in 2004.
The recommended 10 per cent blend would require less than 14,000 barrels (approximately 2.5
million liters), based on the sensitivity to economies of scale a plant of this size may not be the
best investment option and initially, and St. Kitts and Nevis implementation strategy would be to
initially import anhydrous for blending, and waiting until demand driven primarily by public policy
is at the level of where investment in processing facilities is sensible. Another option would be for
St. Kitts and Nevis to enter into agreement with its fellow OECS countries to become the supplier
of anhydrous ethanol at a price linked directly to the imported price of gasoline based on energy
content implying that the price of ethanol would be seventy per cent of the gasoline. In all other
sugarcane growing countries there is no issue with the economies scale for the establishment of
production infrastructure for meeting this initial goal. The components for the establishment of
ethanol plants are sold and built worldwide by a limited number of equipment and engineering
companies on a commercial basis and there is very limited room to negotiate costs.
The operation cost of a biofuels facility depends on energy, materials and labor intensity and their
costs, and financing costs. Interest rates, in addition to reflecting the national cost of money, also
reflect the level of risk perceived by the financial markets. Ins some cases, governments may
need to provide incentives to prevent the cost of financing impacting negatively on the
development of ethanol production. Efficient use of co-products and sale of co-generated
electricity to the grid all have the potential to reduce operation costs. Selling co-generated
electricity, however, requires the existence of appropriate policies and legal framework. The
Brazilian experience shows that the primary route towards lower biofuels production costs is by
increasing yields through the selection of better varieties.
Table 5.2.2:
15-Yr
Mean
Barbados
1,565,429 1,514,120 1,026,940 1,023,100 816,320 692,440 475,360 510,894 400,601 475,978
Cuba
42,384,80352,280,000 51,414,60264,956,166 70,855,69975,169,86253,300,000 36,680,00028,425,400 43,026,773
Dominican Republic 7,325,623 7,273,090 9,872,95610,495,345 10,328,989 7,792,531 6,534,355 5,272,286 5,064,822 5,720,272
Haiti
2,821,200 2,656,140 2,824,420 2,856,800 2,720,000 1,720,000 1,365,856 1,020,020 1,029,525 1,169,832
Jamaica
4,541,527 4,447,011 3,862,611 3,263,976 2,427,546 2,328,104 2,548,000 2,327,059 2,018,250 2,329,286
Saint Kitts and Nevis 380,545 318,241 235,918 355,227 304,943 242,432 212,333 229,927 192,600 210,113
Trinidad and Tobago 2,382,041 2,414,063 2,128,715 1,830,896 1,084,886 1,243,382 1,305,548 1,301,413 980,532 1,229,023
Production (mt)
19611965
Sugarcane Production -- Five-Year Average and Per cent Change
19661970
19711975
19761980
19811985
19861990
19911995
19962000
20012004
Total
61,401,16770,902,666 71,366,16184,781,511 88,538,38389,188,75265,741,452 47,341,60038,111,730
Per cent Change
over Previous
Period
Barbados
-3.3
-32.2
-0.4
-20.2
-15.2
-31.4
7.5
-21.6
Cuba
23.3
-1.7
26.3
9.1
6.1
-29.1
-31.2
-22.5
Dominican Republic
-0.7
35.7
6.3
-1.6
-24.6
-16.1
-19.3
-3.9
Haiti
-5.9
6.3
1.1
-4.8
-36.8
-20.6
-25.3
0.9
Jamaica
-2.1
-13.1
-15.5
-25.6
-4.1
9.4
-8.7
-13.3
Saint Kitts and Nevis
-16.4
-25.9
50.6
-14.2
-20.5
-12.4
8.3
-16.2
Trinidad and Tobago
1.3
-11.8
-14.0
-40.7
14.6
5.0
-0.3
-24.7
Average
-0.5
-6.1
7.8
119
-14.0
-11.5
-13.6
-9.9
-14.5
As shown above in Table 4.7 for Hawaii, an ethanol plant represents a considerable investment.
A breakdown of the estimated construction and running costs for two islands in Hawaii are also
itemized in Table 4.7 that shows cost of two sizes of plants. Total cost for 57 million liters per year
plant is US$34 million, and for 38 million liters per year plant is US$25 million. The estimated
annual running costs for 57 Ml/yr and 38 Ml/yr plants planned for Hawaii are US$21 million and
116
US$14 million, respectively .
Goal 2:
Ethanol Production to Achieve 25 per cent Blend in Gasoline (8.5 Million
barrels or 1,500 million liters) by 2015
All fuels for spark ignition vehicles sold in Brazil (the acknowledged world leader in ethanol for
fuel) contain a minimum of 25 per cent anhydrous ethanol in gasoline. Based on this proven
strategy the goal for this phase of the program is for the production of a minimum of 8.5 million
barrels (1,500 million liters). Using the 2004 level of gasoline as the baseline, meeting this
demand for anhydrous ethanol would mean diverting or establishing additional production equal
to around 20 per cent of the sugarcane juice produced in 2004 into ethanol production. Diverting
this quantity of sugarcane juice into ethanol production would further increase the economic
benefits well above those of the 10 per cent production goal, and as shown below, the production
potential of the feedstock is proven as seen in Table 5.2.3
The development of ethanol industries in the sugar producing countries could proceed along
different paths depending upon the size of the sugar industry, the size and current viability of
sugar industry, and the size of the electricity demand and potential supply sources. The first path,
could be expansion of current land under sugarcane to provide additional feedstock, this may or
may not be associated with increased production of sugar or power. The second path is the
introduction of energy cane varieties in some areas previously used for sugarcane and the
cultivation of new land with energy cane (based on yields of 60 tons of cane per year for
sugarcane, and 120 tons of cane per year for energy cane, the additional land area required
would be reduced, the greater is the percentage of energy cane grown relative to sugarcane. The
third path would be the combination of the previous two.
Goal 3:
Production of 30 Per cent of Regional Transportation Fuels Need by 2020
Meeting this goal, based on the 2004 level of diesel and gasoline fuel consumption, would require
the production of some 14 million tons of cane per year as feedstock. Based on yields of 60 tons
of cane per year for sugarcane and 120 tons cane per year for energy cane the land area
required would be 230 thousand hectares for sugarcane and somewhat less for energy cane. The
regional economic benefits using a base of US$70 per barrel for crude would be in excess of
US$600 million. The social benefits, taken from the Brazilian experience, would be the generation
of employment for 11,000 full-time industrial workers and 34,000 to 136,000 agricultural workers
to grow the cane depending on the yields. Since sugarcane production in the Caribbean
countries is less mechanized than in Brazil, and also because yields are lower, the employment
potential for agricultural workers is likely to be in the higher end of the range. In addition as
discussed earlier there will be significant employment generated indirectly for the provision of
services
As shown in Table 5.2.3 below, the thirty per cent substitution of ethanol for imported
transportation fuels by 2020 would require the cultivation of up to 1,500,000 hectares depending
on which type of cane is grown. If sugarcane is grown, this would represent 150 per cent of the
land under sugarcane production in 2004, and 91 per cent of the land under sugarcane in 1994
and 85 per cent in 1984 as shown in Table 5.2.3. The directly quantifiable global environmental
benefits would be the avoided emission of some 20 million tons of greenhouse gases, which are
responsible for global warming and climate change and sea level rise.
116
DIFID report
120
Other benefits that will contribute toward reducing current environmental threats to the local
environmental associated with production of biofuels include protection of watersheds, reducing
soil erosion, and improving local air quality. National environmental benefits will include reduce
loss of biodiversity, sustainable agriculture, reduce degradation to coastal areas from the
transportation of soil and sediments onto the reefs, seagrass beds, and mangrove swamps which
are the essential natural defense system to protect the islands fragile coastline. It is also this
fragile coast line that is the base for Tourism the most important industry in the region
Achieving this target will signal the maturation of the Regional Liquid Biofuels Industry. Success
will require effective implementation of transportation policies and use of tariff measures to
support the conversion of the vehicular fleet, overtime, from gasoline and diesel fueled engines to
alternate fueled spark ignition and compression ignition vehicles that could run on 100 per cent
ethanol; complemented with conversion and upgrading of existing vehicles to run on a minimum
of 25 per cent ethanol blend (E25).
Table 5.2.3:
Quantity of Ethanol and Area producing Feedstock to substitute for
117
Gasoline and Diesel in 2020
Ethanol
Blend Ratio
Gasoline
substitution
Diesel
substitution
Gasoline
and Diesel
Crop area
10%
15%
20%
25%
M litres
1,197
1,795
2,393
2,992
M litres
2,106
3,158
4,211
5,264
M litres
3,302
4,953
6,605
8,256
000 hectares
500
751
1,001
1,251
30%
3,590
6,317
9,907
1,501
30%
Per cent of Land Area in 2004
150%
30%
Per cent of Land Area in 1994
91%
30%
Per cent of Land Area in 1984
85%
5.2.2
Goal 1:
Solid Biofuels Industries
Development of 50 per cent of the Viable Electricity Potential from the Sugarcane
by 2012
The estimated 38.2 million tons of sugarcane milled in 2004, if utilized in an energy efficient
manner, could produce, depending on the choice of technology for export to the national
electricity grid, between 3,800 to 7,600 Gigawatts hours per year. The potential development of
combined heat and power industries in the region using bagasse and other solid fuels should be
viable in all countries that currently have sugar industries including St. Kitts and Nevis the
smallest producer. The total potential is shown in the Table 5.5 below. Total investments
required to export 3,800 and 7,600 Gigawatt hours per year are US$ 1,300 million and US$ 2,300
million respectively.
The global trend towards accelerated erosion of preferences for agricultural exports to what were
once secure markets paying above world prices for commodities puts pressure on the regional
agricultural sector to find creative ways to improve its productivity in the short-term to bring costs
of production in line with world market prices. This is an imperative for the sugar industry if the
more than a half a million direct sugar jobs and the more than 1.5 million indirect sugar related
jobs are to be sustained. Sustaining these jobs is even more important when it is considered that
117
Level of demand is based on Regional consumption of diesel and gasoline in 2004
121
the Caribbean is a region with unemployment rates consistently surpassing those experienced by
industrial countries during the great depression. The co-production of electricity represents a winwin situation for the regions sugar industry. The production of electricity, as shown in Table 5.2.4
provide a high value and secure market for the bagasse, and the energy efficiency improvement
that would accompany electricity export will also improve the efficiency of sugar production
Table 5.2.4:
Potential for electricity exports from bagasse based cogeneration
Investment required for
Cogeneration Plants
Island State
#
Electricity
@ 100 kWh/tc
Electricity
@ 200 kWh/tc
National
Electricity
Demand
Electricity
@ 100 kWh/tc
Electricity
@ 200 kWh/tc
(GWh / yr)
(GWh / yr)
(GWh / yr)
million US$
million US$
-
-
25
0
0
Bahamas
6
11
149
2
3
Barbados
36
72
831
12
22
115
230
323
40
69
2,400
4,800
15,909
828
1440
0
1
67
0
0
555
1,109
13,489
191
333
1
Antigua & Barbuda
2
3
4
Belize
5
Cuba
6
Dominica
7
Dominican Republic
8
Grenada
1
1
126
0
0
9
Guyana
300
600
52.224
104
180
10
Haiti
108
216
512
37
65
11
Jamaica
210
420
2,974
72
126
12
Saint Kitts & Nevis
19
39
13.8
7
12
13
Saint Lucia
-
-
266
0
0
2
4
107
1
1
14
St.Vincent and
the Grenadines
15
Suriname
12
24
177.6
4
7
16
Trinidad & Tobago
58
116
6,321
20
35
3,822
7,643
41,343
TOTAL
122
1,318
2,293
Table 5.2.5:
The Electricity Sector in Caribbean Countries (2003)
Units
Barbados
Dominican
Republic
Belize Cuba
118
Guyana Haiti
St. Kitts &
Nevis
Jamaica
Trinidad &
Tobago
Installed Generating capacity
MW
210
3,959
5,530
244
811
na
1,416
Electrical Power Production
GWh
871
15,909
13,489
512
7,146
na
6,437
Electrical Production/Installed
Generating Capacity
GWh/MW
4.1
4.0
2.4
2.1
8.8
na
4.5
GWh
782
12,469
11,893
283
6,516
na
5,876
KWh
KWh
19.5
11.1
10.3
8.1
14.7
na
3.9
KWh
20.0
10.5
10.6
9.2
15.0
na
3.7
19.7
8.4
10.8
8.8
11.6
na
4.6
18.8
14.3
9.5
6.2
17.4
na
3.5
Electrical Power Consumption
by Final Users
Average Internal Electricity
Prices (US cents)
-Commercial (US cents)
-Industrial (US cents)
-Residential (US cents)
Electrical Service Coverage of
Homes
KWh
%
98
96
92
34
88
na
97
- Cities
%
na
99
99
na
na
na
na
- Rural Areas
%
na
87
81
na
na
na
na
A strong case can be made for adding value to the Caribbean sugar sector by producing gridconnected electricity using bagasse and cane trash as fuel. Electricity generation within the cane
industry either as the main product or as a by-product is increasingly viable be with increases in
petroleum fuel prices. An attractive feature of cogeneration in the region’s sugarcane sector is the
large volumes of biomass (60-80 tons per hectare) that can be used as a clean burning fuel. This
is being done in India, Mauritius, and Guadeloupe, to mention a few. It is not surprising that many
of the sugar producing countries have in the recent past publicly expressed an interest or
intention to introduce modern cogeneration technologies in their respective industries.
The economics of co-generation using bagasse and trash have changed significantly in
comparison to the costs of conventional electricity generation (imported oil) as prices have more
than doubled in the past two years. Yet another interesting economic aspect of cogeneration is
the prospect for building energy services companies in close proximity to the cogeneration
facilities. ESCOs would be involved in supporting activities such as producers and suppliers of
biomass, retailers of equipment, and engineering services providers.
As shown in Table 5.7 it is estimated that the sugar producing island states could produce some
6,000 GWh of electricity each year. However, even if only 50 per cent of this potential is achieved
in the medium term its contribution to the sustainable energy agenda of the region would be
substantial. Indeed, this would represent more than 6 per cent of the 44,364 GWh generated in
the region in 2003. Achieving 50% of the estimated electricity generating potential would help to
significantly reduce the region’s high levels of dependency on oil import.
The potential for the existing sugarcane industry to generate power in the various countries is
shown in Table 5.7. Table 4.5 shows the results of a UK Department for International
119
Development (DIFID) study for power generation in the Caribbean. Both tables show that by
using more efficient technology or changing the variety of cane to increase fuel supply the
sugarcane can provide a significant portion of the fuel to provide electricity services in the
sugarcane growing countries. As can be seen from the amount of fuel consumed in 2004, shown
118
119
Compiled from OLADE (2004)
DIFID STUDY page
123
in Table 4.4, the market for solid biofuels to generate electricity for export to the national grid is
significant. Based on the projected cost of power from combined heat and power generation,
cogeneration would be a viable enterprise in all sugar growing countries.
Each country will have to assess how best to integrate the power potentially available and what
would be the appropriate level of investment. Critical to the successful power generation in these
countries will be maximizing the value of the power produced. This means that the power
120
produced has to be base-load . The production of base load power is important, as otherwise
additional investment would be required in alternate generating facility to provide power during
period of non-production from factories processing sugarcane. The success of Mauritius in
121
providing significant percentage of base load power from sugar operations is based on: the use
of supplemental fuel in the form of coal during the periods when sugarcane is not being
processed; and institutional relationship which allowed the sugar and power generation sectors to
function in an integrated manner.
With regards to supplemental fuel, in the case of the Caribbean countries there are options to
coal as the supplemental fuel for power generation. These options include the use of BIG-GTCC
technology described in the Technical Report which would require that a portion, representing,
less than half the trash on the sugarcane that would be either burned or left in the field be
collected and stored to provide for fuel off season power generation. Other options for
supplemental fuel could be through the planting of a percentage of sugarcane lands to be planted
in energy cane. Energy cane has significantly higher biomass yields and can be harvest any time
of the year, as harvesting depends only how daily weather condition influence harvesting and
122
transportation operations .
Other options for solid biofuels to either increase electricity output generating capacity or provide
supplement for when there is no cane derived fuel include: wood waste; wood produced on
marginal lands expressly for the purpose of being used for fuel; and refuse derived fuel produced
from municipal waste. There is a wide range of fast growing tree species that have been
researched for this purposes and used in many countries; they include leucaena, acacia,
eucalyptus, and neem a major issue here would be ensuring environmental sustainability in
feedstock production and fair and transparent pricing. Linking the price for supplemental fuel to
the cost of delivered liquid fuel on a relative energy value basis would be a very logical starting
approach.
Based on the state of technology development (Annex 1), the easiest form of energy to derive
biofuel from is electricity.
However, there are a number of major challenges to getting
commercial power generated from biofuels in the region, as the UNDP GEF report of May 2006
123
points out . Institutional relationships is by far the most complex of these challenges and will be
critical in creating the enabling environment for biofuels for power generation Major challenges
in this area include: relationships between the energy and agricultural sectors; and the ownership
of the electric utility and the legal and policy framework under which it operates; and how well are
environmental issues factored into national policy – in other words, is there a sustainable
development policy framework in place.
These are two keys areas where IICA will have to play leadership roles. The first, is in catalyzing
the generation/transfer of new knowledge in key areas like production of supplemental fuel,
coordinating research to more efficient biofuels production, given the weather and soil conditions
across the region. There will be need to generate new knowledge about the germplasm of the
crops with the right characteristic for fuel production. The second key area for IICA would be
working with local partners to create the enabling environment so that power generation systems
120
Base Load power – electricity that is produced and supplied on a constant basis to the e national power grid
Deepchand Report
122
Energy Cane – Alex Alexander—Cuba research
123
Douglas, 2006
121
124
can be so designed to provide markets for biofuels, even when using conventional petroleum
sources.
Table 5.2.6:
Potential of Electricity Generation from sugarcane and energy cane
Installed
Power
Capacity
124
MW
Quantity of
Power
Generation in
2004
GWh
Electricity
generation from
Biofuels Potential
(sugarcane) *
GWh
Electricity
generation from
Biofuels Potential
(energy cane) **
GWh
Bahamas
325
149
11
22
Barbados
210
831
72
144
75
323
230
460
3,957
15,909
4,800
9,600
22
67
1
2
3,290
13,489
1,109
2,219
Grenada
39
126
1
3
Guyana
129
dna
52
600
1,200
512
216
432
767
2,974
420
840
35
14
39
77
40
107
4
7
444
178
24
48
Trinidad & Tobago
1,417
6,321
116
232
TOTAL
10,891
41,343
7,643
15,286
Island State
Belize
Cuba
Dominica
Dominican Republic
Haiti
Jamaica
Saint Kitts & Nevis
St.Vincent and
the Grenadines
Suriname
Goal 2:
Development of Small and Medium Size Solid Biofuels Enterprises
Similar in nature to its counterpart industry for liquid fuels, the small and medium size solid
biofuels industries would also focus on the replacement/substitution of petroleum fuels in small
and medium size industries, institutions, and businesses. These solid biofuels industries would
use simpler conversion technologies such as gasification to produce a low British Thermal Units
(BTU) gaseous fuel, called producer gas, for use in internal combustion engines or kiln
applications. These enterprises would potentially supply electricity for remote locations or to
businesses that generate waste biomass in solid form. Electricity generation application would
include rural electrification and water pumping. Businesses which generate waste biomass
124
* based on the 2004 crop yield and 100kwh/ton of cane milled
** based on the use of energy cane rather than sugarcane on the same area of land.
125
include furniture producers, saw mills and coconut processors that would be very good
candidates for solid biofuels enterprises.
As is the case of small-scale liquid biofuels enterprises, there is very limited information available
that allows for quick identification of opportunities. However, in the case of water pumping, it is
estimated that as much as 25 per cent of electricity used in the SIDS is for water pumping. Small
decentralized pumping using solid fuel has potential application subject to economic viability and
sustainable supply of raw material. An initial goal of 5 per cent of pumping to be done by biofuels
operated facilities would mean supplying some 517 gigawatt hours of electricity. This would
require some 520,000 tons of wood or equivalent biomass material – (shells, husks, stalks). In
terms of land area for production, this would require 25,800 hectares of land in fast growing trees
such as Leucaena, Acacia, and Eucalyptus. These energy plantations will provide direct
employment to 21,700 persons. The existing situation with the availability of wood and wood
waste is shown in Table 5.2.7.
126
Table 5.2.7:
Average Annual Wood Production and Derived Wood Products (Select Caribbean Countries)
125
Fuel & Charcoal
Net Trade
Sawnwood
Paper
Total Roundwood Production
Production
Industrial Roundwood
in
3
3
3
3
3
Metres
% Change Metres
% Change Metres
% Change Metres
% Change Metres
% Change Roundwood
(2000-02)
(1990-02)
(2000-02) (1990-02) (2000-02) (1990-02) (2000-02) (1990-02) (2000-02) (1990-02) (2000-02)
Cuba
2,378,000
98.9 1,554,000
192.0 824,000
-5.6 186,000
6.1
57,000
0.0
0
Dom Republic
562,000
0.0
556,000
0.0
6,000
0.0
0
0.0 130,000
0.0
9,000
Haiti
2,210,000
0.6 1,971,000
0.7 239,000
0.0
14,000
0.0
1,000
Jamaica
874,000
-1.6
591,000
-2.4 282,000
0.0
66,000
0.0
1,000
Trinidad & Tobago
96,000
-20.0
36,000
-2.3
60,000
-29.0
39,000
34.0
8,000
Total
6,120,000
4,708,000
Per cent of Roundwood Going to:
Fuel & Charcoal
Industrial Roundwood Sawnwood
Paper
Cuba
65
35
23
6.917476
Dom Republic
99
1
0
2166.667
Haiti
89
11
6
0
Jamaica
68
32
23
0
Trinidad & Tobago
38
63
65
0
125
USAID (2003). Latin America and the Caribbean Selected Economic and Social Data. United States Agency for International Development, Bureau of Latin America and the
Caribbean, Washington, D.C., 20523, May 2004
127
Goal 3:
Development of 100 per cent of the Viable Electricity Potential from Sugarcane
by 2020
Based on the 2004 sugarcane level of production, it is estimated that some 3,800 to 7,600
Gigawatts hours of electricity can be produced from cogeneration of bagasse, representing some
19 per cent of total electricity consumption in 2004, as shown in Table 5.2.8. If the region met the
25 per cent goal for ethanol in gasoline by 2012, based on the 2004 gasoline imports quantities,
this would require production of some 12 million tons of sugarcane (this assumes that all cane
juice is used for ethanol). This amount of sugarcane would provide bagasse for the production of
between 1,200 to 2,400 Gigawatt hours of electricity, depending on technology choice. This
amount of electricity would be equivalent to the avoided import of 385 to 770 million liters of
diesel, at the base price of US$70 per barrel for crude, this quantity of electricity would be
equivalent to US$260 to $520 million.
As discussed earlier, under the 50 per cent goals, the production of electricity from bagasse for
these factories as base load facilities for power supply require supplemental fuels. This will
provide a market for the production of supplemental biofuels in solid or liquid form.
Table 5.2.8:
Estimated Maximum Potential Power Generation from Sugarcane Residues
Maximum Potential Power Generation
by Fuel Source
Estimates of Potential Output
Cane (t)
Barbados
Belize
Cuba
Dom. Republic
Guyana
Haiti
Jamaica
St. Kitts & Nevis
Trinidad & Tobago
Total
475,978
Bagasse (t) Trash (t)
Bagasse
(GWh/yr)
Trash
(GWh/yr)
Total
(GWh/yr)
138,034
28,559
46
7
53
43,026,773 12,477,764
5,720,272 1,658,879
2,581,606
343,216
4,159
553
641
85
4,800
638
1,169,832
339,251
2,329,286
675,493
210,113
60,933
1,229,023
356,417
54,161,278 15,706,771
70,190
139,757
12,607
73,741
3,249,677
113
225
20
119
5,235
17
35
3
18
807
130
260
23
137
6,042
Cuba has been utilizing cane residues including trash as fuel for over 10 years. For example,
between 1983 and 2005, Cuba used as fuel more than 2 million tonnes of residues that
126
substituted for 500 thousand tonnes of oil and prevented 1.5 million tonnes of CO2 emissions .
However, this represents only 5 per cent of its cane residue potential; therefore supplemental fuel
sources are available. Also, as in Table 5.2.7 above, there is significant amount of wood
availability in the sugar growing countries to provide supplemental fuel for year-round electricity
generation, as well as to provide feedstock supply to small and medium scale enterprises.
5.3
Strategic Element 3: Build the sustainability of IICA to support agro-energy
entrepreneurial activities of the economically disadvantaged that lead to
sustainable livelihoods and a healthy environment
ICCA will need to ensure that it has the institutional capacity to sustain and support agro-energy
entrepreneurial activities that lead to sustainable livelihoods and a healthy environment
particularly for rural populations. The approach to institutional capacity would be through direct
strengthening and through partnerships with regional and international organizations and
126
Douglas, 2006
128
institutions that would provide the range of professional expertise needed to support development
of entrepreneurs in biofuels production and use. Development of small and medium size liquid
and solid biofuels enterprises provides an excellent opportunity for generating employment and
revitalizing rural economies, as well as a mechanism for improving diffusion of technologies.
To implement this element of the regional agro-energy program, IICA would increase its
institutional capacity in the areas of evaluation, financing, installation, operation, and maintenance
of modern biomass technologies in order to effectively promote new entrepreneurial ventures
using biomass technologies and services, and creating markets by raising awareness among
end-users for various applications of such technologies. Development of small and medium scale
liquid and solid biofuels enterprises would involve the provision of training to existing and
prospective entrepreneurs in starting and managing business activities relating to conversion of
feedstock in energy services, and supply and maintenance services (i.e., promote
commercial/entrepreneurial activities in rural areas based on biomass); providing training to other
end-users (like farmers, household members, small industries and shop-owners) in various uses
of biomass energy (i.e., promote development of rural markets for biomass-based economic
activities); interfacing with research and development institutions engaged in biomass technology
development, to provide ready access to relevant technological information, and; interfacing
between local governing bodies/representatives, suppliers of biomass-based technologies, local
financing institutions, entrepreneurs, and other end-users.
Goal 1:
Development of Small and Medium Size Liquid Biofuels Enterprises
The goal is to bring about the liquid biofuels to substitute or supplement the use of petroleum
liquid fuels in providing process heat and/or electricity in small and medium businesses,
institutions, and industries. These biofuels enterprises would primarily use simpler conversion
technologies such as small to medium scale esterification of plant oils for the production of
biodiesel, and anaerobic fermentation for the production of low caloric value but easily
upgradeable, biogas (the Technical Report describes, in detail, the production and use of these
fuels).
Potential industries would be characterized by production agreements between users and
entrepreneurs. For example, operations of fleet vehicles such as bus and trucking companies
could obtain fuel from energy entrepreneurs producing biodiesel from oil seeds (coconuts, castor,
jatropha), or from waste edible oils. Such relationships would be beneficial to both producers and
users once oil is above the threshold price. Other possibilities include the production of special
crops (cassava and leguminous forage such as leucaena) or agricultural waste for the production
of biogas. Biogas produced close to its location of use has been shown to be competitive with
cheap oil ($30 per barrel) in a number of applications ranging from lighting to cooking, water
heating, and generation of steam and/or electricity.
Unlike the case for the larger agro-energy industries where it is possible to use existing
information to make estimates and set targets based on economic scale of production and
projected costs, it is not possible to do so in the case of small and medium scale biofuels
industries due to the absence of available information on energy use in institutions such as
hospitals, prisons, schools, and agro-processing industries. The small and medium size industries
would fit into these niche markets.
5.4
Strategic Element 4: Build IICA’s organizational capacity to accomplish its
mission – The Role of IICA
In recent times, IICA has undertaken some important institutional transformations focused on
strengthening the capabilities for formulating strategies and policies for agriculture and rural life,
modernizing agricultural markets, promoting market access, developing institutional frameworks
for technological innovation, implementing joint activities to eradicate pests and diseases,
overhauling agricultural education, disseminating information and knowledge for agricultural and
129
127
rural management and addressing emerging issues . This strategy for an agro-energy program
would require that ICCA continue with its transformation process to ensure that it is proactive, and
that it increases its capacity in agro-energy management by training its professionals in the
Institute’s member states to develop the capacity that will be required at the national and local
levels to implement a biofuels programs.
Given the limited capacity that exist in the energy sector in the majority of the countries across
the region, the development of agro-energy industries producing biofuels will require IICA to put
in place institutional capacity for the provision of technical assistance. This role is critical and one
that IICA, based on its institutional character, is uniquely positioned to play. There are four key
categories of functional support to be provided by IICA: support for development of policy and
legal framework; building capacity, promoting investments; and catalyzing a research,
development and demonstration program as an effective means of advocacy.
Policy and Legal Framework Development
•
•
•
Assisting National Governments to identify potentially viable biofuels industries, and
accessing the range of benefits and impacts and relationship with land resources,
employment, and level of petroleum fuel usage.
Assisting national levels efforts for the development of the policies that will catalyze and
drive the development of biofuels production.
Supporting the development of effective monitoring and evaluation system to track
progress and identify areas of risks.
Building Capacity at the National and Local Levels
•
•
•
•
•
•
•
•
Support the member countries with the identification of available lands and appropriate
crops that would provide the maximum sustainable supply of raw material.
Assist countries in assessment of feedstock production potential.
Assist with the preparation of pre-feasibility studies to identify potential industries,
constraints and cost benefits.
Provide information support facilities – this could include virtual demonstration centre of
various agro-energy industries.
Assist with the development/evaluation of financing arrangements and/or power purchase
agreements.
Supporting member governments in the development of public education and awareness
programs.
Undertaking Environmental Impact Assessments in a timely fashion.
Assistance with accessing carbon credits certification.
Promoting Investments in Agro-energy
The development of regional strategies to advance the production and use of biofuels is a critical
role for IICA in catalyzing development of national industries. The regional dimension would allow
for an increased number of options for biofuels production versus purely national options. For
example, due to environmental and/or land resource endowment, economies of scale, and labor
cost, some countries will not be able initially to establish viable industries for a particular biofuel.
However, through the CSME, countries with markets but not at economic scale or no capacity to
produce a particular biofuel, can establish partnerships with other countries. This is a model used
very successfully by countries like Singapore, that have very limited agricultural land on which to
produce food but through bilateral agreements or acquisition of land in other countries invest in
agricultural enterprises to help meet national food demand.
127
IICA Annual Report 2005
130
Catalyzing a Focused Research, Development and Demonstration Program
IICA would support the establishment of research, development and/or demonstration of biofuels
systems, including the development and/or use of high biomass producing crops such as energy
cane, oil seeds and fast growing tree species. This would include the development and/or
demonstration of technologies that convert biomass feedstock into products to meet energy
market needs at local and national levels
Goal 1:
To provide IICA with the tools necessary to effect proactive, sustainable, agroenergy management and for IICA to formalize efforts to train project officers in
professional skills in energy planning and policy, and engineering.
The strategy for the development of agro-energy industries in the region, based on substitution of
liquid and solid biofuels for petroleum fuels in regional transportation and electricity generation,
will provide the region with new impetus for the troubled agricultural sector that, as discussed
earlier, has been in decline both in terms of contribution to national development through
employment generation and export earnings, for more than a decade. As discussed, the changes
in global trade protocol have negatively impacted the economic and financial returns from export
commodities such as sugar and bananas. In addition, the region’s farmers are having difficulties
in competing with imported food in their domestic market. For example, in St. Kitts and Nevis,
more than 85 per cent of food is imported; this trend makes for a less than promising future for
the sector in many countries across the region, which as shown in Table 5.4.4 below, is a major
employer in a number of countries. Diversification into the energy market could help to
significantly improve the future prospects of the sector.
Table 5.4.4:
Total Population, Agricultural Population and Rural Population (Select
Caribbean Countries)
Country
Total
Agricultural
Rural Population
130
Population Population Relative to Relative to Total (%)
128
129
(millions)
Total (%)
Antigua and Barbuda
0.1
24
62
Barbados
0.3
4
48
Belize
0.3
30.3
52
Cuba
11.2
13.5
25
Dominican Republic
8.6
15.4
34
Guyana
0.7
16.9
62
Haiti
2.9
dna
63
Jamaica
2.6
20
43
21.1
66
Saint Kitts & Nevis
St. Lucia
St. Vincent and The
Grenadines
0.2
22.4
70
0.1
23.1
42
Suriname
0.4
19
24
Trinidad & Tobago
1.3
8.3
24
128
Human Development Report 2005 (data for 2003)
FAOSTAT
Food and Agriculture Indicators 2003 – Prepared by Socio-Economic Statistics and Analysis Service (ESSA), Food
and Agriculture Organization (FAO), October 2005. http://www.fao.org/es/ESS/
129
130
131
There are a number of causes for the agricultural sector problems including: high cost of inputs;
limited opportunities to exploit economies of scale; weather conditions; and declining capacity
and investment. Plans for rehabilitating the sector are focused on linking the agriculture sector
with the thriving tourism sector, specifically focusing on vegetable, meats and fruits. The
rationale for this focus is the existence of a unique market that has remained under-exploited
Linking agriculture with tourism provides for natural synergies, which when realized, can spur
economic development, increase farm income and open up more opportunities for persons
working in both sectors. More specifically, linking the two sectors could contribute to:
1. Increased resilience in rural communities through enterprise development;
2. Mainstreaming of small and marginalized rural stakeholders;
3. Strengthening of farmer groups and cooperatives;
4. Creation of opportunities for women and youth;
5. Validation and strategic commercialization of the patrimony and intellectual property
related to traditional knowledge and agricultural heritage in production systems, foods,
indigenous herbals, craft and music, and;
6. Enhanced investment in rural areas and increase in tourism-generated income on
131
farms.
The potential value of the biofuels market is significantly greater than the agriculture for tourism
market and agricultural exports combined, and a lot less vulnerable to demand fluctuations and
inclement weather (tropical storms, drought, etc.). In this regard, it compliments the agriculture for
tourism strategy promoted under the leadership of IICA, as biofuels raw material production is
much more sustainable on marginal and/or sloping lands, than annual crops. This represents
significant synergy between both strategies as the biofuels industries would produce some key
inputs for the production of vegetables and fruits that would help maximize economic benefits.
Potential inputs from biofuels would include fertilizers, enhanced water resources, local energy
services – refrigeration, lighting, processing, irrigation, transportation, etc., all of which are critical
to a number of countries successfully implementing the agro-tourism opportunities as well as
benefiting from conventional agricultural activities.
The major issues that may arise in some countries where limited land resources and relatively
high population density come together, is land-use policies. The international experience shows
that at periods during the development of the Brazilian program, there has been debate of how
much land for food and how much for fuel feedstock. This debate is not likely in many countries,
as there is growing dependence on imports to meet food demand. Land use policies will,
however, be critical in ensuring that the soil, the crops as well as the production systems are
sustainable. Unlike increasing the production of meats, vegetables and fruits, which represents
changes and challenges within the sector, the production and use of biofuels as a substitute for
petroleum represents challenging changes within the national economy. The global experience
discussed earlier, as well as the constraints and challenges analyzed, shows that the
development of national scale biofuels programs requires:
• Strong Commitment from the National Government;
• Private sector with strong vested interest;
• Institutional Capacity;
• Market Access and Transparent Pricing, and;
• Quality Control.
For IICA to play this role it will need to undertake institutional strengthening adding professional
skills in energy planning and policy, and information support.
131
The Bahama Journal, Bahamas News Online Edition, June 21, 2005. “Agribusiness Outlook: Agro-Tourism, Godfrey
Eneas. http://www.jonesbahamas.com/?c=47&a=9189
132
CHAPTER 6
FUNDING THE STRATEGY & ESTIMATED
BUDGET
133
6.0
FUNDING THE STRATEGY AND ESTIMATED BUDGET
The principal strategy for financing the investments to develop national biofuels industries in
countries where such industries are considered viable is to redirect government investments in
the energy and agriculture sectors in order to catalyze the development of viable industries.
However, prior to that, an enabling environment has to exist and the activities discussed in
Chapter 5 are intended to achieve this. As discussed earlier, this enabling environment at the
national level, would be characterized by government leadership and policies to support
production and market in biofuels. Caribbean countries have significant annual spending in both
energy and agriculture. As discussed in Chapter 5, it is expected that in response to increasing
prices for crude, the future cost of petroleum will require a greater portion of GDP. It is also
anticipated that higher energy prices could reduce GDP, as was the case in the 1980s. If higher
energy prices results in reduction in GDP and consequently further increases the percentage of
GDP needed to pay for fuel imports, an inward economic spiral of sorts leading to increased
economic vulnerability could result for some, if not all of the countries in the region.
The rationale for advocating greater investment in agro-energy is that this approach builds the
economic resilience of the country during a period where the international energy supply outlook
forecasts continued high and rising costs of petroleum fuels in the future. In addition, it
represents a potentially sustainable source of employment for workers with limited skills, with the
activities outlined previously intended to help create awareness and understanding among the
national stakeholders in sustainable development.
The degree of success in the development of any regional initiative is dependent on having a
resource mobilization strategy that delivers the needed funding to support implementation. This
chapter of the document lays out the basic requirements for the development of this strategy by
identifying potential sources of funding and providing estimates of core costs. As stated earlier,
agro-energy is expected to be a commercial enterprise and, as such, significant portions of the
funding for implementation of production related activities are expected to come from private
sources as debt or equity. Investments will also be coming from the public sector and may
primarily be in-kind such as land, equipment, physical facilities, or debt guarantors. The resource
mobilization strategy will therefore primarily focus on core costs and program activities, such as
funding for consultations, support for the information and technical assistance, annual and biannual events, etc.
6.1
Potential Funding Sources
Funding for implementation, with initial focus on the sugarcane producing countries, is estimated
to cost approximately US$48.8 million, over the period 2007-2012. In addition to support from
IICA, development of biofuels industries will allow sugar-producing Caribbean countries to
capitalize on opportunities for financial assistance from the European Commission (EC). The EC
has established a program to make funding available to countries to help modernize, adjust or
diversify their sugar sectors. While the amount of money the EC will make available for
restructuring the Caribbean sugar industry is still yet to be decided upon, reports have suggested
that in 2007, this will amount to EUR 165 million. Over the period 2007-2013, such support is
expected to total EUR 1.3 billion in all, averaging EUR 184 million per annum and suggesting that
132
in some years the figure for support may rise above 200 million euros .
Another potential source is the APC-EU Energy Facility that, according to the EU, is intended to
help ACP countries reduce dependence of fossil fuel through the development of renewables and
increased efficiency. The EUR 200 million fund is intended to offer grants to co-fund energyrelated projects. According to the EC, the necessary Financing Proposal for the fund is currently
under preparation by the Commission’s services and, it is hoped, a positive decision on the
132
“EC nears agreement for Caribbean fund”, David Jessop, Jamaica Gleaner, May 7, 2006, http://www.jamaicagleaner.com/gleaner/20060507/business/business6.html
134
implementation of the fund could be forthcoming by mid-2006. All financial commitments must be
completed before 31 December 2007, the date of expiry of the current European Development
133
Fund (EDF9) .
Additional opportunities might also exist under the EU Biofuels Strategy. The EU is supporting
biofuels with the objectives of reducing greenhouse gas emissions, boosting the decarbonisation
of transport fuels, diversifying fuel supply sources and developing long-term replacements for
fossil oil. One of the three aims of the EU Biofuels Strategy is to explore the opportunities for
developing countries – including those affected by the reform of the EU sugar regime – for the
production of feedstock and biofuels, and to set out the role the EU could play in supporting the
development of sustainable biofuel production. According to the strategy, the Commission will:
• Ensure that accompanying measures for Sugar Protocol countries affected by the EU
sugar reform can be used to support the development of bioethanol production;
• Develop a coherent Biofuels Assistance Package that can be used in developing
countries that have a potential for biofuels;
• Examine how the EU can best assist the development of national biofuel platforms and
regional biofuel action plans that are environmentally and economically sustainable.
The proposal by the Commission for accompanying measures for Sugar Protocol countries
affected by the EU sugar reform is an important cooperation initiative. The accompanying
measures will support restructuring or diversification in the affected countries, on the basis of their
strategies to face the consequences of the reform. Within this framework, the EU could support
the development of the ethanol production and possibly electricity generation sector, based on
134
thorough country-specific studies . Resources are also potentially available form Bilateral
sources such as the Italians under the G/8 Italy Global Bioenergy Partnership.
There is also the UNDP’s development instrument, the Energy and Environment Thematic Trust
135
Fund (TTF) that will operate at three levels: Country, Regional and Global. The TTF will focus
on low-income countries, the Least Developed Countries (LDCs) and the Africa region, while a
small proportion of the resources will be used to fund global and regional initiatives. The funding
target for the Energy and Environment TTF is US$100 million over a period of 4 years — or about
US$25 million per year. The four priority areas in energy for UNDP are:
1. Strengthening national policy frameworks to support energy for poverty reduction and
sustainable development;
2. Promoting rural energy services to support growth and equity;
3. Promoting clean energy technologies for sustainable development; and
4. Increasing access to investment financing for sustainable energy.
The private sector has also played a role in financing at least three ethanol plants in the
Caribbean (Trinidad and Tobago and Jamaica), with Jamaica’s Petrojam partnering with the
Brazilian company, Coimex Trading, the largest ethanol producer in Brazil, on the $7.5 million
project. In addition to the Petrojam/Coimex 40-million gallon (152 million litres) facility, there is
Jamaica Ethanol Processing Ltd., a 60-million gallon plant, owned by the California company, ED
& F Man. This plant, which began operation in the 1980s, uses mainly European wine as its
feedstock.
In Trinidad, a local firm, Trinidad Bulk Traders Limited, a subsidiary of Angostura Holdings
Limited, received a 15-year lease from Petrotrin, for the construction of the 100-million gallon
ethanol plant. Fifty per cent of the US$11 million for the Trinidad and Tobago project was
“internally generated,” with the other half sourced through an “exim facility” from M&T Bank in
Washington. The company will be importing industrial grade, sugarcane produced alcohol from
133
ACP-EU Energy Facility, http://ec.europa.eu/comm/europeaid/projects/energy/index_en.htm
An EU Strategy for Biofuels, 2006, Commission of the European Communities, Brussels,
http://ec.europa.eu/comm/agriculture/biomass/biofuel/com2006_34_en.pdf
135
UNDP Thematic Trust Fund – Energy and Environment for Sustainable Development (1/12/2005),
http://www.undp.org/dpa/publications/TTFEnvironment0105.pdf
134
135
Brazil, because Trinidad and Tobago cannot produce enough alcohol for ethanol production.
Jamaica, on the other hand, will be planting 9,000 hectares of sugarcane.
If Guyana were to finalize ongoing talks with potential investors, it could see the construction of at
least two plants at a cost of at least $100 million (producing 80 million and 130 million litres per
annum) and the planting of 35,000 hectares of land cultivated with sugarcane (both plants plan to
use Brazilian feedstock in the first instance). The Government of Barbados also has plans of
setting up an ethanol plant that requires $195 million in investment, and plans are underway to
utilize, in the first instance, the existing 23.000 acres of land that is actively under sugarcane
136
cultivation to produce more of the fuel cane (energy cane) varieties .
Opportunities for stimulating private sector development could be enhanced through partnership
with the IDB, under its $1.2 billion Multilateral Investment Fund (MIF), which supports innovative
private sector development. The MIF provides grants and investment mechanisms and is a major
source of technical assistance grants for micro and small business development. For example, in
2004, the MIF approved a grant of $5.5 million toward the Central American Renewable Energy
Cleaner Production Facility (CAREC), a $15 million project. The general objective of the project
is to promote the use of renewable energy technologies for power generation and to improve the
use of energy and other inputs for companies’ operations in Central America. The purpose of this
CAREC Facility is to provide mezzanine-type financing for small and medium enterprises (SMEs)
in the areas of proven renewable energy, cleaner production, and energy efficiency related deals
in Central America. Such deals will also have a myriad of socio-economic and environmental
benefits: small enterprise development, increased productivity, an alternative to fossil fuel
137
dependence and improved health through reduced levels of harmful emissions .
Both the IDB and the Caribbean Development Bank (CDB) could make commercial funds
available for private sector partnerships. As mentioned earlier, the cogeneration project in Belize
was part-funded with a CDB loan. At the national level, there are opportunities for program
funding from the bilateral donors, to support national level activities and initiatives and events.
The major bilateral donors are Canada, UK and USA, with Japan, France, Germany and Norway
also active.
6.2
Estimated Program Budget
As shown in Table 6.2.1 below, the total estimated cost to implement programs in the strategy is
approximately $48.8 million over a five-year period. National governments in the majority of the
countries allocate a significant percentage of annual budgets to the agricultural sector. It is
anticipated that with the establishment and development of biofuels industries and subsequent
verification of its many advantages and associated benefits that governments will increase its
investment in the sector.
In all the sugar-producing countries, there are either projects being proposed or under
implementation to derive electricity from bagasse. In addition, a number of countries are exploring
the viability of producing ethanol for use as transportation fuel. In these countries, IICA’s role
would be more in a capacity development and support role – providing information, facilitating
exchange of experience and expertise, technology transfer, and research and development. In
the other countries where there are no activities focused on the production of energy by the
agricultural sector, then IICA’s role would have to also include sensitization, demonstration, and
public education.
136
Economic and Financial Policies of The Government of Barbados, Presented by the Rt. Hon. Owen Arthur, Minister of
Finance, January 16, 2006, http://www.barbados.gov.bb/Docs/Budget2006.pdf
137
IDB (2006)
136
Table 6.2.1:
Estimated Budget
ITEM
PERSONNEL
2007
2008
2009
2010
2011
2012
Total
$
$
$
$
120,000
100,000
80,000
50,000
$ 120,000.00
$ 100,000.00
$ 80,000.00
$ 50,000.00
$ 120,000.00
$ 100,000.00
$ 80,000.00
$ 50,000.00
$ 120,000.00
$ 100,000.00
$ 80,000.00
$ 50,000.00
$ 120,000.00
$ 100,000.00
$ 80,000.00
$ 50,000.00
$
$
$
$
120,000.00
100,000.00
80,000.00
50,000.00
$
$
$
$
720,000.00
600,000.00
480,000.00
300,000.00
Formulation & Implementation of
Biofuels Policy (tools)
$
Guide for Policy Makers (tools)
$
100,000
100,000
$
$
50,000
50,000
$
$
20,000
20,000
$
$
20,000
20,000
$
$
20,000
20,000
$
$
20,000
20,000
$
$
230,000.00
230,000.00
Advocacy for Biofuels Industries
(tools)
Program Director
Technical Director
Information Coordinator
Administrative Assistant
PROGRAMS
Strategy 1
$
100,000
$
50,000
$
20,000
$
20,000
$
20,000
$
20,000
$
230,000.00
Consultations - Special Interst
Groups
Development of ESCO
Annual Awards
Agro-energy Conference
Public Awareness & Education
Strategy 2
$
$
$
$
$
400,000
100,000
50,000
100,000
350,000
$
$
$
$
$
200,000
100,000
50,000
200,000
$
$
$
$
$
100,000
100,000
50,000
100,000
100,000
$
$
$
$
$
100,000
100,000
50,000
100,000
$
$
$
$
$
50,000
100,000
50,000
100,000
100,000
$
$
$
$
$
50,000
100,000
50,000
100,000
$
$
$
$
$
900,000.00
600,000.00
300,000.00
300,000.00
950,000.00
Ethanol Production 10%
Ethanol Production 25%
Transportation Fuels 30%
$
$
$
100,000
100,000
100,000
$
$
$
100,000
100,000
100,000
$
$
$
100,000
100,000
100,000
$
$
$
100,000
100,000
100,000
$
$
$
100,000
100,000
100,000
$
$
$
100,000
100,000
100,000
$
$
$
600,000.00
600,000.00
600,000.00
50% Electricity from Sugarcane
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
600,000.00
100% Electricity from Sugarcane $
Strategy 3
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
600,000.00
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
600,000.00
Small & Medium Size Solid
Biofuels Enterprises
Strategy 4
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
100,000
$
600,000.00
Technical Assistance
$ 2,000,000
$ 1,000,000
$
1,000,000
$
10,000,000.00
Small & Medium Size Liquid
Biofuels Enterprises
$ 2,000,000
$ 2,000,000
$ 2,000,000
137
Biofuels Research &
Development
Feasibility Studies
$ 5,000,000
$ 1,000,000
$ 5,000,000
$ 1,000,000
$ 5,000,000
$ 1,000,000
$ 5,000,000
$
500,000
$ 2,000,000
$
500,000
$
$
2,000,000
300,000.00
$
$
24,000,000.00
4,300,000.00
Public/Private Sector
Partnerships
Training - IICA Staff
ESTIMATED TOTAL
$
50,000
$
35,000
$ 10,435,000
$
50,000
$
35,000
$ 9,835,000
$
50,000
$
35,000
$ 9,645,000
$
50,000
$
25,000
$ 9,035,000
$
50,000
$
25,000
$ 5,085,000
$
$
$
50,000
20,000
4,780,000
$
$
$
300,000.00
175,000.00
48,815,000.00
138
Potential sources of funding for core program activities beyond IICA itself include:
• South-South Initiative to assist the Caribbean to achieve 10 per cent renewable energy
mix, in its energy supply by 2015. Initiative under development is jointly coordinated by
the United Nations Environment Programme (UNEP) and UNDP.
• GEF - under various operations programs such as natural resources management, land
degradation and biodiversity protection.
•
Bilateral donors and private philanthropic organizations funding climate change
mitigation and adaptation efforts.
6.3
Investment Costs
The Technical Paper (Appendix 1) documents the levels of investment for different levels of
production of biofuels and electricity. The level of investment for each national program will
depend on the character of the national program. In addition, to the conventional financing
available to national governments from financial institutions, non-conventional financing is
available from private sources that would deliver on a turnkey basis - biofuel production
infrastructure in the form of: Build Own Operate (BOO); Build Own Lease and Transfer (BOLT).
These un-conventional financing methods are increasingly being used in the region for the
development of airports, shipping ports and highways. These financing methods, and in
particular Build Own Lease and Transfer, have many advantages over conventional financing
options such as loans from the multilateral financial institutions.
139
CHAPTER 7
CONCLUSION
140
7.0
CONCLUSION
The potential agro-energy industries that can be developed within the region was identified based
on the existing markets for petroleum products, which can be effectively and viably substituted
with biofuels. Based on these criteria and the potential for viable production of the raw material
and subsequent conversion and efficient distribution, biofuels for use in national scale
transportation and electricity generation represents the best options.
Over the coming years, the rise in energy prices will result in many private sector entities from
developed countries trying to convince governments to sign on to renewable energy projects. It is
unlikely, however, that there will be any significant number of proposals for the development of
agro-energy industries for the provision of energy services. As discussed throughout the paper,
agro-energy is the most suited form of energy for the Caribbean countries, with the exception of
countries endowed with petroleum resources, or where land resources are extremely limited.
However, development of agro-energy industries has requirements that are not yet in existence in
the vast majority of the countries, and which IICA’s strategy is intended to address.
As discussed in earlier sections of the document, pursuing sustainable development is proving
very difficult for Caribbean countries. This difficulty is, however, not unique to the region. The core
requirement of sustainability, using biological ecosystems as the frame of reference, is synergy
among diversity. In the political economy, this would translate to synergistic integration of all
sectors. In the vast majority of countries across the region, the concept of sustainable
development is linked primarily to environmental concerns, and only marginally to socio-economic
development, and hence, very limited link to the productive sectors beyond environmental
impacts. The national planning process that is intended to guide socio-economic development
considers inclusion of environmental consideration, in the majority of cases, a nuisance. This
attitude is understandable as in the overwhelming majority of countries across the planet this is
the situation.
Island states are uniquely different and their long-term viability is totally dependent upon how well
they mange the natural environment which is the source of their existence. Under the
sponsorship of United Nations, the Small Islands Developing States (SIDS) was the subject of
two international meeting, the first in Barbados, in 1994, and the second in Mauritius in 2005, to
assess the condition and status of development in these small islands and low lying coastal
states. The results of both meetings were that the long-term existence of SIDS depended on their
ability to develop in a sustainable manner, and towards this end, the international community
would assist them. However, there is still a lot of work to be done to get sustainable development
accepted as the guiding principle. What is now needed are action programs to drive the
development process in that direction and help illuminate what sustainable development is, and
how to implement sustainable development.
The energy sector, despite in the vast majority of countries being the largest recurrent budget
item, or the second largest user of foreign exchange after debt servicing, receives very little
structured planning attention. In many countries, the energy sector responsibilities are not
dedicated but joined with other areas like environment, science and technology, or in some
countries not given any primary designation in Ministerial responsibility. In just about all
countries, the agricultural sector across the region is in decline, for a variety of reasons ranging
from increased occurrence of natural disasters, bad weather, to changes in the international
commodity markets brought about by WTO and European Union policies. The decline in
agricultural production and productivity under conditions of increasing population and growing
tourism has made the region very dependent on food imports. It is estimated that more than 90
per cent of the food consumed in some countries is imported.
The growing food deficiency, in combination with increasing cost of energy and cost of recovery
from natural disasters and debt servicing, is affecting the available resources for investments in
sustainable development. As discussed in the Technical Paper (Appendix 1), the production of
141
biofuels has the potential to help the region’s population address the long-term development
challenges posed by increasing cost of energy imports, declining production and productivity of
the agricultural sector, and help make land use more sustainable, and thereby minimize the
damages from hydro-metrological events ranging from floods and droughts to hurricanes. The
international experiences documented earlier shows that establishment of national biofuels
programs is very beneficial to the population despite being very challenging, requiring an
unprecedented degree of inter-governmental cooperation and partnership, with the private sector
and supportive national policies and capacity development to achieve success.
The run up of oil and gas prices over the last two years, has moved the prices of oil beyond a
number of price barriers between US$35 and US$50 per barrel which was previously considered
as the economic threshold for the viability for Biofuel production. The growing demand for oil is
outstripping the discoveries of new supplies, and where new supplies are being discovered, the
cost of extraction and/or transportation is significantly greater than for past sources of supply.
Many countries that were in the past producers of agricultural commodities such as sugar, coffee,
spices, cocoa, and bananas have substantial potential for biofuels production. Countries that are
or were sugar producers have the potential to provide significant amounts of gasoline substitute
and power for export to the grids; some countries have more potential than their domestic market,
making the trade of biofuels a possible regional trade commodity for the CSME. However,
without leadership from IICA and/or other regional institutions, this potential will be very slow in
coming. The information presented in this document and in the Technical Paper provides all the
background information and analysis necessary to support the development of regional biofuels
industries.
The analysis of fuel imports and use in the Caribbean region showed that countries that have
active agricultural sectors have potentially viable biofuels industries, although with a different mix
of products based on land resource endowment and national policy. Research and analysis, as
well as lessons learned from other countries with agro-energy industries, indicated that agroenergy has the potential to minimize the socio-economic consequences of the current energy
situation and at times reverse this situation, and in the process address a number of social and
environmental issues. The IICA strategy is based on the technical, economic and social aspects
of biofuels in the hemisphere and how agro-energy industries relate to the goal of sustainable
development. As stated previously, biofuels use would have a positive impact on the environment
and would create significant new employment opportunities.
Achieving these positive impacts would require successful implementation of the four core
strategic elements focused on the production of liquid biofuels from varying feedstocks using a
range of technologies from fermentation to distillation, and; solid biofuels
focusing on the
conversion of feedstock to heat and/or power through different forms of combustion. These two
programs would be complimented by other programs that would strengthen the linkages between
the agriculture and energy sectors, promote agro-energy entrepreneurial activities, and
strengthen IICA’s organizational capacity to accomplish its mission, making it the leading
institution on agro-energy in the hemisphere.
With the exception of two countries, almost all of the Caribbean countries are dependent on
imported petroleum fuels for energy purposes. As seen in recent times, the prices of petroleum
fuels are unpredictable and, as noted earlier, will be even more so in the foreseeable future.
Biofuels can provide a long-term alternative by using locally produced feedstock at relatively
constant cost that in many cases is already cheaper than the fossil fuels they could substitute for.
Moreover, because biofuels are locally produced by indigenous agro-industries, most of the
money spent is retained within the national economy instead of going to foreign companies. The
risks arising out of fluctuating crude oil prices adversely affecting the costs of production and
transport of goods in the country can be minimized if indigenous biomass resources are used.
IICA’s agro-energy program also provides Caribbean governments with a unique opportunity to
also address the stern challenges of rural development.
142
Dedicated biomass production, either as by-products in agro-industry (bagasse from the
processing of sugarcane, or waste from livestock production or fish processing, or markets or
from households organic waste) represents not only potential substitutes for fossil fuel, but
opportunities to improve local agricultural productivity and economic profitability, directly
contributing to environmental quality of life improvements and reducing economic vulnerability.
Several studies by international institutions as discussed in the Technical Paper indicate that
st
bioenergy will play a much larger role in energy supplies during the 21 century. This projection is
based on the successes in other developing and developed countries where energy costs are
much lower than in the Caribbean. The price of power in the islands states are significantly higher
than elsewhere, with the exception of the countries that have petroleum. The economic
implications of high cost energy can, however, be minimized through meaningful production of
electricity from biofuels and, consequently, there is high potential for these kinds of agro-energy
industries across the region. The potential industries identified for the Caribbean draws heavily
on the success and lessons from:
• Brazilian ethanol/sugar program, started in the early 1980, and which is the largest in the
world; the USA program which has grown rapidly and could soon exceed Brazil and
Australia, where a State program is underway but without a lot of political support.
• The Mauritius sugar industry co-production of electricity for export to the national grid.
• The substitution of plant oils in compression ignition vehicles in a number of the Pacific
Islands, including Vanuatu, Samoa, Cooks Islands, and Marshall Islands.
• Production of solid biofuels from fast growing tree plantations in the Philippines and India.
7.1
Recommended Next Steps by IICA
The potential contribution of biofuels to the region’s sustainable development goal is based on
potential benefits that are very substantial as shown; however there are significant challenges.
The multiplicity of the challenges lies in the characteristics of biofuel production and use. IICA
would need to:
1. Undertake a landscaping exercise at the country level to gather baseline information on
the following:
• Ongoing national strategies to address the changes in the agricultural sector in
response to the new European Union policy for agricultural imports from the ACP.
The new policy affects in particular raw sugar and banana imports to the EU.
• Land resources previously allocated to the production of export crops that could
potentially be used as biofuels raw material production.
• Land resources that are suffering environmental degradation as a result of current
uses that have potential for biofuels raw material production.
• Land resources that are currently un- or underutilized for agricultural purposes that
potentially could be used for biofuels.
• Water resources availability and future demand and supply options.
• Approaches to waste management.
• Strategies to address the increasing cost of petroleum imports and its impact on
economic growth.
• Electricity supply plans for meeting future demand as well as replacement of existing
capacity.
• Existing energy policies, price for fuels, and energy tariffs structures.
• Existing agricultural and industrial polices
• Priority environmental and social issues in the country and the sustainable
development strategies.
This exercise will provide valuable information from which IICA will be able to identify
biofuels that are best suited in the national context.
2. Assessment of ongoing regional initiatives in agricultural diversification, renewable
energy development and energy efficiency improvements, mitigation and adaptation to
143
climate change, and energy resources development. This exercise will help IICA map
the activities and identify where there is potential for collaboration in developing biofuels
industries as part of ongoing or planned initiatives.
3. Identify regional investment sources and mechanisms that are now supporting agriculture
and energy projects. As discussed, investment is a major constraint of on the agricultural
sector; it is therefore necessary to both document sources as well as the experience of
these investors, as a perquisite to the planning of activities. Unlike agriculture there has
been encouraging signs for renewable energy investment. The two most recent cases
are wind farms in Jamaica, and the sugar factory co-generation project in Belize.
4. Dialogue with National and Regional Institutions working on aspects of sustainable
development to determine potential synergy between those goals and biofuels
production. There are now are number of regional projects being implemented with
funding from the Global Environmental Facility (GEF) focused on helping the region to
address barriers and or threats to sustainable development. These include an Integrated
Coastal Water Quality improvement program being implemented on behalf of the GEF by
Caribbean Environmental Health Institute (CEHI); the Caribbean Renewable Energy
Development Program (CREDP) and the Mainstreaming Adaptation to Climate Change
(MACC) both implemented by the CARICOM Secretariat.
5. Dialogue with the sugarcane and electric utility representatives about the potential of
biofuels -- the six sugarcane CARICOM countries are significant. Based on current
sugarcane area, a flexible mixed sugar-ethanol production system, that could be adapted
to produce between 70 % sugar/30% ethanol, and 30 per cent sugar/70 per cent ethanol,
could produce between about 900 and 2,100 million liters per year. If all the current
sugarcane area were dedicated to ethanol, up to about 3,000 million liters of ethanol
could be produced with an economic value of US$2.06 billion. The residual bagasse
could be used to produce up to about 7,600 GWh of electricity equivalent to 15.4 million
barrels of diesel having an economic value of US$1.6 billion at a crude oil price of
US$70/bbl. It would also thereby reduce the exposure of the region to the current
unacceptable high levels of energy insecurity such as fuel supply and price shocks. For
instance, in 2003, Barbados spent over US$130 million on the importation of petroleum
products. This translates into approximately 9 per cent of its foreign exchange earnings.
Similarly, in 2003, Jamaica imported 27 million barrels of oil valued at US$813 million.
This was an increase in volume of 7.5 per cent and value of 27 per cent over the
preceding year. In 2004, Jamaica’s oil import bill was US$950 million or 12 per cent of
GDP (25 per cent of imports).
6. Engaging in the widest possible private sector dialogue with the following potential
stakeholders: producers, transporters, equipment suppliers, technical service providers,
financing sources ranging from commercial banks, cooperative credit union, retirement
funds, building societies, to get the private sector interested. As discussed previously,
this will be critical to the establishment and growth of National Biofuels Programs.
IICA
JULY 2006
144
Inter-American Institute for Cooperation
on Agriculture (IICA)
Technical, Social & Economic Aspects of
Agro-energy
Prepared by:
Al Binger
July 2006
145
TABLES OF CONTENTS
Abbreviations and Acronyms
List of Tables and Figures
Executive Summary
1.0
INTRODUCTION: BIOFUELS – AN OPTION FOR VIABLE ENERGY INDUSTRIES IN
THE AGRICULTURAL SECTOR
1.1
Economic Aspects of Agro-Energy
1.2
Social Aspects of Agro-Energy
1.3
Technical Aspects of Agro-Energy
1.3.1 Properties of Agricultural Residues
1.3.2 Agro-energy Crops and their Characteristics
1.3.3 Agro-energy Conversion Technologies
1.3.3.1 Anaerobic Digesters
1.3.3.2 Gasifiers
1.3.4 Efficiency Improvements in the Sugar and Ethanol Industry
1.3.4.1 Cogeneration in the Sugar and Ethanol Industry
1.3.4.2 Ethanol Production
1.3.5 Coconut Oil
1.3.6 Biodiesel
1.4
Cost-Benefits of Biofuels
1.4.1 Biomass for electricity generation
1.4.2 Biofuels for Transportation
1.4.3 Benefits of a Biofuels Industry
2.0
AGRO-ENERGY EXPERIENCES & LESSONS LEARNED
2.1
Brazil - Experiences and Lessons Learned
2.1.1 Ethanol
2.1.2 Biodiesel
2.2
India - Experiences and Lessons Learned
2.2.1 Ethanol
2.2.2 Biodiesel
2.3
Philippines - Experiences and Lessons Learned
2.3.1 Ethanol
2.3.2 Biodiesel
2.3.3 Pure Coconut Oil
2.4
Pacific Island Countries - Experiences and Lessons Learned
2.4.1 Sugar Industry in Fiji
2.4.2 Coconut Industry in Fiji
2.4.3 Coconut Oil for Diesel Vehicles in Vanuatu
2.5
Australia - Experiences and Lessons Learned
2.6
United States of America (US) - Experiences and Lessons Learned
2.6.1 Ethanol
2.6.2 Biodiesel
2.7
Cuba - Experiences and Lessons Learned
2.7.1 Cogeneration from Sugarcane Biomass
2.7.2 Ethanol
2.8
Denmark - Experiences and Lessons Learned
3.0
CHALLENGES AND OPPORTUNITIES TO DEVELOPING AN AGRO-ENERGY
INDUSTRY
3.1
Institutional Relationships
3.2
National and Local Ownership
3.3
Raw Material Production and Transportation
146
3.4
3.5
Developing Capacity
Policy and Legislation
4.0
POTENTIAL FOR BIOFUELS INDUSTRIES IN THE CARIBBEAN
4.1
Electricity
4.2
Bagasse, forestry, woody biomass (solid fuel) for electricity generation
4.3
Transportation Fuel
4.4
Gasoline
4.5
Diesel Fuel
4.6
Domestic Fuel
4.6.1 Producer gas from gasifiers
4.6.2 Biogas gas from anaerobic digesters
5.0
RECOMMENDED AGRO-ENERGY INDUSTRIES FOR THE CARIBBEAN
5.1
Potential Industries
5.1.2 Liquid Biofuels Industry
5.1.2.1 Ethanol
5.1.2.2 Biodiesel/Plant Oils
5.1.2.3 Issues in the Usage of Liquid Biofuels to Substitute Gasoline and
Diesel
5.1.3
5.2
6.0
Solid Biofuels Industries
5.1.3.1 Electricity Generation
5.1.3.2 Issues for Consideration in Biofuels for Electricity Generation
5.1.3.3 Small and Medium Scale Solid Biofuels Enterprises
Rationale for Selecting Applications for Biofuels
DEVELOPMENT OF THE CARIBBEAN BIOFUELS INDUSTRY
6.1
Liquid Biofuels Industries
6.1.1 Cost of Industrial Scale Biodiesel Plants
6.1.2 Liquid Biofuels Industries - Goal 1: Ethanol Production to Achieve 10%
Blend in Gasoline (550 Million Liters) and 20 Million Barrels by 2010
6.1.3 Liquid Biofuels Industries - Goal 2: Development of Small- and MediumSize Liquid Biofuels Enterprises by 2008
6.1.4 Liquid Biofuels Industries - Goal 3: Ethanol Production to Achieve 25%
Blend in Gasoline (1,500 Million Liters or 9.6 Million Barrels) by 2015
6.1.5 Liquid Biofuels Industries - Goal 4: Production of 30% of Regional
Transportation Fuels Need (9,900 Million Liters of Ethanol) by 2020
6.2
Solid Biofuels Industries
6.2.1 Solid Biofuels Industries - Goal 1: Development of 50% of the Viable
Electricity Potential from the Sugarcane
6.2.2 Solid Biofuels Industries - Goal 2: Development of Small- and MediumSize Solid Biofuels Enterprises
6.2.3 Solid Biofuels Industries - Goal 3: Development of 100% of the Viable
Electricity Potential from Sugarcane
6.3
The Benefits of Biofuels Industries for the Region
6.3.1 Socio-economic Benefits
6.3.2 Environmental Benefits
6.4
Requirements for the Development of a Biofuels Program
6.4.1 Policy and Legal Framework
6.4.2 National Capacity
6.4.3 Investment Capital
6.4.4 Hardware and Infrastructure
6.4.5 Public Ownership
6.5
The Challenges - Production & Utilization
6.6
The Role of IICA
147
6.6.1
6.6.2
7.0
6.6.3
6.6.4
CONCLUSION
Policy and Legal Framework Development
Building Capacity to support development national capacity in Biofuels
production and use
Promoting Investments In Biofuels
Public Education and Ownership
REFERENCES
ANNEXES
Annex 1
Annex 2
Annex 3
Annex 4
-
Details of Uses of Liquid Biofuels
Technologies for Production of Biofuels
Biodiesel Production Process
Biofuels Production Potential of Caribbean Countries
148
TABLES & FIGURES
TABLES
Table 1.0.1:
Table 1.0.2:
Table 1.0.3:
Table 1.0.4:
Table 1.0.5:
Table 1.0.6:
Table 1.0.7:
Table 1.0.8:
Table 1.2.1:
Table 1.2.2:
Table 1.2.3:
Table 1.2.4:
Table 1.3.2:
Table 1.3.3:
Table 1.3.4:
Table 1.3.5:
Table 1.3.6:
Table 1.3.7:
Table 1.3.8:
Table 1.3.9:
Table 1.3.10:
Table 1.3.11:
Table 1.4.1:
Table 1.4.2:
Table 1.4.3:
Table 4.0.1:
Table 4.0.2:
Table 4.0.3
Table 4.0.4:
Table 4.1.1:
Table 4.1.2:
Table 4.1.3:
Table 4.1.4:
Table 4.1.5:
Table 4.4.1:
Table 4.4.2:
Table 4.5.1:
Table 4.6.1:
Table 4.6.2:
Table 5.0.1:
Table 5.0.2:
Table 5.1.1:
Table 5.1.2:
Table 5.1.3:
Classification of Bioenergy Resources
Potential for Generating Electricity from Sugarcane Residues
Regional Gasoline Consumption (000’s Barrels)
Regional Diesel Consumption (000’s Barrels)
Fuel Consumption by Electric Utilities
International Electricity Prices For Household And Industry - Non-OECD
Countries
Agricultural Production and GDP in Caribbean SIDS
Regional Crop Production (2003 – 2005)
Sources of Foreign Exchange Earnings
Estimated direct employment figures arising from Agro-energy
Selected indicators of sustainability of bioenergy programs
The Sugar/Ethanol Sector – Brazil 2003
Energy Content of the Sugarcane Plant
Technologies to convert agricultural biomass to energy carriers, scale and
energy services
Anaerobic Digester Technologies with their Scale and Applications
Costs for Cooking Gas and Electricity from Small-scale Gasifiers
Capital Investments to implement steam reductions in Sugar and Sugar-Ethanol
plants
Costs for implementing process steam reductions and co-generation plants
Cost of adding an ethanol distillery
Costs of Coconut Oil Mills and Refineries
Biodiesel processing plant costs
Cost details of a 70,000 tons/yr Biodiesel Plant
Current and projected medium-term costs of electricity generating technologies
Biofuels: Current Costs and 2020 Projections (US cents/litre)
Mean Income for Agricultural Workers In Brazil
Liquid Petroleum Products Imports (000’s Bbls)
Value of Petroleum Products Imports (US$000'
s)
The Agricultural Sector Position in Selected Caribbean Countries
Energy from Agro-Residues
Installed Electricity Generation Capacity
Peak Electricity Demand (MW)
Fuel Consumption by Electric Utilities up to 2025 @ 5% per annum growth (000’s
liters)
Fuel Consumption by Electric Utilities up to 2025 @ 5% per annum growth
(million barrels)
Potential biofuels raw material substitutes for the petroleum fuel(s) - Description
of the possible range of biofuels
Gasoline consumption till 2025 @ 5% per annum growth
Ethanol production potential from sugarcane for gasoline
substitution
Diesel consumption till 2025 @ 5% per annum growth
Investments required for installing Gasifiers for cooking gas from Agro residues
Investments required for installing Compact Biogas Plants for cooking
Land Resources (000’s hectares) and Agricultural Employment
Land Area, Arable Land, GDP, Degree of Openness and Arable Land per Capita
(Average 1999/2002)
Potential for Electricity Exports From Bagasse Based Cogeneration
Annual Average Crude Oil Prices: 1946-2005 – U.S. Average (in $/bbl.)
Total Regional Imports (Gasoline, Diesel and Utility Fuels)
149
Table 5.1.4:
Table 5.1.5:
Table 5.1.6:
Table 5.1.7:
Table 5.1.8:
Table 5.1.9:
Table 5.1.10:
Table 5.1.11:
Table 5.1.12:
Table 5.1.13:
Table 5.1.14:
Table 5.2.1:
Table 5.2.2:
Table 6.1.1:
Table 6.1.2:
Table 6.1.3:
Table 6.1.4:
Table 6.1.5:
Table 6.1.6:
Table 6.2.1:
Table 6.2.2:
Table 6.2.3:
Table 6.2.4:
Table 6.3.1:
Table 6.3.2:
Table 6.6.1:
Regional Fuel Energy Use and Changes
Ethanol production potential from sugarcane for gasoline substitution
Value of Coconut Oil and Residues (shells & husk) as diesel substitute
Diesel substitution potential of coconuts from a two-fold and four-fold increase in
area
Biodiesel Production from Jatropha
Employment generated, Economic Value and Greenhouse gases mitigated by
Jatropha cultivation to substitute 50% of diesel consumption
Exportable electricity from different cogeneration technologies in sugar and
sugar-ethanol plants
Potential for Electricity Exports From Bagasse Based Cogeneration
Electricity Generation (2004) for Selected Countries
Total Land Areas for Countries and Total Arable Land and Forest
Biomass Feedstock production for Water Pumping
Projected Ethanol Demand (2010 – 2015)
Relative Importance of Agriculture and Sugar in Caribbean Economies
Construction and running costs for planned ethanol plants in Hawaii
Biodiesel processing plant costs
Cost details of a 70,000 tons/yr Biodiesel Plant
Sugarcane yields, production and area cultivated in 2004
Five-Year Average Sugarcane Yield (t/ha) in the Caribbean 1961-2004
Quantity of Ethanol and Land Area required substituting for gasoline and diesel
across the Caribbean
Potential for electricity exports from bagasse based cogeneration and
investments required
The Electricity Sector in Caribbean Countries (2003)
Employment generation, Economic Value and Green house gases mitigated at
different levels of Diesel substitution by Jatropha in 16 Caribbean countries
Average Annual Wood Production and Derived Wood Products
Value of 2004 sugarcane crop as a mix of sugar, ethanol and electricity
Greenhouse Gas Mitigation By Ethanol Blends
Total Population, Agricultural Population and Rural Population
FIGURES
Figure 1.0.1:
Figure 1.1.1:
Figure 1.1.2:
Figure 1.1.3:
Figure 1.1.4:
Figure 1.2.1:
Figure 1.2.2:
Figure 1.3.1:
Figure 1.3.2:
Figure 1.3.3:
Figure 1.3.4:
Figure 1.3.5:
Figure 1.3.6:
Figure 1.4.1.
Figure 6.2.1:
Figure 6.3.1:
Biomass intensive variant of IPCC-LESS constructions showing sources of
primary energy use
Export Earnings and GDP for the Region
Export Earnings 2003 (Current US$) – Select Caribbean Countries
Sugar Prices versus Oil Prices (1960 – 2005)
Coconut oil prices compared with its value as a diesel substitute when crude oil
prices are 70 and 100 US$ per barrel
Employment - Brazilian Ethanol Program (2001)
Regional Energy Cost Per centages of GDP (2003 – 2004)
Dry tonnage and energy yields per hectare for different biomass production
systems
Basic design of (a) Floating gas-holder, and (b) Fixed-dome Biogas Digestors
Schematic of the Condensing Extraction Steam Turbine (CEST)
Schematic of Ethanol production from Sugarcane
Process for converting agricultural residues (bagasse, straw, etc.) to Ethanol
The Lurgi 2-stage biodiesel process
Changes in crude oil prices over time (1970-2004)
Use of Bagasse for Energy in Brazil
Fuel Cost to Export Earning Ratio for the Caribbean Countries
150
CHAPTER 1
INTRODUCTION:
BIOFUELS – AN OPTION FOR VIABLE
ENERGY INDUSTRIES IN THE
AGRICULTURAL SECTOR
151
1.0
INTRODUCTION: BIOFUELS – AN OPTION FOR VIABLE ENERGY INDUSTRIES IN
THE AGRICULTURAL SECTOR
The principal physical determinant of the potential of biofuels in any country is availably of land
resources, labour force, and climatic conditions. The principal economic determinant of feasibility
is the technological package (from production to processing), while the principal determinant of
economic viability is government policy. Identifying the potential agro-industry begins with
assessment of the land resources.
Biomass provides an efficient and cost-effective way to collect and store solar energy in a solid
form. It can be burned to release the stored energy as heat, or it can be thermally, chemically or
bio-chemically processed to convert it into liquid and gaseous fuels, or into other solid fuels. The
optimal energy conversion process is determined primarily by the form in which the plant stores
its energy (sugar, starch, cellulose, lignin), as well as the physical and chemical properties of the
biomass.
Biomass feedstocks that can be transformed into useful energy carriers are so diverse that
almost every country can develop its own unique domestic energy industry. In combination with
improved agro-energy crop production practices, this would increase the viability of rural
economies and reduce the exodus of rural populations to urban areas. Biomass feedstocks can
be converted into biofuels in many different ways making it possible for each country to evolve its
own strategy based on available resources and infrastructure. Most forms of bioenergy (liquid or
gaseous biofuels, electricity) can use the existing energy distribution system making it easier to
substitute the fossil fuels used at present. Bioenergy resources can be broadly split into three
groups – agrofuels, wood fuels and municipal wastes. The main resources in each group,
examples and uses are summarized in Table 1.0.1.
Table 1.0.1:
GROUP
Classification of Bioenergy Resources
RESOURCE
Liquid Biofuels
Crop residues
AGROFUELS
•
•
•
•
•
Animal wastes
Agro processing
residues
•
•
•
•
•
WOOD FUELS
Straw from cereals,
pulses, tubers
Sugarcane leaves,
tops
Cow dung
Pig wastes
Chicken wastes
•
•
Bagasse
rice husk, maize
cobs, groundnut
shells
Coconut shells,
husks
Oil cake
Forests
•
•
•
Energy plantations
Farm forestry
Agro-forestry
•
Natural
vegetation
Purpose grown
trees
EXAMPLES
Ethanol
Pure plant oils
Biodiesel
152
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
USES
Transportation (Substitute
petrol, diesel)
Electricity generation
Shaft power (pumps,
machinery)
Heating, cooking
Electricity
Shaft power (pumps,
machinery)
Cooking, lighting
Shaft power (pumps,
machinery)
Electricity generation
Fertiliser
Cooking
Heat
Cogeneration (heat &
electricity)
Heat
Electricity
Co-generation
MUNICIPAL
WASTES
Municipal solid
wastes
Sewage sludge
•
•
Landfill gas
(methane)
Sludge gas
•
•
•
Methane for heat and
electricity
Methane for heat and
electricity
Fertiliser
Potential for Agro-energy/Biofuels
Several studies by international institutions indicate that bioenergy will play a much larger role in
st
energy supplies during the 21 century. The contribution from biomass in the long-term given in
138
these studies vary from 100 to 300 exajoules (EJ)
per year towards the total world energy
consumption, which is projected to rise to nearly 500 EJ per year in 2025, and 700 EJ per year by
139
2100.
Interest in biomass is intensified by the fact that bioenergy is essentially carbon-neutral and,
unlike fossil fuels, it does not add to global warming. This is because the carbon dioxide released
while burning biomass is equivalent to that absorbed from the atmosphere when it grows. Under
the LESS constructions (Low CO2 Emitting Energy Supply Systems), the Inter-Government Panel
on Climate Change (IPCC) explored five possible energy supply scenarios to limit cumulative
carbon dioxide emissions from 1990 to 2100, to 500 Gtons carbon. Biomass forms an important
part of all five scenarios. In the most biomass intensive scenario, biomass supplies contribute
180 EJ/yr in 2050, which is nearly three times its present contribution and will form one-third of
the total global energy. Two-thirds of this biomass will come from energy plantations and the
other one-third will come from agricultural and agro-industrial residues. In this scenario, the
developing countries will get half their energy supply from biomass. The sources of energy in the
biomass intensive scenario for developing and industrialized countries, and for the world are
shown in Figure 1.0.1.
Advanced co-generation technologies like the “Biomass Integrated Gasifier - Gas Turbine
Combined Cycle” plants (BIG-GT CC) will make it possible to more than double the electricity
output from combustible biomass residues at a lower unit capital cost. In a United Nations
Development Program (UNDP) study on “Modernised Biomass Energy for Sustainable
Development,” Kartha and Larson (2000) estimate that residues from sugarcane (bagasse,
leaves and tops) have the potential to generate more than half the electricity consumption in the
Caribbean by 2025, as shown in Table 1.0.2.
138
139
One Exajoule is equivalent to the energy content of 177,000 barrels of crude oil
(Johansson, 1993; Greenpeace, 1993; Shell, 1994; WEC, 1994; IPCC, 1996.
153
Figure 1.0.1:
Biomass intensive variant of IPCC-LESS constructions showing sources of
140
primary energy use
Table 1.0.2:
Potential for Generating Electricity from Sugarcane Residues
2025 Cane Prod
1995 Cane Prod.
@ 2%/yr increase
(million tonnes)
(million tonnes)
141
2025 "Excess"
2025 Utility Elec.
Cane
2025 Cane Elec
@ 3%/yr growth
Electricity
/ 2025 Utility Elec.
(TWh/yr)
(TWh/year)
330
623
0.53
Brazil
304
550
India
260
470
282
883
China
70
127
76
2085
0.04
Caribbean
48
87
52
102
0.51
Indonesia
Other Latin
Amer.
Others
31
57
34
141
0.24
152
275
165
1063
0.16
233
422
253
2214
0.11
TOTALS
1098
1988
1192
7112
0.17
0.32
Brazil can also get over half its electricity from sugarcane residues, while India can get nearly
one-third. Brazil is planning to expand its biofeuls program by 2008, and plans to add another 50
processing facilities to process cane from an additional 7.0 million hectares of land, which is
being converted from ranching. This will more than double the approximately six million hectare
of cane harvested in 2004. Electricity generation in these new facilities is expected to be in the
region of 3500 Megawatts – more than all the power generation capacity in the Caribbean,
excluding the Dominican Republic and Cuba.
140
141
UNDP, 2001
Kartha and Larson, 2000
154
Regional Fuel Consumption
Based on successes in other developing countries where energy cost are much lower than in the
Caribbean, there is meaningful production of electricity from biofuels and consequently there is
high potential for viable biofuels industries across the region, as shown in Tables 1.0.3, Table
1.0.4, Table 1.0.5, and Table 1.0.6.
Table 1.0.3:
Regional Gasoline Consumption (000’s Barrels)
COUNTRY
Antigua and Barbuda
Bahamas
Barbados
Belize
B.V.I
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Jamaica
Montserrat
St. Kitts
St. Lucia
St. Vincent
Suriname
Trinidad/Tobago
Turks & Caicos
TOTAL
Table 1.0.4:
142
143
2000
2001
2002
2003
2004
253.4
252.9
263.0
304.5
304.5
1,622.0 1,603.0 1,667.1 1,875.0 1,692.0
700.8
722.2
750.3
776.6
811.7
716.5
687.4
677.9
381.7
354.7
185.8
211.1
219.5
242.6
268.1
3,200.9 3,085.1 3,702.1 3,737.8 4,447.6
119.9
132.1
137.4
115.4
106.4
d/na
d/na
d/na 7,777.3 8,446.4
156.9
180.5
187.7
183.7
163.4
717.0
749.0
723.5
717.3
747.5
4,164.5 4,167.7 4,519.5 4,388.4 4,398.0
14.8
15.0
18.0
15.9
18.5
98.2
106.3
127.6
100.6
132.1
336.6
345.7
414.8
345.4
351.4
72.1
140.0
168.0
162.0
167.3
574.0
587.0
610.0
721.6
634.6
2,820.7 2,768.1 3,321.7 2,887.8 3,101.3
0.0
0.0
0.0
125.9
133.9
15,754.1 15,753.0 17,508.2 24,859.5 26,279.4
Regional Diesel Consumption (000’s Barrels)
COUNTRY
Antigua & Barbuda
Bahamas
Barbados
Belize
B.V.I
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Jamaica
Montserrat
St. Kitts
142
143
2000
2001
2002
2003
2004
291.8
281.0
292.2
315.5
386.4
2,687.0 2,832.0 2,945.3 2,606.0 2,966.0
550.6
550.4
537.0
614.7
673.0
529.0
609.5
709.4
572.4
651.3
164.5
171.1
177.9
231.3
231.8
11,649.8 11,056.5 13,267.8 10,725.7 11,548.1
115.6
128.9
134.1
157.8
147.5
d/na
d/na
d/na 7,619.0 7,543.2
307.7
309.7
322.1
242.7
281.9
1,950.9 1,997.2 1,997.5 2,292.8 1,911.5
2,440.6 3,334.7 3,227.3 3,923.7 3,979.0
29.2
30.4
31.6
33.7
37.3
202.6
278.1
333.7
283.1
229.3
SRC Petstats CD
SRC Petstats CD
155
St. Lucia
St. Vincent
Suriname
Trinidad/Tobago
Turks & Caicos
TOTAL
Table 1.0.5:
COUNTRY
ANTIGUA and
BARBUDA
384.0
425.9
511.1
541.8
582.4
191.6
200.1
222.1
324.1
343.6
1,516.4 1,600.0 1,664.0 1,255.0
945.8
1,840.2 1,431.1 1,716.0 1,913.1 1,936.7
d/na
d/na
d/na
119.4
117.0
24,851.4 25,236.6 28,089.1 33,771.8 34,511.8
Fuel Consumption by Electric Utilities
1985
1990
1995
2000
2001
2002
2003
2004
154.3
308.3
403.6
508.2
542.8
564.5
441.2
560.2
d/na
d/na
2,698.3
3,618.1
3,459.2
3,597.6
4,480.0
4,750.2
684.0
914.0
1,083.6
1,469.1
1,568.5
1,678.1
1,219.8
1,241.6
BELIZE
d/na
d/na
197.8
77.8
81.3
89.9
177.4
142.9
BVI
60.0
94.9
132.1
166.9
174.3
181.3
227.4
231.8
CUBA
d/na
d/na
20,901.0 21,407.2
19,332.9
23,199.4
20,227.2
13,693.4
DOMINICA
DOMINICAN
REPUBLIC
15.5
46.3
45.3
73.2
76.7
79.8
91.5
74.9
d/na
d/na
d/na
d/na
d/na
d/na
d/na
dna
BAHAMAS
BARBADOS
GRENADA
53.0
104.0
152.3
240.2
241.8
251.5
197.3
202.5
GUYANA
913.5
770.3
1,236.3
1,765.6
1,617.4
1,652.0
1,220.1
744.0
JAMAICA
2,822.5
4,086.7
4,264.0
5,889.8
6,031.3
6,136.1
6,471.5
6,225.9
MONTSERRAT
22.6
19.0
22.9
18.2
18.7
19.5
23.2
23.8
ST KITTS/ NEVIS
26.2
95.5
117.9
144.8
224.6
269.5
189.1
187.4
122.1
216.1
308.1
315.0
317.4
380.9
441.3
456.4
ST. VINCENT
40.7
36.5
86.0
131.2
145.2
174.2
155.5
155.6
SURINAME
TRINIDAD/TOBAG
O
d/na
d/na
289.0
374.1
394.7
410.5
488.8
493.0
35.5
1.3
3.1
4.3
5.3
5.0
13.5
18.7
TURKS & CAICOS
d/na
d/na
d/na
d/na
d/na
d/na
d/na
dna
4,949.9
6,692.9
31,941.3 36,203.7
34,232.1
38,689.8
36,064.7
29,202.3
ST. LUCIA
TOTAL
Table 1.0.6:
Argentina
Barbados
Bolivia
Brazil
Chile
Taiwan
Colombia
Costa Rica
Cuba
Dom. Rep.
Ecuador
El Salv.
Grenada
144
1995
0.142
0.096
International Electricity Prices For Household And Industry - Non-OECD
144
Countries
1996
0.111
0.151
0.071
0.146
0.133
0.093
0.044
0.068
0.126
0.084
0.025
0.082
0.193
INDUSTRY
1997
2000
0.139
0.167
0.069
0.121
0.089
0.040
0.062
0.128
0.082
0.060
0.082
0.193
0.081
2001
0.075
2002
0.071
2003
0.037
0.188
0.055
0.079
0.086
0.074
0.071
0.060
0.137
0.107
0.123
0.135
0.221
OECD (Prices in U.S. Dollars per Kilowatt hour)
156
2004
0.038
0.188
0.072
0.093
0.088
0.076
0.084
0.065
0.138
0.150
0.128
0.129
0.221
1995
0.079
0.076
1996
0.081
0.157
0.080
0.082
0.075
0.073
0.088
0.095
0.079
0.101
0.055
0.109
0.163
1997
0.079
0.174
0.077
0.070
0.069
0.080
0.089
0.072
0.098
0.065
0.110
0.163
HOUSEHOLD
2000
2001
2002
0.061
0.053
0.056
2003
0.025
0.197
0.041
0.037
0.056
0.053
0.064
0.067
0.081
0.106
0.098
0.123
0.188
2004
0.033
0.197
0.051
0.047
0.057
0.055
0.081
0.069
0.078
0.120
0.089
0.120
0.188
Guatemala
Guyana
Haiti
Honduras
India
Jamaica
Nicaragua
Panama
Paraguay
Peru
Russia
Slovakia
S. Africa
Suriname
Thailand
T&T
Uruguay
Venezuela
1995
1996
0.071
0.079
0.102
0.063
0.028
0.139
0.107
0.121
0.064
0.146
0.031
0.050
0.031
0.045
0.171
0.086
0.029
0.154
0.017
0.084
0.031
INDUSTRY
1997
2000
0.071
0.078
0.096
0.070
0.032
0.033
0.135
0.119
0.121
0.069
0.138
0.029
0.046
0.171
0.067
0.028
0.157
0.050
0.040
2001
2002
0.035
0.035
0.063
0.036
0.067
0.032
0.060
2003
0.079
0.059
0.060
0.045
0.040
0.169
0.135
0.121
0.054
0.115
2004
0.156
0.059
0.060
0.045
0.187
0.140
0.121
0.058
0.113
0.104
0.048
0.171
0.134
0.129
0.036
0.103
0.055
0.036
0.113
0.046
1995
0.067
0.031
0.052
0.029
0.068
0.061
1996
0.096
0.105
0.098
0.084
0.106
0.101
0.099
0.052
0.056
0.044
0.052
0.023
0.131
0.074
0.024
0.084
0.033
1997
0.097
0.104
0.103
0.089
0.089
0.105
0.107
0.100
0.040
0.052
0.049
0.023
0.131
0.059
0.023
0.077
HOUSEHOLD
2000
2001
2002
0.080
0.042
0.017
0.021
0.043
0.013
0.024
0.047
0.012
0.057
Agricultural Sector in the Caribbean Small Island Developing States (SIDS)
In 2001, the agricultural sector in the Caribbean SIDS (including Belize, Guyana and Suriname)
formed 8.1 per cent of the total gross national product (GDP) and was valued at US$6,673
145
million . Agricultural GDP, and the percentage of agricultural GDP in the gross national product
of each island state, are given in Table 1.0.7.
Table 1.0.7:
Agricultural Production and GDP in Caribbean SIDS
ISLAND STATE
Antigua and Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts and Nevis
145
146
146
National
National GDP
Agricultural GDP as
a
a
b
GDP 2001
2001
% of National GDP
(million US$) (per capita US$) (%)
662
4,557
2,485
766
28,596
263
21,211
378
713
3,494
7,784
295
UNDESA, 2003
Source: (a) UNDESA, 2003; (b) CIA, 2004
157
Agricultural
GDP
(million US$)
10,204
3.9
26
14,856
3.0
137
9,255
6.0
149
3,123
22.6
173
2,545
5.5
1,573
3,367
18.0
47
2,500
10.7
2,270
4,682
7.7
29
936
37.2
265
431
30.0
1,048
2,990
6.7
522
6,396
3.5
10
2003
0.075
0.078
0.085
0.035
2004
0.116
0.078
0.085
0.035
0.115
0.124
0.099
0.036
0.060
0.029
0.070
0.019
0.131
0.130
0.128
0.099
0.039
0.079
0.123
0.035
0.040
0.028
0.037
0.055
0.032
0.083
National
National GDP
Agricultural GDP as
a
a
b
GDP 2001
2001
% of National GDP
(million US$) (per capita US$) (%)
ISLAND STATE
Saint Lucia
733
St.Vincent &
Grenadines
348
Suriname
842
Trinidad and Tobago
8,819
TOTAL
Agricultural
GDP
(million US$)
4,994
7.0
51
1,940
10.0
35
1,965
13.0
109
6,817
2.6
229
8.1
6,673
81,946
The major crops grown in Caribbean SIDS are sugarcane, fruits and vegetables, tubers
(potatoes, cassava, yam, taro, sweet potatoes), cereals (rice, maize, sorghum, millet), coconuts,
groundnuts and pulses. Average annual production for the last three years (2003-05) is given in
Table 1.0.8.
Table 1.0.8:
Regional Crop Production (2003 – 2005)
ISLAND STATE
Sugarcane Coconuts
(Mt / yr)
Antigua & Barbuda
(Mt / yr)
Cereals
(Mt/yr)) (Mt / yr)
58
372
Bahamas
55,500
350
1,018
Barbados
385,264
1,800
258
3,780
Belize
1,124,066
989
51,558
3,619
Cuba
19,800,533
115,955 1,004,647
1,790,39
2
4,400
11,500
5,177,807
179,729
7,200
6,500
300
4,065
Guyana
3,000,000
45,000
505,500
40,300
Haiti
1,070,000
24,500
377,333 753,500
Jamaica
2,133,333
170,000
995 214,215
162,000
1,000
-
1,013
-
14,000
631
11,189
13,318
2,556
2,667
13,810
Grenada
St. Kitts & Nevis
St. Lucia
St. Vincent and
the Grenadines
Suriname
147
180
Vegetabl Fruits excl.
es&
melons
melons
(Mt/yr))
(Mt / yr) (Mt / yr) (Mt/yr))
Roots &
Groundnuts Pulses
Tubers
-
Dominica
Dominican
Republic
147
3,082
9,975
123
25,026
28,667
47
1,106
13,875
3,388
79
7,191
9,446
388,262
10,000 131,633 4,099,834
2,823,911
26,720
80
6,630
63,490
627,840 259,099
2,937 50,144
380,637
1,248,368
595
2,649
16,830
1,300
41,800
68,371
21,333 64,967
201,150
994,050
FAOSTAT; Note: Average production for last 3 years (2003-05)
158
1,900
3,402
5,040
196,531
468,237
31
210
684
1,300
40
1,000
157,924
347
4,301
57,382
72,482
312
260
ISLAND STATE
Trinidad & Tobago
TOTAL
1.1
Sugarcane Coconuts
(Mt / yr)
120,000
(Mt / yr)
9,000
706,002
17,500
33,759,424
Cereals
Vegetabl Fruits excl.
es&
melons
melons
(Mt/yr))
(Mt / yr) (Mt / yr) (Mt/yr))
160
22,048
Roots &
Groundnuts Pulses
Tubers
(Mt/yr)) (Mt / yr)
194,630
5,350
5,980
8,861
600,028 2,772,928
3,137,30
4
80
3,560
23,596
66,692
40,381 266,496 5,032,288
6,469,328
Economic Aspects of Agro-Energy
All Caribbean countries depend on imported petroleum fuels for energy purposes. The prices of
petroleum fuels are unpredictable and will continue to increase in the foreseeable future. Biofuels
can provide a long-term alternative by using locally produced renewable supplies at relatively
constant cost that is in many cases already cheaper than the fossil fuels they substitute.
Moreover, because biofuels are locally produced by indigenous agro-industries, most of the
money spent is retained within the national economy instead of going to foreign multi-national oil
companies. Import substitution will have direct and indirect effects on GDP and the trade
balance. The risks arising out of fluctuating crude oil prices adversely affecting the costs of
production and transport of goods in the country can be minimized if indigenous agro-energy
resources are used.
The cost of biofuels and their competitiveness with fossil fuels depends not only on the cost of
production and conversion of the biomass feedstock, but also on the availability and cost of
alternative energy options and on regulatory frameworks that can tilt the balance in favor of, or
hinder biofuels industries. With regard to biofuels raw material crops (sugarcane, tubers, cereals
for ethanol production, coconuts for oil, etc.) it is primarily the production and conversion costs
that determine the cost of the biofuels. However, most biomass residues are dispersed and this
introduces significant collection and handling costs as in the case of straws from cereals, tubers,
etc., which are dispersed over large areas in small volumes.
The conversion of biomass of different origins, for example, agro-residues to usable energy
carriers, is viable for small-scale operations of up to 50MW of power, based on the international
experience. Biofuels facilities of this scale are within the capability of communities to feed and
operate, creating and retaining wealth within the local economy. On the other hand, agroindustrial residues such as sugarcane bagasse, rice husks, maize cobs, etc., are some of the
cheapest sources of biomass since they are waste products and are already available in one
location; therefore, they require no production costs and minimal collection and transportation
costs, especially if they are converted to biofuels, nearby. Very often the collection and
transportation costs of biomass residues can determine whether the biofuels produced are cost
competitive with fossil fuels or not.
The development of a strong bioenergy sector opens up the possibility of exporting environmental
goods and services (EGS) with favorable trade potentials.
Paragraph 31(iii) of the Doha
Ministerial Declaration encourages negotiations on “the reduction or, as appropriate, elimination
of tariff and non-tariff barriers to environmental goods and services (EGS).” The Kyoto Protocol’s
Clean Development Mechanism (CDM) offers an additional economic incentive for development
of biofuels industries in developing countries. The CDM allows polluting countries or enterprises,
which are mainly in the developed nations, to purchase environmental goods from developing
countries. The trade in carbon credits is already having a positive impact on the economics of
biofuels industries and its alternatives.
159
The real economic contribution of biofuels production has to be assessed across a number of
sectors due to its characteristics. Ironically, these characteristics have acted as a major
constraint to its development. For example, raw material production is usually within the portfolio
of the agriculture ministry, and aside from sugarcane the other plants that could be cultivated to
provide raw material like fast growing leguminous trees species do not get much attention. The
market for biofuels is in the energy sector whose historic approach is to get energy from
petroleum sources. The major benefits of biofuels are usually social and environmental and until
recently were not easily quantifiable or accepted as important. Determining the economics of a
particular biofuels industry is therefore only possible on a case-by-case basis at the national level.
The most well known biofuels program relevant to the conditions in the Caribbean is the Brazil
ethanol/sugar program.
It is estimated that Brazil, in 2004, produced more than 14 billion liters of ethanol (7.2 Hydrous;
8.2 Anhydrous) from almost three million hectares of sugarcane, valued at US$5.2 billion,
considering it displaced 10.5 billion liters of gasoline at an average price of US$0.5/litre. The cost
of production is estimated to be about US$0.30 per litre, hence the economic value added is very
large, making a significant contribution to the country’s GDP. The ethanol/sugar industry employs
an estimated 700,000 workers and is responsible for more than 2 million indirect jobs, and pays
workers better wages than for those employed in the production of crops such as citrus,
vegetables, coffee and tubers.
The 14 billion liters produced in 2004 saved 10.5 billion liters in avoided imports of gasoline. If
Brazil had to import the quantity of gasoline equivalent of the amount of ethanol it consumed in
2005, which was 15 billion liters, and retain the same level of trade deficits, the country would
have to generate US$5.6 billion more in foreign exchange. This would be a major development
challenge. The avoided expenditure of vast sums of foreign exchange therefore lessens
economic vulnerability. The avoided 37.5 million tons of carbon dioxide in the emission of
greenhouse gases helps reduce the threat of global climate change and thereby helps to lessen
environmental vulnerability. If it would be possible to commercialize carbon credits based in
alcohol production its annual value would be US$370 million, assuming a value of US$10/tonne
of carbon dioxide - these are very unique characteristics of biofuels.
As shown in Figure 1.1.1 below, for the region, the GDP of the island states are very dependent
on foreign exchange earnings (with the exception of Guyana and Haiti the two poorer countries).
On average, about half of the GDP is comprised of foreign exchange earning activities. In the
case of Grenada, more than 90 per cent of the GDP is foreign exchange activities (tourism, spice
export, off shore education, and remittances), which makes for a very vulnerable economy. The
increasing demand for foreign exchange to pay for energy imports significantly reduces the
amount of domestic financial resources available for investment in socio-economic development.
160
Figure 1.1.1:
Export Earnings and GDP for the Region
148
Export Earnings (% of GDP)
90
80
70
60
50
40
30
20
10
0
Antigua
Barbados
Belize
Dominica
Dominican
Rep
Grenada
Guyana
Haiti
Jamaica
St. Kitts
St. Lucia
St. Vincent
2003
Additionally, increasing cost of imported fuels results in increased cost of goods and services,
which usually results in reduced ability to compete in foreign markets, reducing the potential for
foreign exchange earnings - reduced earning potential makes for growing economic vulnerability.
Viable production of biofuels in the Caribbean context should also contribute towards increased
economic resilience.
Mauritius and Fiji are two of the major sugar producers among Small Island states that are
pursuing or planning to pursue biofuels programs as part of a strategy to make the sugar more
viable and more beneficial. Biofuels production has made the Mauritius sugar industry the most
competitive among small-scale producers, producing more than 30 per cent of the islands
149
electricity needs . Building on this success, the Government of Mauritius, in 2005, introduced a
policy aimed at further development of biofuels production. The new policy calls for the phasing
out of coal as a supplemental fuel for electricity generation, to be replaced with solid biofuels and
the production of ethanol to reduce gasoline demand.
148
149
World Development Indicators 2005, Published April 2005 ISBN: 0-8213-6071-X SKU: 16071 by World Bank
Kasshiap Deepchand Mauritius Sugar Research Institute
161
Figure 1.1.2:
Export Earnings 2003 (Current US$) – Select Caribbean Countries
Export Earnings 2003
(Current US$)
Thousands
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
150
Need Source
162
Tr
in
id
ad
a
m
aic
St
.K
itts
St
.L
uc
ia
St
.V
inc
en
t
ti
Export
Ja
Ha
i
a
uy
an
G
G
re
n
ad
a
Re
p
n
ica
Do
m
in
ic a
Do
m
in
iz e
Be
l
Ba
rb
ad
o
s
-
150
Figure 1.1.3:
151
Sugar Prices versus Oil Prices (1960 – 2005)
UNCTAD Secretariat
163
151
Figure 1.1.4:
Coconut oil prices compared with its value as a diesel substitute when
152
crude oil prices are 70 and 100 US$ per barrel
1000
900
800
US$ / ton
700
600
500
400
300
200
100
0
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Coconut Oil Prices
Value @
70 US$/barrel
Value @
100 US$/barrel
As shown in Figure 1.1.4 above, coconut oil prices are quite volatile in the international market,
generally fluctuating between US$300 and $700 per ton. At a crude oil price of US$70 per barrel,
the value of coconut oil as a diesel substitute is US$611 per ton, and at US$100 per barrel, the
value is US$873 per ton. These values are more than the international market price for most
years since 1985. Since the exporter would pay freight costs from the Caribbean, the value of
coconut oil as a diesel substitute will be even more attractive.
1.2
Social Aspects of Agro-Energy
In spite of differences in production potential of biomass resources resulting from the combination
of climatic conditions, labour force, and land characteristics and availability, in most countries, an
increasing share of biofuels in the total energy supply will lead to tangible social benefits at the
local, regional and national levels.
Much like the economic benefits, the social benefits of
biofuels are not always easy or possible to quantify, but can be very significant for the local
population. Even though these benefits differ with the nature of the biomass raw material, the
production processes used and the local economic and social structures, they generally
contribute towards: a) an improved quality of life, and b) increased social stability and cohesion.
152
Need Source
164
Table 1.2.1:
Sources of Foreign Exchange Earnings
COUNTRY
Antigua and Barbuda
Barbados
Belize
Dominica
Grenada
Guyana
Haiti
Jamaica
St Kitts and Nevis
St Lucia
St Vincent and Grenadines
Suriname
Trinidad and Tobago
153
MAIN EXPORTS
Fish, Alcoholic beverages, Wood, Tourism
Sugar, Alcoholic beverages, Fuels, Tourism
Sugar, Bananas, Fish, Tourism
Bananas, Oil of coconuts, Tourism
Spices, Fish, Wheat+flour, Tourism
Gold, Sugar, Bauxite, Tourism
d/na
Alumina, Sugar, Bauxite, Tourism
Sugar, Beverages, Tourism
Bananas, Fresh fruit, Pepper, Tourism
Bananas, Wheat+flour, Rice, Tourism
Alumina, Rice, Fuels, Tourism
Fuels, Non- Alcoholic beverages, Sugar,
Tourism
Most of the long-term social and rural development benefits of biofuels industries are due to the
increased employment and income generation opportunities provided by the production of agroenergy crops, or by-products and their local conversion. Estimated levels of employment from
production and processing of biomass raw material in developing countries are given in Table
1.2.2. This assumes even greater importance because the European Union (EU) sugar reforms
will jeopardize 68,300 jobs in six main sugar producing countries in the Caribbean: Jamaica,
154
Trinidad & Tobago, Guyana, Belize, Barbados and St. Kitts & Nevis.
LMC International
predicts that in a worst-case scenario the sugar industry will collapse in all but one of these six
countries.
In the Fiji Islands, where an estimated 35 per cent of the labour force is employed in the sugar
industry and the EU agricultural import policy is expected to have a negative impact on the sugar
export starting 2007, the government is planning the development of a large-scale biofuels
program with the goal of eliminating the import of petroleum for power production or road
transportation. In this way, it will capitalize on the experience in sugar production and its domestic
fuel market, but more importantly keeping and even increasing agricultural sector employment.
This approach adopted by the Fijian Cabinet in 2005, will significantly change the future of the
country’s farmers, as they will have access to a large profitable domestic market, where they
have a number of comparative advantages versus the international sweetener market were they
were always at a disadvantage.
The higher agricultural production resulting from the increased usage of biofuels generates
increases in employment and wages in the rural population, as it is a relatively labour-intensive
activity in many developing countries. This increases the disposable income of households and
more spending results in a number of positive impacts on the rural economy. As the biofuels
industry develops, increased usage of residues from food crops helps improve the food security
of a region or country. The complimentarity in the production of crops that produce biomass for
fuel and food crops holds significant promise for improved efficiency and sustainability in the way
land is used.
153
Caribbean Documentation Center, Subregional Headquarters for the Caribbean. Economic Commission on Latin
America and the Caribbean (ECLAC). http://minisis.eclacpos.org/; Eastern Caribbean Central, (2004), ‘National
Accounts’. http://www.eccb-centralbank.org/PDF/National%20Accounts%20Digest%202004.pdf
Respective National Trade Data Centers.
154
The Impact of the Reform of the EU Sugar Regime on ACP Sugar Industries. Final Report. LMC International January
2006.
165
Table 1.2.2:
Estimated direct employment figures arising from Agro-energy
155
Country
Employment figures
(Estimated)
Nature of employment
Pakistan
600,000
Wholesalers, retailers in the wood-fuels trade. Many are
involved in production, conversion and transportation.
About three-quarters are full-time, the rest part-time;
the ratio between traders and gatherers is 1:5
India
3 to 4 million
The wood fuel trade is the largest source of employment in
the energy sector.
Philippines 700,000 hhs (production) Solid Biofuels Production and trade
140,000 hhs (trade)
Brazil
700,000
Ethanol industry alone
200,000
Charcoal industry
Kenya and 30,000
Charcoal production only
Cameroon
Ivory Coast 90,000
Charcoal production only
Additional economic impacts resulting from construction and operation of processing facilities,
transportation of feedstock to the plant and distribution of the biofuels also provide more social
benefits. A more robust rural economy resulting from biofuels industry plays a substantial role in
reducing migration to urban centers, as shown in the case of Brazil. The increased income
generated by the rural communities allows for growth, leading to the critical mass necessary for
increased national investment in health, education, roads and other public infrastructure in order
to spur further social development.
The employment potential of an agro-fuels industry can be assessed by looking at a typical
ethanol distillery in Brazil that produces 20 million liters of ethanol per year. This distillery
employs 150 full-time industrial workers. To supply the distillery with sugarcane, 455 agricultural
workers are employed in central Brazil, but in North-eastern Brazil, sugarcane crop yields are
lower and around 1,800 agricultural workers would be needed. Ethanol production from
sugarcane can provide up to 15 times more employment than extraction and refining of petroleum
to vehicle fuels, as shown in the Figure 1.2.1 below. If unemployment is high and labor costs are
low this is good, but can become problematic as a country becomes more affluent and wages
rise, and increased mechanization is required.
There are some negative social aspects that must be addressed in the development of national
programs as the Brazilian experience demonstrates some negative social effects of increasing
biofuels production. “As a result of the Ethanol Program, large sugarcane plantations [were]
established in some regions where previously many small farms existed. As a result, the
subsistence crops of small farms—corn, vegetables, black beans, etc.—are being eliminated,
leading to the import of food from distant regions. This has had the negative social consequence
of forcing an exodus of small farmers and field laborers to cities where it is difficult for them to get
jobs, or of making them seasonal laborers for the large plantations where sugarcane cultivation
occupies only six to seven months in a year. It has had a negative effect on income distribution by
156
concentrating resources in the hands of a few entrepreneurs.”
155
156
IEA, 2005
(Goldemberg et al., 1988)
166
Figure 1.2.1:
Employment - Brazilian Ethanol Program (2001)
157
Many raw material crops like Jathropa Curcas L, and Moringo L., fast growing trees (Leucaena,
Acacia, Callynadra, Neem) and fast growing grasses (Sordan, Napier) can be grown on marginal
lands not fit for food crops. The ability of these crops to produce raw material for the production of
biofuels means that there is land available for beyond what can now be sustainably used for food
production. Existence of local biofuels industries creates new markets for farmers whose
available lands were not suited to food production. In many cases, hybrid systems of food and
fuel production results in better returns than either option on there own, and with increased food
security for the household as well.
Environmental benefits from biofuels are also created when high intensity agricultural techniques
shift towards soil conservation and the production of native perennial grasses. The soil benefits
in terms of erosion reduction, chemical leaching, and water quality can be significant. Biofuels
therefore contributes to all the important elements of national and regional development in a
sustainable way. Some indicators of socio-economic sustainability of bioenergy programs are
given in Table 1.2.3.
Table 1.2.3:
Selected indicators of sustainability of bioenergy programs
Category
Impact
Basic needs
Improved access to
basic services
Income generating
Opportunities
Creation or displacement
of jobs, livelihoods
158
Quantitative indicators, based on
assessment of:
Families with access to energy services
(cooking fuel, basic services. pumped
water, electric lighting, milling, etc.),
quality, reliability, accessibility, cost.
Volume of industry and small-scale
enterprise promoted, jobs/$ invested,
jobs/ha used, salaries, seasonality,
accessibility to local labourers, local
recycling of revenue (through wages,
local expenditure, taxes), development of
markets for local farm and non-farm
157 Goldemberg, J. (2002) The Brazilian energy initiative—support report. Paper Presented at the Johannesburg 2002
World Summit for Sustainable Development. Secretaria de Meio Ambiente, São Paulo (The Brazilian São Paulo State
Environmental Secretariat).
158
S. Kartha, S. Larson, ED. (2000), Bioenergy Primer: Modernised Biomass Energy for Sustainable Development, United
Nations Development Program, New York
167
Gender
Impacts on labor, power,
access to resources.
Land use
competition and land
tenure
Changing patterns of land
ownership. Altered
access to common land
resources. Emerging
local and macroeconomic competition
with other land uses.
Figure 1.2.2:
products.
Relative access to outputs of bioenergy
project. Decision-making responsibility
both within and outside of bioenergy
project. Changes to former division of
labor. Access to resources relating to
bioenergy activities.
Recent ownership patterns and trends
(e.g., consolidation or distribution of
landholdings, privatization, common
enclosures, transferral of land rights/tree
rights).Price effects on alternate products.
Simultaneous land uses (e.g.,
multipurpose co-production of other
outputs such as traditional biofuel, fodder,
food, artisanal products, etc.).
Regional Energy Cost Percentages of GDP (2003 – 2004)
159
Energy Cost GDP Ratio
25%
20%
15%
10%
5%
Ba
ba
rd
os
Be
liz
e
D
om
D
om
in
ic
in
a
ic
an
R
ep
G
re
ne
da
G
uy
an
Ja a
m
ai
c
St a
.K
it
St ts
.L
uc
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. V ia
in
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Su nt
rin
am
e
Tr
in
id
ad
0%
2003
As shown in Figure 1.2.2 and Table 1.2.3 above, the acquisition of fuels is costing an increasing
amount of foreign exchange and an increasing percentage of the GDP, while at the same time
contributing to high energy prices. One of the major benefits of the increasing prices of petroleum
prices is that it increases the chances of viability and profitability of domestically produced
biofuels, in the majority of cases. In countries with smaller production potential where economies
of scale are an obstacle, increasing prices of imported fuels brings the price differential closer or
gives a clear advantage to domestic biofuels. While high energy prices are not considered as
positively impacting economic growth, the social impacts of high cost imported energy is not the
same as the high cost of locally produced energy, as the financial resources are circulated
predominantly inside the country, rather than exported, and in the form of domestic currency
rather than foreign exchange.
159
Authors Calculartion from WB data
168
High cost imported energy slows job creation while biofuels creates local jobs helping to address
difficult employment generation problems. High local energy also provides incentives for
sustainable use of fragile land resources rather than pressuring their existence to generate
foreign exchange to pay for the imported energy.
Biofuels production achieves significant
redistribution of wealth, given the declining profitability of existing agricultural land in the majority
of countries. Biofuels production would help to provide a social safety net through guaranteed
employment for a percentage of the rural population as shown for Brazil, in 2003, and
represented in Table 1.2.4 below.
Table 1.2.4:
The Sugar/Ethanol Sector – Brazil 2003
160
Revenue
R$36 Billion (US$12 Billion)
Share of National Income
3.5% of GNP
Employment
3.6 million jobs
Sugarcane growers
70,000 farmers
Sugarcane harvest
340 million tonnes of sugarcane
Output
24 million tonnes of sugar
14 billion liters of alcohol
13.5 million tonnes of sugar
690 million liters of alcohol
64.8 million hectares
Export
Area in agriculture
Area in sugarcane
5 % of above million hectares
Taxes
R$ 4.5 billion (US$ 1.5 billion)
Investments
R$ 3.5 billion / year
Participants
302 Mills – Representing thousands of
communities
Biofuels programs provide Caribbean governments with a unique opportunity to address rural
development. In the case of Brazil, the government implemented the ethanol program for
purposes of:
• Energy Security
• Unsustainable External Debt
The preconditions for success in Brazil were:
• Available land area
• Sugarcane crop availability (tropical+rainfall)
• Low Cost Man-Power
• High energy prices
1.3
Technical Aspects of Agro-Energy
Sugarcane is one of the most efficient crops for converting solar radiation into biomass. As can
be seen in Figure 1.3.1, the above ground parts of the sugarcane plant (stem, leaves, tops) can
produce over 130 tons of dry matter per hectare annually (world average of 60 dry t/ha/yr) giving
an annual energy yield of over 1300 gigajoules per hectare (world average of over 600 GJ/ha).
Eucalyptus energy plantations comes next producing over 100 dry t/ha/yr with an annual energy
yield of 1000 GJ/ha/yr.
160
Moreiera, Jose
169
Figure 1.3.1:
1.3.1
Dry tonnage and energy yields per hectare for different biomass production
161
systems
Properties of Agricultural Residues
Agricultural residues have heating values on a dry basis, ranging from 14 to 20 gigajoules per
ton, which is somewhat lower than the energy density of other solid fuels used for power
generation such as bituminous coal (30 to 35 GJ/ton) or lignite (23 to 26 gigajoules per ton).
Agro-residues also have a low energy density at the point of production due to the moisture
content, which can vary from 8% to 20% for straws; 40% to 50% for bagasse, and; 75% to 90% in
animal manures.
Since most biomass resources are dispersed, conversion to modern energy carriers (electricity,
liquid, gaseous and solid fuels) is better done in relatively small, decentralized locations to avoid
unduly high transportation costs associated with bringing large quantities of biomass to
centralised energy generation facilities. Fortunately, the chemical characteristics of biomass
make it cost-effective to convert it thermo-chemically in small- and medium-scale gasifiers and
other conversion processes. The ash from combustion of biomass is generally free from toxic
substances and has a fertilizer value, so it can be dispersed over biomass growing areas to
replenish nutrients removed while harvesting.
Biomass is also highly amenable to biological and bio-chemical conversion processes like
anaerobic digestion of animal manures and organic wastes, and conversion of sugars and
161
Watson, R.T., Zinyowera, M.C., Mos, R. H., and Dokken, D. J. (eds), 1996. “Climate Change 1995: Adaptations and
Mitigation of Climate Change,” Cambridge University Press, Cambridge, UK.
170
starches to ethanol and production of ethanol from ligno-cellulosic materials. These conversion
techniques are generally carried out using bacteria and enzymes under mild conditions.
It may not be possible to generate energy from all the agro-residues produced because:
• Some residues are not suitable for energy production;
• Storage may be hazardous or it may be too expensive;
• Collection and transportation of residues may be too expensive;
• Residues may have to be re-cycled into the land to restore nutrients removed by the
plant, for soil conservation, etc.;
• Residues may have other uses such as fodder, construction material, industrial
feedstocks, etc.
1.3.2
Agro-energy Crops and their Characteristics
Sugarcane
The sugarcane plant consists of a main stalk, leaves and a green top. In most countries, only the
stalk is transported to the sugar mills for processing to produce sugar or ethanol. The leaves and
tops are burned in the field (or in cleaning houses as in Cuba) to make harvesting easier and for
pest control. The harvesting season is typically around 150 days per year, but varies from over
210 days per year in parts of Brazil, to around 90 days in Thailand.
The bagasse contains about one-third of the energy content of the sugarcane plant and forms
about 30 per cent of the weight of fresh cane on a wet basis (50% moisture); sugarcane juice
contains around one-third and trash contains the remaining third of the energy content. In most
sugar mills, all the bagasse is used to generate process steam and electricity requirements. The
steam-turbine cogeneration systems used are made to be inefficient so that no bagasse is left
over for disposal. If bagasse is used optimally for process energy requirements then there is a
significant potential to generate and export surplus electricity.
The quantity of trash (leaves and tops) that is burned on the field, in most countries, is about the
same as bagasse, i.e., about 15 per cent of the weight of cane crushed on a dry basis. The
energy content of the trash (16.5 MJ / kg) is a little less than bagasse (17.3 MJ / kg). However,
only 60 per cent to 75 per cent of sugarcane trash can be used to supplement bagasse for
electricity generation since some leaves have to left on the fields for weed control and to prevent
soil erosion. It is easier to store trash for operating the cogeneration plant in the off-season
months. Care has to taken while storing bagasse since the heat generated by the fermentation
process can cause spontaneous ignition.
At the sugar mill, the sugarcane stalks are washed, chopped and crushed in rolling mills to extract
the juice from the fibrous matter called bagasse. The juice is filtered, concentrated, crystallized,
centrifuged and dried to produce sugar. Molasses, the final concentrate that contains the sucrose
that cannot be recovered, is fermented and distilled to produce ethanol. By adding raw sugar
juice to the molasses more ethanol can be produced instead of sugar.
171
Table 1.3.2:
Sugar
OR
Ethanol
Energy Content of the Sugarcane Plant
1 Ton of Cane Stalks Contain
145 kg
Bagasse, dry basis
Trash (leaves, tops), dry
163
Stillage
TOTAL
162
Energy (MJ)
2,300
85 liters
2,000
140 kg
140 kg
1600 liters
2,500
2,500
300
7,300
The third source of energy from sugarcane residues is the wastewaters from the ethanol distillery
called “vinasse” or “stillage” that contains around 13 per cent of the energy in the fermentable
solids or four per cent of the total energy in the cane. Stillage has high chemical and biological
oxygen demand levels (COD and BOD) that have to be reduced before effluents can be released
into the environment. Anaerobic digesters provide an ideal method of extracting the energy from
stillage as methane, lowering the COD and BOD to environmentally benign levels, and producing
a very good fertilizer for the sugarcane fields.
Coconuts
The coconut palm has a single trunk, 20-30 metres tall; the leaves and flowers that turn into
coconuts grow at the top of the palm. Fruits mature in about 12 months and a normal, healthy,
tall coconut palm produces one mature bunch of coconuts per month, on average. The nuts are
surrounded by a dense fibrous husk five to 15 cm thick, called the pericarp. Under the husk,
there is a very hard, thin, brown shell containing the albumen, a milky white liquid known as
coconut milk that is transformed into the flesh of the kernel as the fruit matures. Copra is
produced by removing the kernel from the shell and drying it. Both the shell and the husk are
used as fuels for cooking and small industries, especially those processing coconuts. The shell is
also used for making charcoal. Coconut oil can be produced from the fresh kernel by wet
processes, or it can be milled from the dried copra and refined.
Fruits and Vegetables
A wide variety of fruits and vegetables are produced in the Caribbean SIDS, with a large
proportion being produced for export. Wastes from fruits and vegetables include the parts of the
plant not consumed by humans or animals, the skins of the fruits, and fruits that are over-ripe or
rotten and therefore not fit for human consumption. The main characteristic of wastes from fruits
and vegetables that differs from other crops is their high moisture content. This makes it difficult
to utilize their energy by combustion processes, as a high proportion of the energy has to be used
for evaporating the water. However, these wastes are highly biodegradable and can therefore be
converted to biogas (methane) and carbon dioxide in anaerobic digesters where the high
moisture content turns out to be an advantage. Anaerobic digesters also produce very good
organic manure that retains all the fertilizer value of the wastes since only the carbon, hydrogen
and oxygen come out in gaseous form.
Other Crops
The other crops produced by Caribbean SIDS are cereals (mainly rice and maize), roots and
tubers (cassava, yams, taro, potatoes, sweet potatoes), pulses and groundnuts. One common
residue from all these crops is straw and stalks. In addition, rice husk, groundnut shells and
maize cobs are produced in sufficient quantities for utilisation as fuels. However, these residues
162
163
Regis and Leal, 2004
Only for ethanol
172
are used in most developing countries as fodder for cattle or as a fuel for cooking and heating by
direct burning that is somewhat inefficient and causes air pollution, especially in the kitchens.
These residues can be utilized more efficiently and cleanly by burning them in gasifiers and using
the producer gas for cooking, as is being done in several parts of China and India. Gasification of
crop residues can also generate electricity efficiently by using advanced technologies such as
BIG-GTCC.
All cereals and tubers contain starch that can be converted to ethanol by a process of hydrolysis
and fermentation. While the present production of these food crops in Caribbean SIDS may be
sufficient only for human consumption, the value of ethanol as a substitute for fossil fuels used in
the transportation sector (gasoline and diesel) will make it increasingly attractive to grow them as
fuel crops. Starchy materials are also very good feedstock for producing methane on a smallscale for household cooking in compact biogas digesters that can be used even in urban areas.
Groundnut oil can be used as a fuel in diesel engines as it is or after conversion to biodiesel, but
this also has to be evaluated against its edible uses.
1.3.3
Agro-energy Conversion Technologies
The main processes for utilizing agricultural biomass are:
a)
Direct combustion of solid fuels in boilers or furnaces. Either heat is used or
steam is produced to generate electricity in a turbine or both (co-generation). The
equipment is simple and low-cost but has quite low efficiencies.
b)
Gasification: A thermo-chemical conversion process converts the biomass to
“producer gas” which is a mixture of hydrogen and carbon monoxide with some nitrogen,
if air is used for the partial combustion. Gasifiers are generally around twice as efficient
as direct combustion for small- and medium-scale heating applications. For electricity
generation, gasification permits the use of a gas turbine in series with the steam turbine
called “combined cycle” operation, which is the most efficient power generation cycle
commercially available for small- and medium-scale operations.
c)
Biological conversion, using bacteria for anaerobic digestion of biomass
produces methane-rich biogas that can be used for cooking, lighting or electricity. The
sludge remaining in the digester is an excellent organic fertiliser.
d)
Pressing and thermo-chemical processing to produce plant oils from oil
seeds. Pure plant oil can be used in diesel engines with minor modifications. Biodiesel is
produced from plant oils by a process of esterification.
e)
Chemical or biochemical conversion to produce methanol, ethanol from sugar,
starch or cellulose. Sugars can be fermented directly to alcohol. Starch and cellulose
have to be converted to sugars before fermentation. Methanol is produced from synthesis
gas (syngas) that is composed of carbon monoxide and hydrogen and is produced from
biomass feedstocks by gasification.
Energy conversion technologies for utilization of biomass that have been commercialised are
given in Table 1.3.3, with their scales of operation and the energy services they provide.
173
Table 1.3.3:
Technologies to convert agricultural biomass to energy carriers, scale
164
and energy services
TECHNOLOGY
SCALE
ENERGY
CARRIER
Anaerobic Digestion
Small to
medium
Biogas
Gasification
Small to
medium
Producer gas
Oil pressing
and filtration
Esterification
Small to
medium
Medium to
large
Medium to
large
Pure plant oil
Ethanol
Vehicle transportation
Cooking
Medium to
large
Electricity
Heat
Electricity for industrial processing and grid
distribution
Industrial process heat
Distillation
Co-generation
Steam turbine
Gas turbine
Combined cycle
1.3.3.1
Biodiesel
ENERGY SERVICES
Electricity for local pumping, milling, lighting,
communications, refrigeration, etc.
Electricity distribution thru utility grid
Heating
Electricity (as above)
Heating
Vehicle transportation
Cooking
Vehicle transportation
Anaerobic Digesters
Anaerobic digestion is a low temperature biological process in which bacteria converts most
biomass (except lignin) into biogas in the absence of air. Biogas generally contains 60 per cent
methane and 40 per cent carbon dioxide by volume. High moisture biomass such as animal and
human wastes, and industrial effluents and sewage sludge are especially well suited, but crop
residues, food processing wastes and landfill materials can also be used. The slurry removed
from the digester contains all the nutrients in the original feedstock and is an excellent organic
fertilizer free of pathogens. Anaerobic digestion also reduces the chemical oxygen demand
(COD) and the biological oxygen demand (BOD) in industrial effluents allowing them to be
disposed off without adverse environmental effects.
Anaerobic digesters operate in either the mesophilic or the thermophilic temperature regimes.
o
Mesophilic bacteria have a peak microbial activity at 35 C and can therefore be operated without
o
heating the digester externally. Thermophilic bacteria have a peak activity at 55 C. In both
regimes, gas production decreases as the temperature falls. Biogas production is also
dependent on the carbon-nitrogen ratio, the solids-liquid ratio, pH, and the rate of loading of the
feedstock.
The scale, application, and uses of anaerobic digestion technologies are summarized in Table
1.3.4. Small and medium-scale biogas plants can serve rural households and communities while
large anaerobic digesters are used for treating liquid effluents from industries and sewage.
164
174
Table 1.3.4:
Anaerobic Digester
165
Applications
Technologies
SCALE
APPLICATION
USE OF GAS
Small
and
medium
Household
Community
Medium
and large
Industrial
effluents
Sewage sludge
Cooking
Lighting
Pumping
Electricity for own use
Process heat
Electricity for industry
or sale to grid
with
their
Scale
and
TYPE OF
DIGESTOR
Unmixed
tank
DIGESTOR
TECHNOLOGIES
Floating cover (India)
Fixed dome (China)
Retainedbiomass
Contact process
Anaerobic filter
Fluidised bed
Up-flow Anaerobic Sludge
Blanket (UASB)
Unmixed tank digesters are the simplest type of biogas plants for households and communities,
of which millions have been installed in India and China. They can either have a floating gas
holder (used widely in India) or a fixed-dome in which the pressure increases with gas production
(used widely in China, but now increasingly being used in India also). The basic design of both
types is shown in Figure 1.3.2 below.
Figure 1.3.2:
Basic design of (a) Floating gas-holder, and (b) Fixed-dome Biogas
166
Digestors
(a) Floating gas holder Biogas Digestor
(b) Fixed-dome Biogas Digestor
Animal wastes (cows, pigs, chicken, etc.), vegetable wastes, crop residues and other
biodegradable biomass are fed into the digester after mixing with sufficient water. In China,
human wastes are also widely used by connecting the toilets directly to the biogas digester. The
gas is piped into the kitchen for cooking and mantle lamps can be used for lighting. The digested
slurry is pumped to the fields as organic manure. Biogas from larger community-scale digesters
can be used to displace 85 per cent of diesel fuel from irrigation pump sets.
Compact Biogas Plants
The “compact” biogas plant is a small, low-cost biogas plant with a floating plastic gas holder that
has been developed by Dr. A. D. Karve, President, Appropriate Rural Technology Institute
(ARTI), Pune, Maharashtra State, India. Instead of cattle dung or other animal excreta, starchy
and sugary materials are used as feedstock. The retention time of dung in the dung-based
biogas fermenter is six weeks, while that of starch is only six hours, therefore, the volume of the
fermenter is much smaller. The biogas produced from starch has a higher proportion of methane
(80 to 90 per cent by volume) than biogas from cattle dung (around 60 per cent). As a result, less
165
166
Need Source
Kartha and Larson, 2000
175
gas is required for cooking, and even 800 liters per day is sufficient for a family to cook two
167
meals.
Construction
The compact biogas plant is a small version of the standard floating-drum biogas plant. It
consists of two cylindrical plastic drums telescoping into one another. The outer drum is open at
the top and acts as the digester and is kept on the ground. The inner drum that acts as a gas
holder is open at its bottom and moves up and down inside the digester. The diameter of the gas
holder is about two centimeters smaller than that of the fermenter. The fermenter vessel is
provided with appropriate inlet and outlet pipes for introducing the feedstock into it and for
removal of spent slurry from it. The gas holder is provided with a gas tap through which the gas is
led to the burner. The digester tank can also be made of bricks and cement. There is no stirring
mechanism.
Feedstock
Feedstock that can be used in compact biogas plants are rain damaged or insect damaged grain,
flour spilled on the floor of a flour mill, oilcake from non-edible oilseeds (e.g. castor or Jatropha),
mango kernels, seeds of various tree species, non-edible rhizomes (banana, arums, dioscoreas),
leftover food, spoiled and misshapen fruits, non-edible and wild fruits, spoilt fruit juice, molasses,
etc., that are readily available in rural areas. This biogas plant also accepts both sugarcane juice
and whole sugarcane macerated into small pieces. The cellulose in the cane is also converted
into gas, but it has a longer retention period of about 20 days. The raw materials have to be
pulped or powdered and mixed with five liters of water per kilogram of raw material before they
are introduced into the digester. Research is being carried out at ARTI, on using combinations of
feedstock materials to increase gas yields and on additives such as micronutrients, nitrogen,
phosphorous compounds etc.
Starch, sugar, powdered oilcake, grain flour or the powdered seed of any plant takes about the
same time to digest and also produce the same amount of gas. One kilogram of sugar or starch
yields about 400 liters of methane within a period of six to eight hours, since these substances
are highly digestible. This quantity is enough for cooking one meal for five to six persons. About
two kilograms of dry starchy matter mixed in about 10 liters of water is the daily input required for
a family to cook two meals a day.
Operation
To start operating the biogas plant, the outer drum is filled with the material to be fermented and
the inner drum is lowered into it. The gas tap at the top of the inner drum is kept open while
lowering the drum into the outer one, and when it has been completely inserted into the outer
drum, the tap is closed. As biogas is produced in the digester it fills up the inner drum that gets
lifted up due to increased buoyancy.
To begin operations on a new biogas plant, mix about 10 kilograms of cattle dung and water and
pour the slurry into the fermenter. Dung is a dirty and smelly material, so to make the system
more readily acceptable to the users, especially in urban areas; the culture can be produced and
given to the users along with the biogas plant. In the initial phase, only 200 grams of flour is
added daily. Combustible gas starts emanating in seven to 15 days. After the methane production
has started, the daily dose can be gradually increased to one kilogram of starch mixed in five
liters of water at each of the two daily feedings. It is best to feed the raw materials into the biogas
plant once in the morning and once again in the evening.
167
Karve, A.D., Private communication
176
This system is much easier to operate than the dung based biogas plant because of the relatively
small quantities of feedstock and effluent slurry to be handled. A typical 2000 litre dung based
household biogas plant requires 40 kg of dung input and generates 80 to 100 liters of effluent
slurry daily, whereas the compact biogas plant generates only 4 to 5 liters of effluent twice daily.
The residual slurry is a good organic source of plant nutrients because the process of methane
formation removes CO2 and CH4 (methane) selectively from the biomass and the other
constituents such a nitrogen, phosphorus, potassium, calcium, iron, etc., get concentrated in the
slurry. It can be used as manure for plants growing around the house. Because the material to
be fed into the biogas plant consists mainly of starch and sugary material like sugarcane juice or
fruit pulp, the slurry consists almost exclusively of water with a little suspended matter and
bacteria in it. So the starch powder or fruit pulp feedstock can be mixed into the effluent slurry
and recycled back into the input of the digester.
The system is sensitive to temperature and the retention time ranges from six to 12 hours,
depending upon the temperature, compared to a retention time of 40 days for the dung based
plant. To increase gas production at ambient temperatures below 15 degrees Celsius, it is easy
to cover the drums with an insulating material and conserve the heat produced by the bacterial
process.
Costs
The 500-litre biogas plant, mass-produced from moulded plastic drums, would cost about Rs.
3,500 (US$78) and the 1000 litre plant would cost US$100. The smallest cattle-dung based
domestic biogas plant costs about Rs. 12,000 (US$267). The feedback from the users is that
they would like to have more gas, about 1000 liters than the 500 liters. ARTI is trying to bring
costs of the 500 litre capacity plant down to about US$50. The total expenditure in India is about
the same as the present price of an LPG system, which includes the deposit for the LPG cylinder.
The gas produced by this system has almost the same calorific value as LPG and can be used
for cooking and lighting. It burns without smoke or soot, producing an almost invisible bluish flame
similar to that of LPG. The size of the gas holder may vary between 500 liters and 1000 liters
depending upon the requirements of the family. In a family eating mainly rice or noodles, a
capacity of 500 liters is adequate, but in the case of families eating chapattees or tortillas, which
have to be made one after the other, the gas has to last longer, and therefore a larger capacity of
gas holder and fermenter are required. The biogas produced has also been used to operate
petrol-driven portable electricity generators. This technology can be used for household scale
biogas plants or by industries to substitute LPG, by using commercially grown starchy materials
such as cassava, sorghum, etc.
Retained Biomass Digesters
For treating large volumes of liquid effluents with low solids content from distilleries, pulp and
paper factories and a whole range of food processing industries, some form of retained biomass
digester is used in which the solids are retained in the digester while the treated liquid part of the
effluent is removed at high flow rates. The bacteria are retained with the solids in the reactor
allowing fast reaction rates and low residence times. The “Up-flow Anaerobic Sludge Blanket”
(UASB) can handle high flow rates and is the most widely used. Skilled operators are necessary
particularly for proper start-up of the UASB reactor and for managing the process after start-up
when large or sudden fluctuations sometimes occur in composition, strength, temperature, pH or
bicarbonate alkalinity. The expanded granular sludge bed (EGSB) system is a variant of the
UASB that can handle higher organic loading rates but is rather inefficient at removing suspended
solids.
177
3
Cost estimates for UASB reactors have ranged from US$ 280 - 350 per m of reactor volume for
168
3
Brazil . A UASB reactor installed in Colombia for sewage processing cost US$ 181 per m of
169
reactor volume . These are real costs under Colombian conditions, where equipment is more
3
expensive than in Europe or North America, but labor considerably cheaper. For a 120 m steel
3
170
reactor a real cost of US$ 300 per m has also been reported .
1.3.3.2
Gasifiers
Gasification is a high-temperature conversion of solid biomass to combustible “producer gas”
which is a mixture of hydrogen, carbon monoxide, carbon dioxide and nitrogen. Air input is
controlled so that only partial combustion of the biomass occurs. Biomass such as rice husks and
coconut coir, have to be briquetted before being fed into the gasifier. Producer gas has a heating
3
value of 4 to 6 MJ/m that is 10 to 15 per cent of the heating value of natural gas. There are two
main types of gasifiers for biomass: fixed bed and fluidized bed.
Fixed bed gasifiers are generally used for small-scale applications (biomass input from five to 500
kg/hour) and can be either up-draft or down-draft. The up-draft gasifier is best used for heating
applications located close to the gasifier. The producer gas from a down-draft gasifier contains
less tars, so it can be cooled and cleaned and then used to run diesel engines for electricity or
pumping. Fluidised Bed Gasifiers have a bed of inert material like sand that is fluidized by
blowing air through it from the bottom. Biomass Integrated Gasifier - Gas Turbine (BIG-GT) pilot
projects in Brazil and the United Kingdom (UK) have used the atmospheric pressure, air blown,
circulating type of the fluidized bed gasifier. Units larger than 30 MW (biomass input of 15,000
kg/hour) have been successfully commercialized.
Applications of producer gas include heating and as a fuel in internal combustion engines and
gas turbines. Producer gas can be used for heating directly in burners for household cooking or
to replace fuel oil in industrial boilers, furnaces and kilns. Gasifiers are generally at least twice as
efficient as direct combustion of biomass for small- and medium-scale cooking and heating
applications. Moreover, cooking with producer gas causes less indoor air pollution in the kitchen
than traditional direct biomass burning and reduces the fuel collection time. Before it is used in
Internal Combustion (IC) Engines, producer gas has to be cleaned and cooled properly to avoid
corrosion damage in the engine. Around 15 per cent of diesel fuel has to be mixed in
compression ignition (diesel) engines to ignite the mixture but 100 per cent producer gas can be
used in spark ignition (petrol/gasoline) engines. Diesel engines are more durable and reliable
than petrol engines, have a higher efficiency and are simpler to maintain. Only one-third of the
energy content of producer gas is converted to electricity, the other two-thirds being converted to
heat. It is possible to recover around 50 per cent of the waste heat from the exhaust gases and
cooling water of the IC engine. In this way, the efficiency of biomass usage can easily be
doubled if this waste heat is utilized for industrial process heating, domestic heating applications
(space and water heating), absorption refrigeration and air-conditioning systems, or for producing
fresh water by multi-stage flash evaporation process.
The third application of gasifiers is for cogeneration of heat and power in industries. The
producer gas from gasifiers can be fired in gas turbines or in the boilers of steam turbines. It can
also be used in “combined cycle” operation in which the producer gas fires the gas turbine and
the exhaust gases of the gas turbine are used to raise steam in a heat recovery steam generator
for the steam turbine.
Costs of gasifiers for cooking gas and electricity to communities and villages are given in Table
1.3.5. At 50 per cent capacity utilization, these systems will be sufficient for 100 households. The
3
gasifier produces 250,000 Nm per year of cooking gas that is sufficient for 100 households at a
168
Souza, 1986
Schellingkout and Collazos, 1999
170
Vieira and Souza, 1986
169
178
3
consumption of 6 Nm per household per day. For the electricity production option, each of the
100 households can consume 12 kWh per day, again at a capacity utilization of 50 per cent.
Table 1.3.5:
Costs for Cooking Gas and Electricity from Small-scale Gasifiers
171
GAS SUPPLY TO HOMES FOR COOKING - (central village gasifier system with
3
capacity ~ 60 Nm /hr gas)
a
Capital investment for gas production, 2004$
a
Capital investment for gas storage tank, $
a
Capital investment for piping system for gas distribution, $
TOTAL Capital Investment
Biomass consumption (17.5 MJ/kg biomass), kg/hr
Biomass consumption, tons/yr
Operating labor
a
Maintenance/spare parts (assuming ~2% of capital cost/year), $
Cost of delivered gas, $ / Nm
of which
3
16,200
17,400
17,400
51,000
25
110
2
350
0.0738
gas production system capital charges
gas distribution capital charges
0.0106
0.0226
biomass fuel charges ($0.10/kg biomass)
0.0044
operating labor ($1/hr per operator)
Maintenance
0.0350
0.0012
ELECTRICITY PRODUCTION
Gasifier/diesel engine/generator system with capacity ~ 100 kWe
a
1.3.4
TOTAL Capital Investment, including installation, $
Biomass consumption, kg/hr (@0.01 $ / kg)
Biomass consumption, tons/yr
Diesel consumption, liters/hr (@0.25 $ / hr)
Number of operators per shift (@$1 / hr)
a
Maintenance/spare parts (1% of capital cost/year), $
87,000
100
438
10
2
750
Cost of electricity generation, $ / kWh
0.0880
of which
0.032
0.010
0.025
0.020
0.0007
Gasifier + diesel genset capital charges
biomass fuel charges (assuming $10/tonne biomass)
diesel fuel charges (assuming $0.25/liter)
operating labor (assuming $2/hr per operator)
maintenance
Efficiency Improvements in the Sugar and Ethanol Industry
Traditionally, sugar factories have been satisfied with very inefficient usage of energy because
they wanted to burn all the bagasse produced in order to avoid disposal problems. Since the
energy in the bagasse was several times the process steam and electricity requirements,
inefficiency in steam production and usage was desirable. Now that the option of selling “excess”
171
Kartha and Larson, 2000
179
electricity to the grid for additional revenues exists, efficiency improvements are required at sugar
or sugar-ethanol factories for two reasons:
1. To minimize steam and electricity consumption in the factory so that maximum electricity
can be generated and sold to the utility grid, and;
2. Cogeneration technologies such as BIG/GTCC, convert a high fraction of the biomass
fuel input into electricity and a smaller fraction into process steam. The process steam
demand therefore has to be reduced to the levels of steam generated by these advanced
technologies.
Sugar and ethanol factories all over the world consume 400 to 500 kg of steam per ton of
sugarcane crushed (kg/tc). Several studies have shown that this can be reduced by up to half, by
172
effecting steam economy and energy conservation measures . The Hector Molino sugar mill in
Cuba has implemented a CEST cogeneration project partly financed by the Global Environment
Facility (GEF) in which the process steam consumption has been reduced by 32 per cent, from
500 kg/tc to 340 kg/tc, by making several modifications at the juice heating, evaporation and
173
vacuum pan . The mill’s average electricity demand of 7.5 MW has also been reduced by 500
kW.
Table 1.3.6 shows cost estimates for implementing steam reductions in two stages for “sugar
174
only” and “sugar with ethanol” plants . In the first stage, the steam consumption is reduced by
32 per cent from 500 kg/tc to 340 kg/tc, and in the second stage, it is reduced by another 18 per
cent from 340 kg/tc to 280 kg/tc. In order to generate additional revenues, investments on steam
reductions have to be coupled with a cogeneration technology such as CEST or BIG-GTCC so
that the bagasse saved is used to generate electricity that can be sold to the utility grid. The first
stage: Steam Saving-I, has to be implemented in combination with CEST, but for the BIG-GTCC
further steam reductions made possible by Steam Saving-II are necessary.
Table 1.3.6:
Capital Investments to implement steam reductions in Sugar and Sugar175
Ethanol plants
SUGAR ONLY factory
Typical
Steam
Steam
today
Saving I
Saving II
Process steam
consumption (kg/tc)
Process electricity
consumption (kWh/tc)
Total capital
investment (million
US$)
SUGAR with ETHANOL distillery
Typical
Steam
Steam
today
Saving I
Saving II
500
340
280
500
340
280
20
28
29
20
28
29
-
1.6
2.2
-
3.33
4.86
Costs have been estimated for a typical existing “sugar only” mill or a “sugar with ethanol”
distillery processing 7000 tons per day of cane containing 14.1 per cent sucrose and 13.8 per
cent fibre. The sugar only mill produces 800 t/day of sugar, while the sugar with ethanol factory
3
uses half the sucrose for distilling ethanol producing 353 m /day of ethanol. Investments for the
“sugar with ethanol” plant are over double the investments required for the “sugar only” mill due to
additional steam reduction equipment required at the distillery. Capital investments required for
the first and second stages are US$1.6 million and US$2.2 million for the sugar only mill, and
US$3.33 million and US$4.86 million for the sugar with ethanol distillery respectively.
172
Ogden et al., 1990; 1991
Guzman and Valdes, 2000
Estimates made by the Copersucar Technology Center, which is the research and development center of the sugar cooperative in Sao Paulo state of Brazil.
175
Facility processing 7000 tons cane per day; Source: Estimates of Copersucar Technology Center (CTC), Sao Paulo
taken from Larson et al, 2001
173
174
180
1.3.4.1
Cogeneration in the Sugar and Ethanol Industry
The production of both heat and electricity is called “combined heat and power” (CHP) or cogeneration that is used by the sugar and sugar-ethanol industry. Sugar mills use only bagasse,
but other combustible agricultural residues such as straws, groundnut shells, etc. can be used for
power generation using essentially the same technologies, though some differences may arise in
the gasifier and the gas clean-up procedures depending on the chemical composition of the
feedstock.
Cogeneration technologies widely used by the sugar industry that have already been
commercialised or are under development for biomass are:
a) Back-pressure steam turbine;
b) Condensing extraction steam turbine (CEST);
c) Biomass Integrated Gasifier – Gas Turbine (BIG-GT);
d) BIG-GT in “combined cycle” operation with a steam turbine (BIG-GT CC);
e) Two variants of the BIG-GT: the Biomass Integrated Gasifier - Steam Injected Gas
Turbine (BIG-STIG) and the BIG-ISTIG.
The somewhat inefficient back-pressure steam turbine is used by most sugar industries all over
the world. They operate at a pressure of around 20 bar, and produce just enough electricity (20
kWh / ton cane) and steam (around 400 – 500 kg / ton cane) for factory needs at an efficiency of
less than 10 per cent. The more efficient CEST is a fully commercialized technology used in the
process industries for many years, but only recently being introduced in the sugar industry so that
more electricity can be produced for sale to the utility grid.
The BIG-GT and its “steam injected gas turbine” (STIG) variant are high efficiency technologies
under development with technology demonstration projects under way, so they should be
available for large-scale commercialization within two to three years. The most advanced
technology having the maximum efficiency is the “intercooled steam injected gas turbine” (ISTIG)
which is already being used with “coal integrated gasifiers” (CIG) for thermal power generation.
However, three to five years of development are required to adapt the BIG-ISTIG to biomass
integrated gasifier applications. CEST and BIG-GTCC are being proposed as cogeneration
solutions for the sugar industry in the Caribbean, and technical details of these two technologies
are given below.
Condensing extraction steam turbine (CEST) is a more efficient technology than the backpressure steam turbine if electricity generation is the primary or the only objective. Steam at
different pressures for process requirements can be extracted at several points while it is
expanding in the turbine. The rest of the steam continues to expand to sub-atmospheric
pressures and is then condensed and returned to the boiler. If no process steam is required, then
CEST can be operated in the purely condensing mode to maximize electricity production, for
example, during the off-season in sugar mills. CEST systems operate at pressures of 60 to 80
bars and have typical electricity generation efficiencies of around 20 per cent. CEST allows
sugar mills to export 100 – 150 kWh of electricity per ton of cane and a figure of 100 kWh/tc has
been used to estimate cogeneration electricity export potential of the Caribbean countries. At the
176
Hector Molino sugar mill in Cuba, implementation of CEST allows export of 109 kWh/tc .
176
Guzman and Valdes, 2000
181
Figure 1.3.3:
Schematic of the Condensing Extraction Steam Turbine (CEST)
177
Biomass Integrated Gasifier – Gas Turbine Combined Cycle (BIG-GT CC) - Gasification of
the biomass permits the use of a gas turbine that can be combined in series with a steam turbine
to give “combined cycle” operation. This is one of the most efficient power generation
technologies commercially available for small and medium scale operation, as shown in Figure
1.3.4. The basic elements of a BIG-GTCC power plant are:
• Biomass dryer (ideally fueled by waste heat);
• Gasifier for converting the biomass into a combustible fuel gas;
• Gas cleanup system;
• Gas turbine-generator fuelled by combustion of the biomass-derived gas;
• Heat recovery steam generator (HRSG), and;
• Steam turbine-generator to produce additional electricity.
The producer gas from the gasifier is first used to fire the gas turbine. The exhaust gas from the
gas turbine raises steam in the HRSG to drive the steam turbine that provides process steam and
generates more electricity. BIG-GTCC has an efficiency of over 30 per cent allowing the export
178
of 200 to 300 kWh per ton cane . By incorporating steam injection and inter-cooling in the BIGGT efficiencies of more than 40 per cent can be achieved. It should be noted that it is possible to
leapfrog the CEST stage and go in straightaway for BIG/GTCC since it can export double the
electricity of CEST due to its higher efficiency.
177
Williams and Larson, 1993
Larson et al, 2001
178
182
Figure 1.3.4:
Schematic of the BIG/GTCC proposed for sugar industry
179
Costs
The cost of implementing process steam reductions and co-generation plants for a “Sugar Only”
factory and “Sugar with Ethanol” distillery, for a facility processing 7000 tons cane per day, are
given in Table 1.3.7.
Table 1.3.7:
Costs for implementing process steam reductions and co-generation
180
plants
SUGAR ONLY factory
Total installed generating
capacity, MW
Costs of Cogeneration
plant, @$1480/kW, million $
Costs for process steam
reductions, million $
TOTAL capital
181
investments, million $
1.3.4.2
SUGAR with ETHANOL distillery
Phase - I
Additional
for Phase-II
Phase - I
Additional
for Phase-II
29.8
28.7
29.8
28.7
44.25
42.5
44.25
42.5
1.60
0.60
3.33
1.53
45.9
43.1
47.6
44.0
Ethanol Production
Ethanol is produced from sugar by a process of fermentation, distillation, rectification and dehydration. Molasses, which is a by-product of the sugar production process, is generally used but
the secondary juice or the primary cane juice or the cane syrup can be added to produce more
ethanol instead of sugar, as shown in Figure 1.3.5.
179
Larson et al, 2001
Estimates of Copersucar Technology Center (CTC), Sao Paulo taken from Larson et al, 2001
181
Note: Facility processing 7000 tons cane per day for 150 days /yr at 87% capacity utilization
180
183
Figure 1.3.5:
Schematic of Ethanol production from Sugarcane
182
To provide ideal conditions for fermentation, the sugar concentration is adjusted by mixing treated
juice with syrup or molasses. Generally, batch processes are used but continuous processes are
now being introduced in some distilleries. Yeast is used for fermentation during which heat and
carbon dioxide are liberated. Carbon dioxide (CO2) is collected and sold as a by-product.
o
Fermentation temperature is kept below 34 C by cooling the vats. Modern systems use closed
vats with CO2 washing for ethanol recovery. The fermented wine is centrifuged to recycle the
yeast and then sent to the distillation system with three sets of distillation columns and a benzene
recovery column. Low pressure steam is used for heating the columns. The rectification stage
removes impurities and produces hydrated ethanol that can be used in E-100 engines. To
produce pure, anhydrous ethanol for blending with petrol, the ethanol is dehydrated using
benzene in a special column.
Ethanol can also be produced from bagasse, straws, woods and other basically cellulosic
materials by a process of hydrolysis that converts the cellulose to glucose and the hemi-cellulose
to xylose. Glucose and xylose are essentially sugars that are fermented to ethanol that is then
recovered by distillation as shown in Figure 1.3.6.
182
Planning Commission, 2003
184
Figure 1.3.6:
Process for converting agricultural residues (bagasse, straw, etc.) to
Ethanol
BAGASSE
Feedstock
preparation
ETHANOL
Cellulose
hydrolysis
to glucose
Glucose
fermentation
Product
recovery
Xylose
fermentation
Hemicellulose
hydrolysis
to xylose
LIGNIN
fuel for process,
feedstock for octane
booster or chemical
feedstock
For the development of the cellulosic ethanol industry, a sensible path is to begin with existing
feedstocks, namely, crop residues, followed by dedicated energy crops as the industry expands.
The supply of cellulosic feedstock will depend on the agricultural production methods employed.
The availability of crop residues for energy can be increased by introducing agricultural practices,
like cover cropping, that protect soils from the impacts of water and wind erosion, and maintain or
improve long-term productivity. These practices tend to increase the volume of crop residues left
on the ground, and consequently the potential supply for energy conversion. Such practices are a
necessary element for a sustainable development strategy as well as a major component in the
production of environmental goods and services (EGS).
Costs
3
Capital investment required for adding a distillery having a capacity of 350 m anhydrous ethanol
per day, to a sugar factory crushing 7000 tons cane per day, are given in Table 1.3.8. This
distillery can convert half of the sucrose into ethanol. The costs have been estimated for
Brazilian conditions.
Table 1.3.8:
Cost of adding an ethanol distillery
Equipment for Distillery
Fermentation and distillation plants
Ethanol storage tanks
Stillage handling and storage
Laboratory
Spare parts warehouse
Fuse oil system
Cooling water system
TOTAL
183
183
US$ (000)
4,577
1,220
464
6
6
15
100
6,388
Estimates of Copersucar Technology Center (CTC), Sao Paulo, taken from Larson et al, 2001.
185
1.3.5
Coconut Oil
Coconut oil is a mixture of chemical compounds called glycerides containing fatty acids and
glycerol. The different fatty acids present in coconut oil range from C6 - C18 carbon atom chains.
The oil is contained in the kernel or meat of the nut. Technologies for producing coconut oil can
be grouped into (a) dry processes and (b) wet processes. In the dry process the oil is extracted
from the dried coconut kernel called copra whereas in the wet processes the oil is extracted from
the fresh kernel in its wet or a semi-dried state.
Dry process and oil refining
Copra from the farm is stored in warehouses, sometimes up to two to three months, before it is
processed in a medium- or large-scale oil mill. Firstly, the copra is cleaned of metals, dirt and
other foreign matter manually by picking, or by means of shaking, or revolving screens, magnetic
separators and other similar devices. Then the copra is broken into fine particle sizes of about
1/16" to 1/8" by high-speed vertical hammer mills or cutters to facilitate oil extraction. The
crushed copra that has about five to six per cent moisture is passed through a steam-heated
o
cooker where it attains a uniform temperature of about 104-110 C to facilitate the expelling
action. The milled hot copra is sent to an expeller where it is subjected to high-pressure oil
extraction, first by a vertical screw, and finally by a horizontal screw. The temperature of the oil is
o
kept at about 93-102 C to produce light coloured oil and effect good extraction. The oil extracted
in the expeller flows into the screening tanks to remove the entrained foots from the oil. The oil is
finally passed through a plate and frame filter press under pressure to further remove the solids in
the oil. The filtered oil flows into a surge tank from where it is finally pumped to the coconut oil
storage tank.
Good quality coconut oil, low in fatty acid and having a good aroma can only be produced from
good quality copra. However, after several weeks or months in storage and transportation, copra
is likely to be dark, turbid, high in free fatty acids (FFA), phosphatides and gums, and have an
unpleasant odor. The oil from such low quality copra has to be refined to produce clear, odor-free
edible oil. Losses during the refining process can be five to 7.5 per cent of the weight of the
crude oil. The main steps in the refining process are neutralization, physical refining, bleaching
and deodorization.
Prices of coconut oil mills and refineries provided by Tiny Tech, a leading manufacturer in India,
are given in Table 1.3.9.
Table 1.3.9:
Costs of Coconut Oil Mills and Refineries
Capacity (tons/day)
185
Cost
(US$)
184
Coconut oil mills using copra
3
6
10
20
30
Coconut oil refineries
5
10
30
6,200 10,800 15,500 29,000 40,600
39,200 70,800 233,900
Wet Processes
There are several processes starting from fresh kernel that are used, some of which are suited
only for a farm size operation but can produce a high quality virgin oil:
a) HOID – hot oil immersion drying
b) Ram press
c) DME - direct micro-expelling
184
185
Tinytech Udyog, 2005
FOB Mumbai, India
186
186
Hot Oil Immersion Drying (HOID) - The HOID technology, also called the `fry-dry'process,
originated in West and North Sumatra, and is now widely used all over Indonesia; usage is
spreading to the Philippines and other countries. HOID is well suited to medium- and large-scale
operations, and produces oil generally of a better quality than the dry process, with a distinctive
coconut flavour that is preferred for cooking. The viability of the process is sensitive to the price
of raw material, price of oil and the oil yield, so it is necessary to operate the system efficiently
and maximize yields. In the HOID process the fresh coconut kernels are grated and dried by
immersing in hot oil. The dried residue is then taken out of the hot oil, drained and sent through a
screw press to extract the oil and leave a dry cake. The main equipment used in a small HOID
processing plant are: hammer mill or grater, drying pans, furnace, screw press, filter press or
setting tank, draining tank and other handling equipment such as a scooper, tray, metal and
rattan baskets.
Ram Press Coconut Oil Extraction - Ram press coconut oil extraction is a method of expelling
oil from dried coconut either in the form of dried fresh coconut gratings, copra or dried residue
from aqueous coconut processes. The Ram Press, also called the Bielenberg Press, was
developed by Appropriate Technology International, a Washington-based non-governmental
organization (NGO), in 1985, through its Village Oil Press Project, in Tanzania. It is a manually
operated, low-cost piece of equipment that was originally designed to be used by smallholder
farmers to process soft-shelled sunflower seeds to obtain scarce cooking oil. The original design
of the Ram Press was arduous to use and took two men to operate.
Recently, the Natural Resources Institute (NRI) of the UK has carried out some work on
improving small-scale coconut oil extraction methods using the participatory approach,
particularly involving women in the rural areas in Asia, the Pacific and Africa. One of the design
advancements of the Ram Press is a version that is smaller and easily operated by a woman.
The newly designed Ram Press has a long, pivoted lever that moves a piston backwards and
forwards inside a cylindrical cage constructed from metal bars spaced to allow the passage of oil.
At the end of the piston’s stroke an entry port from the feed hopper is opened so that the oilseed
or the squeezed coconut gratings can enter the cage. When the piston is moved forward, the
entry port is closed and the gratings are compressed in the cage. An adjustable choke at the
outlet of the perforated cage controls the pressure. The lever mechanism of the press is such that
it can operate pressures greater than those in most manually operated presses, and as high as
those in small-scale expellers. While the Ram Press has a low seed throughput, it has the
advantage of continuous operation. Laboratory and field trials conducted by the NRI in Tanzania
indicated that the Ram Press was suitable for pressing sun dried squeezed coconut gratings with
an oil extraction efficiency of 60-70 per cent.
A farmer scale Ram Press manufactured by Appropriate Technology International of Tanzania,
can typically process around 4 kg/hour of dried gratings producing around 2.5 liters of oil per
hour. In addition to dried coconut gratings from the traditional wet process, the press can be used
to expel oil from other seeds (including sesame, niger and rapeseed). In 2003, the FOB cost of
this ram press was US$380.
187
Direct Micro Expelling (DME) - The DME process was developed by an Australian company,
Kokonut Pacific Pty Limited that is the only known supplier of small-scale DME equipment and
training services. Kokonut Pacific is also trying to help coconut farmers sell the virgin coconut oil
from DME, after local demand is satisfied. The main features of the Direct Micro Expelling (DME)
process are:
a) DME is a small-scale (family farm size) process for producing virgin coconut oil of vastly
superior quality.
186
Punchihewa and Arancon
187
Direct Micro Expelling (DME) Technology, Kokonut Pacific, http://www.kokonutpacific.com.au/index.html?home.html
187
b) The DME process is quick (1½ hours per batch) and efficient (oil extraction efficiency 85
per cent).
c) The DME Process concentrates on small, manageable, daily batches instead of
producing large batches of copra that take many weeks to ship and process.
d) The DME process depends upon simple, easily learned skills, rather than sophisticated
equipment. Families really enjoy working together on DME oil production, whereas they
typically describe the making of copra as a form of slavery.
e) DME gives regular meaningful employment to teams of three to five women and/or men
of all ages. A team can work on the process more-or-less whenever it suits them.
Production can take place all year round and in virtually any weather.
f) It gives direct local employment in rural areas in nut collection and oil production, and it
has multiplier income and employment effects. Where the oil is packaged locally or used
as an input by local cosmetic, soap and detergent producers, there is significant value
added. Also, the residue goes for baking and livestock.
g) In general, the gross return from the DME process is about three times, and the net
return is about four times that of copra.
h) Average daily production is typically 20 to 50 liters (depending on the number of hours
worked by a team), with skilled operators obtaining an oil extraction efficiency) of over 85
per cent of available oil.
i) Besides its uses as cooking oil, or for skin moisturizing and massage, virgin coconut oil is
a good lamp fuel and, of all the vegetable oils, it is the best direct substitute for dieselengine fuel.
j) After the coconut oil is extracted, the residual meal is de-fatted grated coconut that is
excellent for baking biscuits and cakes and as animal feed.
k) The DME equipment can also produce excellent coconut cream for local domestic use.
DME equipment supplied by Kokonut Pacific consists of a robust rack and pinion press with its
interchangeable stainless steel cylinders and pistons; two electric graters (230 V 370 W); plus
collection, measuring and cleaning tools and Trainer’s Manual. This equipment weighs about 80
kg. The cost of setting up a single operative unit is currently about AU$10,000 (US$ 7,600).
However, in order to avoid the problems of an “orphan,” site and to gain economies of scale,
Kokonut Pacific advises that a DME unit should operate within a ‘DME system’. The minimum
cluster for an area should be three units costing up to AU$40,000 (US$30,400) inclusive of
training. A fully economic project is likely to involve 10 to 100 DME units. Overheads for training
remain relatively constant with larger projects.
1.3.6
Biodiesel
Biodiesel consists of the methyl or ethyl esters of the fatty acids contained in vegetable oil
triglycerides. The most common means of manufacturing biodiesel is the process of
transesterification whereby the vegetable oil triglyceride is reacted with methanol (or ethanol) in
the presence of a catalyst to form the fatty acid methyl (or ethyl) esters. Under ideal
circumstances, nearly the same weight of methyl esters will be produced from the vegetable oil
feedstock. Glycerol is a by-product produced in significant quantities from the transesterification
process. Technology for the pre-treatment of fats and oils and the purification of the methyl
esters and glycerol is well established and commonly used outside the biodiesel industry.
Alcohols that can be used in the transesterification reaction are methanol, ethanol, propanol,
butanol and amyl alcohol. The reaction is reversible, so an excess of alcohol is used to increase
the conversion of triglycerides to esters. Methanol is widely used because of its low cost and its
physical and chemical advantages (polar and shortest chain alcohol). Ethanol seems preferable
compared to methanol because it is derived from agricultural products; it is renewable and
biologically less damaging to the environment. Unfortunately, ethanol is more expensive than
methanol and about 44 per cent more ethanol is required for the reaction causing a major
increase in production cost. The excess ethanol from the reaction is also hard to recover because
water and ethanol form an azeotrope so it is hard to return 100 per cent ethanol to the process.
188
Additional processing is required at higher expense. Finally, transesterification with ethanol is
more prone to soap formation and thus requires tighter process controls than with methanol.
The transesterification reaction can be catalyzed by alkalis, acids or enzymes. Potassium
hydroxide (KOH) and sodium hydroxide (NaOH) are widely used alkaline catalysts. Potassium
hydroxide is generally observed to be more effective than sodium hydroxide and has the added
advantage that when the catalyst is removed from the glycerol at the end of the process, it yields
a fertilizer (potash). Sulfuric acid and other strong acids can be used for transesterification, but
they are very slow and thus not commonly used except for pre-treatment of free fatty acids. The
acids do have the advantage that they do not make soap with free fatty acids.
Both batch processing as well as continuous processing are used to produce biodiesel.
Processing biodiesel in batches tends to be favored by small plants. This approach is more
flexible as it allows the process parameters to be adjusted for each batch so it is relatively easy to
compensate for differences in feedstock characteristics. The equipment needed for batch
processing tends to be less expensive since all of the operations can be performed at
atmospheric pressure in tanks. The disadvantage of batch processing is that the physical size of
the plant tends to scale directly with the capacity of the plant. Continuous flow processing is
favored by larger plants as it uses utilities and other resources in a continuous manner, at a lower
peak rate that is usually less expensive. Both batch and continuous flow processing can provide
a high quality product and successful plants have been developed using both approaches. Yields
of biodiesel are already near theoretical limits but several new technologies are being developed
that attempt to overcome some of the limitations of these processes. Technical details about the
biodiesel production process are given in Annex 3.
Biodiesel has a high cetane number, good lubricating properties and energy content comparable
to petroleum diesel fuels with which it can be easily mixed. The molecular weights of the methyl
esters are similar to diesel fuels, making their transport properties and melting points superior to
the fats and oils from which they were derived. Biodiesel has two main advantages over
vegetable oil also called “pure plant oil” (PPO) or straight vegetable oil (SVO): a) It is easily
miscible with petroleum diesel in any proportion, and; b) It can be used in diesel engines without
any modifications to the engine, or with minor modifications in some cases.
Small-scale biodiesel processors
Biodiesel can be produced in small-scale, “do-it-yourself” (DIY) processors that can be
assembled from components or from a DIY Biodiesel Kit, available from several companies in the
US, Argentina, etc. However, quality assurance to produce consistent, fuel grade biodiesel is
very difficult in these types of plants. A typical biodiesel production system for the laboratory,
188
home or farm environment will comprise of the following main equipment : a) Polyethylene tank
for premix system; b) Reactor or Processor tank; c) Pumps: System pump (Electric), Alcohol
pump, Biodiesel pump; d) Barrels or Drums for Coconut oil, Methanol, Biodiesel; and e) Air
compressor. A small 150 L batch processor could be constructed for about US$300, and a 450 L
189
batch processor would cost about US$1,100 .
Industrial -scale biodiesel plants
Large-scale biodiesel plants can have capacities of up to 250,000 tons per year. The process
flow diagram of a 2-stage process used in industrial biodiesel plants manufactured by Lurgi of
Germany, is shown in Fig 1.3.6.
188
189
FuelMeister
Lund, 2004
189
Figure 1.3.6:
The Lurgi 2-stage biodiesel process
190
The Lurgi technology consists of two main steps: (a) oil pre-treatment, and (b) transesterification
by adding methanol and catalysts. The oil pre-treatment stage combines de-gumming, thermal
deacidification or neutralization, leaching and winterization to provide a feedstock for the
transesterification that will produce biodiesel of a very high quality. To achieve a maximum
conversion irrespective of the type of oil used, Lurgi have designed their transesterification in two
stages, with each of the two reactors followed by a downstream separator for the glycerine
phase. The system is operated continuously at atmospheric pressure and does not require
expensive centrifuges. If required, pharmaceutical grade glycerine can be produced instead of
crude glycerine depending on their market prices.
Capital costs of industrial scale, fuel grade biodiesel plants show significant economies of scale.
A plant with a capacity of 10,000 tons/yr has a capital cost of 0.500 US$/liter, whereas a plant
191
with 10 times its capacity (100,000 tons/yr) has a capital cost of only 0.202 US$/liter .
Table 1.3.10:
Biodiesel processing plant costs
Capacity (tonnes/year)
20,000
40,000
60,000
Euro (million)
3.8
4.3
5.1
192
Euro/litre
0.167
0.095
0.075
This can be seen in the capital costs for the processing plant provided by the Austrian company
Energia, shown in Table 1.3.3.8. Energia supplies the processing plant only, which is provided in
modular form, and leaves the provision of tankage, services, infrastructure and buildings to its
clients. These plants can process both vegetable oils as well as tallow.
190
Lurgi, 2004
Duncan, 2003
192
Duncan, 2003
191
190
Table 1.3.11:
Cost details of a 70,000 tons/yr Biodiesel Plant
193
Details of capital costs of a complete
Modular Processing Plant are given in
Table 1.3.11. The process plant costs
Process Plant
are
based on prices given in Table
Plant installation,
1.3.10 adjusted to a 70,000 tons per
piping,
annum plant capacity, using the scaling
instrumentation
1.12
factor implicit in the Energea data.
Plant buildings
0.5
0.35
Because the Energea equipment is
Storage
3.4
2.38
supplied in modular form, the associated
Services
1.7
1.19
costs for installation, pipe work and
Civil Works
2.4
1.68
instrumentation
have been estimated,
Spares
0.6
0.42
based
on
a
study
by the Liquid Fuels
Unallocated
1.5
1.05
Trust Board in New Zealand. In 2003,
Contingency
2.2
1.54
the total capital investment needed for a
Engineering
5.0
3.5
70,000 tons/yr biodiesel plant is 20.8
Total
29.7
20.79
million US$ giving a specific capital cost
of US$0.50/kWh is cheaper than the other renewables (PV, tidal, wind) and is similar in cost to
fossil fuel alternatives (combined cycle gas turbines, coal thermal). Biomass used directly for
electricity generation and in combined heat and power applications at US$0.05 to US$0.15/kWh
is more expensive than natural gas, coal and on-shore wind farms, around the same cost as offshore wind farms, and cheaper than tidal and PV.
Cost
(Million NZ$)
10.9
1.6
1.4
Cost
(Million US$)
7.63
Cost-Benefits of Biofuels
Electricity generation and transportation are the two major uses of biofuels. Costs of using
biofuels for these two uses are compared with the alternatives (other renewables, fossil fuels and
nuclear) in Table 1.4.1 and Table 1.4.2. Present costs are given together with medium-term
projections. Cost of promising technologies under development such as ethanol from cellulosic
materials and synthetic diesel produced from biomass by the Fischer-Tropsch process has also
been estimated for 2020.
1.4.1
Biomass for electricity generation
The cost of biofuels used to generate electricity is compared with the alternatives: other
renewable energy sources (wind farms, grid connected photovoltaics and tidal/wave power),
fossil fuels (natural gas and coal) and nuclear power in Table 1.4.1.
193
Duncan, 2003
191
Table 1.4.1:
Current and projected medium-term costs of electricity generating
194
technologies
Technology
Present fossil fuel plant
1) Fossil fuels
a) Gas CCGT
b) Coal
Current cost
(UScents/kWh)
Medium
term
projections
3-4
3.5-4.5
Depends on
fuel prices
Very low carbon electricity technologies
2) Carbon Capture and
Storage (CCS)
Nat. Gas with CCS
NA
IGCC Coal with CCS
NA
4–6
5–8
3) Nuclear Power
5–7
4–8
4) Biomass
a) Co-firing with coal
b) Electricity
c) CHP-mode
2.5 – 5
5 – 15
6 – 15
2.5 – 5
5–9
5 – 12
5) Wind Electricity
a) on-shore
b) off-shore
5-8
9 - 12
2–4
3–8
6) Tidal Stream/Wave
13 – 20
<15
194
Gross and Bauen, 2005
192
Comments
Unclear. Gas price and volatility
increasing. Modest capital cost
decreases and efficiency gains may
be offset by rising fuel prices
Costs based on engineering
assessment, as yet no market
experience to permit learning rate
derivation. The techniques are well
known but not tested for this
application.
Industry provides very low cost
estimates. MIT and PIU rather
higher nos. Low historical learning
rate.
Costs vary widely depending on
conversion technology, scale and
feedstock cost.
Learning curve evidence and strong
market growth (30 % pa), with good
engineering data allows robust
assessment for onshore. Offshore
less certain as experience is
limited,
but
engineering
assessment,
learning
rate
extension/proxy indicates strong
potential.
Future costs difficult to estimate
due to immaturity of technologies.
Estimates draw on parametric
models of hypothetical costs.
Uncertainties are large for these
technologies. Installed capacity
roughly doubled during 2004,
through
new
demonstration
projects.
7) Grid connected PV
2
a) 1000 kWh/m /year
(temperate)
50 – 80
15 – 25
b) 2500 kWh/m / year
(tropics)
20 – 40
5 – 15
2
1.4.2
Robust learning curve evidence
and strong market growth (25 %
pa) suggest costs should decline
strongly to 2020 and beyond.
Recent cost reduction trends
appear to have declined, likely due
to temporary factors (price increase
due to high demand) or indicative of
longer term problems. Neglects
offset costs (e.g. building materials
displaced by PV façade).
Biofuels for Transportation
The two main fossil fuels used in the transportation sector are gasoline and diesel. These can be
substituted by liquid biofuels such as ethanol produced from sugars and carbohydrates, and plant
oils or biodiesel produced from plant oils. Both biofuels can be produced from several different
plants sources. The cost of producing ethanol from sugarcane, corn, grain and cellulosic crops,
and producing biodiesel from rapeseed is compared with gasoline and diesel in Table 1.4.2. Also
given is the cost of synthetic biodiesel produced from biomass-derived synthesis gas.
Table 1.4.2:
Biofuels: Current Costs and 2020 Projections (US cents/liter)
Technology
Current
costs
US cents/l
[$/GJ]
Gasoline / (diesel) cost
for oil crude @ c.
$50/barrel (FOB Gulf
cost)
Ethanol from sugar
cane (Brazil)
0.34/(0.37)
[10.4/(10.0)]
Ethanol from corn (US)
0.29 – 0.32
[13.5– 14.9]
Commercial ethanol production in
US. Some scope for cost reduction.
Ethanol
(UK)
0.38 – 0.65
[18.0– 30.6]
Commercial ethanol production in
UK. Some scope for cost reduction.
from
grain
from
F-T
diesel
coppice (UK)
from
195
Comments
Dependent upon oil supplies
0.29
[13.5]
Ethanol from cellulosic
crops (UK)
Biodiesel
rapeseed (UK)
2020
Projections
US cents/l
[$/GJ]
195
Commercial ethanol production in
Southern Brazil. Some scope for cost
reduction.
0.31 – 0.73
[14.4 – 34.2]
0.59 – 1.48
[18.0– 45.0]
Cost projection for commercial plant
based on engineering analysis.
Commercial biodiesel production in
UK. Some scope for cost reduction.
0.58 – 0.97
[16.2 – 27.0]
Gross and Bauen, 2005.
193
Cost projection for commercial plant
based on engineering analysis.
1.4.4
Benefits of a Biofuels Industry
Even though biofuels may be more expensive than its fossil fuel alternative, it still may make very
good local and national sense to promote its production and use because of its multiple socioeconomic and environmental benefits. The development of a biofuels industry can go a long way
towards meeting the basic developmental needs of most segments of the population. As
discussed earlier, substituting the use of imported fossil fuels with locally produced biofuels
channels cash back into the rural economy even benefiting the poorest farmers. Increased
income generation opportunities will be provided at all stages of biomass production and
transportation, plant operation, by the equipment manufacturers and for maintenance. Marginal
and degraded lands could become viable and farmers can sell energy by-products for additional
income.
Other socio-economic benefits include support of traditional industries, rural
diversification and the economic development of rural societies. In some cases, the increased
th
use of bioenergy can revive cultural traditions that were eclipsed by the fossil fuel era of the 20
century.
Environmental benefits of using bioenergy include: a) cultivation of bioenergy crops on waste and
marginal lands increasing the biodiversity and arresting soil erosion; b) conservation of natural
resources by reducing pressure on finite resources; c) protection of groundwater supplies and
reduced dryland salinity and erosion; d) increased terrestrial carbon sinks and reservoirs; e)
reduced GHG emissions due to fossil fuel substitution; improvement in coastal ecosystem due to
reduced deposition of sediments on reefs, mangroves, and seagrass beds.
In addition to the benefits described above there are very special and unique benefits to the
countries in the Caribbean region. Most of these countries are Small Island Developing States
and face a number of challenges in pursuing sustainable development. The concept of
sustainable development has been endorsed by the leaders of SIDS, as the guiding principle for
planning the future development.
Table 1.4.3:
Mean Income for Agricultural Workers In Brazil
196
Region
Crop
Rice
Banana
Coffee
Sugarcane
Citrus
Manioc
Corn
Soybean
Brazil
R$/mth
197
Education
R$/mth
Education
R$/mth
Education
R$/mth
Education
318
2.3
191
1.8
788
4.4
198
—
—
348
3.1
262
2.5
467
4.0
452
3.9
358
3.6
223
2.3
376
3.8
635
5.5
447
2.9
283
2.0
679
4.0
797
4.2
489
3.8
289
1.7
565
4.6
584
4.8
218
1.8
211
1.6
278
3.0
—
—
214
2.3
133
1.5
326
3.2
620
3.9
1,044
4.9
378
4.2
1,071
4.9
864
5.8
NorthNortheast
CenterSouth
São
Paulo
The concept of sustainable development has been endorsed by the leaders of SIDS as the
guiding principle for planning future development. At the core of the sustainable development
paradigm is synergy between sectors; ironically, it is this synergy that poses the challenges to
biofuels, as the bottom lines in comparative assessments are always relative prices. In order to
make this comparison, there is need to quantify benefits which require identification of income
streams. Unfortunately, a number of the biofuels industries potential benefits cannot be easily
quantified or income stream established.
Biofuels production would, however, be very beneficial to these countries, as it would address a
number of sustainable development challenges such as:
196
Moreiera
Average number of years of education
198
Fewer than 10 observations in the sample
197
194
•
•
•
How to diversity the economy in a way that makes it more economically and
environmentally resilient;
Identification of new, secure and significant size markets for goods and service to
provide employment and economic growth.
How to develop new industries based on their natural resources within the existing WTO
rules, and that is resilient to the projected hazards of global climate change including
tropical storms and hurricanes, floods and drought.
While seldom discussed, there are a number of political benefits from the development of biofuels
industries. First, since there are no international trade agreements on how nations can provide
energy services or the prices at which they provide these services, governments have a lot more
latitude in deciding how energy investments occur and what interests are paramount.
The absence of WTO rules in the energy sector allows governments to use proven approaches
such as subsidies, incentives and different tariffs to move the energy sector in a desired direction.
The French moved their energy sector to nuclear, as did the Brazilians to biomass, and the British
to natural gas. The flexibility that governments have in the energy sector is in stark contrast to
that which exists for foreign investments or for exports of goods and service. Consequently,
governments have the flexibility to provide the appropriate incentives to help reduce the high
economic vulnerability of SIDS, arising from its high dependence on imported petroleum as well
as positioning the countries on the path of sound land use. In the energy sector, governments
have the option to provide incentives such as start-up subsidies, tax tariff relief, and income tax
holidays and to help overcome the negative impacts of economies of scale to catalyze private
sector investment in a non-traditional sector. The ability of governments to use such policy to
attract investments in other areas is prohibited under WTO rules.
As shown in Figure 1.4.1, the international price of petroleum is increasing both in the price per
barrel, as well as volatility of prices. The commodity is affected by weather, geo-political unrest,
economic growth, and natural disasters. This situation is expected to worsen over the next
couple of decades as societies and economies adjust to growing demand and less accessible
supplies, and international politics. For countries with small economies, this combination makes
for very difficult planning and implementation at the national level. Consequently, the stability of
energy supplies and increased predictability of pricing energy services would be a major political
benefit to these countries.
195
Figure 1.4.1. Changes in crude oil prices over time (1970-2004)
199
50
69
24
Nominal Dollars per Barrel
40
23
25
21
68
27
20
2930
22
19
18
30
17
43
31
33
8
9
47
37
50
35
15
11
51
48
41
36
16
20
61
52
44
14
67
59
34
26
28
60
32
6
64
53
54
58
55
5
62
6
6
45
4649
10
10
4
2
3
6
12
13
38
7
42
39
40
58
56
57
1
0
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Official Price of Saudi Light
Refiner Acquisition Cost of Imported Crude Oil (IRAC)
With more and more attention being paid to the changing global climate, countries will be required
to meet the responsibilities as stated in the United Nations Framework Convention on Climate
Change (UNFCCC) for reducing the emission of greenhouse gases. Consistent with the
UNFCCC, international systems have been established for trade in greenhouse gas emissions.
As global climate change concerns increase in the future, the value of using renewable resources
will increase. As the international trade in carbon emission grows another tangible income stream
will accrue to biofuels industries and consequently to the farming households.
199
IEA , US govt
196
CHAPTER 2
AGRO-ENERGY EXPERIENCES &
LESSONS LEARNED
197
2.0
AGRO-ENERGY EXPERIENCES & LESSONS LEARNED
2.1
Brazil - Experiences and Lessons Learned
2.1.1
Ethanol
Brazil was an oil importer and the two oil shocks of the 1970s and 80s had an enormous impact
on the Brazilian economy. In order to make fuel prices less susceptible to international petroleum
price oscillations and reduce petroleum imports, the Federal Government started the “Proalcool”
program in 1975, to produce ethanol from sugarcane juice and use it for two different
applications: a) to introduce gasoline blended with ethanol in the market, and; b) to promote the
development of pure ethanol-fueled vehicles. Now, thirty years later, the Brazilian alcohol
program is the world’s largest commercial biomass program, and Brazil has a complete mastery
over the whole alcohol production and consumption chain. In a similar way to the sugarcane
industry, Brazil has reached a high level of technology for establishment, management and
utilization of eucalyptus forests. Advanced technologies such as gasification and combined
cycles for electricity and hydrolysis and fermentation for ethanol production has made it possible
for Brazil to produce some of the cheapest bioenergy in the world both from sugarcane and
eucalyptus.
All gasoline sold in Brazil is blended with 20 to 26 per cent ethanol (anhydrous) on a volume
basis and is called gasohol. Ethanol production has increased from around 0.5 billion liters in
1975, to over 16 billion liters in 2005, and comprises of 14.8 per cent of transportation fuels
(gasoline and diesel), with hydrous ethanol having a market share of 6.3 per cent, and anhydrous
ethanol blended with gasoline having 8.5 per cent. Ethanol is used both as an octane enhancer
in vehicles, replacing lead and/or MTBE, and as a fuel substitute for gasoline. At current
production costs, ethanol is cheaper than gasoline if oil prices are above US$35 per barrel.
Currently, the ethanol-fueled vehicle fleet in Brazil is composed of: a) 15.5 million gasohol-fueled
vehicles; b) 2 million hydrated ethanol-fueled vehicles; c) 606,000 flex-fuel vehicles; and d) 3.5
million motorcycles. Hydrated ethanol vehicles run only on a 95 per cent ethanol – 5 per cent
water mix, but cannot run on gasoline alone or gasohol, while gasohol vehicles cannot run on
hydrated ethanol. A few years ago, there was a shortage of ethanol that put some vehicle
owners in a tight spot. To increase the range of fuels that a vehicle can run on, Brazilian car
manufacturers developed the flex-fuel vehicle (FFV) that can run on ethanol, gasoline or any
blend of the two, and launched it in March 2003. FFV vehicles have changed the fuel market by
introducing full flexibility for the consumers to decide the fuel they want to buy at the gas station
based mainly on the fuel price even though they are aware that ethanol is better for the
environment. Currently, Volkswagen, General Motors, Ford, Renault, Peugeot and Fiat
manufacture FFVs and in May 2005, FFV sales exceeded gasoline-fueled vehicle sales, 49.5 per
cent against 43.3 per cent. In 2006, cars manufacturers will produce around of 70% of FFV in
Brazil, and by 2010, FFVs will comprise 25 per cent of the fleet. Future developments will include
a Flex-Fuel Engine that can run on 3 fuels: gasoline, alcohol and natural gas
In 2004, Brazil produced 350 million tones of cane; the sugarcane agro-industry generated
around 700,000 direct jobs and about 3.5 million indirect jobs. The rapid growth of this industry
has been characterized by fast transition to commercial energy plantations, lower domestic
utilization and improvement in transportation and industry. By 2010, this industry will provide
direct employment to 840,000 persons with over 50,000 additional jobs being created every year.
The success story of the Brazilian ethanol industry is the result of a long road that began with first
experiences with alcohol-fueled automobiles in the country in 1912. By 1925, there were ethanolfueled vehicles on the roads. The year 1931 saw the beginning of five per cent (5 per cent)
anhydrous ethanol blends with gasoline and the Brazilian Government made this compulsory in
1938.
198
In 1966, the blend ratio was increased up to 10 per cent on a voluntary basis. However, rapid
progress started only after 1975, when the Federal Government launched the Proalcohol
Program in response to the first oil shock. The first commercial ethanol-fueled vehicle was
introduced in 1979. The ethanol blend ratio in gasoline was increased from 15 to 20 per cent
also in 1979, and this was raised to 25 per cent in 2003.
At present the total ethanol
consumption at some 30,000 gas stations is 200,000 barrels per day of equivalent gasoline, and
the sugar cane industry is strong enough to operate without governmental subsidies. By building
up the capability to produce either ethanol or sugar, the sugarcane mills can produce the best mix
of these two products depending on the world market prices.
Brazilian ethanol produced from sugarcane is much more effective in mitigating climate change
than ethanol produced from corn as in the USA. Each unit of fossil energy used to produce
ethanol results in 8.3 units of biomass energy if it is produced from sugarcane, whereas it results
in only 1.34 units of biomass energy if it is produced from corn. The ethanol production of over
16 billion liters in 2005 was responsible for mitigating around 40 million tons of carbon dioxide
emissions. Brazilian ethanol’s contributions to reducing global warming can be replicated in other
tropical countries by using appropriate plants and procedures.
One important lesson that can be learnt from the path-breaking Brazilian ethanol experience is
that a properly planned and executed government program for supporting the development of a
biofuels industry can produce substantial benefits at the local, regional, national and global levels
and lead the industry to a state where it can survive without special governmental incentives.
Many aspects of the Brazilian experience could be very relevant to countries going in for ethanol
production and usage in the transportation sector. The main barriers to fuel ethanol production,
use and trade were found to be: a) land use change to a combination of food, feed, fiber, fuel; b)
national agricultural interests; c) production and freight costs; d) taxation; e) export and import
infrastructures; f) sustainability of supply; g) resistance of OEMs (Original Equipment
Manufacturer) in certain markets; and i) resistance of oil marketers.
The main drivers of fuel ethanol production, use and trade have been oil import dependence,
switching from oil to ethanol imports, improving local and global environments, developing nonfood markets for agriculture, creating jobs along the productive chain, adding value to the rural
economy, and fuel ethanol mandates and/or fiscal incentives. Strategic benefits include
increasing the energy security by reducing reliance on fossil fuel and diversifying the energy
matrix. Social benefits include the recovery of large deforested areas by biofuels crops and
significant increase in employment opportunities, mainly in rural areas.
Environmental benefits include reduction of atmospheric automotive emissions from alcohol
vehicles that have almost zero greenhouse gas emissions, a sustainable production cycle for
ethanol from sugarcane by controlling the use of fertilizers in sugarcane fields and replacing it
with by-products of industrial production (vinasse and filter cake), and a reduction in the use of
pesticides and their environmental impacts by development of disease-resistant species.
Environmental legislation in Brazil specifies that it is forbidden to engage in any type of
deforestation; consequently, sugarcane plantations have expanded mainly in areas previously
used for cattle. Environmental regulations also require the gradual introduction of green cane
harvesting to allow the recovery of sugarcane trash (leaves and the tips of the plant) and
significantly increase the biomass available for energy production.
Brazilian experience also shows that vehicle adjustments are not necessary if blends of up to 10
per cent ethanol in gasoline are used, but transport and storage tanks need to be cleaned
properly. For blends with more than 10 per cent ethanol the current vehicle fleet need
modifications or else vehicles manufactured for running on such blends must be used. The
environmental benefits of using up to 10 per cent ethanol blends include reductions of: a) 20 to 30
per cent in 7 per cent in CO2 emissions; b) toxic compounds (benzene) and sulphur oxides
proportional to the mixture level. However, these blends will increase emissions of: a) nitrogen
oxides by 10 per cent, and; b) aldehydes by 30 per cent.
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2.1.2
Biodiesel
The developments in producing biodiesel and blending it with diesel fuel are only very recent.
Even though first experiences began in 1970, high vegetable oil prices prevented further
development. In 1980, the first biodiesel patent in the world was awarded to the Federal
University of Ceará. However, it was only as late as 2002 that biodiesel came into the
Government Agenda and a Working Group was formed. In December 2003, an Inter-Ministerial
Executive Committee was constituted and a Management Group was made responsible for
program implementation.
The Brazilian “ProBiodiesel” Program was finally launched in
December 2004, with the academic, industrial and government sectors working together to define
the proportions, routes and technologies to be employed. The basic objectives of the Biodiesel
Program are: a) to reduce oil dependency, b) to produce environmental gains, and c) to introduce
family agriculture into the raw material production process. A Regulatory Framework is being
consolidated that will: a) allow blends up to 2 per cent, b) make a 2 per cent blend compulsory in
2008, c) increase the blend ratio to 5 per cent by 2013, and d) give priority to North and Northeast
regions for palm and castor cultivation. A 2% blend will require production of 800 million liters of
biodiesel per year.
Brazil has also started a new National Program of Incentive to Electric Energy from Alternative
Sources called “ProInfa,” that will guarantee the purchase of 3,300 MW from small hydro,
biomass and wind power plants. A minimum of 60% of national equipment is to be employed in
the first phase, and 90% in the second. ProInfa will diversify the Brazilian energy matrix and
stimulate the national engineering industries.
2.2
India - Experiences and Lessons Learned
India’s import of crude oil is expected to go up from 85 million tons in 2001, to 147 million tons by
2007. Overall transport crude oil demand was more than 50 million tons in 2001, with nearly 80
per cent in the form of diesel. Domestic supply can presently satisfy 22 per cent of demand and
dependence on crude oil imports amounting to more than US$8 billion per annum is increasing
since there is a growing demand gap between production and consumption. Indian petrol
reserves are expected to last only another 20 years. Rising and volatile crude oil prices and its
foreign exchange costs are one of the main risk factors of the Indian economic and social
development prospects. In addition to reducing this risk, local production of bioenergy is
projected to have a broad range of positive economic, social and environmental implications. The
Indian national program on biofuels (mainly ethanol and biodiesel) aims to stop soil and forest
degradation and its environmental implications, generate employment for the poor, in particular
for women, reduce greenhouse gas emissions and improve energy security.
Ethanol
The Indian fuel ethanol industry began during World War II with, “The Power Alcohol Program,”
when a large number of distilleries began to manufacture ethanol for mixing with petrol, as there
was an acute shortage of petroleum products. After the ‘oil shock’ of the 1970s, extensive field
trials were conducted by the research and development department of the public sector Indian Oil
Corporation, in collaboration with the Indian Institute of Petroleum. These trials were carried out
within cities, on the highways, on hilly terrain and in all types of weather conditions, employing a
variety of vehicles including two-wheelers and cars using 10 per cent and 20 per cent blends. The
Program was highly successful and no problems were encountered but the technical report
concluded in its last portion that there was an inadequate availability of ethanol without studying
the matter in detail, and so the Ethanol Program was forgotten for more than a decade. In the
mid-1990s, the Bureau of Indian Standards brought out standards for petrol that permitted the
use of 5 per cent ethanol as an oxygenate. Another set of blending trials was also conducted in
Delhi, with government vehicles, which again proved to be highly successful from the point of
view of environment and fuel efficiency, etc.
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According to a study by the Federation of Indian Chambers of Commerce and Industry, the
country has the potential to save nearly 800 million liters of gasoline annually, if the transport
sector blends 10 per cent ethanol with gasoline. Assuming a yield of 225 liters per ton of
molasses, the potential production of ethanol from molasses in 1999/2000 would be 1.8 billion
liters. Even after accounting for the estimated normal requirement for industrial and beverage
purposes of 1.193 billion liters, the country would still have a potential ethanol surplus of 607
million liters that could be used for blending with petrol. If other raw materials are used for ethanol
production as well, total surplus alcohol production could reach almost 800 million liters.
Considering that India’s current annual petrol consumption exceeds 8 billion liters, the present
installed ethanol capacity could easily meet the petrol demand of the transport sector, if the
government decided to introduce gasohol with a 10 per cent alcohol content.
A fuel ethanol program is of particular interest to the sugar industry because of a sugar glut (part
of which the industry has been trying to export) and increasing supplies of molasses. The sugar
industry has therefore lobbied the government to embrace a bio-ethanol program for several
years now. The industry emphasises that producing fuel ethanol would absorb the sugar surplus
and help the country’s distillery sector, which is presently burdened with huge overcapacity, and
also allow value addition to by-products, particularly molasses and bagasse.
Realizing the huge potential benefits of ethanol blending for the country, the Petroleum Ministry
started projects at three depots in April 2001, to blend 5 per cent ethanol with petrol. This
provided an opportunity to the stakeholders to identify the barriers in implementation of the
program including archaic laws and procedures dating back to the 18th century. Encouraged by
the results of the pilot projects, the Government announced in December 2001, the decision to
start 5% blending in eight states in Phase I, enhance blending to 10 per cent at the three pilot
projects and initiate research and development programs for ethanol blending with diesel. An
Inter-Ministerial Task Force (IMTF) was set up and concessional finance was to be made
available to the ethanol/sugar industry. The 5 per cent blend would require around 330 million
liters of ethanol per year in Phase I. A concessional excise surcharge on petrol "doped with 5 per
cent ethanol" was also proposed. The Indian Parliament approved these provisions.
Other opportunities announced by the government in parliament were: a) At present, for a 10 per
cent blend with petrol and diesel, the ethanol requirement is 6 billion liters per year requiring
nearly 90 to 100 million tonnes of additional sugarcane (30 per cent of total sugarcane crop).
This will provide an additional income of Rs. 65 billion per year, to an estimated 10 million farmers
and provide direct employment to about 50,000 in the plants; b) US$1 billion in foreign exchange
can be saved and energy security of the nation will be enhanced; d) Carbon emission reductions
would amount to nearly 5 million tons per year, giving an additional income of $100 million from
international carbon trading; f) The turnover of the alcohol industry, which operates at 40 per cent
capacity utilization at present would increase by around Rs. 100 billion.
In order to realize these opportunities, a number of challenges have been identified for the main
actors involved - the central and state governments, the ethanol industry, the petroleum
companies and the automobile industry. The Central Government needs to:
• Make ethanol blending mandatory in a phased manner, with a detailed time schedule of
implementation so that distilleries have adequate time to set up ethanol dehydration
facilities;
• Announce dates for taking up the 10 per cent blending program in good time so that
additional distillery capacity can be created;
• Allow market forces to determine prices and allow imports of ethanol or molasses, if
required;
• Notify the tax break proposed in the budget at the earliest;
• Bring clarity to the excise laws;
• Reduce duties and taxes and give incentives similar to those already being provided to
other renewable sources of energy in the initial stages;
• Promote research and development in new biomass substrates for ethanol production.
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•
Set up an institutional framework where all stake holders and key policy maker meet
regularly.
The state Governments also have a major role to play. They need to:
f) Immediately overhaul the laws relating to ethanol production for fuel;
g) Eliminate levies, charges, fees etc., and reduce permissible taxes to encourage this
industry.
h) Permit alcohol industry and entrepreneurs to set up ethanol plants without any licensing
procedure as per the guidelines of various Supreme Court rulings;
i) Limit the role of the state excise department to ensure that denaturant is added to the
ethanol and then treat ethanol like any other chemical;
j) Remove all restriction for the use of any biomass substrates for production of ethanol.
The Ethanol Industry needs to:
e) Implement capacity building and select the best technology, plant size, and increase
efficiency to reduce production costs;
f) Employ latest technology in cultivation of crops so that lowest raw material prices can be
maintained;
g) Make sure there is adequate raw material available by shifting to new feed stocks;
h) Undertake research and development in biomass to ethanol technology so as to increase
the potential for ethanol production from these new feedstocks.
Oil Industry needs to:
f) Make buying procedures simple and transparent, and pay a fair price on time;
g) Internalize the environmental and economics benefits baased on ethanol being both an
oxygenated and an octane enhancing fuel.
h) Carry out research into renewable fuels including ethanol diesel blends and bio-diesel;
i) Assist the Bureau of Indian Standards to make 10% blend norms at the earliest;
j) Build up capacity to store and blend ethanol at all depots.
Biodiesel
Biodiesel is meant to be produced in India mainly from Jatropha curcas and, to a lower extent,
from other non-edible virgin oils (in particular Pongamia pinnata, called honge or pinnata, as well
as Neem, and Mahua). Demand of edible oil is higher than production, so edible oils are much
more expensive, sometimes by a factor 3-5, in India. In April 2003, the Planning Commission of
India’s Committee on Development of Biofuels, recommended a major multi-dimensional program
to replace 20 per cent of India’s diesel consumption. The Ministries of Petroleum, Rural
Development, Poverty Alleviation and Environment have been integrated for this program whose
objective is to blend 13 million tons of bio-diesel by 2013. A National Mission on Biodiesel has
been proposed in two phases: 1) Phase I consisting of a Demonstration Project to be
implemented by the year 2006-07, with an investment of Rs. 1500 crore ($300 million) on
400,000 hectares; 2) As a follow up of the Demonstration Project, Phase II will consist of a selfsustaining expansion of the program beginning in the year 2007, leading to production of
Biodiesel required in the year 2011-12. Jatropha curcas is considered the most suitable tree,
based non-edible oilseed, since it uses lands that are largely unproductive for the time being and
are located in poverty-stricken and watershed areas and degraded forests.
In Phase I, jathropa demonstration projects will be implemented on 400,000 hectares of land in
eight states. These demonstration plots will allow the viability of all components to be tested,
developed and demonstrated by the Government, including linkages with different parts of the
country, sufficient production of seeds, and to increase the awareness and education of potential
participants and stakeholders to allow for a self-sustained dissemination in the subsequent
phases. Each state will have one esterification plant of around 80.000 tons per year of bio-diesel
that is expected to process jatropha seeds from some 50,000 to 70,000 hectares. Compact areas
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in each state will be further subdivided into 2000 hectares blocks of plantation to facilitate supply
of planting material, procurement of seed and primary processing through expellers. Expected
outputs from 400,000 hectares are meant to be 0.5 million tons of bio-diesel, compost from the
press cake, and massive generation of employment (16 million days/year) for the poor. The
program will improve degraded land resources and provide income to 1.9 million poor families.
Phase II, beginning in 2007, is meant to bring the process forward to a market based, selfsustained mode. The National Biodiesel Mission wants to make it into a mass movement and
mobilize a large number of stakeholders including individuals, communities, entrepreneurs, oil
companies, businesses, industry, the financial sector as well as Government and most of its
institutions. A total land area of 13.4 million hectares has been identified for jathropa cultivation;
this includes forest areas (3.0 Mha); agriculture boundary plantation (3.0 Mha); agriforestry (2.0
Mha); cultivable fallow lands (2.4 Mha); wastelands under integrated watershed development (2.0
Mha); and strip lands such as roads, railways, and canal banks (1.0 Mha). A scheme of margin
money, subsidy and loans is planned. Expansion of processing capacities will be supported by 30
per cent subsidy, 60 per cent loan, and 10 per cent private capital basis. Additional support is
being sought from International Funding Agencies, since the program addresses global
environmental concerns and contributes to poverty alleviation.
Instruments to promote non-edible oils will include buy-back arrangements with oil companies
and mandatory use of bio-diesel blends. The jatropha program is being combined with other
programs of the Ministry of Rural Development to attract growers, entrepreneurs and financial
institutions so that a self-sustaining program of expansion takes off on its own, with the
Government playing mainly the role of a facilitator and provide only marginal financial support.
The rural community will have the first right of access to the oil for its own use. Responsibility for
availability of sufficient processing units will be with the Ministry of Petroleum. The direct and
indirect impact of bio-diesel, e.g., employment generation, balance of trade, emission benefits
etc., will be considered while fixing the duty structure so that the price of bio-diesel will be slightly
lower than that of imported petro-diesel.
A number of research and development needs have been defined by the program: a) genetically
improved tree species, to produce better quality and quantity of oil; b) technology practices for
adoption at grass root level; c) research on inter-cropping for agriculture, agro-forestry and
forestry application; d) processing techniques including bio-diesel and uses of by-products; e)
utilization of different oils and oil blends including potential additives needed; f) blending, storage
and transport of bio-diesel; g) engine development and modification; h) marketing and trade; i)
efficient water utilization techniques.
2.3
Philippines - Experiences and Lessons Learned
2.3.1
Ethanol
The Bioethanol Initiative in the Philippines began only in March 2004, when the sugar industry
created the Ethanol Program Consultative Committee (EPCC) to “supervise the conduct and
review of studies pertaining to the viability of ethanol production from sugarcane” but, spurred on
by the rapidly rising oil prices that have crossed US$70 per barrel, events started unfolding quite
rapidly after that. The EPCC is composed of the Sugar Regulatory Administration (representing
the government), planters group, and millers group. The sugar industry also created a Technical
Working Group (TWG) composed of technical staff from the offices of EPCC members to “provide
technical know-how and assistance”. In July 2004, the TWG presented its first report on,
“Production Phase of Ethanol”. The report: a) showed the capability of the Philippine sugar
industry to meet requirements of a nationwide National Fuel Ethanol Program; b) showed the
bioethanol volume requirement at 5 per cent and 10 per cent can be supplied by the projected
surplus production of sugarcane, starting in 2008; c) provided information on criteria for canebased substrates, logistic and investment requirements, and sugar/ethanol dynamics, and; d)
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noted that other feedstock options should be explored, such as corn, cassava, and sweet
sorghum in order to support feedstock supply if the ethanol blend is further increased.
Several important events took place in August 2004, to move the bioethanol initiative forward.
Firstly, the Philippine Fuel Ethanol Alliance was created in order to coordinate efforts of the
stakeholder industries by way of information sharing and regular dialogues. The Alliance was
composed of the Sugar Regulatory Administration; Sugar Master Plan Foundation, Inc.;
Philippines Sugar Millers Association; Center for Alcohol Research and Development, and; the oil
company Petron Corporation. Secondly, the “Bioethanol Bills” were filed in the House of
Representatives and the Senate with the aim of promoting the use of ethanol as an alternative
transport fuel by establishing a National Fuel Ethanol Program. Thirdly, senior officials from the
government, sugar industry and the oil company visited Thailand, to meet with the heads of
petroleum company PTT, Thai Ministry of Energy and others, to discuss possible cooperation
between Thailand and the Philippines in an Association of Southeast Asian Nations (ASEAN)
Fuel Ethanol Initiative.
In September 2004, the Department of Energy adopted Bioethanol as a part of its agenda
towards Energy Independence and officially presented its Alternative Fuels and Energy
Technology Program, which included plans to implement bioethanol production and utilization A
mandate for bioethanol use began to take shape in November 2004, when the Thai Prime
Minister Thaksin Shinawatra advised President Gloria Macapagal Arroyo to adopt a mandated
policy on bioethanol use. The Second Pacific Ethanol and Biofuels Conference, held in Bangkok,
in December 2004, was attended by a multi-sectoral delegation from the Philippines. The main
objectives of the visit to Bangkok were to study and learn about developments regarding fuel
ethanol in other countries, and to meet with representatives of the Thai Ministry of Energy, Cane
and Sugar Board, and petroleum company PTT, to obtain information on the legislative
framework and technical considerations related to the implementation of the Thai Fuel Ethanol
Program.
In February 2005, Congress began discussing bioethanol in the Lower House, and the House
Committee on Energy created its own Technical Working Group to put flesh into the Bioethanol
Bills. The Chamber of Automotive Manufacturers of the Philippines approved the 10 per cent
ethanol-gasoline blend as provided in the World Fuel Charter. In March 2005, the Ethanol
Alliance worked with different government agencies on specific provisions of the Bioethanol Bill,
and discussions were held with the Environmental Management Bureau to classify ethanol
distillery effluents, also called vinasse, as liquid organic fertilizer.
In May 2005, President Arroyo launched the Philippines’s National Bioethanol Program during the
signing of contracts for the country’s first ethanol plant, with a capacity of 25 million liters per
year, using 300,000 tons of cane. Construction of the plant will begin in the first quarter of 2006,
and operations will start in the second half of 2007. Construction of a second ethanol plant with a
capacity of 38 million liters per year is expected to begin in June 2006. A website has been
created to provide online information dissemination and education on ethanol and the sugar
industry. The government is now formally committed “to pursue a policy towards energy
independence consistent with the country’s sustainable economic growth that would expand
opportunities for livelihood, with due regard to the protection of public health and the environment
by mandating the use of bioethanol as motor fuel as a measure to mitigate toxic and greenhouse
gas (GHG) emissions; to provide indigenous renewable energy sources to reduce dependence
on imported fuel oil, and; to increase rural employment and income.”
2.3.2
Biodiesel
Since 1983, several government and private institutions in the Philippines have conducted
research and development experiments on the fuel application of Coconut Methyl Ester (CME).
These included technology transfer of CME to Dahitri Plantation in 1991, and evaluation of a
claimed “cold process” transesterification technology, at PCA Zamboanga Research Center in
1995. The general objective of these experiments was to establish the viability of CME as a
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substitute for petroleum diesel fuel. These studies concluded that it is technically viable to
substitute petroleum diesel with 100% CME directly fed to diesel transport vehicles, but not
economically viable due to high cost of coconut oil. When the price of Coconut Oil (CNO)
increased, or when the price of petro-diesel decreased to a level much lower than that of CNO,
the promotion tended to be discontinued because of economic viability issues which failed to
attract local and foreign investors.
When the Philippine Clean Air Act (RA 8749) was enacted in 1999, the law provided a window of
opportunity for CME as a petro-diesel quality enhancing additive, as CME has demonstrated that
it is a cost-effective solution for complying with the smoke emission specifications/standards of
the Clean Air Act. PCA-DA launched a Biodiesel Development Project in May 2001, with
issuance of DA Special Order no. 176, series of 2001. PCA set-up a Coconut Biodiesel Pump
Station at its Quezon City compound for promotional utilization of CME and conduct of scientific
validation testing and research and development activities. The general objective was to
establish the viability of CME as a petro-diesel quality enhancer for the reduction of air pollution,
for better engine performance, and for increased utilization of CNO in the domestic market.
Smoke emissions of 15 PCA vehicles without any engine modifications were tested with one per
cent CME blend. The test results showed a reduction of around 50 per cent on their smoke
emissions. Further engine performance and emission tests with CME were undertaken by
Interagency and Multi-sectoral cooperation, in 2003. This study established the cost-benefits of
using Coco-Biodiesel. Actual road run testing showed an average increase of more than 17 per
cent kilometers for every liter of diesel consumed was recorded, and dynamometer test results
showed a torque increase of 2.5 per cent to 3.2 per cent for CME blends compared to Low
Sulphur Diesel.
Standards for pure CME (Philippine National Standard 2020:2003) were promulgated in May
2003, and in February 2004, President Arroyo signed the Memorandum Circular No. 55, directing
all Departments, Bureaus, Offices and Instrumentalities of the Government, including
Government-owned and controlled Corporations to incorporate the use of one per cent, by
volume, Coconut Methyl Ester in their diesel requirements by July 2004. M.C. 55 made the
Department of Energy as the lead implementing agency and also specified the responsibilities of
the other agencies that would ensure security of CME supply, monitor and test vehicle emissions
standards, provide an inventory of diesel vehicles, support research and development activities,
develop fiscal and non-fiscal incentives, and provide incentives under the BOI IPP.
In April 2004, President Arroyo launched the Coco-Biodiesel Program. She said the program was
a) renewable; b) indigenous, thereby reduces dependence on imported fuel; c) supports
government’s poverty alleviation program, and; d) directly affects the lives of about 3.1 million
farmers and 25 million Filipinos dependent on the coconut industry. The coconut industry, at its
present production levels, can supply enough coconut oil for 10 per cent CME blending. The
current coconut oil production is nearly 1,400 million liters, of which 500 million liters caters to
local demand leaving 900 million liters for biodiesel production. Since the present petro-diesel
demand is 7 billion liters, only 700 million liters is required for a 10 per cent blend.
2.3.3
Pure Coconut Oil
Another interesting development is a series of tests conducted by the Philippine Coconut
Authority (PCA) on the use of filtered coconut oil to substitute diesel without esterifying it to
biodiesel. Initial results in running several PCA vehicles, shallow tube well pumps, and other farm
equipment on 100 per cent coconut oil for about two months, show that it really works. Coconut
oil is cheaper than coco-biodiesel. PCA says that a one-ton mini oil mill, organized by the
farmers themselves under various cooperatives, could now manage the production of filtered
coconut oil that could supply the fuel requirements of their farms and their community. If this
would be realized, PCA said it would have great impact on the lives of the coconut farmers, to the
industry and the country. In order for these potentials to materialize, there must be cooperation of
other government agencies and institutions like the Department of Science and Technology,
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Department of Energy, University of the Philippines and the Local Government Units. PCA said
that a filtered coconut oil protocol must be established immediately so that the dissemination of
the process and technology of producing filtered coconut oil could be started to fully develop this
biofuel alternative to petro-diesel.
The Biofuels Act
After being passed by the House of Representatives in November 2005, the Biofuels Bill was
approved by three Senate Committees in April 2006: the Energy, Finance and Food and
Agriculture Committees. The Bill will be put forward for approval by the Senate plenary, when
session resumes in May 2006. Once the bill becomes a law, a Philippine Biofuel Board would be
created to oversee production and use of alternative fuels according to the bill. The Biofuels Act
will mandate the use of biofuels in a phased manner, with a minimum of one per cent biofuel mix
for all diesel fuel sold in the country, for the first two years. This would be increased to two per
cent biodiesel in diesel fuel and five per cent ethanol in gasoline after two years, and to 10 per
cent after four years. The bill also calls for:
h) Zero value-added tax (VAT) on biofuels; regular gasoline at present is subject to a 10-per
cent VAT;
i) Government financial institutions like LandBank, Development Bank of the Philippines
and Quedancor, to provide easier financial assistance to local biofuel producers;
j) A wide range of fiscal and non-fiscal incentives including exemption from tariff duties on
importation of equipment and machinery to encourage entry of new investors in the
biofuels sector;
k) Classification of all ethanol production and blending investments as "pioneering" or
"preferred areas of investment," which would entitle them to financial incentives;
l) Tariff Commission to create a tariff line for bio-ethanol fuel;
m) Department of Agriculture, through its relevant agencies, to develop a national program
for the production of crops for use as feedstock including but not limited to sugarcane,
cassava, sweet sorghum and corn to ensure availability of feedstock for production of
bioethanol for motor fuel;
n) Gradual phasing out of the use of harmful gasoline additives and/or oxygenates to begin
within six months, such that within three (3) years from the effect of this Act, such harmful
gasoline additives and oxygenates shall have been totally phased out nationwide.
2.4
Pacific Island Countries - Experiences and Lessons Learned
The Pacific Island Countries are heavily dependent on imported petroleum products for
transportation and electricity. The main biomass resources that can substitute gasoline and
diesel are coconuts, found all over the Pacific, and sugarcane produced only in Fiji. Fiji happens
to be the largest country in the south Pacific, and in this section we examine Fiji’s sugar and
coconut industries. We also look at some pioneering work being done in Vanuatu, on using
coconut oil to run diesel vehicles without converting it to biodiesel; this has tremendous
implications for all coconut growing countries searching for a more profitable use for coconut oil.
2.4.1
Sugar Industry in Fiji
Sugar continues to be a major export commodity, accounting for around 19 per cent of total
exports in 2003. Unlike most sugar growing countries, over 21,000 independent growers grow
nearly all of Fiji’s sugarcane on farms averaging four hectares. However, the future of sugar
exports and the sugar sector as a whole is uncertain because the current industry structure is not
viable and a restructure is essential to address the industry’s problems. Preferential prices offered
by the EU has led to the gradual decline of Fiji’s sugar industry into its present state of crisis,
characterized by high incidences of cane burning, low sugar quality, low yields, high costs due to
antiquated, inefficient sugar mills, an inefficient rail transport system, a land tenure system that
lacks incentives to improve, and politics that make reform difficult. The recent WTO ruling that
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will force the EU to withdraw subsidies it extends to Fiji and other ACP countries by 2007, is
forcing the sugar industry to go through a very difficult period of adjustment.
Two studies completed recently have recommended measures to address problems in different
segments of the industry: “Intermediation of the Sugar Sector Restructuring” by the Asian
Development Bank (ADB), 2003; and “Revival of the Sugar Industry,” by an Indian Technical
Team, in 2004. The ADB study focused on providing alternate livelihoods to sugarcane farmers
and cane cutters forced out by expiry of the land leases and restructuring. The Indian study
came up with a plan to revive the sugar industry by increasing the productivity of the sugarcane
crop and the efficiency of the sugar mills, and to produce higher quality sugar. Both studies have
been received positively by most of the Fijian stakeholders and their implementation has started.
For reviving the Fijian sugar industry the Technical Team from the Indian Sugar Technology
Mission (STM) has proposed upgrading of the four sugar mills using higher-pressure boilers to
increase efficiency of steam usage and several other measures. The F$86 million required for
implementing the Indian proposal is being given as a G2G soft loan by the Government of India.
In 2005, the Fiji Sugar Corporation (FSC) floated tenders for the equipment, and has placed
orders for the equipment that will be installed and commissioned before the crushing season of
2007. Training of field and factory personnel at sugar mills in India has already commenced. In
addition, a human resource development program for training and carrier enhancement will also
be implemented in Fiji, to meet the higher professional requirements.
The Indian team also proposed increased cogeneration capacities at two of the largest sugar
mills so that more electricity can be exported to the Fiji Electricity Authority (FEA) grid, on the
island of Viti Levu. Additional turbo-generator capacities of 20 MW will be installed at the two
biggest mills that process a total of two million tons of cane per year. The F$60 million required
for this will be raised from national financial institutions. The cogeneration plants proposed will
use bagasse during the crushing season and coal during the off-season. FEA and FSC have
signed a power purchase agreement for sale of the cogeneration electricity.
An Asian Development Bank (ADB) study on “Intermediation of the Sugar Sector Restructuring”
in 2003, led to a F$40 million loan being approved by the ADB for the Alternative Livelihoods
Project (ALP), that started in May 2005. The main goal of the ALP is to create increased and
diversified on- and off-farm livelihood opportunities for people in rural areas to offset adverse
effects of sugar restructuring and lease expiry, and to support poverty reduction. The project
comprises four components to be implemented over six years: (i) Agricultural Diversification; (ii)
Off-farm Livelihoods; (iii) Rural Financial Services, and; (iv) Savusavu Port.
The Agricultural Diversification component aims at maintaining a viable and healthy agriculture
sector and ensuring there are viable farming alternatives to sugarcane farming. It consists of
three sub-components: a) Industry Organization and Market Access; b) Commercial Farming
Capacity, and; c) Technology Development and Transfer. The Off-Farm Livelihoods component
aims to generate sustainable off-farm employment and self-employment for people exiting the
sugar sector and other poor in the project areas. Particular emphasis will be placed on promoting
income generating livelihood activities, such as handicrafts and small-scale agro-processing for
women household members in both farming communities and indigenous Fijian villages. This will
be implemented through two sub-components addressing needs for advisory services and
vocational training: a) Small and Micro Enterprises Promotion, and; b) Vocational Training.
The Rural Financial Services (RFS) component aims to develop and establish RFS which can
efficiently provide access to funds, both savings and credit, for farming and non-farming rural
communities, including traditional village communities and women, to facilitate their livelihood
activities and improved quality of life. This will be done primarily by supporting development of
community based Micro-Finance Institutions (MFI) which are better able to address rural market
needs than the formal, commercial financial system. The objective of the Savusavu Port
component of the ALP is to develop infrastructure critical to the ability of Vanua Levu’s people to
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participate in the project through development and diversification of the island’s economy,
improving living standards for indigenous Fijian and Indo-Fijian communities, and reducing
migration to Viti Levu and out of Fiji. The ADB study had found that the level of socio-economic
development on Vanua Levu depends largely on having a direct access to international markets.
An all-weather, deep-water international port will be constructed at a total cost of US$22 million.
2.4.2
Coconut Industry in Fiji
Fiji’s coconut industry has been declining over the last 40 years because of low productivity, low
prices and competition from other edible oils sold on the world market. The soybean industry in
the US contributed to this by spreading a lot of misinformation about the ill effects of using
coconut oil for cooking, on cholesterol levels. Although there have been some efforts in the last
four decades to revive the industry, the lack of a sustained long-term national policy for
development of the coconut sector has made it difficult to reverse the decline. In the early 1960s,
copra production was over 40,000 tons/yr; now it is less than 15,000 tons/yr. Moreover, about
two-thirds of the trees will go out of production over the next 20 years. The older trees need to be
replaced soon otherwise the industry will decline further and the rural people dependent on the
industry will migrate to urban areas looking for alternative livelihoods adding more pressure on
the limited resources of the urban centers. The rural population could also react by resorting to
more unsustainable use of natural resources for livelihood such as “ slash and burn”.
In response to this problem, the Fijian Government created the Coconut Industry Development
Authority (CIDA) under an Act of parliament, in November 1998, with a mandate to revitalize the
industry. CIDA has drawn up a 25-year Coconut Industry Master Development Plan that includes
a Nationwide Coconut Industry Promotions Program (NCIPP). CIDA aims to restructure the
coconut industry, register 20,000 coconut growers and establish a network of Coconut Planters
Associations throughout the coconut growing areas. This will assist the Extension and Research
and Development Divisions to achieve their targets for the planting of six million trees and the
rehabilitation of another two million trees. The Taveuni Coconut Center, with its four seed
gardens, will be provided financial, manpower and logistical support to play a key role in this
campaign. A manpower development plan and increasing public awareness through posters in
schools, restaurants, hotels, public markets and government offices, etc., are also being planned.
CIDA aims to increase the production of copra, coconut oil and tender nuts for the local and
export markets. Product diversification, intercropping practices, wholenut purchase centers and a
centralized copra drying facility are envisaged together with a large number of mini-mills and two
big coconut oil (CNO) mills. CIDA wants to improve the quality of life of 100,000 rural people
involved in the coconut sector, empower women, reduce poverty and improve the education of
rural children. Other ambitious targets of CIDA include export of coconut timber and production
of biodiesel to replace 10% of imported diesel.
2.4.3
Coconut Oil for Diesel Vehicles in Vanuatu
One of the pioneers in using coconut oil in diesel vehicles is Tony Deamer, who lives in Vanuatu,
in the south Pacific. For several years he has been experimenting with usage of coconut oil to
run diesel automobiles and has now arrived at a mix that he sells under the name of “Island Fuel,”
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which can be used in diesel engines without any modifications.
Deamer started by using
normal factory produced coconut oil that contains around four per cent water and two-three per
cent FFAs. He found that these contaminants cause the oil to solidify when the temperature of
the oil drops below 22°C, which is quite common during winter in the South Pacific. One way
around this problem is to blend the oil with some diesel fuel to prevent solidification. The
presence of the diesel fuel also aids cold starting when the ambient temperature is below 20°C.
The other problem was that the FFAs blocked the fuel filter when the fuel system was cold. This
was overcome by fitting a small heat exchanger in the fuel line to warm the fuel prior to the fuel
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filter. The water for the heat exchanger was taken from the thermostat bypass circuit so that it
was warm with a minute or so of the engine starting. This eliminated the fuel filter blockages.
Tony Deamer now uses a proprietary process that removes both the water and the FFA from the
coconut oil. The fuel is then filtered through a three-micron filter. The removal of water and FFA
eliminates the solidification of the fuel and gives the fuel greater calorific value. Moreover, after
the water and FFA have been removed from the oil, it has been found that the fuel pre-heater is
not required.
Deamer has been operating his fleet of vehicles on various blends of coconut oil and diesel in
several ratios, and also on a coconut oil and kerosene mix. He even tried five per cent methanol
for a time, but found it evaporated out too quickly, so in the end he decided to stick with the
proven 15 per cent kerosene blend. Tony Deamer’s “Island Fuel” made in Vanuatu, contains 85
per cent of the purified and filtered coconut oil blended with 15 per cent kerosene. No
modifications are required in the diesel engines that use Island Fuel; however, engine pre-heaters
are recommended for colder areas. Tony Deamer says that this fuel has been tried and tested
over many years, and is now ready for retail sale. Unfortunately, the laws of Vanuatu do not
allow the sale of Island Fuel, so he sells only the coconut oil to interested car owners. The
minibus fleet in Porta Vila has tried out Island Fuel for over six months, and the bus operators are
completely satisfied with using it and find that they are getting more kilometers per liter.
Based on his experience with producing fuel-grade coconut oil and blends, and in using them as
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fuels in all his vehicles, Tony Deamer has found that :
k) Coconut oil has better lubricating qualities than other fuels for diesel engines so it causes
less wear on internal engine parts and prolongs engine life.
l) Coconut oil burns slower than other diesel fuels so it pushes the piston all the way down
the cylinder instead of a rapid explosion at the top of the stroke, resulting in an even
power release, less fuel use, less engine wear and a quieter running engine.
m) Coconut oil fuelled diesel engines run cooler due to less internal friction and the slower
burn rate.
n) Coconut oil is not an ideal sub-tropical fuel as it will solidify overnight if temperatures drop
below 14 degrees Celsius. However, the gel point (the point at which it becomes solid)
can be greatly reduced by mixing the coconut oil with kerosene or by keeping the fuel
heated using heating accessories commonly found on generators, boats and transport
vehicles.
o) Coconut oil based fuels yield over 10 per cent more kilometers per liter (km/l) used than
petroleum diesel. Data collected over a 20,000 km, 6-month test on an Isuzu Direct
injection 2.5ltr 4JAI diesel motor in a pickup, that was giving less than 12 km/l diesel,
showed that it had improved to approximately 13.5 km/l on "Island Fuel 60".
p) A noticeable torque increase is felt with Island Fuel. It was noticed that a change down to
the next gear was often not required as the engine keeps pulling at the lower RPM
(revolutions per minute). This is easily explained by the fact that the coconut oil burns
slower than diesel.
q) The exhaust fumes from coconut oil are less harmful than mineral based fuels. When
burnt in a diesel engine, coco diesel emits 50 per cent less particle matter (black smoke)
and less sulphur dioxide (SO2). Exhaust from coconut oil contains no poly acrylic
hydrocarbons (PAH'
s) -- the main cancer- causing component of mineral diesel fuel
exhaust.
r) Coconut oil is non-toxic and fully biodegradable. It is safe to store and to transport. Oil
spills on land or water are harmless and there is a reduced risk of fire. No chemicals are
required to produce the fuel so there are no harmful by-products.
s) The entire process of making coconut-based fuel for diesel engines can be done in the
islands creating jobs and stimulating the economy. All the income from the production
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Deamer et al, 2005
209
t)
and sale of coconut oil stays in the islands instead of going overseas. A high percentage
of the income from coconut-based fuels will go to the local farmers in rural areas.
All the steps in the production of coconut oil can be fuelled by coconut oil or coconut
residues so there is no addition to green house gases during the production of the fuel
product.
On the negative side, some drivers and passengers of the coconut oil blend powered vehicles
have reported headaches if the exhaust gas leaks into the passenger compartment. The Motor
Traders fleet has made changes to the exhaust system to clear the exhaust gases from the
vehicle. The nature of the headache causing agent needs to be determined and if a greater
number of vehicles are operating in an urban area it will need to be determined if this agent will
cause problems for the general public.
2.5
Australia - Experiences and Lessons Learned
Bioenergy is relatively well established in some sectors in Australia. The installed electricity
generating capacity at Australia’s 30 sugar mills, using bagasse, totals 369 MW. Australia is a
leader in capturing and using landfill gas. Some 29 projects across Australia, up to 13 MW in size,
have a total installed capacity of close to 100 MW. There are also 11 wastewater treatment plants
around Australia that capture biogas for producing 24 MW of electricity. In addition, six to seven
million tonnes of firewood are used in Australia every year. In recent years, there has been
increased interest in the development of bioenergy to meet government greenhouse gas
reduction targets. In April 2001, Australia’s Mandatory Renewable Energy Target (MRET) came
into force. The Target requires an additional 9,500 GWh of new renewable electricity to be
generated per year, from sources such as bioenergy. It is set to raise Australia’s renewable
energy proportion from 10.5 per cent in 1997, to approximately 12.5 per cent by 2010.
The MRET has provided a stimulus for bioenergy in Australia. For instance, Australia’s oldest
sugar mill, the Rocky Point Mill in South Eastern Queensland, has been upgraded to 30 Mwe, for
year-round operation, using wood waste in the non-crushing season. Australia’s first large-scale
anaerobic digester (82,000 tonnes per year), fed by food and other organic wastes, is currently
being commissioned near Sydney. This will generate 3 MW of electricity, enabling it to acquire
Renewable Energy Certificates (RECs) under MRET. Co-firing biomass with coal has also
become a commercial proposition at a number of power stations. Bioenergy is also geared up to
help address one of Australia’s major environmental challenges – dryland salinity caused by
rising water tables from earlier land clearing. This is being dealt with in part by the planting of
deep-rooted oil mallee eucalyptus trees. Some 22 million oil mallees have recently been planted
in Western Australia. A pilot plant is under construction to convert coppiced oil mallee to
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eucalyptus oil (as an industrial solvent), activated carbon and renewable electricity .
In its 2001 election policy, Biofuels for Cleaner Transport, the Australian government set a target
of producing 350 ML of liquid biofuels by 2010. In 2003, the long-term costs of meeting this target
were studied and in 2005, the Biofuels Taskforce examined whether the 2010 target can be met
by studying the factors preventing achievement, actions that can be taken to help, the costs and
the benefits. It was found that there are inter-related commercial risks that are impeding the
350 ML target by preventing an operating mainstream market for fuel ethanol blends, including:
f) Oil companies in a highly competitive market, with no forcing regulation or long-term
economic incentive, have no commercial reason to surrender market share to others –
whether to other oil or biofuels suppliers;
g) There is almost no consumer demand for ethanol blends, other than in minor market
segments supplied by independents and small market trials by the oil majors;
h) Consumer confidence remains poor following the events of 2002–03. Automobile
associations and vehicle manufacturers generally have been cautious about giving
unequivocal messages of confidence in a 10 per cent ethanol blend (E10). However, the
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210
i)
j)
Taskforce considers that the low level of consumer confidence is not justified by the facts.
Almost all post-1986 vehicles on Australian roads can use E10 quite satisfactorily.
Under current market conditions, and with no consumer demand, oil majors have little
commercial incentive to promote ethanol blends as a bulk fuel. But without contracts for
sales to oil majors, new ethanol producers cannot invest in bulk fuel ethanol production.
The first mover into bulk mainstream ethanol blend retailing faces considerably higher
commercial risks than later entrants since they:
(i)
Would incur infrastructure and marketing start up costs;
(ii)
May need to discount prices;
(iii)
May not attract new customers – and so may only move current customers
away from a fuel type with higher commercial returns;
(iv)
May be unable to secure reliable and sufficient ethanol at competitive market
prices unless E10 is included in the shopper docket programs;
(v)
Would face a discounting price gap that will be difficult to bridge. Should the
first mover fail to develop a retail market, it may face significant commercial losses
– including wider loss of brand reputation.
The oil majors cannot collude to avoid these first mover risks, even if they want to assist in
meeting the 350 ML target. In addition, the policy settings for biofuels are complex and have
undergone significant changes over recent years. Given the intense public debate around
ethanol, there is sovereign risk in being the first mover to make investments. Also, until 1 July
2011, domestic ethanol producers will be protected from international competition. Current fuel
ethanol costs of production in Brazil are around Aus$0.20/litre; Australian producers have much
higher costs of production. In 2011, Australian oil companies will have access to fuel ethanol at
world parity prices, and so may have an incentive to wait until closer to that time if they do make
strategic decisions to move into ethanol blends. Raising capital for ethanol plants in Australia will
become more difficult as 2011 approaches and competition looms.
The Taskforce suggested some actions that could readily be taken to help address this impasse
without affecting key policy settings or distorting markets:
f) The government mandated ethanol-blend labeling standard can be modified. The
Taskforce sees no need to label up to five per cent ethanol blends. Suppliers would then
be able to use ethanol in the mix up to five per cent according to commercial
requirements, including where it cost-effectively contributes to octane levels. For 5–10
per cent ethanol blends the label does not have to appear like a warning label. It could
simply inform. For example, ‘E10’ or ‘Contains up to 10 per cent ethanol’.
g) Information on vehicle/fuel compatibility could be provided to consumers in a more
accurate and user-friendly way than the Federal Chamber of Automotive Industries’
current listing. For example, labels on fuel-filler caps and forecourt pamphlets with simple
tick boxes could be used.
h) Consistency with world’s best practice can be demonstrated. For example, the industry
and government could highlight that European fuel standards include up to five per cent
ethanol in petrol without labeling.
i) Submissions have raised program options that the government could consider, to
demonstrate confidence in E10. For example, opening procurement guidelines for its
vehicle fleet and fuel supply to E10, or providing a limited number of competitive
infrastructure grants for small business service station owners to lessen the risk of
entering an embryonic E10 market.
j) Consumer confidence, and health outcomes, could be improved by increasing the level of
compliance inspections for fuel quality standards. This could be complemented by
supporting information provided to industry participants on ethanol blend housekeeping.
The Taskforce estimated that the costs to the economy of the current policy settings, driven by
the biofuels excise advantage, to be around $90 million in 2009–10, reducing to $72 million a
year (2004–05 dollars) in the long-term (post 2015). It was noted that most overseas production
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of biofuels is subsidized by governments, with the driver generally being agricultural support. The
benefits were estimated to be:
e) Meeting a 350 ML target by 2010 under current policy settings could involve investment
in new ethanol plant capacity (grain and C molasses based) and biodiesel capacity.
Modelling suggested this could provide some 648 direct and indirect jobs regionally,
although these would not be net gains to employment nationally.
f)
There would be some greenhouse gas emission benefits, of the order of $7 million a
year, which could vary greatly depending on plant design and feedstock. On their own,
these are not sufficient to warrant significant policy intervention, given that cheaper
carbon reduction options are readily available.
g) There may be potential for significant air-quality benefits from fuel ethanol use,
emphasizing that considerable uncertainty remains. Benefits cannot reasonably be
costed at this time due to uncertainty, but the potential for these to be substantial in the
context of ethanol’s long-term fuel-excise concession underscores the need for urgent
scientific and technical research.
h) There is prima facie evidence that there may be potential for significant reductions in
fine-particle emissions from the use of E10 in place of neat petrol. A comprehensive
scientific and technical research is needed to assess and quantify this in Australian
conditions for both E5 and E10. The government could consider tightening the
framework of air quality–fuel quality–vehicle particulate emission standards, with the
objective of gaining public health benefits, but this should take place within the general
policy framework of harmonizing with world automotive and fuel markets. In turn, tighter
particulate standards may create significant market demand for fuel ethanol without
requiring additional subsidies or interventions.
2.6
United States of America (US) - Experiences and Lessons Learned
Transportation fuel demand in the US is increasing at a rate of 1.5 to 2.3 per cent per annum
mostly in diesel consumption. In 2004, biofuels represented about 3 per cent of total current US
transportation fuel consumption. US refineries are operating at or near capacity and the demand
for biofuels has been increased by environmental protection regulations. For example, air quality
regulations have been a major stimulus for ethanol and biodiesel, alternative-fueled vehicle
requirements for government and state motor fleets increase demand and production, and the
banning of MTBE has stimulated ethanol demand.
Policy and legislation have been used widely by the US government as instruments to increase
the production and usage of biofuels. Recent biomass legislation includes the Biomass Research
and Development Act of 2000, Farm Security and Rural Investment Act of 2002, American Jobs
Creation Act of 2004, and Energy Policy Act of 2005. The Farm Bill funds Grants for bio-based
procurement, bio-refinery grants, public education, and hydrogen and fuel cell technology, and
new programs to help farmers, ranchers, and rural small businesses purchase renewable energy
systems and make energy efficiency improvements. The Jobs Creation Act offers several tax
incentives for ethanol producers and blenders, allows tax credit to be passed through to the
farmer/owners of a cooperative, and allows the tax credit to be offset against the alternative
minimum tax.
The Energy Policy Act aims to enhance the national security of the US, by providing for the
research, development, demonstration, and market mechanisms for widespread deployment and
commercialisation of bio-based fuels and bio-based products. This Act extends the Renewable
Fuel Standard (RFS), until 2012. The RFS, to be implemented and enforced by the
Environmental Protection Agency (EPA), specifies that: a) at least 4 billion gallons of ethanol and
biodiesel must be used in 2006; b) ramps up about 700 million gallons per year, up to 7.5 billion
gallons in 2012; c) regulations apply to refiners, blenders, and importers, and; d) cellulosic
ethanol qualifies for enhanced credit (1 gallon = 2.5 gallon credit).
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The 2005 Transportation Bill provides funding for the National Biodiesel Board, for biodiesel
testing in new clean diesel engines, and $10 million per year, four years, for five Sun Grant
centers. The Sun Grant Initiative of January 2004, is a concept to solve America’s energy needs
and revitalize rural communities with land-grant university research, education and extension
programs on renewable energy and bio-based, non-food industries. The mission of this initiative
is to: a) enhance America’s national energy security; b) promote diversification and environmental
sustainability of America’s agriculture; c) promote opportunities for economic diversification in
America’s rural communities, and; d) expected to provide significant funding for competitive
university-based grants.
2.6.1
Ethanol
The ethanol industry has been developing in U.S. for the last 25 years, as compared to 30 years
for Brazil. Since 1990, the ethanol industry has been the fastest growing industry in rural
America, and in 2005, the industry will add 13,000 jobs to America’s manufacturing sector and
will be responsible for over 147,000 jobs in all sectors of the economy. It will also reduce
greenhouse gas emissions by 7 million tons, decrease petroleum imports by 143.3 million barrels,
decrease the U.S. trade deficit by $5.1 billion, and give $1.3 billion of tax revenue for the federal
government, and $1.2 billion for State and Local governments.
The fuel ethanol capacity in 2004 was 15 billion liters, and the industry opened 12 new state-ofthe-art production facilities during the year. The potential capacity in 2025 is estimated to be 100
to 110 billion liters that is roughly 15 per cent of U.S. fuel demand. Ninety per cent (90%) of the
ethanol is made from corn. New ethanol capacity will include grain sorghum, straw, so called
“waste” materials, cellulose, municipal solid waste (MSW), etc. There are over three million
ethanol flex-fuel vehicles operating in the U.S.
The main uses for fuel ethanol are: a) gasoline octane component (up to 10vol%); b) E85 - an
alternative fuel (85vol% ethanol); c) E diesel - an ethanol-diesel blend (up to 15vol% ethanol in
additized diesel fuel), and; d) Fuel cell energy source (under development). The main limitations
of ethanol are: a) reduced emissions benefits (in gasoline, E85); b) evaporative emissions (in
gasoline), and; c) long supply lines and transportation cost.
An important part of the ethanol program is the federal tax incentive, where petroleum refiners
receive a US$0.51 tax credit on each gallon of ethanol blended with gasoline domestic or
imported. To ensure that the US taxpayer does not subsidise imports, a secondary tariff of
US$0.54 per gallon is levied on ethanol imports. However, unilateral trade preference programs,
such as the Caribbean Basin Initiative and the Andean Trade Preference Act, allows duty-free
ethanol imports from those countries as long as the ethanol is produced from within their own
country. The purpose of this program is to encourage economic development in the Andean and
Caribbean region, and thereby help fight poverty and drug trafficking but, to date, these trade
agreements and preference programs have not led to significant ethanol imports to the U.S.
2.6.2
Biodiesel
The biodiesel industry has been developing in the U.S. since 1991. Biodiesel production capacity
in 2004 was 100 to 110 million liters. The potential capacity in 2030 is estimated to be 20 to 40
billion liters. Most of the biodiesel is made from soybean oil. Other current and emerging
feedstocks include recycled vegetable oil (restaurant grease), canola oil, tallow, yellow grease,
trap greases, etc.
The main uses for biodiesel are: a) conventional diesel fuel lubricity additive (up to 2.0vol%) for
Ultra Low Sulfur Diesel; b) “B20” - an EPACT alternative fuel equivalent (20vol% biodiesel) for
AFV fleet acquisition credits; and c) “B100” - a clean fuel for niche markets (e.g., marine, home
heating oil, etc.). Its main limitations are: a) increased NOx exhaust emissions; b) Limited overall
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emissions benefits (at B20 and higher); c) quality control, cold weather operability, and; d) limited
supply and high cost of production.
The American Jobs Creation Act of 2004 included the first biodiesel tax incentive policy in the US.
A Federal excise tax credit of about US$0.01 per percentage point of agri-diesel, blended with
petroleum diesel, is expected to increase demand from 30m gallons/yr to more than 124m
gallons/yr. The tax credit is effective for 2005 and 2006, and it is estimated that every 100 million
gallons of biodiesel demand increases soybean prices by about US$0.10 per bushel.
2.7
Cuba - Experiences and Lessons Learned
At one time, Cuba was the world’s most important sugar producer and exporter. Production has
fallen from over 80 million tons cane in 1990, to 35 million in 2002, 24 million in 2004, and around
15 million tons cane in 2005, due to a series of hurricanes and droughts that have devastated its
crop area. In addition, a lack of investment in infrastructure has forced the closing of many mills.
Since 2002, the government has tried to restructure the industry, closing 71 of the 156 mills, and
reallocating 60 per cent of the planted area to develop different agricultural products for the
internal market, to boost forests and fruit trees as well as other agricultural activities. This effort
has failed to improve the industry and some observers believe that only 40 to 50 mills will be
operational next year.
2.7.1 Cogeneration from Sugarcane Biomass
The total primary energy supply in 2002 was 6.9 million tons of oil equivalent of which 64 per cent
came from crude oil, 26 per cent from sugarcane bagasse, 6 per cent from gas, 3.3 per cent from
wood and 0.1 per cent from hydropower. Eighty-six per cent (86%) of the total electricity
consumption of 15,700 gigawatt-hours came from oil, 7 per cent from gas, and only 0.7 per cent
from hydropower. Electricity from sugarcane biomass based cogeneration can supply over 25
per cent of Cuba’s electricity demand. Using steam saving measures and high pressure boilers
with condensing extraction steam turbines it is possible to export 100 kilowatt-hours of electricity
per ton of cane throughout the year, from bagasse and sugarcane trash (leaves and tops). The
total electricity consumption of 16,000 gigawatt-hours will require 40 million tons cane per year to
supply 4,000 gigawatt hours to the grid, and this level of sugarcane production can be easily
regained.
The first demonstration cogeneration project was installed at the Hector Molino sugar mill in 2000,
with assistance from GEF. This sugar factory mills nearly 900,000 tons cane per year. The main
objectives of the project are to reduce fossil fuel-based carbon emissions in order to mitigate
climate change by exporting a significant quantity of electricity to the national grid to replace
imported fossil fuel consumption. The main features of the ‘‘Héctor Molina’’ project are: a) high
pressure steam boiler (82 bar, 525ºC); b) condensing-extraction steam turbogenerator (CEST); c)
operation 8,000 ha/year; d) consumption of sugarcane crop residues (trash) and bagasse as fuel,
to be supplied by the Héctor Molina sugar mill (capacity 7,000 ton of milled cane/day); e) low
consumption of process steam at the sugar mill (340 kg steam/t of milled cane), and; f) 155 kWh
gross cogenerated electricity/tn of milled cane, and 109 kWh exported electricity/tn of milled cane.
The power plant at Hector Molino operates 8,000 h/year and supplies 97.3 GWh to the grid in the
sugarcane season, and 166.1 GWh during the off-season, thereby decreasing carbon emissions
by 600,000 tons C, over the 25-year lifetime of the plant. The project cost was US$1,725/kWe, of
which 70 per cent was the ‘‘turnkey’’ cost of the power plant. The 25-year levelized cost of the
electricity production is estimated to be 6.6¢/kWh (without taxes). This corresponds to the project
having an internal rate of return of 12.5 per cent over 15 years. It is anticipated that the
replication of the project will further reduce the levelized electricity cost to 5.6¢/kWh.
The replication of the project to 34 Cuban sugar mills, that have been identified as able to support
similar projects, will increase the installed generation capacity to 1,000 megawatts, the energy
production to over 3000 GWh/year, and reduce emissions by more than 700,000 tons C annually.
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The projects being planned will consume only biomass as a fuel and operate throughout the year;
they are of two types: a) energy efficiency and increased cogeneration capacity in the sugar mill,
and; b) new cogenerating power plants annexed to sugar mills. Funding sources for these
projects are estimated to be of the credits-to-exports and commercial types. New cogeneration
power plants projects may be implemented via foreign investment. As a next stage, the
executing entities have considered undertaking feasibility studies that will allow decisions to be
made on the continuation of arrangements with possible funding entities or negotiations with
foreign investors interested in project development.
2.7.2
Ethanol
Sugar cane based ethanol is being given high consideration and focus within Cuba’s national
energy policy, since it would: a) create considerable economic benefits in new investments and
employment creation; b) support the sugarcane industry, preserving a large number of
agricultural jobs, that otherwise would have been lost, and; c) support the national balance of
payments by reducing the demand for imported oil and creating a new export revenue source.
Cuba has the sugarcane production capacity to compete with Brazil as a major exporter, and its
proximity to the US gives it a price advantage over Brazil.
During Brazilian President da Silva’s visit to Cuba, in 2003, a $20 million fuel ethanol production
agreement was signed between Brazil and Cuba. This aid financed the planting of approximately
400,000 tons of sugarcane and the construction of a 100,000 liters per day ethanol processing
plant. Used as a 10 per cent blend, this quantity of ethanol represents a six per cent reduction in
the imported gasoline demand of 1.7 million liters of gasoline per day. Ethanol production is
being seen as a one of the new initiatives aimed at the reviving the sugar sector, reducing oil
import bills, reducing carbon emissions and providing energy security in a sustainable way.
2.8
Denmark - Experiences and Lessons Learned
Energy production from renewable resources has been an important component of Denmark’s
energy supply since the 1970’s oil crisis. At that time, Denmark was totally dependent on
imported coal and oil. The use of renewable energy has contributed to security of supply, and to
better management of environmental pollution. Furthermore, the development and practical
application of renewable energy technologies in Denmark has promoted growth through exports
and new jobs. From 1992 to 2005, energy equipment exports increased their share of total
exports by a factor of 10. Exports of energy equipment are currently valued at DKK$30 billion per
year.
While wind energy dominates the renewable energy electricity supply (which is 25 per cent of the
total domestic electricity consumption), biomass is the single most important source of renewable
energy in Denmark, contributing 12 per cent of the total energy consumption. The development of
biomass capabilities started in the 1980’s, when farmers were prohibited from burning the large
amounts of surplus straw in the fields. The straw became a commodity and the fire was ‘moved’
into the boilers of 120 district heating plants for cities and villages, and into 100,000 smaller boiler
installations for households, enterprises and institutions. Wood is also widely used. The need for
space-heating dominates due to Denmark’s northern hemispheric location. Danish biomass
sources are now mostly straw from agriculture, wood from forestry, waste wood from industry, the
biodegradable part of municipal solid waste (MSW), and to a lesser extent, biogas from manure
from pig and cattle farming. Consumption of biomass for energy production in Denmark more
than tripled between 1980 and 2005, and it is now 100 PJ/year, which is two-thirds of the total
technical potential of domestic biomass resources.
The extensive and advanced use of biomass has been facilitated to a large extent by the Danish
Parliament'
s “Biomass Agreement” of 14 June 1993, according to which the big power plants are
to use 1.2 million tons of straw, and 0.2 million tons of wood chips, annually, for combined heat
and power (CHP) production. Biomass, and in particular straw which has become a Danish
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‘speciality’, is a more difficult fuel for power production than coal, oil and natural gas. Under the
Biomass Agreement, the Danish utility companies have conducted a comprehensive research
and development program to handle the biomass challenge. As a result, 15 biomass-based CHP
plants of up to 40MW electricity are in operation today, and straw and wood now contribute five
per cent of the total Danish electricity consumption.
The public framework for the promotion of bioenergy use comprises exemption from various fuel
taxes when used for heating. For electricity production based on biomass, there is a substantial
element of public support in the form of an additional ‘green’ reward on top of the core market
price per KWh, as specified in the Electricity Supply Act. Within the public applied-energy
research and development programs, biomass has in recent decades been the largest single
focus area. Denmark will increasingly focus its research and development efforts on the
development of liquid biofuels, in synergy with the development of new technologies for the
transformation of biomass into heat and power. The goal is to further integrate the supply of
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energy for all sectors in line with the Danish tradition for holistic technological solutions.
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CHAPTER 3
CHALLENGES AND OPPORTUNITIES TO
DEVELOPING AN AGRO-ENERGY
INDUSTRY
217
3.0
CHALLENGES AND OPPORTUNITIES TO DEVELOPING AN AGRO-ENERGY
INDUSTRY
3.1
Institutional Relationships
Developing biofuels industries in the countries will require a more synergistic working relationship
between a number of institutions in the public and private sectors. Public sector institutions will
have to work in an integrated manner to drive the development of the local market for biofuels
and in so doing address the growing economic vulnerability of the economy to agricultural
commodity and petroleum price increases. Private sector participation will be critical in all areas
but especially in transportation fuel production and distribution. Several Government Ministries
and Departments will have to work closely to address the diverse nature of the biofuels
production and usage process including those dealing with Lands and Agriculture, Energy,
Finance, Transportation, Industries, Power and Petroleum, Environment and Water
3.2
National and Local Ownership
From the initial stages of the development of a biofuels industry, it is important to involve the
stakeholders in the process. A sense of ownership gives the initiative greater chances of
success. The local rural population has to be involved in the planning and implementation so that
stakeholder feedback is incorporated into project deign from the beginning. It is also necessary
that local stakeholders derive maximum benefits from the project. Involving women in villagelevel biofuels projects are more likely to benefit them.
Wide public dialogue, demonstration for education and outreach are important to achieve wide
possible public understanding about the cost and benefits of biofuels. Tough financial issues such
as pricing for raw material and percentages of profits shared among the direct production by
stakeholders (land owners, workers, and transport and factory operators) needs to be addressed
through participatory processes. National ownership will help make the political environment more
conducive to the effective use of appropriate lands for biofuels production. National dialogue will
also provide baseline information to help in the formulation of policies on land use for biofuels
production, the kinds of incentives and disincentives that will be necessary to ensure that land
use is sustainable and there is maximum use of suitable land for biofuels production.
3.3
Raw Material Production and Transportation
Key requirements for sustainable and reliable production of raw material are technology, research
and development coupled to good extension, financial benefits linked to a secure market, and
adequate land resources. Labor issues and transportation management are key challenges that
will have to be addressed through public dialogue. Incentives to encourage good worker attitude
and productivity need to be devised to ensure adequate supply of raw material to the biofuels
industry. Biofuels production requires significant transportation of raw material to the production
facilities and economic and reliable transportation systems.
3.4
Developing Capacity
Implementing a biofuels program will require putting in place a dedicated capacity development
strategy that provides the individual and institutional capacity necessary to plan and manage the
energy sector and sustainable production of biofuels raw materials by the agricultural sector.
There are a number of critical technical skills that are essential for the implementation of a
successful biofuels program. Trained technical personnel are required for:
218
h)
i)
j)
k)
l)
m)
Breeding high yielding, disease resistant varieties for particular agronomic
environments and the development of environmentally benign pest management
technologies;
Research and extension services to monitor the performance of selected varieties
under field and processing conditions, to enable pests and diseases to be identified
and controlled before they become a serious problem, and to inform the plant breeders
and farmers;
Operating, maintaining and managing a modern, sophisticated ethanol plant optimally;
Designing and implementing environmental best practices to protect the environment
and for the long-term sustainability of the industry;
Downstream activities including transport, storage, blending and distribution, and;
Other activities associated with ethanol production such as infrastructure, logistics, land
use, plant configurations, the use of co-products, and disposal of wastes.
There is sufficient experience with some of the biofuels in developing countries, such as Brazil,
India, Mauritius and Cuba, for much of the capacity building required to take place under SouthSouth cooperation agreements.
3.5
Policy and Legislation
The development of natural resources based industries requires supportive policy and effective
legal framework to drive the process and to provide comfort to the private sector. Biofuels
industries need supportive energy, agricultural, and environment policies that view each barrel of
oil imported for land transportation or electricity generation as a loss of income to farmers. The
energy policy should support, as first priority, maximum energy from biofuels in the transportation,
electricity generation and domestic sectors. Private sector participation in electricity generation
will require policies to promote power purchase agreements between the utilities and the
producers of biomass based power.
National investment policies should be formulated to encourage industry workers to be
shareholders. Policy and legislation actions will be necessary to establish raw material prices,
linked to certified land use to ensure environmental sustainability. Land utilization policies should
give priority to identifying lands that are suitable for sustainable biofuels production. Where such
lands are not in managed production, they should be made available to interested private sector
parties with an interest in production of raw materials or biofuels. Agricultural research policy
should give priority focus to building capacities in crop varieties with a high biomass yield such as
“energy cane,” higher copra producing coconut varieties, fast growing trees and grasses, etc.
Vehicle import policy will be a major determinant of the success of biofuels for transportation fuel,
and tariff instruments have to be used to favour the importation of biofueled vehicles. Product
standards need to be developed and enforcement procedures need to be incorporated in the
legal framework of the country. A regulatory framework has to be put into place that can
determine and implement a pricing system for biofuels based on the energy value of the raw
material and linked to the international price of oil.
219
CHAPTER 4
POTENTIAL FOR BIOFUELS
INDUSTRIES IN THE CARIBBEAN
220
4.0
POTENTIAL FOR BIOFUELS INDUSTRIES IN THE CARIBBEAN
The tables below (Table 4.0.1 and 4.0.2) show the imports of petroleum fuels by the region, for
the last two decades, and the cost. Examination of the information shows that the region’s
consumption of petroleum fuel has increased from slightly over 116 million barrels in 1985,
costing the region US$530 million, to over 160 million barrels in 2004, costing more than US$6.5
billion. The increase in consumption is driven by the expansion in population and economic
growth. As discussed earlier, generating the level of foreign exchange will become more difficult.
Table 4.0.1:
Liquid Petroleum Products Imports (000’s Bbls)
COUNTRY
ANTIGUA and BARBUDA
204
1985
1990
1995
2000
2001
2002
2003
2004
847
1,441
1,300
1,435
1,448
1,506
1,611
1,720
BAHAMAS
3,130
4,268
5,186
7,014
6,944
7,221
7,127
7,855
BARBADOS
2,051
2,146
2,426
3,650
3,809
4,079
7,625
7,265
1,018
1,607
1,627
1,671
1,223
1,274
BELIZE
B.V.I
CUBA
170
262
317
472
507
528
609
640
37,310
97,288
76,878
41,270
41,481
37,757
45,308
31,925
DOMINICA
112
179
220
317
340
353
316
291
DOMINICAN REPUBLIC
d/na
d/na
d/na
d/na
d/na
d/na
43,297
42,277
GRENADA
181
333
419
623
613
647
525
537
GUYANA
3,358
2,782
3,624
3,957
3,940
4,044
4,981
3,898
JAMAICA
8,583
11,266
21,078
23,399
24,140
24,569
26,610
25,870
MONTSERRAT
52
56
66
55
59
61
54
59
ST. KITTS/NEVIS
132
217
265
337
437
525
438
418
ST. LUCIA
391
666
867
1,007
1,030
1,236
1,260
1,246
ST. VINCENT
149
233
363
420
430
477
532
562
0
0
3,661
5,238
5,719
5,918
5,494
4,299
161
6,794
9,833
35,184
33,381
40,057
31,406
27,482
SURINAME
TRINIDAD/TOBAGO
TURKS & CAICOS
TOTAL
d/na
116,605.5
d/na
d/na
d/na
d/na
107,521.5 91,911.1 126,195.8 122,180.5
d/na
295
285
138,200.4 165,327.6 163,287.6
Unlike the growth of the energy sector, the region’s agriculture sector has been in decline,
generating decreasing amounts of foreign exchange relative to the demand generated by
petroleum fuels. However, as shown in Table 4.0.3 below, the agricultural sector is critical for a
number of countries. Based on the global experience with biofuels a number of these countries
have significant biofuels production potential relative to the amount of petroleum fuel imported.
However, Table 4.0.4 shows the biofuels production potential of the different countries, based on
the average 2003-2005 agricultural production. The liquid biofuels that could be derived from
sugarcane juice and coconut oil fails to meet the regional demand for gasoline and diesel in 2004.
This level of demand, relative to the current production potential taken together with the urgent
need to revive the future of agriculture across the region, points to a potentially significant future
for farmers producing biofuels raw material. Analysis of the 16 countries 2004 crop production
figures reveal that if all the sugarcane crop were converted to ethanol, the quantity of ethanol
204
SRC PETSTATS
221
produced would be around 3,000 million liters, which can substitute around 2,300 million liters of
gasoline. The quantity of gasoline imported in 2004, was about 4,000 million liters, and the
quantity of diesel 5,400 million liters.
Table 4.0.2:
Value of Petroleum Products Imports (US$000'
s)
COUNTRY
ANTIGUA and BARBUDA
BAHAMAS
BARBADOS
BELIZE
B.V.I
CUBA
DOMINICA
DOMINICAN REPUBLIC
1995
2000
205
1985
1990
2001
2002
2003
2004
27,717
45,030
30,442
55,646
47,515
55,482
57,781
75,088
N/A
N/A
125,822
227,714
207,258
225,400
280,142
247,015
111,233
88,214
56,480
126,535
118,412
131,763
177,390
209,451
N/A
N/A
30,920
72,039
64,419
65,419
61,942
73,185
5,745
7,776
8,536
18,981
18,412
20,537
25,515
20,527
N/A
N/A
853,517
1,163,482
1,092,847
1,295,050
1,015,155
1,449,014
4,824
5,836
5,185
13,122
11,298
13,348
12,992
14,686
d/na
d/na
d/na
d/na
d/na
d/na
1,475,953
1,712,591
6,678
10,913
11,559
26,860
22,911
23,840
17,168
29,283
GUYANA
105,699
76,196
85,161
144,568
126,311
138,414
153,194
169,004
JAMAICA
240,755
256,560
361,027
659,157
559,518
604,190
790,295
928,646
1,868
1,776
1,616
2,719
4,014
3,594
3,402
3,154
GRENADA
MONTSERRAT
ST. KITTS
4,888
7,011
7,879
14,097
16,256
19,706
18,394
26,669
ST. LUCIA
9,715
20,915
23,293
39,597
38,596
45,315
53,179
82,885
ST. VINCENT
5,701
7,537
8,558
14,535
15,227
18,040
18,457
23,137
N/A
N/A
78,203
170,342
171,055
186,196
199,637
162,381
7,906
136,020
161,542
981,647
744,379
1,005,431
1,058,015
1,258,353
d/na
d/na
d/na
d/na
d/na
d/na
13,774
16,063
532,728
663,785
1,849,738
3,731,042
3,258,426
3,851,725
5,432,384
6,501,132
SURINAME
TRINIDAD/TOBAGO
TURKS & CAICOS
TOTAL
In addition to sugarcane and coconut crops which are expected to be principal sources of raw
material for biofuels, given that these crops are already widely grown across the region, and have
successfully been used, there are other potential crops that could be grown for the production of
biofuels; these crops were listed in Table 3.1.1. In addition to these crops, there is also a range
of agricultural residue that is suited to the production of biofuels.
Table 4.0.3
Country
Barbados
205
206
The Agricultural Sector Position in Selected Caribbean Countries
206
Trade in
Sugar (as
GDP Value Added as % of GDP
Goods Sugar
Agric.
% of
(Billion
as % of Export
Export
Agric
Year US$) Agriculture Industry Services GDP
US$ mil US$ mil Export)
1999
2.50
6.20
21.60
72.20
55.60
27.72
75.92
37
2002
2.50
5.80
20.80
73.40
49.10
18.84
73.37
26
2003
2.60
51.10
20.50
66.00
31
SRC PETSTATS
Compiled from World Bank World Development Indicators 2004
222
Mean
Cuba
1999
2002
2003
Mean
Dominican
Republic
1999
2002
2003
17.40
21.60
16.50
Mean
Haiti
1999
2002
2003
4.20
3.50
2.90
Mean
Jamaica
1999
2002
2003
7.70
8.40
8.10
Mean
Saint Kitts
& Nevis
1999
2002
2003
0.30
0.36
0.35
Mean
Trinidad &
Tobago
1999
2002
2003
6.80
8.90
10.50
Mean
6
21
73
6.40
47.50
46.10
6.40
47.50
46.10
11.40
11.50
11.20
34.10
32.10
30.60
54.90
56.30
58.10
11
32
29.70
27.90
52
23
75
31
458.21
510.0
510.0
458.21
785.49
724.08
746.97
785.49
58
70
68
66
75.80
64.80
80.50
66.28
74.06
75.32
535.29
592.26
603.88
12
13
12
56
74
72
577
12
16.20
16.80
54.10
55.30
32.60
40.70
52.50
0.00
0.00
0.00
30.99
17.94
20.74
29
17
55
37
0
24
6.80
5.50
5.20
29.20
29.10
29.80
63.90
65.30
65.10
53.50
55.00
59.20
101.62
75.00
66.84
302.54
281.82
292.21
34
27
23
6
29
65
56
81
292
28
3.30
3.30
3.00
26.20
29.70
28.30
70.50
67.10
68.20
59.40
64.60
79.00
10.00
10.00
10.27
11.37
10.79
12.18
88
93
84
3
28
69
68
10
11
88
1.50
1.30
1.20
40.00
43.70
48.80
58.40
55.00
50.00
81.40
84.90
78.20
33.28
24.61
12.73
219.59
239.52
222.42
15
10
6
1
44
54
82
24
227
10
The energy content of residues that can be used for producing liquid fuels, heat and electricity are
summarized in Table 4.0.4.
Table 4.0.4:
#
Energy from Agro-Residues
ISLAND STATE
Sugarcane Coconuts
: bagasse : shells &
& trash
husk
(TJ / yr) (TJ / yr)
Antigua &
1 Barbuda
-
207
Roots &
Cereals:
Groundnuts Pulses:
Tubers:
straws
: shells straw
straw
(TJ / yr) (TJ / yr)
(TJ / yr) (TJ / yr)
-1
3
-
-8
7
-
-
2 Bahamas
282
3 Barbados
1,955
24 6
27
0
18
4 Belize
5,704
13 1,237
26
0
115
207
2
Calculations based on data from FAOSTAT. Note: Average production for last 3 years (2003-05)
223
#
ISLAND STATE
Sugarcane Coconuts
: bagasse : shells &
& trash
husk
(TJ / yr) (TJ / yr)
5 Cuba
100,478
6 Dominica
22
Dominican
Roots &
Cereals:
Groundnuts Pulses:
Tubers:
straws
: shells straw
straw
(TJ / yr) (TJ / yr)
(TJ / yr) (TJ / yr)
1,529 24,112
152 4
190
7 Republic
26,275
8 Grenada
37
9 Guyana
15,224
593 12,132
10 Haiti
5,430
323 9,056
11 Jamaica
10,826
Saint Kitts &
12 Nevis
822
13 Saint Lucia
2,370 15,068
86 7
2,242 24
-
59
-
1,845
29
13
-
12,748
2,106
1
17
-
802
10
287
11
21
5,365
126
1,039
1,525
20
81
7
0
3
185 15
80
34 64
98
2
6
-
1
St. Vincent and
14 the Grenadines
68
15 Suriname
609
119 4,671
38
2
3
Trinidad &
16 Tobago
3,583
231 144
63
0
57
22,338
239
4,264
TOTAL
171,312
7,912 66,550
Based on the analysis of fuel imports and use, the Caribbean has potentially viable biofuels
industries in a number of countries, although with a different mix of products based on land
resource endowment and national policy. Biofuels industries can be classified into two principal
categories, liquid and solid biofuels; the classification is based on the form that the biomass is
converted into for final use.
The conversion of the biomass raw material is necessary to overcome the major disadvantages
of biofuels, which is that the raw material for biofuels contains inherent high quantities of water,
and therefore low energy density, compared to crude oil. This means that there is relatively high
transportation cost in moving the raw material over distances. This is addressed by locating
processing and/or conversion facilities within determined distances of raw material production.
The biofuels industries would therefore produce liquid biofuels (ethanol and biodiesel) for
transportation that is the major use of imported fuels. The solid biofuels would be used primarily
for electricity generation, which is the second major user of imported fuels.
4.1
Electricity
In 2004, the region consumed in excess of 4,600 million liters of diesel and fuel oil to meet the
demand for electricity. As shown below in Table 4.1.1, the demand for electricity represented in
the form of installed generating capacity has increased more than five-fold, over the two decades,
and in most countries present capacity is considered inadequate and new supply options are
being evaluated.
224
Table 4.1.1:
Installed Electricity Generation Capacity
Island State
1985 1990
Antigua & Barbuda
25.3
48.3
Bahamas
161.0 216.0
Barbados
109.8 152.1
Belize
d/na
d/na
Cuba
d/na
d/na
Dominica
6.6
10.0
Dominican
7 Republic
d/na
d/na
8 Grenada
13.5
13.5
9 Guyana
147.0 156.0
10 Haiti
d/na
d/na
11 Jamaica
459.1 508.4
12 Saint Kitts & Nevis
9.0
16.3
13 Saint Lucia
19.0
38.9
St.Vincent and
13.4
14 the Grenadines
18.8
15 Suriname
d/na
d/na
16 Trinidad & Tobago 1,181.0 1,181.0
TOTAL
2,144.7 2,359.3
1
2
3
4
5
6
208
1995
41.3
267.0
152.5
70.9
3,991.1
14.8
2000
57.4
365.0
185.5
76.3
4,286.5
20.4
2001
57.4
373.0
189.5
77.0
4,410.9
21.7
2002
57.4
373.0
209.5
77.0
3,958.7
20.4
2003
63.5
373.0
209.5
74.3
3,959.1
21.2
2004
84.5
325.0
209.5
75.1
3,957.2
22.0
d/na
25.0
157.0
d/na
624.9
22.9
40.2
d/na
35.8
300.4
d/na
668.7
33.5
66.4
d/na
37.5
300.4
d/na
688.2
33.5
66.4
d/na
38.2
307.5
d/na
743.6
32.0
66.4
5,530.3
32.9
130.6
dna
767.5
34.5
56.5
3,290.3
39.0
129.1
Dna
767.5
34.5
56.8
21.1
444.0
1,253.0
7,125.7
33.9
444.0
1,416.0
7,989.8
33.9
444.0
1,416.0
8,149.4
33.9
37.4
39.9
444.0
444.0
444.0
1,416.0 1,416.7 1,416.7
7,777.6 13,150.9 10,891.1
The five-fold increase in installed generating capacity is driven by economic development and
population growth and increased affluence. A significant portion of this increase is as a result of
the demand during peak periods for electricity (Table 4.1.2). Driven primarily by cooling services
during the day, and lighting, water heating and appliance use during the evening periods, peak
electricity is the most expensive power to generate as it uses very expensive fuel and requires
that a significant amount of redundant generating capacity be kept.
Table 4.1.2:
Island State
Antigua &
1 Barbuda
2 Bahamas
3 Barbados
4 Belize
5 Cuba
6 Dominica
Dominican
7 Republic
8 Grenada
9 Guyana
10 Haiti
208
209
Peak Electricity Demand (MW)
209
1985
1990
1995
2000
2001
2002
2003
2004
13.4
121.5
64.2
d/na
d/na
4.3
19.5
150.5
87.2
d/na
d/na
7.4
24.8
137.0
104.2
31.2
d/na
9.6
35.4
183.0
124.9
44.5
d/na
13.0
35.9
194.0
130.5
49.3
d/na
13.9
37.3
204.0
134.7
54.0
d/na
13.0
39.0
214.6
141.6
57.0
dna
12.9
43.0
214.6
143.0
61.0
dna
13.2
d/na
5.4
48.7
d/na
d/na
9.1
41.6
d/na
d/na
14.5
61.4
d/na
d/na
20.4
85.0
d/na
d/na
22.7
93.5
d/na
d/na
23.8
96.9
d/na
dna
22.4
86.6
dna
dna
25.8
85.0
dna
CARILEC 2005
CARILEC 2005
225
11 Jamaica
12 Saint Kitts & Nevis
13 Saint Lucia
St. Vincent and
14 the Grenadines
15 Suriname
16 Trinidad & Tobago
TOTAL
241.2
5.3
12.3
327.8
8.0
20.8
6.5
9.5
d/na
d/na
470.0 557.0
992.8 1,238.3
424.2
11.9
31.9
546.7
17.3
43.3
554.8
18.1
43.3
579.2
18.9
46.5
12.6
17.2
18.8
19.1
71.4
82.8
83.1
83.1
665.0
834.0 876.0
925.0
1,599.7 2,047.4 2,133.8 2,235.5
589.0
19.0
44.9
604.8
19.4
46.6
19.0
20.7
83.1
83.1
970.0 1,034.0
2,299.1 2,394.2
Projections are that demand for power will continue to increase if the regional economy is to
grow, and the population behaves more like developed countries, with the acquisition of more
appliances and increased demand for energy services. At a five per cent annual increase in
power demand and continuing on the same path, the region’s demand for fuels to meet power
generation needs will be in excess of 80 million barrels (12,800 million liters) in 2025, as shown in
the Table 4.1.3.
Table 4.1.3:
Fuel Consumption by Electric Utilities up to 2025 @ 5% per annum growth
210
(000’s liters)
Island State
2004
2010
2015
2020
2025
M liters /yr M liters /yr M liters /yr M liters /yr M liters /yr
Antigua & Barbuda
89
119
152
194
248
Bahamas
755
1,012
1,292
1,649
2,104
Barbados
197
265
338
431
550
Belize
23
30
39
50
63
Cuba
2,177
2,918
3,724
4,753
6,066
Dominica
12
16
20
26
33
Dominican Republic d/na
d/na
d/na
d/na
d/na
Grenada
32
43
55
70
90
Guyana
118
159
202
258
330
Haiti
d/na
d/na
d/na
d/na
d/na
Jamaica
990
1,327
1,693
2,161
2,758
Saint Kitts & Nevis
30
40
51
65
83
Saint Lucia
73
97
124
158
202
St.Vincent and
the Grenadines
Suriname
Trinidad & Tobago
TOTAL
210
25
78
3
4,603
33
105
4
6,168
42
134
5
7,872
54
171
6
10,047
69
218
8
12,822
Author’s own calculations based on data from SRC PETSTATS. Note: d/na – data not available
226
Table 4.1.4:
Fuel Consumption by Electric Utilities up to 2025 @ 5% per annum growth
211
(million barrels)
Island State
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
St. Vincent and
the Grenadines
Suriname
Trinidad & Tobago
TOTAL
2004
2010
2015
2020
2025
Million
Barrels
0.56
4.75
1.24
0.14
13.69
0.07
0.20
0.74
6.23
0.19
0.46
Million
Barrels
0.75
6.37
1.66
0.19
18.35
0.10
0.27
1.00
8.34
0.25
0.61
Million
Barrels
0.96
8.12
2.12
0.24
23.42
0.13
0.35
1.27
10.65
0.32
0.78
Million
Barrels
1.22
10.37
2.71
0.31
29.89
0.16
0.44
1.62
13.59
0.41
1.00
Million
Barrels
1.56
13.23
3.46
0.40
38.15
0.21
0.56
2.07
17.35
0.52
1.27
0.16
0.49
0.02
28.95
0.21
0.66
0.03
38.79
0.27
0.84
0.03
49.51
0.34
1.08
0.04
63.19
0.43
1.37
0.05
80.64
The production of biofuels for electricity generation, whether for grid connection or for
decentralized use, is one of the longest proven applications of solid biofuels. Solid biofuels for
electricity generation can be viable, provided by a much wider range of crops than is the case for
liquid biofuels.
Table 4.1.5:
Potential biofuels raw material substitutes for the petroleum fuel(s) Description of the possible range of biofuels
Crop/Plant
Petroleum
Substitute
Seed bearing
shrubs -Jatropha C
Castor
Cassava
Coconut
Oil Palm
211
Primary BiomassSecondary
Yield
Biomass
Yield
Diesel for Transport or
Seeds
or
None of
power generation
consequence
Experience
with Crop
Gasoline
Starch tubers
None of
Consequence
Diesel for transport
Diesel of power
Generation
Diesel for transport
Oil
Shells
Grown
traditionally for
food
Grown widely
Oil
Shells
No experience
Author’s own calculations based on data from SRC PETSTATS
227
Very limited
Diesel of power
Generation
Diesel or Fuel Oil
Power generation
Fast
Growing
Trees
Fast Growing Diesel or Fuel Oil
Legumes trees Power generation
Liquid Petroleum Gas
Sugarcane
Gasoline
Diesel for transport
Diesel or fuel oil for
power generation
Energycane
Gasoline
Diesel for transport
Diesel or fuel oil for
Power generation
4.2
Wood
None
Very limited
Leaves
Wood
Very limited
Sucrose
Fibers and
Trash
Fibers and
Trash
Sugars
Long
Very limited
Bagasse, forestry, woody biomass (solid fuel) for electricity generation
There are three main techniques to generate electricity from solid biofuels:
a) Burning the biomass in boilers to generate steam that is used in steam turbines to
generate electricity. Cogeneration, for example, in the sugar industry, uses this method
to produce process steam and electricity up to several tens of Megawatts capacity.
Boilers in the sugar industry that are designed to burn bagasse can easily handle woody
biomass cut into suitable sizes, but sugarcane trash (leaves and tops) and straw need to
be baled and fed into the boiler properly.
b) Producer gas generated by gasification of biomass in gasifiers is fed to engine-gensets
for producing electrical energy. This generally substitutes diesel, in diesel gensets and is
used for small- and medium-scale applications of kilowatts up to around 1 Megawatt.
Two modes of operation are possible: 1) Dual fuel mode in which up to 70 per cent diesel
replacement is possible, and; 2) 100 per cent Producer Gas mode where no diesel is
used.
c) The third technique is under development but has a huge potential in the future due to its
higher efficiency. In the BIG-GT CC (Biomass Integrated Gasifier – Gas Turbine
Combined Cycle) the biomass is gasified and the producer gas is fed into a gas turbine.
The exhaust gases of the gas turbine are used to generate steam for the steam turbine,
resulting in a combined cycle operation. BIG-GTCC sizes range up to several tens of
Megawatts and are also used to cogenerate process heat and electricity.
Table 4.2.1:
#
1
2
3
4
5
6
7
212
Potential for electricity exports from bagasse-based cogeneration
Island State
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Electricity
@ 100 kWh/tc
(GWh / yr)
6
39
112
1,980
0
518
Electricity
@ 200 kWh/tc
(GWh / yr)
11
77
225
3,960
1
1,036
Note: Based on sugarcane and electricity production data for 2004
228
Total
Electricity
Production
GWh
25.4
149.2
831
323
15,909
67
13,489
212
8
9
10
11
12
13
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
St. Vincent and
14 the Grenadines
15 Suriname
16 Trinidad & Tobago
TOTAL
4.3
1
300
107
213
16
-
1
600
214
427
32
126
52.224
512
2,974
13.8
266
3
24
141
6,752
107
177.6
6,321
41,343
1
12
71
3,376
Transportation Fuel
The two primary sources of transportation fuel is gasoline and diesel. Gasoline is used in Spark
ignition small vehicles and in small buses and pick up trucks and small boats. Diesel fuel is used
by heavy vehicles and larger boats with compression ignition engines.
4.4
Gasoline
There are various grade of gasoline used across the region, the grade varies from 87 to 93
octane. As shown in Table 3.4.6 below regional gasoline consumption has increased significantly
between the 2000 and 2004 as a result of the more private cars, pickup trucks, and taxis. At a five
per cent annual rate of increase as shown in Table 4.4.1 the demand for gasoline would almost
double 2015.
Table 4.4.1:
Island State
1
2
3
4
5
6
7
8
9
10
11
12
13
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
St.Vincent and
14 the Grenadines
15 Suriname
16 Trinidad & Tobago
TOTAL
213
213
Gasoline consumption till 2025 @ 5% per annum growth
2004
2010
2015
2020
2025
M liters /yr M liters /yr M liters /yr M liters /yr M liters /yr
48
65
83
106
135
269
361
460
587
750
129
173
221
282
360
56
76
96
123
157
707
948
1,209
1,544
1,970
17
23
29
37
47
1,343
1,800
2,297
2,932
3,741
26
35
44
57
72
119
159
203
259
331
699
21
56
937
28
75
1,196
36
96
1,526
46
122
1,948
59
156
27
101
493
4,112
36
135
661
5,510
46
173
843
7,032
58
220
1,076
8,975
74
281
1,374
11,455
Author’s own calculations based on data from SRC PETSTATS
229
Based on a five per cent increase, the region is expected to double consumption before 2020.
This will require the region to import an estimated 7,000 million liters of gasoline. This represents
a significant potential market for regional ethanol producers. As shown in Table 4.4.2, the
maximum ethanol production from the average cane production for the period 2003-2005 is
slightly more than 2,700 million liters, which would be only significantly less than the 5,500 million
liters estimated need in 2010.
Table 4.4.2:
Ethanol production potential from sugarcane for gasoline substitution
50% sugars converted
to ethanol
Island State
100% sugars converted
to ethanol
Average Cane
Ethanol
Gasoline
Prod. 2003-05 produced (a) substituted (b)
Ethanol
produced
(a)
Gasoline
(b)
substituted
M liters /yr M liters /yr
-
M liters /yr
-
#
1
Antigua & Barbuda
2
Bahamas
56
2
2 4
3
3
Barbados
385
15
12 31
23
4
Belize
1,124
45
34 90
67
5
Cuba
19,801
792
6
Dominica
4
0
7
Dominican Republic
5,178
207
8
Grenada
7
0
9
Guyana
3,000
120
90 240
180
10 Haiti
1,070
43
32 86
64
11 Jamaica
2,133
85
64 171
128
162
-
6
-
5 13
-
10
-
13
1
0 1
1
120
5
4 10
7
706
33,759
28
1,350
21 56
1,013
42
2,026
12 Saint Kitts & Nevis
13 Saint Lucia
St. Vincent and
14 the Grenadines
15 Suriname
16 Trinidad & Tobago
TOTAL
(1000 t / yr) M liters /yr
-
214
214
Calculations based on data from FAOSTAT.
Note:
(a) Ethanol production @ 80 liters per ton cane;
(b) Substitution @ 0.75 liters gasoline / liter ethanol;
214
Author’s own calculations based on data from SRC PETSTATS
230
594 1,584
1,188
0 0
0
155 414
311
0 1
0
-
2,701
4.5
Diesel Fuel
Diesel fuel is used both for transportation, electricity generation, and for industrial applications
such as for the production of steam and for drying. The increasing use of diesel fuel is projected
to almost double by 2015. There is a projected demand of more than 9,000 million liters, the
majority of which would be used for transportation - the potential biofuels to substitute for diesel in
transportation are ethanol and biodiesel.
Table 4.5.1:
Diesel consumption till 2025 @ 5% per annum growth
Island State
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
St. Vincent and
the Grenadines
Suriname
Trinidad & Tobago
TOTAL
4.6
215
2004
2010
2015
2020
2025
M liters /yr M liters /yr M liters /yr M liters /yr M liters /yr
61
82
105
134
171
472
632
807
1,029
1,314
107
143
183
234
298
104
139
177
226
289
1,836
2,461
3,140
4,008
5,115
23
31
40
51
65
1,199
1,607
2,051
2,618
3,341
45
60
77
98
125
304
407
520
663
847
633
36
93
848
49
124
1,082
62
158
1,381
80
202
1,763
102
258
55
150
308
5,426
73
202
413
7,271
93
257
527
9,280
119
328
672
11,844
152
419
858
15,117
Domestic Fuel
Domestic fuel will primarily be in the form of liquefied petroleum gas (LPG) for cooking and
kerosene for lighting and refrigeration. Biofuels substitute is primarily in the form of biogas and
producer gas from gasifiers. Biogas is very sensitive to scale, both for cost as well as viability.
Biofuel for cooking is generated much easier on rural and agro-industrial environments than in
urban environments. Advancements such as the development of small-scale “compact” plastic
anaerobic digesters for households that use starch and other biodegradable fruit and vegetable
wastes as feedstock may help make biogas appropriate to urban households and institutions.
Two biofuels substitutes for domestic fuel are analysed below:
a) Producer gas from gasifiers, and;
b) Biogas gas from anaerobic digesters.
215
Calculations based on data from FAOSTAT.
Note:
(a) Ethanol production @ 80 liters per ton cane;
(b) Substitution @ 0.75 liters gasoline / liter ethanol;
231
4.6.1
Producer gas from gasifiers
Presently, cooking in SIDS is done primarily by burning fuel wood, coconut residues or
agricultural residues that is quite inefficient and causes indoor air pollution in the kitchens. A
cleaner, more efficient and sustainable alternative fuel is producer gas from gasification of the
biomass. This will allow the same quantity of biomass to be sufficient for nearly double the
number of households with less detrimental health effects. In the urban centers, imported LPG is
increasingly being used, and this can be substituted by producer gas. Community-sized gasifiers
for cooking gas have been used successfully in China and India.
Since there are other uses for some of these residues such as recycling to the land, fodder,
construction materials, etc., it has been assumed that 50 per cent of the total residues are
available for gasification to produce cooking gas. A household (6 persons) needs 3kg/day of
biomass, having an energy content of 17.5MJ/kg, giving an annual requirement of
19GJ/yr/household. The number of households and the percentage of the population that can get
all their cooking energy needs from agro residues are given in Table 4.6.1.
Table 4.6.1:
Investments required for installing Gasifiers for cooking gas from Agro
residues
ISLAND STATE
Residues
available
for cooking
@ 50%
of total
Number of
Households (HH)
who can get
cooking gas
@ 19 GJ /yr /HH
Number of
Gasifiers
required
@100 HH
/gasifier
(GJ/yr)
Total Capital
Investment
Population
@$51,000
July 2004
/gasifier
estimated
Per centage of
Population who
will get cooking
gas from
agro residues
(million $)
%
1
Antigua and Barbuda
2
Bahamas
4,326
3
Barbados
22,461
4
Belize
273,324
5
Cuba
6
Dominica
7
Dominican Republic
8
Grenada
20,652
1,087
11
0.56
89,357
7.4%
9
Guyana
6,996,519
368,238
1,177
60.03
705,803
100%
10
Haiti
4,978,392
262,021
2,621
133.67
7,656,166
20.5%
11
Jamaica
825,857
43,466
435
22.19
2,713,130
9.6%
12
Saint Kitts and Nevis
5,886
310
4
0.20
38,836
6.2%
13
Saint Lucia
40,402
2,126
22
1.12
164,213
8.0%
14
St Vincent/Grenadines
15
Suriname
16
Trinidad and Tobago
TOTAL
1,095
58
1
0.05
68,320
0.9%
228
3
0.15
299,697
0.6%
1,182
12
0.61
278,289
2.6%
14,385
144
7.34
272,945
31.7%
16,152,538
850,134
8,502
433.60
11,308,764
45.1%
95,164
5,009
51
2.60
69,278
44.2%
11,346,632
597,191
5,972
304.57
8,833,634
40.6%
50,477
2,657
27
1.38
117,193
13.8%
2,629,682
138,404
729
37.18
436,935
100%
108,900
5,732
58
2.96
1,096,585
3.2%
19,769
1008.21
34,149,145
43,552,307
2,292,228
By using only 50 per cent of the total agro residues and installing around 20,000 gasifiers, serving
100 households each, nearly 12 million people living in 2.0 million households, on 16 Caribbean
SIDS can get piped cooking gas. The total investment required to achieve this is over a billion
dollars ($1,008 millions) that works out to US$85 per person. By using only one-sixth of the total
agro residues in Guyana, and one quarter in Suriname, 100 per cent of the population of these
two countries can get piped cooking gas.
4.6.2
Biogas gas from anaerobic digesters
232
One model of the compact biogas plant currently being propagated by ARTI, in western India, has
a gas holder tank of 550 liters capacity, having about 500 liters of usable gas holding space. The
housewife is advised to introduce a kilogram of feedstock mixed with five liters of water, once in
the morning and again in the evening. Twice a day, she gets about 500 liters of gas, which is
enough to cook one meal for a family of five. ARTI has installed more than 100 compact biogas
digesters operating on starch, and all are working without any hitch.
However, feedback from the users indicates that they would like to have more gas than the
present model delivers - about 1000 liters instead of the 500 liters they get at present. Therefore,
for the Caribbean, we consider the 1000-liter compact biogas plant as the best size to
demonstrate and disseminate. If mass-produced, the 1000-liter plant would cost about US$100
in India. The gas stove with two burners cost US$20. Adding another US$30 for transportation, it
is estimated that the total cost of a 1000-liter biogas plant with stove would be approximately
US$150. To provide 20 per cent of the population of the 16 countries with compact biogas plants,
around 1.4 million biogas plants are required. Nearly seven million persons would be able to
cook on biogas at a total investment of US$210 million. The total quantity of feedstocks required
will be around one millions tons per year (see Table 4.6.2).
Table 4.6.2:
Investments required for installing Compact Biogas Plants for cooking
persons
No. of
persons
getting
Biogas
@ 20% of
pop.
persons
Population
in 2002
#
1 Antigua & Barbuda
No. of
households Feedstocks
getting Biogas
required
@ 5 persons/HH
Cost of
Biogas
Plants
households
tons/yr
million US$
65,000
13,000
2,600
1,898
0.39
312,000
269,000
62,400
53,800
12,480
10,760
9,110
7,855
1.87
1.61
236,000
11,273,000
47,200
2,254,600
9,440
450,920
6,891
329,172
1.42
67.64
70,000
8,639,000
14,000
1,727,800
2,800
345,560
2,044
252,259
0.42
51.83
8 Grenada
9 Guyana
94,000
765,000
18,800
153,000
3,760
30,600
2,745
22,338
0.56
4.59
10 Haiti
11 Jamaica
8,400,000
2,621,000
1,680,000
524,200
336,000
104,840
245,280
76,533
50.40
15.73
12 Saint Kitts & Nevis
13 Saint Lucia
38000
151000
7,600
30,200
1,520
6,040
1,110
4,409
0.23
0.91
St. Vincent and
14 the Grenadines
115,000
23,000
4,600
3,358
0.69
441,000
1,306,000
34,795,000
88,200
261,200
6,959,000
17,640
12,877
52,240
38,135
1,391,800 1,016,014
2.65
7.84
208.77
2 Bahamas
3 Barbados
4 Belize
5 Cuba
6 Dominica
7 Dominican Republic
15 Suriname
16 Trinidad & Tobago
TOTAL
233
CHAPTER 5
RECOMMENDED AGRO-ENERGY
INDUSTRIES FOR THE CARIBBEAN
234
5.0
RECOMMENDED AGRO-ENERGY INDUSTRIES FOR THE CARIBBEAN
The principal physical determinant of the potential of biofuels in any country is availably of land
resources, labor force, and climatic conditions. The principal economic determinant of feasibility is
the technological package (from production to processing), and the principal determinant of
economic viability is government’s policy. Identifying the potential agro-industry begins with an
assessment of the land resources, as shown in Table 5.0.1.
Table 5.0.1:
Country
Land Resources (000’s hectares) and Agricultural Employment
Total
Landmass
and
population
density
Arable
Land +
Permanent
216
Crops
(2002)
(000’ ha)
Total in Area
in Sugarcane
Antigua and
Barbuda
Barbados
430
17
7
Belize
22,800
102
24
n/a
Dominican
Republic
Dominica
(2002)
Grenada
750
102
0.2
340
12
0.2
Guyana
196,850
510
49
Haiti
Jamaica
10,830
284
18
48
620
18
-
360
8
3.5
0.7
5,130
122
St. Lucia
(2002)
St. Kitts
St. Vincent
and the
Grenadines
Suriname
Trinidad and
Tobago
Total
Agriculture
Labor Force
217
(2003)
(000’) % of
national labor
6
4
27
30
136
3
12
216
Compendium of food and agriculture indicators – 2005
Compendium of food and agriculture indicators – 2005
The World Factbook
219
The World Factbook
220
The World Factbook
217
218
235
218
10
40
219
10
24
55
17
262
20
220
9
21.7
No data
49
8
Employme
nt per
hectare of
Arable
Land and
Permanent
Crops
As can be seen from the tables above and below, there are large differences between and among
countries as to available land and labour force, but when viewed from population density, the
differences are not as great although there is significant difference between Barbados, the most
densely populated, and Guyana and Belize, the least populated. Despite its high population
density and small land area, the Government of Barbados, in 2005, approved the development of
a national biofuels program. This decision was taken after a careful assessment of the country’s
future energy for sustainable development needs, which took into consideration the
environmental challenges, domestic energy resources and energy security, employment, and
land resources endowment. The assessment shows that countries with small land areas and
relatively sound economies can find biofuels production to be a viable national activity. This
action by Barbados shows that biofuels production is not just for countries with relatively large
land areas.
Table 5.0.2:
Country
Antigua and
Barbuda
Barbados
Belize
Cuba
Dominican
Republic
Dominica
Grenada
Guyana
Jamaica
Haiti
St. Lucia
Land Area, Arable Land, GDP, Degree of Openness and Arable Land per
221
Capita (Average 1999/2002)
Land Arable Land GDP per Arable Land as Arable Agri Exports
Area
('000 ha)
Capita US$ % of Total Land Land per as % of GDP
('000
Area
Capita
ha)
43
16
9,769
37.2
0.1
2.6
10,982
3,630
2,863
33.1
0.3
4,838
1,088
2,278
22.5
0.1
2.7
1,083
2,756
174
780
2,961
486
16.1
28.3
0.1
0.1
3.3
0.7
36
7
7,198
19.4
0.2
2.6
513
75
6,115
14.6
0.1
2.7
St. Vincnet
and The
grenadines
Saint
Kitts/Nevis
Suriname
Trinidad &
Tobago
In the late-1980s, Mauritius implemented a biofuels program based on the use of bagasse to
provide base load electricity, which provides some 30 to 40 per cent of the island’s needs, and
plans are ongoing to increase the amount of electricity generated from biofuels to reduce
221
FAO (2004)
236
dependence on imported fuels. Minimum land requirement is determined by a number of factors,
but primarily by the following: lowest level of feasible production throughput – influenced primarily
by processing technology; the production price – very dependent on the price of raw material, the
current and projected price of the products it is to substitute for, and the policies to promote
sustainable development – particularly in the rural areas.
As shown above in Table 4.1.5, there are a number of potential crops that could be used for
biofuels production, depending on which product(s) has the market potential. In the case of
Barbados, the decision was to use sugarcane as the crop based on the existence of more than
9,000 hectares of high sucrose cane. The products for the domestic energy market are ethanol,
to reduce demand for imported gasoline, and power, to reduce the demand of imported diesel.
The raw material for the proposed Barbados Biofuels Industry will be a mix of varieties of high
sucrose and high fibre cane.
5.1
Potential Industries
The potential industries for the Caribbean are in two areas: liquid fuels for transportation and,
solid fuels for electricity generation. The potential industries identified for the Caribbean draws
heavily on the success and lessons from the:
• Brazilian ethanol/sugar program started in the early 1980s, and which is the largest in the
world; however, the US program is increasing rapidly and could equal or surpass Brazil in
the next couple of years.
• Mauritius sugar industry co-production of electricity for export to the national grid.
• Substitution of plant oils in compression ignition vehicles in a number of the Pacific
Islands, including Vanuatu, Somoa, Cook Islands, and the Marshall Islands.
• Production of solid biofuels from fast growing tree plantations in the Philippines and India.
• Swedish experience with public transportation using ethanol in compression ignition
engines.
The identification also includes the assessment of a series of technologies that convert the raw
material into intermediate form or final use form, and how these technologies impact the viability
of biofuels production and use.
Biofuels, as discussed earlier, can be in liquid, solid or gaseous form depending on the raw
material and the conversions technology used. Consequently, biofuels industries can be
classified into two groups – liquid and solid fuels. The technologies used will depend on the raw
material, which depends on the type of crop cultivated, and the energy service required by the
market. Identification of the potential biofuels industries that can be developed within the region
was based on the existing markets for petroleum products, which can be effectively and viably
substituted with biofuels. Based on these criteria and the potential for viable production of the
raw material, and subsequent conversion and efficient distribution, biofuels for use in national
scale transportation and electricity generation represents the best options.
The production of both transportation fuel and electricity will likely be a mixture of large-scale and
small- and medium-scale enterprises. The large-scale biofuels operations will be for the
production of anhydrous ethanol to substitute for gasoline, diesel fuel, and electricity. The raw
material for ethanol will be sugarcane or in combination with energy cane. There is potential to
supplement ethanol production with other crops such as fruits (mangoes, pineapple, oranges)
during periods of over-production The small/medium-scale liquid biofuels industries will likely be
producing biodiesel to substitute for diesel, however, under some circumstances, hydrous ethanol
production may be viable.
The sources of solid biofuels raw material for electricity generation can range from sugarcane
bagasse to wood/wood chips, or briquette waste from crops such as rice and corn. The majority
of the small to medium enterprises that are not producing biodiesel would likely be producing
fuels for institutions and individual business users. As shown in Table 5.1.1 below, the region has
237
the potential to generate electricity from the bagasse available from the regions raw sugar
factories.
Table 5.1.1:
Potential for Electricity Exports From Bagasse Based Cogeneration
Island State
#
Sugarcane
Prod. 2004
Electricity
exports with
CEST
@ 100 kWh/tc
Electricity
exports with
BIG-GTCC
@ 200 kWh/tc
National
Electricity
Demand
Investment
required for
CEST
(100 kWh/tc)
Investment
required for
BIG-GTCC
(200 kWh/tc)
(1000 Mt / yr)
(GWh / yr)
(GWh / yr)
(GWh / yr)
million US$
million US$
25.4
149.2
831
323
15,909
67
13,489
126
52.224
512
2,974
13.8
266
0
0
1
Antigua & Barbuda
-
2
Bahamas
56
6
11
3
Barbados
361
36
72
4
Belize
1,149
115
230
5
Cuba
24,000
2,400
4,800
6
Dominica
4
0
1
7
Dominican Republic
5,547
555
1,109
8
Grenada
7
1
1
9
Guyana
3,000
300
600
10
Haiti
1,080
108
216
11
Jamaica
2,100
210
420
12
Saint Kitts & Nevis
13
Saint Lucia
-
193
-
19
-
St.Vincent and
14 the Grenadines
39
-
-
18
2
4
15
Suriname
120
12
24
16
Trinidad & Tobago
580
58
116
38,216
3,822
7,643
TOTAL
Table 5.1.2:
Year
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
222
107
177.6
6,321
41,343
2
3
12
22
40
69
828
1440
0
0
191
333
0
0
104
180
37
65
72
126
7
12
0
0
1
1
4
7
20
35
1,318
2,293
Annual Average Crude Oil Prices: 1946-2005 – U.S. Average (in $/bbl.)
Ave
Nominal
Price
$1.63
$2.16
$2.77
$2.77
$2.77
$2.77
$2.77
$2.92
$2.99
$2.93
$2.94
Ave
Annual
Inflation
Adj.
Price
$16.18
$19.01
$22.68
$22.90
$22.66
$21.00
$20.53
$21.43
$21.91
$21.50
$21.30
Year
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
Ave
Nominal
Price
$3.10
$3.12
$3.18
$3.32
$3.39
$3.60
$2.85
$4.75
$9.35
$12.21
$13.10
222
Ave
Annual
Inflation
Adj.
Price
$18.80
$18.41
$17.97
$17.82
$17.19
$17.50
$18.76
$20.88
$37.26
$44.63
$45.31
Year
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
Ave
Nominal
Price
$14.44
$17.75
$14.87
$18.33
$23.19
$20.20
$19.25
$16.75
$15.66
$16.75
$20.46
223
Ave
Annual
Inflation
Adj.
Price
$25.92
$30.74
$24.78
$29.09
$34.83
$29.19
$27.00
$22.83
$20.79
$21.64
$25.66
Calculations based on data from FAOSTAT
This table shows the Annual Average Crude Oil Price from 1946 to 2003. Prices are adjusted for Inflation to December
2005 prices using the CPI-U. Note: Since they are ANNUAL Averages they will not show the absolute peak price and will
differ slightly from the Monthly Averages. Data sourced from the US Department of Energy (DOE); Historical Crude Oil
Prices Average Annual Crude Oil Prices 1946-2003
http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp.
223
238
1957
1958
1959
1960
1961
1962
1963
1964
1965
$3.14
$3.00
$3.00
$2.91
$2.85
$2.85
$2.91
$3.00
$3.01
$21.98
$20.46
$20.25
$19.38
$18.76
$18.54
$18.71
$19.04
$18.79
1977
1978
1979
1980
1981
1982
1983
1984
1985
$14.40
$14.95
$25.10
$37.42
$35.75
$31.83
$29.08
$28.75
$26.92
$46.74
$45.13
$67.42
$89.48
$77.49
$64.96
$57.48
$54.48
$49.25
1997
1998
1999
2000
2001
2002
2003
2004
2005
$18.64
$11.91
$16.56
$27.39
$23.00
$22.81
$27.69
$37.66
$50.04
$22.86
$14.38
$19.52
$31.29
$25.57
$24.94
$29.63
$39.21
$50.38
The economic context in which the potential industries were identified is reflected in Table 3.4.4
above, and Table 5.1.3 below, which shows that the increasing cost of petroleum, as well as the
differential cost between the price of crude and that of a barrel of fuel either as gasoline of diesel,
when it comes ashore in the region. While the barrel cost of transportation fuel on average is
higher, the price differential is higher in countries where there is no oil refinery and where the
quantities imported are on the smaller side. In the majority of countries, government generates
significant revenue from taxes collected on petroleum fuels.
Table 5.1.3:
Total Regional Imports (Gasoline, Diesel and Utility Fuels)
224
2000
15.8
2001
15.8
2002
17.5
2003
24.9
2004
26.3
466
420
488
817
1,046
Diesel Million
barrels)
Cost (US$
Millions)
24.9
25.2
28.1
33.8
34.5
735
673
783
1,100
1,374
Total Gasoline
& Diesel (Million
barrels)
Total Cost
Gasoline &
Diesel (US$
Millions)
40.7
41.0
45.6
58.5
60.7
1,201
1,093
1,271
1,922
2,417
Average
Cost/Barrel of
Transport Fuel
(US$/bbl)
29.6
26.7
27.9
32.9
39.8
Total Imports
(US$ Million)
Total Cost of
Imports (US$
Million)
126
122
138
165
163
3,731
3,258
3,852
5,432
6,501
Gasoline
(Million barrels)
Cost (US$
Million)
Of the total petroleum fuel imports, from 2000 to 2004 the share of:
a) Gasoline rises from 12% to 16%
b) Diesel almost constant 20-21%
224
Total Imports includes the Fuel Oil (Industrial, Residual), Aviation gas, Aviation turbine fuel (Jet fuel)and Kerosene. Out
of Total Imports in 2004, of 163,000 bbl, only 62,000 bbls are for gasoline and diesel. Another 29 Mbbl used by Utilities.
239
c) Utilities falls from 29% to 18%.
This means that in examining the proposed industries at the local level, the economic context
needs to consider the cost/benefits of the foreign exchange savings. Thus, when the feasibility of
individual projects is being assessed there is need to do effective shadow pricing to capture real
value of the particular biofuel to the economy, paying particular attention of the global energy
situation characterized by growing consumption, limited supply and increasing price for oil and
gas.
Table 5.1.4:
Regional Fuel Energy Use and Changes
Gasoline
(million
Barrels)
Gasoline
% of Total
Diesel
(million
Barrels)
Diesel
(% of Total)
Gasoline and
Diesel
(million
Barrels)
Gasoline and
Diesel
(% of Total)
Utilities
(million
Barrels)
Utilties
(% of Total)
TOTAL
IMPORTS
(million
Barrels)
Cost of
Imports
(million $)
Average
Price
Calculated
($/bbl)
5.1.2
225
2000
2001
2002
2003
2004
16
16
18
25
26
12%
13%
13%
15%
16%
25
25
28
34
35
20%
41
21%
41
20%
46
20%
59
21%
61
32%
34%
33%
35%
37%
36
34
39
36
29
29%
28%
28%
22%
18%
126
122
3,258
138
3,852
165
5,432
163
6,501
27
28
33
40
3,731
30
Liquid Biofuels Industry
The recommendation for ethanol for use in spark ignition vehicles draws heavily on the
experience of Brazil, where during 2003, half the spark ignition vehicles sold were fuelled by
ethanol only. In the case of fuels for compression combustion engines, the Swedish experience
with the use of ethanol in diesel engines used for public transportation, and discussed earlier in
225
SRC PETSTATS
240
the technical aspects of biofuels is also recommended. Public transportation applications using
ethanol in buses, for over a decade in some locations, have proven the technical viability of this
biofuel as a substitute for diesel. Public transportation policies would have to be implemented to
ensure that in the future all vehicles intended for public transportation are powered by engines
that use ethanol.
5.1.2.1
Ethanol
As pointed out earlier, the economic context in which the potential industries were identified
shows that for a range of reasons, the cost of a barrel of fuel (either as gasoline or diesel), when
it comes ashore in the region, is significantly above the international prices of crude. The reason
for the higher price includes the added cost of transportation, refining, blending and distribution.
The projected demand for transportation fuel in 2010 based on the table above is estimated at
81.3 million barrels at a 5 per cent per annum growth. Production capacity is estimated at some
19.2 million barrels of ethanol, if all the sugarcane grown were used for ethanol, from an
estimated 894,500 hectares of land. If the varieties of sugarcane were changed from high
sucrose to high fiber, high yielding cane then ethanol production potential would be increased to
38.4 million barrels.
Table 5.1.5:
Ethanol production potential from sugarcane for gasoline substitution
226
50% sugars converted 100% sugars converted
to ethanol
to ethanol
Island State
Sugarcane
Area Ethanol
Gasoline Ethanol
Prod. 2004 cultivated produced substituted produced
Gasoline
substituted
(1000 t / yr) (hectares)M liters /yr M liters /yrM liters /yr
0
-
M liters /yr
-
#
1
Antigua & Barbuda
2
Bahamas
55.5
2,250
2
2
4
3
3
Barbados
361.237
6,993
14
11
29
22
4
Belize
1149.475
23,887
46
34
92
69
5
Cuba
24000
700,000
960
720
1,920
1,440
6
Dominica
4.4
220
0
0
0
0
7
Dominican Republic
5547.15
136,000
222
166
444
333
8
Grenada
7.2
160
0
0
1
0
9
Guyana
3000
49,000
120
90
240
180
10 Haiti
1080
18,000
43
32
86
65
11 Jamaica
2100
48,000
84
63
168
126
193
0
3,500
12 Saint Kitts & Nevis
13 Saint Lucia
8
-
6
-
15
-
12
-
226
Calculations based on data from FAOSTAT. Note: (a) Ethanol production @ 80 liters per ton cane (b) Substitution @
0.75 liters gasoline / litre ethanol
241
St. Vincent and
14 the Grenadines
18
715
1
1
1
1
15 Suriname
120
3,000
5
4
10
7
16 Trinidad & Tobago
580
12,000
23
17
46
35
38,216
894,473
1,529
1,146
3,057
2,293
TOTAL
If the variety of sugarcane was changed from high sucrose, low fiber varieties to high fiber, high
fermentable “energy cane” varieties then the ethanol production based on the results of the
Cuban agronomic trials, where the yields are in the region of 200 tons per hectare, ethanol
production would be expected to doubled. If all the juice were converted to ethanol using the
higher yielding energy cane varieties, the ethanol produced substitute less than half of the
transportation fuel demand (Table 5.1.5).
5.1.2.2
Biodiesel/Plant Oils
Despite the proven ability of ethanol to substitute for diesel oil in compression ignition engines,
some countries’ land resources may not allow for viable production of ethanol from either
sugarcane or energy cane as raw material. The growing use of plants oil in diesel engines in the
small islands of the Pacific provides options for these countries to develop liquid biofuels
industries. The crops most used in the Pacific for plant oil is coconut, and much in the same way
as the sugar industry gave birth to Brazil’s ethanol industry, the copra industry in the Pacific is
responsible for the biodiesel fuel industry in that region.
Coconut is, however, one of a number of crops that could be grown for the production of
biodiesel. Unlike sugarcane that has very specific land characteristics for growth, crops that
produce seeds grow under a wide range of soil conditions and climate. In countries where hilly
and steep slopes dominate the landscape, and where there is ongoing environmental degradation
due to soil erosion, the production of oil seeds using hardy crops such as Jatropha and Castor
would make significant contribution to sustainable development in a number of ways. The
development of biodiesel production would be best in countries like Haiti, Jamaica, Dominica, St.
Lucia, and Grenada, where protection of upland watershed is critical to long-term water
resources, quality of the coastal environment, and adaptation to climate change.
Unlike ethanol, where economy of scale is very critical, the technology for the production of plant
oil or biodiesel is relatively simple as it can be done viably at a small scale. Gasifiers for
converting coconut residues (shells and husk) to producer gas that can substitute diesel used for
electricity generation are also viable on a small scale. This provides opportunities, especially for
companies/individuals who operate fleet vehicles and diesel generating sets using diesel oil. The
value of the coconut oil and residues as a diesel substitute, from current coconut production, at
crude oil prices of US$70 and $100 per barrel, are given in Table 5.1.6. The average production
during 2003-05 from 14 Caribbean states of 600,000 tons per annum can produce enough
coconut oil to substitute 109 million liters of diesel, and enough residues (shells & husk) to
substitute 132 million liters of diesel. The foreign exchange savings from the diesel substituted by
the coconut oil and residues is US$160 million at a crude oil price of US$70 per barrel and
US$229 million at US$100 per barrel.
242
227
Table 5.1.6:
Value of Coconut Oil and Residues (shells & husk) as diesel substitute
Coconuts
productio
n
2003-05
Antigua &
Barbuda
Diesel
Total Energy
Diesel
Coconut
Diesel substituted
Value as
Value as
of Residues substituted
Oil substituted
by both
Diesel
Diesel
(Shells &
by
Copra
by Coconut Coconut Oil &
substitute substitute
Husk) Residues produced produced
Oil
Residues @ 70 US$/bbl @ 100 $/bbl
(tons/ yr)
(TJ / yr) (M liters/yr) (tons/ yr) (tons/ yr) (M liters/yr)
(M liters/yr)
(M US$ /yr) (M US$ /yr)
-
-
0.0
-
-
-
-
-
Bahamas
-
-
0.0
-
-
-
-
-
Barbados
1,800
Belize
Cuba
Dominica
Dominican
Republic
24
0.4
594
356
0.3
0.7
0.5
0.7
989
13
0.2
326
196
0.2
0.4
0.3
0.4
115,955
1,529
25.5
38,265
22,959
21.1
46.6
31.0
44.3
11,500
152
2.5
3,795
2,277
2.1
4.6
3.1
4.4
179,729
2,370
39.5
59,311
35,586
32.7
72.2
48.1
68.7
Grenada
6,500
86
1.4
2,145
1,287
1.2
2.6
1.7
2.5
Guyana
45,000
593
9.9
14,850
8,910
8.2
18.1
12.0
17.2
Haiti
24,500
323
5.4
8,085
4,851
4.5
9.8
6.6
9.4
170,000
2,242
37.4
56,100
33,660
30.9
68.3
45.5
64.9
1,000
13
0.2
330
198
0.2
0.4
0.3
0.4
14,000
185
3.1
4,620
2,772
2.5
5.6
3.7
5.3
2,556
34
0.6
843
506
0.5
1.0
0.7
1.0
9,000
119
2.0
2,970
1,782
1.6
3.6
2.4
3.4
5,775
3,465
3.2
7.0
4.7
6.7
198,009 118,806
109
241
160
229
Jamaica
St. Kitts & Nevis
St. Lucia
St. Vincent and
the Grenadines
Suriname
Trinidad &
Tobago
TOTAL
17,500
231
600,028
7,912
3.8
132
The potential for diesel substitution from coconuts, if the present area under coconuts is
increased two-fold and four-fold, is given in Table 5.1.7. A four-fold increase in coconut
production could produce enough coconut oil and residues to substitute close to one billion liters
of diesel.
Table 5.1.7:
Diesel substitution potential of coconuts from a two-fold and four-fold
increase in area
Country
Antigua and Barbuda
Barbados
Belize
Diesel
Diesel substitution
Coconuts
substituted
potential
Area under Production by Coconut Oil
from twice
Coconuts (2003-05) and Residues
the area
(Hectares) (Tons / yr)
M liters /yr
M liters /yr
600
383
Diesel
substitution
potential from
four-fold
increase
M liters /yr
0
0
0
0
200
128
0.7
0.4
1.4
0.8
2.9
1.6
227
Assumptions:
a) Proportion: kernel 33%, shell 23%, husk 44% (by dry weight).
b) Residue Energy of shell = 20.6 MJ/dry kg, of husk = 19.2 MJ/dry kg
c) Shells and Husk gasified to produce electricity at overall efficiency of 20%
d) Coconut oil produced = 60% of copra by weight
e) 1 liter coconut oil equivalent to 0.83 liters diesel
f) Density of coconut oil = 1100 liters/ton
243
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts and Nevis
Saint Lucia
Saint Vincent/Grenadines
Suriname
Trinidad and Tobago
TOTAL
25,095
3,450
37,667
2,300
14,333
9,633
51,000
200
3,500
688
1,054
3,200
153,104
8,366
46.6
93.2
186.3
1,151
12,557
4.6
72.2
9.2
144.4
18.5
288.8
769
4,780
2.6
18.1
5.2
36.2
10.4
72.3
3,214
17,003
9.8
68.3
19.7
136.6
39.4
273.2
70
1,170
0.4
5.6
0.8
11.2
1.6
22.5
233
356
1.0
3.6
2.1
7.2
4.1
14.5
7.0
14.1
482.1
28.1
964.3
1,071
51,070
241.1
In addition to coconut, two other crops that have been used for biodiesel are Jatropha Curcas and
Castor, as shown in the Table below, the estimated areas of Jatropha that would have to be
planted to achieve a 10, 20 and 50 per cent production of diesel fuel and the percentage of land
resources required.
Table 5.1.8:
Biodiesel Production from Jatropha
Island State
Diesel
consumption
2004
M liters /yr
Antigua & Barbuda
61
Bahamas
472
Barbados
107
Belize
104
Cuba
Dominica
Dominican Republic
1,836
23
1,199
Grenada
45
Guyana
304
Haiti
Jamaica
Land
Area
000'ha
44
1,387
43
2,269
10,982
75
4,838
34
21,497
2,756
633
1,083
Saint Kitts & Nevis
36
36
Saint Lucia
93
62
St.Vincent and
the Grenadines
55
39
Suriname
150
16,382
Trinidad & Tobago
308
513
TOTAL
5,426
62,041
228
for 10% diesel
substitution
for 20% diesel
substitution
Jatropha Jatropha
Area Area / Total
required Land Area
Jatropha Jatropha
Area Area / Total
required Land Area
000'ha
3.3
%
7.5%
000'ha
6.7
for 50% diesel
substitution
%
15.1%
Jatropha Jatropha
Area Area / Total
required Land Area
%
000'ha
16.7
37.7%
25.6
1.8%
51.2
3.7%
127.9
9.2%
5.8
13.5%
11.6
27.0%
29.0
67.5%
5.6
0.2%
11.2
0.5%
28.1
1.2%
99.6
0.9%
199.2
1.8%
497.9
4.5%
1.3
1.7%
2.5
3.4%
6.4
8.5%
65.0
1.3%
130.1
2.7%
325.2
6.7%
2.4
7.1%
4.9
14.1%
12.2
35.3%
16.5
0.1%
33.0
0.2%
82.4
0.4%
-
0.0%
-
0.0%
-
0.0%
34.3
3.2%
68.6
6.3%
171.6
15.8%
2.0
5.5%
4.0
11.0%
9.9
27.5%
5.0
8.1%
10.0
16.1%
25.1
40.4%
3.0
7.6%
5.9
15.3%
14.8
38.2%
8.2
0.0%
16.3
0.1%
40.8
0.2%
3.3%
33.4
6.5%
83.5
16.3%
16.7
0.5%
294
589
0.9%
1,471
228
Based on yield assumptions from Nicaragua of 33.3 tons/ha of dry fruit and 5.0 tons of dry seeds per hectare giving
1,868 liters of oil per hectares) 1.7 tons per hectare
244
2.4%
Table 5.1.9:
Employment generated, Economic Value and Greenhouse gases mitigated
by Jatropha cultivation to substitute 50 per cent of diesel consumption
Island State
Antigua & Barbuda
Employment generated
Economic Value
Diesel
Area under
During first
After
CO2
substituted
Jatropha
3 years
3 years @ 70 US$/bbl @ 100 US$/bbl equivalent
M liters /yr
Million
Million
man days man days
Million
Million
Million
000'ha
/yr
/yr
US$ /yr
US$ /yr
tons /yr
31
1.7
0.7
21
29
0.08
Bahamas
128
17
236
13.3
5.1
158
226
0.64
Barbados
29
54
3.0
1.2
36
51
0.14
Belize
28
52
2.9
1.1
35
50
0.14
Cuba
498
918
51.6
19.9
615
879
2.48
6
12
0.7
0.3
8
11
0.03
325
600
33.7
13.0
402
574
1.62
0.06
Dominica
Dominican Republic
Grenada
12
22
1.3
0.5
15
21
Guyana
82
152
8.5
3.3
102
145
Haiti
-
Jamaica
-
-
-
-
-
0.41
-
172
316
17.8
6.9
212
303
0.85
Saint Kitts & Nevis
10
18
1.0
0.4
12
17
0.05
Saint Lucia
25
46
2.6
1.0
31
44
0.13
St. Vincent and
the Grenadines
15
27
1.5
0.6
18
26
0.07
Suriname
41
75
4.2
1.6
50
72
0.20
Trinidad & Tobago
84
154
8.7
3.3
103
147
0.42
1,471
2,713
153
59
1,818
2,597
7.33
TOTAL
5.1.2.3
Issues in the Usage of Liquid Biofuels to Substitute Gasoline and Diesel
There are a number of technical, economic and environmental issues related to the production of
biofuels in engines. Liquid biofuels are used mainly in two types of engines:
• Spark ignition (SI) engines that generally use gasoline/petrol as fuel; these engines are used
in automobiles, small boats, aircraft and small electricity generating sets;
• Compression ignition (CI) engines that generally use diesel as fuel; these engines are used in
medium- and heavy-duty trucks and buses, boats and ships, and diesel power plants.
Brief technical details of the four main uses of liquid biofuels are given below. For in depth
discussions please see Appendix 1.
a)
Ethanol in SI engines
Ethanol makes an excellent motor fuel for the following reasons:
• Ethanol is an excellent octane enhancer in gasoline.
• Ethanol also has a lower vapour pressure than gasoline that results in lower evaporative
emission.
• Ethanol’s flammability in air is much lower than that of gasoline reducing the number and
severity of vehicle fires.
• Ethanol can be blended directly in gasoline, up to a mix of 10 per cent (anhydrous),
without engine modifications. Higher blends up to 100 per cent ethanol (hydrated) are
possible with engine modifications.
Modifications necessary to run SI engines on ethanol are based on two factors:
245
• Differences in combustion process parameters and fuel properties;
• Corrosive behavior of ethanol.
Details of the modifications required are given in Annex 1.
Ethanol’s excellent chemical and physical properties as a motor fuel has led to the development
of three types of engines by major automobile manufacturers in Brazil:
• Dedicated (E-100) engines that can run on 100 per cent hydrated ethanol (containing 5
per cent moisture);
• Modified (E-22) engines that can run on an ethanol-gasoline mixture containing 22 per
cent anhydrous ethanol (zero % moisture);
• “Flex-fuel” cars that can run on gasoline or ethanol or any blend of the two fuels.
b)
Ethanol in CI engines
Ethanol can be used in CI engines either as low-level blends (10 to 15 per cent) or as neat
ethanol fuel (E-95) – in both cases hydrous ethanol containing approximately 95 per cent ethanol
and 5 per cent water (E-95) is used. Since ethanol is not miscible in diesel, some emulsifiers and
solubilisers have to be added in the low-level blends to prevent separation of the phases. Ten
per cent to 15 per cent blends of ethanol with diesel do not require any modifications in the diesel
engine. E-95 has a low cetane number, so an additive to improve ignition has to be added.
Composition of neat ethanol used in CI bus engines and other technical details are given in
Appendix 1. Since 1990, the Swedish heavy vehicles manufacturer Scania, has supplied around
450 ethanol buses to 15 Swedish cities; one of the main reasons for its popularity is that ethanol
causes far less air pollution than diesel buses.
c)
Coconut Oil in CI Engines
Almost any vegetable oil can be burned in a CI engine, though some modifications may be
necessary on an engine that has been optimized to run on petroleum diesel. These fuels are
called “pure plant oil” (PPO) or “straight vegetable oil” (SVO). The main advantage of using
coconut oil instead of biodiesel is that the cost of esterifying the coconut oil to biodiesel is
avoided.
Properties of vegetable oils including coconut oil are given in Annex 1. The most important fuelrelated properties of plant oils are:
• Specific Energy – indication of the fuel’s energy released when it is burned.
• Cetane Number – indication of the fuel’s willingness to ignite when it is compressed.
• Viscosity – indication of the fuel’s ability to atomize in the injector system.
• Solidification Point – indication of the temperature at which the fuel will turn solid.
• Iodine Value – indication of the ability of the fuel to polymerise.
• Saponification Value – indication of the fuel’s ability to vaporize and atomize.
One of the most widely used plant oils in Germany, Denmark, and other European countries is
rapeseed oil, so its properties and effects on the diesel engine have been studied in detail. Kits
are now available for modifying car engines to run on 100 per cent rapeseed oil or diesel or any
mixture of the two, even during the north European winters without any problems. It is only
recently that the use of palm oil and coconut oil in diesel engines has been studied and used in
South-east Asian countries (Thailand, Philippines, Indonesia, India, etc.), and at several places in
the south Pacific, notably Vanuatu. Coconut oil blends with diesel and kerosene have been used
quite successfully in automobiles in Vanuatu and the Philippines, but its use in large diesel power
plants is still experimental as discussed in an earlier section of the paper, which provided details
of using coconut oil in diesel vehicles, irrigation pump sets, etc. One of the key issues is the
validity of manufacturer’s warranties, so utilities on some SIDS are trying to test coconut oil
blends in their diesel gensets, in collaboration with manufacturers such as Caterpillar, etc.
246
d)
Biodiesel in CI Engines
A high cetane number and a low iodine number makes coconut oil well suited for CI engines, but
it has two main drawbacks: a high melting point and high viscosity, both of which can be
corrected by esterifying the oil into biodiesel.
Biodiesel made from coconut oil by
transesterification has a melting point that is below zero degree C, and its cetane and iodine
numbers are nearly the same as coconut oil. Biodiesel has other advantages over coconut oil: its
viscosity and other physical properties are similar to petroleum diesel so it can be easily mixed,
transported and distributed with diesel, and most diesel engines do not need any modification for
using blends of biodiesel. This makes biodiesel ideal for blending with petro-diesel in the existing
supply and distribution infrastructure.
Most European diesel engines manufactured for the European market now come with biodieselwarranted engines. In Europe, Volkswagen, Mercedes, Volvo and others are all warranted to run
at 100% biodiesel. However, diesel engines made for the US market, have differing warranty
coverage. For further details on warranties, properties of biodiesel and biodiesel standards in the
leading European countries and the USA please refer Appendix 1.
5.1.3
Solid Biofuels Industries
The use of solid biomass fuels is well developed in a number of Organization of Eastern
Caribbean States (OECD) countries, in particular the European countries. The feasible use of
solid biomass fuels dictates that the fuel not be transported over long distances. Consequently,
the major opportunity that currently exists for economically competitive use of solid fuel is in
combined heat and power generation. The economical viability of CHP systems using solid
biomass fuels is very sensitive to economies of scale, consequently, countries with relatively
small electric energy markets would not be likely candidates. Additionally, the cost of small- to
medium-scale units such as those that could provide reliable electricity would require additional
investment vis a vis the investment needed to use petroleum fuel.
5.1.3.1
Electricity Generation
The projected demand for electricity in the region is expected to grow more than 38 per cent by
2010. This will require the addition of significant new generating capacity. In addition, many
countries will have to replace old generating capacity which are much too costly to operate at
high oil prices and not very reliable. The significant investment in new generating capacity that
has to be made could be a unique opportunity for the development of national industries in a
number of countries.
Most sugar mills world-wide have been using the very inefficient back-pressure steam turbine
operating at a pressure of 22 bar, which provides enough electricity for in-plant requirements and
uses up all the bagasse produced. To be able to export significant quantities of electricity, sugar
and sugar-ethanol plants have to implement efficiency improvements in steam usage together
with a more advanced cogeneration technology like the Condensing Extraction Steam Turbine
(CEST) or the Biomass Integrated Gasifier-Gas Turbine Combined Cycle (BIG-GTCC). Table
5.1.10 summarizes the amount of electricity that can be exported by these technologies at steam
pressures up to 82 bar. CEST can export at least 100 kWh per ton cane, while BIG-GTCC can
export at least 200 kWh/tc.
247
Table 5.1.10:
Exportable electricity from different cogeneration technologies in sugar
and sugar-ethanol plants
Steam
Conditions
Fuel
22 bar / 300 °C
Bagasse
82 bar / 480 °C
Bagasse
22 bar / 300 °C
82 bar / 480 °C
82 bar / 480 °C
Turbine-Generator Type
Bagasse +
trash
Bagasse +
trash
Bagasse +
trash
Surplus power
potential
(kWh/tc)
Operation
Back-pressure steam
Crushing Season
turbine
Back-pressure steam
Crushing Season
turbine
Condensing Extraction
Year round
Steam Turbine (CEST)
Condensing Extraction
Year round
Steam Turbine (CEST)
Gasification, Gas turbine,
combined cycle (BIGYear round
GTCC)
0 – 10
40 – 60
40 – 60
100 – 150
200 – 300
The potential for electricity exports from sugar mills in the 16 countries, if CEST or BIG-GTCC are
implemented, is shown in Table 5.1.11. Based on 2004 sugarcane production, over 3,800
gigawatt-hours of electricity can be exported by implementing CEST at all the sugar mills, and
over 7,600 GWh can be exported with BIG-GTCC. Both technologies will operate throughout the
year, and require sugarcane trash in addition to bagasse for the boilers. The total investment
required to implement CEST is US$1.3 billion, and to implement BIG-GTCC is US$2.3 billion.
Sugar mills can choose to implement BIG-GTCC in the first instance without having to do CEST
first.
Table 5.1.11:
Potential for Electricity Exports From Bagasse Based Cogeneration
Island State
Antigua & Barbuda
SugarCane
Prod. 2004
Electricity
exports with
CEST
@ 100 kWh/tc
Electricity
exports with
BIG-GTCC
@ 200 kWh/tc
National
Electricity
Demand
Investment
required for
CEST
(100 kWh/tc)
Investment
required for
BIG-GTCC
(200 kWh/tc)
(1000 Mt / yr)
(GWh / yr)
(GWh / yr)
(GWh / yr)
million US$
million US$
25.4
149.2
831
323
15,909
67
13,489
126
52.224
512
2,974
13.8
266
0
0
-
-
-
Bahamas
56
6
11
Barbados
361
36
72
Belize
1,149
115
230
Cuba
24,000
2,400
4,800
4
0
1
5,547
555
1,109
Dominica
Dominican Republic
Grenada
7
1
1
Guyana
3,000
300
600
Haiti
1,080
108
216
Jamaica
2,100
210
420
193
19
39
-
-
-
Saint Kitts & Nevis
Saint Lucia
St. Vincent and
the Grenadines
Suriname
229
229
18
2
4
120
12
24
Author’s own calculations based on data from FAOSTAT
248
107
177.6
2
3
12
22
40
69
828
1440
0
0
191
333
0
0
104
180
37
65
72
126
7
12
0
0
1
1
4
7
Trinidad & Tobago
TOTAL
580
58
116
38,216
3,822
7,643
6,321
41,343
20
1,318
The generation of electricity, which in 2004 represented approximately 29 million barrels of
petroleum fuels (primarily diesel and heavy fuels) on varying grades, cost the region to spend
some US$1.2 billion of hard earned foreign exchange. With few exceptions, all countries in the
region that have an existing agricultural sector will have potential for producing biofuels for use in
generating electricity; of course, the scale as a percentage of demand will vary significantly based
on land area available and level of consumption. This situation is different from the production of
ethanol where a number of countries would have, based on the current technology package, no
viable potential. The principal raw materials for the generation of electricity are bagasse, forestry
and agricultural residue, and other woody biomass available within the distances that are feasible
to transport.
5.1.3.2 Issues for Consideration in Biofuels for Electricity Generation
A mix of biofuels is potentially available for use as fuel in generating electricity; these fuels can
either be in a solid, liquid or gaseous form. This is a result of available commercial technologies
for converting biofuels into power. These technologies described in Appendix 1, range from
conventional but highly efficient boiler and steam turbines, to combined cycle turbines. Added
packages such as briquetting or pelletizing and gasification further extend the range of fuel
sources.
The ownership of the companies supplying electricity varies in the region, between public owned
company, private owed, and a mix of public and private. These companies, regardless of their
ownership, are solely responsible for the transmission and distribution of electricity. In some
cases, they also have monopolies on generation and therefore projects would have to be
developed in close cooperation starting with the formalization of power purchase agreements.
There are three kinds of electricity produced in the region, base-load power, peak power, and
power as available. The value for base-load and peak is significantly greater than power as
available. The kind of energy to be produced can therefore significantly impact on project viability.
Significant quantities of solid biomass are required for generation of electricity. If an advanced
technology such as the Biomass Integrated Gasifier / Gas Turbine Combined Cycle, having an
electrical efficiency of 33 per cent is used, then a 30 MW plant, operating at a capacity factor of
80 per cent, will require nearly 127,000 tons of wood to generate 210 gigawatt-hours per year. At
a woody biomass yield of 30 tons/ha/yr, this will require energy plantations on 4,250 hectares of
land. The cost of this plant in Brazil is estimated to be US$2,450/ kW, but this is likely to come
down to US$1,780/kW after the cost reductions due to technological improvements and reducing
230
contingency costs ; therefore a 30 MW plant estimated to cost US$74 million is likely to come
down to US$54 million. This power plant will substitute 63 million liters of diesel per year, having
an economic value of US$42 million, at a crude oil price of US$70/barrel. These requirements
would limit countries that would be able to pursue development of solid biomass fuel production
systems.
Countries that do not have existing sugar or forest industries, where there would be significant
raw material generated, should not consider going for 100 per cent solid biofuels electricity
generating facilities. Countries with potential for 100 per cent would include Barbados, Cuba,
Guyana, Belize, Jamaica, Trinidad and Tobago, Dominican Republic, St. Kitts and Nevis, and
Suriname.
230
Larson, ED. William, RH and. Leal MRLV, (2001), A review of biomass integrated-gasifier/gas turbine combined cycle
technology and its application in sugarcane industries, with an analysis for Cuba, Energy for Sustainable Development,
Volume V No. 1, March 2001
249
35
2,293
While the cost of generating electricity from biomass has traditionally been more costly than from
oil the increased prices and projected significantly higher future prices will positively impact on the
relative cost of electricity cost vis a vis the cost of expensive diesel and/or fuel oil. The cost of
generating electricity as shown in Table 5.1.12 is highest in the Small island developing countries.
Table 5.1.12:
Electricity Generation (2004) for Selected Countries
Rate of Demand
Growth
Island State
Installed
Capacity Fuel Type
MW
Antigua & Barbuda
84.5
Bahamas
325.0
Barbados
209.5
Belize
75.1
Cuba
3,957.2
Dominica
22.0
Dominican Republic 3,290.3
Grenada
39.0
Guyana
129.1
Haiti
dna
Jamaica
767.5
Saint Kitts & Nevis
34.5
Saint Lucia
56.8
St.Vincent and
39.9
14 the Grenadines
15 Suriname
444.0
16 Trinidad & Tobago
1,416.7
TOTAL
10,891.1
1
2
3
4
5
6
7
8
9
10
11
12
13
5.1.3.3
19851995
% per
year
8.5%
1.3%
6.2%
dna
dna
12.4%
dna
16.9%
2.6%
dna
7.6%
12.5%
15.9%
19952004
% per
year
8.2%
6.3%
4.1%
10.6%
dna
4.1%
dna
8.7%
4.3%
dna
4.7%
7.0%
5.1%
9.3%
dna
4.1%
7.2%
1.8%
6.2%
Quantity of
Cost of
Fuel Used Fuel Used
M liters /yr
89
755
197
23
2,177
12
990
30
73
M US$
22
189
49
6
545
3
8
30
248
7
18
25
78
3
4,603
6
20
1
1,152
32
118
Small and Medium Scale Solid Biofuels Enterprises
These enterprises will focus on the production of fuel for domestic and institutional and services
such as water supplies.
a)
Domestic Fuel
Current sources of domestic fuel are primarily in the form of LPG and kerosene for cooking and
electricity for lighting. Biofuels substitute will primarily be in the form of biogas. Biogas is very
sensitive to scale, both for cost as well as viability. Biofuel for cooking is generated much easier
on rural and agro-industrial environment than in urban environments. Advancements such as the
development of small-scale plastic “compact” anaerobic digesters for households that use starch
and fruit and vegetable wastes as feedstock may help biogas appropriate to urban households
and institutions.
b)
Water Pumping
Producer gas from gasifiers can also be used for meeting the power requirements of water
pumping systems. It is estimated that as much as 25 per cent of electricity use in the SIDS is for
water pumping. An initial goal of five per cent of pumping to be done by biofuels operated
facilities would mean supplying some 500 gigawatt-hours of electricity. This would require some
550,000 tons of wood or equivalent biomass material (shells, husks, stalks). In terms of land area
250
for production, this would require 28,000 hectares of land in fast growing trees (such as
Leucaena, Acacia, Eucalyptus), and as shown in Table 5.0.2 there is adequate land and forest
resources available in many countries to provide the feedstock on a sustainable basis. Details
are given in Table 5.1.14.
Table 5.1.14:
Biomass Feedstock production for Water Pumping
Island State
Electricity
needed
for
Total Pumping
Electricity @ 25% of
Consumption
Total
(GWh)
(GWh)
5% of
Pumping
Electricity
from
Gasifiers
(GWh)
231
Quantity Employme
Quantity
of
nt
of
Land provided
Biomass required by energy
required (Hectare plantation
(Tons)
s) (Persons)
Antigua &
Barbuda
25
6
0
318 16
13
Bahamas
149
37
2
1,865 93
75
Barbados
831
208
10
10,388 519
416
Belize
323
81
4
4,038 202
162
Cuba
Dominica
Dominican
Republic
15,909
67
13,489
3,977
199
17
1
3,372
169
198,863 9,943
838 42
168,613 8,431
7,955
34
6,745
Grenada
126
32
2
1,575 79
63
Guyana
52
13
1
653 33
26
512
128
6
6,400 320
256
2,974
744
37
37,175 1,859
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
St. Vincent and
the Grenadines
Suriname
14
3
0
173 9
266
67
3
3,325 166
133
107
27
1
1,338 67
54
178
44
2
2,220 111
89
231
Assumptions:
Average Demand
Pumping electricity
Biomass used for
Efficiency of gasifier pump
Energy content of wood
Biomass yield
50 hectares of energy
plantation employs231
1,487
40%
25%
5%
20%
18
20
of Installed Capacity for countries with data not available
of Total electricity
of Pumping electricity
GJ /ton
tons /ha
40
Persons
251
7
Trinidad & Tobago
TOTAL
5.2
6,321
1,580
41,343
10,336
79
517
79,013 3,951
3,161
516,790 25,840
20,672
Rationale for Selecting Applications for Biofuels
Analysis of the imports of gasoline and diesel shows that in 2004, the region spent more than
US$6.5 billion dollars for the importation of some 163 million barrels of petroleum fuels. Based
on a projected average consumption and prices for these products increasing at the 2000 to 2004
rate, the region in 2010 is projected to spend in excess of US$14.9 billion. By 2015, the cost
would have increased to US$29.9 billion. It should be pointed out that the assumed cost of crude
is significantly below what is being forecasted by the International Energy Agency (IEA). As
shown below in Tables 5.2.1, the substitution of ethanol for gasoline at various levels of blends
would create a significant demand across the region; this would in turn make a major contribution
to the prospects for a viable agricultural sector which is critical to the region’s future development
and in particular to the sugar industry.
As shown, an equivalent amount of energy substituted by biofuels has a national economic value
that is greater than the avoided cost of the imported fuel. Further, the transfer of the payment to
the rural community instead of foreign suppliers support to socio-economic development, and
additionally the payment in local currency rather than hard currency reduces the economic
vulnerability of the country, and helps promote sustainable development which is supposed to be
the guiding development paradigm of these countries, based on the Barbados Program of Action
and the Mauritius Implementation Strategy for Development of SIDS.
Table 5.2.1:
Projected Ethanol Demand (2010 – 2015)
Countries
1
2
3
4
5
6
7
8
9
10
11
12
13
Ethanol
Ethanol
Ethanol
Ethanol
Ethanol
Ethanol
Demand @ Demand @ Demand @ Demand @ Demand @ Demand @
10% blend 25% blend 25% blend 50% blend 25% blend 50% blend
2010
2010
2012
2012
2015
2015
Antigua & Barbuda
Bahamas
Barbados
Belize
Cuba
Dominica
Dominican Republic
Grenada
Guyana
Haiti
Jamaica
Saint Kitts & Nevis
Saint Lucia
St. Vincent and
14 the Grenadines
15 Suriname
16 Trinidad & Tobago
TOTAL DEMAND
M liters /yr
6
36
17
8
95
2
180
3
16
M liters /yr
16
90
43
19
237
6
450
9
40
94
3
7
234
7
19
M liters /yr
18
99
48
21
261
6
496
10
44
258
8
21
4
14
66
551
9
34
165
1,377
10
37
182
1,519
M liters /yr M liters /yr
36
21
199
115
95
55
42
24
522
302
12
7
992
574
19
11
88
51
517
299
16
9
41
24
20
75
364
3,037
TOTAL ETHANOL PRODUCTION POTENTIAL 2004 *with SUGARCANE
252
M liters /yr
41
230
110
48
605
14
1,148
22
102
598
18
48
11
43
211
1,758
23
86
422
3,516
3900
7800
TOTAL ETHANOL PRODUCTION POTENTIAL 2004 area *with ENERGYCANE
* Based on the use of the total sugarcane crop – i.e., both sucrose and bagasse for ethanol production
Table 5.2.2:
Country
Barbados
Relative Importance of Agriculture and Sugar in Caribbean Economies
Trade in
GDP Value Added as % of GDP
Goods Sugar
(Billion
as % of Export
Year US$) Agriculture Industry Services GDP
US$ mil
1999
2002
2003
2.50
2.50
2.60
Mean
Cuba
1999
2002
2003
Mean
Dominican
Republic
1999
2002
2003
17.40
21.60
16.50
Mean
Haiti
1999
2002
2003
4.20
3.50
2.90
Mean
Jamaica
1999
2002
2003
7.70
8.40
8.10
Mean
Saint Kitts
& Nevis
1999
2002
2003
0.30
0.36
0.35
Mean
Trinidad &
Tobago
Mean
232
1999
2002
2003
6.80
8.90
10.50
Agric.
Export
US$ mil
232
Sugar (as
% of Agric
Export)
6.20
5.80
21.60
20.80
72.20
73.40
55.60
49.10
51.10
27.72
18.84
20.50
75.92
73.37
66.00
37
26
31
6
21
73
52
23
75
31
6.40
47.50
46.10
6.40
47.50
46.10
458.21
510.0
510.0
458.21
785.49
724.08
746.97
785.49
58
70
68
66
11.40
11.50
11.20
34.10
32.10
30.60
54.90
56.30
58.10
75.80
64.80
80.50
66.28
74.06
75.32
535.29
592.26
603.88
12
13
12
11
32
56
74
72
577
12
29.70
27.90
16.20
16.80
54.10
55.30
32.60
40.70
52.50
0.00
0.00
0.00
30.99
17.94
20.74
29
17
55
37
0
24
6.80
5.50
5.20
29.20
29.10
29.80
63.90
65.30
65.10
53.50
55.00
59.20
101.62
75.00
66.84
302.54
281.82
292.21
34
27
23
6
29
65
56
81
292
28
3.30
3.30
3.00
26.20
29.70
28.30
70.50
67.10
68.20
59.40
64.60
79.00
10.00
10.00
10.27
11.37
10.79
12.18
88
93
84
3
28
69
68
10
11
88
1.50
1.30
1.20
40.00
43.70
48.80
58.40
55.00
50.00
81.40
84.90
78.20
33.28
24.61
12.73
219.59
239.52
222.42
15
10
6
1
44
54
82
24
227
10
Compiled from World Bank World Development Indicators 2004
253
CHAPTER 6
DEVELOPMENT OF THE CARIBBEAN
BIOFUELS INDUSTRY
254
6.0
DEVELOPMENT OF THE CARIBBEAN BIOFUELS INDUSTRY
The consumption of fuels to meet the region’s energy needs in 2004 cost in excess of US$6.5
billion. This represents the single largest expenditure on import by the region and a major new
market for the region’s agricultural sector, as petroleum prices reach unseen new highs, in
response to strong demand and limited supply. Biofuels, in addition to being a potential
replacement for petroleum fuels and a major product of the region’s agriculture, will also help
address a number of prevailing environmental challenges. The analysis of fuel imports and use
in the various countries show that all countries with an active agricultural sector have potentially
viable biofuels industries, although with a different mix of products based on land resource
endowment and national policy.
Biofuels industries can be classified as Liquid and Solid Biofuels Industry; the classification is
based on the form that the biomass is converted into for final use:
a) Liquid Biofuels Industries - produce liquids fuels from varying forms of raw material using
a range of technologies from fermentation to distillation, and;
b) Solid Biofuels Industries - where the biomass is converted to heat and/or power through
different forms of combustion.
The conversion of the biomass raw material is necessary to overcome the major disadvantages
of biofuels, which is that the raw material contains inherent high quantities of water, and therefore
low energy density compared to crude oil. This means that there is relatively high transportation
cost in moving the raw material over distances. This is addressed by locating processing and/or
conversion facilities within determined distances of raw material production.
As explained in the technical aspects of biofuels earlier, the conversion of raw material into
biofuels and then to electricity for export or consumption on site, or into ethanol/alcohol for export
to foreign markets, or for local fuel stations, represents the transformation of the low energy
density biomass into a high-energy carrier. In this transformation significant added value occurs
in the area, boosting the local and adjoining economies.
6.1
Liquid Biofuels Industries
Liquid Biofuels industries will consist of ethanol for replacement of gasoline in spark ignition
engines and diesel in compression ignition engines, and biodiesel to supplement or replace diesel
fuels in transportation and electricity generation. The sugarcane growing countries have the best
potential to establish viable industries within the next three to five years. Preliminary assessment
shows that an even greater number of countries can produce biodiesel and biogas.
A critical determinant of the viability of biofuels production, and ethanol in particular, is plant
scale. Based on the Brazilian experience, a threefold increase in plant capacity from 10Ml/yr to
233
30Ml/yr could result in a 36 per cent reduction in production cost . In the smaller countries the
additional benefits of biofuels are important to the achievement of national goals such as energy
security, waste management, water resources, and protection of critical ecosystems provide
rationale for investing in smaller size plants. However the first priority in achieving the production
of the 10 per cent quantity of fuel should be to achieve economies of scale. The economies of
scale are important, as the capital cost of the plant that consists of two components, on which the
industry has limited influence and is the major investment cost. First, is the cost of the plant. The
equipment and plants are sold and built worldwide, by a limited number of equipment and
engineering companies on a commercial basis and there is very limited room to negotiate costs.
Second, is the financing cost, which through the interest rate reflects the level of risk perceived by
the financial markets. In some cases, government may need to provide incentives to prevent the
cost of financing impacting negatively on the development of ethanol production.
233
DIFID Report – for the Caribbean --
255
In addition to the above, the operational cost of a biofuels facility depends on energy, materials
and labour intensity and their costs. Efficient use of co-products and the sale of co-generated
electricity to the grid (as discussed later under Solid Biofuels) all have the potential to reduce
operational cost. Selling co-generated electricity, however, requires the existence of appropriate
policies and legal framework. The Brazilian experience shows that the primary route towards
lower production cost is by lowering sugar cane cost by increasing yields through the selection of
better varieties. An ethanol plant represents a considerable investment. A breakdown of the
estimated construction and running costs for two islands in Hawaii, are itemized in the table
below that shows cost of two sizes of plants. Total cost for a 57 million liter per year plant is
US$34 million, and for a 38 million litre per year plant is US$25 million. The estimated annual
running costs for 57 Ml/yr and 38 Ml/yr plants planned for Hawaii are US$21 million and US$14
234
million, respectively .
Table 6.1.1:
Construction and running costs for planned ethanol plants in Hawaii
Cost Item
Capacity
6.1.1
Unit
Maui
Kauai
Ml / yr
57
38
236
Plant Cost
US$
29,142,857 21,714,286
Equipment & Buildings
US$
4,720,000 3,598,000
Total Construction Costs
US$
33,862,857 25,312,286
Annual Operating Costs
US$
15,471,333 10,364,296
Administration & Maintenance
US$
5,307,463 4,095,890
Total Running Costs
US$
20,778,796 14,460,186
235
Cost of Industrial Scale Biodiesel Plants
Capital costs of industrial scale, fuel grade biodiesel plants show significant economies of scale.
A plant with a capacity of 10,000 tons/yr has a capital cost of US$0.500/litre, whereas a plant with
237
10 times its capacity (100,000 tons/yr) has a capital cost of only US$0.202/litrer
Table 6.1.2:
Biodiesel processing plant costs
Capacity (tons/year)
20,000
40,000
60,000
Euro million
3.8
4.3
5.1
238
Euro/liter
0.167
0.095
0.075
This can be seen in the capital costs for the processing plant provided by the Austrian company
Energia, shown in Table 6.1.2. Energia supplies the processing plant only, which is provided in
modular form, and leaves the provision of tankage, services, infrastructure and buildings to its
clients. These plants can process both vegetable oils as well as tallow.
Details of capital costs of a complete Modular Processing Plant are given in Table 6.1.3. In 2003,
the total capital investment needed for a 70,000 tons/yr biodiesel plant was US$20.8 million,
giving a specific capital cost of US$0.261/litre.
234
DIFID report
Economic Impact Assessment for Ethanol Production and Use in Hawaii, Energy, Resources and Technology Division,
Department of Business, Economic Development and Tourism, State of Hawaii, USA. November 2003
236
Main plant components are fermentation tanks, centrifuge, treatment tanks, distillation column and rectifying column.
237
Duncan, 2003
238
Duncan, 2003
235
256
Table 6.1.3:
Cost details of a 70,000 tons/yr Biodiesel Plant
Cost
(Million NZ$)
10.9
1.6
Process Plant
Plant installation, piping,
instrumentation
Plant buildings
Storage
Services
Civil Works
Spares
Unallocated
Contingency
Engineering
Total
6.1.2
239
Cost
(Million US$)
7.63
1.12
0.35
2.38
1.19
1.68
0.42
1.05
1.54
3.5
20.79
0.5
3.4
1.7
2.4
0.6
1.5
2.2
5.0
29.7
Liquid Biofuels Industries - Goal 1: Ethanol Production to Achieve 10% Blend in
Gasoline (550 Million Liters or 3.4 Million Barrels)by 2010
Based on experiences from the USA and Australia, anhydrous ethanol can be used as an octane
enhancer for gasoline at up to ten per cent. In 2004, the region produced some 38 million tons of
sugarcane for the production of raw sugar, with value estimated at US$955 million. The 2004
gasoline consumption represents a regional market of in excess of 34 million barrels of
anhydrous ethanol. Using sugarcane as the raw material, and using average yield of 60 tons per
hectare (achieved by the most efficient producers - Guyana and Haiti) would require 850
thousand hectares. Table 6.1.4 shows the production of sugarcane and potential ethanol for the
2004 crop.
Table 6.1.4:
Sugarcane yields, production and area cultivated in 2004
Island State
#
1 Antigua & Barbuda
Sugarcane Yield
(tons/Ha)
-
Potential
Sugarcane
Ethanol
production Production
Barrels
tons / yr
0
-
240
Area
cultivated
(hectares)
2 Bahamas
24.7
55,500 28
2,250
3 Barbados
53.8
430,000 216
8,000
4 Belize
48.1
1,149,475 578
23,887
5 Cuba
31.3
12,500,000 6,289
400,000
6 Dominica
20.0
4,400 2
7 Dominican Republic
38.1
4,950,000 2,491
8 Grenada
45.0
7,200 4
239
240
Duncan, 2003
FAOSTAT
257
220
130,000
160
9 Guyana
61.2
3,000,000 1,509
49,000
10 Haiti
60.0
1,080,000 543
18,000
11 Jamaica
47.5
1,900,000 956
40,000
12 Saint Kitts & Nevis
13 Saint Lucia
St. Vincent and
14 the Grenadines
55.6
-
100,000 50
15 Suriname
40.0
120,000 60
3,000
16 Trinidad & Tobago
51.2
665,000 335
13,000
42.9
25,981,575 13,062
604,927
Average / Total
25.0
0
20,000
-
1,800
800
A significant quantity of the biofuels feedstock can be provided from the existing sugarcane crop
at increased economic benefits to the countries. The almost 26 million tons of sugarcane
produced in 2005 was used as feedstock and produced some of 3.8 million tons of raw sugar.
Based on prices for gasoline at crude of $70 per barrel, and sugar at US$250 per ton, the
economic loss form the conversion of the juice into ethanol instead of sugar would be would be
approximately US$955 million and the economic benefit of an estimated 14 million barrels (2,000
million litres) of ethanol would be US$2,000 million. State another way, using the 2004 sugarcane
crop for the production of 3.8 million tons of sugar, instead of 20 million barrels of ethanol, would
have negative economics of US$1,045 million.
Ethanol production based on sugarcane production ranges from 15 million liters for St. Kitts and
Nevis, to over 440 million liters for the Dominican Republic, based on using the juice from the
annual sugarcane yield in 2004 (see Table 6.1.4). If the bagasse was also used, St. Kitts and
Nevis would potentially produce 21 million liters of ethanol, and the Dominican Republic could
potentially produce 590 million liters. As shown in Table 5.2.1 above, the use of energy cane
instead of sugarcane as feedstock could double the levels of productions.
6.1.3
Liquid Biofuels Industries - Goal 2:
Liquid Biofuels Enterprises by 2008
Development of Small- and Medium-Size
While not as large a user of fuels as transportation or power generation, there are a number of
small- and medium-size industries and institutions that use significant amounts of energy in
varying forms. These industries use fuels in boilers to provide steam and kiln drying, electricity for
cooling and refrigeration, or metal fabrication. Institutions such as hospitals and schools and
penal facilities use energy for a range of domestic purposes like laundry, cooking, operation of
equipment and appliances.
Small- and/or medium-size liquid biofuels enterprises would focus their business development on
opportunities to displace the use of petroleum liquid fuels for heat and electricity in small and
medium businesses, institutions, and industries. These enterprises would primarily use simpler
conversion technologies such as and small- to medium-scale esterification to convert plant oils for
the production of biodiesel, and anaerobic fermentation for the production of low calorie but easily
upgradeable biogas. The production and use of these fuels were described earlier.
Potential businesses would be characterized by production agreements between users and
entrepreneurs. For example, operations of fleet vehicles such as bus and trucking companies
could obtain fuel from energy entrepreneurs producing biodiesel from various oil seeds (coconuts,
258
castor, jatropha,), or from waste edible oils. Such relationships would be beneficial to both
producers and users once oil is above the threshold price. In the case of institutions, the
production of special crops (cassava and leguminous forage such as leucaena) or agricultural
waste could be used for the production of biogas. Biogas produced close to its location of use
has been shown to be competitive with cheap oil (below $30 per barrel) in a number of
applications ranging from lighting to cooking, water heating, and generation of steam and/or
electricity.
Unlike the larger industries where it is possible to use existing information to make estimates and
set targets based on economic scale of production and projected costs, it is not possible to do so
in the case of small- and medium-scale biofuels industries due to the absence of collected
information on energy use in institutions such as hospitals, prisons, schools, and agro-processing
industries. The small- and medium-size enterprises will fit niche markets that have to be identified
and analysed, on the ground, in each country, and developed through partnerships.
6.1.4
Liquid Biofuels Industries - Goal 3: Ethanol Production to Achieve 25% Blend in
Gasoline (1,500 Million Liters or 9.6 Million Barrels) by 2015
To achieve this goal would require building on the success in achieving a 10 per cent blend in
gasoline. A 25 per cent blend of ethanol in all fuels for spark ignition vehicles represents the
current base of the Brazilian experience (the acknowledged world leader in liquid biofuels
contains a minimum of 25 per cent anhydrous ethanol). This level of use should be the regional
target in 2012. Achieving the 25 per cent blend will require production of a minimum of 9.6 million
barrels (1,500 million liters) of ethanol. Using the 2004 level of gasoline as the baseline, meeting
this demand for anhydrous ethanol would mean using around 40 per cent of the sugarcane juice
to produce ethanol. Meeting this target would increase the economic benefits well above those of
the 10 per cent blending goal, and as shown below, the production of the raw material is already
proven as Table 6.1.4 above and Table 6.1.5 below. The development of fuel ethanol industries
in the sugar producing countries could proceed along different paths depending upon the size of
the sugar industry, the size and viability of existing sugar markets, the size of the electricity
demand and potential supply sources, the availability of additional lands and availability of
investment capital.
One option could be expansion of current land under sugarcane to provide additional raw
material, this may or may not be associated with increased production of sugar or power. The
second path, is the introduction of energy cane varieties in some areas previously used for
sugarcane, and the addition of new land under energy cane (based on yields of 60 tons of cane
per year for sugarcane, and 120 tons of cane per year for energy cane); the land area required
would be reduced, the greater percentage of energy cane grown relative to sugarcane. The third
path would be the combination of the previous two.
6.1.5
Liquid Biofuels Industries - Goal 4: Production of 30% of Regional Transportation
Fuels Need (9,900 Million Liters of Ethanol) by 2020
This goal, based on the 2004 level of fuel consumption (8,980 million liters of gasoline and 11,840
million liters of diesel per annum), would require the production of some 124 million tons of cane
per year. Based on yields of 60 tons of cane per year for sugarcane, and 120 tons cane per year
for energy cane, the land area required would be 1,500 thousand hectares for sugarcane or
750.thousand hectares for energy cane. This level of sugarcane production would produce 7,200
million liters of ethanol from the juice, and 2,700 million liters from bagasse. The economic
benefits using a base of US$70 per barrel for crude oil would be in excess of US$4,100 million.
259
Table 6.1.5:
Five-Year Average Sugarcane Yield (t/ha) in the Caribbean 1961-2004
19611965
Barbados
Belize
Cuba
Dominican
Republic
Guyana
Haiti
Jamaica
Saint Kitts and
Nevis
Trinidad and
Tobago
Average
19661970
19711975
19761980
19811985
19861990
19911995
19962000
241
20012004
79
74
57
64
55
58
52
58
53
38
46
42
52
55
56
40
33
34
71
63
60
61
55
41
30
32
38
38
69
36
74
38
64
38
64
37
57
36
62
38
63
49
59
60
48
77
69
63
79
71
56
57
63
55
69
63
68
61
57
54
53
59
57
55
61
53
54
48
57
50
52
49
The social benefits, taken from the Brazilian experience would be the generation of employment
for 11,000 full-time industrial workers and 34,000 to 136,000 agricultural workers to grow the
cane depending on the yields. Since sugarcane production in the Caribbean countries is less
mechanized than in Brazil and also because yields are lowers the employment potential for
agricultural workers likely to be in the higher end of the range.
The environmental benefits would be the avoided emission of some 20 million tons of greenhouse
gases, which are responsible for global warming, as well as significant local environmental
benefits associated with production of the cane including protection of watershed, reducing soil
erosions, and improving low air quality. Achieving this target will signal the maturation of the
Liquid Fuels industry. Success will require effective implementation of transportation policies and
use of tariff measures to support the conversion of the vehicular fleet overtime from gasoline and
diesel fueled engines to alternate fueled spark ignition and compression ignition vehicles that
could run on 100 per cent ethanol.
Table 6.1.6:
Quantity of Ethanol and Land Area required substituting for gasoline and
diesel across the Caribbean
Land Area required for
both gasoline and
diesel substitution
Ethanol required
Ethanol
Gasoline
Blend
Gasoline
Diesel
and
Ratio substitution substitution
Diesel
M liters
M liters
M liters
10%
548
965
1,513
15%
822
1,447
2,269
20%
1,097
1,929
3,026
25%
1,371
2,412
3,782
30%
1,645
2,894
4,539
241
Calculated from FAOSTAT
260
Sugarcane area
000 hectares
229
344
458
573
688
Energy cane area
000 hectares
115
172
229
287
344
6.2
Solid Biofuels Industries
6.2.1
Solid Biofuels Industries - Goal 1: Development of 50 per cent of the Viable
Electricity Potential from the Sugarcane
Table 6.2.1 below shows that the 38.2 million tons of sugarcane milled in 2004, if utilized in an
energy efficient manner, could produce, depending on the choice of technology for export to the
national electricity grid, 3,800 GWh/yr if CEST (100 kWh/tc) is used, and 7,600 GWh/yr if BIGGTCC (200 kWh/tc) is used. Development of 50 per cent of these electricity export potentials
would require an investment of US$660 million for CEST, and US$1,150 million in the case of
BIG-GTCC. The potential development of combined heat and power industries in the region
using, in the case of ethanol, the combined production of heat and power should be viable in all
countries that currently have viable sugar industries. This industry would also be viable at low
cane production levels, if there is going to be production of ethanol for local consumption instead
of gasoline. Some countries, due to limited sugarcane production, may have to get supplemental
biofuels to have viable power generation industry. The current state of the region’s electricity
generation is summarized Table 6.2.2, and shows that the majority of sugar producing countries,
with the exception of Trinidad and Tobago, the price of electricity is at levels where power from
cogeneration using bagasse and supplemental fuel would be competitive.
Table 6.2.1:
Potential for electricity exports from bagasse based cogeneration and
investments required
Investment required for
Cogeneration Plants
Electricity
@
100
kWh/tc
Island State
(GWh / yr)
Antigua & Barbuda
Bahamas
6
Barbados
36
Belize
115
Cuba
2,400
Dominica
0
Dominican Republic
555
Grenada
1
Guyana
300
Haiti
108
Jamaica
210
Saint Kitts & Nevis
19
Saint Lucia
St.Vincent and
the Grenadines
2
Suriname
12
Trinidad & Tobago
58
TOTAL
3,822
National
Electricity Electricity
Electricity
@ 200 kWh/tc Demand @ 100 kWh/tc
(GWh / yr) (GWh / yr)
Million US$
- 25.4
0
11 149.2
2
72 831
12
230 323
40
4,800
15,909
828
1 67
0
1,109
13,489
191
1 126
0
600 52.224
104
216
512
37
420 2,974
72
39 13.8
7
- 266
0
4 107
24 177.6
116 6,321
7,643
41,343
Electricity
@ 200 kWh/tc
Million US$
0
3
22
69
1440
0
333
0
180
65
126
12
0
1
1
4
20
7
35
1,318
2,293
The trend towards accelerated erosion of preference for ACP agricultural exports puts pressure
on the regional agricultural sector to find creative ways to improve its productivity in the shortterm, to bring costs of production in line with world market prices. One of the industries facing this
major productivity challenge is the sugar industry, which generates more than a half a million
261
direct sugar jobs and more than 1.5 million indirect sugar-related jobs. Sustaining these jobs is
even more important when it is considered that the Caribbean is a region with unemployment
rates consistently surpassing those experienced by industrial countries during the great
242
depression . The production of electricity and ethanol would go a long way in making sure that
this level of unemployment does not continue to increase.
A strong case can be made for adding value to the Caribbean sugar sector by producing gridconnected electricity using bagasse and cane trash as fuel. Electricity generation within the cane
industry either as the main product or as a by-product is increasingly viable against the
background of increases in petroleum fuel prices. An attractive feature of cogeneration in the
region’s sugarcane sector is the large volume of biomass (60-80 tons per hectare) that can be
used as a clean burning fuel, and the potential for significant increase. Combined generation of
heat and power or cogeneration is being done by a number of small countries including Mauritius,
Reunion, and Guadeloupe, as well as Hawaii, in the USA. A number of the sugar-producing
countries in the region have expressed an interest or intention to introduce modern cogeneration
technologies in their respective industries.
243
Table 6.2.2:
The Electricity Sector in Caribbean Countries (2003)
Units
Installed
Generating
capacity
MW
Electrical Power
Production
GWh
Electrical
Production/Installed
Generating
Capacity
GWh/MW
Electrical Power
Consumption
by Final Users
Average Internal
Electricity
Prices (US cents)
-Commercial (US
cents)
-Industrial (US
cents)
-Residential (US
cents)
Electrical Service
Coverage of
Homes
- Cities
- Rural Areas
Trinidad
Dominican
St. Kitts &
Barbados BelizeCuba Republic GuyanaHaitiJamaica & Nevis Tobago
210
3,959
5,530
244
811
na
1,416
871
15,909
13,489
512
7,146
na
6,437
4.1
4.0
2.4
2.1
8.8
na
4.5
GWh
782
12,469
11,893
283
6,516
na
5,876
KWh
KWh
19.5
11.1
10.3
8.1
14.7
na
3.9
20.0
10.5
10.6
9.2
15.0
na
3.7
19.7
8.4
10.8
8.8
11.6
na
4.6
18.8
14.3
9.5
6.2
17.4
na
3.5
98
na
na
96
99
87
92
99
81
34
na
na
88
na
na
na
na
na
97
Na
Na
KWh
KWh
%
%
%
The economics of co-generation using bagasse and trash have changed dramatically as the
costs of conventional electricity generation (imported oil) have more than doubled in the past two
242
243
Douglas, Charles (2006)
Compiled from OLADE (2004)
262
years. Yet another interesting economic aspect of cogeneration is the prospect for building
energy services companies (ESC) in close proximity to the cogeneration facilities. ESCs would be
involved in supporting activities to producers and suppliers of biomass, retailers of equipment,
and engineering services providers. It is estimated that the sugar-producing states could produce
some 7,600 GWh of electricity each year.
However, even if only 50 per cent of this potential is achieved in the medium-term its contribution
to the sustainable energy agenda of the region would be substantial. Indeed, this would represent
more than eight per cent of the 44,364 GWh generated in the region in 2003. Achieving 50 per
cent of the estimated electricity generating potential would help to significantly reduce the region’s
high levels of dependency on oil imports. It would save the region 1,200 million liters of petroleum
fuels, and avoid 3.3 million tons of carbon emissions.
6.2.2
Solid Biofuels Industries - Goal 2: Development of Small- and Medium-Size Solid
Biofuels Enterprises
While the Brazilian ethanol industry has achieved global recognition and a growing domestic and
export markets, the use of bagasse as a source of energy for food processors has contributed
significantly to the success of biofuels in Brazil. As shown below, the food and beverage industry
consumes eight per cent of the primary energy used in the country in 2003. This is equivalent to
some 132 million barrels of oil. As shown in the Figure 6.2.1 below, almost 72 per cent of this
energy was supplied by bagasse equivalent to some 95 million barrels of oil.
Figure 6.2.1:
Use of Bagasse for Energy in Brazil
244
Solid Biofuels exist in many different forms and varying energy density but there are used
commercially in a growing number of countries. Small- and medium-scale solid biofuels
enterprises would be similar in nature to its counterpart industry for liquid fuels. These
enterprises would also focus on the replacement/substitution of petroleum fuels in small- and
medium-size enterprises (SMEs), institutions, and businesses. These SMEs would use simpler
244
José Roberto Moreira -- Cenbio – Brazilian Reference Center Of Biomass
263
conversion technologies such as gasification to produce a low BTU (British Thermal Units)
gaseous fuel called producer gas, for use in internal combustion engines or kiln applications.
These enterprises would potentially supply electricity for remote locations or to businesses that
generate waste biomass in solid form as a by-product of operations. Businesses which generate
waste biomass such as furniture producers, saw mills, and coconut processors would be very
good candidates for solid biofuels enterprises. Electricity generation and shaft power applications
would include rural electrification and water pumping.
There is very limited information available on small-scale liquid biofuels enterprises that allows for
quick identification of opportunities. However, in the case of water pumping it is estimated that as
much as 25 per cent of electricity use in the SIDS is for water pumping. Small decentralized
pumping using solid fuel has potential application subject to economic viability and sustainable
supply of raw material. An initial goal of five per cent of pumping to be done by Biofuels operated
facilities would mean supplying some 500 gigawatt-hours of electricity. As pointed out above in
Section 5.1.3.2, this would require some 517,000 tons of woods or equivalent biomass material
(shells, husks, stalks). In terms of land area for production, this would require 25,800 hectares of
land in fast growing trees (such as Leucaena, Acacia, Eucalyptus). These energy plantations
would employ nearly 20,700 persons, year-round.
Table 6.2.3:
Employment generation, Economic Value and Green house gases mitigated
at different levels of Diesel substitution by Jatropha in 16 Caribbean
countries
Diesel substitution
Jatropha Area required, 000'ha
Employment generated during first 3 years, Million mandays /yr
Employment generated after 3 years, Million mandays /yr
Diesel saved, M liters
10%
294
31
12
543
20%
589
61
24
1,085
50%
1,471
153
59
2,713
Economic value @ 70 $/bbl, M $
364
727
1,818
Economic value @ 100 $/bbl, M $
CO2 equivalent, Million tons
Assumptions:
519
1.47
1,039
2.93
2,597
7.33
245
Employment generated
During first 3 years
104 mandays/ ha /yr
After 3 years
40 mandays/ ha /yr
6.2.3
Solid Biofuels Industries - Goal 3: Development of 100% of the Viable Electricity
Potential from Sugarcane
Based on the 2004 sugarcane level of production, it is estimated that some 3,800 to 7,600 GWh
of electricity can be produced from the cogeneration of bagasse, representing some nine to 18
per cent of total electricity consumption. If the region met the 25 per cent ethanol target for
ethanol in gasoline, based on the 2004 figures, this would require production of some 12 million
tons of sugarcane (this assumes that all cane is used for ethanol). This amount of sugarcane
would provide bagasse for the production of between 1,200 to 2,400 gigawatt hours of electricity
depending on technology choice. This amount of electricity would be equivalent to the avoided
import of 385 to 770 million liters of diesel; at the base price of US$70 per barrel, this would be
equivalent to US$260 to $520 millions.
245
Planning Commission of India
264
As discussed earlier, under the 50 per cent goal, the production of electricity from bagasse for
these factories as base load facilities for power supply require supplemental fuels. This would
provide a market for the production of supplemental biofuels feedstock in solid or liquid form. As
shown in Table 6.2.4, there is significant wood available in many of these countries to provide the
supplement feedstock for power generation.
Table 6.2.4:
Average Annual Wood Production and Derived Wood Products
246
Total Roundwood
Production
Metres3
(2000-02)
Fuel & Charcoal
Industrial
Production
Roundwood
Sawnwood
Paper
%
%
Metres3 %
Metres3 %
% Change Metres3 Change Metres3
Change (2000Change (2000Change
(1990-02) (2000-02) (1990-02) (2000-02) (1990-02) 02)
(1990-02) 02)
(1990-02)
Net Trade
in
Roundwoo
d (2000-02)
Barbados
Belize
Cuba
Dom
Republic
2,378,000
562,000
98.9 1,554,000
192.0
824,000
556,000
0.0
6,000
0.0
0
0.6 1,971,000
0.7
239,000
0.0
14,000
0.0
1,000
0.0
-5.6 186,000
6.1
57,000
0.0
0
0.0 130,000
0.0
9,000
Guyana
Haiti
Jamaica
Trinidad &
Tobago
2,210,000
874,000
-1.6
591,000
-2.4
282,000
0.0
66,000
0.0
1,000
96,000
-20.0
36,000
-2.3
60,000
-29.0
39,000
34.0
8,000
Suriname
Total
6,120,000
4,708,000
Per cent of Roundwood Going to:
Fuel & Charcoal
Industrial Roundwood
Sawnwood
Paper
Barbados
Belize
Cuba
Dom
Republic
65
35
23
6.917476
99
1
0
2166.667
Haiti
89
11
6
0
Jamaica
Trinidad &
Tobago
68
32
23
0
38
63
65
0
Guyana
Cuba has been utilizing cane residues including trash as fuel for over 10 years. For example,
between 1983 and 2005, Cuba used as fuel more than 2 million tons of residues that substituted
247
for 500 thousand tons of oil, and prevented 1.5 million tons of CO2 emissions . However, this
represents only five per cent of its cane residue potential, supplemental fuel sources as therefore
available. Also as in Table 6.2.4 above, there is significant amount of wood available in the sugar
growing countries to provide supplemental fuel for year-round electricity generation, as well as to
supply some small- and medium-scale enterprises.
6.3
The Benefits of Biofuels Industries for the Region
The agricultural sector has been in decline for decades, and is experiencing negative growth as it
struggles to respond to economic globalization of agricultural commodities. A major determinant
246
Latin America and the Caribbean Selected Economic and Social Data. United States Agency for International
Development (USAID), Bureau for Latin America and the Caribbean, Washington, D.C. 20523 May 2004.
247
Douglas, Charles (2006)
265
of a successful response would be finding new markets that are viable for the high cost product it
produces, and/or significantly increasing productivity to better compete. The latter is very difficult,
given the high costs of inputs (chemicals, energy, and planting material), transportation, and
labor, and this is in addition to the low economy of scale. The current state of the region’s
agriculture sector prevents it from being a major generator of employment. Many countries are
also experiencing significant environmental degradation as a result of unsustainable land use
associated with crop production in certain areas. Capitalizing on the potential for biofuels
production by the sector would represent a sustainable diversification option, which could help
reverse the ongoing trend of decline and degradation of soil resources as well as reversing the
continuing decline in employment. The higher economic value of the sugarcane as an energy
raw material versus sweetener is based on the high energy content of the cane stalk, and the
availability at economic prices of technology to convert the sugarcane into electricity and alcohol.
6.3.1
Socio-economic Benefits
Based on the global experience, significant socio-economic benefits accrue from national biofuels
programs. In the case of sugarcane-based biofuels programs, these benefits would be primarily
as a result of increased economic value of sugarcane as a raw material for energy instead of
sweeteners. As shown in Table 6.3.1 below, as the cost of oil and gas increases, the economic
value of sugarcane grown increases significantly. It should be noted that the cost of processing is
not reflected in the valuation of the raw material. The expected socio-economic benefits that
accrue include:
• Diversification of the national and regional economy – the majority of countries in the
region are very dependent on remittances and/or tourism. Notable exceptions are
Trinidad and Tobago, where petroleum fuels dominate the economy, and Guyana and
Belize, where the agriculture sector plays a significant role. Overall the economies of
these countries are very vulnerable because of the dependence on a few goods and/or
services for economic well being. Diversification into viable biofuels industries would
reduce vulnerability in a number of ways including reducing the demand on the foreign
exchange required to meet local fuel needs, which is increasing along with the increasing
cost of crude oil and declining export earnings from sectors such as agriculture. This is
very vulnerable as a lot of the export earnings are in the form of remittances from
nationals working in foreign countries, which in some countries is the dominant source of
foreign exchange earnings. The high per centage of GDP and export earnings required
to pay for oil, relative to other economies such as Singapore and Japan, that also have
limited fossil resources or none at all, is further evidence of the region’s economic
vulnerability (see Figure 6.3.1 below).
•
Development of regional trade within the CSME – one of the major challenges facing
the non-oil producing countries in the Latin American and Caribbean Region, is how they
will be able to generate the additional financial resources that will be needed to pay for
increasing costly petroleum fuels imports. The development of a regional biofuels
industry at a viable scale to meet any significant percentage of liquid fuel demands would
be very beneficial to the development of the CSME, by substantially increasing the
quantum of financial resources circulating in the CSME. A 50 per cent substitution of
imported fuels by biofuels would mean a minimum of US$3.25 billion, based on 2004
figures and costs.
266
Figure 6.3.1:
Fuel Cost to Export Earning Ratio for the Caribbean Countries
248
Fuel Cost Export Ratio
70%
60%
50%
40%
30%
20%
10%
0%
rd
Baba
os
e
Beliz
p
inica
n Re
Dom
inica
Dom
eda
Gren
n
Guya
a
2003
•
Jama
ica
it
St. K
ts
u
St. L
cia
in
St. V
cent
ame
Suri n
ad
Trinid
2004
Improving the economic value of the crops like sugarcane – the social benefits
derived from the production of biofuels raw material varies depending on the sugar and
ethanol mix that is produced, and the amount of electricity generated, as shown in Table
6.3.1 below. The value of the 2004 sugarcane crop (38.2 million tons cane) in the 16
countries has been calculated for crude oil prices of US$70 and US$100 per barrel in
table. For the production of sugar and molasses only, the value of the sugarcane is
US$24 per ton cane, and the total value of the 2004 crop is US$917 million.
If all the sugarcane juice is used to produce sugar and the bagasse is used for export electricity,
then the value of the sugarcane is US$64 per ton cane at a crude oil price of US$70 per barrel,
and US$81/tc at US$100/bbl; the total value of the 2004 crop is US$2.4 billion at US$70 per
barrel, and US$3.1 billion at US$100/bbl. If half the sugarcane juice is used to produce ethanol
instead of sugar, then the value of the sugarcane increases to US$72 and US$98 per ton cane at
crude oil prices of US$70 and US$100/bbl, respectively. If ethanol is produced from the
sugarcane juice and electricity from the bagasse then the value of the cane increases to US$80
and US$115 per ton cane for crude prices of US$70 and US$100/bbl, respectively; the total value
is now US$3.1 billion at US$70 per barrel and US$ 4.4 billion at US$100 per barrel.
Table 6.3.1: Value of 2004 sugarcane crop as a mix of sugar, ethanol and electricity
ONLY SUGAR
Sugar
Mollases
TOTAL
UNITS
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
22
22 US$ per ton cane
2
2 US$ per ton cane
24
24 US$ per ton cane
VALUE of 2004 crop
(38.2 million tons cane)
917
248
917 Million US$
Data is taken from World Bank 2006 World Development Indicators. Note the data for Barbados, Belize, Grenada, St.
Lucia and Suriname, the 2003 export and import data was used as proxy for 2004.
267
SUGAR & ELECTRICITY
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
40
57 US$ per ton cane
22
22 US$ per ton cane
2
2 US$ per ton cane
64
81 US$ per ton cane
Electricity
Sugar
Mollases
TOTAL
VALUE of 2004 crop
(38.2 million tons cane)
2,442
3,096 Million US$
SUGAR, ETHANOL & ELECTRICITY
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
40
57 US$ per ton cane
11
11 US$ per ton cane
1
1 US$ per ton cane
20
29 US$ per ton cane
72
98 US$ per ton cane
Electricity
Sugar
Mollases
Ethanol
TOTAL
VALUE of 2004 crop
(38.2 million tons cane)
2,754
3,738 Million US$
ETHANOL & ELECTRICITY
Electricity
Ethanol
TOTAL
Crude oil @
Crude oil @
70 US$/barrel 100 US$/barrel
40
57 US$ per ton cane
40
58 US$ per ton cane
80
115 US$ per ton cane
VALUE of 2004 crop
(38.2 million tons cane)
3,066
Assumptions:
Sugar production
Sugar price
Mollases production
Mollases price
Ethanol prod from sugars
1 liter ethanol equivalent to
Electricity production
Diesel consumption
Sugarcane production in 2004
0.110 tons / ton cane
200 US$/ton
0.05 tons / ton cane
40 US$ / ton
80 liters / ton cane
0.75 liters gasoline
200 kWh / ton cane
0.30 liters / kWh
38.2 M tc /yr
Crude oil price
Diesel cost
Gasoline cost
70
0.666
0.672
268
4,379 Million US$
100 US$ /barrel
0.951 US$ / liter
0.960 US$ / liter
Note: Diesel and Gasoline
costs includes 40%
processing & distribution
costs but excludes taxes &
duties
•
Improved household incomes - based on the existing wages in the sugar industry and
the greater economic benefits that are expected to result from biofuels production,
farming households involved in the production of raw material is expected to derive
improved benefits. The degree of potential increased benefits of biofuels is, however,
significantly influenced by factors such as cost of production, the cost of transportation,
and scale of production.
•
Generation of sustainable employment – as pointed out earlier, biofuels production
can be structured to have significant requirement for labor or can be very mechanized
depending on the cost of labor. In some countries where the current level of investment in
education is inadequate, biofuels production could have a positive impact on providing
employment for young workers with limited skills. From the Brazilian example, we know
that there will also be demand for higher skilled workers. A million liters per day plant
producing ethanol may require up to 200 people, not all necessarily directly employed, to
provide support services including agronomic inputs, spares and maintenance, and
information technology expertise.
•
Improved future for the agriculture sector –it will help countries to overcome the
changes in export markets, due to EU changes in policies for export from the ACP
countries. The performance of the sector has been a negative impact on the socioeconomic conditions in the majority of countries.
6.3.2
Environmental Benefits
As listed in both the Barbados Program of Action in 1994, and the 2005 Mauritius Implementation
Strategy for Sustainable Development of Small Island States and Low Lying Coastal States, the
major concern of these countries is climate change. Under international agreements, all states
are required to take mitigation actions to reduce the emissions of greenhouse gases, and
implement adaptation options to minimize the projected impact of global climate change. As
shown in Table 6.3.2 below, the blending of ethanol with gasoline and diesel for transport, using
the year 2004 as baseline, would reduce carbon dioxide emissions by 3.9 to 11.8 million tons, as
the ethanol blend ratio rises from 10% to 30 per cent.
Table 6.3.2:
Greenhouse Gas Mitigation By Ethanol Blends
Ethanol
Ethanol required for both CO2 Emissions
Blend Ratio
Gasoline and Diesel
mitigated
M liters
M tons
10%
1,513
3.9
15%
2,269
5.9
20%
3,026
7.9
25%
3,782
9.8
30%
4,539
11.8
The development of biofuels industries addresses both the mitigation and adaptation obligations
of all countries under the UNFCCC, but it also represents major adaptation approaches. Biofuels
production uses crops that are much more resilient to nature’s destructive forces such as tropical
storms/hurricanes, floods, droughts, and fires. Other crops grown for food or exports such as
269
vegetables, tobacco, bananas, coffee, and spices are not as resilient and therefore are much
more vulnerable to climate change. Additionally, the production of raw material should result in
improved land use leading to reduced soil erosion, improved raw water resources, and improved
coastal environmental quality. These environmental benefits are significant and invaluable for a
number of countries, if they are successful in pursuing sustainable development.
6.4
Requirements for the Development of a Biofuels Program
The international experience related to biofuels production provides a number of lessons as to the
necessary conditions for the development of viable and sustainable industries. These necessary
conditions, or in the case of countries that wish to initiate development of biofuels industries,
challenges can be classified in four categories:
a) Policy and legal framework;
b) National capacity (technical assistance);
c) Investment capital, and;
d) Public ownership.
6.4.1
Policy and Legal Framework
Policy makers will play a vital role in providing the right environment for all the factors necessary
to create a competitive and sustainable ethanol market. Experiences from other countries can be
valuable in defining policies to stimulate biofuels. Policies needs to be in place that nurtures the
development of a viable industry, in particular support to the development of domestic markets
and ensuring the sustainability of the industry in the long-term. Policy intervention should be
aimed at creating appropriate regulatory and legislative environments and promoting skills
development necessary to the industry’s development.
In countries with successful biofuels industries, government policies and the regulatory
environment has played a leading role.
Sustainable development agendas have steered
government energy policies towards increased diversification of sources and energy self-reliance,
security of supplies and a cleaner environment. Governments have used a wide range of policies
and support mechanisms to address the technical, financial, institutional, and policy barriers that
have prevented increased usage of biofuels and other renewable sources of energy. These
include research and development in new biofuels crops and conversion technologies,
demonstration and public awareness raising programs, soft loans, tax incentives and subsidies to
encourage market penetration, development of standards and certification, and training and
capacity building at all levels. Policies and regulations have to be continuously modified and
adapted to evolving circumstances if scarce national resources are to be used for maximum
penetration of renewable fuels into the energy supply matrix.
Government would have to secure access and availability of land resources and ensure
sustainable production of land use polices that disallows land suited for biofuels raw material
production to remain idle, as well as to enforce regulations of sound land use, and provide
incentives based on environmental benefits. Supportive and flexible policies and national
government commitment at the highest levels, to maximizing synergy and linkages between
sectors is necessary. The Belize example also shows the critical need for supportive legislative
and legal frameworks such as power purchase agreements and utility pricing.
6.4.2
National Capacity
Capacity to plan and implement, monitor and make adjustments over time has to be supported by
information, technical assistance, whilst training and referrals represent a unique role for IICA to
play. The availability of a number of technical skills is critical to the establishment of a
competitive and sustainable ethanol industry. The availability of a skilled workforce is critical to
maintain and run a plant efficiently, and to the efficiency and sustainability of the entire system.
Critical skills for implementing a successful biofuels program include managers with a decade or
270
more of experience that is crucial for these modern complex plants; good managers cannot be
produced quickly and their scarcity may be a major constraint during the development phase of
the industry. Skilled personnel are also required for a number of downstream activities including
transport, storage, blending and distribution. Training may be required for countries with little
experience in handling the distribution of liquids.
While the sugar industry has developed a cadre of skilled technicians and engineers, they would
probably require additional training to run and maintain a modern, sophisticated ethanol plant
optimally.
- Technical capacity for research and development is essential. Experience from Brazil
has shown that the development of a constant supply of productive, disease resistant
varieties for particular agronomic environments and the development of environmentally
benign pest management technologies are major factors for increasing and maintaining
cane productivity.
- Research and extension services are important to determine the performance of selected
varieties under field and processing conditions, to enable pests and diseases to be
identified and controlled before they become a serious problem, and to inform the plant
breeders and farmers.
- Awareness and training in relation to environmental best practices and its implementation
are important to protect the environment and to the long-term sustainability of the
industry. In many cases, environmental best practices have been shown to result in
249
economic benefits .
The production of ethanol, sugar and electricity require multiple skills usually associated with one
industry. “System thinkers” are required to handle aspects of the production chain that are not
directly linked to ethanol production, including infrastructure, logistics, land use, plant
configurations, the use of co-products, and disposal of wastes. It would be necessary to develop
the skills base essential for establishing and expansion of the industry, including actively
supporting exchange visits and placement for key personnel with relevant organizations abroad.
Where necessary, there would be strengthening of research and extension facilities to provide the
necessary inputs to the industry. This is particularly important in the areas of plant breeding and
selection and integrated pest management
6.4.3
Investment Capital
Road systems for transportation and storage facilities are a basic requirement. In countries with
existing sugar industries there would have to development for the plant oil and solid biofuels.
Investments in the equipment and hardware for biofuels production would also be required. Given
the limited financial resources available to governments, enabling economic policies would be
required to provide market-based mechanisms to stimulate private investments in biofuels
production. Examples of market-based mechanisms for stimulating biofuels in the domestic
market include:
- Encouraging biofuels over fossil fuels through suitable tax regimes;
- Encouraging the replacement of MTBE with ethanol;
- Requiring a share of transport fuels to be provided by biofuels;
- Encouraging the sale of vehicles that can run on higher ethanol blends (E10 and
above) through mechanisms such as positive differential tariffs, for the import of
such vehicles – this would include both spark and compression ignition vehicles,
and;
- Promoting biofuels procurement in government and other organizations.
249
Environmental best practice guidelines developed by Noodsberg Farmers in South Africa and by the South African
Sugar Association.
271
6.4.4
Hardware and Infrastructure
These are core short-term investments that would have to be made to catalyze the development
and validate the viability and help create the pre-conditions for private sector support and
investment. For example, financial resources at concession terms, as shown in the most recent
financing of a biofuels investment of a 32.5W bagasse fueled co-generation facility, at a sugar
factory in Belize, costing US$47 million. The funding came from a variety of sources in the form of
loan and equity financing from different sources including the Caribbean Development Bank
(CDB) and private financing. However, without the legislative and legal framework that exists in
Belize, such a private sector project would have been impossible to fund, much less arrange the
additional loan and equity financing needed from other international players. Concessionary
resources are also needed to assist in the preparation of implementation documents that would
make possible innovating financing options such as a private sector developed facility under
agreements like Build Own Lease Transfer (BOLT).
Additional requirements include an economic and social climate that is stable and attractive for
long-term investments, and a robust regulatory and legal framework that facilitates the
development of the industry. Progress on cogeneration, for example, is often hampered through
the lack of a suitable regulatory framework for small producers to sell power to the grid at a fair
price. There should also be harmonization of the tax regimes and customs procedures within the
region, and the region should look to developing partnerships with industries and markets
worldwide, and entering into joint ventures, technology support, and export import financing for
equipment procurement.
6.4.5
Public Ownership
Public ownership would involve bringing together all stakeholders from relevant industries,
research organisations, government and civil society to promote the industry. Public education
and awareness would lead to ownership by the population. Countries would benefit from
promoting the industry at home and internationally, possibly through the appointment of a high
level “champion.” There would need to be adequate social regulations and laws that protect the
rights of people associated with the industry and the putting in place of mechanisms to resolve
conflicts between all sectors involved. Disagreements between the sugar cane producers, sugar
and ethanol producers, and electricity companies can hamper the development of the industry.
Strong environmental regulations and laws to prevent pollution of water systems and coastal
zones, encourage biodiversity, promote sustainable farming practices and prevent atmospheric
pollution, would have to be backed up by strong enforcement. These considerations are
particularly important in areas where tourism is an important economic activity.
6.5
The Challenges - Production & Utilization
a)
Production
The development of biofuels industries will represent a new endeavor for the countries. The
closest experience for liquid biofuels is the production of potable alcohol (rum that is widespread
across the region. The production of rum is a very profitable activity for a number of producers;
indeed, the region boasts a number of world-renowned brands. However, the development of
liquid biofuels industries implies a relatively steep learning curve, but starting off with valuable
experience with agronomic and conversion aspects of ethanol production. In the case of
biodiesel, the relevant experience comes from the production of copra and coconut oil. In the
case of the production and processing of solid biofuels, the regional experience is limited to the
forestry sector with limited experience from charcoal production.
The Brazilian ethanol program has experienced an impressive learning curve during the last three
decades. As a result, production cost in 2004 was a quarter of what it was in the 1970s, reflecting
cumulative results of a large number of improvements both on the agricultural side (primarily from
272
increase in yields) and on the industrial one (primarily from economies of scale and process
improvements, but also from use of co-products and better infrastructures), as well as the
continuous development of the skills base. The availability of a number of technical skills is critical
to the establishment of a biofuels industry. A skilled workforce is critical to maintain and run a
plant efficiently, and to the efficiency and sustainability of the entire system. Critical skills required
are managerial and technical skills for the operation of ethanol plants, technical skills for the
development and management of sugar cane crops, skills in relation to environmental best
practice, policy-making skills, as well as a range of other skills needed to provide support services
to the industry.
Countries like Brazil and India could contribute to the development of technical and managerial
skills, and knowledge in the areas of agronomy, waste management, downstream activities, and
systems thinking and integration of sectors. The region is well positioned through IICA to access
any benefits from this experience. Jamaica and Trinidad and Tobago were exporters of ethanol,
to the US, in 2005, representing experience in the handling of ethanol fuel. The major challenges
on the production side for biofuels are land access, labor and transportation cost, and quality
control.
The ongoing access to information on best practices at all levels across all sectors of the industry
is important for a sustainable and profitable industry. Best practices will differ according to
location, and evolve as informed by research and with the development of new technologies and
techniques. Best practices should apply to agronomic activities, environmental management, coproducts use, wastes disposal, stakeholder communication, and workplace activities.
b)
Utilization
Utilization of liquid biofuels (ethanol and biodiesel) would require points of fuel production to be
connected to distribution outlets (gas stations). The physical connection include the necessary
modification to vehicles, as discussed in the technical aspects of biofuels, establishment of
blending facilities, water tight storage and transport infrastructure. These will have cost
implications and thereby impact the financial viability of biofuels industries. For example, the
costs of transporting ethanol in the US, by tanker over less that 300 km, is between US$0.01 to
250
US$0.02 per liter, and by boat (ocean or inland), between US$0.01 and US$0.03 per liter.
Some cost estimates are available for downstream infrastructure and equipment:
- A 40 million-litre tank, required if storage tanks are not available, costs about
US$500,000.
- The associated splash blending systems, including the necessary modifications to have
an ethanol-compatible terminal are in the range of an additional US$500,000.
Despite these investments, if sales volumes are sufficiently high (i.e., 24 tank refills per year or
251
more), the impact on ethanol costs would be around $0.002 per liter of ethanol.
Overall, total
cost for transporting, storing and dispensing ethanol ranges from about US$0.01 to US$ 0.07 per
252
liter .
Utilization of solid biofuels would primarily be for the generation of electricity either for local
consumption or for export. Requirement for using solid biofuels would be linked to technology and
rules and regulations for the generation, transmission and distribution of electricity. Generation
of electricity for export to the grid would require agreements for power purchase with the national
utility, or for power-wheeling to other users. Implementing legislation for Power Purchase
Agreements (PPA) and appropriate regulatory reform (such as an independent regulatory for the
energy sector), and deregulation of the foreign exchange regime and privatization have been
successful in getting investments into power generation.
250
IEA, 2004
IEA, 2004
252
DIFID Report
251
273
6.6
The Role of IICA
The development of a regional biofuels industry is based on substitution of liquid and solid
biofuels for petroleum fuels in regional transportation and electricity generation. The proposed
biofuels industries would provide the region with new impetus for the troubled agricultural sector
that, as discussed earlier, has been in decline both in terms of contribution to national
development through employment generation and export earning, for more than a decade. The
changes in global trade protocol have negatively impacted the economic and financial returns
from export commodities such as sugar and bananas. In addition, the region’s farmers are having
difficulties in competing with imported food. This makes for a less than promising future for the
sector in many countries across the region which, as shown in Table 6.6.1. below, is a major
employer in a number of countries. This new market could help boost the future prospects of the
sector in the production of biofuels to reduce the level of petroleum imports.
Table 6.6.1:
Total Population, Agricultural Population and Rural Population (Select
253
Caribbean Countries)
Country
Total
Agricultural
Rural Population
256
Population Population Relative to Relative to Total (%)
254
255
(millions)
Total (%)
Antigua and Barbuda
0.1
24
62
Barbados
0.3
4
48
Belize
0.3
30.3
52
Cuba
11.2
13.5
25
Dominican Republic
8.6
15.4
34
Guyana
0.7
16.9
62
Haiti
2.9
dna
63
Jamaica
2.6
20
43
Saint Kitts & Nevis
-
21.1
66
St. Lucia
St. Vincent and The
Grenadines
0.2
22.4
70
0.1
23.1
42
Suriname
0.4
19
24
Trinidad & Tobago
1.3
8.3
24
There are a number of causes for problems in the region’s agricultural sector including: high cost
of inputs, limited opportunities to exploit economies of scale, weather conditions and declining
capacity and investment. Plans for rehabilitating the sector are focused on linking the sector with
the thriving tourism sector, specifically focusing on vegetables, meats and fruits. The rationale for
this focus is the existence of a unique market that has remained under-exploited. There is,
however, potential synergy between both strategies as the biofuels industries would produce
some key inputs for the production of vegetables and fruits that would help maximize economic
benefits. Potential inputs from biofuels would include fertilizers, enhanced water resources, and
local energy services – refrigeration, lighting, processing, irrigation, transportation, etc., all of
which are critical to a number of countries successfully implementing the agro-tourism
opportunities, as well as benefiting from conventional agricultural activities.
253
Compiled from FAOSTATS
Human Development Report 2005 (data for 2003)
255
FAOSTATS
256
FAO, Food and Agriculture Indicators 2003– Prepared by ESSA, October 2005
254
274
The major issues that may arise in some countries where limited land resources and relatively
high population density come together, is land-use policies. The international experience shows
that at periods during the development of the Brazilian program, there has been debate of how
much land for food and how much for food. This debate is not likely in many countries as there is
growing dependence on imports to meet food demand. Land use policies would, however, be
critical in ensuring that the soil and the crop as well as the production systems are sustainable.
Unlike increasing the production of meats, vegetables and fruits that represents change within the
sector, the production and use of biofuels as a substitute for petroleum represents challenging
changes within the national economy. The global experience discussed earlier, as well as the
constraints and challenges analyzed, shows that the development of national-scale biofuels
programs require:
• Strong Commitment from the National Government;
• Private sector with strong vested interest;
• Institutional capacity;
• Market Access and Transparent Pricing, and;
• Quality Control.
Given the limited capacity that exists in the energy sector in the majority of the countries, the
development of biofuels industries would require the provision of systematic long-term technical
assistance. This support function is critical, and one that IICA, as discussed earlier, based on its
institutional character, is uniquely positioned to play. The support function of IICA is categorized
as support for:
a) Development of policy and legal framework;
b) Building capacity;
c) Promoting investments, and;
d) Public ownership.
6.6.1
•
•
Policy and Legal Framework Development
Assistance to countries to help identify which biofuels industries are likely to provide
maximum benefits based on land resources and petroleum fuel usage.
Provide assistance to national governments in the development of the policies that would
catalyze and drive the development of biofuels production.
6.6.2
Building Capacity to Support Development National Capacity in Biofuels
Production and Use
•
Support the establishment of research and development of biofuels systems, including
the development and/or use of high biomass producing crops such as energy cane, oil
seeds and fast growing tree species.
Support the member countries with the identification of available lands and appropriate
crop that would provide the maximum sustainable supply of raw material.
Assist countries in assessment of Biomass resources.
Assist with the preparation of pre-feasibility studies to identify potential industries and
constraints and cost benefits.
Provide innovative information support facilities – this could include virtual demonstration
center of various biofuels industries.
Assist with the development of financial agreements and power purchase agreements.
•
•
•
•
•
6.6.3
Promoting Investments In Biofuels
Support to develop regional strategies to advance the production and use of biofuels would be
very critical to achieving maximizing progress in developing the industry. The regional dimension
would allow for an increased number of options for biofuels production versus purely national
275
options. For example, due to environmental and/or land resource endowment, economies of
scale, and labor cost, some countries would not be able to establish viable industries for a
particular biofuel(s). However, through the CSME, countries with markets but not enough or no
capacity to produce a particular biofuel can establish partnerships with other countries. This is a
model used very successfully by countries like Singapore, that have very limited agricultural land,
to help meet some of its food demand.
6.6.4
Public Education and Ownership
For IICA to play this role, it would need to undertake institutional strengthening, adding
professional skills in energy planning and policy, and engineering, and information support
capacity that allows IICA to implement a regional program. This will require a well-defined and
focused research, development and demonstration component.
276
CHAPTER 7
CONCLUSION
277
7.0
CONCLUSION
As can be seen from the analysis of the data presented in Annex 4, the biofuels production
potential of the different countries, based on the average 2003 to 2005 agricultural production,
there is not enough agricultural production to equate to fuel demand in 2004, but there is land
resources available to significantly increase production levels. The amount of biofuels from
sugarcane juice and coconut oil, which are the two primary potential sources of biofuels, would
have to be increased almost four-fold to meet the regional demand for gasoline and diesel, in
2004. This level of demand points to a potentially significant regional market in energy for
farmers, if the economics of biofuels production prove favorable. Analysis of the 16 countries’
2004 crop production figures reveal that if all the sugarcane crop were converted to ethanol, the
quantity of ethanol produced would be approximately 3,100 million liters, which can substitute
around 2,300 million liters of gasoline. The quantity of gasoline imported in 2004 was about 4,000
million liters, and the quantity of diesel, 5,400 million liters.
Instead of doing cogeneration to produce electricity for export to the national grid as in Mauritius
and some parts of Brazil, India, and Indonesia, and if all the bagasse were to be converted to fuel
alcohol, using the best available technology, then an estimated 1,000 million liters could be
produced. The technology for producing ethanol from cellulosic materials such as bagasse, straw
and wood is under development with a few pilot projects underway in Canada, Finland and
Sweden. It is likely to take another five to 10 years to reach a commercially mature stage. If the
current high sucrose varieties of sugarcane were replaced with energy cane varieties (these
varieties’ biomass and fermentable solids yields are both twice that of the existing high sucrose
varieties), then nearly 2,000 million liters of ethanol can be produced from bagasse, and another
3,100 million liters from the sugars, giving a total production of 8,200 million liters.
This level of liquid biofuels production would meet all the projected demand for gasoline and a
significant portion of the demand for diesel, presuming of course that appropriate transportation
policies can be implemented so alcohol fuels is used in both spark ignition and compression
ignition engines.
The global biofuels experiences analyzed suggest that the principal
requirement, once market and production capacity has been established, is government
leadership.
Based on a crude price of US$70 per barrel, this amount of biofuels would be worth in excess of
US$3.6 billion, which is nearly 55 per cent of the region’s total agricultural output, in 2004. The
reduction in carbon dioxide emissions would amount to some 21 million tons, worth over US$100
257
million, based on a value of US$5/ton.
It is estimated that the Brazilian sugarcane-based
biofuels program produced 16 billion liters of ethanol, and avoided the emission of some 40
millions tons of greenhouse gases in 2004.
Examination of the regional land resources endowment, labor force, and climate, shows that their
is no land resource constraint to the production of the raw material to meet the entire regional
demand for biofuels to replace the amount of gasoline and diesel imported in 2004. Despite large
disparities in land resource endowments across the countries, that would place constraint on the
participation of some countries, there would be significant regional benefits as countries would be
able to trade within the CSME. While biofuels has the potential to be one of the largest traded
commodities within the region, it will, however, require coordination at the national and regional
levels if the significant social, economic, and environmental benefits that accrue from biofuels are
to be realized.
IICA
July 2006
278
IICA TECHNICAL PAPER – ANNEXES
279
Annex 1 – Technical Issues in the Production and use of Liquid Biofuels
Liquid biofuels are used mainly in two types of engines:
• Spark ignition (SI) engines that generally use gasoline / petrol as fuel; these engines are
used in automobiles, small boats, aircraft and small electricity generating sets;
• Compression ignition (CI) engines that generally use diesel as fuel; these engines are used in
medium and heavy duty trucks and buses, boats and ships, and diesel power plants;
Technical details of the following main uses of liquid biofuels are given in the following sections:
a) Ethanol in SI engines
b) Ethanol in CI engines
c) Coconut oil in CI engines
d) Biodiesel in CI engines
a)
Ethanol in SI engines
Ethanol makes an excellent motor fuel for the following reasons:
a) Ethanol can be used as an octane enhancer in petrol since its octane numbers are higher
than those of petrol. Ethanol’s research octane number (RON) is 109 and its motor octane
number (MON) is 90.
b) Ethanol also has a lower vapor pressure than gasoline that results in lower evaporative
emission.
c) Ethanol’s flammability in air is also much lower than that of gasoline. This reduces the
number and severity of vehicle fires.
d) Ethanol can be blended directly in petrol, up to a mix of 22% (anhydrous), without engine
modifications. Higher blends upto 100% ethanol (hydrated) are possible with engine
modifications.
e) Anhydrous ethanol has lower and higher heating values of 21.2 MJ per liter and 23.4 MJ per
liter, respectively; for gasoline the values are 30.1 and 34.9 MJ per liter.
Table 2 Fuel properties and characteristics of Ethanol and Petrol
Petrol
Ethanol
Specific calorific value (KJ/kg)
43,900
26,700
a
Octane number (RON/MON)
91/80
109/98
Latentheat of Vaporization (kJ/kg)
376-502
903
Ignition temperature (oC)
220
420
Stoichiometric A/F ratio
14.5
9
Source: Goldemberg and Macedo, 1994
(a) RON (Research Octane Number): as defined by ASTM in
D908-47T; MON (Motor Octane Number): as defined in ASTM
D357-47
A comparison between
the fuel properties and
characteristics of ethanol
with petrol are given in
Table 36. Ethanol’s
excellent properties as a
motor fuel has led to the
development of three
types of engines by
major automobile
manufacturers in Brazil:
a) Dedicated (E-100) engines that can run on 100% hydrated ethanol (containing 5% moisture);
b) Modified (E-22) engines that can run on an ethanol-gasoline mixture containing 22%
anhydrous ethanol (zero % moisture);
c) “Flex-fuel” cars that can run on gasoline or ethanol or any blend of the two fuels.
Initially, carburetor-based systems were developed, but since the early 1990s, electronic fuel
injection systems are available for both E-22 and E-100 engines. “Flex fuel” cars have recently
been developed in response to ethanol shortages so that vehicles can also run on petrol when
ethanol is not available. The main modifications necessary to run petrol engines on ethanol are
listed in Table 22. The modifications are necessary because of two factors:
• Differences in combustion process parameters and fuel properties; and
280
•
Corrosive behaviour of ethanol
Table 3 Modifications required to run petrol engines on ethanol
Modifications required
• Higher compression ratios (12:1, instead of 8.1:1);
• Larger fuel tank volumes ( ~ 20% ) for equivalent
Due to combustion process
autonomy;
parameters and fuel properties • Colder spark plugs;
• Specific carburetor, distribution or fuel injection
calibrations;
• Automatic cold starting system (gasoline injection);
• Heated air inlet (with exhaust manifold);
• Electric warm-up system in some cases;
• Fuel tanks: tin coated (electrolytic) steel, 7um;
• Filling nozzle: tin coated (hot immersion), 100g/m2;
• Fuel lines: pump to tank, polyamide (nylon 11);
Due to corrosive behaviour of
• Pump to carburetor, nitrile rubber;
ethanol
• Carburetor surface: Electroless nickel (Zamak, Cu-2um,
Ni-5um);
• Fuel pump finish, steel, coating with Cd-Ni-dichromate
(10um);
• Cylinder head gasket fire ring: stainless steel.
• Valve materials and seats: hardened.
Source: Goldemberg and Macedo, 1994
Table 4 Fuel Ethanol Specifications
Anhydrous
Alcoholic strength (% vol, 20oC) 99.5 (min.)
30 (max.)
Acidity (as acetic acid) (mg/l)
pH
500 (max.)
Conductivity (uS/m)
Copper (mg/kg)
Sodium (mg/kg)
Chloride (mg/kg)
Sulphate (mg/kg)
30 (max.)
Dry residue (mg/l)
Source: Goldemberg and Macedo, 1994
b)
Hydrated
95.2 ± 0.6
30 (max)
7±1
500 (max.)
2 (max.)
5 (max.)
1 (max.)
4 (max.)
30 (max.)
Specifications for the
composition of ethanol as a
motor fuel are given in Table 23.
These specifications must be
followed in order to limit the
corrosive’ behavior of ethanol
and formation of inorganic
deposits on internal engine
surfaces.
Ethanol in CI engines
Ethanol can be used in CI engines either as low level blends (10 to 15% ) or as neat ethanol fuel
(E-95) – in both cases hydrous ethanol containing approximately 95% ethanol and 5% water (E95). Since ethanol is not miscible in diesel, some emulsifiers and solubilisers have to be added in
the low level blends to prevent separation of the phases. 10 to 15% blends of ethanol with diesel
do not require any modifications in the diesel engine. E-95 has a now cetane number, so an
additive to improve ignition has to be added; composition of neat ethanol used in CI bus engines
is given in Table ???.
Several experiments have been done since the early 1990s to modify diesel engines to adjust
their fuel auto-ignition characteristics, in order to be able to run on very high ethanol blends, such
as 95% ethanol. In 1992, Archer Daniels Midland (ADM) put into service the first fleet of ethanolpowered, heavy-duty trucks for evaluation and demonstration in the US. Four trucks were
281
equipped with specially modified Detroit Diesel Corporation model 6V-92TA engines and were
fuelled with E95, composed of 95% ethanol and 5% gasoline [IEA, 2004]. Substantial engine
modifications were necessary, including to the electronic control module and the electronic fuel
injectors. Since ethanol contains only about 60% of the energy of diesel fuel per unit volume,
more ethanol fuel is required to generate the same amount of power in the engine. Therefore,
larger ethanol-resistant fuel pumps were used and the diameter of the holes in the injector tips
was increased. The bypass air system was modified to achieve the proper ethanol compression
ignition temperature.
Other tests of high-level ethanol blends in modified diesel engines have now been carried out in
Minnesota and Sweden. In both cases, the vehicles performed well, although in the Minnesota
trial the maintenance and repair costs of the E95 trucks were considerably higher, primarily due
to fuel filter and fuel pump issues. From an emissions standpoint, it was found that the E95 trucks
appear to emit less particulate matter and fewer oxides of nitrogen but more carbon monoxide
and hydrocarbons than their conventional diesel-fuelled counterparts.
The Swedish programme is probably the world’s largest, and is ongoing. Both Scania and Volvo
manufacture buses that can run on 95% hydrous ethanol. Specifications for ETAMAX D, an
ethanol fuel produced by the ethanol manufacturer Sekab and used in Swedish buses are given
in Table 40. Since 1990, Scania has supplied around 450 ethanol buses to 15 Swedish cities.
Stockholm already has the world’s largest fleet of ethanol buses, and after the addition of 123
ethanol-fuelled suburban buses during autumn 2005, Storstockholms Lokaltrafik (SL), the public
transport operator in greater Stockholm is now operating around 350 ethanol buses.
Based on its experience since 1996, SL has found that modified service requirements are
unnecessary, apart from more frequent cleaning of the injectors to reduce the acetic acid odour.
Table 5 Specifications of ETAMAX D ethanol fuel for buses
The exhaust emissions are
PROPERTY
SPECIFICATION
considerably below those of the
Appearance
Clear, without particles
diesel buses in the case of all
pH min-max
5.2 – 9.0
substances subject to statutory
Water max %mass
6.20
limits, as well as for unregulated
Density g/ml 0
820 – 0.840
constituents, such as aldehydes
Fuel composition
and polyaromatic hydrocarbons.
Ethanol 95%, %mass
90.2
The ethanol buses used by SL are
Ignition Improver, %mass
7.0
equipped with Scania'
s 9-litre 230
MTBE, %mass
2.3
hp
ethanol
engine,
which
has had
Isobutanol, %mass
0.5
exhaust
emissions
equivalent
to
Corrosion Inhibitor, ppm
90
Euro
4
since
many
years.
Color
red
Source: Sekab
The main differences between
Scania’s 95% ethanol (E-95) powered buses and diesel buses are:
a) The fuel system on the ethanol buses is modified by installing bigger fuel tanks since the fuel
consumption for ethanol is approximately 60% higher compared with diesel;
b) Ethanol buses have larger injectors to take account of the higher consumption resulting from
the lower energy content of ethanol;
c) Fuel injection pumps on ethanol buses have a higher capacity and are fitted with a separate
lubrication system since ethanol, unlike diesel oil, has no lubricating properties; the injection
timing is also modified;
d) Gaskets and filters are changed to those resistant to ethanol;
e) Modifications to the basic engine are confined to an increase in the compression ratio from
18:1 for diesel to 23:1 for E95;
f) An “ignition-improving” additive is required with E-95 engines to help initiate combustion of
the ethanol fuel and decrease ignition delay. However, with the engine modifications, such
additives were actually easier to develop, and were developed earlier, than for ethanol in low282
level blends in conventional diesel engines. Scania has assisted in developing one blending
agent, used to create the ethanol formulation “Beraid”, that is now undergoing approval in the
European Union as a reference fuel for diesel engines that run on ethanol. Another
formulation, called “Puranol”, has been developed by the Pure Energy Corporation;
g) The glow plug system is modified to help start the E-95 engine;
h) An engine oil without additives must be used with E-95.
i) The catalytic exhaust gas purification system has been adapted for the ethanol buses in
collaboration with the Royal Institute of Technology, Stockholm.
While low level ethanol blends with diesel can easily be introduced, it is the use of 95% ethanol
fuel in E-95 engines that can make a substantial displacement of diesel by ethanol possible. The
E-95 engine for buses and trucks is a very attractive and proven option especially for ethanol
producing SIDS who aim to substitute a very high percentage of their imported diesel fuel
consumption with locally produced ethanol.
c)
Coconut oil in CI engines
When Rudolf Diesel, the inventor of the compression ignition (diesel) engine, demonstrated for
the first time his invention at the Exhibition Fair in Paris in 1898, the fuel he used in the engine
was peanut oil. Almost any vegetable oil can be burned in a CI engine, though some
modifications may be necessary on an engine that has been optimized to run on petroleum
diesel. These fuels are called “pure plant oil” (PPO) or “straight vegetable oil” (SVO). Important
fuel related properties of the most widely used vegetable oils including coconut oil is compared
with petroleum diesel in Table 39.
One of the most widely used plant oils in Germany, Denmark and other European countries is
rape seed oil, so its properties and effects on the diesel engine have been studied in detail. Kits
are now available for modifying car engines to run on 100% rapeseed oil or diesel or any mixture
of the two, even during the north European winters without any problems. Soyabean oil is used
to some extent in USA. It is only recently that the use of palm oil and coconut oil in diesel
engines has been studied and used in south-east Asian countries (Thailand, Philippines,
Indonesia, India, etc.) and at several places in the south Pacific notably Vanuatu. Coconut oil
blends with diesel and kerosene have been used quite successfully in automobiles but its use in
diesel power plants is still experimental. One of the key issues is the validity of manufacturer’s
warranties, so utilities on some SIDS are trying to test coconut oil blends in their diesel gensets
in collaboration with manufacturers such as Caterpillar.
Table 6 Fuel-related properties of vegetable oils and petroleum diesel
Specific
Cetane Kinematic
Solidification
Energy, Gross Numbe Viscosity@
Point
40°C (cS)
(MJ/kg)
r
(C)
Petroleum
45.3
45 – 55 4
-9
Diesel
Coconut Oil
42.0
60
20
24
Palm Oil
39.6
37
35
Rapeseed Oil
39.7
38
37
-10
Soybean Oil
39.6
37.9
33
-16
Linseed Oil
39.7
29
-24
Source: Bradley, 2004
Iodine
Value
Saponificatio
n Value
-
-
10
54
125
130
179
268
199
175
191
190
The significance of these properties for using coconut oil as a diesel substitute are:
Specific Energy – indication of the fuel’s energy released when it is burned. Coconut oil’s energy
(38.4 MJ/kg or 34.9 MJ/liter) is a little less than petro-diesel (46 MJ/kg or 38.6 MJ/liter). The
energy content of one liter of coconut oil is only 90% of that of one liter of diesel. However, it has
been found that coconut oil blends give better mileage on a kms per liter basis than diesel. This
283
is due to the improved burning characteristics of coconut oil in the cylinder that also gives more
torque.
Cetane Number (CN) – indication of the fuel’s willingness to ignite when it is compressed.
Coconut oil’s CN (60) is the highest.
Viscosity – indication of the fuel’s ability to atomize in the injector system. Coconut oil’s viscosity
is comparable with other oils but is several times higher than petrodiesel. Higher viscosity will
cause poor volatilization of the fuel in the injector system and poor spray pattern. This can cause
injector coking and crankcase lubricant polymerization. Viscosity can be reduced by four ways:
(a) blending, (b) transesterification, (c) microemulsification, or (d) pyrolysis.
Solidification Point – indication of the temperature at which the fuel will turn solid. Coconut oil’s
solidification point (24°C) is at room temperature. This can be lowered by blending it with diesel
or kerosene. Removing the residual water and free fatty acids found in mill refined coconut oil
also reduces the melting point to some extent.
Iodine Value (IV) – indication of the ability of the fuel to polymerize due to the fuels’ degree of
bonds available. Coconut oil’s IV (10) is the lowest among all the fuels so it can be used directly
in the engines without modification.
Saponification Value (SV) – indication of the fuel’s ability to vaporize and atomize due to the
fuels carbon chains. Coconut oil has the highest SV (268), so it will ignite more quickly than other
plant oils.
d)
Biodiesel in CI engines
A high cetane number and a low iodine number makes coconut oil well suited for CI engines, but
it has two main drawbacks: a high melting point and high viscosity, both of which can be
corrected by esterifying the oil into biodiesel. Biodiesel made from coconut oil by
transesterification has a melting point that is below zero degree C and its cetane and iodine
numbers are nearly the same as coconut oil (refer Table 40). Biodiesel has other advantages
over coconut oil: its viscosity and other physical properties are similar to petroleum diesel so it
can be easily mixed, transported and distributed with diesel, and most diesel engines do not need
any modification for using blends of biodiesel.
Table 7 Fuel related properties of oils & fats and their esters
Melting Range deg C
Iodine
Methyl
Ethyl
number
Type of Oil
Oil / Fat Ester
Ester
Rapeseed oil, h. eruc. 5
0
-2
97 to 105
Rapeseed oil, i. eruc. -5
-10
-12
110 to 115
Sunflower oil
-18
-12
-14
125 to 135
Olive oil
-12
-6
-8
77 to 94
Soybean oil
-12
-10
-12
125 to 140
Cotton seed oil
0
-5
-8
100 to 115
Corn oil
-5
-10
-12
115 to 124
Coconut oil
20 to 24 -9
-6
8 to 10
Palm kernel oil
20 to 26 -8
-8
12 to 18
Palm oil
30 to 38 14
10
44 to 58
Palm oleine
20 to 25 5
3
85 to 95
Palm stearine
35 to 40 21
18
20 to 45
Tallow
35 to 40 16
12
50 to 60
Lard
32 to 36 14
10
60 to 70
Source: Journey to Forever
Cetane
Number
55
58
52
60
53
55
53
70
70
65
65
85
75
65
The major international standards for biodiesel (Austrian, German, European and US) are given
in Table 43. Does not exist
Table 8 Biodiesel Standards
284
BioDiesel
Property
Unit
Austrian
Standard
C1190
1)
Feb. 91
DIN 51606
Sept 1997
U.S. Quality Euro
Specification Standard
NBB/ASTM EN 14214
Density at 15°C
g/cm3
0.86 - 0.90
0.875 - 0.90
/
0.86 - 0.90
Viscosity
at 40°C
mm2/s
6.5 - 9.0
(20°C)
3.5 - 5.0
1.9 - 6.0
3.50 - 5.00
Flash point
°C
(°F)
min. 55
(131)
min. 110
(230)
min. 100
(212)
min. 120
(248)
CFPP
°C (°F)
summer
winter
max. 0 (32)
max. 0 (32)
/
max. -8 (17.6) max. -20 (-4)
2)
Total sulphur
mg/kg
max. 200
max. 100
max. 500
max. 10.0
Conradson (CCR)
at 100%
at 10%
% mass
max. 0.1
/
max. 0.05
/
max. 0.05
/
/
max. 0.30
Cetane number
-
min. 48
min. 49
min. 40
min. 51
Sulfated ash
content
% mass
max. 0.02
max. 0.03
max. 0.02
max. 0.02
Water content
mg/kg
free of
deposited
water
max. 300
/
max. 500
Water & sediment
vol. %
/
/
max. 0.05
/
Total
contamination
mg/kg
/
max. 20
/
max. 24
Copper corrosion
( 3 hs, 50°C)
degree of
Corrosion
/
1
No. 3b max.
1
Neutralisation
value
mg
max. 1
max. 0.5
max. 0.8
max. 0.50
Oxidation stability
h
/
/
/
min. 6.0
Methanol content
% mass
max. 0.30
max. 0.3
max. 0.2
max. 0.20
Ester content
% mass
/
/
/
min 96.5
Monoglycerides
% mass
/
max. 0.8
/
max. 0.80
Diglycerides
% mass
/
max. 0.4
/
max. 0.20
Triglycerides
% mass
/
max. 0.4
/
max. 0.20
Free glycerine
% mass
max. 0.03
max. 0.02
max. 0.02
max. 0.02
Total glycerine
% mass
max. 0.25
max. 0.25
max. 0.24
max. 0.25
/
max. 115
/
max. 120
Iodine value
Linolenic acid ME
% mass
/
/
/
max. 12.0
Polyunsaturated
(>=4db)
% mass
/
/
/
max. 1
Phosphorus
content
mg/kg
/
max. 10
/
max. 10.0
Alkaline content
(Na+K)
mg/kg
/
max. 5
/
max. 5.0
285
BioDiesel
Property
Unit
Austrian
Standard
C1190
1)
Feb. 91
DIN 51606
Sept 1997
U.S. Quality Euro
Specification Standard
NBB/ASTM EN 14214
Alkaline earth
mg/kg
/
/
/
metals (Ca + Mg)
Source: BioDiesel International;
(1) the world'
s first BioDiesel standard, ÖNORM C1190 (Feb 1991);
(2) depending on the national appendix to EN 14214
max. 5.0
The main characteristics of biodiesel as a fuel for CI engines are:
a) Nearly all compression ignition engines will burn biodiesel without any modification.
However, biodiesel contains trace amounts of methanol or ethanol and will, over time,
degrade any rubber parts that it comes in contact with. In some automobiles the fuel hose
that carries fuel from the fuel door to the fuel tank and the fuel hose that carries fuel from the
tank to engine may have to be replaced earlier than usual.
b) Biodiesel generally has a cetane rating of between 50-60 whereas diesel fuel generally has a
cetane rating of between 40-50. Biodiesel’s higher cetane rating is due to its higher oxygen
content and superior combustion properties.
c) Biodiesel is more lubricating to the engine and therefore can help to prolong engine life.
d) Maintenance costs are unaffected by using biodiesel.
e) The fuel consumption of automobiles using biodiesel (kms per litre) is almost the same as
those using petroleum diesel.
f) In tests done in US universities and in Europe, engines running on biodiesel have minor, if
any differences in torque, horse power, range, and top speed. Engines running on biodiesel
generally idle smoother and accelerate more smoothly.
Most European diesel engines manufactured for the European market now come with biodieselwarranted engines. In Europe, Volkswagen, Mercedes, Volvo and others are all warranted to run
at 100% biodiesel. However, diesel engines made for the US market, have differing warranty
coverage. Some diesels in the US are now warranted for use with biodiesel that meets the
automobile manufacturer’s fuel specifications. Most warranties state that any fuel system problem
caused by fuel that does not meet specs is not covered by the warranty, however all vehiclerelated problems are covered regardless of the type of fuel used. [Biodiesel America]
286
Annex 2
Technical Aspects of Agro-energy
Sugarcane is one of the most efficient crops for converting solar radiation into biomass. As can be seen in
Figure 1, the above ground parts of the sugarcane plant (stem, leaves, tops) can produce over 130 tons of
dry matter per hectare annually (world average of 60 dry t/ha/yr) giving an annual energy yield of over
1300 gigajoules per hectare (world average of over 600 GJ/ha). Eucalyptus energy plantations comes next
producing over 100 dry t/ha/yr with an annual energy yield of 1000 GJ/ha/yr.
Figure 2 Dry tonnage and energy yields per hectare for different biomass production systems258
A2.1
Properties of agricultural residues
Heating Values
Agricultural residues have heating values on a dry basis ranging from 14 to 20 gigajoules per ton
which is lower than the energy density of other solid fuels used for power generation such as
bituminous coal (30 to 35 gigajoules per ton) or lignite (23 to 26 gigajoules per ton). Agroresidues also have a fairly low energy density at the point of production due to the moisture
content, which can vary from 8% to 20% for straws, from 40% to 50% for bagasse and from 75%
to 90% in animal manures. The heating values for commonly found agricultural residues given in
Table 16 are the “higher heating values” (HHV) for dry biomass. The “lower heating values”
(LHV) take into account the latent heat of evaporation of the moisture in the biomass and are
typically 5% to 6% lower than HHV for sun dried straw, but can be more than 30% lower for high
moisture residues like bagasse.
258 Watson, R.T., Zinyowera, M.C., Moss, R.H., and Dokken, D.J. (eds), 1996. Climate Change 1995: Adaptations and Mitigation of Climate Change, Cambridge
University Press, Cambridge, UK.
287
Table 9 Residue Ratio, Energy Content and Uses of combustible agricultural residues259
Crop
Residue
Barley
Coconut
Straw
Shell
Coconut
Coconut
Cotton
Mustard Cotton
Groundnut
Groundnut
Maize
Maize
Millet
Seed
Pulses
Fibre
Pith
Stalks
gin waste
Shells
Straw
Cobs
Stalks
Straw
Stalks
Straws
Rapeseed
Rice
Residue ratio
Residue energy,
(kgs dry residue Higher Heating
Typical current residue
per kg crop
Value (MJ/dry
uses
produced)
kg)
2.3
17
0.1 kg/nut
20.56
household fuel
0.2 kg/nut
0.2 kg/nut
3
0.1
0.3
2
0.3
1.5
1.2
1.8
1.3
19.24
mattresses, carpets, etc.
18.26
16.42
19.7
household fuel
fuel in small industry
fuel in industry
cattle feed, household fuel
cattle feed
cattle feed, household fuel
household fuel
household fuel
household fuel
16.00
Stalks
Straw
1.8
1.5
16.28
Rice
Husk
0.25
16.14
Soybeans
Sugarcane
Stalks
Bagasse
1.5
0.15
15.91
17.33
Sugarcane
Tobacco
tops/leaves
Stalks
0.15
5
16.5
Tubers
Straw
Wheat
Straw
Wood products waste wood
0.5
1.5
0.5
14.24
17.51
20
18.77
17.65
household fuel
cattle feed, roof thatching,
field burned
fuel in small industry, ash
used for cement production
fuel at sugar factories,
feedstock for paper
production
cattle feed, field burned
heat supply for tobacco
processing, household fuel
cattle feed
Chemical Properties
Since most biomass resources are dispersed, conversion to modern energy carriers (electricity,
liquid, gaseous and solid fuels) is better done in relatively small, decentralized locations to avoid
unduly high transportation costs associated with bringing large quantities of biomass to
centralised energy generation facilities. Fortunately, the chemical characteristics of biomass
make it cost-effective to convert it thermo-chemically in small and medium scale gasifiers and
other conversion processes. The ash from combustion of biomass is generally free from toxic
substances and has a fertilizer value, so it can be dispersed over biomass growing areas to
replenish nutrients removed while harvesting.
Biomass is also highly amenable to biological and bio-chemical conversion processes like
anaerobic digestion of animal manures and organic wastes, conversion of sugars and starches to
ethanol and production of ethanol from lingo-cellulosic materials. These conversion techniques
are generally carried out using bacteria and enzymes under mild conditions.
259
) Kartha and Larsen, 2000
288
Other considerations
It may not be possible to generate energy from all the agro-residues produced because:
• Some residues are not suitable for energy production;
• Storage may be hazardous or it may be too expensive;
• Collection and transportation of residues may be too expensive;
• Residues may have to be re-cycled into the land to restore nutrients removed by the
plant;
• Residues may have other uses such as fodder, construction material, industrial
feedstocks; etc.
A2.2
Agro-energy crops and their characteristics
Fuel related characteristics of the following agro-energy crops are given below:
a) Sugarcane
b) Coconuts
c) Fruits and vegetables
d) Other crops (cereals, roots and tubers, pulses, groundnuts)
a)
Sugar cane
The sugarcane plant consists of a main stalk, leaves and a green top. In most countries only the
stalk is transported to the sugar mills for processing to produce sugar or ethanol. The leaves and
tops are burned in the field (or in cleaning houses as in Cuba) to make harvesting easier and for
pest control. The harvesting season is typically around 150 days per year but varies from over
210 days per year in parts of Brazil to around 90 days in Thailand.
The bagasse contains about one-third of the energy content of the sugarcane plant and forms
about 30% of the weight of fresh cane on a wet basis (50% moisture); sugarcane juice contains
around one-third and trash contains the remaining third of the energy content. In most sugar mills
all the bagasse is used to generate process steam and electricity requirements. The steamturbine cogeneration systems used are made to be inefficient so that no bagasse is left over for
disposal. If bagasse is used optimally for process energy requirements then there is a significant
potential to generate and export surplus electricity.
The quantity of trash (leaves and tops) that are, in most countries, burned on the field is about the
same as bagasse, i.e. about 15% of the weight of cane crushed on a dry basis. The energy
content of the trash (16.5 MJ / kg) is a little less than bagasse (17.3 MJ / kg). However, only 60%
to 75% of sugarcane trash can be used to supplement bagasse for electricity generation since
some leaves have to left on the fields for weed control and to prevent soil erosion. It is easier to
store trash for operating the cogeneration plant in the off-season months. Care has to taken
while storing bagasse since the heat generated by the fermentation process, can cause
spontaneous ignition.
At the sugar mill the sugarcane stalks are washed, chopped and crushed in rolling mills to extract
the juice from the fibrous matter called bagasse. The juice is filtered, concentrated, crystallized,
centrifuged and dried to produce sugar. Molasses, the final concentrate which contains the
sucrose that cannot be recovered, is fermented and distilled to produce ethanol. By adding raw
sugar juice to the molasses more ethanol can be produced instead of sugar.
Table 10 Energy content of the sugarcane plant
289
1 TON of CANE STALKS contain
Sugar
145 kg
OR
Ethanol
85 liters
Energy (MJ)
2,300
Bagasse, dry basis
Trash (leaves, tops),
dry
a
Stillage
140 kg
140 kg
2,500
2,500
1600
litres
300
2,000
TOTAL
7,300
Source: Regis and Leal, 2004, (a) Only for ethanol
producing a very good fertilizer for the sugarcane fields.
b)
The third source of energy from sugarcane
residues is the wastewaters from the
ethanol distillery called “vinasse” or
“stillage”. which contains around 13% of the
energy in the fermentable solids or 4% of
the total energy in the cane. Stillage has
high chemical and biological oxygen
demand levels (COD and BOD) that have
to be reduced before effluents can be
released into the environment. Anaerobic
digestors provide an ideal method of
extracting the energy from stillage as
methane, lowering the COD and BOD to
environmentally
benign
levels,
and
Coconuts
The coconut palm has a single trunk, 20-30 metres tall; the leaves and flowers that turn into
coconuts grow at the top of the palm. Fruits mature in about 12 months and a normal healthy tall
coconut palm produces one mature bunch of coconuts per month on average. The nuts are
surrounded by a dense fibrous husk 5 to 15 cm thick, called the pericarp. Under the husk, there
is a very hard, thin brown shell containing the albumen, a milky white liquid known as coconut
milk, which is transformed into flesh of the kernel as the fruit matures. Copra is produced by
removing the kernel from the shell and drying it. Both the shell and the husk are used as fuels for
cooking and small industries, especially those processing coconuts. The shell is also used for
making charcoal. Coconut oil can be produced from the fresh kernel by wet processes, or it can
be milled from the dried copra and refined.
c)
Fruits and vegetables
A wide variety of fruits and vegetables are produced in the Caribbean SIDS with a large
proportion being produced for export. Wastes from fruits and vegetables include the parts of the
plant not consumed by humans or animals, the skins of the fruits and fruits that are over-ripe or
rotten and therefore not fit for human consumption. The main characteristic of wastes from fruits
and vegetables that differs from other crops is their high moisture content. This makes it difficult
to utilize their energy by combustion processes as a high proportion of the energy has to be used
for evaporating the water. However, the wastes are highly biodegradable and can therefore be
converted to biogas (methane) and carbon dioxide in anaerobic digesters where the high
moisture content turns out to be an advantage. Anaerobic digesters also produce a very good
organic manure that retains all the fertilizer value of the wastes since only the carbon, hydrogen
and oxygen come out in gaseous form.
c)
Other crops
The other crops produced by SIDS are cereals (mainly rice and maize), roots & tubers (cassava,
yams, taro, potatoes, sweet potatoes), pulses and groundnuts. One common residue from all
these crops is straw & stalks. In addition, rice husk, groundnut shells and maize cobs are
produced in sufficient quantities for utilisation as fuels. However, these residues are used in most
developing countries as fodder for cattle or as a fuel for cooking and heating by direct burning
that is somewhat inefficient and causes air pollution especially in the kitchens. These residues
can be utilized more efficiently and cleanly by burning them in gasifiers, and using the producer
gas for cooking, as is being done in several parts of China and India. Gasification of crop
residues can also generate electricity efficiently by using advanced technologies such as BIGGTCC.
290
All cereals and tubers contain starch that can be converted to ethanol by a process of hydrolysis and
fermentation.
While the present production of these food crops in SIDS may be sufficient only for
human consumption, the value of ethanol as a substitute for fossil fuels used in the transportation sector
(gasoline and diesel) will make it increasingly attractive to grow them as fuel crops. Starchy materials are
also very good feedstock for producing methane on a small-scale for household cooking in compact
biogas digesters that can be used even in urban areas. Groundnut oil can be used as a fuel in diesel
engines as it is or after conversion to biodiesel, but this also has to be evaluated against its edible uses.
A2.3
Agro-energy Conversion Technologies
The main processes for utilizing agricultural biomass are:
Direct combustion of
asification by means of a thermo-chemical conversion process to “producer gas” which is a
mixture of hydrogen and carbon monoxide, with some nitrogen if air is used for the partial
combustion. Gasifiers are generally around twice as efficient as direct combustion for small and
medium scale heating applications. For electricity generation, gasification permits the use of a
gas turbine in series with the steam turbine called “combined cycle” operation, which is the most
efficient power generation cycle commercially available for small and medium scale operation.
Biological conversion, using bacteria for anaerobic digestion of biomass produces methane-rich
biogas which can be used like producer gas for cooking, lighting or electricity. The sludge
remaining in the digester is an excellent organic fertiliser.
Pressing and thermo-chemical processing to produce plant oils from oil seeds. Pure plant oil
can be used in diesel engines with minor modifications. Biodiesel is produced from plant oils by a
process of esterification.
Chemical or biochemical conversion to produce methanol, ethanol from sugar, starch or
cellulose. Sugars can be fermented directly to alcohol. Starch and cellulose have to be
converted to sugars before fermentation.
Energy conversion technologies for utilization of biomass that have been commercialized are
given in Table 18 with their scales of operation and the energy services they provide.
Table 11 Technologies to convert agricultural biomass to energy carriers, scale and
energy services
TECHNOLOGY
SCALE
ENERGY
ENERGY SERVICES
CARRIER
Electricity for local pumping, milling, lighting,
Anaerobic Digestion
Small to
Biogas
communications, refrigeration, etc.
medium
Electricity distribution thru utility grid
Heating
Gasification
Small to
Producer gas Electricity (as above)
medium
Heating
Oil pressing
and filtration
Esterification
Distillation
Co-generation
Steam turbine
Gas turbine
Combined cycle
Small to
medium
Med to
large
Medium
to large
Pure plant oil
Ethanol
Vehicle transportation
Cooking
Medium
to large
Electricity
Heat
Electricity for industrial processing and grid
distribution
Industrial process heat
Biodiesel
Anaerobic digestors
291
Vehicle transportation
Cooking
Vehicle transportation
Anaerobic digestion is a low temperature biological process in which bacteria convert most
biomass (except lignin) into biogas in the absence of air. Biogas generally contains 60%
methane and 40% carbon dioxide. High moisture biomass such as animal and human wastes,
industrial effluents and sewage sludge are especially well suited, but crop residues, food
processing wastes and landfill materials can also be used. The slurry removed from the digestor
contains all the nutrients in the original feedstock and is an excellent fertilizer free of pathogens.
Anaerobic digestion also reduces the chemical oxygen demand (COD) and the biological oxygen
demand (BOD) in industrial effluents allowing them to be disposed off without adverse
environmental effects.
Anaerobic digestors operate in either the mesophilic or the thermophilic temperature regimes.
o
Mesophilic bacteria have a peak microbial activity at 35 C and can therefore be operated without
o
heating the digestor externally. Thermophilic bacteria have a peak activity at 55 C. In both
regimes, gas production decreases as the temperature falls. Biogas production is also
dependent on the carbon-nitrogen ratio, the solids-liquid ratio, pH and the rate of loading of the
feedstock.
The scale, application, and uses of anaerobic digestion technologies are summarized in Table 20.
Small and medium scale biogas plants can serve rural households and communities while large
anaerobic digestors are used for treating liquid effluents from industries and sewage.
Table 12 Anaerobic digestor technologies with their scale and applications
SCALE
APPLICATION USE OF GAS
TYPE OF
DIGESTOR
DIGESTOR
TECHNOLOGIES
Household
Cooking
Unmixed
Floating cover (India)
Small
and
Community
Lighting
tank
Fixed dome (China)
medium
Pumping
Electricity for own use
Medium
Industrial
Process heat
RetainedContact process
Electricity for industry
biomass
Anaerobic filter
and large effluents
Sewage sludge or sale to grid
Fluidised bed
Up-flow Anaerobic Sludge
Blanket (UASB)
Unmixed tank digesters
Millions of household and community scale biogas digestors have been installed in India and
China. These are generally of the simple, unmixed tank type that can either have a floating gas
holder (used widely in India) or a fixed-dome in which the pressure increases with gas production
(used widely in China). The basic design of both types are shown in Figures ZZZ and ZZZ.
Figure 3 Basic design of a Floating cover Biogas Digestor
292
Source: Kartha and Larson, 2000
Figure 4 Basic design of a Fixed-dome Biogas Digestor
Source: Kartha and Larson, 2000
Animal wastes (cows, pigs, etc.), vegetable wastes, crop residues and other bio-degradable
biomass are fed into the digestor after mixing with sufficient water. In China human wastes are
also widely used by connecting the toilets directly to the biogas digester. The gas is piped into
the kitchen for cooking and mantle lamps can be used for lighting. The digested slurry is pumped
to the fields as organic manure. Biogas from larger, community scale digesters can be used to
displace 85% diesel fuel from irrigation pumpsets.
Compact Biogas Plants
The “compact” biogas plant is a small, low cost biogas plant with a floating plastic gas holder that
has been developed by Dr.A.D.Karve, President, Appropriate Rural Technology Institute (ARTI),
Pune, Maharashtra state, India. Instead of cattle dung or other animal excreta, starchy and
sugary materials are used as feedstock. The retention time of dung in the dung-based biogas
293
fermenter is 6 weeks, while that of starch is only 6 hours, therefore the volume of the fermenter is
much smaller. The biogas produced from starch has a higher proportion of methane (80 to 90 %
by volume) than biogas from cattle dung (around 60%). As a result, less gas is required for
260
cooking and even 800 litres per day is sufficient for a family to cook two meals.
Construction
The compact biogas plant is a small version of the standard floating-drum biogas plant. It
consists of two cylindrical plastic drums telescoping into one another. The outer drum is open at
the top; acts as the digester and is kept on the ground. The inner drum which acts as a gas
holder is open at its bottom and moves up and down inside the digester. The diameter of the gas
holder is about 2 cm smaller than that of the fermenter. The fermenter vessel is provided with
appropriate inlet and outlet pipes for introducing the feedstock into it and for removal of spent
slurry from it. The gas holder is provided with a gas tap, through which the gas is led to the
burner. The digester tank can also be made of bricks and cement. There is no stirring
mechanism.
Feedstock
Feedstock that can be used in compact biogas plants are rain damaged or insect damaged grain,
flour spilled on the floor of a flour mill, oilcake from non-edible oilseeds (e.g. castor or Jatropha),
mango kernels, seed of various tree species, non-edible rhizomes (banana, arums, dioscoreas),
leftover food, spoiled and misshapen fruits, non-edible and wild fruits, spoilt fruit juice, molasses,
etc. that are readily available in rural areas. This biogas plant also accepts both sugarcane juice
and whole sugarcane macerated into small pieces. The cellulose in the cane is also converted
into gas, but it has a longer retention period of about 20 days. The raw materials have to be
pulped or powdered and mixed with 5 litres of water per kg of raw material before they are
introduced into the digester. Research is being carried out at ARTI on using combinations of
feedstock materials to increase gas yields and on additives such as micronutrients, nitrogen,
phosphorous compounds etc.
Starch, sugar, powdered oilcake, grain flour or powdered seed of any plant, take about the same
time to digest and also produce the same amount of gas. 1kg of sugar or starch yields about 400
litres of methane, within a period of 6 to 8 hours since these substances are highly digestible.
This quantity is enough for cooking one meal for 5 to 6 persons. About 2 kg dry starchy matter
mixed in about 10 litres of water is the daily input required for a family to cook two meals a day.
Operation
To start operating the biogas plant the outer drum is filled with the material to be fermented and
the inner drum is lowered into it. The gas tap at the top of the inner drum is kept open while
lowering the drum into the outer one, and when it has been completely inserted into the outer
drum, the tap is closed. As biogas is produced in the digester it fills up the inner drum which gets
lifted up due to increased buoyancy.
To begin operations on a new biogas plant mix about 10 kg cattle dung and water and pour the
slurry into the fermenter. Dung is a dirty and smelly material, so to make the system more readily
acceptable to the users, especially in urban areas, the culture can be produced and given to the
users along with the biogas plant. In the initial phase, only 200 grams of flour is added daily.
Combustible gas starts emanating in 7 to 15 days. After the methane production has started, the
daily dose can be gradually increased to 1 kg starch mixed in 5 litres of water at each of the two
daily feedings. It is best to feed the raw materials into the biogas plant once in the morning and
once again in the evening.
This system is much easier to operate than the dung based biogas plant, because of the
relatively small quantities of feedstock and effluent slurry to be handled. A typical 2000 litre dung
260
Karve, A.D., Private communication
294
based household biogas plant requires 40kg dung input and generates 80 to 100 litres of effluent
slurry daily, whereas the compact biogas plant generates only 4 to 5 litres of effluent twice daily.
The residual slurry is a good organic source of plant nutrients, because the process of methane
formation removes CO2 and CH4 selectively from the biomass and the other constituents such a
N,P,K,Ca, Fe, etc. get concentrated in the slurry. It can be used as manure for plants growing
around the house. Because the material to be fed into the biogas plant consists mainly of starch
and sugary material like sugarcane juice or fruit pulp, the slurry consists almost exclusively of
water with a little suspended matter and bacteria in it. So the starch powder or fruit pulp
feedstock can be mixed into the effluent slurry and recycled back into the input of the digester.
The system is sensitive to temperature and the retention time ranges from 6 to 12 hours,
depending upon the temperature, compared to a retention time of 40 days for the dung based
plant. To increase gas production at ambient temperatures below 15 degrees C, it is easy to
cover the drums with an insulating material and conserve the heat produced by the bacterial
process.
Costs
The 500 litre biogas plant, mass produced from moulded plastic drums, would cost about Rs.
3,500 (US$ 78) and the 1000 litre plant would cost US$ 100. The smallest cattle-dung based
domestic biogas plant costs about Rs. 12,000 (US$267). The feedback from the users is that
they would like to have more gas, about 1000 litres than the 500 litres. ARTI is trying to bring
costs of the 500 litre capacity plant down to about US$50. The total expenditure in India is about
the same as the present price of an LPG system, which includes the deposit for the LPG cylinder.
The gas produced by this system has almost the same calorific value as LPG and can be used
for cooking and lighting. It burns without smoke or soot, producing an almost invisible bluish flame
similar to that of LPG. The size of the gas holder may vary between 500 litres and 1000 litres
depending upon the requirements of the family. In a family eating mainly rice or noodles, a
capacity of 500 litres is adequate, but in the case of families eating chapattees or tortillas, which
have to be made one after the other, the gas has to last longer, and therefore a larger capacity of
gas holder and fermenter are required. The biogas produced has also been used to operate a
petrol driven portable electricity generator. This technology can be used for household scale
biogas plants or by industries to substitute LPG by using commercially grown starchy materials
such as cassava, sorghum, etc.
Retained Biomass Digesters
For treating large volumes of liquid effluents with low solids content from distilleries, pulp and
paper factories and a whole range of food processing industries, some form of retained biomass
digester is used in which the solids are retained in the digester while the treated liquid part of the
effluent is removed at high flow rates . The bacteria are retained with the solids in the reactor
allowing fast reaction rates and low residence times. Of the four technologies listed in Table ZZZ
the “Up-flow Anaerobic Sludge Blanket” (UASB) can handle high flow rates and is the most widely
used.
Figure 5 Basic design of the Up-flow Anaerobic Sludge Blanket (UASB) reactor
295
Source: Biothane Corp., 2003
A schematic of the UASB system is shown in Figure ZZZ. The reactor consists of a digester
compartment containing the active sludge bed covered by the sludge blanket, a gas-solids
separator in the upper part of the reactor, and an internal settler for sludge retention at the top of
the reactor vessel. The influent is introduced into the bottom of the reactor and flows through the
sludge bed and sludge blanket. Skilled operators are necessary particularly for proper start-up of
the UASB reactor and also for managing the process after start-up when large or sudden
fluctuations sometimes occur in composition, strength, temperature, pH or bicarbonate alkalinity.
The expanded granular sludge bed (EGSB) system is a variant of the UASB that can handle
higher organic loading rates but is rather inefficient at removing suspended solids.
Costs
3
Cost estimates for UASB reactors have ranged from US$ 280 - 350 per m of reactor volume for
Brazil [Souza, 1986]. A UASB reactor installed in Colombia for sewage processing cost US$ 181
3
per m of reactor volume [Schellingkout and Collazos, 1999]. These are real costs under
Colombian conditions, where equipment is more expensive than in Europe or North America, but
3
3
labour considerably cheaper. For a 120 m steel reactor a real cost of US$ 300 per m has also
been reported (Vieira and Souza, 1986).
Gasifiers
asification is a high-temperature conversion of solid biomass to combustible “producer gas”
which is a mixture of hydrogen, carbon monoxide, carbon dioxide and nitrogen. Air input is
controlled so that only partial combustion of the biomass occurs. Biomass such as rice husks and
coconut coir, have to be briquetted before being fed into the gasifier. Producer gas has a heating
3
value of 4 to 6 MJ/m that is 10 to 15 percent of the heating value of natural gas. Gasifiers for
biomass are of two main types: fixed bed and fluidized bed.
296
Fixed Bed Gasifiers
Figure 6 Basic design of Up-draft (left) and Down-draft (right) fixed bed gasifiers
Source: Kartha and Larson, 2000
Fixed bed gasifiers, generally used for small-scale applications (biomass input from 5 to 500
kg/hour), are of two basic designs: the up-draft and the down-draft. In the up-draft fixed bed
gasifier, biomass is fed from the top and comes down by gravity while the combustion air is
introduced from the bottom of the gasifier and moves upwards. The efficiency is high but exit
gases have too much tars and oils that cause operation and maintenance problems if used in
internal combustion engines for shaft power or electricity. Removing the tars reduces the energy
content of the gases significantly, so the up-draft gasifier is best used for heating applications
located close to the gasifier. In the down-draft fixed bed gasifier, the gases are drawn out from
the bottom of the gasifier where the hot zone breaks down the tars into lighter gases. The gases
are then cooled and cleaned before being used in a diesel engine. (Figure ZZZ)
k
Fluidised bed gasifiers have a bed of inert material like sand that is fluidized by blowing air
through it from the bottom. BIG-GT pilot projects in Brazil and UK have used the atmospheric
pressure, air blown, circulating type of the fluidized bed gasifier shown in Figure
as the bubbling type are also being developed commercially. Units larger than 30 MW (biomass
input of 15,000 kg/hour) have been successfully commercialized.
Figure 7 Basic design of a Circulating Fluidised bed Gasifier
297
Source: Kartha and Larson, 2000
Applications
Heating
Producer gas can be used directly in burners for household cooking or to replace fuel oil in
industrial boilers, furnaces and kilns. Gasifiers are generally at least twice as efficient as direct
combustion of biomass for small and medium scale cooking and heating applications. In addition
to more efficient usage of biomass, cooking with producer gas causes less indoor air pollution in
the kitchen than traditional, direct biomass burning and reduces the fuel collection time.
Figure 8 Schematic of a direct heating application of gasifiers in industries
Source: Kartha and Larson, 2000
Internal Combustion Engines
Producer gas can also be used in internal combustion engines for shaft power or electricity
generation but it has to be cleaned and cooled properly to avoid corrosion damage in the engine.
298
Around 15% diesel fuel has to be mixed in compression ignition (diesel) engines but 100%
producer gas can be used in spark ignition (petrol/gasoline) engines. Diesel engines are more
durable and reliable than petrol engines, have a higher efficiency and are simpler to maintain.
The basic layout of the biomass gasifier - internal combustion engine system is shown in Figure
ZZZ.
Figure 9 Basic layout of a Biomass Gasifier - Internal Combustion Engine system
Source: Kartha and Larson, 2000
Only one-third of the energy content of producer gas is converted to electricity, the other twothirds being converted to heat. “Combined heat and power” (CHP) systems can recover around
50% of the waste heat from the exhaust gases and cooling water of the IC engine. By utilizing
this waste heat for industrial process heating or for domestic heating applications (space and
water heating) the efficiency of biomass usage can easily be doubled.
Cogeneration
The third application of gasifiers is for cogeneration of heat and power in industries. The
producer gas from gasifiers can be fired in gas turbines or in the boilers of steam turbines. It can
also be used in “combined cycle” operation in which the producer gas fires the gas turbine and
the exhaust gases of the gas turbine are used to raise steam in a heat recovery steam generator
for the steam turbine.
Costs
Costs for using gasifiers to provide cooking gas and electricity to communities and villages are
given in Table 20. At 50% capacity utilization, these systems will be sufficient for 100
3
households. The gasifier produces 250,000 Nm per year of cooking gas which is sufficient for
3
100 households at a consumption of 6 Nm per household per day. For the electricity production
option, each of the 100 households can consume 12 kWh per day, again at a capacity utilization
of 50%.
Table 13 Costs for Cooking Gas and Electricity from small-scale Gasifiers
GAS SUPPLY TO HOMES FOR COOKING
3
from central village gasifier system with capacity ~ 60 Nm /hr gas
a
Capital investment for gas production, 2004$
a
Capital investment for gas storage tank, $
a
Capital investment for piping system for gas distribution, $
299
16,200
17,400
17,400
TOTAL Capital Investment
Biomass consumption (17.5 MJ/kg biomass), kg/hr
Biomass consumption, tons/yr
Operating labor
a
Maintenance/spare parts (assuming ~2% of capital cost/year), $
3
51,000
25
110
2
350
Cost of delivered gas, $ / Nm
0.0738
of which
gas production system capital charges
gas distribution capital charges
0.0106
0.0226
biomass fuel charges ($0.10/kg biomass)
0.0044
operating labor ($1/hr per operator)
Maintenance
0.0350
0.0012
ELECTRICITY PRODUCTION
gasifier/diesel engine/generator system with capacity ~ 100 kWe
a
TOTAL Capital Investment, including installation, $
Biomass consumption, kg/hr (@0.01 $ / kg)
Biomass consumption, tons/yr
Diesel consumption, liters/hr (@0.25 $ / hr)
Number of operators per shift (@$1 / hr)
a
Maintenance/spare parts (1% of capital cost/year), $
87,000
100
438
10
2
750
Cost of electricity generation, $ / kWh
0.0880
of which
0.032
0.010
0.025
0.020
0.0007
gasifier + diesel genset capital charges
biomass fuel charges (assuming $10/tonne biomass)
diesel fuel charges (assuming $0.25/liter)
operating labor (assuming $2/hr per operator)
maintenance
Source: Kartha and Larson, 2000
2004$ from 1998$ @ 2.5% per year
Cogeneration Technologies
The production of both heat and electricity is called “combined heat and power” (CHP) or cogeneration. The following discussion of cogeneration technologies is relevant to the sugar
industry whose power requirement comes wholly from the burning of bagasse. It is also relevant
to other combustible agricultural residues such as straws, groundnut shells, etc. that can be used
for power generation using essentially the same technologies, though some differences may arise
in the gasifier and the gas clean-up procedures depending on the chemical composition of the
feedstock.
Cogeneration technologies widely used by the sugar industry that have already been
commercialized or are under development for biomass are:
f) Back-pressure steam turbine;
g) Condensing extraction steam turbine (CEST);
h) Biomass Integrated Gasifier – Gas Turbine (BIG-GT);
i) BIG-GT in “combined cycle” operation with a steam turbine (BIG-GT CC);
j) Two variants of the BIG-GT: the BIG-STIG and the BIG-ISTIG.
The somewhat inefficient back-pressure steam turbine is used by most sugar industries all over
the world. The more efficient CEST is a fully commercialized technology used in the process
300
industries for many years but only recently being introduced in the sugar industry so that more
electricity can be produced for sale to the utility grid. The BIG-GT and its “steam injected gas
turbine” (STIG) variant are high efficiency technologies under development with technology
demonstration projects under way, so they should be available for large-scale commercialization
within 2 to 3 years. The most advanced technology having the maximum efficiency is the
“intercooled steam injected gas turbine” (ISTIG) which is already being used with “coal integrated
gasifiers” (CIG) for thermal power generation. However, 3 to 5 years of development are required
to adapt the BIG-ISTIG to biomass integrated gasifier applications.
a)
Back-pressure steam turbine
For around 100 years steam turbines based on the Rankine cycle have been used in sugar and
ethanol factories for combined heat and power (CHP) production. Biomass is burned directly in a
boiler to raise steam that expands to drive the turbine and generate electricity. The pressure of
the steam emerging from the turbine is substantially above atmospheric pressure allowing it to be
used for industrial process heating where it condenses to water that is sent back to the boiler.
Steam turbines in most sugar mills operate at a pressure of around 20 bar and produce just
enough electricity (20 kWh / ton cane) and steam (around 400 – 500 kg / ton cane) for factory
needs at an efficiency of less than 10%.
b)
Condensing extraction steam turbine (CEST)
If electricity generation is the primary or the only objective then CEST is a more efficient
technology than the back-pressure steam turbine. Steam at different pressures for process
requirements can be extracted at several points while it is expanding in the turbine as shown in
Figure ZZZ. The rest of the steam continues to expand to sub-atmospheric pressures and is then
condensed and returned to the boiler. If no process steam is required, then CEST can be
operated in the purely condensing mode to maximize electricity production, for example during
the off-season in sugar mills. CEST systems operate at pressures of 60 to 80 bars and have
typical electricity generation efficiencies of around 20%.
Figure 10 Schematic of the Condensing Extraction Steam Turbine (CEST)
301
Source: Williams and Larson, 1993
c)
Biomass Integrated Gasifier – Gas Turbine Combined Cycle (BIG-GT CC)
Gasification of the biomass permits the use of a gas turbine that can be combined in series with a
steam turbine to give “combined cycle” operation. This is one of the most efficient power
generation technologies commercially available for small and medium scale operation (Figure
ZZZ). The basic elements of a BIG-GT combined cycle power plant are:
• biomass dryer (ideally fueled by waste heat)
• gasifier for converting the biomass into a combustible fuel gas
• gas cleanup system
• gas turbine-generator fueled by combustion of the biomass-derived gas
• heat recovery steam generator (HRSG) to raise steam from the hot exhaust
• of the gas turbine
• steam turbine-generator to produce additional electricity
The producer gas from the gasifier is first used to fire the gas turbine. The exhaust gases from
the gas turbine raises steam in a “heat recovery steam generator” (HRSG) to drive the steam
turbine which provides process steam and generates more electricity. (Figure ZZZ)
Figure 11 Schematic of a Biomass Integrated Gasifier - Gas Turbine Combined Cycle (BIGGT CC)
302
Source: Larson et al, 2001
d)
Steam Injected Gas Turbines: BIG-STIG and BIG-ISTIG
Simple cycle gas turbines have poor part-load efficiencies for co-generation applications. So, to
increase the efficiency, at part-loads steam in excess of process requirements is injected into the
combustor and at points along the gas flow so that more electricity is generated at a higher
efficiency. A schematic of the BIG-GT based on the steam injected gas turbine (STIG) shown in
Figure ZZZ). The BIG-STIG has an electricity generation efficiency of 33 to 36%.
Figure 12 Biomass Integrated Gasifier - Gas Turbine (BIG-GT) based on the STIG
Source: Williams and Larson, 1993
303
To further increase the efficiency, an inter-cooler is incorporated with the compressor. The
biomass gasifier with the inter-cooled steam injected gas turbine (BIG-ISTIG) has an efficiency of
around 43%. The BIG-ISTIG, however, needs some more development to adapt the technology
to biomass applications, so it can take another 3 to 5 years for commercialization. The lower unit
capital cost of the BIG-GT variants together with their high efficiencies make them the most
promising of the new advanced technologies that can generate electricity and heat from biomass.
Efficiency Improvements in the Sugar and Ethanol industry
Traditionally sugar factories have been satisfied with very inefficient usage of energy because
they wanted to burn all the bagasse produced so as to avoid disposal problems. Since the
energy in the bagasse was several times the process steam and electricity requirements,
inefficiency in steam production and usage was desirable. Now that the option of selling “excess”
electricity to the grid for additional revenues exists, efficiency improvements are required at sugar
or sugar-ethanol factories for two reasons:
To minimize steam and electricity consumption in the factory so that maximum electricity can be
generated and sold to the utility grid.
Cogeneration technologies such as such as BIG/GTCC, convert a high fraction of the biomass
fuel input into electricity and a smaller fraction into process steam. The process steam demand
therefore has to be reduced to the levels of steam generated by these advanced technologies.
Sugar and ethanol factories all over the world consume 400 to 500 kg steam per ton of sugarcane
crushed (kg/tc). Several studies have shown that this can be reduced by upto half by effecting
steam economy and energy conservation measures [Ogden et al., 1990; 1991]. The Hector
Molino sugar mill in Cuba is currently implementing a CEST cogeneration project partly financed
by the Global Environment Facility (GEF) in which the process steam consumption is being
reduced by 32 % from 500 kg/tc to 340 kg/tc by making the following modifications at the juice
heating, evaporation and vacuum pan [Guzman and Valdes, 2000]
1. five evaporator effects, with saturated steam (2.7 kg/cm2) fed to the first one and steam
bleeding from downstream effects for use in heaters and vacuum pans;
2. the first two evaporator effects being of the falling film design, the rest of the Roberts design;
3. use of contaminated condensate for heating juice in the first heating stage; and
4. mechanical agitation at the vacuum pan.
In addition, the mills average power demand of 7.5 MW is being reduced by 500 kW by means of
the following:
replacement of the actual shredder by a first mill;
reduction of mill’s speed; and
use of Donnelly type hopper for feeding each mill.
Steam reductions in sugar and ethanol factories can be implemented in stages so that plant
operators can gain confidence and the capital investment requirements are modest for each
stage. Table 20 shows cost estimates for sugar only and sugar with ethanol plants to implement
steam reductions in two stages made by the Copersucar Technology Center, which is the
research and development center of the sugar co-operative in Sao Paulo state of Brazil.
Costs
Costs have been estimated for a typical existing “sugar only” mill or a “sugar with ethanol”
distillery processing 7000 tons per day of cane containing 14.1 % sucrose and 13.8 % fiber. The
sugar only mill produces 800 t/day sugar while the sugar with ethanol factory uses half the
3
sucrose for distilling ethanol producing 353 m /day ethanol. In both modes this mill consumes
500 kg/tc of saturated steam at 2.5 bar and has:
• a 5-effect evaporator;
• vacuum pan heated with steam bled from 1st evaporator effect;
304
•
•
6-bar steam for centrifuges; and
10 kg/tc steam losses.
Steam reductions can be implemented in two stages. In the first stage the steam consumption is
reduced from 500 kg/tc to 340 kg/tc (32% reduction) by implementing the following:
• mill with vapor bleeding from 1st, 2nd, and 3rd evaporator effects for juice heating;
• regenerative heat exchangers for juice heating (using stillage and juice as heat source);
• mechanical stirrers for vacuum pans;
• 2nd stage evaporator bleeding for vacuum pans, and
• use of Flegstil technology and molecular sieves in the distillery.
In addition, the following changes are made in the second stage to reduce steam consumption
from 340 kg/tc to 280 kg/tc (18% reduction):
vapor bleeding from 4th effect for juice heating;
additional set of juice heaters; and
vapor bleeding from 5th effect for vacuum pans
Table 14 Capital Investments to implement steam reductions in Sugar and Sugar-Ethanol
plants
a
a
SUGAR ONLY factory
SUGAR with ETHANOL distillery
Typical
Steam
Steam
Typical
Steam
Steam
today
Saving I
Saving II
today
Saving I
Saving II
Process steam
consumption (kg/tc)
500
340
280
500
340
280
Process electricity
20
28
29
20
28
29
consumption (kWh/tc)
Total capital
investment (million
1.6
2.2
3.33
4.86
US$)
Source: Estimates of Copersucar Technology Center (CTC), Sao Paulo taken from Larson et al,
2001
(a) Facility processing 7000 tons cane per day
Investments for the “sugar with ethanol” plant are over double the investments required for the
“sugar only” mill due to additional steam reductions’ equipment required at the distillery. Capital
investments required for the first and second stages are 1.6 and 2.2 million US$ for the sugar
only mill, and 3.33. and 4.86 million US$ for the sugar with ethanol distillery respectively. In order
to generate additional revenues, investments on steam reductions have to be coupled with a
cogeneration technology such as CEST or BIG-GTCC so that the bagasse saved is used to
generate electricity that can be sold to the utility grid.
Cogeneration in the Sugar and Ethanol Industry
Since most sugar mills now cogenerate steam and electricity using the highly inefficient backpressure steam turbine, CEST will be a significant improvement and this is already being
demonstrated at some sugar mills in Mauritius and Cuba. However, it is proposed that the sugar
producing SIDS skip the “CEST only” stage and go in straightaway for BIG/GTCC since it can
generate more electricity for export due to its higher efficiencies. This can be done in two
phases. In both phases the back-pressure turbine drives supply all the process steam and
mechanical power requirements, and a large part of the electrical power requirements also.
BIG/GTCC supplies the shortfall in process electricity demand, and the rest of the electricity is
exported to the grid.
305
In the first phase (BIG/GTCC-1), the existing back pressure turbine drives driven by 22 bar steam
from the existing boiler are kept intact and operate autonomously. The biomass gasifier is
integrated with the gas turbine. Exhaust gases from the gas turbine raise steam in a heat
recovery steam generator to drive the condensing extraction steam turbine (Figure 19). In the
second phase (BIG/GTCC-2), the back-pressure turbine drives are integrated completely with the
BIG/GTCC and are now driven by 22 bar steam extracted from CEST to give improved system
efficiencies (Fig 20).
Table 36 shows detailed figures for total electricity generation, electricity exported and quantity of
bagasse and trash consumed, for both phases. These calculations assume conditions prevalent
in Cuba where the sugar milling season lasts 150 days in a year. On an annual basis, the
electricity exported per ton of cane crushed is 240 kWh/tc for Phase-I and 446 kWh/tc for PhaseII.
The figures for dry biomass consumed in tons per ton cane shows that all the bagasse produced
is used up since it is already available at the factory, unlike trash that has to be collected and
transported to the factory for cogeneration. In addition to the bagasse, the annual trash
requirement on a dry basis is 0.121 tons dry trash per ton cane (t0/tc) during Phase-1 and 0.218
t0/tc in Phase-II. The amount of trash produced by the sugarcane plant varies from country to
country, with 0.140 t0/tc being the lowest figure. However higher trash yields of 0.330 t0/tc have
been reported from the Dominican Republic [Larson et al, 2001] and 0.280 t0/tc from Puerto Rico
[Alexander, 1985]. The yield of biomass per acre can be increased upto three times by growing
“energy cane” varieties (refer Sec 5.1.3).
Figure 13 Schematic of the BIG/GTCC-1 proposed for the sugar industry in PHASE-1
Source: Larson et al, 2001
Figure 14 Schematic of the BIG/GTCC-2 proposed for the sugar industry in PHASE-2
306
Source: Larson et al, 2001
Table 15 Electricity Generation and Biomass Consumption for BIG/GTCC phases I and II
BIG/GTCC phase-I
BIG/GTCC phase-II
ONOFFANNUAL
season
Season
365 days
150 days/yr 215 days/yr
ONseason
150
days/yr
OFFANNUAL
Season
365 days
215 days/yr
51.7
162
177
58.5
263
287
Total Electricity Generation
Capacity, MW
36.4
Production, GWh
114
Specific Production, kWh/tc 125
Exported electricity
29.2
131
144
Capacity, MW
29.2
28.1
Production, GWh
88
131
Specific Production, kWh/tc 96
144
Total biomass consumption, wet tons per year
Bagasse, thousand t50 /yr 159
92
Trash, thousand t15 /yr
77
53
Dry Biomass consumed, dry tons per ton cane
Bagasse, t0/tc
0.089
0.051
Trash, t0/tc
0.072
0.049
Source: Larson et al, 2001
245
268
425
475
43.3
58.5
219
240
133
148
267
298
400
446
251
130
101
92
150
137
251
229
0.140
0.121
0.056
0.088
0.084
0.130
0.140
0.218
Costs
The cost of implementing process steam reductions and co-generation plants for a “Sugar only”
factory and “Sugar with Ethanol” distillery for a facility processing 7000 tons cane per day are
given in Table ???.
Table 16 Costs for implementing process steam reductions and co-generation plants
SUGAR ONLY factory
307
a
SUGAR with ETHANOL
a
distillery
Phase - I
Additional
for Phase-II
Phase - I
Additional
for Phase-II
Total installed generating capacity,
MW
29.8
28.7
29.8
28.7
Costs of Cogeneration plant,
@$1480/kW, million $
44.25
42.5
44.25
42.5
Costs for process steam reductions,
1.60
0.60
million $
3.33
1.53
TOTAL capital investments, million
$
53.97
44.08
53.97
44.08
Source: Estimates of Copersucar Technology Center (CTC), Sao Paulo taken from Larson et al,
2001
(a) Facility processing 7000 tons cane per day for 150 days /yr at 87% capacity utilisation
Ethanol Production
Ethanol is produced from sugar by a process of fermentation, distillation, rectification and dehydration. Molasses, which are a by-product of the the sugar production process, are generally
used but the secondary juice or the primary cane juice or the cane syrup can be added to
produce more ethanol instead of sugar, as shown in Figure 16.
Figure 15 Schematic of Ethanol production from Sugarcane
Source: Planning Commision, 2003
To provide ideal conditions for fermentation the sugar concentration is adjusted by mixing treated
juice with syrup or molasses. Generally, batch processes are used but continuous processes are
now being introduced in some distilleries. Yeast is used for fermentation during which heat and
carbon dioxide are liberated. Carbon dioxide is collected and sold as a by-product. Fermentation
o
temperature is kept below 34 C by cooling the vats. Modern systems use closed vats with CO2
washing for ethanol recovery. The fermented wine is centrifuged to recycle the yeast and then
sent to the distillation system with three sets of distillation columns and a benzene recovery
column. Low pressure steam is used for heating the columns. The rectification stage removes
impurities and produces hydrated ethanol that can be used in E-100 engines. To produce pure,
anhydrous ethanol for blending with petrol, the ethanol is dehydrated using benzene in a special
column.
Ethanol can also be produced from bagasse, straws, woods and other basically cellulosic
materials by a process of hydrolysis that converts the cellulose to glucose and the hemi-cellulose
to xylose. Glucose and xylose are essentially sugars that are fermented to ethanol which is then
recovered by distillation as shown in Figure.
308
Schemata for converting agricultural residues (bagasse, straw, etc.) to Ethanol
BAGASSE
Feedstock
preparation
ETHANOL
Cellulose
hydrolysis
to glucose
Glucose
fermentation
Hemicellulose
hydrolysis
to xylose
Product
recovery
Xylose
fermentation
LIGNIN
fuel for process,
feedstock for octane
booster or chemical
feedstock
For the development of the cellulosic ethanol industry, a sensible path is to begin
with existing feedstocks, namely crop residues, followed by dedicated energy crops
as the industry expands. The supply of cellulosic feedstock will depend on the
agricultural production methods employed. The availability of crop residues for
energy can be increased by introducing agricultural practices, like cover cropping,
that protect soils from the impacts of water and wind erosion, and maintain or
improve long-term productivity. These practices tend to increase the volume of crop
residues left on the ground, and consequently the potential supply for energy
conversion. Such practices are a necessary element for a sustainable development
strategy as well as a major component in the production of environmental goods and
services (EGS).
Costs
Table 17 Cost of adding an ethanol distillery
309
Thousand
US$
Fermentation and distillation plants 4,577
1,220
Ethanol storage tanks
464
Stillage handling and storage
6
Laboratory
6
Spare parts warehouse
15
Fuse oil system
100
Cooling water system
6,388
TOTAL
Source: Estimates of Copersucar Technology
Center (CTC), Sao Paulo taken from Larson et al,
2001.
3
(a) capacity = 350 m anhydrous ethanol per day
Equipment for distillery
a
Capital investment required for adding
3
a distillery having a capacity of 350 m
anhydrous ethanol per day to a sugar
factory crushing 7000 tons cane per
day are given in Table 21. This
distillery can convert half of the
sucrose into ethanol. The costs have
been estimated by engineers of the
Copersucar Technology Center (CTC)
in São Paulo, Brazil.
Coconut oil
Coconut oil is a mixture of chemical
compounds called glycerides containing fatty acids and glycerol. The different fatty acids present
in coconut oil range from C6 - C18 carbon atom chains. The oil is contained in the kernel or meat
of the nut. Technologies for producing coconut oil can be grouped into (a) dry processes and (b)
wet processes. In the dry process the oil is extracted from the dried coconut kernel called copra
whereas in the wet processes the oil is extracted from the fresh kernel in its wet or a semi-dried
state. There are several processes starting from fresh kernel that are used, some of which are
suited only for a farm size operation but can produce a high quality virgin oil. The following
processes will be described:
d) Dry process and oil refining
e) HOID – hot oil immersion drying
f) Ram press
g) DME - direct micro-expelling
a)
Dry process and oil refining
Copra from the farm is stored in warehouses, sometimes upto 2 to 3 months, before it is
processed in a medium or large scale oil mill where it undergoes the following main steps:
Cleaning: Copra is transferred from the warehouse to a mill by a series of floor conveyors, rotorlift and overhead conveyors. Copra is cleaned of metals, dirt and other foreign matter manually by
picking or by means of shaking or revolving screens, magnetic separators and other similar
devices;
Figure 16 Schematic of dry process for coconut oil extraction
310
Source: Cottor International
Crushing / Cutting: Copra is broken into fine particle sizes of about 1/16" to 1/8" by high-speed
vertical hammer mills or cutters to facilitate oil extraction;
Cooking/Conditioning: The crushed copra that has about 5-6 percent moisture is passed through
a steam-heated cooker. This brings the temperature of the copra to the conditioning temperature
o
o
o
of about 104 C (220 F). At the conditioner, the copra is maintained at about 104-110 C (220o
230 F) for about 30 minutes to insure uniform heat penetration before oil extraction. Moderately
high temperature facilitates the expelling action. Oil is able to flow out more easily due to
decrease in viscosity. Moisture content of copra is about 3 percent when it leaves the
conditioner.
Oil extraction: In the expeller, the milled copra is subjected to high-pressure oil extraction, first by
a vertical screw, and finally by a horizontal screw. To control the temperature during extraction,
the main shaft is provided with water-cooling and cooled oil is sprayed over the screw cage bars.
o
o
The temperature of the oil should be kept at about 93-102 C (200-215 F) to produce light
coloured oil and effect good extraction.
Screening: The oil extracted in the expeller flows into the screening tanks to remove the entrained
foots from the oil. The foots settle at the bottom and are continuously scooped-out by a series of
chain-mounted scrapers which lift the foots to the screen on top of the tank. While travelling
across the screen, oil is drained out of the foots. The filtered oil flows into a surge tank from
where it is finally pumped to the coconut oil storage tank.
Filtration: The oil is passed through a plate and frame filter press to further remove the solids in
the oil. Maximum filtering pressures reach about 60 psi. The filtered oil flows into a surge tank
from where it is finally pumped to the coconut oil storage tank.
Coconut oil refining
Good quality coconut oil low in fatty acid and having a good aroma can only be produced from
good quality copra. However, after several weeks or months in storage and transportation, copra
is likely to be dark, turbid, high in free fatty acids (FFA), phosphatides and gums, and have an
unpleasant odour. The oil from such low quality copra has to be refined to produce clear, odourfree edible oil. Losses during the refining process can be 5 to 7.5 percent of the weight of the
crude oil.
311
The main steps in the refining process are:
Neutralisation: Sodium hydroxide is used to convert free fatty acid into an oil-insoluble precipitate
called soapstock which settles down and is removed.
Physical refining: Phosphoric acid is added to remove phosphatides and gums which are
separated from the oil by centrifugation or by decantation.
Bleaching: Either activated carbon or bleaching earth such as bentonite or a combination of both
o
are added to the oil under vacuum while heating it to 95-100 C. This removes most of the
dissolved or colloidal pigments responsible for the colour of crude oil. The bleaching agents are
then removed by passing the oil through a filter press.
o
Deodorisation: The oil is heated to a temperature between 150-250 C and contacting with live
steam under vacuum conditions. This removes volatile odours and flavours as well as peroxides
that affect the stability of the oil.
Costs
Prices of oil mills for producing coconut oil from copra provided by Tiny Tech, a leading
manufacturer in India, are given in Table 32. Prices for coconut oil refineries are given in Table
33.
Table 18 Prices of coconut oil mills using copra
Description of goods/items
3 ton/day
Heavy duty expellers complete with
all standard accessories.
Long/Round cooking kettles with
round feeding hopper complete with
all standard accessories.
Filter press complete with all
Euro
standard accessories / Filter pump 4,900
Copra cutter complete with all
standard accessories.
All electric motors
All Installation accessories /
Replaceable spare parts kit
6 ton/day
10 ton/day
20 ton/day
30 ton/day
Euro
8,500
Euro
12,200
Euro
22,900
Euro
32,100
Source: Tinytech Udyog, 2005
Table 19 Prices for coconut oil refineries
5
10
30
ton/day ton/day ton/day
Description of goods/items
Edible oil refinery plant based on vacuum technology having raw oil
tank, heavy duty neutralizers, soap stock tanks, heavy duty bleacher,
filter press for bleached oil, pressure pump for bleached oil, water
centrifugal pump, raw oil centrifugal pump, heavy duty vacuum
pump, bleached oil tank, heavy duty deodorizer, cooler (heat
Euro
exchanger), filter press for refined oil, pressure pump for refined oil,
31,000
catchalls, barometric condenser with 12 mtrs. height tower, thermic
oil boiler with pressure (feed) pump, all installation accessories, all
standard accessories, all steel structure, all necessary electric
motors, all necessary reduction gear box systems, plant testing
chemicals etc.
Source: Tinytech Udyog, 2005
b)
HOID - Hot Oil Immersion Drying
312
Euro
56,000
Euro
185,000
The Hot Oil Immersion Drying (HOID) technology, also called the `fry-dry'process, originated in
West and North Sumatra and is now widely used all over Indonesia; usage is spreading to the
Phillipines and other countries. HOID is well suited to medium and large-scale operations, and
produces an oil generally of a better quality than the dry process, with a distinctive coconut
flavour that is preferred for cooking. The viability of the process is sensitive to the price of raw
material, price of oil and the oil yield, so it is necessary to operate the system efficiently and
maximize yields.
In the HOID process the fresh coconut kernels are grated and dried by immersing in hot oil. The
dried residue is then taken out of the hot oil, drained and sent through a screw press to extract
the oil and leave a dry cake. The main steps in the process are:
a) The fresh coconut meat is delivered to the processing plant where it is inspected, washed
and cut into pieces with a hammer mill or a grater.
o
b) The grated kernel is then fried in a pan of hot coconut oil at approximately 120 C for 20-45
minutes depending on the oil temperature and ratio of fresh meat to coconut oil used. Care
must be exercised not to add too much meat at once during the frying because the immersion
of the cut coconut kernel results in a rapid evolution of steam that can result in oil spillage.
Stirring of the grated coconut is occasionally done during the frying. The drying process is
completed when there is no more steam produced, the coconut meat becomes yellowish to
brown and the temperature of the coconut oil in the pan increases;
c) The fried particles are then taken out of the oil by means of perforated spoon affixed to the
end of a long wooden handle. The meat is then dumped in a filter box and the oil is allowed to
drain through a meshed plate at the base of the container.
d) The drained, cooked brown coconut particles, rich in coconut oil, are then fed to the hopper
whence it is fed to the screw press. The expelled oil is passed through a mesh plate and
settled in a tank before it is pumped or poured into the main settling tank.
e) The oil is then clarified by settling the oil in the tank. Sometimes a filter press is used. Once
clarified, the oil can be sold directly in the market as cooking oil without further chemical
refining.
The main equipment used in a small HOID processing plant are:
• hammer mill or grater - this is used to cut the fresh coconut kernels. In some areas in
Indonesia, the kernel is grated;
• drying pans - either circular or rectangular in shape. These pans are equipped with wooden
stirrers and spoons for taking out the dried meat manually,
• furnace - is used to heat the pans by burning wood, coconut shells or husk in the combustion
chamber;
• screw press - is used to extract oil from cooked, brown coconut meat;
• filter press or setting tank; and
• draining tank and other handling equipment such as scooper, tray, metal and rattan baskets.
Source: Punchihewa and Arancon
c)
Ram Press coconut oil extraction
Ram press coconut oil extraction is a method of expelling oil from dried coconut either in the form
of dried fresh coconut gratings, copra or dried residue from aqueous coconut processes.
Figure 17 Coconut oil extraction using the Ram Press
313
Source: ATTRA, 2004
Source: Swetman, 2003
The ram press, also called the Bielenberg press, was developed by Appropriate Technology
International, a Washington based NGO, in 1985 through its Village Oil Press Project in
Tanzania. It is a manually operated, low-cost piece of equipment which was originally designed to
be used by smallholder farmers to process soft-shelled sunflower seed to obtain scarce cooking
oil. The original design of the Ram Press was arduous to use and took two men to operate.
Recently, the Natural Resources Institute (NRI) of the UK has carried out some work on
improving small scale coconut oil extraction methods using the participatory approach,
particularly involving women in the rural areas in Asia, the Pacific and Africa. One of the design
advancements of the Ram Press is a version that is smaller and easily operated by a woman.
The newly designed Ram Press has a long, pivoted lever that moves a piston backwards and
forwards inside a cylindrical cage constructed from metal bars spaced to allow the passage of oil.
At the end of the piston'
s stroke an entry port from the feed hopper is opened so that the oilseed
or the squeezed coconut gratings can enter the cage. When the piston is moved forward, the
entry port is closed and the gratings are compressed in the cage
An adjustable choke at the outlet of the perforated cage controls the pressure. The lever
mechanism of the press is such that it can operate pressures greater than those in most
manually-operated presses, and as high as those in small-scale expellers. While the Ram Press
has a low seed throughput, it has the advantage of continuous operation. Laboratory and field
trials conducted by the NRI in Tanzania indicated that the Ram Press was suitable for pressing
sundried squeezed coconut gratings with an oil extraction efficiency of 60-70 percent.
Costs
A farmer scale ram press manufactured by Appro Tec of Tanzania can typically process around 4
kg/hour of dried gratings producing around 2.5 litres of oil per hour. In addition to dried coconut
gratings from the traditional wet process, the press can be used to expel oil from other seeds
(including sesame, niger and rapeseed). In 2003 the FOB cost of this ram press was US$ 380.00
d)
DME - Direct Micro Expelling
The main features of the DME process are given below. Information about DME has been taken
from the website of Kokonut Pacific, the Australian company who developed the DME process
and is the only known supplier of small-scale DME equipment and training services. Kokonut
Pacific is also trying to help coconut farmers sell the virgin coconut oil from DME after local
demand is satisfied.
314
l)
m)
n)
o)
p)
q)
r)
s)
t)
u)
v)
DME is a small scale (family farm size) process for producing virgin coconut oil of vastly
superior quality.
The DME process is quick (1½ hours per batch) and efficient (oil extraction efficiency 85%).
The DME Process concentrates on small, manageable, daily batches instead of producing
large batches of copra that take many weeks to ship and process.
The DME process depends upon simple, easily learned skills, rather than sophisticated
equipment. Families really enjoy working together on DME Oil production, whereas they
typically describe the making of copra as a form of slavery.
DME gives regular meaningful employment to teams of 3 to 5 women and/or men of all ages.
A team can work on the process more-or-less whenever it suits them — whether it be 2 hours
a day on 2 days per week or 10 hours a day for 6 days a week — it could even be operated
on a shift basis all day and all night. Production can take place all year round and in virtually
any weather.
It gives direct local employment in rural areas in nut collection and oil production, and it has
multiplier income- and employment-effects. Where the oil is packaged locally or used as an
input by local cosmetic, soap and detergent producers there is significant value added. Also,
the residue goes for baking and livestock.
In general, the gross return from the DME process is about 3 times, and the net return is
about 4 times that of copra.
Average daily production is typically 20 to 50 litres (depending on the number of hours
worked by a team), with skilled operators obtaining an oil extraction efficiency (OEE) of over
85% (of available oil). The number of nuts needed to produce one litre of oil depends on the
size of the nuts. The range is between 9 and 15 nuts/litre.
Besides its uses as a cooking oil, or for skin moisturizing and massage, virgin coconut oil is a
good lamp fuel and, of all the vegetable oils, it is the best direct substitute for diesel-engine
fuel.
After DME coconut oil is extracted, the residual meal is de-fatted grated coconut that is
excellent for baking biscuits and cakes and as stock feed.
The DME equipment can also produce excellent coconut cream for local domestic use.
Figure 18 Direct Micro Expelling of coconut oil using the Rachet Press
Source: Swetman, 2003
Source: Kokonut Pacific
Costs
315
At present DME equipment is only being supplied by the Australian company Kokonut Pacific Pty
Ltd. The equipment consists of a robust rack and pinion press with its interchangeable stainless
steel cylinders and pistons; two electric graters (230 V 370 W); plus collection, measuring and
cleaning tools and Trainer’s Manual. This equipment weighs about 80 kg.
The cost of setting up a single operative unit is currently about AU$10,000 (US$ 7,600).
However, in order to avoid the problems of an ‘orphan’ site and to gain economies of scale,
Kokonut Pacific advises that a DME unit should operate within a ‘DME system’. The minimum
cluster for an area should be 3 units (costing up to AU$40,000 (US$ 30,400) — depending on
location — inclusive of training). A fully economic project is likely to involve 10 to 100 DME units.
Overheads for training remain relatively constant with larger projects.
Biodiesel
Biodiesel consists of the methyl or ethyl esters of the fatty acids contained in vegetable oil
triglycerides. It has a high cetane number, good lubricity properties and an energy content
comparable to petroleum diesel fuels with which it can be easily mixed. The molecular weights of
the methyl esters are similar to diesel fuels, making their transport properties and melting points
superior to the fats and oils from which they were derived. Biodiesel has two main advantages
over vegetable oil also called “pure plant oil” (PPO) or straight vegetable oil (SVO):
It is easily miscible with petroleum diesel in any proportion, and
It can be used in diesel engines without any modifications to the engine, or with minor
modifications in some cases.
The most common means of manufacturing biodiesel is the process of transesterification
whereby the vegetable oil triglyceride is reacted with methanol (or ethanol) in the presence of a
catalyst to form the fatty acid methyl (or ethyl) esters as shown in Fig 20 for the case of stearic
acid esters and methanol.
Figure 19 Transesterification reaction for producing Biodiesel from vegetable oils
Source: Duncan, 2003
Under ideal circumstances, nearly the same weight of methyl esters will be produced from the
triglyceride feedstock. Glycerol (alternatively known as glycerine) is a byproduct produced in
significant quantities from the transesterification process. Technology for the pre-treatment of
fats and oils and the purification of the methyl esters and glycerol is well established and
commonly used outside the biodiesel industry.
Alcohols that can be used in the transesterification reaction are methanol, ethanol,
propanol, butanol and amyl alcohol. The reaction is reversible, so an excess of alcohol is used to
increase the conversion of triglycerides to esters. Methanol is widely used because of its low cost
and its physical and chemical advantages (polar and shortest chain alcohol). Ethanol seems
preferable compared to methanol because it is derived from agricultural products, it is renewable
316
and biologically less damaging to the environment.. Unfortunately, ethanol is more expensive
than methanol and about 44% more ethanol is required for the reaction causing a major increase
in production cost. The excess ethanol from the reaction is also hard to recover because water
and ethanol form an azeotrope so it is hard to return 100% ethanol to the process. Additional
processing is required at higher expense. Finally, transesterification with ethanol is more prone to
soap formation and thus requires tighter process controls than with methanol.
The transesterification reaction can be catalyzed by alkalis, acids or enzymes. Potassium
hydroxide (KOH) and sodium hydroxide (NaOH) are widely used alkaline catalysts. Potassium
hydroxide is generally observed to be more effective than sodium hydroxide and has the added
advantage that when the catalyst is removed from the glycerol at the end of the process, it yields
a fertilizer (potash). Sulfuric acid and other strong acids can be used for transesterification, but
they are very slow and thus not commonly used except for pretreatment of free fatty acids. The
acids do have the advantage that they do not make soap with free fatty acids.
Both batch processing well as continous processing are used to produce biodiesel. Processing
biodiesel in batches tends to be favored by small plants. This approach is more flexible as it
allows the process parameters to be adjusted for each batch so it is relatively easy to
compensate for differences in feedstock characteristics. The equipment needed for batch
processing tends to be less expensive since all of the operations can be performed at
atmospheric pressure in tanks. The disadvantage of batch processing is that the physical size of
the plant tends to scale directly with the capacity of the plant. To double the capacity of the plant
requires tanks that are twice as large. Continuous flow processing is favored by larger plants. It
uses utilities and other resources in a continuous manner at a lower peak rate, which usually is
less expensive. Continuous flow plants usually operate at high temperatures (at least 65 C) to
shorten the processing time. They also tend to avoid gravity separation processes which usually
involve long times and large tanks. Centrifugal separators are often used to do separations very
quickly while taking very little plant space. However, the cost of the separators is very high. The
equipment for continuous flow processing does not usually require a lot of space, and it can be
scaled up to provide increased capacity without taking a corresponding increase in space. Both
batch and continuous flow processing can provide a high quality product and successful plants
have been developed using both approaches.
In a typical biodiesel production process, the catalyst is dissolved into the methanol by vigorous
stirring in a small reactor. The oil is transferred into the biodiesel reactor, and then, the catalyst/
alcohol mixture is pumped into the oil. The final mixture is stirred vigorously for 2 hours at 340K in
ambient pressure. A successful transesterification reaction produces two liquid phases: ester and
crude glycerin. Crude glycerin, the heavier liquid, will collect at the bottom after several hours of
settling. Phase separation can be observed within 10min and can be complete within 2 hours of
settling. Complete settling can take as long as 20 hours. After settling is complete, water is added
at the rate of 5.5 percent by volume of the methyl ester of oil and then stirred for 5 min, and the
glycerin is allowed to settle again. Washing the ester is a two-step process, which is performed
with extreme care. A water wash solution at the rate of 28 percent by volume of oil and 1 g of
tannic acid per liter of water is added to the ester and gently agitated. Air is carefully introduced
into the aqueous layer while simultaneously stirring very gently. This process is continued until
the ester layer becomes clear. After settling, the aqueous solution is drained, and water alone is
added at 28 percent by volume of oil for the final washing.
Although the technology for biodiesel production continues to evolve, yields of biodiesel are
already near theoretical limits. However, the alkaline catalysed process described above has
some drawbacks. Several new technologies have been developed that attempt to overcome
some of the following difficulties:
a) The reaction is slow at ambient temperatures;
b) There are difficulties in the recovery of glycerin;
c) It is necessary to remove the catalyst;
d) The process is energy intensive;
317
e) Oils containing free fatty acids and/or water are incompletely transesterified;
f) The reaction does not go to completion, and therefore requires a second and even third pass
to achieve the necessary purity;
g) The reaction cannot handle substrates which have fatty acid contents much above one
percent, simply because the acids neutralize the catalyst to form soaps.
Small-scale biodiesel processors
Biodiesel can be produced in small-scale, “do-it-yourself” (DIY) processors that can be
assembled from components or from a DIY Biodiesel Kit available from several companies in
USA, Argentina, etc. Schematic of a typical process is shown in Fig. 21, while Fig 22 shows an
assembled biodiesel processor from the USA. However, quality assurance to produce consistent,
fuel grade biodiesel is very difficult in these types of plants.
Figure 20 Schematic of biodiesel batch process used in small-scale DIY plants
Figure 21 A small-scale “do-it-yourself” (DIY) biodiesel processor
318
Source: Scott & Graydon
Industrial -scale biodiesel plants
Large scale biodiesel plants can have capacities upto 250,000 tons per year. The process flow
diagram of a 2-stage process used in industrial biodiesel plants manufactured by Lurgi of
Germany is shown in Fig 21, and photos of a 100,000 tons/yr plant using this process are shown
in Fig 22.
Figure 22 The Lurgi 2-stage biodiesel process
Source: Lurgi, 2004
319
The Lurgi technology consists of two main steps: (a) oil pretreatment, and (b) transesterification
by adding methanol and catalysts. The oil pretreatment stage combines de-gumming, thermal
deacidification or neutralization, leaching and winterization to provide a feedstock for the
transesterification that will produce biodiesel of a very high quality. To achieve a maximum
conversion irrespective of the type of oil used, Lurgi have designed their transesterification in two
stages, with each of the two reactors followed by a downstream separator for the glycerine
phase. The system is operated continuously at atmospheric pressure and does not require
expensive centrifuges. If required, pharmaceutical grade glycerine can be produced instead of
crude glycerine depending on their market prices.
Figure 23 An industrial scale 100,000 tons/yr biodiesel plant
Source: Lurgi, 2004
Costs
a)
Industrial scale biodiesel plants
Capital costs of industrial scale, fuel grade biodiesel plants show significant economies of scale.
A plant with a capacity of 10,000 tons/yr has a capital cost of 0.500 US$/liter, whereas a plant
with 10 times its capacity (100,000 tons/yr) has a capital cost of only 0.202 US$/liter [Duncan,
2003].
Table 20 Biodiesel processing plant costs
Capacity
Euro
tonnes/year million
Euro/liter
20,000
3.8
0.167
40,000
4.3
0.095
60,000
5.1
0.075
Source: Duncan, 2003
This can be seen in the capital costs for the
processing plant provided by the Austrian company
Energia, shown in Table 34. Energia supplies the
processing plant only, which is provided in modular
form, and leaves the provision of tankage, services,
infrastructure and buildings to its clients. These
plants can process both vegetable oils as well as
tallow.
Table 21 Cost details of a 70,000 tons/yr Biodiesel Plant
320
Cost
(million NZ$)
10.9
1.6
Process Plant
Plant installation,
piping,
instrumentation
Plant buildings
0.5
Storage
3.4
Services
1.7
Civil Works
2.4
Spares
0.6
Unallocated
1.5
Contingency
2.2
Engineering
5.0
Total
29.7
Source: Duncan, 2003
Cost
(million US$)
7.63
1.12
0.35
2.38
1.19
1.68
0.42
1.05
1.54
3.5
20.79
Details of capital costs of a complete
Modular Processing Plant are given in
Table 35. The process plant costs are
based on prices given in Table 34
adjusted to a 70,000 tons per annum
plant capacity, using the scaling factor
implicit in the Energea data. Because
the Energea equipment is supplied in
modular form, the associated costs for
installation, pipework and
instrumentation have been estimated
based on a study by the Liquid Fuels
Trust Board in New Zealand. In 2003,
the total capital investment needed for a
70,000 tons/yr biodiesel plant is 20.8
million US$ giving a specific capital cost
of 0.261 US$/liter.
b)
Small-scale Biodiesel production
Biodiesel produced on a small scale by farmers or individuals is usually by means of a batch
process using very simple equipment as shown in Figs ??? and ???. A typical biodiesel
production system for the laboratory or home environment will comprise of the following main
equipment [FuelMeister]:
a) Polyethylene tank for premix system
b) Reactor or Processor tank
c) Pumps: System pump (Electric), Alcohol pump, Biodiesel pump
d) Barrels or Drums for Coconut oil, Methanol, Biodiesel
e) Air compressor
A small 150 L batch processor could be constructed for about US$300, and a 450 L batch
processor would cost about US$1100 [Lund, 2004].
Environmental considerations
Environmental concerns related to the technologies that convert agricultural biomass into useful
energy carriers are discussed in this section. Environmental effects of increasing biomass
production for energy generation can also be significant but they fall outside the scope of this
study.
Anaerobic Digestors
Small-scale biogas plants
Biogas digestors provide an ideal method of treating organic wastes so that they do not pollute
the environment. They can convert animal and human excreta into an organic, nutrient-rich
fertilizer that is free from pathogens provided sufficient residence times are ensured. Biogas is
not toxic and its usage for cooking has generally been free from problems. However, care should
be taken to avoid accumulation in enclosed spaces to avoid the danger of explosion or
asphyxiation.
Industrial digestors
Anaerobic digestion of high volume industrial and sewage effluents is a well-established
commercial technology that can reduce the polluting characteristics of these effluents to
acceptable levels while extracting energy in the form of gaseous methane. Sufficient solids
retention time in an UASB reactor reduces the chemical and biological oxygen demands (COD
and BOD) to safe levels before the waters are released into the environment.
The liquid remaining after treatment of distillery waste-waters (called vinasse) in a UASB reactor
is virtually free from bio-degradable material and can be used freely for irrigation of sugarcane
321
fields and even provides some fertilization. The settled vinasse slurries can be converted into
protein rich cattle feed by spray drying or into solid fertilizer by sun-drying.
Gasifiers
Gasifiers produce solid, liquid and gaseous by-products. The solid residues left over after
gasification of most biomass are inert inorganic materials that contain the non-combustible
minerals and compounds in the feedstocks. They can be used as a mineral fertilizer for the same
crop to recycle some of the nutrients that are generally not found in applied NPK fertilizers. Some
solid residues, such as the ash of rice husks, can be used as a construction material.
The liquid effluents from a gasifier have to be treated before they can be discharged into the
environment because they contain tars with carcinogenic compounds such as phenols.
Due to the higher temperatures in a gasifier, the gaseous products of gasification are far less
polluting than the products of direct combustion. However, producer gas contains the highly
toxic, odorless gas carbon monoxide whose leakage is dangerous especially within enclosed
spaces like kitchens with cookstoves.
Co-generation Plants
Flue gases from biomass fired boilers with steam turbines or with gas turbine combined cycle systems
have to be filtered to minimize particulate emissions to the atmosphere. Reservoirs of air or water used to
cool the condensers in biomass steam cycles have to be large enough to avoid thermal pollution. Ash left
after combustion should preferably be recycled to the soil to return the inorganic minerals contained by
the biomass, but it is sometimes buried in a landfill.
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Annex 3
Ethanol a major liquid Biofuel
Background Ethanol as Fuel
Ethanol has a wide range of uses from fuel additive, to solvents or agents for chemical reactions
and is also used in food industry. Its expanded use as an automotive fuel since the seventies has
created a new market segment that is viewed as the fastest growing and most important market
for the product in the foreseeable future. It is estimated that this demand for ethanol, estimated
currently at around 30 million m3/year (189 million barrels/year), already accounts for 70% of
world ethanol production. Two countries – Brazil and the USA – have been the major fuel-ethanol
producers and consumers, and represent presently 85% of demand.
The Food and Agriculture Organization of the United Nations has given the following figures for total
world production and trade in alcohol for non-food uses.
Alcohol, Non-Food
Production (Mt)
World
Alcohol, Non-Food
Imports (Mt)
World
Alcohol, Non-Food
Exports (Mt)
World
Year
2000
2001
20,688,003
20,669,174
Year
2000
2001
2,289,342
Year
2000
2,285,276
1,966,799
2001
2,449,588
2002
21,233,041
2002
1,918,430
2002
2,410,632
However, there is no globally organized or recognized market for ethanol, as most of the
producers outside of Brazil and USA are private or public monopolies. The FAO figures clearly
shows that in its current structure, what could pass for a world ethanol market is not particularly
large, and that most of the ethanol produced is consumed by the domestic market. Nevertheless,
considering the chronic instability of the oil market and projected average ex-refinery gasoline
prices at approximately US$ 55/barrel for 2004, fuel-ethanol becomes an attractive alternative
and its expansion in the energy marketplace happens to be basically a matter of economic
competitiveness and supply.
The impact on national economies of increasingly higher oil prices and the perspective that oil
production will peak in a few years, therefore fueling a new wave of price increase, has motivated
a growing number of countries to implement “agri-energy” policies.
This motivation has also resulted from environment-based initiatives like the EU Biofuels
Directive, the U.S. Oxygenated Fuels Program and the Kyoto Protocol. All these driving forces
address the development of bio-fuels within a framework that is essential to national and
international interests and can be summarized as follows:
Energy diversification and security
Renewability of energy feedstocks
Mitigation of air pollution and the greenhouse effect
Expansion of agribusiness
Opportunities for rural employment
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The Case for Ethanol
To value the importance of a bio-fuel like ethanol one must understand that a considerable
number of developing and transition-economy countries, which have in agriculture a large share
of their wealth, are seeing “energy farming” as a way to improve life conditions and the economy
in a sustainable way. Therefore support from industrialized countries to bio-fuels production and
its wide use does not represent only a way to lessen dependence on fossil fuels but constitutes
an intelligent and cost-effective way to induce progress in less developed parts of the globe. Fuelethanol produced in a developing country and used in the developed world is effectively a win-win
situation that offers the opportunity of environmental and energy benefits to one side while
creates a new source of income and well-being to the other side.
The value of biofuels is also dependent on the relative values of sugar and of oil. It is well known
that Brazil set its threshold for switching between sugar and ethanol production at the US$30 per
barrel. It is very difficult to adequately predict future sugar prices. A useful indicator is given by
261
the sugar futures markets , which reports that world raw sugar (sugar #11) future prices are
ranging from 8.72-8.84 for July 2005 to 8.71-8.72 in May 2007. The highest point in the range is
9.01 for March 2006. For world white sugar (LIFFE sugar #5) future prices are ranging from
249.10-251.20 in August 2005 to 255.50-257.10 in October 2006 (the latter figure represents the
highest point in the range).
Oil prices are also very difficult to predict. While a recent Goldman-Sachs study indicated that
future prices of up to $100 per barrel could be expected there are a large number of uncertainties
in this market. The International Energy Agency has predicted that there will be growth in the
exploration of new oil reserves, but these will be deeper and more costly to extract. The table
below shows how IEA assumes the oil market will develop.
This confirms the notion that the expansion to extract the new oil reserves will be technology
dependent, and that the costs of producing this new oil may be significantly higher, thus
supporting the Goldman-Sachs findings.
The IEA have predicted an expansion in the ethanol market as follows:
261
Provided by the International Sugar Association, www.sugaronline.com
324
Despite of favorable conditions to bio-energy expansion, fuel-ethanol still plays a minor role in the
energy market. Considering that world gasoline consumption is close to 1.2 billion m3/year (7.7
billion barrels/year) it becomes clear that fuel-ethanol consumption is very small, representing
about 2.5% of current gasoline consumption. However it is worth of note that the potential for
expansion of this percentage could reach 20% (given the amounts of ethanol that can actually be
blended in). The proposed 10% share under the Brazilian Energy Initiative the fuel-ethanol
market would have reached in 2010 the volume of 130 million m3.
Presently about 4 billion liters/year of the ethanol produced world-wide comes into international
trade. This represents almost 10 % of total world production and is largely of industrial and
potable brands. With regard to fuel usage about 700 million liters (4.4 million barrels) will be
traded in 2004 representing less than 20% of the trading market and this is still a very low volume
considering market potential. Although it is true that this market is in an infant stage and therefore
is not well structured yet the protectionist barriers that exist in important energy markets such as
325
the European Union, the USA and Japan certainly limit its evolution and inhibit its consolidation.
Transportation of the ethanol is also an issue in relation to the costs and marketability of ethanol.
Ethanol Fuel Use – Technical Issues
Countries that have invested in ethanol as a biofuel have taken different approaches to the
blends. Typical blends range from 5% ethanol to 10% in Europe and elsewhere is being
dispensed with no reported incompatibility with materials. The higher blend of 25% is utilized in
Brazil and for so-called flexible fuel vehicles up to 85% ethanol can be used. Currently most car
manufacturers will only warranty their vehicles for use with the blends most utilized in that
particular market. For example in the United States where up to 10% blends are prevalent,
manufacturers have set that as the upper limit, but they are also producing a wide range of
flexible fuel vehicles that can take higher percentage blend such as that of 85%. The Brazil
example has shown that up to 25% blends require a minimum of attention to changes in valves
and gaskets as well as firing sequencing, and is all within the skill levels of local mechanics.
This process of re-optimising by adjusting engine timing and increasing compression ratio allows
them to run more efficiently on the higher blend levels, and saves fuel. On an energy basis, a
20% blend of ethanol could use several percentage points less fuel with a re-optimised engine.
Some newer vehicles automatically detect the higher octane provided by higher ethanol blends,
and adjust timing automatically. This could result in immediate fuel economy improvements on
ethanol blends (taking into account ethanol’s lower energy content), but it is not clear just how
much fuel economy impact this could have. In Brazil, cars with electronic fuel injection, including
imported cars built for the Brazilian market with minor modifications (such as tuning and the use
of ethanol-resistant elastomers), have operated satisfactorily on a 20% to 25% ethanol blend
since 1994.
As mentioned, the low-level ethanol blends (E5 and especially E10) are widely used in the US,
Canada, Australia and in many European countries, where they have delivered over a trillion
kilometres of driving without demonstrating any significant differences in operability or reliability.
E10 typically has a slightly higher octane than standard gasoline and burns more slowly and at a
cooler temperature. It also has higher oxygen content and burns more completely, which results
in reduced emissions of some pollutants.
What are the potential problems with operating conventional gasoline vehicles with an alcoholgasoline blend? Alcohols tend to degrade some types of plastic, rubber and other elastomer
components, and, since alcohol is more conductive than gasoline, it accelerates corrosion of
certain metals such as aluminum, brass, zinc and lead . The resulting degradation can damage
ignition and fuel system components like fuel injectors and fuel pressure regulators.
As the ethanol concentration of a fuel increases, so does its corrosive effect. When a vehicle is
operated on higher concentrations of ethanol, materials that would not normally be affected by
gasoline or E10 may degrade in the presence of the more concentrated alcohol. In particular, the
swelling and embrittlement of rubber fuel lines and o-rings can, over time, lead to component
failure.
These problems can be eliminated by using compatible materials, such as Teflon or highly
fluorinated elastomers (Vitorns). Corrosion can be avoided by using some stainless steel
components, such as fuel filters. The cost of making vehicles fully compatible with E10 is
estimated to be a few dollars per vehicle. To produce vehicles capable of running on E85 may
cost a few hundred dollars per vehicle. In the US, however, several car models capable of
operating on fuel from 0% to 85% alcohol are sold as standard equipment, with no price premium
over comparable models.
It should also be noted that there are examples of diesel vehicles using an 85% ethanol blend
which creates a whole new set of possibilities in the development and use of biodisel in Fiji. Fleet
testing using low-level ethanol-diesel blends have been carried out in Europe (Sweden, Denmark,
Ireland), Brazil, Australia, and the United States (Nevada, Illinois, Nebraska, Texas and New York
326
City). Sweden has tested a variant of E-diesel for many years in urban buses operating in
Stockholm, with great success. Using Swedish Mark II diesel fuel, perhaps the cleanest in the
world as the base, this 15% ethanol blend with up to 5% solubiliser has shown significantly
improved emissions performance and reliable revenue service.
Brazil has also pioneered the investigation of E-diesel since the late 1990s, demonstrating that a
properly blended and formulated E-diesel can operate quite successfully in a very warm, humid
climate. Generally, the results of US E-diesel fleet testing to date have indicated that a fuel with
less than 8% ethanol in most applications, particularly in stop-and-go urban operations, has no
adverse effect on fuel efficiency when compared to the performance of “typical” low-sulphur
diesel. The Swedish programme is probably the world’s largest, and is ongoing. By 1996, there
were roughly 280 Volvo and Scania buses in 15 cities running on neat, 95% ethanol, with an
additive to improve ignition. Scania has assisted in developing one blending agent, used to create
the ethanol formulation “Beraid”, that is now undergoing approval in the European Union as a
reference fuel for diesel engines that run on ethanol.
As mentioned, the relative costs of biofuels vis-à-vis regular gasoline and diesel correspond to
whatever associated costs might be realized, such as storage, handling, transportation,
dehydration and blending. These issues will have to be fully explored in the cost analysis
envisaged for the biofuels industry proposal. In the case of the Caribbean therefore it may be
advisable to look to the domestic market and potential for consumption, as well as by the markets
nearby and the demand that could be represented by the range of blends from 5, 10 and 20%
fuel-ethanol blend, for the long term viability.
Annex 4:
Biofuels production Potential for the Caribbean Countries
BARBADOS
Agriculture and Land use data for Barbados
National GDP, 2001
Population, 2001
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
2,485 Million US$
268,504
Per Capita
9,255 US$
149 Million US$
6%
2.6%
43 000'hectares
16 000'hectares
7.5 000'hectares
6,000
4%,
Bioenergy potential from Agricultural Residues in Barbados
Production
Area
2003-05 Harvested
Yield
327
Energy of
Residues
000'tons/yr
1 Sugarcane
385.3
2 Coconuts
1.8
3 Cereals
0.3
4 Roots & Tubers
3.8
5 Groundnuts
0.05
6 Pulses
1.1
7 Vegetables
13.9
8 Fruits
3.4
TOTAL
409.5
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
Ha
7,503
600
50
264
22
716
1,255
513
10,923
tons/Ha
51.3
3.0
7.8
14.6
1.9
1.7
11.2
6.6
TJ / yr
1,833.1
23.7
6.2
26.9
0.3
17.7
2.9
0.7
1,911
338,918 Barrels diesel oil /yr
35.9 Million US$ /yr
51.2 Million US$ /yr
0.6 Million US$
3%
1.6 Million US$
20%
Ethanol production potential from Sugarcane in Barbados
Sugarcane Production. 2004
361 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
29 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
10 Million Liters /year
39 Million Liters /year
29 Million Liters /year
182 000'Barrels /yr
812 000'Barrels /yr
Crude oil @ 70 US$ /barrel
19 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice
only)
28 Million US$
5.6 Million US$
Electricity generation potential from Sugarcane Residues in Barbados
328
Sugarcane Production. 2004
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
@ 200 kilowatt-hours /ton cane
Electricity consumption, 2004
Fuel consumed by Electric Utilities, 2004
@ 100 kWh /ton cane:
Fuel oil substituted
Economic Value @ 70 US$ /barrel
Economic Value @ 100 US$ /barrel
Investment required
@ 200 kWh /ton cane:
Fuel oil substituted
Economic Value @ 70 US$ /barrel
Economic Value @ 100 US$ /barrel
Investment required
361 000'tons / year
36 Gigawatt-hours /year
72 Gigawatt-hours /year
831 Gigawatt-hours /year
1,242 000'Barrels /yr
73 000'Barrels /yr
8 Million US$
11 Million US$
12 Million US$
145 000'Barrels /yr
15 Million US$
22 Million US$
22 Million US$
Jatropha cultivation for Diesel substitution in Barbados
Diesel consumption, 2004
107 Million liters /yr
43 000'Hectares
Total Land Area
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
Employment generated after 3 years
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
10%
6
13%
0.6
0.2
11
7
10
0.03
4.82
4.09
0.74
20%
12
27%
1.2
0.5
21
14
20
0.06
9.65
8.18
1.47
50%
29 000'Hectares
67%
3.0 Million mandays /yr
1.2 Million mandays /yr
54 Million liters /yr
36 Million US$ /yr
51 Million US$ /yr
0.14 Million tons CO2
24.12 Million US$
20.44 Million US$
3.68 Million US$
Potential to expand Biofuels production from Sugarcane in Barbados
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
At Present Acreage At Double the Acreage
7,503
7,503
15,005
15,005 Hectares
60
120
60
120 Tons /Ha
450
900
900
1,801 000'Tons /yr
45
90
90
180 GWh /yr
91
181
181
362 000'Barrels /yr
15.5
31.1
31.1
62.1 Million US$
90
180
180
360 GWh /yr
329
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
181
27.0
36.01
170
7
362
54.0
72.03
340
16
330
362
54.0
72.03
340
16
725 000'Barrels /yr
108.0 Million US$
144.05 Million liters /yr
679 000'Barrels /yr
36 Million US$
DOMINICA
Agriculture and Land use data for Dominica
National GDP, 2001
Population, 2001
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
263 Million US$
78,111
3,367 Per Capita US$
149 Million US$
18%
75 000'hectares
000'hectares
0.22 000'hectares
10,000
40%
Bioenergy potential from Agricultural Residues in Dominica
1 Sugarcane
2 Coconuts
3 Cereals
4 Roots & Tubers
5 Groundnuts
6 Pulses
7 Vegetables
8 Fruits
TOTAL
Production
Area
2003-05 Harvested
000'tons/yr
Ha
4.4
220
11.5
3,450
0.2
135
26.7
2,877
0.1
6.6
63.5
113.0
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
Yield
tons/Ha
20.0
3.3
1.3
9.3
190
731
9,765
17,368
0.4
9.1
6.2
68,156 Barrels diesel oil /yr
7.2 Million US$ /yr
10.3 Million US$ /yr
2.6 Million US$
44%
0.4 Million US$
20%
331
Energy of
Residues
TJ / yr
22.3
151.6
4.3
190.2
1.3
1.4
13.2
384
Ethanol production potential from Sugarcane in Dominica
Sugarcane Production. 2004
4 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
0.35 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
0.12 Million Liters /year
0.47 Million Liters /year
0.35 Million Liters /year
2.22 000'Barrels /yr
106 000'Barrels /yr
Crude oil @ 70 US$ /barrel
0.24 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice
only)
0.34 Million US$
0.1 Million US$
Electricity generation potential from Sugarcane Residues in Dominica
Sugarcane Production. 2004
4 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
0.44 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
0.88 Gigawatt-hours /year
Electricity consumption, 2004
67 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
75 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
0.89 000'Barrels /yr
Economic Value @ 70 US$ /barrel
0.09 Million US$
Economic Value @ 100 US$ /barrel
0.13 Million US$
Investment required
0.15 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
1.77 000'Barrels /yr
Economic Value @ 70 US$ /barrel
0.19 Million US$
Economic Value @ 100 US$ /barrel
0.27 Million US$
Investment required
0.26 Million US$
Jatropha cultivation for Diesel substitution in Dominica
Diesel consumption, 2004
Total Land Area
23 Million liters /yr
751 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
Employment generated after 3 years
10%
1.3
0%
0.1
0.1
332
20%
2.5
0%
0.3
0.1
50%
6.4 000'Hectares
1%
0.7 Million mandays /yr
0.3 Million mandays /yr
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
2.3
1.6
2.2
0.01
1.06
0.90
0.16
4.7
3.1
4.5
0.01
2.11
1.79
0.32
11.7
7.8
11.2
0.03
5.29
4.48
0.81
Potential to expand Biofuels
production from Sugarcane in
Dominica
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
220
220
440
440 Hectares
60
120
60
120 Tons /Ha
13
26
26
53 000'Tons /yr
1.3
2.6
2.6
5.3 GWh /yr
2.7
5.3
5.3
10.6 000'Barrels /yr
0.5
0.9
0.9
1.8 Million US$
2.6
5.3
5.3
10.6 GWh /yr
5.3
10.6
10.6
21.3 000'Barrels /yr
0.8
1.6
1.6
3.2 Million US$
1.06
2.11
2.11
4.22 Million liters /yr
5.0
10.0
10.0
19.9 000'Barrels /yr
0.2
0.5
0.5
1.1 Million US$
Economic Value of Coconuts: Oil and Residues (shells & husk) in Dominica
Diesel consumption, 2004
Coconuts production, 2003-05
Area under Coconuts
Yield of Coconuts
Coconut Oil produced
Diesel susbtituted by Coconut Oil
Residues (shells & husk) produced
Electricity generated by Residues
Diesel substituted by Residues
Diesel susbtituted by both Coconut Oil & Residues
At a Crude Oil Price = 70 US$/barrel
Economic Value =
=
At a Crude Oil Price = 100 US$/barrel
Economic Value =
=
Assumptions:
333
148 000'Barrels/yr
11,500 Tons /yr
3,450 Hectares
3.3 Tons / Ha
2,277 Tons/ yr
13 000'Barrels/yr
7,705 Tons/ yr
8.4 GWh /yr
18 000'Barrels/yr
31 000'Barrels/yr
3.2 Million US$
855 US$ /ton copra
4.6 Million US$
1,221 US$ /ton copra
Million liters /yr
Million US$ /yr
Million US$ /yr
Million tons CO2
Million US$
Million US$
Million US$
a) Proportion: kernel 33%, shell 23%, husk 44% (by dry weight).
b) Residue Energy of shell = 20.6 MJ/dry kg, of husk = 19.2 MJ/dry kg
c) Shells and Husk gasified to produce electricity at overall efficiency of 20%
d) Coconut oil produced = 60% of copra by weight
e) 1 liter coconut oil equivalent to 0.83 liters diesel
f) Density of coconut oil = 1100 liters/ton
g) Diesel generating set consumes 0.33 Litres per kWh
334
DOMINICAN REPUBLIC
Agriculture and Land use data for Dominican Republic
National GDP, 2001
Population, 2001
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
21,211 Million US$
8,484,400
Per Capita
2,500 US$
2,270 Million US$
11%
2.7%
4,851 000'hectares
1,088 000'hectares
133,667 000'hectares
Bioenergy potential from Agricultural Residues in Dominican Republic
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
5,177.8
133,667
2 Coconuts
179.7
37,667
3 Cereals
627.8
150,300
4 Roots & Tubers
259.1
35,217
5 Groundnuts
2.94
2,633
6 Pulses
50.1
62,320
7 Vegetables
380.6
36,178
8 Fruits
1,248.4
121,588
TOTAL
7,926.6
579,570
Yield
tons/Ha
38.7
4.8
4.2
7.6
1.1
0.8
10.9
10.5
Oil equivalent of Residues
8,615,312 Barrels diesel oil /yr
Economic Value @70 US$/bbl
912.3 Million US$ /yr
Economic Value @100 US$/bbl
1,302.7 Million US$ /yr
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
304.6 Million US$
41%
51.8 Million US$
20%
335
Energy of
Residues
TJ / yr
28,149.0
2,369.9
15,068.2
1,844.8
17.4
802.3
79.2
259.7
48,590
served
Ethanol production potential from Sugarcane in Dominican Republic
Sugarcane Production. 2004
5,547 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
444 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
150 Million Liters /year
594 Million Liters /year
445 Million Liters /year
2800 000'Barrels /yr
8446 000'Barrels /yr
Crude oil @ 70 US$ /barrel
299 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice only)
427 Million US$
69.0 Million US$
Electricity generation potential from Sugarcane Residues in Dominican Republic
Sugarcane Production. 2004
5,547 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
555 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
1,109 Gigawatt-hours /year
Electricity consumption, 2004
13,489 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
1,116 000'Barrels /yr
Economic Value @ 70 US$ /barrel
118 Million US$
Economic Value @ 100 US$ /barrel
169 Million US$
Investment required
191 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
2,233 000'Barrels /yr
Economic Value @ 70 US$ /barrel
236 Million US$
Economic Value @ 100 US$ /barrel
338 Million US$
Investment required
333 Million US$
Jatropha cultivation for Diesel substitution in Dominican Republic
Diesel consumption, 2004
Total Land Area
1,199 Million liters /yr
4,851 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
10%
65
1%
6.7
336
20%
130
3%
13.5
50%
325 000'Hectares
7%
33.7 Million mandays /yr
Employment generated after 3 years
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
2.6
120
80
114
0.32
54.06
45.82
8.24
5.2
240
160
228
0.65
108.12
91.63
16.48
13.0 Million mandays /yr
600 Million liters /yr
399 Million US$ /yr
571 Million US$ /yr
1.62 Million tons CO2
270.29 Million US$
229.09 Million US$
41.21 Million US$
Potential to expand Biofuels production from Sugarcane in Dominican Republic
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
133,667
133,667
267,333
267,333 Hectares
60
120
60
120 Tons /Ha
8,020
16,040
16,040
32,080 000'Tons /yr
802
1,604
1,604
3,208 GWh /yr
1,614
3,228
3,228
6,456 000'Barrels /yr
276.7
553.4
553.4
1,106.8 Million US$
1,604
3,208
3,208
6,416 GWh /yr
3,228
6,456
6,456
12,913 000'Barrels /yr
481.2
962.4
962.4
1,924.8 Million US$
641.60 1,283.20 1,283.20 2,566.40 Million liters /yr
3,026
6,053
6,053
12,106 000'Barrels /yr
124
298
298
644 Million US$
337
GRENADA
Agriculture and Land use data for Grenada
National GDP, 2001
Population, 2001
378 Million US$
80,735
Per Capita
4,682 US$
29 Million US$
8%
0.0%
34 000'hectares
12 000'hectares
0.16 000'hectares
10,000
24%
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land + Permanent crops area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
Bioenergy potential from Agricultural Residues in Grenada
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
7.2
160
2 Coconuts
6.5
2,300
3 Cereals
0.3
300
4 Roots & Tubers
4.1
770
5 Groundnuts
6 Pulses
0.6
615
7 Vegetables
2.6
276
8 Fruits
16.8
2,925
TOTAL
38.1
7,346
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
Yield
tons/Ha
45.0
2.8
1.0
5.3
1.0
9.6
5.8
30,489 Barrels diesel oil /yr
3.2 Million US$ /yr
4.6 Million US$ /yr
0.6 Million US$
7%
0.6 Million US$
20%
338
Energy of
Residues
TJ / yr
36.5
85.7
7.2
28.9
9.5
0.6
3.5
172
Ethanol production potential from Sugarcane in Grenada
Sugarcane Production. 2004
7 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
0.58 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
0.19 Million Liters /year
0.77 Million Liters /year
0.58 Million Liters /year
3.63 000'Barrels /yr
163 000'Barrels /yr
Crude oil @ 70 US$ /barrel
0.39 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice
only)
0.55 Million US$
0.09 Million US$
Electricity generation potential from Sugarcane Residues in Grenada
7 000'tons / year
Sugarcane Production. 2004
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
0.7 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
1.4 Gigawatt-hours /year
Electricity consumption, 2004
126 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
203 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
1.45 000'Barrels /yr
Economic Value @ 70 US$ /barrel
0.15 Million US$
Economic Value @ 100 US$ /barrel
0.22 Million US$
Investment required
0.25 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
2.90 000'Barrels /yr
Economic Value @ 70 US$ /barrel
0.31 Million US$
Economic Value @ 100 US$ /barrel
0.44 Million US$
Investment required
0.43 Million US$
Jatropha cultivation for Diesel substitution in Grenada
Diesel consumption, 2004
Total Land Area
45 Million liters /yr
34 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
10%
2
7%
0.3
339
20%
5
14%
0.5
50%
12 000'Hectares
35%
1.3 Million mandays /yr
Employment generated after 3 years
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
0.1
4
3
4
0.01
2.02
1.71
0.31
0.2
9
6
9
0.02
4.04
3.42
0.62
0.5 Million mandays /yr
22 Million liters /yr
15 Million US$ /yr
21 Million US$ /yr
0.06 Million tons CO2
10.10 Million US$
8.56 Million US$
1.54 Million US$
Potential to expand Biofuels production from Sugarcane in Grenada
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
160
160
320
320 Hectares
60
120
60
120 Tons /Ha
10
19
19
38 000'Tons /yr
0.96
1.92
1.92
3.84 GWh /yr
1.93
3.86
3.86
7.73 000'Barrels /yr
0.33
0.66
0.66
1.32 Million US$
1.92
3.84
3.84
7.68 GWh /yr
3.86
7.73
7.73
15.46 000'Barrels /yr
0.58
1.15
1.15
2.30 Million US$
0.77
1.54
1.54
3.07 Million liters /yr
3.62
7.25
7.25
14.49 000'Barrels /yr
0.14
0.35
0.35
0.77 Million US$
340
HAITI
Agriculture and Land use data for Haiti
National GDP, 2001
Population, 2001
3,494 Million US$
8,106,729
Per Capita
431 US$
1,048 Million US$
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National
GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
30%
0.7%
2,775 000'hectares
780 000'hectares
17.8 000'hectares
Bioenergy potential from Agricultural Residues in Haiti
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
1,070.0
17,833
2 Coconuts
24.5
9,633
3 Cereals
377.3
458,167
4 Roots & Tubers
753.5
194,227
5 Groundnuts
21.33
25,333
6 Pulses
65.0
100,500
7 Vegetables
201.2
33,210
8 Fruits
994.1
159,510
TOTAL
3,506.8
998,413
Yield
tons/Ha
60.0
2.5
0.8
3.9
0.8
0.6
6.1
6.2
Oil equivalent of Residues
3,836,629 Barrels diesel oil /yr
Economic Value @70 US$/bbl
406.3 Million US$ /yr
Economic Value @100 US$/bbl
580.1 Million US$ /yr
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
134 Million US$
21%
50.4 Million US$
20%
341
Energy of
Residues
TJ / yr
5,480.5
323.1
9,056.0
5,364.9
126.1
1,039.5
41.8
206.8
21,639
Ethanol production potential from Sugarcane in Haiti
Sugarcane Production. 2004
1,080 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
86 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
29 Million Liters /year
116 Million Liters /year
87 Million Liters /year
545 000'Barrels /yr
N/A 000'Barrels /yr
Crude oil @ 70 US$ /barrel
58 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice
only)
83 Million US$
13.4 Million US$
Electricity generation potential from Sugarcane Residues in Haiti
Sugarcane Production. 2004
1,080 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
108 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
216 Gigawatt-hours /year
Electricity consumption, 2004
512 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
217 000'Barrels /yr
Economic Value @ 70 US$ /barrel
23 Million US$
Economic Value @ 100 US$ /barrel
33 Million US$
Investment required
37 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
435 000'Barrels /yr
Economic Value @ 70 US$ /barrel
46 Million US$
Economic Value @ 100 US$ /barrel
66 Million US$
Investment required
65 Million US$
Jatropha cultivation for Diesel substitution in Haiti
Diesel consumption, 2004
Million liters /yr
2,775 000'Hectares
Total Land Area
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
10%
0%
-
342
20%
0%
-
50%
- 000'Hectares
0%
- Million mandays /yr
Employment generated after 3 years
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
-
-
Potential to expand Biofuels production from Sugarcane in Haiti
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
17,833
17,833
35,667
35,667 Hectares
60
120
60
120 Tons /Ha
1,070
2,140
2,140
4,280 000'Tons /yr
107
214
214
428 GWh /yr
215
431
431
861 000'Barrels /yr
36.9
73.8
73.8
147.7 Million US$
214
428
428
856 GWh /yr
431
861
861
1,723 000'Barrels /yr
64.2
128.4
128.4
256.8 Million US$
85.60
171.20
171.20
342.40 Million liters /yr
404
808
808
1,615 000'Barrels /yr
14
37
37
83 Million US$
343
- Million mandays /yr
- Million liters /yr
- Million US$ /yr
- Million US$ /yr
- Million tons CO2
- Million US$
- Million US$
- Million US$
JAMAICA
Agriculture and Land use data for Jamaica
National GDP, 2001
Population, 2001
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
7,784 Million US$
2,603,344
Per Capita
2,990 US$
522 Million US$
7%
3.3%
1,099 000'hectares
174 000'hectares
42.7 000'hectares
262
20%
Bioenergy potential from Agricultural Residues in Jamaica
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
2,133.3
42,667
2 Coconuts
170.0
51,000
3 Cereals
1.0
857
4 Roots & Tubers
214.2
12,600
5 Groundnuts
3.40
2,713
6 Pulses
5.0
4,730
7 Vegetables
196.5
14,393
8 Fruits
468.2
46,566
TOTAL
3,191.8
175,525
Yield
tons/Ha
45.2
3.3
1.2
17.1
1.3
1.1
13.7
9.9
Oil equivalent of Residues
2,603,932 Barrels diesel oil /yr
Economic Value @70 US$/bbl
275.7 Million US$ /yr
Economic Value @100 US$/bbl
393.7 Million US$ /yr
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
22.2 Million US$
10%
15.7 Million US$
20%
344
Energy of
Residues
TJ / yr
10,656.5
2,241.6
23.9
1,525.2
20.1
80.6
40.9
97.4
14,686
Ethanol production potential from Sugarcane in Jamaica
Sugarcane Production. 2004
2,100 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
168 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
57 Million Liters /year
225 Million Liters /year
169 Million Liters /year
1060 000'Barrels /yr
4398 000'Barrels /yr
Crude oil @ 70 US$ /barrel
113 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice
only)
162 Million US$
26.1 Million US$
Electricity generation potential from Sugarcane Residues in Jamaica
Sugarcane Production. 2004
2,100 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
210 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
420 Gigawatt-hours /year
Electricity consumption, 2004
2,974 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
6,226 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
423 000'Barrels /yr
Economic Value @ 70 US$ /barrel
45 Million US$
Economic Value @ 100 US$ /barrel
64 Million US$
Investment required
72 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
845 000'Barrels /yr
Economic Value @ 70 US$ /barrel
90 Million US$
Economic Value @ 100 US$ /barrel
128 Million US$
Investment required
126 Million US$
Jatropha cultivation for Diesel substitution in Jamaica
Diesel consumption, 2004
Total Land Area
633 Million liters /yr
1,099 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
10%
34
3%
3.6
345
20%
69
6%
7.1
50%
172 000'Hectares
16%
17.8 Million mandays /yr
Employment generated after 3 years
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
1.4
63
42
60
0.17
28.52
24.17
4.35
2.7
127
84
120
0.34
57.03
48.34
8.69
6.9 Million mandays /yr
316 Million liters /yr
211 Million US$ /yr
301 Million US$ /yr
0.85 Million tons CO2
142.58 Million US$
120.84 Million US$
21.74 Million US$
Potential to expand Biofuels production from Sugarcane in Jamaica
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
42,667
42,667
85,333
85,333 Hectares
60
120
60
120 Tons /Ha
2,560
5,120
5,120
10,240 000'Tons /yr
256
512
512
1,024 GWh /yr
515
1,030
1,030
2,061 000'Barrels /yr
88.3
176.6
176.6
353.3 Million US$
512
1,024
1,024
2,048 GWh /yr
1,030
2,061
2,061
4,122 000'Barrels /yr
153.6
307.2
307.2
614.4 Million US$
204.80
409.60
409.60
819.20 Million liters /yr
966
1,932
1,932
3,864 000'Barrels /yr
37
92
92
203 Million US$
346
SAINT KITTS AND NEVIS
Agriculture and Land use data for Saint Kitts and Nevis
National GDP, 2001
Population, 2001
295 Million US$
46,123
Per Capita
6,396 US$
10 Million US$
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National
GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
4%
2.6%
27 000'hectares
7 000'hectares
2.9 000'hectares
Bioenergy potential from Agricultural Residues in Saint Kitts and
Nevis
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
162.0
2,933
2 Coconuts
1.0
200
3 Cereals
4 Roots & Tubers
1.0
365
5 Groundnuts
0.03
26
6 Pulses
0.2
210
7 Vegetables
0.7
30
8 Fruits
1.3
200
TOTAL
166.2
3,965
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
Yield
tons/Ha
55.3
5.0
2.8
1.2
1.0
22.8
6.5
177,967 Barrels diesel oil /yr
18.8 Million US$ /yr
26.9 Million US$ /yr
0.2 Million US$
6%
0.2 Million US$
20%
347
Energy of
Residues
TJ / yr
979.4
13.2
7.2
0.2
3.4
0.1
0.3
1,004
Ethanol production potential from Sugarcane in Saint Kitts and Nevis
Sugarcane Production. 2004
193 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
15 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
5 Million Liters /year
21 Million Liters /year
15 Million Liters /year
97 000'Barrels /yr
132 000'Barrels /yr
Crude oil @ 70 US$ /barrel
10 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice only)
15 Million US$
3.6 Million US$
Electricity generation potential from Sugarcane Residues in Saint Kitts and Nevis
Sugarcane Production. 2004
193 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
19 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
39 Gigawatt-hours /year
Electricity consumption, 2004
14 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
187 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
39 000'Barrels /yr
Economic Value @ 70 US$ /barrel
4 Million US$
Economic Value @ 100 US$ /barrel
6 Million US$
Investment required
7 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
78 000'Barrels /yr
Economic Value @ 70 US$ /barrel
8 Million US$
Economic Value @ 100 US$ /barrel
12 Million US$
Investment required
12 Million US$
Jatropha cultivation for Diesel substitution in Saint Kitts and Nevis
Diesel consumption, 2004
Total Land Area
36 Million liters /yr
27 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
Employment generated after 3 years
10%
2
7%
0.2
0.1
348
20%
4
15%
0.4
0.2
50%
10 000'Hectares
37%
1.0 Million mandays /yr
0.4 Million mandays /yr
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
4
2
3
0.01
1.64
1.39
0.25
7
5
7
0.02
3.29
2.79
0.50
18
12
17
0.05
8.22
6.96
1.25
Potential to expand Biofuels production from Sugarcane in Saint Kitts and Nevis
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
2,933
2,933
5,867
5,867 Hectares
60
120
60
120 Tons /Ha
176
352
352
704 000'Tons /yr
18
35
35
70 GWh /yr
35
71
71
142 000'Barrels /yr
6.1
12.1
12.1
24.3 Million US$
35
70
70
141 GWh /yr
71
142
142
283 000'Barrels /yr
10.6
21.1
21.1
42.2 Million US$
14.08
28.16
28.16
56.32 Million liters /yr
66
133
133
266 000'Barrels /yr
2.1
5.9
5.9
13.5 Million US$
349
Million liters /yr
Million US$ /yr
Million US$ /yr
Million tons CO2
Million US$
Million US$
Million US$
SAINT LUCIA
Agriculture and Land use data for Saint Lucia
National GDP, 2001
Population, 2001
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land + Permanent crops area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
733 Million US$
146,776
4,994 Per Capita US$
51 Million US$
7%
62 000'hectares
18 000'hectares
- 000'hectares
9
22%
Bioenergy potential from Agricultural Residues in Saint Lucia
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
2 Coconuts
14.0
3,500
3 Cereals
0.6
4 Roots & Tubers
11.2
2,792
5 Groundnuts
6 Pulses
0.0
20
7 Vegetables
1.0
140
8 Fruits
157.9
17,303
TOTAL
184.8
23,755
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
Yield
tons/Ha
4.0
4.0
2.0
7.1
9.1
55,516 Barrels diesel oil /yr
5.9 Million US$ /yr
8.4 Million US$ /yr
1.1 Million US$
8%
0.9 Million US$
20%
350
Energy of
Residues
TJ / yr
184.6
15.1
79.7
0.6
0.2
32.8
313
Ethanol production potential from Sugarcane in Saint Lucia
Sugarcane Production. 2004
- 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
0 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
0 Million Liters /year
0 Million Liters /year
0 Million Liters /year
0 000'Barrels /yr
351 000'Barrels /yr
Crude oil @ 70 US$ /barrel
0 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice
only)
0 Million US$
- Million US$
Electricity generation potential from Sugarcane Residues in Saint Lucia
Sugarcane Production. 2004
- 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
- Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
- Gigawatt-hours /year
Electricity consumption, 2004
266 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
456 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
- 000'Barrels /yr
Economic Value @ 70 US$ /barrel
- Million US$
Economic Value @ 100 US$ /barrel
- Million US$
Investment required
- Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
- 000'Barrels /yr
Economic Value @ 70 US$ /barrel
- Million US$
Economic Value @ 100 US$ /barrel
- Million US$
Investment required
- Million US$
Jatropha cultivation for Diesel substitution in Saint Lucia
Diesel consumption, 2004
Total Land Area
93 Million liters /yr
62 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
Employment generated after 3 years
10%
5
8%
0.5
0.2
351
20%
10
16%
1.0
0.4
50%
25 000'Hectares
40%
2.6 Million mandays /yr
1.0 Million mandays /yr
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
9
6
9
0.03
4.17
3.54
0.64
19
12
18
0.05
8.35
7.07
1.27
46
31
44
0.13
20.87
17.69
3.18
Potential to expand Biofuels production from Sugarcane in Saint Lucia
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
- Hectares
60
120
60
120 Tons /Ha
- 000'Tons /yr
- GWh /yr
- 000'Barrels /yr
Million US$
- GWh /yr
- 000'Barrels /yr
Million US$
- Million liters /yr
- 000'Barrels /yr
Million US$
Economic Value of Coconuts: Oil and Residues (shells & husk) in St Lucia
Diesel consumption, 2004
Coconuts production, 2003-05
Area under Coconuts
Yield of Coconuts
Coconut Oil produced
Diesel susbtituted by Coconut Oil
Residues (shells & husk) produced
Electricity generated by Residues
Diesel substituted by Residues
Diesel susbtituted by both Coconut Oil & Residues
At a Crude Oil Price = 70 US$/barrel
Economic Value =
=
At a Crude Oil Price = 100 US$/barrel
Economic Value =
=
582 000'Barrels/yr
14,000 Tons /yr
3,500 Hectares
4.0 Tons / Ha
2,772 Tons/ yr
16 000'Barrels/yr
9,380 Tons/ yr
10.3 GWh /yr
22 000'Barrels/yr
38 000'Barrels/yr
3.9 Million US$
855 US$ /ton copra
5.6 Million US$
1,221 US$ /ton copra
Assumptions:
a) Proportion: kernel 33%, shell 23%, husk 44% (by dry weight).
b) Residue Energy of shell = 20.6 MJ/dry kg, of husk = 19.2 MJ/dry kg
352
Million liters /yr
Million US$ /yr
Million US$ /yr
Million tons CO2
Million US$
Million US$
Million US$
c) Shells and Husk gasified to produce electricity at overall efficiency of 20%
d) Coconut oil produced = 60% of copra by weight
e) 1 liter coconut oil equivalent to 0.83 liters diesel
f) Density of coconut oil = 1100 liters/ton
g) Diesel generating set consumes 0.33 Litres per kWh
353
ST. VINCENT & THE GRENADINES
Agriculture and Land use data for St. Vincent & the Grenadines
National GDP, 2001
Population, 2001
348 Million US$
179,381
Per Capita
1,940 US$
35 Million US$
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National
GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
10%
39 000'hectares
000'hectares
0.7 000'hectares
Bioenergy potential from Agricultural Residues in St. Vincent & the
Grenadines
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
13.3
742
2 Coconuts
2.6
688
3 Cereals
2.7
200
4 Roots & Tubers
13.8
2,372
5 Groundnuts
0.31
312
6 Pulses
0.3
350
7 Vegetables
4.3
501
8 Fruits
57.4
6,291
TOTAL
94.7
11,456
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
Percentage of population
served
Yield
tons/Ha
25.1
3.7
3.2
5.8
1.0
1.0
8.6
9.2
54,538 Barrels diesel oil /yr
5.8 Million US$ /yr
8.2 Million US$ /yr
1.38 Million US$
14%
0.69 Million US$
20%
354
Energy of
Residues
TJ / yr
91.3
33.7
64.0
98.3
1.8
5.5
0.9
11.9
308
Ethanol production potential from Sugarcane in St. Vincent & the Grenadines
Sugarcane Production. 2004
18 000'tons / year
Ethanol Production Potential:
from Sugarcane Juice
1.4 Million Liters /year
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
0.5 Million Liters /year
1.9 Million Liters /year
1.4 Million Liters /year
9.1 000'Barrels /yr
167 000'Barrels /yr
Crude oil @ 70 US$ /barrel
1.0 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice only)
1.4 Million US$
0.2 Million US$
Electricity generation potential from Sugarcane Residues in St. Vincent & the Grenadines
Sugarcane Production. 2004
18 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
1.8 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
3.6 Gigawatt-hours /year
Electricity consumption, 2004
107 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
156 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
3.6 000'Barrels /yr
Economic Value @ 70 US$ /barrel
0.4 Million US$
Economic Value @ 100 US$ /barrel
0.5 Million US$
Investment required
0.6 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
7.2 000'Barrels /yr
Economic Value @ 70 US$ /barrel
0.8 Million US$
Economic Value @ 100 US$ /barrel
1.1 Million US$
Investment required
1.1 Million US$
Jatropha cultivation for Diesel substitution in St. Vincent & the Grenadines
Diesel consumption, 2004
Total Land Area
55 Million liters /yr
39 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
10%
3.0
8%
0.3
355
20%
5.9
15%
0.6
50%
14.8 000'Hectares
38%
1.5 Million mandays /yr
Employment generated after 3 years
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
0.1
5.5
3.6
5.2
0.01
2.46
2.09
0.38
0.2
10.9
7.3
10.4
0.03
4.92
4.17
0.75
0.6 Million mandays /yr
27.3 Million liters /yr
18.2 Million US$ /yr
26.0 Million US$ /yr
0.07 Million tons CO2
12.31 Million US$
10.44 Million US$
1.88 Million US$
Potential to expand Biofuels production from Sugarcane in St. Vincent & the Grenadines
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
742
742
1,483
1,483 Hectares
60
120
60
120 Tons /Ha
45
89
89
178 000'Tons /yr
4.5
8.9
8.9
17.8 GWh /yr
9.0
17.9
17.9
35.8 000'Barrels /yr
1.5
3.1
3.1
6.1 Million US$
8.9
17.8
17.8
35.6 GWh /yr
17.9
35.8
35.8
71.6 000'Barrels /yr
2.7
5.3
5.3
10.7 Million US$
3.6
7.1
7.1
14.2 Million liters /yr
16.8
33.6
33.6
67.2 000'Barrels /yr
0.8
1.8
1.8
3.7 Million US$
356
TRINIDAD AND TOBAGO
Agriculture and Land use data for Trinidad and Tobago
National GDP, 2001
Population, 2001
8,819 Million US$
1,293,678
Per Capita
6,817 US$
229 Million US$
3%
2.7%
453 000'hectares
75 000'hectares
13.8 000'hectares
49,000
8%
National GDP
Agricultural GDP, 2001
Agricultural GDP as % of National GDP
Agricultural Exports as % of GDP
Total land area
Arable land area
Total Area in Sugarcane
Agricultural Labor Force
% of National Labor Force in Agriculture
Bioenergy potential from Agricultural Residues in Trinidad and
Tobago
Production
Area
2003-05 Harvested
000'tons/yr
Ha
1 Sugarcane
706.0
13,833
2 Coconuts
17.5
3,200
3 Cereals
6.0
2,197
4 Roots & Tubers
8.9
905
5 Groundnuts
0.08
6 Pulses
3.6
1,662
7 Vegetables
23.6
2,248
8 Fruits
66.7
11,065
TOTAL
832.3
35,110
Oil equivalent of Residues
Economic Value @70 US$/bbl
Economic Value @100 US$/bbl
Yield
tons/Ha
50.8
5.5
2.7
9.7
2.1
10.5
6.0
612,906 Barrels diesel oil /yr
64.9 Million US$ /yr
92.7 Million US$ /yr
Gasifiers for cooking gas from
50% of residues (excluding
sugarcane)
Investment required
Percentage of population
served
3%
Biogas for cooking from
wastes of vegetables, fruits &
starchy materials
Investment required
7.8 Million US$
3.0 Million US$
357
Energy of
Residues
TJ / yr
2,943.2
230.8
143.5
63.1
0.5
57.0
4.9
13.9
3,457
Percentage of population
served
20%
Ethanol production potential from Sugarcane in Trinidad and Tobago
Sugarcane Production. 2004
Ethanol Production Potential:
from Sugarcane Juice
from Bagasse
Total Ethanol potential
Gasoline Substituted:
=
Gasoline consumption, 2004
Economic Value of Ethanol:
580 000'tons / year
46 Million Liters /year
16 Million Liters /year
62 Million Liters /year
47 Million Liters /year
293 000'Barrels /yr
3101 000'Barrels /yr
Crude oil @ 70 US$ /barrel
31 Million US$
Crude oil @ 100 US$ /barrel
Investment required (Ethanol from cane juice only)
45 Million US$
7.2 Million US$
Electricity generation potential from Sugarcane Residues in Trinidad and Tobago
Sugarcane Production. 2004
580 000'tons / year
Electricity generated from Bagasse & Trash:
@ 100 kilowatt-hours /ton cane
58 Gigawatt-hours /year
@ 200 kilowatt-hours /ton cane
116 Gigawatt-hours /year
Electricity consumption, 2004
6,321 Gigawatt-hours /year
Fuel consumed by Electric Utilities, 2004
19 000'Barrels /yr
@ 100 kWh /ton cane:
Fuel oil substituted
117 000'Barrels /yr
Economic Value @ 70 US$ /barrel
12 Million US$
Economic Value @ 100 US$ /barrel
18 Million US$
Investment required
20 Million US$
@ 200 kWh /ton cane:
Fuel oil substituted
233 000'Barrels /yr
Economic Value @ 70 US$ /barrel
25 Million US$
Economic Value @ 100 US$ /barrel
35 Million US$
Investment required
35 Million US$
Jatropha cultivation for Diesel substitution in Trinidad and Tobago
Diesel consumption, 2004
Total Land Area
308 Million liters /yr
453 000'Hectares
Diesel substitution Percentage
Jatropha Area required
Percentage of Total Land Area required
Employment generated during first 3 years
Employment generated after 3 years
10%
17
4%
1.7
0.7
358
20%
33
7%
3.5
1.3
50%
84 000'Hectares
18%
8.7 Million mandays /yr
3.3 Million mandays /yr
Diesel saved
Economic value @ 70 $/bbl
Economic value @ 100 $/bbl
Greeenhouse gas reductions
Total Investments required:
a) for Nurseries and Plantations
b) for Seed Collection & Oil Extraction Centres
31
21
29
0.08
13.88
11.76
2.12
62
41
59
0.17
27.76
23.53
4.23
154
103
146
0.42
69.40
58.82
10.58
Potential to expand Biofuels production from Sugarcane in Trinidad and Tobago
Area
Yield
Production
Electricity Exports @100 kWh /tc
Fuel Oil substituted
Investment required
Electricity Exports @200 kWh /tc
Fuel Oil substituted
Investment required
Ethanol Production
Gasoline substituted
Investment required
At Present Acreage At Double the Acreage
13,833
13,833
27,667
27,667 Hectares
60
120
60
120 Tons /Ha
830
1,660
1,660
3,320 000'Tons /yr
83
166
166
332 GWh /yr
167
334
334
668 000'Barrels /yr
28.6
57.3
57.3
114.5 Million US$
166
332
332
664 GWh /yr
334
668
668
1,336 000'Barrels /yr
49.8
99.6
99.6
199.2 Million US$
66.40
132.80
132.80
265.60 Million liters /yr
313
626
626
1,253 000'Barrels /yr
13
31
31
67 Million US$
359
Million liters /yr
Million US$ /yr
Million US$ /yr
Million tons CO2
Million US$
Million US$
Million US$