29/10/2007 (International Herald Tribune), Singapore - Second-generation biofuels, made from products like waste from agriculture and forestry, may not yet be a commercial reality, but that is not preventing Singapore from trying to position itself to become a major processing and trading hub in Asia for new clean energies.

"We feel that if we're going to focus on a sustainable type of activity we need to look beyond first-generation biofuels: Those made from food crops," Julian Ho, executive director for energy, chemical and engineering services at Singapore's Economic Development Board, said.

Singapore does not believe that diverting food crops to create fuels will be sustainable over the long term, Ho said. "Right now, everybody in the region seems to focus more on first-generation biofuels, but what we really want is to be the leading place for second-generation biofuels in Asia."

Although definitions vary, first-generation biofuels are generally regarded as those made from food crops like sugar cane, corn and palm oil, and are used commercially as ethanol and bio-esters. Up to 10 percent of ethanol can be blended with standard fuel in the United States, and up to 5 percent in Europe, while bio-esters can be mixed with diesel.

Second-generation biofuels are those made from nonfood feedstocks, like jatropha, wood chips, and cellulose. Using gasification technology, clean fuels can be produced for pure use, unblended with hydrocarbons. If used at 100 percent concentration, second-generation biofuels could reduce production-to-driving carbon dioxide production by up to 90 percent, according to Royal Dutch Shell, which has been researching second-generation fuel development since 2002.

So far, however, only a handful of international companies have succeed in developing the technologies needed for second-generation biofuel production, and their commercial viability remains to be proven.

Among the leaders in the development effort, Iogen, a Canadian company in which Shell has a stake, has developed a processing technology that uses enzymes to make cellulose-based ethanol from straw. But Iogen has yet to build a commercial cellulose ethanol plant.

Choren Industries, in Germany, is scheduled to bring a first industrial-scale plant into production in mid-2008 that will convert biomass to liquid fuel. The plant, in Freiberg, will use gasification technology to convert a woody feedstock into high-quality synthetic fuel.

In Finland, Neste Oil, a refining and marketing company that focuses on producing clean transport fuels, inaugurated a first biodiesel production line at its Porvoo refinery on May 31. The €100 million, or $140 million, plant is now running at its normal capacity of 170,000 tons a year following a start-up period of several months, said Sami Oja, Neste's manager for marketing and sales.

Ho, of Singapore's Economic Development Board, said that while the industrialization of second-generation biofuel was still at a very early stage, it had growth potential. "And while first-generation biofuel is a resource play, second-generation biofuel is a technology play and technology is what Singapore prides itself at being good at."

Moving into biofuel is a natural extension for the island state. Although it has no oil sources, it is already the world's third-largest refining center and a major petrochemicals hub, with the oil industry accounting for 5 percent of its GDP. "Our location in a resource rich region also gives us easy access to raw materials," Ho said.

Singapore has yet to announce a major second-generation biofuel project. "We're talking to various companies and we hope to have a significant announcement in the next six months," Ho said. But first-generation biodiesel manufacturing is already under way.

Continental BioEnergy, a Singapore company, opened a biodiesel plant in September 2006, with production capacity of 150,000 tons a year, while Peter Cremer, a German company based in Hamburg, is building a Singapore plant with planned annual output of 200,000 tons. Construction should be completed early next year.

Both sites will convert palm oil, drawing on supplies from neighboring Malaysia and Indonesia, which together produce 85 percent of global palm oil supplies.

Natural Fuel, a renewable-energy company in Perth, Western Australia, has also chosen Singapore for a $130 million, state-of-the-art biodiesel production refinery, which is expected to be the largest such facility in the world when production begins in the first quarter of 2008. The refinery's three units will each produce 200,000 tons a year, initially from palm oil and soya oil. Jatropha could be added when sufficient supplies are available, a spokeswoman for the company said.

Production from the plant is destined to be sold initially in the United States and Europe, with Asian markets developing progressively as mandatory blending regulations in the region start to kick in.

"Singapore made a lot of sense when we were looking for a development site," said Larry Tan, chief executive of the company's local unit, Natural Fuel Singapore. "Biodiesel is best when it is blended with petroleum diesel so it makes good economic sense for the company to build its plants near or within major oil trading centers with a well-established logistics infrastructure."

Biodiesel production in Singapore could exceed a million tons a year by 2010, and reach three million tons by 2015, S. Iswaran, the minister of state for trade and industry, forecast recently.

To remain competitive, the government in May committed to spending 350 million Singapore dollars, or $240 million, in the next five years to help make Singapore a world leader in clean energy production, including both solar power - the government's main focus - and biofuels. Singapore intends to market itself as a research and development center, a global testing ground and a site for early adoption of clean energy solutions.

Nine industry players, including DaimlerChrysler and Shell Eastern Petroleum, have already started a Singapore biodiesel testing project for the evaluation of biodiesel in modern diesel-powered cars. The project aims to improve the use of methyl esters from palm oil in motor fuels in Southeast Asian climates.

Meanwhile, Temasek Life Sciences Laboratory, a nonprofit bio-research organization linked to two local universities, is exploring the molecular enhancement of second-generation biofuels, and the Singapore Institute of Chemical and Engineering Sciences is carrying out research and development in areas like lubricants, process optimization and catalyst development for clean fuel.

"We are investigating improved ways of gasification of biomass, developing improved catalysts for the Fischer-Tropsch process, but also looking at the conversion of syngas to chemicals as well as fuels," said Keith Carpenter, executive director of the institute.

The Fischer-Tropsch process is a chemical reaction in which carbon monoxide and hydrogen are converted into liquid hydrocarbons. Syngas is synthetic gas.

"We are also investigating the production of biogas from biomass waste and the subsequent conversion to chemicals, and the conversion of the glycerol byproduct to other chemicals," Carpenter said."