ORF ENERGY NEWS MONITOR - Observer Research Foundation

Exxon says growing its algae biofuels program
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July 14, 2010. Exxon Mobil Corp said it opened a greenhouse facility to grow and test algae, the next step for
its nascent biofuels program. Exxon said last year it would invest $600 million over the next five to six years
attempting to develop biofuel from algae. If it met research goals, Exxon said it would spend more than
originally budgeted in the next decade, $300 million of which would be allocated to its partner Synthetic
Genomics Inc. The project would cost billions to fully develop, Exxon said. Researchers from Exxon and
Synthetic Genomics will use the new facility to test whether large-scale quantities of affordable fuel can be
produced from algae. Exxon's biofuel investment represents a tiny portion of the oil company's spending, which
is set for $32 billion for just this year. That figure includes the budget of XTO Energy Inc, a natural gas company
that the oil company bought. Synthetic Genomics, headed by entrepreneurial scientist Craig Venter, is a
privately held firm focusing on gene-based research. Some strains of algae produce oil that can be converted
into diesel and other fuels. To make biofuel from algae, sunlight and a large source of carbon dioxide would be
needed. Venter said thousands of natural strains of algae are being screened for quantities that would make
commercial production economical, but the sheer number of requirements means at some stage chosen strains
will probably need genetic modification.
European Union's Nations approve rules for carbon auctions after 2012
July 14, 2010. European Union member states unanimously approved rules for auctioning most of their carbon
permits after 2012, when the next phase of trading begins in the world’s largest emissions market. The EU,
which has given away the majority of allowances since it started its cap-and-trade program in 2005, will require
most emitters to purchase their allotment of permits in the phase that starts in 2013 and runs through 2020. The
European Commission, the EU regulator, said countries will be able to apply for permission to run national
auctions alongside a common European platform in the system’s third and later phases. Germany, Poland,
Spain and the U.K. had asked for individual auctions. The U.K. government, which already has its own platform
for selling CO2 permits, said that it “successfully secured concessions which will allow it to continue to hold its
own national auctions. RWE AG, Germany’s second-biggest utility, is one of the companies that said it needs
phase-three permits immediately to hedge the risk of power it is selling now for delivery in 2013 and beyond.
West European utilities will no longer get free permits in the third phase, while east European power plants will
have to buy 30 percent of their permits at auctions, with the amount rising to 100 percent by 2020.
New Zealand emissions trade plan set for supply boost
July 14, 2010. New Zealand's fledgling emissions trading scheme, the only national scheme outside Europe,
stepped up from July 1 with the addition of industries that emit half the nation's greenhouse gases. But trading
remains muted, bedevilled by lack of supply of offsets called New Zealand Units, with NZU prices trading below
the NZ$25 price cap. In coming months, though, the supply picture is expected to change sharply as sectors
entitled to free allocations of NZUs start to receive their offsets and as demand grows from companies that
must meet carbon emissions obligations. New Zealand's total greenhouse gas emissions have risen 22 percent
since 1990, the base year of the Kyoto Protocol. The country has pledged to have no increase from 1990 level
emissions during Kyoto's 2008-2012 first commitment period. The emissions trading scheme is meant to help
New Zealand meet its target, with forests that soak up large volumes of carbon dioxide playing a key role. TOP