Over the long to very long term, algae may offer an interesting potential for the production of biomass and biofuels. But much fundamental research is first needed to make algaeculture systems competitive and feasible, with some estimating that costs will have to come down 20 times before algae can compete with ordinary biofuels. Since algae research programs were discontinued in the early 1990s, no major biotech or engineering breakthroughs have been made in the sector, so we must assume that algal biomass yields remain the same as at that time, that is, between 30 and 50 tonnes per hectare - below the productivity of most tropical terrestrial crops (earlier post).

However, many entrepreneurs have quickly established algae companies, hoping they could profit from the hype that surrounds the technology. They have acquired the questionable habit of distributing optimistic but unsubstantiated press releases full of absurd yield projections. Very few of these companies have demonstrated their technologies (the ones that have used photobioreactors, which many researchers have dismissed as unfeasible because way too costly). None of the companies has ever shown a large-scale working system based on open ponds (the only system thought to have a future). And with all of them, yield projections are up to 100 times those of actual results obtained in field trials. In short, a hype has been created around algae that has not the slightest basis in science and reality.

With this background in mind, it does not come as a surprise that investors from South Africa feel betrayed by one such an algae company that kept issueing press releases with false numbers and that created absurd expectations. The virtual collapse of De Beers Fuel (no connection with the diamond-mining giant), which had promised South Africa vast quantities of cheap biodiesel produced from algae, has left a stink in the biofuels industry there.

The company had teamed up with US-based GreenFuel Technology - another algae company - whose technology it licensed. But in what is a blow to the algae hype, the licensing agreement has been terminated owing to “nonperformance” by De Beers.

The algae company was recently 'exposed' by an investigative programme as a scam (earlier post) and Engineering News now finds that investors in the company, who invested up to 6 million Rand each in biodiesel plants, in what was trumpeted to be the world’s first fuel-franchising scheme, today have nothing but paper to show for their money. Not one plant has been built and the company has been spewing fake numbers on the technology's potential and outright false statements about its order book: bioenergy :: biofuels :: energy :: sustainability :: biomass :: biodiesel :: algae ::South Africa ::

The amount of money lost by investors, and the number of investors who have lost money, could not be determined owing to conflicting information on the value and number of plants sold.

De Beers Fuel marketed the concept under the Infiniti Biodiesel brand name. Shareholders were promised plants capable of producing tens of thousands of litres of biodiesel every day, and exclusive offset areas. These plants would initially process conventional vegetable oils, like sunflower oil.

However, from the company’s public launch onwards, a more exciting, if somewhat strange, source of alternative feedstock was punted – algae. De Beers Fuel started a relationship with Green- Fuel Technology Corporation, of the US, which had been working on the development of a strain of algae suited to the production of biofuels.

One of the founders of GreenFuel Technology, Dr Isaac Berzin, researched the use of algae on the International Space Station and at the Massachusetts Institute of Technology. Berzin and GreenFuel Technology inter- national MD Paul Rodzianko visited South Africa in November.

De Beers Fuel founder Frik de Beer and adviser to the company’s board, Hendy Schoon-bee, sang the praises of algae as a feedstock for biofuels production during a media visit to the company’s demonstration algae bioreactor in Mookgopong (formerly Naboomspruit), which coincided with Berzin and Rodzianko’s visit.

Also accompanying the group was Stretch Fowler, of Green Star Products, the US company contracted by De Beers to build 90 high-pressure biodiesel reactors, and Matthias Wackerbauer, of MWK Biogas, of Germany.

The experts expanded on the potential of algae technology to provide large volumes of algae feedstock for biofuels production in South Africa. The fact that De Beers was the first company to receive a licence for commercial biofuels production from the South African Revenue Service was also mentioned frequently.

At the time of the visit, the media was told about De Beers Fuel’s ambitious plans to produce feedstock for between 16-billion litres and 24-billion litres of biofuels a year.

Moreover, by enabling the propagation of large volumes of relatively cheap renewable algae feedstock, De Beers would limit the use of food-crop feedstocks, such as sunflower and soy, in local biofuels production.

Besides giving South Africa biofuels, algae technology would consume carbon dioxide, as algae depended on large amounts of carbon dioxide for its rapid growth. Plans were made known to deploy a fuel- assessment unit at the Kelvin power station, in Johannesburg.

The technology would also be tested in other locations in South Africa. To prove De Beers’ abilities, visitors were shown a production plant that, according to De Beer, produced 144,000 liters/day of biodiesel and was being run 25 days a month, and had 50-million litres of diesel on its order book every month.

However, on April 1, popular investigative programme Carte Blanche ‘exposed’ the company when it aired a programme on De Beers Fuel. When questioned by Carte Blanche, De Beer said that the company had only sold 41,000 liters of biodiesel and had 39,000 liters in its tanks, ready to be sold.

And, while investors in De Beers and Infiniti Biodiesel were given the impression that algae was an almost immediate solution to the antici- pated shortage of vegetable oil for biofuels production, in truth, the production of algae feedstock is viewed as a third-generation technology.

Rodzianko then said that, “on an accelerated schedule, the earliest that a commercial-scale facility would be available [would] probably be the end of next year, to the beginning of 2009”.

Even after being exposed, De Beers continued to publish on its website unrealistic claims about its abilities. The company also continued to point out its relationship with GreenFuel Technology, which had received the prestigious Frost and Sullivan technology innovation award of the year.

GreenFuel has since terminated the licensing agreement with De Beers Fuel owing to “nonperformance”. It also requested that the company remove any reference to the agreement from its website.

LONDON (AFP) - Europe's first train operated on environmentally friendly bio-fuel went into service Thursday with prime minister-designate Gordon Brown travelling on its maiden journey.

Brown travelled on the Virgin Voyager train which left London Euston station for Llandudno at 11:27am.

The train has been modified to run on a blended fuel which is 20 percent bio-diesel -- fuel derived from sustainable and biological sources such as rapeseed, soyabean and palm oil -- and produces less CO2 emissions than diesel.

Virgin has received a special tax concession from the Treasury to operate the train and hopes to convert its entire fleet of trains to run on the environmentally friendly fuel if a six-month trial proves successful.

Virgin chairman Sir Richard Branson believes the move could slash its CO2 emissions by 14 percent -- the equivalent of taking 23,000 cars off the road.

"It's fantastic that we are leading the rest of Europe in developing this fuel," he told reporters.

The Treasury has given Virgin a special concession -- whereby it only pays 7p a litre in tax to use the cleaner fuel, rather than the normal 54p a litre for diesel -- and Branson urged the Treasury to provide further further tax-incentives.

"The tax on clean fuels is, quite bizarrely, higher than on dirty fuels. Our indications are from Gordon Brown that he will address this problem."

Brown told reporters he was delighted that bio-diesel is being used on trains and promised to extend the tax-relief scheme.

"I want Britain to be a world leader in the development and use of environmentally friendly fuels and I believe they will play a fundamental part in our efforts to reduce emissions and tackle climate change," he said.

"If this scheme works well we are prepared to look at other things. We are prepared to look at what could be done in the future.

"We have to prove that this works. If it works I want other train companies to consider using bio-diesel."

The train will travel across England, south Wales and Scotland during a six-month experiment that has been organised by Virgin Trains, the Association of Train Operating Companies and the Rail Safety and Standards Board.

Johannesburg - An R850 million project intended to produce more than 40 000 tons of biodiesel a year and create more than 10 000 jobs in North West has been put on hold.

In the past six months the 47 workers employed to start a nursery of 400 000 trees, including the renowned jatropha curcas oil seed tree, have been laid off as initial funding has run out, while the North West government and Diprojeke, the private company employed to manage the project, have been haggling over ownership and shareholdings.

While the province has been pushing to take a 49 percent stake in the blue-ribbon project alongside a proposed 51 percent for the Barolong Bo-Rratshidi Development Company, an upliftment organisation, thereby excluding the private sector, most of the 400 000 trees, worth R2 million, planted to kick-start the project are dying.

The current shareholding in the project is split between the development company with 45 percent, the province with 25 percent and the private sector with 30 percent.

Petro Naude, a director at Mafikeng Bio-Diesel, says the nursery workers have been laid off since September because of insufficient funds. The nursery employs 47 people. He says the project has the potential to create more than 10 000 jobs over the next decade.

The North West unemployment rate for the period March 2005 to March last year was 31.8 percent, the second-largest unemployment rate in all provinces, Statistics SA figures show. Furthermore, Naude says the firm lost the growing season, between September and March.

The trees that had been planted all have to be replaced. "The 400 000 trees that we had planted at a cost of R5 each are becoming useless. About 300 000 trees are dying because it is hot and we have few staff who cannot control the weeds and water them properly," says Naude.

Abe Tlaletse, the acting head of the North West economic department of development and tourism, says the issues are more related to the restructuring of the management of the project, which includes the replacement or reinstatement of the former project manager, Diprojeke.

Last year the North West government promised to increase its initial R4.7 million start-up investment in the project by R10 million. But the money never arrived.

Tlaletse says the department has not issued the funds because of the delay of submission of audited financial results by Diprojeke. "We decided to withhold the R10 million until they showed us how they had spent the initial funds."

The project includes the establishment of a nursery, the roll-out of agricultural plantations, and the commissioning of the refinery.

Naude says the project can cover 60 000ha of plantations over the next 10 years.

Four tree species, jatropha curcas, moring oleifera, pappea capensis and ximenia caffra, are to be tested for making biodiesel fuel from the trees' seeds. All are thought to be suited to the semi-arid conditions around Mafikeng.

Biodiesel can be used in any conventional diesel engine either as 100 percent biodiesel or in a blend with normal fossil diesel. "The objective is to produce 20 tons of biodiesel per hour," says Naude.

The domestic demand for biodiesel at a 5 percent blend with fossil diesel has been confirmed to be about 1.3 billion litres a year. The 5 percent blend of biodiesel with fossil diesel is a recommendation by the JIC, the international centre of excellence in plant science and microbiology, as a minimum for South Africa to reach the targets as set in the objectives of the Kyoto protocol, to which South Africa is a participant. The treaty was aimed at curbing air pollution blamed for global warming by demanding a 5.2 percent cut in greenhouse gas emissions, especially carbon dioxide, from industrialised nations by 2012.

South African fuels firm De Beers Fuel plans to produce 16 to 24-billion litres of biodiesel a year from algae within five years with an initial investment of R3,5-billion ($487,4-million), it said on Tuesday.

The company has bought licenses for 40 000 hectares to be developed into algae farms -- for which the initial investment is targeted -- and within five years from now the intention is to increase that land area to 320 000 hectares.

De Beers Fuel -- which is unrelated to the world's biggest diamond producer De Beers -- said in a statement that South Africa uses about 8,1-billion litres of biodiesel yearly.

De Beers Fuel already runs a plant which produces 144 000 litres of biodiesel daily from sunflower seed oil, at Naboomspruit in the northern Limpopo province. A biodiesel algae reactor installed at the plant will be showcased to investors, experts and the media later this week.

"The project is highly capital-intensive. The first 100 acres will require about R3,5-billion, this has been sourced mainly from foreign private equity groups," Hendy Schoombee, a senior official at De Beers Fuel said.

"We had initially intended to list the company to raise the money. We might list at a future date to raise money for further expansion," he said.

One acre of algae can produce 92 000 litres of biodiesel, compared to 350 litres produced from one acre of a sun-flower seed farm, he added.

The company will use land that is not arable or useful for most other purposes, and will also generate electricity from waste material out of the biodiesel-making process.

Its bio-diesel will be targeted for industrial use and for future exports, and is based on technology supplied by a United States company, GreenFuel Technologies Corporation, while Green Star Products, also of the US, will build the biodiesel reactors. - Reuters