Finland is proposing to build a Billion Dollar Highway from its Capital Helsinki to a City near the Russian Border.This Highway will be the first Zero Carbon Highway in the World using an innovative mix of Biofuels,Electric Vehicles Charging Infrastructure and Renewable Energy.This Highway will use EV Charging Points which will get their energy from Solar and Wind Power.The Towns along the highway will be involved in the project generating biofuels and biomass energy.The Project is still under the feasibility stage and is slated to be completed by 2016 if passed.This route is one of the major arteries to EU-Russian Trade and will serve as an important Green Symbol for Future Transportation Needs.Finland will also tap EU’s subsidies on Clean Transportation to help build this Green Highway.Note Scandinavian Countries have been the leaders in the Green Movement with Denmark  one of the pioneers in Wind Energy and Norway’s Sovereign Fund committed to SRI principles.

Finland to Build First Ever Green Highway – IndustryWeek

With service stations offering charging points for electric cars and pumps filled with local biofuels,  Finland wants to build the world’s first “green highway”, the project manager said on August 19.The project concerns the remaining eastern 130-kilometer (81-mile) stretch yet to be built on a highway linking Turku on Finland’s southwestern coast with Vaalimaa near the Russian border. The town of Loviisa, located east of Helsinki and near the beginning of where the last leg of the highway will be built, proposed making the final stretch of road “green” and has taken charge of the project.

The plan involves using waste and other resources from the region that the new road will pass through to produce ethanol, other biofuels and electricity to keep the most environmentally-friendly cars on the green highway running.Pumps with fossil fuels will also be available for “normal” cars.Other proposals include installing geothermal heat pumps and providing information to users on their emission levels and the impact they are having on the environment.

World’s biggest Oil company Exxon Mobil has opened a Greenhouse facility to grow and test algae which will be used for producing biofuels.Algae based Biofuels is a green investment opportunity is still a decade away,as the technology is far from mature.However major Oil Refiners like Valero are already positioning themselves in this space.All the Oil Majors like Chevron,Shell,Exxon have made investments in  biofuels in order to hedge themselves for the future.However I don’t think current crop based biofuels are the answer to climate change problems because of their negative impacts on food security and deforestation.

Oil Majors invest a Minuscule Amount in Clean Energy and Green Fuels

The Big Oil companies have recently come under fire after the BP Oil Rig Disaster for doing too little in the case of Global Warming and Climate Change.Exxon though committing $600 million over the next 5-6 years on algae based biofuels with $300 million to be spent in its JV with startup Synthetic Genomics.Note the $120 million investment per year forms a minuscule 0.4% of its annual $32 billion in revenues.These companies need to be forced to spend more on clean energy and green fuels.One easy way to do that would be to eliminate the $550 Billion in annual subsidies given to fossil fuels globally.The Oil Industry has learned nothing from the Deephorizon Disaster as it continues in its merry polluting destroying ways opposing green laws and promoting fossil fuels.

Exxon says growing its algae biofuels program – Reuters

Exxon Mobil Corp said on Wednesday it opened a greenhouse facility to grow and test algae, the next step for its nascent biofuels program.Exxon said last year it would invest $600 million over the next five to six years attempting to develop biofuel from algae. If it met research goals, Exxon said it would spend more than originally budgeted in the next decade, $300 million of which would be allocated to its partner Synthetic Genomics Inc.

The project would cost billions to fully develop, Exxon said.Researchers from Exxon and Synthetic Genomics will use the new facility to test whether large-scale quantities of affordable fuel can be produced from algae.”It’s one step along a pretty long path, but it’s an important step,” Emil Jacobs, vice president of research and development at Exxon Mobil, said at a teleconference held at Synthetic Genomics headquarters in La Jolla, California.

Valero Energy which is the US’s largest oil refiner has positioned itself strongly to take advantage of future shift in the fuel industry.The massive drop in Oil Price and the Global Financial  Crisis had virtually destroyed the US ethanol industry in 2008.Valero Energy had used the depressed prices of the ethanol companies to its advantage,buying up a massive ethanol capacity from bankrupt biofuel leader Verasun Energy for a dirt cheap $477 million .Note at that time Valero Energy  was the first Oil Refiner to buy/set up Ethanol Capacity.

Valero Energy, the Oil Refiner, Wins an Auction for 7 Ethanol Plants – NY Times

Valero Energy, the country’s largest independent refiner, said on Wednesday that it would buy seven ethanol plants from VeraSun Energy for $477 million, giving the biofuel industry a lift at a time when it is suffering from excess production capacity and falling gasoline consumption.VeraSun, the nation’s second-largest ethanol producer after Archer Daniels Midland, filed for Chapter 11 bankruptcy protection last fall. Valero’s purchase signals important new support for a flagging industry from an unexpected quarter. In recent years, refiners have opposed Congressional mandates for refineries to blend increasing amounts of ethanol in gasoline, arguing that it made neither economic nor environmental sense.

While I don’t think Biofuels from crops are a solution to peak oil and climate change, nonetheless Governments are still strongly supporting this industry.With the BP Oil Spill putting the focus back on Renewable Energy and Alternative Fuels,ethanol stands to make a comeback as the 22 Billion Gallons of Biofuel still needs to blended by the US Transportation Industry by 2022.

Verasun putting the money where its mouth is unlike other Oil Companies

Verasun Energy is not sitting on its ethanol laurels,but is actively looking at other biofuel areas like biodiesel and algae based biofuels.Exxon,Chevron has made only token promises in supporting biofuels committing a minuscule portions of their vast resources in supporting biofuels.Now the Oil Companies are busy trying to evade questions about their Green commitment in the wake of the BP disaster.However Valero with smaller resources has been much more proactive in the green fuel area.It has partnered with one of the US largest food processors to set up a biodiesel plant in Louisiana.It has also invested in a algae based biofuel startup Algenol though Algae based biofuel still remains an nonviable commercial technology as of now. Terrabon a waste to fuel startup has seen a small investments from Valero Energy

Valero plans JV biodiesel plant with Darling International –

The largest independent refiner in North America teams up with the processor of food by-products for the plant that would make 10,000 barrels of fuel per day from used cooking oil and animal fat.San Antonio, Texas-based refiner Valero Energy said it plans to grow its diesel production through a joint venture with Irving, Texas-based Darling International  which processes by-products of the food industry.The proposed biodiesel plant in Louisiana is expected to produce 10,000 gallons per day, or 135 million gallons per year. The companies declined to reveal financial terms of the venture or a time line, but said they want to secure a loan guarantee from the U.S. Department of Energy.

Algenol partners Valero to commercialize algae biofuels – Brighterenergy

Florida company Algenol Biofuels, Inc., has agreed to work with a subsidiary of oil and gas giant Valero Energy Corporation to pursue commercial-scale algae biofuels production.Algenol, which is based in Bonita Springs, southern Florida, signed a joint development deal with Valero Services, Inc., to combine its “Direct to Ethanol” algae technology with Valero’s expertise in fuel production and distribution infrastructure.The collaboration has the potential to result in a joint venture to develop commercial scale algae-based biofuels production facilities, the companies said.Paul Woods, CEO and founder of Algenol, said: “We are excited and encouraged to be working with Valero on this initiative, bringing together Valero’s industrial expertise and Algenol’s revolutionary technology. This collaborative effort is a significant step on the road to the commercialization of algae-based biofuels and biochemicals.”

Why Algae based Biofuels

Algae Based Biofuels have been hyped in the media as a potential panacea to our Crude Oil based Transportation problems. The advantages of Algae Biofuels are being propagated by strong backers like Bill Gates ,Rockefeller family and Exxon Mobil.Crop based biofuels have been discredited because of their pernicious effects on Food Prices and increasing rather than reducing GHG emissions.First Generation Crop based Biofuels are clearly not the answer to substitute Crude Oil based Transportation fuels.Second Generation Biofuels based on Algae is now the new hope for Biofuel enthusiasts.

Advantages of  Algae based Biofuels

The advantages of algae based biofuels makes for impressive reading.The main advantages of algae based biofuels are

  1. More Productive Land Usage compared to traditional crop based biofuels from corn,soybean,sugar.

    Algae have the potential to yield greater volumes of biofuel per acre of production than other biofuel sources. Algae could yield more than 2000 gallons of fuel per acre per year of production. Approximate yields for other fuel sources are far lower:
    – Palm — 650 gallons per acre per year
    – Sugar cane — 450 gallons per acre per year
    – Corn — 250 gallons per acre per year
    – Soy — 50 gallons per acre per year

  2. Algae uses Carbon Dioxide as Feedstock thereby helping in reduction of one of the main reasons for Global Warming

    In the Sapphire process, 1 kilogram of algae biomass uses 1.8 kilograms of CO2. About 50 percent of that algal biomass is oil, so the production of each gallon of oil consumes 13 to 14 kilograms of the greenhouse gas, Zenk said.”You can see, it’s just completely packed full of that stuff,” Zenk said. “That’s what makes it one of the most unique plants on planet Earth for consumption of carbon.”

  3. The Fuels generated through them have the same specifications that can be directly be used by Planes and Automobiles.

Criticisms of Algae Based Biofuels

The main criticism leveled at Biofuels are that they are not ready for commercial production yet despite claims made by a number of algae biofuel startups.The  criticisms leveled at algae based biofuels are

  1. Algae based biofuels uses a lot of Energy and Water and may lead to more GHG emissions than crop based biofuels over its complete life-cycle
  2. The Technology for Biofuels is not still ready for Mass based production.It will still take around 10 years for the Technology of Algae Biofuels to become ready for the prime time.

Algae Biofuel Companies

There are a number of startups in this space just like the other green fields sectors of Electric Vehicles , Solar and Wind.Some are hyped more than others like Solyndra and will end up in failure. The more famous ones are Solazyme,Sapphire Energy and Synthetic Genomics, Inc.Most of these companies are private and have strong backers.There are also some publicly listed companies like Codexis and Petroalgae for investors wanting a piece of the algae based biofuel action.Here is an article from Earth2Tech which gives the most comprehensive list of  Startups in this Green Segment.


Algae Based Biofuels is a promising technology of which there is  little doubt .However Algae Biofuel still needs a lot of  time to move from the Lab to Commercial Production.Most of the opportunities mostly exist in the Private Equity and Venture Capital side and that too for people with really deep pockets like Bill Gates and Exxon.For the mainstream investor Algae Biofuel sector is still not a feasible investment opportunity yet.

Biofuels were all the rage during the Bush administration which mandated the use of biofuels for the Transportation Industry.It led to a huge boom in biofuel stocks like Verasun,Pacific Ethanol due to a confluence of positive factors like a) Increasing Oil Prices  b) Regulatory Action c) Low Raw Material Prices.However Biofuels from Crops can never be  a meaningful answer to the problems of Climate Change and Global Warming due to the fact that

  1. A large part of the world’s 6 billion population lives in hunger
  2. Water and Land needed for Crops are becoming a Scarce Resource as per capita consumption and population both rise
  3. Inevitable Increase in Crop Prices increases the Raw Material prices
  4. Growing Demand for Biofuels lead to deforestation perversely contributing to Global Warming

I think governmental support for biofuels is totally misdirected just like it is for Carbon Sequestration.Both Solutions contribute to the Problem rather than being a Solution.I think both of these approaches have a very limited use in solving the Climate Change problem.

Limited biofuel land compatible with food -industry-  Reuters

A large but limited amount of land can be used to provide plant-based fuel without cutting the world’s food supply, environmentalists and consultants told a global biofuels gathering on Wednesday.Martina Fleckenstein of the World Wild Fund for Nature said the WWF estimated 380-450 million hectares could be sustainably planted for fuel feedstocks, alongside 1.6 billion ha needed to guarantee the world’s food supply.

Estimates on how much of the world’s energy supply could be met by biofuels varied widely.Hamelinck predicted 50 percent, while Enrique Cerda, a professor of genetics at Seville University, said data from the United Nations Food and Agriculture Organization showed biofuels could only provide 3 percent of the total energy supply.Hamelinck urged biofuel manufacturers to use raw materials grown with sustainable water supplies, and without eroding soil or using land needed to maintain biodiversity.

Lufthansa is going to mix biofuel with kerosene for its planes starting from 2012 . The EU is mandating the ETS system for the flight industry from 2012 ,therefore to reduce the costs of emitting carbon Lufthansa is being compelled to think of using biofuel.I am not a fan of carbon certificates as it benefits Large scale connected companies and individuals,besides giving birth to frauds. In my earlier posts I have written about how a hotel can get money from using CFLs but not a common person.I am more in favor of a carbon tax with suitable safeguards rather than ad hoc systems of cap and trade. Plus you also have to face frauds in the cap and trade system as well.

Lufthansa to use biofuel on flights by 2012 – Reuters

Lufthansa is set to become one of the world’s first airlines to mix biofuel with traditional kerosene on commercial flights as carriers seek ways to cut soaring fuel costs, its chief executive said.

The German flag carrier will start running its engines on some flights on a mix of biofuel and kerosene within two years, Wolfgang Mayrhuber told reporters on the sidelines of an event late on Saturday.

A spokesman for Lufthansa added the airline will likely decide on a more precise schedule by the end of this year.

Aircraft account for an estimated 2-4 percent of global carbon dioxide (CO2) emissions, which scientists say could cause global temperatures to rise, triggering widespread disease, famine, flooding and drought.

Experts say global aviation emissions could reach 2.4 billion tonnes in 2050, which would be 15-20 percent of all CO2 permitted under a global agreement and a nearly four-fold increase on current levels.

Lufthansa rival KLM, part of Franco-Dutch Air France, last year became the first airline to test biofuel in a passenger airplane, filling one of four engines on a Boeing 747 with biofuel for a 1.5 hour test flight.

The carrier has said it aims to make commercial flights which use biofuel from 2011.

U.S.-based Continental Airlines, the U.S. airline that is set to create the world’s largest carrier by merging with United Airlines parent UAL, had already used a mix of biologically derived fuel and jet fuel on a test flight.

Mayrhuber said Lufthansa had no plans to run individual test flights at this point. Instead, the carrier would wait until it could start using biofuel regularly on some routes to gather reliable data over a longer period of time.

In the long run, the use of biofuel is expected to save airlines money.

“First, we are hoping to get some resource security, and second, we hope that we will have some advantages in our costs for emissions trading,” Mayrhuber said at the event, which celebrates 50 years of Boeing planes at Lufthansa.

The European Union is set to extend its Emissions Trading System (ETS) to airlines from 2012, and the less traditional kerosene airlines use every year, the fewer certificates they have to buy permitting them to pollute the air.

Lufthansa has estimated its annual costs from the ETS at 150-350 million euros ($201-470 million) once airlines join the scheme.