CTA/IICA, High Level Seminar: Expanding Bioenergy Opportunities in the Caribbean, 8-2007

7/31/2019 CTA/IICA, High Level Seminar: Expanding Bioenergy Opportunities in the Caribbean, 8-2007

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Expanding Bioenergy Opportunities in the Caribbean Region

High Level Seminar:

Expanding Bio-Energy

Opportunities in the CaribbeanRegion

Seminar Report Oc tob er 2007


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High Level Seminar:

Expanding BioenergyOpportunities in the Caribbean

Interna tiona l Conferenc e Centre

5 E Orc hid Drive, Lilliend aa l, ECD,

Grea ter George town

Guyana

6-7 August 2007


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Expanding Bioenergy Opportunities in the Caribbean

ACRONYMS

ACP Asian Caribbean Pacific

CARICOM Caribbean Commun ity

CBI Caribbean Basin Initiative

CCS Caribbean Commu nity Secretariat

CDB Caribbean Developmen t Bank

CDM Clean Developm ent Mechan ism

CEIS Caribbean Energy Information System

CFC Common Fund for Commodities

CHOG Commonw ealth Heads of Government

CO 2 Carbon Dioxide

CREBAP Caribbean Renewable Energy, Energy Efficiency and Bio-energy

Action Program

CREDP Caribbean Renewable Energy Developm ent Programm e

CTA Techn ical Centre for Agricultural and Rural Cooperation

ECLAC Econom ic Commission for Latin America and the Caribbean

ECLAC Econom ic Comm ission for Latin America and the Caribbean

EU European Union

GDP Gross Domestic Produ ct

GoG Government of Guyan a

GTZ Geselleschaft fr Technische Zusammenarbeit


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GUYSUCO Guyan a Sugar Comp any

IADB Inter-American Developm ent Bank

IASCCT Inter-Agency Stand ing Committee Country Team

IAST Institute for Applied Science and Techn ology

IDB Inter-American Developm ent Bank

IDB-SECCI Inter-American Developm ent Bank Sustainable Energy Clima te

Change Fund

IICA Inter-American Institute for Cooperation on Agriculture

JSF Jap an Special Fun d

KV Kilo Volts

MOU Memorandum of Understanding

MOU Memorandu m of Understanding

MW Mega Watts

NARI National Agricultura l Research Institute

NARI National Agricultura l Research Institute

NGOs Non -Governmental Organization

OAS Organization of American States

R&D Research and Developmen t

TBTL Trinidad Bulk Trad ers Limited

TOR Terms of Reference

US United States

USA United States of America

USAID US Agency for Interna tional Developm ent


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TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS

1. INTRODUCTION1.1Background1.2Highlights of the Seminar1.3Next steps

1

3

5

2.THE SEMIN AR 7

Session I: Opening Ceremony 7Session II: Signature Of a Memorandum of Understanding (MOU) and

Launching of the Caribbean Renewal Energy, Energy Efficient and

Bioenergy Action Program (CREBA P)

14

Session III: Presentation of Bio-energy Studies in the Caribbean 15

Session IV: Round Table with Sugar/Ethanol Project Developers and

Opportunities for the Private Sector 19

Session V: Achieving Competitiveness in Sugar/Bio-fuel Production

through Value-Added Products 26

Session VI:Highlights of Preceding Day 28

Session VII:Building an Agro-energy St rategy for the Caribbean 30Session VIII: Carbon, Finance, Innovation, Science and Technology in

Bio-energy

33

Session IX: Financing Bio-energy Projects 36

Session X:Next S teps and Conclusions 39

Session XI: Final Remarks 43

3. APPENDICES 44Appendix I: Agenda

Appendix II: Memorandum of Understanding

Appendix III: Press Releases

Appendix IV: Draft Strategy Presentation

Appendix V: List of Participants


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Acknowledgement

To all those whose effort contributed to the successful hosting of this high level seminar, we say

thank you.

To the Technical Cent re for Agriculture and Rural Cooperation (CTA ), our senior partner, and

in particular John Wooden who assisted to move the concept along to reality and which led to the

significant commitment of funding for Governments and industry to participate in the discourse,

we at IICA say thank you for the confidence placed in us.

To all other partners, the Government of Guyana, the CARICOM Secretariat, the Inter-

American Development Bank and the Organization of American States, thanks for the

collaboration and partnership on this all important initiative.

Una May Gordon

IICA


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1. INTRODUCTION

1.1 Background

The European Union (EU) will reduce its preferential price of sugar to the Asian

Caribbean Pacific (ACP) countries by 36% over a th ree-year period starting in 2008. This

decision will produce a severe economic impact to the Caribbean countries that are

currently highly dep endan t on sugar p rodu ction, especially in Guyana, where the sugar

industry represents over 9% of its Gross Domestic Product (GDP). To confront that

situation, several Caribbean countries have prepared strategic action plans, under the

auspices of the EU, on wh ich the transformation and/ or mod ernization of the sugar

indu stry should p rovide more p rodu ctive and alternative uses of the resources - labor,

land an d cap ital - tha t are currently emp loyed on sugar industry.

In addition to the latter, the Caribbean region is heavily depen dent on fossil fuels for its

energy needs. Almost ninety percent (90%) of the regions energy matrix originates

from imports of fossil fuels, an alarming statistic in the face of high volatility in the p rice

of petroleum, resulting in a drain of foreign exchange. Growing concerns about global

warming, and the resulting need for reductions in green house gases and criteria air

contaminants, are also increasing concerns on the environmental impacts of fossil fuel

use. This scenario provides significant opportunities for the utilization of renewable

bio-fuels in the region, which could potentially lead to opportunities for employment,

poverty reduction, climate change abatement, and the birth of a new, sustainable bio-

energy indu stry in th e Caribbean.

The Caribbean Development Bank (CDB) and the Caribbean Renewable Energy

Development Program (CREDP) within the Caribbean Community Secretariat

(CARICOM) developed dur ing m id 2006 a techn ical cooperation called Expanding bio-

fuel opportunit ies through carbon finance in three Caribbean Countries Jamaica, Barbados and

Guyana. The objective of the technical cooperation was to analyze viable alternatives,

such bio-fuels, cogeneration with bagasse and efficient sugar production that could

mitigate the effect of the sugar preferential price cut and the high oil prices. The

assessment includ ed a thorou gh rev iew of the state of the art of bio-fuels in these three

countries and th e carbon finance opportu nities that could be obtained in r elation to thepossible bio-fuel projects. The findings of this assessment were supposed to be

presented at a workshop that should be held in Guyana.

In a similar effort the Inter-American Institute for Cooperation on Agriculture (IICA)

was also prep aring a similar assessment in bio-fuels for the Caribbean region and was

aiming to present their results in a workshop in Guyan a. Therefore, after a meeting in

Washington DC in January of this year, IICA, CDB and CREDP decided to join forces

and work together in the preparation and organization of a workshop. Soon after the

Organization of American States (OAS) and the Government of Guyana (GoG), as the


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host country also agreed to join part of this unprecedented effort of four (4)

multilaterals and a country working together to organize this event. The expectation

raised and the joint effort w as surely too high to label the event a w orkshop, thereforethe nam e was changed to High Level Seminar:Expan ding Bioenergy Opp ortunities in

the Caribbean Bioenergy, the first of its kind to be held in Car ibbean an d certainly one

of the most strategic events that w as organized in Guyana.

The seminar was held on August 6 th and 7th , 2007 at the Guyana International

Conference Centre, 5 E Orchid Drive, Lilliendaal, ECD, Greater Georgetown, Guyana.

The key objectives of the Seminar w ere:

a. To disseminate the results of recent studies on Bio-energy in the Caribbean,including the p otential for regional carbon finance opportunities un der the Clean

Developm ent Mechanism (CDM);

b. To convey and formalize the regional efforts towards the development of the

Caribbean Renewable Energy, Energy Efficiency and Bio-energy Action Program

(CREBAP);

c. To initiate a d ialogue tow ards the organization an d prep aration of regionalagro-energy strategy, including bio-ethanol, bio-diesel and bagasse cogeneration

opportunities;

d. To facilitate dialogue between the public sector, private investors, carbonfinanciers and project developers interested in the Caribbean bio-energy

industry.

This report presents the principal papers, conclusions, comments, questions and

answers and recommend ations derived from the H igh Level Seminar held in Guyana in

Au gu st 2007.

Of all the countries in the Caribbean, Guyana presents the most immediate possibility

for the developmen t of a sustainable bio-fuel indu stry.

1.1.2 Participants

The organizers of the seminar managed to attract high-level representatives from the

governments, private sector, research institutions, universities and financial entities,

related to the bio-energy indu stry from the Caribbean countries of Guyana, Surinam e,

Jamaica, Barbados, Haiti, Belize, Dominican Republic, Saint Lucia and St Kitts and

Nevis, also Brazil, USA, Colombia, Mauritius, Asia an d Europ e.


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At the end of Day One, there were one hun dred and fifteen (115) participan ts present.

Day Two started with one hundred and twenty-three (123) and ended with one

hu nd red and forty-two (142).

1.1.3 Agenda

The agenda of the seminar and links to the presentations (click in the agenda) can be

found at: http://www.iadb.org/events/caricomseminar/.

1.2 Highlights of the Seminar

There w ere more than forty-five (45) presentations of outstanding technical information

about bio-energy opportunities for the Caribbean. A number of presentations also

emp hasized the p ossibilities of Guyana being a bio-fuel p rodu cer in th e region.

The following are selections of statements and ideas expressed during the seminar by

the presenters and p articipants:

a) The recent announcement of a target of 20% reduction of gasoline usage over the

next 20 years in the US and the ad vantages throu gh the Caribbean Basin Initiative

(CBI) provides Guyana and the Caribbean region with an enormous opportunity.

Up to 7% of total US ethanol consum ption can be imported u nd er the CBI without

import duties: this quota represents a potential export level for Caribbean countries

of 340 million gallons per year. That allocation is expected to reach 525 milliongallons by 2012, a threefold increase over the current level of Caribbean ethanol

exports to the US. However, the CBI agreement should not be seen as the only

alternative to facilitate the production of bio-fuels. The Caribbean region has

already learned the lessons with the ACP agreement in relation to preferential

prices for sugar, and the effect of that agreement today is an inefficient and

un comp etitive sugar indu stry.

b) As a condition for the development of a competitive, integrated Agro-energyindu stry that produces bio-fuels and sells the surp lus energy to the grid, measu res

must be taken to lower the costs of sugar production. Recent increases in ethanol

and sugar prices in non-subsidized markets create better possibilities for the sugarcane producing Caribbean countries; major improvements in productivity still need

to be made for long-run sustainability. In cases like Mauritius Island and Barbados,

in order to become competitive, a rationalization of factories was needed, that is to

say, fewer factories using the state of the art technology, capable of producing

ethanol, pow er, sugar and m olasses for the rum indu stry.

c) In order to have a viable bio-fuel/ cogeneration/ sugar indu stry, the agriculture

portion of the industry is essential. There has to be availability of raw material (i.e.

sugarcane, cassava, sugar beet, African palm, jatropha) at a competitive cost of


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production. The latter considers improvement of varieties, better irrigation

techniques, improvem ent of soil drainage an d remed iation an d strong incentives for

research and developm ent in the area of bio-fuels. In the case of suga r cane, themechanization for the harvesting of the sugarcane is a must; otherwise high labor

absenteeism in the cane field will increase production cost, hence reducing

competitiveness.

d) A viable agro-industry sector gives rise to the possibility of increased financialreturns on investmen ts related to the sugar cane indu stry through the sale of carbon

credits derived from the reductions on CO 2 emissions, as response to mitigation of

climate change in compliance with the Kyoto Protocol. These reductions can be

obtained, directly or indirectly, through the use of bioethanol and biodiesel

substituting gasoline and diesel respectively, cogeneration with bagasse and

methane abatement from bio-fuel wastewater treatment processes. Bundling ofprojects that can reduce CO2 emission can be an effective way to reduce transaction

cost, increase volum e of redu ced emissions and obtain a better pr ice for the certified

emission redu ction.

e) Guyana , together with Belize and Jamaica, are seen in the Caribbean as the coun tries

with the best potential for agro-energy. In the case of Guyana, there is a huge

potential for bio-fuel production because of natural advantages such as: its climate,

level of precipitation, availability of land without the need for deforestation or the

substitution of other food crops, a strong trad ition for sugar p rodu ction and a steady

policy to lower the production cost of sugar. The agro-energy potential of Guyana

could not only meet half of their energy requirements by cogeneration with bagasse,but also transform th e country in a n et bio-fuel exporter. However, this expansion

should neither threaten food security nor promote deforestation. Additionally,

access to ports and remoteness of locations could be also limiting factors for

production.

f) The launching of the Caribbean, Renewable Energy, Energy Efficiency andBioenergy Action Program (CREBAP), is definitely a first step, however m any more

must follow in order not lose the momentum achieved by the seminar. The agro-

energy policy of Guyana a s well as the agro-energy strategy for the Caribbean, to be

prepared under the CREBAP, is clear examples of the future actions required.

Moreover the government need s to establish targets, such as blending m and ates orpercentage of electricity generation with renewable sources. These targets should

have to be sup ported by national policies.

In his final remarks, Dr Chelston W Braithwaite, IICA Director General, reminded all

participan ts that the circumstances deman d th at we d o things in a different way.


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1.3 Next steps

The CREBAP was signed by the IADB, IICA, OAS, CARICOM1 and the GoG, sending a

message of collaborative work an d cooperation to the world.

However, this initiative will mean nothing if no action is taken to establish as soon as

possible a task force and prep are a w ork p lan in order to implement th e CREBAP.

The task force shou ld ad dress, at least the following issues:

Prepare an agr o-energy strategy for the Caribbean;

Prepare and ad opt an agro-energy policy for Guyana;

Negotiate with the European Union the possibility of accessing their market

with Caribbean bio-fuel;

Promote cogeneration with bagasse;

Promote and support renewable energy and energy efficiency in theCaribbean;

Provide the region with funding for research and development in bio-energy; and

Increase capacity building and transfer of technology in relation to bio-

energy.

The GoG has requested th e assistance of the Inter-American Developm ent Bank (IADB),through the Japan Special Fund (JSF), to improve the capacity of the Government to

better respond to project proposals related to non-traditional energy sources. The Bank

will be working in collaboration with the GoG during the coming months in the

preparation and execution of this technical cooperation, which will assist the GoG to

improve the capacity of the Government to screen (technically, economically, socially

and environmen tally) the p roject p roposals received.

Immediately following the Seminar and Day Three, an interim working group was

convened a t the IADB office in Gu yana to chart a road map for continu ance/ follow-up

of the outcome of the seminar. This working group consisted of the followingpersons/ organizations:

CARICOM/ GoG - Dr Suresh Narine

IICA - Dr Al Binger

Dr H Arlington D Chesney

Ms Una May Gordon

1CARICOM w ill sign the CREBAP, once that this institution consu lts and obtains the app roval of all

CARICOM mem ber states.


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IADB - Mr Christian Gischler

It was also agreed that th e CDB, the Caribbean Energy Inform ation System (CEIS) andthe CARICOM Community Climate Change Centre (5Cs) would be added to form a

task force once the w orking grou p d efines a Terms of Reference (TOR) and chart a p ath

to advance the strategy to be presented to the Commonwealth Heads of Government

(CHOG).


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2. THE SEMIN AR

The opening remarks were delivered by Mr. RobertPersaud, Honourable Minister of Agriculture in

Guyana . His presentation highlighted the following

points:

The Seminar was the first of its kind to be

organized. He pointed out the timeliness of the

Seminar and its importance for the Region to

harness the significant potential of bio-fuels, given

that Guyana had begun a programme to sup port the

development of agro-energy. He thanked the

collaborators for sponsorship of the Seminar, noting

that it was especially significant for agriculture-

based economies such as Guyana.

The goal of the Seminar was to d isseminate results

of studies done on Bio-Energy in the Caribbean, to

convey and formalize regional efforts towards the

developm ent of the CREBAP, to facilitate d iscussion

among public and private investors with a view to

the developm ent of the Caribbean.

Further stated that agro-energy and the productionof bio-fuels constitute an alternative that would

enable countries like Guyana to promote the

expansion and modernization of agriculture.

Pointed out too, re climatic concerns both regionally

and globally, that participation of the Region in the

agro-energy sector could significantly reduce

greenhouse gases through the use of cleaner bio-

fuels and wastes.

Posited that he was confident that Guyana would

emerge as the bio-capital of the region and

reiterated that the rationale for advocating greater

attention on bio-fuels was that this activity

promised to build economic resilience of countries

of the Region without too much dependence on

fossil fuel utilizat ion.

Session 1

Opening Ceremony


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Remarks were then made by Dr. Edwin Carrington, Secretary General of theCaribbean Community, who also extended a warm welcome and thanked the

team of collaborators for sponsoring the Seminar. His presentation placed theevent w ithin the context of regional energy and bio-fuel concerns.

Stated that the convening of this seminar was timely as there were two external

developments impacting on the Region at the moment, namely the escalation of

the oil crisis and the adjustment of the preferential policy on sugar, namely a 37%

decrease in sugar prices.

Mentioned that the political tensions in the Middle East, international political

instability and increase in the global deman d for oil have together resulted in the

high volatility in the price of petroleum .

Further stated that the Region was economically vulnerable because of its highdependence on fossil fuels for its energy needs, resulting in a drain of foreign

exchange and its ensuing p roblems.

Stated that there was opportunity for the Region to use forms of renewable bio-

fuels, emphasizing that this had to be a p riority for the Caribbean.

Stated that some member states had already started using forms of renewable

energy.

Cautioned that the policies must be carefully considered, that there should be asystematic integration of the agri sector with the energy sector and that there

shou ld be a pooling of bio-energy resour ces to maximize the benefits to the region.

He h inted that the goal of the seminar w as to discover ways in wh ich the barriers

to the increased use of bio-energy could be removed, where the Caribbean could

be released from the stranglehold of increasing oil prices, where a regional policy

for the Region could be implemented, thereby enhancing the bio-energy prospects

of the Caribbean and in the long run safeguarding the local and global

environment.

Mr. Luis Alberto Moreno, President of the Inter-American Development Bank

(IADB), provided an overview of opportunities to consolidate a Caribbean

Regional App roach for Bio-fuels and Sustainable Energy.

Outlined the instruments that the Bank has put in place to support the differentinitiatives of the Region. Stated that the Bank is likely to initiate private bio-fuel

investments and cogeneration in Guyana through a US$850,000 funding provided

by Japan.


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Referred to the Regions total dependence on fossil fuels and the critical situationin the sugar policy. Pointed out that each member state had its own unique

circumstances, hence bio-fuel production provided an attractive investmentopportunity.

Stressed that the debate on bio-fuels and ethanol expansion was timely and

pointed out the need for ethanol expansion to meet domestic needs, stating that

bio-fuel policies were most attractive for the Caribbean, creating bigger

investments and more job opp ortunities.

Intimated that two approaches could be tried, namely a conservative approach

whereby the country could replace 10% of its current gasoline by investing just

US$6.5 million dollars in a single ethanol plant. Such an investment would save

Guyana millions on imported gasoline. A more ambitious approach would be

where promotion of bio-fuels could help to modernize the industrial sector of

Guyana by simultaneously producing sugar ethanol and electricity for both

domestic and export markets.

Emphasized that w ith v isionary leadership, there was the p ossibility that Guyan a

could become the first country in the world to meet half of its electricity demands

through cogeneration production of ethanol and at the same time produce sugar

for export. Stated that in terms of transportation fuel needs, the country could

become the first in the world to use ethanol and biodiesel from home grown

prod uce. Stated that given the growing d emand for ethanol and bio-fuel in the EUand USA, there was every reason to believe that Guyana could become a fuel

exporter.

Stated that Guyan a had the potential to develop a new su gar cane ind ustry wh ichproduces sugar, ethanol and electricity for both domestic and foreign markets.

Pointed out, that in Guyana the resources were there land, water, climate, no

need for new plantations and that the creation of this industry - could attract

foreign investment, resulting in new jobs, generate foreign exchange which could

be spent on enh ancing social services and oth er priorities.

Stated that Guyana is benefiting from IADB-administered technical cooperation

program me th at w ill provide funds to evaluate bio-energy p roject p roposals which

will help to boost private investment in areas such as bio-fuel production and

cogeneration w ith biomass.

Mentioned that there would be risks and uncertainties but that a bold andambitious approach had to be considered. Stated that the IADB was flexible

because the u nique circumstances of each country called for uniqu e solutions.


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Stressed the need for a bio-energy action programme but suggested that the firststep w as financing stud ies that w ould give an insight on the economic, technical

and environmental feasibility of bio-fuels and other renewable sources, such aswind an d solar power.

Stated that the IADB wou ld soon commence disbursements of grants and loans to

finance project preparation activities. Intimated that the Bank was making

provision of US$300 million in lending and technical assistance for renewable

energy and energy efficient projects through out the region w ith emphasis on small

scale investmen t.

Reiterated that the IADB was ready and willing to assist in each stage of the

process from preliminary studies all the way to the necessary financing for large-

scale production facilities.

Conclud ed that renewable energy and bio-fuel production were rapidly expand ingand that the signing of the Memorandum of Understanding (MoU) provided the

framework for collaboration to make renewable energy the engine of developmen t

for the Caribbean and th e Hemisph ere as a whole.

Dr Chelston W.D. Brathwaite, Director General of the Inter-American Institute

for Cooperation on Agricultu re (IICA) un derscored his presentation, showing the

opp ortun ities for agriculture th rough an agro-energy strategy for the Caribbean.

Began by stressing the importance of the Jagdeo Initiative and IICAs support of

the Initiative vis--vis growing food concerns.

Stated that with regard to the food/ fuel debate, there was a dilemma emerging

since there was the increased p rod uction of corn for feedstock in the US. Added

that this debate could be less controversial once the private sector and

governments become engaged in developing bio-fuel policies at the national level.

Stressed the need for development of the agro-energy possibilities in the Region

and mentioned that IICA believed that agro-energy wou ld help in the redu ction ofpoverty, since it was contributing to crime which could undermine development

efforts.

Stated that all member states with the exception of Trinidad and Tobago were

dependable on the importation of fossil fuels and were facing adverse economic

expansion because of the almost 300% increase in oil prices and the decline in

sugar p rices.


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Posited that some countries have taken initiatives using indigenous renewableenergy resources.

Pointed ou t the need for a legal framew ork for ethanol production for its use and

also for the sale of bio-fuels.

Stressed the need for financing, dissemination of information, discussion and

strategy for facilitating h orizontal collabora tion in the promotion of bio-fuels.

Emphasized the potential of renewable energy resources of the Region and theneed for an Agro-energy Developm ent Fund .

Pointed ou t that p olicies mu st not only be u rban-oriented bu t rural concerns mu stalso be add ressed.

Conclud ed that the Region should engage in agro -energy p olicies based on goodsense and that the expansion of such policies should be undertaken, but not at the

detriment of food security. Food security must be prioritized and its sustainability

considered even as renew able energy resources are developed.

Amb assador Albert R. Ramd in, Assistant Secretary General of the O rganisation

of American States (OAS) reiterated the Regions situation as a resu lt of escalating

oil prices and decline in sugar prices.

Pointed out that Guyana had land resources and potential for Bio-energydevelopment.

Stressed that wh ile mu ltilateral efforts were important and needed , there was theneed for member states of the OAS and CARICOM to strengthen efforts at the

bilateral level among themselves through sincere and dedicated commitments at

the highest political levels so as to facilitate better use of opportunities in the

development of bio-energy resources.

Stressed the need to pool resources, develop synergies between the sugar caneindustry and the energy sector and to work together to support the needs of the

Caribbean in the emerging bio-energy sector.

Posited tha t one canno t ignore the potential for goods and services and the social

and economic benefits that can accrue from the expan sion of such a p olicy.

Cautioned that expansion must not threaten food security and must be situated

within the context of global warming. Need to examine concerns and

considerations such expan sion w ould engender.


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Stressed OASs commitment to efforts aimed at enabling the Caribbean to d evelopa sustainable energy initiative.

President Jagdeo in his presentation stressed his optimism at the p rospect Guyana

holds and intimated that the Government was committed to pursuing bio-energy

opportunities. Expressed his appreciation for the role of the IADB in the energy

security issue in the Region.

President Jagdeo highlighted that there were issues that needed consideration,

taking into account bio-fuel and renew able energy vis--vis rising fossil fuel prices.

Stated that rising oil prices had moved the issue of energy security from a sectoral

level to a macroeconomic level.

Mentioned that the focus should be strategic rather than tactical. It should not be

based on a short-term solution to the h igh fuel cost. He intimated the situation in

Brazil is ind icative of the approach tha t he had mentioned earlier. Brazil used th e

strategic approach and at the beginning it was not competitive, but the

Government p rovided su pp ort in terms of subsidies and other incentives. Today it

is a viable indu stry.

Expressed the hope that as the Caribbean crafted its bio-energy fuel policy,developed countries and multilateral financial institutions that were averse to

subsidies would recognize the need for some form of subsidy in order for the

sector to star t off.

Urged participants to consider bio-fuels within the context of climate change,

pointing out that the Region needed to re-examine the Kyoto Protocol, which

provided assistance for those countries that cut down trees and replanted them,

but gave none to those who keep their forests. Further stated tha t it was critical for

the Region to highlight climate change as the Caribbean w as extremely vu lnerable.

Stated that while the debate on the move to bio-fuels is underscoring adverse

effects, in Guyanas case there would be no need to fell trees and displace land

currently used for food p rodu ction. Pointed out that the Region w as a net importerof food and as the bio-fuel sector developed, land and water resources would be

critical issues competing with food prod uction and food security.

Urged that the discussion be moved to the next stage. Guyana had a draft

docum ent in wh ich w as highlighted the kind of infrastructural supp ort needed to

be in place such as transportation for export of bio-fuel, taxation policies and

legislative fram ework.


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Expressed the hope that the Seminar, while exploring all opportunities, wouldfocus on the practical considerations for moving the sector forward in those

countries that h ave already considered this as the way forward .


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See Append ix II: Memorandu m of Understand ing

Signatories:

The Caribbean Com mu nity Secretariat (CCS)

The Inter-American Development Bank (IDB)

The Inter-American Institute for Cooperation on

Agricultu re (IICA)

The Organ ization of American States (OAS)

The Government of the Co-operative Republic of

Guyana (GoG)

Session II

Signature of a

Memorandum of

Understanding

(MOU) and

Launching of theCaribbean Renewable

Energy, Energy

Efficient and Bio-

energy Action

Programme

(CREBAP)


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Professor Albert Binger, who was referred to as the

Pioneer of Renew able Energy considered the Regional Bio-

energy Market in the context of the Presidents featureaddress.

He pinpointed that the developmental issues facing

the Caribbean, as well as globally, were:

o Population

o Watero Energy

o Environment

Stated that there were also issues of the high level of

Petroleum consump tion, issue of integrating energy

with Agriculture (food deficits), climate chan ge, all of

wh ich w ere linked to the Energy sector.

Pinpointed that quality of life for peoples of the

Caribbean was proportional to the availability of

energy, which could be translated into goods and

services.

Stated that the Caribbean was faced with amultiplicity of energy-related problems - high

dependence on fossil fuels for

transporta tion/ electricity and a food d eficit in excess

of ten (10) billion dollars.

Suggested that bio-fuel, if adequate, can besubstituted in almost any area of pu rpose, that bio-

fuel had the potential to substitute and subsidize just

about any fuel there was on the market.

With regard to electricity, the Caribbean has

tremendous potential given that electricity can be

generated from biomass of several kinds, such as

wood, garbage and bagasse. Stated that in Guyana,

garbage was identified as a p roblem bu t it was not so

since it constituted an efficient source of electricity,

even surp lus electricity.

Binger noted that fossil was not a renewable source,

Session III

Presentation of Bio-

Energy Studies in the

Caribbean

Moderat or:Dr. H. Arlingt on D.

Chesney

Inter-American Inst itu te for

Cooperation in Agriculture


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thu s any renew able source of fuel was marketable.

Reiterated the need for the Region to reduce dependence on fossil fuels andembrace wind , solar, ocean an d geothermal resources.

Posited that the market depended on choices made elsewhere; must have a

synergy more than one application.

Stressed the need to push en ergy efficiency.

Pinpointed that the market was u ntap ped , as well as its capabilities for the use and

expansion of bio-fuel.

There was n eed to look at techniques and take sugar cane to a higher level, since

cane was resilient. Different varieties of sugar cane would yield greater biomass,

thus the market for bio-fuel had great potential.

Dr. Orlan do Jimenez, IADBConsultant in his presentation on Expanding Bio-fuel

Operations in Barbados, Jamaica and Guyana pointed out that this was the way

forward for the Region. The studies carried out a financial and technical

assessment of the potential for sugar cane based on ethanol prod uction.

Considered the prod uction of ethanol from bagasse. He p osited that considerationmu st be given to be issues, such as:

Is there market potential?

Who will sup ply such a demand ?

Investment made must be viable, there must be a connection between supply and

demand , must consider the gap based on sup ply and deman d expectations in each of

the countries.

The general picture was that the investment seemed attractive, but there was need to

stud y all the inherent factors so that the best p lan of action could be imp lemented.

Mr. Manlio Covielo, ECLAC considered the bio-fuel potential of Guyana and

Jamaica.

In an overview, the assessment of poten tial revealed these factors:-

1. Transition to a new energy era was linked to the skyrocketing of energyconsumption.


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2. Expan sion an d use of bio- fuel and ethanol in the w orld w as linked to rising oilprices.

Stated that there were opportunities and challenges for Bio-fuel and ethanol in the

world.

There was the challenge of the energy sector vis--vis the agricultur e sector.

Need for bio-diversity, balance of food reserves vs. bio-energy.

The world ethanol produ ction was high in US, wh ereas in th e EU, there was a slowtake-off for bio-fuel consum pt ion

How ever, there was an opportun ity for ethanol prod uction.

In Jamaica, there w as possibility for Bagasse cogeneration w hich w ould genera te

more than 110 kWh.

There was also place for ethanol and this wou ld p rovide surp lus electricity.

Recommended for Jamaica a long-term energy policy, low interest credit or income

tax rebates, strength ening of political capacities in interna tional p rogram mes and

that Jamaica need ed to take the opp ortun ity to use CDM financing.

In the case of Guyana, the m ajor issue w as the d epend ence on oil imp ortation; hencethe assessment of ethanol potential was g ood.

Stated that p otential for fuel from m olasses was the more viable one.

In terms of the bio-energy options, there was rice whose waste (rice husks) could

prod uce fuels, also the waste from w ood (sawdust and wood shavings).

Guyana had good conditions for the development of the bio-fuel sector and hence

the next steps were to seek financial support, expand studies on bio-energy,

understand market development options and organise workshops to discuss

measures to be implemented .

The final speaker in this section was Dr. Oudho Homenauth , Director of the

National Agricultural Research Institute (NARI), whose presentation was titled

Production of Agro-Energy Feedstock in Guyana.

In light of Guyanas high dependence on petroleum, diesel fuel and gasolineimp ortation, there was need for the coun try to find alternative energy r esources.

Use was therefore made of indigenous material, such as sugar cane, oil seed,

coconut, oil palm, japtropha, molasses, bagasse, wood waste and also considered

was the possibility of man ufacturing b iogas from raw man ure.

From the forest, energy could also be derived from firewood, coal and briquettes.


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He further pointed out that ethanol could be derived from sugar cane as well asfrom molasses, thu s seeing Gu yana as a poten tial exporter of bio-fuel.

Through substitution of diesel, there was a possibility of generating biodiesel in thefollowing w ays:

o Using g lycerol if amalgamated with saw du st, with the p otential to replace logsas a fuel source.

o Vegetable and animal fats, e.g. coconut could be used for biodiesel production,oil palm biodiesel, coconut fuel for compression ignition engines without

conversion to biod iesel (still untested ), jatrop ha - biodiesel.

In term s of cogeneration , the following possibilities exist:

Cogeneration with bagasse (e.g. provision of a constant supply of power in the case

of a factory in the Berbice area).

Use of rice waste, wood waste.

Cow manure for biogas (IICA Project at St. Stanislaus Farm - used for householdconsum ption, as well as for pow erin g machines for milking cows).

In view of Guyanas available land, enabling environment and interest in

investment, potential exists for Guyana to become a major player in the next 3-5

years.

This presentation elicited the following comm ent:

Given the existence of only small-scale economies in Guyana and the Caribbean, there was

not enough critical mass for effective entry into the bio-energy market, thus there was a need

to look at new technology which would facilitate smaller plants.

Clarification was sought on the willingness to pay in view of the tax attracted by

petroleum and the response was that all the costs incurred and expected profit

needed to be considered and the narrow er the gap, the more viable the investment,

failing which an assessment would need to be made as to the feasibility of

investment.


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Mr. Ronald Alli, Chairman of the Guyana Sugar

Corporation gave an overview of the sugar ind ustry in the

Region. He noted that it has been aroun d for 300 years and

was fairly stable and intact, until recently, due to escalation

of fuel prices and cuts in p referential policy affecting su gar.

These challenges have provided the opportunity forbio-fuel expansion in the Region.

Cited the case of Brazil, whose readjustment camemuch earlier, resulting in their ability to export ethanol

and their unenviable position as a top producer and

exporter of ethanol.

Existing trends are tending towards the production ofbio-fuels with a view to reducing dependence on

imported fuels.

This trend can also be seen in term s of taking ad vantageof the existing ethan ol markets.

The CBI is the trade framework for facilitating exports

of ethanol into the US market, e.g. du ty-free treatmen t if

50% of raw material can be resourced into the

Caribbean, or up to 7% regardless of source of raw

material. There is a vast opportunity for the development of

ethanol, increased prod uction, thu s the Region is urged

to take ad van tage of the US duty-free concessions.

Caution expressed w ith respect to the routes of origin of

the raw ma terial.

Mr. Aub yn St. Hill, Director of the Develop men t Bank of

Jamaica, spoke on Caribbean Bio-fuels Good Funding

Opportunities.

Began w ith anecdote, stating that during h is youth, the

colour green signified the colour of trees, whereas now,

green represents money which could be had from

investment in bio-fuel production, hence, the Green

Investment.

Session IV

Round Table with

Sugar/Ethanol Project

Developers and

Opportunities for the

Private Sector

Regional and

International Trends

of Sugar and Bio-fuel

Production

Moderator:

Mr. Rona ld All i

Chairman of Guyana Sugar

Corporation


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Referred to a major move in Jamaica, by the Billion Gallon Club three (3)comp anies which joined forces to produce one (1) billion gallons of ethan ol.

Why this move? The market was viable, hence the investment was sound . Marketfinan cing an d tax incentives were also available.

Consideration had to be given to the global corporations in defining a nationalpolicy.

What w as behind the sustainability of the Green Investment? It protected nationalsecurity interests and lessened the need for depend ence on fossil fuels.

To date, this ethanol p lant has su rpassed all expectations, having grow n in terms ofthe investment.

Strongly urged Caribbean investors not to miss this opportunity, since there ismon ey to be had from investing in bio-fuel prod uction.

Mr. Lindslay Holder, Chairman of the Barbados Agricultural Management

Company on the topic The Sugar Cane Industry in Barbados as a Source of Renewable

Energy:

Began by describing the challenges faced by the industry in Barbados, namely

decreasing acreages, declining yield of cane in term s of cane/ sugar prod uction ratio,

old, inefficient sugar factories, increased labou r costs, cut in p rices for sugar.

Further stated that the industry has been unprofitable since 1956 owing to itsdep endence on government subsidies, thus restructuring w as intensified to prevent

this dependence on subsidies for an industry which was not generating enough

profits.

After a feasibility study, a decision was made to shift from sugar to sugar cane, andto use sugar molasses to produce ethan ol for electricity.

He examined the objectives for preservation of the agri sector:

Ensure that agri sector was the most viable source of econom ic activity.

Countryside must be maintained in consonance with the environment - best

practices used to achieve the overall macroeconom ic goals for the island .

Maximize econom ic returns from bagasse genera ted from m illing of cane to prod uce

electricity for export to national grid and reduce depend ence on fossil fuels.

Two (2) components of project were the sugar cane process and agronomic andagricultural best practices (cultivation of high -fibre cane and fuel cane).

Sugar indu stry in Barbados was ind eed a v iable enterprise.


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Mr. Nick Jackson, Ch ief Executive O fficer, GUYSUCO :

Gave a historical review of the sugar cane industry of Guyana and the challengesfaced presently, noted the move to the Skeldon Modernisation Project, and the scope

it offers for the bio-fuel ind ustry.

Modern factory is competitive on the world market, will generate power up to 40kV, export up to 15 MW and has registered carbon credits through the World Bank.

After feasibility study undertaken, new cultivation of 50,000 ha, increased ethanolproduction, possibility of use of fallow crop for biod iesel prod uction (e.g. soya), use

of different varieties of sugar cane.

Viability of industry illustrated by interest shown by investment companies in

Jamaica, Israel, USA and Brazil. Some of the challenges faced by the project are port facilities, remoteness of the

location and skills and workforce availability.

Strong hope for viability of project in view of land and water availability, years of

experience with sugar and being strategically placed with respect to du ty-free access

throu gh the Caribbean Basin Initiative.

Mr. Oneil Tabar, Bio-fuel Director, National Energy Commission of the

Dominican Repu blic on the topic Opportunities for Sugar, Ethanol Project Developers

in the Dominican Republic:

Having given a brief overview of the existing energy resources (wind, solar, hydro,

biomass), he explained that the reason for his optimism was that the cost for

renew able technology was decreasing while that for fossil fuels was ever-increasing.

Government eliminated the mills (16 in number) and converted them to privateagroenterprises in order to increase their efficiency, by developing programmes that

wou ld optimize opportu nities for sugar ethanol production.

Mr. Arlan Lecorps, Bioenergy Com mission of Haiti:

Provided an insight into the situation in Haiti, namely that bioenergy was a new

concept for Haiti.

Many proposals were received from companies for land and for preferential

treatment.

However, in view of the lack of information and illiteracy of the populace, the

Bioenergy Commission was created within the Ministry of Agriculture to look into

the viability of this undertaking (legal framework, policy, management capacity,

strategy ethanol or biodiesel or both).


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This process is continuing and fund ing is being sou ght from the IADB.

Mr. Lennox Neal, Belize Sugar Industry Ltd on Investment Opportunit ies inBioenergy in Belize:

Indu stry is comp letely p rivately ow ned (8,000 farmers supp lying su gar cane over anarea w hich is mostly un suitable for cane). This is because 30% of the su itable agri

lands are in reserves, wh ich are u sed in the tou rism sector.

Up to two (2) years ago , oil was imp orted , but after discovery of oil in the coun try, it

is now possible to export, thu s balancing their energy n eeds.

In spite of the p resence of oil, there is still imp ortation of d ifferent fuels and gas.

Measures have been taken for energy imp ort substitution and energy exportation. In concluding, he stated that investment opportunities should be export-oriented,

should look at electricity from biomass, bagasse, glyricidea, eucalyptus, alcohol

production from sugar cane molasses, biodiesel from oil seeds and palm oil, and

palletized fuels.

Mr. Arnaldo Vieira de Carvalho, IADB on the Mesoamerican Ethanol Group:

In view of the oil escalation p rices, ten (10) countries came together to p romote andstimulate bio-fuel production and started initiatives to tap the hydroelectric

potential of the Region.

In 2005, resources were d iversified and oth er alternatives w ere looked at.

Countries exchanged experiences and facilitated decisionmaking at the level ofenergy, finance and agriculture.

Next step is to examine the options Colombia is using, through consultancies andselect the m ost suitable scenario.

Mr. Fenton Sands, Director, USAID on the US Energy Policy and Caribbean

Cooperation:

In keeping with USAID policy, he stressed th e importance of accessing energy , sinceit is a key enabler of growth .

Policy is to use every tool to advance their energy security.

Leadership roles taken with multinational agencies to promote their respective

energy investments.

In terms of the Caribbean, their ap proach w as to exploit the bio-fuel market as m uchas possible, in collaboration w ith the US.


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Haiti and El Salvador were targ eted coun tries where the possibility of reducing theirdependency, stimulating economic growth and ensure sustainable development

with regard to the bio-fuel indu stry. The US is moving forward in terms of agreement on specific quantities, prospects for

stability in th e environm ent an d private sector capital.

Mr. Jeffrey Izzo, Energy Officer, Bureau of Economics, Energy and Business

Affairs on US International Energy Policy and Bio-fuels Diplomacy:

Provided an insight into US energy p olicy and the d riving force behind the energy

market.

In spite of the challenges facing the oil market, e.g. rising demand for oil andgeopolitical concerns, lack of surplus production, the US demand for energy has not

decreased.

However, the Caribbean has had to look for alternative sources of energy, and theUS is trying to help. They have developed energy p olicy pillars, facilitating

engagement with allies, producers, consumers, NGOs bilaterally and multilaterally.

The policy pillars are intended to diversify suppliers and expand production

through open markets, and d iversify energy types, with a view to promoting energy

efficiency.

Attempts have been made to broaden the base through feasibility studies, but thebottleneck is the d ifficulty in stimulating pr ivate sector investment.

The Hemispheric Bio-fuels Partnership has been established with the following

advantages:

Most oil-dep endent countries can g row a p ortion of their own energy, resulting

in improvem ent of emissions and creation of jobs.

This partnership en abled great p otential for biodiesel prod uction.

The US is continually engaged in encouraging greater investment with Saudi

Arabia and d ialogue w ith other key produ cers, e.g. Canad a and the EU.

Some concerns include the destabilizing effects of oil money, the CaspianEnergy Agency, Chinas cooperative mechanisms, clean technologies and the

International Energy Agency.

Energy efficiency and conservation is grow ing as a p ublic concern, since the oil

market is unpredictable and the USs dependence, driven by transportation

demands, continues to grow.


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The policy goals of diversity in fuel sources and types of energy conservationand efficiency, protection of infrastructure and expansion of strategic reserves

mu st be established . Bio-fuels and increased auto-efficiency are the logical policy responses to the

USs oil depen dence.

Mr. Brian Dean , Executive D irector, Inter-American Ethan ol Com mission on the

Potential for the US-Brazil Bio-fuels Partnership:

This collaborative relationship was cemented between the US and Brazil to explore

the p otential for the US marketplace.

There is a need for stand ard ization and collaboration in this partnership.

In 2009 Brazil, because of its huge land mass, will look at th e prod uction of cellulosic

ethan ol (from corn).

Cautioned tha t the partnership shou ld be strategic and not tactical.

The partners must collectively move forward to forge a framework for free trade,

ensuring su ccess and prosperity w hile the m arket is evolving.

Energy diversity and energy security w ere factors that had to be kept in p erspective,and the key to success was ethanol d iversity.

Sheld on M cLean, Trade Policy Adviser for CARICOM on Bioenergy Opportunities

within the Context of the Development Dimension of Trade Agreements:

In view of the d isman tling of p referential market access arrangements and prod uct

displacement, the Doha Development Agenda was established, the rationale being

recognition of the potential role of international trade in fostering economic

developm ent and alleviating p overty.

He pinpointed some of the global trends, e.g. the EUs goal of achieving 12% ofprimary energy p rodu ction from renewable energy sources by 2012 and the USAs

target of replacing at least 25% of its petroleum use by 2025.

Issues raised :

Suggested use of cooking gas, which w as cheaper to run for transport and dom esticuse.

Criteria for foreign investment make them as attractive as possible, but with somereserve in v iew of political imp lications, tha t is sale of land vs. lease.


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In restructuring of domestic industry, how should labour costs and field costs bedefined?

The response to this question w as that if a modern facility is pu t in place, that w ouldinvolve more autom ation, thus there wou ld be some control over labour costs.

Need to ad dress p olicy, domestic, regional and hemisph eric issues.

Matrix of issues consid er viability of efforts of the bio-fuel initiative.

The trade issue highlighted the fact that the US market was available for theexporting of ethanol. Is it that our Regional Programm e was w orking solely for

exports, with no consideration for imp orts? The response was that there was need

to assess the implications inherent in accessing the US market, while making every

effort to ensu re that d omestic consum ption is enhanced .

The approach must be a strategic one, taking into account all the varying sectors,

with their peculiarities and concerns, and making a h olistic assessment.

Reliance on ethanol exporta tion to the detriment of sugar prod uction. If no exports,

wh ere does the money come from to sustain the ind ustry.

Cost-effectiveness of ethanol p roduction for export in term s of labour .

Responses:

Look at ethanol p rodu ction and all its capabilities and not cloud ones vision w ithnegative attitud es, but do not m iss the op portu nity to join in the ethan ol race, since

there is mon ey to be had.

Way Forward :

Efforts must be directed towards alleviation of poverty and modernization of the

agri sector throu gh a nexus biomass prod uct.

Conclusion:

The need for appropriate compensatory and adjustment mechanisms, a broad-package technical cooperation, access to investment capital on incentive terms and

presence of a legal and regu latory framew ork.


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Dr. Kassiap Deepchand, Mauritius Sugar Authority on

Cogenerated Electricity Export from an integrated sugar

cane ind ustry exporter in Maur itius.

Provided an historical overview and listed four (4)

points governing the country policy, namely the Sugar

Sector Reform (the Sugar Can e Cluster).

Cogenerated Energy from Bagasse simultaneous

production of electricity and steam in a single power

plant; represents a saving when compared to separate

regeneration of electricity.

Sugar Reform Initiatives and Bagasse Energy - eleven

(11) sugar factories where 1.7m tons of bagasseproduced annually, and three (3) categories of Bagasse

Energy and Environment.

Existence of four (4) clusters in four (4) geographicareas. Prod uction of: raw special, white and industrial

sugar, electricity from bagasse and coal, ethanol from

molasses and even tually cane ju ice. Energy viability of

investment in these clusters.

The reform is on-going, w ith developm ent of a bagasse

energy programme. Conclusion of bagasse coalpower purchase:

o Multi-annual adaptation strategy, with targetsbeing set for production, generation of electricity

from bagasse, and ethanol.

o Bagasse-based electricity was a high priority in the

sugar sector reform, and this plan could be easily

replicated in the sugar cane ind ustry worldwide.

Dr. Jorge Bendeck, Executive President, Bio-fuelFederation of Colombia on Present and Future of Bio-fuels

in Colombia:

Plant operations to prod uce alcohol from sugar cane.

Contemplating u sing yu cca to p rodu ce alcohol.

Need to prod uce new plants produ cing enough alcohol

for domestic use and export.

Stressed the need for investment in agriculture and

Session V

Achieving

Competitiveness in

Sugar/Bio-fuel

Production through

Value-Added Products

Moderator:

Mr. Juan Pablo Bonil la

IDB-SECCI Coordinator


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processing p lants, including legal framew ork and perm anency gu arantees, resulting

in a significant increase in employmen t op portu nities, particularly in rural a reas.

In terms of biod iesel, potential exists for the African, both for domestic consum ptionand export. At the moment, there are n ine (9) plants under construction, includ ing

four (4) for biodiesel production, which will enhance employment both directly and

indirectly.

Mr. Curtis Moh amm ed, Angostura Ltd, Trinidad & Tobago: Dehydrant Plant using

the CBI A greement for Ethanol Export:

Potential for ethanol p rodu ction seen and TBTL Group ing took ad vantage of marketby setting u p d ehyd ration plant using the CBI.

Encouragement to Regions to make u se of the CBI initiative.

Dr. Suresh Narine, Director, Institute of Applied Science and Technology of

Gu yana, on Biodiesel Production in Guyana:

Explained situation in Guyana small population, levels of poverty, limitedcapitalization, aging fleet of vehicles and projection of end of oil by 2025, increased

dem and for crud e oil.

Went ahead and looked at feasibility of prod ucing biodiesel in Gu yana.

Have also tried out biod iesel in vehicles and have n oted n o ma jor issues.

Anoth er possibility therefore exists re feasibility of biod iesel prod uction in Gu yana.

Potential not on ly limited to bio-fuels bu t also to cosmetics and lubr icants.

Mr. Wash ington Silva, EMBRAPA, Bio-fuels Production of the Nor th -East of Brazil:

Brazils agro-energy p latforms are biod iesel, ethan ol, energetic forests and residu es.

Flexfuel vehicles (coexistence of ethanol and diesel). Programmes envisaged are production of hydrous ethanol and more flexfuel

vehicles.

Exper imenting with feedstock, but this is not qu ite lucrative, corn, beet.

Agro section is not comprom ised because land could be rotated.

Cogeneration w ith sugar cane bagasse.

Ninety (90) new factories prop osed in an effort to boost Brazils bio-fuel production.

Looking into th e prod uction of vinasses (food fertilizers).


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In the highlight s, i t w as recogniz ed t hat:

A high benchmark was set for the rest of meeting by the

deliveries in the opening session, especially the address

given by His Excellency the President of the Republic of

Guyana, Bharrat Jagdeo.

A Memorandu m of Understanding was signed launching

the CREBAP.

In the presentations and discussions that took place a

nu mber of issues and observations were highlighted.

These includ e, among oth ers:

The need to ad dress global policy issues.

The need for a new Kyoto Protocol that does

not penalize countries for efforts to conserve

their forests.

The development of bio-fuels provided an

opportunity to promote development and

change trade patterns.

The need for a h olistic app roach to developing

bio-fuels, considering that food production

shou ld not be sacrificed for the sake of energy .

That environmental considerations are key, aswell as sustainability and socio-economic

issues.

That the exchange of experiences is vital.

That strategic vision was also important. One

cannot expect results in the short term.

That production facilities should be integrated.

That quality plann ing was required.

The work of the Institute for Applied Science

and Techn ology (IAST) of Guyana showed how

Session VI

Highlights of

Preceding Day One -

Carlos Echevera, IICA


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countries can start to work with limited resources, relying on their own

capabilities, using mod erate technology. The challenge was to keep up the

work and rep rodu ce the mod el. The question now is how to transfer this intobest p ractices.


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Prospects for Ethanol in Guyana Mr. Harold Davis,

Director Agriculture Research Centre, Guyana Sugar

Corporation (GUYSUCO)

Mr. Davis expressed the hop e that the seminar marked the

beginning of the maturing of the sugar industry. He

outlined the available feedstock: rice, cassava and sweet

potato bu t said that sugar cane offers the best p rospects.

His presentation covered the prevailing conditions in the

Caribbean sugar indu stry that necessitate becoming more

competitive including bringing down the costs of

production, expanding the industry and increasing

productivity and efficiency.

He outlined strategies being pursued by GUYSUCO to

add ress these issues. These included , among other things,

increasing yields and reducing production costs and

construction of a new 8,400 ton mill to produce refined

sugar w ith co-generation of 10 MW.

He outlined the market prospects of ethanol, taking the

view of sugar cane as an energy crop. The ethanol market

is grow ing. Projected world ou tpu t of ethan ol in 2015 is115 billion ton s, compared with 49 billion ton s in 2006.

Dr. Davis presented some considerations for ethanol

production and outlined current research and

development contributions such as development of

multipurpose sugar cane and high sucrose and high fibre

varieties.

Renewable Energy in Caribbean Countries Joseph

OLall, Chief Executive O fficer, Gu yana Energy Agency

Mr. OLall was of the opinion that the CARICOM

countries could not afford to the insular in their approach

to energy . He spoke of the rising price for gasoline which

was projected to reach US$100 per barrel by the end of

2007. This wou ld make every CARICOM coun try poor.

He indicated that his agency had been approached by a

Trinidad and Tobago company regarding the

Session VII

Building an A gro-

energy Strategy for

the Caribbean

Moderat or:Mr. Ricardo Vargas Del

Valle

Agriculture Specialist, IADB


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establishment of a hydroelectricity plant to supply energy to Trinidad and Tobago by

an un derw ater cable. He could see this moving toward a natural gas cable to feed

energy to other CARICOM countries.

He urged participants to look at how to gear the industries of the region to accept

ethanol as a source of power rather than concentrating on the ethanol export market.

Agro-energy Policy of Guyana Dr. Suresh Narine, Director, Institute of

App lied Science and Techn ology

Dr. Narine stated that it was recognized that development of the agro-energy in

Guyana would requ ire significant and long term investmen t of capital. As such, it

wou ld be imp ortant to articulate a vision as well as a strategy and a p olicy to achieve

that v ision..

A draft agro-energy policy had been p repared an d this twen ty (20) page d ocument w as

expected to go to Cabinet for d iscussion shortly. The draft policy sets out the vision and

scope of where the country w ould like to go with regard to this sector. This included

agro-energy making u p 65% of the coun trys energy m atrix by 2020.

The draft policy sets out three (3) main pillars for growth in the sector: value creation,

competitive un derstand ing and market technologies.

The draft policy attemp ts to ad dress a nu mber of issues and questions includ ing:

How to build capacity?

What techn ologies to invest in?

What w ill be the prod uct and p ricing strategy?

What markets to add ress?

Dr. Narine p resented opp ortunities w ithin the Guyana agro-energy p ortfolio includ ing

sugar cane, oil crops, agricultura l and mu nicipa l wastes. He told participants that they

need to pick the low hanging fruits. In the case of Guyana it was poised for ethanol

prod ucts from sugar cane.

Some gu iding principles had been developed in the policy document. For example, the

sector would not be developed at the expense of food production or protected forest

areas and wou ld not be subsidized by the government.

Dr N arine indicated that the Governm ent realizes policies and regulations on land use.

Taxation, environmen tal stand ards will need to be mod ified or streamlined to support

developm ent of the agro-energy indu stry. Land u se is central to this endeavou r.


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Prospects for Ethanol in Guyana Mr. Harold Davis, Director Agriculture

Research Cen tre, Guyan a Sugar Corporation (GUYSUCO)

Mr. Davis expressed the hope that the seminar marked the beginning of the maturing

the sugar ind ustry. He outlined the available feedstock: rice, cassava and sweet potato

but said that sugar cane offers the best prospects.

His presentation covered the prevailing conditions in the Caribbean sugar industry

that necessitate becoming more competitive including bringing down the costs of

prod uction, expand ing the industry and increasing p rodu ctivity and efficiency.

He ou tlined strategies being p ursu ed by GUYSUCO to add ress these issues. These

included, among other things, increasing yields and reducing production costs and

construction of a new 8,400 ton mill to produce refined sugar with co-generation of 10

MW.

He ou tlined the market prosp ects of ethanol, taking the view of sugar cane as an energy

crop. The ethanol market is grow ing. Projected world ou tpu t of ethan ol in 2015 is 115

billion tons, compared with 49 billion ton s in 2006.

Dr. Davis presented some considerations for ethanol production and outlined current

research and development contributions such as development of multipurpose sugar

cane and high su crose and high fibre varieties.

Renewable Energy in Caribbean Countries Joseph OLall, Chief Executive

Officer, Gu yana Energy Agency

Mr. OLall was of the opinion that the CARICOM countries could not afford to he

insular in th eir approach to energy. He spoke of the rising p rice for gasoline which is

projected to reach $100 per barrel by the end of 2007. This would make every

CARICOM coun try p oor.

He ind icated that his agency had been app roached by a Trinidad and Tobago compan y

regarding the establishmen t of a hyd roelectricity p lant to sup ply energy to a Trinidadand Tobago by an un derw ater cable. He could see this mov ing toward a natural gas

cable to feed en ergy to other CARICOM coun tries.

He urged participants to look at how to gear the industries of the region to accept

ethanol as a source of pow er rather than concentrating on the ethan ol export m arket.


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Clean Development Mechanism for Bio-Fuels in the

Caribb ean, Mr. Orlan do Jiminez, IADB Consu ltant

Mr. Jiminez explained what the Clean Development

Mechan ism was about. He indicated who the main

emitters of greenhouse gases were and that the Kyoto

Protocol was abou t reducing the emissions. The protocol

provided flexibility for bringing d own em issions, allowing

the main emitters (developed countries) to buy emissions

redu ction som ewhere else.

Emissions r edu ction, such as su bstitution of fossil fuels can

be sold on the international market.

Mr. Jiminez also presented some key concepts including

bundling of CDM projects which creates options for small

scale projects in the region and brings down transaction

costs. Another key concept presented was programmatic

CDM where the focus was broadened to include policies

and program mes. The CDM Board issued a directive on

the scope of this approach in June 2007. This allows more

than one country to be involved in project and only a

project needed to start with. Sub-bund les can be

subm itted. How ever, one coordinating body is required tobe the focal point and to pu ll the p ieces together.

Finally, Mr. Jiminez also gave some tips for development

of ethanol projects.

Colombian Research and Development on bio-fuels

Dr. Carlos Arroyave, Deputy Director, Innovation for

Corporate Development Programmes, Colombian

Institu te for Science and Techn ology

Dr. Arroyave gave some statistics and a profile of

Colombia. He indicated that the country has a history of

developm ent of research centre. Figu res were available for

Colombian capabilities in biodiesel by region, gender, age

group, project and institution. He also outlined some

recent and current research and development (R&D)

projects.

Session VIII

Carbon Finance,

Innovation, Science

and Technology in

Bio-energy

Moderat or:

Mr. Arna ldo Viera De

Carvalho

IDB


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Dr Arroyave informed participants that Colombia had a N ational Energy Plan for 2006-

2025 wh ich included clean u se of coal and new uses of PLG among other things.

Bio-energy the imp ortant role of information for d ecision-makin g

Dr Harjorw Neun, Director, Technical Centre for Agricultural and Rural

Cooperation (CTA)

Dr N eun explained that the CTA was established in 1983 un der the Lome Convention.

It serves seventy-nine (79) ACP countries and was funded by the European

Developm ent Fund .

He stated that the Caribbean has a hu ge potential and has choices. Information helps to

make choices. The CTA is increasingly working with med ia netw orks because of their

key role in the dissemination of information.

Dr. Neun told participants that the main driver of global changes was population

grow th. In 2010 the popu lation wou ld be nine (9) billion people resulting in increased

demand for food an d fuel. This has imp lications for global warming.

Having not heard mu ch about wom en and fuel, Dr Neu n invited a female colleague to

continu e the presentation. His colleague p resented CTAs mand ate and m ission and

invited p articipants to visit its website.

She also presented information needed for success bio-energy development and

production including successful factors and information on technological, social and

economic aspects.

CTAs activities in bio-energy were also presented. Participants were encouraged to use

the CTA network and platform for sharing experiences.

Challenges in breeding new sugar cane varieties for energy use in the

Caribbean

Dr. Anthon y Kenned y, West Ind ies Central Breedin g Station

Dr. Kenned y presented the new mandate that his organization had been given to breed

sugar cane for high fibre and high sugar content and biomass for the bio-fuel ind ustry.

He outlined what kind of germplasm to look for and indicated that the station had the

germp lasm to work with. Some cand idate varieties now exist. How ever, the major

challenge remains lack of fun ding for research and developm ent.


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Dr Kennedy explained to participants that biotechnology may be able to help

eventually but is still in its infancy in sugar cane because of the complexity of the

genome and the lack of well equipp ed and active laboratories in the region.

DISCUSSION

Question:

The question was asked w hether landfill sites could attract carbon credits.

Answer:

It was explained that technically they could but th e sites need to be w ell man aged.

An enquiry w as mad e on the level of collaboration and meetings with other colleagues

and institutions involved in R&D. The respon se was that trad itionally, breeding

material was freely exchanged for sole pu rpose of breeding. How ever, with the

emergence of intellectual p roperty issues and awareness that free and open climate has

changed. Breeders benefit to some extent from a yearly meeting organized by the

IASCCT.

Concern was also expressed regarding the difficulty in obtaining financing for research

on new varieties and the reasons for this. Dr. Kenned y explained that trad itionally the

breeding station w as fun ded by a tax on sugar. The Sugar Association of the Caribbean

wou ld get money from the sugar indu stry and give a percentage of this to the research

station. This was formu lated w hen the focus was on selling sugar. Now there w as theneed to reexamine how to fund research.


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Green Energy Programme and Financial Products of the

IADB Group

Mr. Peter Stevenson, IADB

Mr. Stevenson presented some recent strategic changes in

IADB. These included expansion of eligible sectors; ability

to finance in local currency, increase in the limits to

financial contributions per project and shorter processing

time. He presented financing products and a new Green

Energy Programm e that supp orts development and design

and implementation of green energy p rojects.

Accessing Finan cing from CDB Ms Alison Davis, CDB

Ms Davis gave a brief overview of the CDB. She explained

that there was no special window for energy projects but

that the bank was in the process of revising its energy

policy.

She also presented some guiding principles for

intervention in the pr ivate sector. These includ ed

ad ditionality, catalytic role and p artner ships. Ms Davis

also presented some other screening considerations,

including among other things, Governments noobjections, size of p roject and pr oject cash flows.

Current Tren ds in G lobal Investmen t in Bio-fuel Projects

Stephen Allum Poon, First Citizens Bank of Trinidad

and Tobago

Mr. Poon first presented a p rofile of the Bank. He then

explained what was driving the bioenergy development

energy was the lifeblood of the economy and there is agrowing demand.

He also ou tlined wh o w ere the major global players in bio-

energy: corporate spon sors, investmen t banks an d regional

commercial banks.

He briefly looked at the downside of the bioenergy issue,

including, d istortion of food p rices and the environm ental

fall out.

Session IX

Financing Bio-Energy

Projects

Moderat or:

Mr. Gerard Johnson

IDB Representative, Jamaica


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Mr. Poon identified some experiences in the Caribbean and attempted to present w hat

was the futu re. He felt that conditions were favou rable for investmen t in bio-energy. A

new sector call clean tech is about to take off. It has app eal in that it will facilitatemovement from h eavy reliance on fossil fuel.

Comm on Fun d for Comm odities (CFC) and Bio-energy

- Mr. Getachew Geb re Medh in, CFC

Mr. Medhin explained that the Fund was established to redu ce terms of trade, imp rove

productivity and increase export earnings of developing countries. The Fund was

financing p ilot d emonstration p rojects through grants.

He p ointed out that the forecast for the bioenergy industry are very optimistic. Manycountries are receiving direct foreign investment on the basis of bio-fuels and so there

was increasing p ressure on CFC to sup port bio-fuel prod uction.

There are also expressions of concern regarding diversion of food production to other

uses. Carefu l analysis of all the issues was required for rational decision m aking.

CFC was organizing a seminar in Malaysia in November 2007 on options for policy

makers.


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DISCUSSION

One participant stated that given the weak capital economies of the region emphasisshould be placed on ability to repay loans rather than on collateral. The respon se was

that commercial banks are usually very conservative in nature and this was why this

kind of financing was through developm ent banks. How ever, the requirement of

collateral was not likely to be thrown out of the w indow .

In response to comp laints of difficulty in obtaining finan cing one par ticipant stated that

it was usually the best prepared and presented p rojects that captu re the fun ding.

It was emphasized that greater attention should be paid to application management

process. One way of ad dressing this was involving financial brokers external

consultants.

The view was expressed that people need to know how to present projects and this

could be an area of follow u p on this seminar.


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In introducing this final session, Dr. Narine pointed out to

participants that the seminar had reached the stage where

it was time to d ecide on clear objectives and to make a firmcommitment to move forward . This was the first time the

Caribbean had been able to host such a comprehensive

and h igh level meeting on the issue of energy. This

opportunity should be used to ensure commitment to

concrete pu rsuable goals at the end of the session.

Members of the panel were invited to make closing

remarks. Key points mad e by each of them are

summ arized below.

Dr. H Arlington D Chesney, Director of Operations for

the Caribb ean, IICA

A multitude of operations for feedstock,

processes, products and markets exist pick

the low hanging fruits.

Start w ith sugar as first feedstock.

Must fit into context of regional and national

energy strategy.

There should be greater public-public

collaboration no tu rfism .

A common regional strategy should be

developed . National strategies can be

developed w ithin this framew ork.

Und erstand carbon credits within this context.

Develop system for fund ing.

Capacity building university curricula should

be changed to meet the needs.

How to move forward?

o Make the MOU active

o Political endorsement

Session X

Next Steps and

CTA/IICA, High Level Seminar: Expanding Bioenergy Opportunities in the Caribbean, 8-2007

Documents

Transcript of CTA/IICA, High Level Seminar: Expanding Bioenergy Opportunities in the Caribbean, 8-2007