By Gaulbert Sutherland
The development of a local bio-fuel sector is still on the cards though President Bharrat Jagdeo has indicated that Guyana will likely pursue next-generation bio-fuels, which are not made from food crops.
Jagdeo, at a press conference at the Office of the President on Friday, said that government is still in discussions with a few companies that have shown interest in the sector. Government has committed some 40,000 hectares of land in the Canje Basin for investment in the bio-fuel/agro-energy sector and, last month, Agriculture Minister Robert Persaud said that government is still reviewing a dozen proposals for agro-energy/bio-fuels production on 250,000 acres of land.
The President on Friday noted that the cost of infrastructure in the East Canje Reservoir Scheme is high, thus making the project’s economics “a little bit on the low side.” He said that funds arising out of engagements with Norway and others could catalyze larger scale investment. He explained that small investments of about $10M or $20M in infrastructure can catalyze larger investments in projects.
Following high oil prices and with increasing concerns about carbon dioxide emissions –which contribute to global warming, from fossil fuels, tremendous interest had been shown in the bio-fuels sector globally. In Guyana, proposals were received from at least 11 companies interested in investing in developing a local bio-fuel/ agro-energy sector. One of the companies had proposed an investment of US$600m. The proposals were to be evaluated last year with assistance from the Inter-American Development Bank (IDB) and the UN’s Economic Commission for Latin America and the Caribbean (ECLAC).
The proposals submitted include those from a locally-registered company, Sawarima Agro and Bio Energy Enterprise; and the Canada-registered Agri Solutions Technologies which operates a bio-diesel facility using palm oil at Wauna in the Mabaruma District, Region One (Barima/Waini).
Proposals were also received from Global Energy Ventures – a consortium involving capital from the US, Brazil and Jamaica; Bio-Capital out of Brazil and US companies Twin Lakes and Grynberg, who all expressed interest in cane cultivation for ethanol production. Zoom of India expressed interest in cane cultivation for ethanol and bio-diesel production, while Integrated Bio-Energy Resources of the USA and Iberdrola of Spain were interested in oil palm cultivation for bio-diesel. AMCAR/ Jatropha Inc of France had also submitted a proposal and Anand Marketing Network of Canada proposed sweet potato cultivation for ethanol production. Other companies had also expressed interest including ESSAR out of India.
Jagdeo, on Friday, indicated a shift from bio-fuels based on food crops. He noted that there is new research ongoing into next-generation bio-fuels, pointing to new technologies such as cellulosic conversion, whereby bio-mass such as straw and other vegetation–considered useless now-are converted into bio-fuels. “So I think that’s going to be the future; another generation of bio-fuels that are made not from food crops but from other biomass. That is what we probably will support,” he asserted.
Jagdeo had noted that there was a backlash about the displacement of food production to make way for bio-fuels and now incremental growth is being examined. He pointed out, however, that should the cane be grown in the East Canje Reservoir Scheme, it wouldn’t be displacing food production.
Recent studies have found that growing demand for bio-fuels could actually increase greenhouse gas emissions, as farmers clear forests and grassland to create more cropland. One study by researchers at Princeton University concluded that land use change reduces the benefits of bio-fuels because it would release carbon sequestered by the land into the atmosphere. The study calculated that it could take decades for bio-fuels to pay back their carbon debt if forests and grasslands were converted to grow them or to grow the food crops displaced by bio-fuel crops. The Guyana government has emphasised that no agricultural lands in use would be put under cultivation for bio-fuel production and forests would not be felled for this purpose.
In April last year, the IDB announced that US$925,500 or $187.4 million in grants had been approved to encourage private investment in bio-fuel production here. The grants comprise US$675,500 from the IDB’s Japan Special Fund and US$250 000 from the IDB’s Sustainable Energy and Climate Change Initiative Fund.
The process of evaluation and implementing a comprehensive strategic plan to promote the country’s potential for bio-energy investment and production was estimated to cost US$1.2 million. The money from the IDB would have supported this.