The Chinese government occasionally publishes guidance prices for diesel. These guidance prices set a range for the retail prices and are generally followed by industry participants. As biodiesel prices are affected by the price of diesel, these guidance prices will limit the price that a biofuel company can charge for their products. I expect that the Chinese government will gradually relax the pricing mechanism.

China is committed to a 25% usage of biofuel for transportation by 2020. The three state-owned oil companies — China National Petroleum Corporation (CNPC), Sinopec, and China National Offshore Oil Corporation (CNOOC) — have launched new biorefineries or are planning to do so.

Analysts forecast demand for diesel to grow at 5.7% in the 2006-2030 period to 360 million tonnes. Table 12.1 shows see projections for China’s biodiesel growth potential.

150 | 72 Biofuels in China

12.9

On 18 February 2009, the European Commission stated that just over 2700 airlines would be regulated for carbon emissions. Airlines from all over the world are included in the list, after the European Union agreed to cap emissions from all aircraft that land and take off within the 27-nation bloc. These airlines will be included in the EU Emission Trading Scheme (ETS) from 1 January 2012 (http:// ec. europa. eu/clima/policies/ets/index_en. htm).

The aviation industry is working closely with fuel specification bodies, such as the American Society for Testing and Materials (ASTM) International (www. astm. org). On 5 July 2011, the ASTM gave its approval to use algae and Jatropha as bio jet fuel.

Most of the time, capitalism has managed to produce cheaper goods at a higher quality — I think the airline industry is a worrying exception: it is cheaper, but worse quality.

The total annual global jet fuel consumption is around 200 million tonnes and is expected to double by 2020. If according to the new EU legislation we blend fossil fuel kerosene with 10% biofuel kerosene, by 2020 we are talking about a brand new market of 40 million tonnes with a value of $25 billion at today’s prices.

Second Generation Biofuels and Biomass: Essential Guide for Investors, Scientists and Decision Makers, First Edition. Roland A. Jansen. r 2013 Wiley-VCH Verlag GmbH & Co. KGaA.

Published 2013 by Wiley-VCH Verlag GmbH & Co. KGaA.

As we have seen in Section 15.2, relative to fossil fuels, sustainably produced biofuels result in a reduction in carbon dioxide emissions across their lifecycle.

16.3

I want to thank the following people, who inspired me and have been instrumental to put me on the biofuel and biomass road, which enabled me to write this book:

Ben Sze from Hong Kong. In 2007, I was invited for an interview on the Asian channel of Bloomberg Television in Singapore to talk about renewable energies. I talked about this exotic plant called “Jatropha” and 5 minutes after the interview my BlackBerry rang. A voice said: “Hi, my name is Ben Sze. We have Jatropha plantations in China and I would like to meet you”! A little while afterwards we met in Hong Kong and we flew to Hainan, the beautiful island south of China where his company CPE Ltd. cultivates over 100 hectares of Jatropha nurseries in collaboration with the China-UN Development Program Green Poverty Allevia­tion Collaboration Project. This was a new world for me and from that moment on I was inspired and convinced that this plant could deliver not only energy, but also organic fertilizers on a giant scale. Ben Sze is extremely knowledgeable about Jatropha and has insight information how the government in Beijing plans its clean energy future. Ben moves very easily between Western and Chinese cultures, and is a great interpreter. He has been a partner and a loyal friend ever since.

Professor Feng Shang, PhD in Life Sciences at the University of Sichuan in Chengdu. His research team is developing a medicine, made out of Jatropha, against lung cancer. He is probably the best Jatropha scientist in China and a real authority. He closely linked to the renewable energy policy of the Beijing gov­ernment. He inspired me very much.

Hans van den Berg is a private equity specialist in Zurich who has always helped me throughout the years.

Peter Poort, a grain specialist from Glencore Grain in Rotterdam, has always inspired me with “the big picture” and always gavin me his view from one of the big grain traders in the world.

Bloomberg TV has always given me room to communicate my commodity views live on the air in their programs worldwide. I have been interviewed in their studios in New York, London, Zurich, Singapore, Hong Kong, and Tokyo. Bloomberg always treated me extremely well.

Vital Kharoshi is one of the Jatropha pioneers in Ethiopia. With very modest means he develops Jatropha plantations where he gives employment to the poo­rest of the poor. He practices “intercropping”, and the farmers grow sorghum,

Second Generation Biofuels and Biomass: Essential Guide for Investors, Scientists and Decision Makers, First Edition. Roland A. Jansen. r 2013 Wiley-VCH Verlag GmbH & Co. KGaA.

Published 2013 by Wiley-VCH Verlag GmbH & Co. KGaA.

tomatoes, coffee, and sesame between the Jatropha, and improve the quality of their lives. He inspired me about what you can achieve with simple means.

Frank ter Voorde is a very experienced palm oil trader and always has time to discuss the latest developments. I learned a lot from him about how the physical markets function.

Dr. Walter Ammann from Davos, Switzerland, Chairman of the Global Risk Forum. (www. grforum. org). Dr. Ammann organizes a large biannial conference on global risks, and he gave me a platform to speak about desertification, marginal land, erosion, its consequences, and planting Jatropha.

Lucas Bruggeman, an expert on derivative products in Zurich and one of the best marketers in Switzerland, always stimulated me in my development into renewable energies and introduced me to several decision makers in his network.

Stephan and Christiane Oberacher, my German partners with whom I learned the ins and outs of biomass, calorific values, and gigajoules.

Peter Berger, a well known journalist on financial matters, who brought me in contact with Wiley-VCH Verlag in Germany.

Dominique Menoud from Switzerland and living most of the time in Romania, who lives and dreams megawatts and kilowatts. She is a great connoisseur of the power industry and the best planner of renewable energy power plants I have ever met.

Dr. Julia Stuthe from Wiley-VCH Verlag in Germany, who guided me from the manuscript presentation to the publication of this book.

John Teo from Kuala Lumpur, who introduced me to important biofuel and biomass players in Malaysia.

Peter Mockli, CEO Sharewood Switzerland AG, an expert in wood and teak plantations in Brazil, who has always inspired me with new ideas.

Dr. Hong Yan, Chief Scientific Officer of JOil, the premier research company in Jatropha plant biotechnology in Singapore for the production of elite lines, development of tissue culture facilities, and nurseries. Dr. Hong Yan taught me a lot about the future of Jatropha as a source for clean energy.

Chris Niemandt, biofuel farmer in South Africa, who has always informed me from his tractor about the latest developments in the energy plantations.

The Bionas Management team from Kuala Lumpur: Mohd Safi’e M. Jaffri (Chairman), Zurina Amnan (CEO), and Khairil Anuar Bin Zainuddin (General Operations Manager). Bionas is probably one of the very few profitable companies in Jatropha worldwide and they showed me how it is done with contract farming in 13 countries.

My wife Anna, who always stimulated me into realizing this project. She always gives me new ideas, inspires me, is always realistic, critical, loyal, and a big sup­port in life.

I dedicate this book to my children Laura and Vincent. As a singer, Laura Jansen is becoming a real star and she has a global audience today. She works very hard in composing beautiful music, she performsg on stage in the United States, Europe,

and China, and never gives up her goals. You can follow her on Facebook. Vincent saves lives as a helicopter pilot in the US Coast Guard in Alaska. In November 2011, he starred in a documentary on the Weather Channel about the Coast Guard heroes, doing their work under extreme circumstances. The film is comparable to Top Gun with Tom Cruise. Only Top Gun is fiction and the Coast Guard doc­umentary is for real!

Abbreviations

AAU Assigned Amount Unit

ABPPM Associagao Brasileira de Produtores de Pinhao Manso AIREG Aviation Initiative for Renewable Energy in Germany ARA Amsterdam, Rotterdam, and Antwerp

ASA Asian

ASTM American Society for Testing and Materials

ASTM American Society for Testing and Materials

ASTM American Society for Testing and Materials

ASTM American Society for Testing and Materials

ASTM American Society for Testing and Materials

BCAP Biomass Crop Assistance Program

BEES Bio-Energy Emission Solution

BTL biomass-to-liquid

BTL biomass-to-liquid

BTL biomass-to-liquids

CAAC Civil Aviation Administration of China

CDM Clean Development Mechanism

CDM Clean Development Mechanism

CEPI Confederation of European Paper Industries

CERs Certified Emission Reductions

CNOOC China National Offshore Oil Corporation

CNPC China National Petroleum Corporation

COFCO China National Cereals, Oils and Foodstuffs Corporation

CPI Consumer Price Index

DESC Defense Energy Support Center

EIA Energy Information Administration

EIA Energy Information Administration

EIA Environmental Impact Assessment

EITI Extractive Industry Transparency Initiative

EPA Environmental Protection Agency

EPFL Ecole Polytechnique Federale de Lausanne

ETF exchange-traded fund

ETS Emission Trading Scheme

Second Generation Biofuels and Biomass: Essential Guide for Investors, Scientists and Decision Makers, First Edition. Roland A. Jansen. r 2013 Wiley-VCH Verlag GmbH & Co. KGaA.

Published 2013 by Wiley-VCH Verlag GmbH & Co. KGaA.

emissions trading scheme Emissions Trading Scheme Emissions Trading Scheme European Emission Allowances Federal Aviation Administration Food and Agricultural Organization Food and Agriculture Organization Forum for Agricultural Research in Africa Framework Convention on Climate Change Ghana Investment Promotion Council Genetic Resource Center gas-to-liquid

International Air Transport Association International Air Transport Association International Air Transport Association International Air Transport Association International Energy Agency International Energy Agency International Fund for Agricultural Development International Food Policy Research Institute Intergovernmental Panel on Climate Change initial public offering International Plant Protection Convention International Union for Conservation of Nature marine gas oil

non-governmental organization non-governmental organization non-governmental organization non-governmental organization non-governmental organization non-governmental organization National Renewable Energy Laboratory Organization of the Petroleum Exporting Countries polyethylene terephthalate Qatar Advanced Biofuel Platform Reliance Life Sciences Roundtable on Sustainable Biofuels Roundtable on Sustainable Biofuels Roundtable on Sustainable Biofuels Roundtable on Sustainable Palm Oil Sustainable Aviation Fuel Users Group Sustainable Aviation Fuel Users Group

In this context it is important to note that Jatropha is not a domesticated plant — many varieties grow in the wild and there are at least 200 of them. It will need a lot more research to “standardize” the best qualities. This means breeding and multiplying Jatropha plants with the highest oil yields, the lowest water require­ments, and the most resistance against diseases on many soil types in different climates.

Breeding objectives will depend on its use. Oil yield will, in most cases, be the most important part of Jatropha cultivation. Components that contribute to the Jatropha oil yield per hectare are shown in Figure 3.1.

As the maximum number of seeds per capsule is limited and the agronomic factor of planting density does not offer much flexibility for increasing yields, selection should focus on the other yield components like number of female flowers, pollination rate, and so on. An important research objective is also to reduce the plant height to facilitate harvesting.

Number of Female Flowers

Figure 3.1 Seed yield factors affecting the yield of Jatropha seeds. Source: CPE — Mother Earth Business Plan.

3.1.13

In 2008, the Saudi Binladin Group — does this name ring a bell?? — started negotiations with the Indonesian government to invest $4.3 billion in 1.6 million hectares in Papua Province, primarily to grow basmati rice for export back to Saudi Arabia. In the same year, China negotiated to lease more than 1 million hectares of rice land in the Philippines. These were two of the largest of a host of similar plans put forward by interests from economically powerful nations that faced serious agricultural challenges in their respective countries and, in the wake of the 2007/ 08 food crisis, had lost faith in international food markets. The deals have not been restricted to rice. Also in 2008, Korea’s Daewoo Logistics Corporation brokered a deal for a 99-year lease on 1.3 million hectares in Madagascar (around half the country’s arable land) to grow maize and oil palm. There was so much protest from all sides that in 2009 the deal was cancelled. At first sight it looks and sounds like good business and potentially a win-win situation. Wealthy governments or companies buy land and set up large-scale agricultural operations in poorer countries, which have land and water, but not the resources, infrastructure, or technologies to do it themselves. With improved tools, the local farmers increase their productivity and get paid (relatively) well for their efforts. However, here

is the catch: sometimes the foreign entities take the profits and food back home.

On the other hand, the modern technologies and expertise remain in the host country, eventually trickling down to other farmers across the land, resulting in better production. All in all, the level of support for public agricultural research remains well below that required to make a real and lasting difference. The UN FAO has calculated that, to achieve the Millennium Development Goal (www. fao. org) of halving the world’s hungry by 2015, funding of at least $30 billion is needed every year above the current levels of support for the agricultural sector in developing countries. With the share of international aid directed to agriculture trending downward in recent years (now below 5%) official development assistance offers a supplement at best. On the other hand, some economically better-off countries are physically unable to sufficiently increase their domestic production. Countries such as China and several of the Gulf States — burdened variously by large populations, rapidly growing industrial and domestic sectors that put pressure on natural resources, or lack of water (along with a lack of confidence in international markets) — have both the need and the money to invest in rice production beyond their own borders.

The idea of one country growing food in another in order to export it back home is nothing new. However, according to the International Food Policy Research Institute (IFPRI; www. ifpri. org), it is a phenomenon that has accelerated amid the aftershocks of the 2007/08 food crisis. The UN FAO estimates that foreign interests acquired up to 20 million hectares in Africa alone in 2007-2009. The Gulf States, which already import more than half their food and whose populations are projected to increase by 50% in the next 20 years, are the major investors at this stage, with China and South Korea also involved in significant deals. Southeast Asia and South America have also seen investor interest. Recent investments have involved government-to — government, private sector-to-government, and private sector-to-private sector deals, along with agricultural investment funds that offer finance to private investors. Ironically, the desire to ensure food security and stable domestic prices was in itself a major reason behind the price rises, as major exporters restricted or banned exports and major importers scrambled to secure rice at almost any cost. The resulting problems — rising domestic prices (despite, or possibly because of, the attempts to avoid this) and civil unrest in several countries — reinforced in the minds of politi­cians the importance of ensuring adequate domestic supplies.

The potential for such projects to bring agricultural investment to countries that sorely need to increase their own production is undeniable. However, if things are done poorly, poor farmers in target countries can lose control over and even access to the land on which they depend for their livelihood. Further, it does not take too much to imagine a situation in which local communities dependent on rain-fed agriculture struggle to produce sufficient food, while foreign interests export food grown on well-resourced, irrigated farm compounds. It is not a scenario likely to be accepted gracefully by the hungry. Sure enough, the three land deals mentioned earlier — in Indonesia, the Philippines, and Madagascar — were all scrapped or postponed after public outrage and resistance from local communities. The Madagascar deal reportedly influenced the political unrest that engulfed the country and led to a change of government in 2009.

62 | 3 Biofuels Feedstock: Jatropha curcas

3.5

Sugarcane is gradually being edged out of pole position for biofuel efficiency, as studies at the state-owned EMBRAPA are finding that Napier grass or Elephant grass has a much greater potential. Its dry biomass, burned in ovens, can generate

25 times as much energy as the amount of fossil fuel used to produce it, while sugarcane converted into ethanol only produces 9 times as much.

Napier grass belongs to the sugarcane family. In South Malaysia, close to the equator, in the state of Johor, 50 km north from Singapore, I walked along dense Napier grass fields, where Napier grass grows 3 meters every 45 days. This means the farmers harvest the grass 6 times a year with a yield of 40 tonnes per hectare or 240 tonnes per year. I have pictures of Napier grass fields, after 1 week of har­vesting, already 30 cm high again! I do not know any other kind of energy crop that grows so fast with such a high bulk density as Napier grass.

Napier grass has a high cellulosic fiber content and is therefore an excellent cheap feedstock for ethanol production. Several kinds of Napier grass do not need nitro­genous fertilizers to grow fast. For use as a biofuel, the least nutritious varieties are sought, in contrast to its traditional use as animal feed. Nitrogenous fertilizers require the greatest amount of fossil fuel energy to produce them chemically and, by avoiding their use, greenhouse gas emissions are also avoided. In Malaysia, Napier grass is mostly fed by rainwater. Green Elephant grass is 80% water anyway and it does not dry out in the sun, as eucalyptus does, but rots if left in piles. To dry, it must be cut up into small pieces and some heat energy applied. Compacting is necessary for storage and transport because of the great bulk of the dry grass.

The potential demand for this alternative energy source is huge. Biomass energy implies a key saving for electricity companies because it can supply extra electricity at times of peak demand. The cement and mining industry, which imports coal to process iron ore into iron and steel for export, could use Elephant grass com­pressed into pellets, similar to woodpellets, in its blast furnaces as an economical and environmentally friendly solution. Pelletized, Elephant grass could open up export markets for Malaysia.

Advantages

1. Napier grass is propagated easily.

2. It has a soft stem that is easy to cut.

3. It has deep roots, so is fairly drought resistant.

4. The tender, young leaves are an excellent animal feed.

5. Napier grass grows very fast.

Disadvantages

1. Napier grass is an aggressive plant and if it is not controlled it can invade crop fields and become a weed.

Napier grass can reach 4 meters in height and reaches a very high productivity up to 150 tonnes per hectare per year. It can capture 40 tonnes of carbon dioxide. Napier grass is easy to maintain, permitting total mechanization. Napier grass can also clean up contaminated sites. It has the ability to pull a number of pollutants out of the soil, including heavy metals. Growing on poor soils, the grass is able to pump oxygen back into the soil. There is evidence that the grass draws the toxic materials out of the soil and improves its condition as a result.

Napier grass has a much higher productivity than switchgrass, Miscanthus, or food crops. Napier grass provides fuel and animal feed. Napier grass is becoming extremely interesting, since the costs of enzymes necessary to convert cellulosic fibers into sugars has come down by about 80% in the past 3 years. It is now commercially possible to produce ethanol out of Napier grass at a cost price 50% below gasoline with a depreciation time of the refinery of 10 years. The falling enzyme costs mean they will only account for 25% of the overall production costs. The improvements come as the enzyme makers have optimized and fine-tuned the exact cocktail needed at each stage of the process.

Contrary to the world’s large commodity trade in, for instance, sugar, corn, palm oil, wheat, or soybeans, there is a lack of credit-worthy biomass supply-chain companies, capable of providing predictable and reliable long-term deliveries of adequate biomass to support power generators around the world.

Also, there is still a lack of investments to convert existing coal-fired power plants into cogeneration utilities or dedicated biomass-to-energy facilities. Many utilities and airlines are feeling very “comfy,” and want the final biomass product to be delivered in their backyard. They do not invest in the whole value chain to secure a permanent, long-term, feedstock supply, which I think is a big mistake. Luckily there are also exceptions, like the German utility giant RWE. It is now producing 750 000 tonnes of woodpellets from its own plantations. The company does not sell the pellets to third parties, but uses it all in its own boilers in England and Holland.

Brazil’s sugarcane-based industry is more efficient than the US corn-based industry. Sugarcane ethanol has an energy balance 7 times greater than ethanol produced from corn. Brazilian distillers are able to produce ethanol for $0.22 per liter, compared with the $0.30 per liter for corn-based ethanol. US corn-derived ethanol costs 30% more because the corn starch must first be converted to sugar before being distilled into alcohol. Despite this cost differential in production, the United States does not import more Brazilian ethanol because of US trade barriers corresponding to a tariff of $0.54 per gallon.

13.3

What is Driving the Urgency in Renewable Jet Fuel?

Industry usage is about 60 billion gallons per year and jet fuel prices have increased 141% since 2000, according to International Air Transport Association (IATA) (www. biofueldigest. com/blog/2/2010/01/08). The Energy Information Administration projects a $3.20 cost per gallon for jet fuel by 2020.

The industry is facing billion of dollars in added costs and thus reduced profits from their required carbon credit purchases as of 2012 via their entry into the EU Emissions Trading Scheme (ETS). Mid 2011 protests from the airlines against the EU ETS are mounting and I would not be surprised that for instance the obliga­tions would be halved for airlines during the first 5 years.

The five things that airlines want from renewable jet fuel are shown in Table 13.1.

13.4

We are witnessing the greatest wealth shift of all time — from industry to mining and agriculture, from the traditional industrial power centers in the West to new power centers in the East and South, and from paper assets to hard assets.

Mother Earth is exposed to the following megaforces:

1. The global population explosion and rising incomes are fuelling a parallel explosion in the demand for resources, which is bullish for commodities like grains and energy.

2. One thing is certain: we are constantly exposed to changes — and the biggest change of them all is "climate change” — the cause of "global warming.” Global warming causes extreme weather patterns, which threaten to destroy a larger portion of the world’s crops with floods, droughts, and other disasters. The picture is especially bullish for slow-growing plantation crops like cocoa, coffee, rubber, palm oil, and Jatropha. They take 5-7 years to grow and supply cannot be increased overnight. After 40-50 years they must be replaced, like 50% of all tea plantations in Sri Lanka or cocoa plantations in the Ivory Coast.

3. The housing bust, the mortgage meltdown, and the credit crunch guaran­tee a US recession, which is, I say, very, very bullish for commodities. A new upward cycle will start one day and demand for raw materials will increase likewise.

4. Massive money pumping by the US Federal Reserve, which results in a devaluation of paper money and a trend towards hoarding hard assets. Consequently consumer prices will rise like never before, all of which is very, very, very bullish for commodities.

5. Keeping it real: the global transition from paper to tangible assets is just getting under way. With the Federal Reserve and other central banks pumping so much money into the financial system, yet getting rather muted economic results, many investors are debating whether inflation or deflation will ultimately prevail. We think that inflation and deflation can in fact coexist as a new economic paradigm. This economic environment shows moderate economic growth and an underperformance of traditional paper assets, like stocks and bonds. Commodity prices, however, will soar, along with real asset values. Agricultural commodities and farmland are doing well in such a scenario, while US stock and bond returns are lagging. This is a structural shift away from the regime ofthe past 30 years, in which paper assets have outpaced real assets 5 times over. The 1970s were particularly painful because stagnating growth was accompanied by high inflation and extremely high interest rates. Today’s new environment is different. There is not the same pressure on the Federal Reserve to hike rates as there was 30 years ago.

6. Food crisis. I think we are at the verge of a serious food crisis in many parts of the world. The question is not how we are going to provide food for 9 billion people in 2050, but how we are feeding 7 billion people today. This book is not about "first-generation biofuels.” It is not about palm oil, soybean oil, rapeseed oil, and corn. These staple crops should remain reserved to feed humans and animals, and not be used for energy purposes. This book is about the second-generation biofuels, which do not grow on agricultural land and which do not compete with food.

7. It is my view that commodity-based, resource-rich economies will continue to do very well. Among them: powerhouse Brazil (where there are 4-5% real yields currently), Canada, Turkey, Chili, and Southeast Asian nations, like Indonesia and Malaysia. We predict a continued US dollar depreciation of 20-40% over the next decade. It will be a broad-based natural devaluation against all currencies.

8. African nations will supply China with oil and copper, and Europe with woodchips, palm kernel shells, and electricity. Angola, Nigeria, and Somalia are big oil suppliers, and China already has a big presence in Africa and invests in the complete value chain, from oil drilling to copper mines. Wood waste from Nigeria and Ghana will be compressed to woodpellets and shipped to Europe. The Sahara will become the largest solar center in the world to supply electricity to Europe.

9. The protein play. The next 10 years should underscore the shift to real asset investments that began around 2000. In particular, as more emerging economies like China, India, and parts of Latin America "consume” their way toward growth — rather than export — their diets will include more protein, intensifying the need for both food and feed and alternative biofuels. Call it a "protein play.” At their spending peak, average US citizens were consuming $1.60 of goods for every $1 of income. In contrast, Brazilians consume just $0.35 for every $1 of income and Mexicans, $0.60. As emerging-market consumers spend more of what they make, upward pressure will be put on agricultural prices, as well as increasing the value of farmland.

10. This shift toward commodities means that power and capital will move not only from West to East but from North to South as well. Asian nations such as Indonesia, Malaysia, Singapore, and Thailand, South American countries such as Argentina, Colombia, Chile, Uruguay, Australia, and Brazil will do very well and their currencies will remain strong. The classic ingredients of rising consumer demand, a demand for sustainable energies, tight supplies, and monetary inflation are all coming together at once.

11. Stringent EU carbon regulation today affects 11000 major polluting industries in Europe, such as the mining industry, power plants, cement, paper, chemical industries, and airlines. These carbon dioxide emitters either keep on polluting and will be forced to pay for their carbon emissions or they will introduce clean renewable energy in their boilers to cogenerate energy and lower their carbon bills. Unfortunately, Europe does not produce enough waste that can be recycled.

So the feedstock for woodpellets, agripellets, woodchips, and so on, must come from non-traditional sources like the United States, Africa, Russia, Africa, and Asia. As you read this Introduction big long-term supply contracts are being signed between buyers and sellers. The sellers did not know that their “waste” was a gold mine and are now happy to discover that their waste is worth a lot of money. Smart buyers are happy to secure long-term supply chains and cofire coal with biomass.

1.12

Trading volumes in Jatropha crude oil, Jatropha biodiesel, and Jatropha bioker­osene are still very small. As biofuels are a substitute for petroleum, the market is closely tied to that of petrofuels and also palm oil. Usually, biofuel it trades at a premium, also because the energy content per tonne is higher than the energy in a tonne of crude oil. Crude Jatropha oil has been traded in the Rotterdam harbor at the price of crude oil plus 10%. Professional traders like to take palm oil as a benchmark to hedge their exposure. I am sure within 5 years we will witness the development of a transparent futures market in crude Jatropha oil, maybe in Singapore, Shanghai, Dalian, Sao Paolo, or Kuala Lumpur.

The properties described below make Jatropha one of the lowest-, if not the lowest-, cost means of biofuels production. Analysis suggests that it could be used to produce fuel for approximately $43 a barrel.

3.1.24