Category Archives: biofuels

An Impossible Made Possible: the Green Energy Revolution

Since the cost of renewable energy can now be competitive with fossil fuels. Government, corporate and consumer interests finally seem to be aligning.  The stock market has noticed. After years of underperformance, indexes that track clean-energy stocks bottomed out in late 2018. The S&P Global Clean Energy index, which covers 30 big utilities and green-technology stocks, is now up 37% over two years, including dividends, compared with 18% for the S&P 500.

This year’s Covid crisis will delay some renewable projects, but could speed up the energy transition in other ways. Alternative-energy spending has held up much better than spending on oil and gas. Globally, clean-energy investment is now expected to account for half of total investment in the entire energy sector this year, according to UBS.  Moreover, the crisis has pushed governments to spend money, including on renewable technologies. The massive stimulus plan announced by the European Union last month is decidedly green. The German government increased electric-car subsidies as part of its pandemic-related stimulus package rather than rolling out a 2009-style “cash-for-clunkers” program. China’s plans include clean-energy incentives, too.

Solar and wind are now mature technologies that provide predictable long-term returns. Big lithium-ion batteries, such as those that power Teslas, are industrializing rapidly. More speculatively, hydrogen is a promising green fuel for hard-to-decarbonize sectors such as long-haul transport, aviation, steel and cement.  Many big companies—the likes of Royal Dutch Shell, Air Liquide and Toyota —have green initiatives worth many hundreds of millions of dollars. They are, however, a relatively small part of these large businesses, some of whose other assets may be rendered obsolete by the energy transition… Early-stage electric-truck maker Nikola jumped on its market debut this month to a valuation at one point exceeding that of Ford.

Investors might be better off looking at the established specialists in between. Vestas is the world’s leading manufacturer of wind turbines. Orsted, another Danish company, has made the transition from oil-and-gas producer to wind-energy supplier and aspires to be the first green-energy supermajor. More speculatively, Canadian company Ballard has three decades of experience making hydrogen fuel cells.

Rochelle Toplensky, Green Energy Is Finally Going Mainstream, WSJ, June 24, 2020

The Eco-Villain of the 2020s: Moving

[E]ven “green” transport risks becoming a villain… Transport has been the only sector in which greenhouse-gas emissions have consistently risen both in the U.S. and in the European Union… Road, aviation, waterborne and rail transportation put together now account for eight metric gigatons of carbon-dioxide equivalents, which is 24% of global greenhouse-gas emissions, according to the International Energy Agency. In the U.S. this figure rises to 34%….To be consistent with the existing Paris Agreement goals, transport emissions need to peak around 2020 and then fall around 70% relative to 2015 levels, estimates by the International Energy Agency show.

In theory, electric and plug-in hybrid vehicles chart a clear path to lower emissions. Even once the costs of making the batteries and generating the electricity that feeds them is taken into account, most estimates suggest that they emit roughly half as much greenhouse gases as a gasoline car. But recent experience proves that consumer tastes can easily sabotage steps toward sustainability: In the U.S., rising demand for pickup trucks has offset any gain from electric vehicles. And faster economic development in emerging nations will inevitably mean higher emissions, even if each vehicle pollutes less.

In China and India, the number of motorized vehicles per person quintupled and tripled, respectively, between 2007 and 2017, according to U.S. Department of Energy data. Catching up with U.S. levels of motorization—which admittedly are very high—both countries would need two billion extra vehicles. Even if 100% of those were electric, they would add more emissions on their own than the total level allowed by the Paris goals.

Greenhouse gases coming from aviation also keep surging despite the fact that planes are becoming increasingly fuel efficient because air traffic growth has surged. Furthermore, while environmental policies have tended to focus on passenger transport, this misses a big chunk of the picture, because almost half of transportation emissions now come from freight.

Adoption of rail, a cleaner alternative, isn’t picking up. Meanwhile ocean freight, which is by far the most efficient form of transport per ton mile, faces a reckoning from new rules that take effect in January 2020 because it relies on the dirtiest fuel to be so economical.

Excerpts from  Jon Sindreu, In the Green Transition, Transportation Is the Next Big Baddie, WSJ, Dec. 23, 2019

The Carbon-Neutral Europe and its Climate Bank

The European Union (EU) Green Deal, a  24-page document reads like a list of vows to transform Europe into a living demonstration of how a vast economy can both prosper and prioritise the health of the planet. It covers everything from housing and food to biodiversity, batteries, decarbonised steel, air pollution and, crucially, how the EU will spread its vision beyond its borders to the wider world….The plan is large on ambition, but in many places frustratingly vague on detail.

Top billing goes to a pledge to make Europe carbon-neutral by 2050….Current policies on renewable energy and energy efficiency should already help to achieve 45-48% cuts by 2030. Green NGOs  would like to see the EU sweat a bit more and strive for 65% cuts by 2030, which is what models suggest is needed if the bloc is to do its share to limit global warming to 1.5-2ºC.

All this green ambition comes at a price. The commission estimates that an additional €175bn-€290bn ($192bn-$320bn) of investment will be needed each year to meet its net-zero goals. Much of this will come from private investors. One way they will be encouraged to pitch in is with new financial regulations. On December 5th, 2019 EU negotiators struck a provisional agreement on what financial products are deemed “green”. Next year large European companies will be forced to disclose more information about their impacts on the environment, including carbon emissions. These measures, the thinking goes, will give clearer signals to markets and help money flow into worthy investments.

Another lever is the European Investment Bank, a development bank with about €550bn on its balance-sheet, which is to be transformed into a climate bank. Already it has pledged to phase out financing fossil fuels by 2021. By 2025 Werner Hoyer, its boss, wants 50% of its lending to go to green projects, up from 28% today, and the rest to go to investments aligned with climate-change goals. Some of that money will flow into a “just transition” fund, worth €100bn over seven years. Job losses are an unavoidable consequence of decarbonising Europe’s economy; the coal industry alone employs around 250,000 people, mainly in eastern Europe. The fund will try to ease some of this pain, and the political opposition it provokes.

The Green Deal goes beyond the scope of previous climate policies. One area it enters with gusto is trade. Under the commission’s proposals, the eu will simply refuse to strike new trade deals with countries that fail to comply with the Paris agreement’s requirement that signatories must increase the scale of their decarbonisation pledges, known as “nationally determined contributions” or NDCs, every five years. That would mean no new deals with America while Donald Trump is president; it is set to drop out of the Paris agreement late in 2020. And, because the first round of enhanced ndcs is due next year, it would put pressure on countries that are dragging their feet on these, of which there are dozens—including China and India.

The deal also sketches out plans for a carbon border-adjustment levy. Under the eu’s emission-trading scheme, large industries pay a fee of about €25 for every tonne of carbon dioxide they emit. Other regions have similar schemes with different carbon prices. A border-adjustment mechanism would level the playing field.

Excerpts from, The EU’s Green Deal, Economist, Dec. 2019

When Logging Works: “Every Part of the Tree”

The rapacious industrialisation of the Finnish forest, which covers three-quarters of the country’s landscape, looks the antithesis of tree-hugging environmentalism. The forest is home to wolves, bears, deer and many other species of wildlife, and its trees lock away carbon that would otherwise be in the air, warming the atmosphere. Yet Metsä Group, which operates the Äänekoski pulp mill, claims the very opposite.  Metsä is ultimately controlled by a co-operative belonging to more than 100,000 families who have each owned large chunks of the forest for generations. For every tree harvested, four saplings are planted. These are allowed to grow for a few years and are then thinned to encourage the best specimens to develop vigorously. The thinnings, however, are not wasted. They are sent to the mill. The mature trees, meanwhile, are harvested when they are between six and ten decades old. The consequence of this husbandry, according to Finland’s Natural Resources Institute, is that the annual growth of trees in Finland exceeds the volume of felling and natural loss by over 20m cubic metres, despite the increasing demand for wood.

As for the mill itself, Metsä’s stated aim is to make best use of every part of a tree, both to maximise the value of its wood and, where possible, to continue to lock up its carbon. To this end, besides the bread-and-butter business of turning out planks and plywood, the firm has come up with several new ideas. Three are of particular interest. One is a better way of converting wood pulp into fibre that can be turned into textiles. A second is to produce plastic-free cardboard cartons which can be used as food containers and then recycled. The third is to find employment for lignin, a by-product of the pulping process which is, at the moment, usually burned…

Metsä has also teamed up with Itochu, a Japanese trading company with a large clothing business, to make fabric that will compete with oil-based synthetic fibres and provide an alternative to cotton, the growing of which requires a lot of land, irrigation and pesticides. Some fabrics—rayon, for example—can be made from wood….

The complex processes involved in processing wood result in several “sidestreams”. These are wastes that become raw materials for other processes. They include sulphuric acid, which is re-used by the mill, and biogas, tall oil (a byproduct of papermaking) and lignin—carbon-rich materials burnt to produce electricity. This powers the mill, and yields a surplus which is exported to the national grid. As a consequence, unlike some wood mills, the Äänekoski plant uses no fossil fuels.

Excerpts from Sustainable Forestry: If you go down to the woods today, Economist, Oct. 19, at 75

Bio-Energy and Food Security

In the effort to keep the planet from reaching dangerous temperatures, a hybrid approach called BECCS (bioenergy with carbon capture and storage) has a seductive appeal. Crops suck carbon dioxide (CO2) from the atmosphere, power plants burn the biomass to generate electricity, and the emissions are captured in a smokestack and pumped underground for long-term storage. Energy is generated even as CO2 is removed: an irresistible win-win. But, the United Nations’s climate panel sounded a warning about creating vast bioenergy plantations, which could jeopardize food production, water supplies, and land rights for poor farmers.

In an earlier special report in October 2018, IPCC called for holding the rise in global average temperatures to no more than 1.5°C above preindustrial conditions to avoid the worst consequences of climate change. It emphasized that cutting emissions won’t be enough to reach that goal. Replacing coal with renewable energy, and significantly cutting oil and natural gas, would still leave gigatons of excess carbon in the atmosphere. BECCS could remove it, computer models suggested, if several million square kilometers—an area the size of India—were devoted to energy crops.

But the 2019 IPCC report examines the consequences of deploying BECCS on that vast scale and concludes it could “greatly increase” the demand for agricultural land. The pressure on conventional crops could compromise food security, as happened in 2007 when rising U.S. corn ethanol production contributed to a spike in food prices. (In Mexico, the price of tortillas, a staple for the poor, rose 69% between 2005 and 2011.) The bioenergy plantations could also take a toll on biodiversity—as is happening in Southeast Asia, where plantations producing palm oil for biodiesel as well as food are displacing diverse tropical forest. And they could suck up scarce water, especially in drylands, where irrigation of crops might deplete local supplies, the IPCC report says.

Industrial bioenergy crops can lead to the same kinds of problems as intensive food production, such as the contamination of water from excess fertilizer. Scaling up bioenergy in developing countries can also exacerbate social problems like the loss of land by small farmers.

Excerpts from Erik Stokstad, Bioenergy plantations could fight climate change—but threaten food crops, U.N. panel warns, Science, Aug. 8, 2019

A Cure Worse than the Disease? Biofuels in Planes

The 2019 report by the Rainforest Foundation Norway RFN is called ‘Destination Deforestation’ and reviewed the role of the aviation industry in contributing to the climate crisis, concluding that there’s a high risk that increased use of palm and soy-based biofuel in planes will lead to increased deforestation.

Finland, the world’s largest producers of renewable diesel and the only EU country that gives additional incentives for the use of palm oil products to manufacture biofuel, could spearhead the race towards deforestation, as areas of rainforest in countries like Indonesia or in South America are cleared to plant crops that will later be used to produce the fuel.  RFN says that meeting the aviation industry’s own climate-change targets to reduce emissions could result in 3.2 million hectares of tropical forest lost, an area larger than Belgium.

Researchers at Rainforest Foundation Norway believe the Finnish incentives for (Palm Fatty Acid Distillate) PFAD-based biofuels are likely to contribute to this deforestation, since Finland’s state-owned oil company Neste produces half of the world’s renewable diesel.  “Finland continues to treat the palm oil by-product PFAD as a waste, eligible for additional incentives. In addition, Finland is home to Neste, the world’s largest producer of hydrotreated biodiesel, and uses PFAD as a raw material. Therefore, Finland’s program could contribute to the massive deforestation discussed in our report” he explains.

With Finland left isolated as the only EU country to pay producers to use waste-classified PFAD in biofuel production, Rainforest Foundation Norway cautions that the country risks becoming a dumping ground for unsustainable raw material….“As long as PFAD is classified as ‘waste’, it enjoys huge incentives from the state. Biofuels made out of PFAD are completely exempt from carbon dioxide tax in Finland. Additionally, PFAD’s emissions can be discounted, and it is not subject to the same sustainability criteria as other raw materials.

With ‘flight shame’ gaining more momentum across the world, the aviation industry is desperate to find ways to make flying compatible with climate goals. While replacing fossil fuels with renewables sounds like a great idea, the sustainability of biofuels is highly dependent on the raw materials used to produce them…The most common aviation biofuels, Hydrogenated Esters and Fatty Acids (HEFA) fuels are produced from vegetable oils and animal fats. While the use of waste oils and other recycled materials is possible, the most viable raw materials for HEFA jet fuels are food crops.  “The cheapest and most readily available raw materials for HEFA jet fuel are palm oil and soy oil, which are closely linked to tropical deforestation” Ranum says.  The experts suggest that aiming to reduce emissions by increasing demand for palm and soy oil is a cure worse than the disease.

Elias Huuhtan, Report: Finland’s push to use biofuel could cause ‘massive deforestation, https://newsnowfinland.fi/ , Oct. 7, 2019

Who to Save? Forests or Farmers

Agriculture continues to present the biggest threat to forests worldwide. Some experts predict that crop production needs to be doubled by 2050 to feed the world at the current pace of population growth and dietary changes toward higher meat and dairy consumption. Scientists generally agree that productivity increase alone is not going to do the trick. Cropland expansion will be needed, most likely at the expense of large swathes of tropical forests – as much as 200 million hectares by some estimates. 

Nowhere is this competition for land between forests and agriculture more acute than in Africa. Its deforestation rate has surpassed those of Latin America and Southeast Asia. Sadly, the pace shows no sign of slowing down. Africa’s agriculture sector needs to feed its burgeoning populations- the fastest growing in the world…. What’s more, for the millions of unemployed African youth, a vibrant agriculture sector will deliver jobs and spur structural transformation of the rural economy. Taken together, the pressures on forests are immense. Unless interventions are made urgently, a large portion of Africa’s forests will be lost in the coming decades – one farm plot at a time.

The difficult question is: what interventions can protect forests and support farmers at the same time? 

To tackle these complex challenges, the Center for International Forestry Research (CIFOR) has launched a new initiative: The “Governing Multifunctional Landscapes (GML) in Sub-Saharan Africa: Managing Trade-Offs Between Social and Ecological Impacts”  Read more

Excerpts from XIAOXUE WENG et al Can forests and smallholders live in harmony in Africa?, CIFOR, June 3, 2019

From Savior to Villain: Biofuel from Palm Oil

Globally, average palm oil yields have been more or less stagnant for the last 20  years, so the required increase in palm oil production to meet the  growing demand for biofuels  has come from deforestation and peat destruction in Indonesia.  Without fundamental changes in governance, we can expect at least a third of new palm oil  area to require peat drainage, and a half to result in deforestation.

Currently, biofuel policy results in 10.7  million tonnes of palm oil demand.  If the current biofuel policy continues we expect by 2030:
• 67 million tonnes palm oil demand due to biofuel policy.
• 4.5 million hectares deforestation.
• 2.9 million hectares peat loss.
• 7 billion tonnes of CO2 emissions over 20 years, more than total annual U.S. GHG emissions.
It must always be remembered that the primary purpose of biofuel policy in the EU and many  other countries is climate change mitigation. Fuel consumers in the European Union, Norway  and elsewhere cannot be asked to continue indefinitely to pay to support vegetable oil based
alternative fuels
that exacerbate rather than mitigate climate change.

The use of palm oil-based biofuel should be  reduced and ideally phased out entirely.  In Europe, the use of biodiesel other than that produced from approved waste or  by-product feedstocks should be reduced or eliminated.
In the United States, palm oil biodiesel should continue to be restricted from generating  advanced RINs under the Renewable Fuel Standard. Indonesia should reassess the relationship between biofuel mandate, and its  international climate commitments, and refocus its biofuel programme on advanced biofuels from wastes and residues. The aviation industry should focus on the development of advanced aviation biofuels  from wastes and residues, rather than hydrotreated fats and oils.

Excerpts from Dr Chris Malins,  Driving deforestation: The impact of expanding palm oil demand through biofuel policy, January 2018

In Feb. 28, 2019, Norway’s $1 trillion sovereign wealth fund, the world’s largest, pulled out of more than 33 palm oil companies over deforestation risks.

Cleaning Up Dirty Shipping

Making shipping cleaner is made more urgent by the decision of the International Maritime Organisation (IMO), the United Nations body responsible for the world’s shipping, to reduce the amount of sulphur allowed in bunker fuel from 3.5% to 0.5% by 2020. Sulphur is nasty stuff. When burned, it forms sulphates, which cause acid rain and pollute the air. A paper published in February 2017 in Nature Communications, by Mikhail Sofiev of the Finnish Meteorological Institute, found that the imo’s new rule could stop between 139,000 and 396,000 premature deaths a year.

The trouble is that sulphates also scatter sunlight and help to form and thicken clouds, which reflect solar radiation away from Earth. As a result, shipping is thought to reduce rather than increase man-made global warming—by 7% throughout the 20th century, according to one study. Dr Sofiev’s research showed that this cooling effect could fall by 80% after 2020, with the new low-sulphur standard in place…

The obvious way to offset the loss of sulphur-related cooling is by steep cuts to shipping’s planet-cooking carbon-dioxide emissions. The IMO wants these to fall by half, compared with 2008 levels, by 2050, regardless of how many vessels then ply the seas. But unlike desulphurisation, which is both imminent and legally binding, the CO2 target looks fuzzy and lacks any enforcement mechanism. An attempt to begin fleshing it out, at a meeting of  IMO member states which concluded in London on October 26, 2018 foundered.

One way to cut fuel consumption is to reduce drag by redesigning hulls and propellers. This is happening. In the past five or so years many ships’ propellers have been fitted with tip fins analogous to the turbulence-reducing upturned winglets on aeroplanes.  Further percentage points can be shaved away by smoothing hulls. This means, in particular, stopping barnacles and other creatures growing on them. Tin-based antifouling paints are now banned as toxic to sea life, so paintmakers are returning to an 18th-century solution to the fouling problem—copper.   Hulls can be scraped smooth, too, but restrictions on littering waters with paint chips and species from foreign parts have made such cleaning problematic. This may change, though, thanks to an underwater drone described by its Norwegian maker, ecosubsea, as “a cross between a vacuum cleaner and a lawnmower”. Rather than scour hulls with a metal brush, ecosubsea’s robots blast water at an angle almost parallel with the hull’s surface, which mostly spares paint from abrasion but hits marine growth perpendicularly, and thus hard. 

Many have hopes of returning to wind propulsion, and engineers have devised various modern versions of the sail. None has yet succeeded. A system developed by SkySails, a firm in Hamburg, for example, relied on kites to pull ships along. It was installed on five ships from 2008-11, but proved fiddly to use and maintain…

Some hope to cut marine emissions by employing batteries and electric motors. For transoceanic shipping this looks a long-shot. But local shipping might benefit. Norway, for instance, has started to introduce battery-powered ferries. And a Dutch company called Port-Liner is building electric canal barges for transporting shipping containers. The technology is expensive. Without taxpayer subsidy it would hardly be a runner—a fact also true of the Norwegian ferries.

The problem of shifting emissions around rather than eliminating them also applies to the idea of powering ocean-going vessels using fuel-cells. These generate electricity by reacting hydrogen and oxygen together. Given that electric propulsion more usually disguises emissions than eliminates them, some suggest the most practical approach to reducing shipping’s contribution to global warming is to switch to low-carbon fuel systems rather than conducting a futile search for no-carbon fuels. One alternative is diesel-electric propulsion.  Liquefied natural gas (lng) is another option. 

Excerpts  from Marine Technology of the Future: In Need for a Cean Up, Economist,  Nov. 3, 2018, at 75

Furthest from their Minds: greenhouse gases in Afirca

When sub-Saharan Africa comes up in discussions of climate change, it is almost invariably in the context of adapting to the consequences, such as worsening droughts. That makes sense. The region is responsible for just 7.1% of the world’s greenhouse-gas emissions, despite being home to 14% of its people. Most African countries do not emit much carbon dioxide. Yet there are some notable exceptions.

Start with coal-rich South Africa, which belches out more carbon dioxide than Britain, despite having 10m fewer people and an economy one-eighth the size. Like nearly all of its power plants, many of its vehicles depend on coal, which is used to make the country’s petrol (a technique that helped the old apartheid regime cope with sanctions). A petrochemical complex in the town of Secunda owned by Sasol, a big energy and chemicals firm, is one of the world’s largest localised sources of greenhouse gases.  Zambia is another exception. It burns so much vegetation that its land-use-related emissions surpass those of Brazil, a notorious—and much larger—deforester.

South Africa and Zambia may be extreme examples, but they are not the region’s only big emitters . Nigerian households and businesses rely on dirty diesel generators for 14GW of power, more than the country’s installed capacity of 10GW. Subsistence farmers from Angola to Kenya use slash-and-burn techniques to fertilise fields with ash and to make charcoal, which nearly 1bn Africans use to cook. This, plus the breakneck growth of extractive industries, explains why African forests are disappearing at a rate of 0.5% a year, faster than in South America. Because trees sequester carbon, cutting them counts as emissions in climate accounting.

Other African countries are following South Africa’s lead and embracing coal…A new coal-fired power plant ….Lamu in Kenya is one of many Chinese-backed coal projects in Africa…Africa’s sunny skies and long, blustery coastlines offer near-limitless solar- and wind-energy potential. But what African economies need now are “spinning reserves”, which can respond quickly to volatile demand, says Josh Agenbroad of the Rocky Mountain Institute, a think-tank in Colorado. Fossil fuels deliver this; renewables do not…. Several countries are intrigued by hybrid plants where most electricity is generated by solar panels, but diesel provides the spinning reserves…

Excerpts from  Africa and Climate Change: A Burning Issue, Economist,  Apr. 21, 2018, at 41.

Deforestation Tolerance: Amazon

Amazon generates approximately half of its own rainfall by recycling moisture 5 to 6 times as airmasses move from the Atlantic across the basin to the west.  From the start, the demonstration of the hydrological cycle of the Amazon raised the question of how much deforestation would be required to cause this hydrolological cycle to degrade to the point of being unable to support rain forest ecosystems.

High levels of evaporation and transpiration that forests produce throughout the year contribute to a wetter atmospheric boundary layer than would be the case with non-forest.This surface-atmosphere coupling is more important where large-scale factors for rainfall formation are weaker, such as in central and eastern Amazonia. Near the Andes, the impact of at least modest deforestation is less dramatic because the general ascending motion of airmasses in this area induces high levels of rainfall in addition to that expected from local evaporation and transpiration.

Where might the tipping point be for deforestation-generated degradation of the hydrological cycle? The very first model to examine this question  showed that at about 40% deforestation, central, southern and eastern Amazonia would experience diminished rainfall and a lengthier dry season, predicting a shift to savanna vegetation to the east.

Moisture from the Amazon is important to rainfall and human wellbeing because it contributes to winter rainfall for parts of the La Plata basin, especially southern Paraguay, southern Brazil, Uruguay and central-eastern Argentina; in other regions, the moisture passes over the area, but does not precipitate out. Although the amount contributing to rainfall in southeastern Brazil is smaller than in other areas, even small amounts can be a welcome addition to urban reservoirs…

In recent decades, new forcing factors have impinged on the hydrological cycle: climate change and widespread use of fire to eliminate felled trees and clear weedy vegetation. Many studies show that in the absence of other contributing factors, 4° Celsius of global warming would be the tipping point to degraded savannas in most of the central, southern, and eastern Amazon. Widespread use of fire leads to drying of surrounding forest and greater vulnerability to fire in the subsequent year.

We believe that negative synergies between deforestation, climate change, and widespread use of fire indicate a tipping point for the Amazon system to flip to non-forest ecosystems in eastern, southern and central Amazonia at 20-25% deforestation.

We believe that the sensible course is not only to strictly curb further deforestation, but also to build back a margin of safety against the Amazon tipping point, by reducing the deforested area to less than 20%, for the commonsense reason that there is no point in discovering the precise tipping point by tipping it. At the 2015 Paris Conference of the Parties, Brazil committed to 12 million ha of reforestation by 2030. Much or most of this reforestation should be in southern and eastern Amazonia.

Excerpts from Amazon Tipping Point  by Thomas E. Lovejoy and Carlos Nobre, Sciences Advances,  Feb. 21, 2018

Deforestation and Supply Chains

366 companies, worth $2.9 trillion, have committed to eliminating deforestation from their supply chains, according to the organization Supply Change. Groups such as the Tropical Forest Alliance 2020, the Consumer Goods Forum and Banking Environment Initiative aim to help them achieve these goals.  Around 70 percent of the world’s deforestation still occurs as a result of production of palm oil, soy, beef, cocoa and other agricultural commodities. These are complex supply chains.  A global company like Cargill, for example, sources tropical palm, soy and cocoa from almost 2,000 mills and silos, relying on hundreds of thousands of farmers. Also, many products are traded on spot markets, so supply chains can change on a daily basis. Such scale and complexity make it difficult for global corporations to trace individual suppliers and root out bad actors from supply chains.

Global Forest Watch (GFW), a WRI-convened partnership that uses satellites and algorithms to track tree cover loss in near-real time, is one example. Any individual with a cell phone and internet connection can now check if an area of forest as small as a soccer penalty box was cleared anywhere in the world since 2001. GFW is already working with companies like Mars, Unilever, Cargill and Mondelēz in order to assess deforestation risks in an area of land the size of Mexico.

Other companies are also employing technological advances to track and reduce deforestation. Walmart, Carrefour and McDonalds have been working together with their main beef suppliers to map forests around farms in the Amazon in order to identify risks and implement and monitor changes. Banco do Brasil and Rabobank are mapping the locations of their clients with a mobile-based application in order to comply with local legal requirements and corporate commitments. And Trase, a web tool, publicizes companies’ soy-sourcing areas by analyzing enormous amounts of available datasets, exposing the deforestation risks in those supply chains…

[C]ompanies need to incorporate the issue into their core business strategies by monitoring deforestation consistently – the same way they would track stock markets.

With those challenges in mind, WRI and a partnership of major traders, retailers, food processors, financial institutions and NGOs are building the go-to global decision-support system for monitoring and managing land-related sustainability performance, with a focus on deforestation commitments. Early partners include Bunge, Cargill, Walmart, Carrefour, Mars, Mondelēz, the Inter-American Investment Corporation, the Nature Conservancy, Rainforest Alliance and more.  Using the platform, a company will be able to plot the location of thousands of mills, farms or municipalities; access alerts and dashboards to track issues such as tree cover loss and fires occurring in those areas; and then take action. Similarly, a bank will be able to map the evolution of deforestation risk across its whole portfolio. This is information that investors are increasingly demanding.

Excerpt from Save the Forests? There’s Now an App for That, World Resources Institute, Jan. 18, 2017

Forest Fires and Haze

In 2015 a dry spell caused by the El Niño weather pattern made Indonesia’s forest fires especially severe. Smoke settled over Singapore for months and even reached Cambodia, Vietnam and the Philippines. At least 2m hectares of forest were burned. Dozens of people were killed and hundreds of thousands sickened. For much of October 2015 greenhouse gases released by those fires exceeded the emissions of the entire American economy. The losses over five months of fires amounted to around 2% of the country’s GDP…[The event has labeled  the 2015 Southeast Asian haze]

Between 2001 and 2014, Indonesia lost 18.5m hectares of tree cover—an area more than twice the size of Ireland. In 2014 Indonesia overtook Brazil to become the world’s biggest deforester.

One of the reasons for those forest fires is economic. The country produces well over half the world’s palm oil, a commodity used in cooking and cosmetics, as a food additive and as a biofuel. It accounts for around 4.5% of Indonesia’s GDP, and demand is still rising. To meet it, Indonesian farmers set fires to clear forest and make way for new plantations. Often these forests grow on peatlands, which store carbon from decayed organic matter; in tropical regions these hold up to ten times as much carbon as surface soil. Draining peatlands releases all of that carbon. The peat also becomes a fuel, so it is not just felled trees that are burning but the ground itself.

But politics also plays a part. … The president declared a moratorium on peatland-development licences and called for peat forests to be restored, even as his agriculture minister pointed out that burned peatland can be used for corn and soyabean planting….

Civil-society groups have had some success. At least 188 Indonesian palm-oil companies have made some sort of sustainability pledge, including five large multinational firms that in 2014 signed the Indonesian Palm Oil Pledge (IPOP), which commits them to avoiding deforestation and planting oil palms on peatland. Together those five firms account for 80% of Indonesia’s palm-oil exports.All the same, deforestation continues. Perversely, it may even have increased temporarily, as companies cleared as much land as they could before the agreement took effect. Besides, opaque supply chains allow companies to buy palm oil from suppliers not bound by IPOP.

Forests: A world on fire, Economist Special Report on Indonesia, Feb. 27, 2016

Biofuels Revolution? not really

B]iofuel schemes—ranging from fermenting starch, to recycling cooking oil, to turning algae into jet fuel—have drawn more than $126 billion in investment since 2003, according to Bloomberg New Energy Finance (BNEF), a research outfit… [But]Those biofuels that can best compete commercially are not, in fact, green. Those that are green cannot compete commercially.

The biggest cause of ungreenness is that biofuels made from food crops—or from plants grown on land that might otherwise produce such crops—hurt food supplies. A committee of the European Parliament agreed this week to cap the use of “first-generation” biofuels of this sort. The current European target is for renewables to make up 10% of the energy used in transport by 2020. The new proposal says only seven-tenths of this can come from first-generation fuels. The difference must be made up by more advanced ones based on waste products and other feedstocks that do not impinge on food production. That could mean European demand for advanced biofuels of 14 billion litres by 2020, reckons Claire Curry of BNEF.
Only two such advanced fuels, she thinks, are capable of large-scale production. One is turning waste cooking oil and other fats into diesel—a process for which Europe already has 2 billion litres of capacity. The other involves making ethanol from cellulose by enzymatic hydrolysis. Everything elseis at least four years from commercial production. That includes the much-touted idea of renewable jet fuel.  This is promising on a small scale. South African Airways (SAA), in conjunction with Boeing and other partners, is developing fuel based on the seeds of the tobacco plant—once a big crop in the country, but now fallen on hard times.

Biofuels: Thin harvest, Economist, Apr. 18, 2015, at 72

Deforestation: mixed picture

In a new study of the Centre for Global Development (CGD), a Washington think-tank, Jonah Busch and Kalifi Ferretti-Gallon look at 117 cases of deforestation round the world. They find that two of the influences most closely correlated with the loss of forests are population and proximity to cities (the third is proximity to roads). Dramatic falls in fertility in Brazil, China and other well-forested nations therefore help explain why (after a lag) deforestation is slowing, too. Demography even helps account for what is happening in Congo, where fertility is high. Its people are flocking to cities, notably Kinshasa, with the result that the population in more distant, forested areas is thinning out.

Two of the countries that have done most to slow forest decline also have impressive agricultural records: Brazil, which became the biggest food exporter of all tropical countries over the past 20 years; and India, home of the green revolution. Brazil’s agricultural boom took place in the cerrado, the savannah-like region south and east of the Amazon (there is farming in the Amazon, too, but little by comparison). The green revolution took place mostly in India’s north-west and south, whereas its biggest forests are in the east and north.

But if population and agricultural prowess were the whole story, Indonesia, where fertility has fallen and farm output risen, would not be one of the worst failures. Figures published inNature Climate Change in June show that in the past decade it destroyed around 60,000 sq km of primary forests; its deforestation rate overtook Brazil’s in 2011. Policies matter, too—and the political will to implement them.

The central problem facing policymakers is that trees are usually worth more dead than alive; that is, land is worth more as pasture or cropland than as virgin forest. The benefits from forests, such as capturing carbon emissions, cleaning up water supplies and embodying biodiversity, are hard to price….The most successful policies therefore tend to be top-down bans, rather than incentives (though these have been tried, too). India’s national forest policy of 1988 explicitly rejects the idea of trying to make money from stewardship. “The derivation of direct economic benefit”, it says, “must be subordinated to this principal aim” (maintaining the health of the forest). In Brazil 44% of the Amazon is now national park, wildlife reserve or indigenous reserve, where farming is banned; much of that area was added recently. In Costa Rica half the forests are similarly protected. In India a third are managed jointly by local groups and state governments.

Top-down bans require more than just writing a law. Brazil’s regime developed over 15 years and involved tightening up its code on economic activity in forested areas, moratoriums on sales of food grown on cleared land, a new land registry, withholding government-subsidised credit from areas with the worst deforestation and strengthening law enforcement through the public prosecutor’s office. (The most draconian restriction, requiring 80% of any farm in the Amazon to be set aside as a wildlife reserve, is rarely enforced.)

Two developments make bans easier to impose. Cheaper, more detailed satellite imagery shows in real time where the violations are and who may be responsible. Brazil put the data from its system online, enabling green activists to help police the frontier between forest and farmland. Its moratoriums on soyabeans and beef from the Amazon, which require tracing where food is coming from, would not have worked without satellites…

The Forestry Ministry of Indonesia, [on the other hand] is rated the most corrupt among 20 government institutions by Indonesia’s Corruption Eradication Commission in 2012. Some within government are hostile to anti-deforestation schemes, which they see as “foreign”, says Ade Wahyudi of Katadata, an Indonesian firm of analysts. Perhaps the biggest problem is the lack of a single, unified map including all information on land tenure and forest licensing: efforts to create one have been slowed by unco-operative government ministries and difficulties created by overlapping land claims.

Excerpts from Tropical Forests: A Clearing in the Trees, Economist,  Aug. 23, 2014, at 56

Amazon Protected Areas: 215 Million Fund

Brazil’s government, the World Wildlife Fund and various partners are expected to unveil an agreement that would establish a $215 million fund for conservation of protected jungle in the Amazon rainforest.  The fund, which seeks to ensure conservation of over 90 protected areas in the Amazon, comes as renewed developmental pressures mount in the region, resulting last year in an uptick in deforestation figures after years of record lows.

Under the terms of the agreement, partners in the fund will make annual contributions to help Brazil meet financing needs for the protected lands, whose combined area totals more than 60 million hectares, or an area 20 percent larger than Spain.  Contributions, partners said, will be contingent upon conditions required of Brazil, including audits of the government body that will administer the fund and continued staffing and financing of government offices required to administer the rainforest areas.

Money from the fund would be used for a range of basic conservation measures, including fences and signs to delineate protected areas and to pay for vehicles used to patrol them…

Brazil’s government through 2012 made large inroads against deforestation, largely through strict environmental enforcement and financial measures that blocked credit for companies and individuals caught doing business with loggers, ranchers, farmers or others known to exploit illegally cleared land.

In recent years, however, the government has made changes to environmental agencies and regulations that critics say make it easier for would-be developers to target protected areas. The government has also altered borders of some parkland to make way for infrastructure projects, including hydroelectric dams on various Amazon tributaries.

Financing for the new fund, expected to pay out over 25 years, was secured from private and public sources including the German government, the Inter-American Development Bank, the World Bank, philanthropists and the Amazon Fund, an existing facility financed mostly by the Norwegian government and administered by Brazil’s national development bank.

Together, the forest zones targeted by the fund are known as the Amazon Region Protected Areas, or ARPA, a program established in 2002 to coordinate financing and conservation strategy in the region.

Whereas previous financing for the effort relied on cumulative fundraising efforts, partners this time agreed to an all-or-nothing approach, borrowed from private-sector financing practices, to build momentum toward a target total. The $215 million is the amount calculated as necessary to help the Brazilian government, over the 25 years, become self-sufficient in terms of financing the rainforest areas.

Excerpts from  PAULO PRADA, Donors commit $215 million for Amazon conservation in Brazil, Reuters, May 21, 2014

Biofuels from Agricultural Waste

Ethanol, for instance, is an alcoholic biofuel easily distilled from sugary or starchy plants. It has been used to power cars since Ford’s Model T and, blended into conventional petrol, constitutes about 10% of the fuel burned by America’s vehicles today. Biodiesel made from vegetable fats is similarly mixed (at a lower proportion of 5%) into conventional diesel in Europe. But these “first generation” biofuels have drawbacks. They are made from plants rich in sugar, starch or oil that might otherwise be eaten by people or livestock. Ethanol production already consumes 40% of America’s maize (corn) harvest and a single new ethanol plant in Hull is about to become Britain’s largest buyer of wheat, using 1.1m tonnes a year. Ethanol and biodiesel also have limitations as vehicle fuels, performing poorly in cold weather and capable of damaging unmodified engines.

In an effort to overcome these limitations, dozens of start-up companies emerged over the past decade with the aim of developing second-generation biofuels. They hoped to avoid the “food versus fuel” debate by making fuel from biomass feedstocks with no nutritional value, such as agricultural waste or fast-growing trees and grasses grown on otherwise unproductive land. Other firms planned to make “drop in” biofuels that could replace conventional fossil fuels directly, rather than having to be blended in…..

Even if second-generation processes can be economically scaled up, however, that might in turn highlight a further problem. To make a significant dent in the 2,500m litres of conventional oil that American refineries churn through each day, biofuel factories would have to be able to get hold of a staggering quantity of feedstock. Mr Ghisolfi of Beta Renewables points out that a factory with an annual output of 140m litres needs 350,000 tonnes of biomass a year to operate. “There are only certain areas, in Brazil and some parts of the US and Asia, where you can locate this much biomass within a close radius,” says Mr Ghisolfi. “I am sceptical of scaling to ten times that size, because getting 3.5m tonnes of biomass to a single collection point is going to be a very big undertaking.”

Billions of tonnes of agricultural waste are produced worldwide each year, but such material is thinly spread, making it expensive to collect and transport. Moreover, farms use such waste to condition the soil, feed animals or burn for power. Diverting existing sources of wood to make biofuels will annoy builders and paper-makers, and planting fuel crops on undeveloped land is hardly without controversy: one man’s wasteland is another’s pristine ecosystem. Dozens of environmental groups have protested against the EPA’s recent decision to permit plantations of fast-growing giant reed for biofuels, calling it a noxious and highly invasive weed. Just as the food-versus-fuel argument has proved controversial for today’s biofuels, flora-versus-fuel could be an equally tough struggle for tomorrow’s.

Biofuels: What happened to biofuels?, Economist Technology Quarterly, Sept. 7, 2013