Development & Aid, Environment, Headlines, Latin America & the Caribbean

ENERGY-CHILE: Betting On Biofuels

Daniela Estrada

SANTIAGO, Jul 28 2006 (IPS) - Amid the turmoil caused by Argentina’s price hikes on its natural gas exports, Chile has announced that it will develop its biofuels industry in order to continue diversifying its energy sources.

The announcement was made Thursday at an international seminar in Santiago on Agro-Energy and Biofuels, organised by the Food and Agriculture Organisation (FAO), which ended Friday.

Biofuels, considered to be clean, environmentally friendly energy sources, are derived from agricultural or forestry raw materials such as sugarcane, beets, maize, energy-rich herbaceous plants, oil-bearing seeds (such as rapeseed), agricultural waste, lumber offcuts and manure.

“Energy is a strategic question, fundamental for the future development of the country. Improvisations and good intentions are not enough here,” said Chilean President Michelle Bachelet, who was an invited guest at the inauguration of the meeting.

“We simply cannot fail in this matter. Only responsible work, planning, research and an adequate investment climate will guarantee success,” added Bachelet.

Developing agro-energy is a government priority, and the hope is that by 2010 “either biodiesel or ethanol will have some degree of presence in the market,” Agriculture Minister Álvaro Rojas told IPS. The biofuels will come mainly from processing maize, beets and rapeseed, he said.

“We want this seminar to be a milestone”à”a new point of departure” for this industry, added Rojas, referring to the contacts the administration has made with delegations from other countries in the region, such as Argentina and Brazil, where development of biofuels is more advanced than in Chile.

The government has created an inter-ministerial committee, bringing together the ministries of Agriculture, Mining and Energy, and National Property, and the National Energy Commission (CNE), to direct formulation of a national policy for agro-energy and biofuels, which requires an alliance between public and private enterprise.

Rojas said that Chile has the potential to develop biofuels, particularly in the centre and south of the country on lands with low productivity, now devoted to subsistence farming. In his opinion, this would benefit both small farmers and society as a whole.

The minister pointed out that “some small rapeseed crushing presses are already functioning, producing oil for feeding farmed salmon. They could be the first stage of developing biodiesel production.”

The Bachelet administration has earmarked 200 million pesos (370,000 dollars) for specific actions to promote the industry this year.

These include the establishment of a Biofuels Development Unit, within the Agriculture Ministry’s Office for Agrarian Research and Policy; the organisation of information seminars throughout the country; and tours abroad by public-private delegations, to study the experiences of other countries.

Foreign experts will also be invited to Chile, and the agronomy faculties of national universities will be asked to support this biotechnology sector with their research.

During her speech, Bachelet reminded all present that to date, Chile has mostly been a net importer of energy.

“Today, about 72 percent of our energy is imported, which means that we are directly affected by volatile international prices and the prevailing scarcity in the markets from which we import fuel,” she said.

FAO regional representative José Graziano Da Silva, of Brazil, said that the fact that “the new (bio)fuels can be ‘sown’ in the fields, instead of extracted from the subsoil, marks a far-reaching and profound structural transformation.”

“This implies that governments, authorities and researchers must take a new look at their agendas and their assessments of the future of rural areas,” he said. He thought agro-energy would boost agriculture, afforestation and forestry industries.

Brazil’s minister of Agriculture, Livestock and Supply, Luis Carlos Guedes Pinto, told the press that the biofuels industry should not be seen only through “economic spectacles,” but also from a social and environmental point of view, since to develop it will require the delivery of specific incentives, such as credits for small farmers, as Brazil has done.

Brazil, the pioneer in the region, produces ethanol from sugarcane, and is now making biodiesel from leguminous seeds, ricin and palm oil. Argentina is also producing biodiesel, but using soya as the raw material. The Dominican Republic and Cuba are also making progress with sugarcane.

During the seminar, FAO presented its proposal for an International Bio-Energy Platform (IBEP) “as a way of coordinating the global effort to move forward in the development of this new energy source.”

The U.N. agency pointed out that, although many countries are working on bioenergy, the considerable gap in knowledge, technology, capability and skills between the richer and poorer nations of the world needs to be bridged.

Sara Larraín, of the non-governmental Sustainable Chile Programme, told IPS that “in principle, it is positive for the country to open itself up to new energy sources that can be produced independently, generate jobs, and avoid dependence on expensive and dirty foreign fuels.”

However, she said biofuels also entail risks, such as the spread of monoculture, the possible displacement of food crops, the use of fertilisers and pesticides, and the introduction of transgenic crops like maize and soya.

To avoid these ills, in her opinion, a sound regulatory framework is required.