Submitted by New Energy News Blog
That there are problems with ethanol, especially corn ethanol, will come as no surprise to NewEnergyNews readers. That the Inter-American Development Bank (IDB) has now shifted its financing strategies in response to the problems will come as good news, especially on the heels of last week’s news that the EU is considering doing the same. (See EXPERTS TELL EU TO PUT BIOFUELS ON HOLD)
It seems the U.S. and Brazil will be the slowest to respond. (See CORN ETHANOL AND HUNGER) Guess why. (The answer is green but only grows as investments.)
The IDB will stop spreading its wealth to Latin American food crop ethanol producers in favor of those who cultivate hardy nonfood crops like Jatropha on non-arable lands.
Nathaniel Jackson, senior advisor, IDB: “It’s a good thing that voices have been raised in that debate. Biofuels are not a complete panacea, we have to distinguish between what are the better sectors of biofuels…The ideal will be something like Jatropha which clearly has no impact on food prices…Now, if they come to us with anything that would directly impact food prices, we say that’s probably not what we’re looking for…”
This new IDB policy is NOT what Brazil is looking for because it loves its sugar ethanol. Brazil is a special case. It is making sugar cane ethanol work a lot better than corn ethanol works, and in some parts of Brazil the economic value of promoting it is greater than the harm. So the IDB will be flexible on that subject.
Jackson: “If there’s a sugar cane project coming our way we ask ‘where is it’? If it’s up there in the area we want to target, which the government wants to develop, then from that standpoint it comes into the equation…”
That’s kind of like corn ethanol in the U.S. – if it’s in the Midwest where the presidential candidates need VOTES, they’ll include it in the equation.
The truth is that biomass is more efficiently used for biogas to generate electricity than as a transportation fuel. Sorry.
Food vs fuel debate changes biofuel financing-IDB
Andrei Khalip, April 22, 2008 (Reuters)
WHO
The Inter-American Development Bank (IDB) (Nathaniel Jackson, senior advisor); UN Food and Agriculture Organization (FAO)
The IDB likes jatropha, an adaptable, versatile plant. (click to enlarge)
WHAT
The IDB has changed its policy regarding financing for biofuels development, shifting funding away from food crops to non-edible crops that grow on non-arable lands without significant cultivation.
WHEN
– In keeping with a growing interest in developing non-petroleum fuels, IDB has been funding ethanol and biofuels projects.
– In light of the recent UN FAO announcement and other criticisms of agrofuels, IDB will has now shifted its emphasis.
– 2008: IDB will increase its funding of selected biofuels projects from 1% to 10% of its $4 billion investments.
WHERE
– The Latin American Renewable Energy Financing Forum, Rio de Janeiro.
– The IDB will support sugar cane-based biofuels in the poor northeast of Brazil but not in the wealthier southeast (Brazil’s main sugar cane region).
WHY
– According to the UN FAO, the world’s increased production of biofuels is making food more expensive and less available to Latin America’s poor and hungry.
– IDB likes Jatropha, an extremely hardy non food crop that grows in arid regions all over the world. It is being successfully cultivated for biofuel in India and Africa.
– IDB will not invest in corn ethanol production.
– IDB is also not big on soy as an ethanol source. It might go for sorghum. It will go for sugar cane if production serves the population more than it harms food production.
– By the end of the year, IDB’s investments in “bioenergy” will be equal to its investments in “traditional energy.”
QUOTES
Nathaniel Jackson, senior advisor, IDB: “We think sorghum would be appropriate, but for instance soy would not be ideal, as it impacts (food) prices. We do reckon sugar price does have an impact. It is by and large less desirable than jatropha, but then again, we have to look at the overall development picture…”