InterviewColombia to pour $8.5bn into biofuels

19 October 2007 19:55  [Source: ICIS news]

By Ivan Castano

LONDON (ICIS news)--Investment in Colombia to expand the biofuels industry will reach $8.5bn (€5.95bn) by 2020, president Jorge Bendeck of the local trade association Federacion Nacional de Biocombustibles said on Friday.

“If everything goes as planned, we will supply 10% of all of Latin America and Caribbean’s bio-ethanol by 2010, becoming the region’s second-largest producer after Brazil,” Bendeck told ICIS news.

Colombia hopes to produce 5bn litres/year of bioethanol and 1.6m tonnes/year of biodiesel by 2020, compared with 340m litres/year and 50,000 tonnes/year of the respective products forecast by 2008.

By 2010, the country hopes to produce 1.6bn litres of bioethanol and 721,000 tonnes of biodiesel, Bendeck added.

If the initiative succeeds, 25% of Colombia’s transport fuel will be bioethanol and 35% will be biodiesel in 12 years. The rest will be exported.

The aggressive expansion effort will place Colombia along with Brazil and Argentina as top biofuels producers in Latin America. At a September meeting in El Salvador, 20 Latin American countries pledged to develop biofuels.

Bendeck said the government intends to require 5% biodiesel blending next January. That’s on top of an existing 10% bioethanol target introduced in October 2005.

Colombia is pursuing bioethanol more ambitiously than biodiesel because the majority of its transport runs on gasoline. That, coupled with its abundant sugar cane fields, has motivated the state to tap biofuels as a new engine of economic growth.

Currently, Colombia has 42,000 hectares of sugar cane used for bioethanol production and hopes to have 370,000 hectares by 2020. The country also wants to nearly triple its African palm harvests to reach 800,000 by that time.

Bendeck said Colombia plans to operate 55 ethanol factories and 20 biodiesel mills by 2020. There should be 12 bioethanol plants and 9 biodiesel factories running in three years, up respectively from six and one now.

To achieve this goal, the federation has invited a string of global engineering firms to bid for the projects. They include India’s Praj Industries (which has built the first bioethanol plants), Siemens, Basf, and ABB among others.

To raise feedstock supplies for biodiesel, Colombia is rushing to increase its African palm harvests. There are also initiatives to cultivate jatropha and casaba.

Colombia, which seeks to eradicate its illicit narcotics industry has offered a biofuels-for-coca programme, making significant progress toward displacing coca farming with biodiesel crops in the northeast, Bendeck said.

So far, 8,000 hectares of coca plantations have been replaced by African palm, and the government hopes up to 30,000 hectares can be replanted through this process over the next eight years.

By: Ivan Castano Freeman
+44 20 8652 3214

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