Why are mysterious UK businesses registering to trade carbon in Europe?
By Rowena Mason, City ReporterPublished: 6:07PM GMT 30 Dec 2009
It is a building site, formerly a derelict car park, in a deprived part of West London, where the neon glow of curry houses and late-night grocery stores could not be further from the wealth and glamour of London's financial markets.
Described as a "consulting" business, this is the address of a UK company that has signed up to trade carbon permits under the European Emissions Trading Scheme in Copenhagen. But there is no trace of its existence on the Companies House database.
At the newsagent next door, nobody has ever even heard of emissions trading – the system where companies buy and sell the right to emit carbon dioxide – and there has not been a building there for many years.
It is not the only oddity to emerge from the Danish Carbon Registry. All the expected big players are on the list – utilities, oil and heavy industry – the only sectors obliged by law to own permits to cover emissions.
Quite a few investment banks are also signed up, on behalf of industry or trading to make a profit.
But outnumbering these familiar names, hundreds of UK companies selling anything from hair loss treatments to electronics have mysteriously registered to buy and sell carbon permits in the Scandinavian nation – mostly in the last 18 months.
Many give addresses in the regions such as Yorkshire, Lancashire, Essex and other places not known for their links to the world of finance.
The appearance of these obscure British companies – among them businesses with unreachable addresses and Hotmail, Gmail or Yahoo email accounts for company representatives – has recently come to the attention of the Danish authorities.
While many are bound to be genuine individual private traders playing the carbon markets, investigators are examining the possibility that some of these unknown UK-based companies have used the system to commit "carousel" fraud linked to VAT.
As the Copenhagen summit on global warming began this month, Denmark, the host nation, was bringing in an emergency ban to halt VAT on carbon. This followed similar suspensions in Britain, France, Spain and Holland.
According to sources, the Danish registry may be at the heart of Europe's problems with carbon trading fraud. Local media has repeatedly raised the fact that few, if any, checks are done on new traders and approval can be much quicker than in other countries.
Criminals profit by importing goods VAT-free, selling them through a series of companies, each liable to VAT, before exporting them again. Then, the first link in the chain often goes missing without accounting for the VAT and the final link reclaims the VAT it has paid from the state before disappearing.
It might sound like the tinpot scheme of local small-time crooks, but fleecing the tax man can bring in big money.
Just a few weeks ago, Europol, the cross-border police force, said that carbon trading fraudsters may have accounted for up to 90pc of all market activity in some European countries, with criminals mainly from Britain, France, Spain, Denmark and Holland pocketing an estimated €5bn (£4.5bn).
"It is estimated that in some countries, up to 90pc of the whole market volume was caused by fraudulent activities," Europol said.
Figures from New Energy Finance show the value of the global market falling from $38bn (£23bn) in the second quarter to $30bn in the three months to the end of September after several countries cracked down.
The London platform, the European Climate Exchange, where banks and energy companies tend to trade, is not affected by the fraud because it does not offer the spot contracts on which VAT was payable. But British traders can still defraud authorities by buying and selling permits on other European exchanges.
This organised criminal activity has even "endangered the credibility" of the current carbon trading system, according to Rob Wainwright, the director of Europol.
So why have fraudsters particularly targeted carbon trading? And what is being done to iron out problems in Europe before other areas – such as the US – start to trade carbon in the next few years?
Carousel fraud has been a known scam for years among mobile commodities, such as phones, computer chips and cigarettes.
But the attraction of carbon permits is their intangible nature, so there is no need physically to ship goods across borders. All is done at the click of a mouse.
It now looks like Europe will start a so-called "reverse charge" mechanism, which would remove the need for VAT to change hands between carbon traders every time permits are sold.
But will this remove all problems from the system? It should certainly eradicate VAT fraud, but the very nature of carbon credits makes them "an incredibly lucrative target for criminals", Rafael Rondelez, who was involved with the Europol investigation, has warned.
His message is clear: other types of carbon fraud could soon spring up because there are "no strong regulations or checking principles as there is in banking to prevent such activities as money laundering."
Thursday, 31 December 2009
Corn Cobs Have Energy Use
By IAN BERRY
The corn cob could go from farmer trash to treasure if an effort by the world's largest ethanol maker takes root.
Poet, Sioux Falls, S.D., is readying production of a new cellulosic ethanol plant that uses the corn waste product, rather than corn itself, to make the biofuel. The plant, located in Emmitsburg, Iowa, where Poet already has a traditional corn-based ethanol refinery, is expected to produce 25 million gallons per year once it starts commercial production in 2011. Poet already has a pilot project in Scotland, S.D., that produced about 20,000 gallons of cellulosic ethanol since it opened in November 2008.
The plant, called Project Liberty, could be a new revenue source for farmers, proponents say, although the future for the technology remains uncertain.
"We're looking at $30 to $60 per ton is what we'd be paying for the corn cobs," said Scott Weishaar, vice president of Commercial Development for Poet. "You take a look at a farmer who maybe has 1,000 or 2,000 acres of corn, that's pretty significant incremental income to his operation."
Currently, farmers have little use for the stripped-down corn cobs. The industry is moving toward cellulosic, as spelled out in the Environmental Protection Agency's renewable-fuel mandate. The mandate calls for cellulosic ethanol to account for 16 billion gallons of the total 36 billion gallons of production by 2022. Other sources for the cellulosic ethanol include wood waste, switchgrass and other corn "residue" besides the cob, such as the stalks. Corn cobs are currently the sole focus of Poet's cellulosic effort.
Unlike some of the other corn residue, the cobs are seen as having little if any value to the land and can be removed without depleting the soil. And the cob, unlike the grain, doesn't ignite the "food versus fuel" debate. Poet said that it is quickly finding ways to make cellulosic ethanol profitable. Since the pilot project started, it has cut costs almost in half, to $2.35 per gallon from $4.13, by reducing energy usage and enzyme costs, among other expenses. It costs roughly 50 to 80 cents more per gallon to make ethanol from corn cobs than from the grain, Poet said.
It hopes to have the costs per gallon below $2 by the start of commercial operation. Ethanol futures are trading around $1.90 at the Chicago Board of Trade.
Chief Executive Jeff Broin said that two years ago he would have considered cellulosic ethanol "a long shot" but that it is now a reality.
For farmers, harvesting the cobs requires additional equipment, and Poet is working with farm machine manufacturers to "accelerate their development" of equipment that will harvest cobs, Mr. Weishaar said.
The company hosted 16 different equipment makers in Emmitsburg for a field day in November, in which industry leaders showed off prototype machines to area farmers.
One of those companies, Agco Corp., has rarely before, if ever, taken a prototype machine to such a public event, said Agco spokesman Reid Hamre. The Duluth, Ga., company is probably at least several months away from deciding whether to mass-produce the equipment.
"It's a prototype machine, we've got some more testing and exhibiting and gathering of feedback for farmers and dealers we want to do," Mr. Hamre said.
The corn cob could go from farmer trash to treasure if an effort by the world's largest ethanol maker takes root.
Poet, Sioux Falls, S.D., is readying production of a new cellulosic ethanol plant that uses the corn waste product, rather than corn itself, to make the biofuel. The plant, located in Emmitsburg, Iowa, where Poet already has a traditional corn-based ethanol refinery, is expected to produce 25 million gallons per year once it starts commercial production in 2011. Poet already has a pilot project in Scotland, S.D., that produced about 20,000 gallons of cellulosic ethanol since it opened in November 2008.
The plant, called Project Liberty, could be a new revenue source for farmers, proponents say, although the future for the technology remains uncertain.
"We're looking at $30 to $60 per ton is what we'd be paying for the corn cobs," said Scott Weishaar, vice president of Commercial Development for Poet. "You take a look at a farmer who maybe has 1,000 or 2,000 acres of corn, that's pretty significant incremental income to his operation."
Currently, farmers have little use for the stripped-down corn cobs. The industry is moving toward cellulosic, as spelled out in the Environmental Protection Agency's renewable-fuel mandate. The mandate calls for cellulosic ethanol to account for 16 billion gallons of the total 36 billion gallons of production by 2022. Other sources for the cellulosic ethanol include wood waste, switchgrass and other corn "residue" besides the cob, such as the stalks. Corn cobs are currently the sole focus of Poet's cellulosic effort.
Unlike some of the other corn residue, the cobs are seen as having little if any value to the land and can be removed without depleting the soil. And the cob, unlike the grain, doesn't ignite the "food versus fuel" debate. Poet said that it is quickly finding ways to make cellulosic ethanol profitable. Since the pilot project started, it has cut costs almost in half, to $2.35 per gallon from $4.13, by reducing energy usage and enzyme costs, among other expenses. It costs roughly 50 to 80 cents more per gallon to make ethanol from corn cobs than from the grain, Poet said.
It hopes to have the costs per gallon below $2 by the start of commercial operation. Ethanol futures are trading around $1.90 at the Chicago Board of Trade.
Chief Executive Jeff Broin said that two years ago he would have considered cellulosic ethanol "a long shot" but that it is now a reality.
For farmers, harvesting the cobs requires additional equipment, and Poet is working with farm machine manufacturers to "accelerate their development" of equipment that will harvest cobs, Mr. Weishaar said.
The company hosted 16 different equipment makers in Emmitsburg for a field day in November, in which industry leaders showed off prototype machines to area farmers.
One of those companies, Agco Corp., has rarely before, if ever, taken a prototype machine to such a public event, said Agco spokesman Reid Hamre. The Duluth, Ga., company is probably at least several months away from deciding whether to mass-produce the equipment.
"It's a prototype machine, we've got some more testing and exhibiting and gathering of feedback for farmers and dealers we want to do," Mr. Hamre said.
Investing in coal is dysfunctional
Power companies, investment bankers and pension fund managers are fuelling an unlivable future – with our money
Jeremy Leggett
guardian.co.uk, Wednesday 30 December 2009 14.23 GMT
The acid test of the Copenhagen climate change summit was always going to be coal. Had governments managed to come up with a meaningful agreement, those who seek to continue burning coal would have faced significant risk that they would be spending their money on what investors call "strandable" assets – assets that become obsolete and therefore worthless. And for their part, financial institutions would have had to think twice whether they should keep pouring billions of dollars into new coal-fired electricity generation, seeking short-term returns while knowingly fuelling future climate ruin that is not costed in today's books.
But there was no meaningful agreement. And so we see the first in the queue to foist coal horrors upon us already knocking at the door. Since Copenhagen, E.ON has announced that any further emissions cuts by the company will depend on governments making progress in 2010 in the climate negotiations. E.ON and Centrica have both said they are less likely to build coal plants attempting carbon capture and storage. We can expect to see similar sentiments from most of the other big energy companies. Enlightened business leadership ahead of legislation is not their bag. More plans for unsequestered coal, without trapping and burying the carbon dioxide, will be the best we can expect.
To be fair to the power companies, the fault is wider. Most investors expect this behaviour of them. Most banks, insurance companies and pension funds are happy, as things stand, to continue investing in coal.
When it comes to the London Stock Exchange, they will have their first major chance soon. The largest Russian steam coal producer is eyeing an initial public offering in London during the first half of 2010. Suek, owned by two oligarchs, is worth $8-9bn (£5-6bn), and will be floating as many as a quarter of its shares. As one anonymous banker put it to Reuters: "There haven't been any good opportunities in this sector for a long time, and the sector is on its way up, so therefore this will be a positive story."
Of course, at the same time, those buying shares will be fuelling long-term wealth destruction – let me not be so base as to mention killing people to boot, let's stick to the money – by stoking climate change. This is the bottom line with the dysfunctional form of capitalism we have allowed to evolve. And the most galling thing is this: the bonus cultists are doing it, in large part, with our money.
A pension fund manager invests billions built up from tiny parcels of the peoples' pension contributions. He is rewarded, like everyone else in the temples of finance, on the basis of short-term returns. That the pension holder might retire into a world that is increasingly unliveable because of the actions of his fund manager features nowhere in any bonus calculation.
Hugo Chávez gloatingly told the Copenhagen summit that capitalism is to blame for climate change. He has more than half a point. After this failure of a summit many leaders had cast as a last-chance saloon, surely now we have to think hard about capitalism in the form we have allowed it to evolve.
The fact is that as things stand – to use the parlance of the investment bankers who will scrabble to win the Russian coal business and the pension fund managers who will line up to invest in the listing – there is no place on the global balance sheet for the assets most relevant to the survival of economies: ecosystems and civilisation. There is plenty of space for spectres they label as assets while shovelling the attendant megarisks off the books. That is the real bottom line.
Unless, that is, we can mobilise enough people-power, on enough fronts, for the citizenry to turn around the course of a war in which our leaders are currently displaying toothless impotence. The listing by Suek, and the role of our money it, might be a good place to start.
Any company investing in that IPO is a company that I will no longer bank or insure with. And any pension fund investing in it is one that I will encourage all my friends to switch their pension out of.
Jeremy Leggett, jeremyleggett.net, set up his company, Solarcentury, to fight climate change.
Jeremy Leggett
guardian.co.uk, Wednesday 30 December 2009 14.23 GMT
The acid test of the Copenhagen climate change summit was always going to be coal. Had governments managed to come up with a meaningful agreement, those who seek to continue burning coal would have faced significant risk that they would be spending their money on what investors call "strandable" assets – assets that become obsolete and therefore worthless. And for their part, financial institutions would have had to think twice whether they should keep pouring billions of dollars into new coal-fired electricity generation, seeking short-term returns while knowingly fuelling future climate ruin that is not costed in today's books.
But there was no meaningful agreement. And so we see the first in the queue to foist coal horrors upon us already knocking at the door. Since Copenhagen, E.ON has announced that any further emissions cuts by the company will depend on governments making progress in 2010 in the climate negotiations. E.ON and Centrica have both said they are less likely to build coal plants attempting carbon capture and storage. We can expect to see similar sentiments from most of the other big energy companies. Enlightened business leadership ahead of legislation is not their bag. More plans for unsequestered coal, without trapping and burying the carbon dioxide, will be the best we can expect.
To be fair to the power companies, the fault is wider. Most investors expect this behaviour of them. Most banks, insurance companies and pension funds are happy, as things stand, to continue investing in coal.
When it comes to the London Stock Exchange, they will have their first major chance soon. The largest Russian steam coal producer is eyeing an initial public offering in London during the first half of 2010. Suek, owned by two oligarchs, is worth $8-9bn (£5-6bn), and will be floating as many as a quarter of its shares. As one anonymous banker put it to Reuters: "There haven't been any good opportunities in this sector for a long time, and the sector is on its way up, so therefore this will be a positive story."
Of course, at the same time, those buying shares will be fuelling long-term wealth destruction – let me not be so base as to mention killing people to boot, let's stick to the money – by stoking climate change. This is the bottom line with the dysfunctional form of capitalism we have allowed to evolve. And the most galling thing is this: the bonus cultists are doing it, in large part, with our money.
A pension fund manager invests billions built up from tiny parcels of the peoples' pension contributions. He is rewarded, like everyone else in the temples of finance, on the basis of short-term returns. That the pension holder might retire into a world that is increasingly unliveable because of the actions of his fund manager features nowhere in any bonus calculation.
Hugo Chávez gloatingly told the Copenhagen summit that capitalism is to blame for climate change. He has more than half a point. After this failure of a summit many leaders had cast as a last-chance saloon, surely now we have to think hard about capitalism in the form we have allowed it to evolve.
The fact is that as things stand – to use the parlance of the investment bankers who will scrabble to win the Russian coal business and the pension fund managers who will line up to invest in the listing – there is no place on the global balance sheet for the assets most relevant to the survival of economies: ecosystems and civilisation. There is plenty of space for spectres they label as assets while shovelling the attendant megarisks off the books. That is the real bottom line.
Unless, that is, we can mobilise enough people-power, on enough fronts, for the citizenry to turn around the course of a war in which our leaders are currently displaying toothless impotence. The listing by Suek, and the role of our money it, might be a good place to start.
Any company investing in that IPO is a company that I will no longer bank or insure with. And any pension fund investing in it is one that I will encourage all my friends to switch their pension out of.
Jeremy Leggett, jeremyleggett.net, set up his company, Solarcentury, to fight climate change.
More China Companies Are Going Green
By JASON DEAN
BEIJING -- Chinese entrepreneurs and private citizens are starting to become more active in trying to address concerns over global warming, a nascent trend that could have significant long-term impact on the ability of the world's largest greenhouse-gas emitter to curb its effects on the climate.
The shift is most pronounced among a small-but-growing group of private business executives, who are adjusting their business practices and helping to spread awareness more broadly among the public.
Wang Shi, the 58-year-old chairman of China Vanke Co., the country's largest housing developer, said he became concerned about global warming through mountain climbing, a hobby he took up in 1998. He had read the Ernest Hemingway story "The Snows of Kilimanjaro," and in 2002 went to Tanzania to scale the mountain in the title. He was surprised at what he found.
"I didn't see any snow," he says. "I did more research, and discovered that within 50 years...its glaciers could be entirely gone as well."
Mr. Wang is gradually replacing wood used in the interiors of Vanke's apartment buildings with recyclable materials. Vanke is using more solar and other renewable energy, and adopting prefabrication techniques, borrowed partly from Japan, that are less wasteful than standard Chinese construction.
Mr. Wang is building a new corporate headquarters in Shenzhen designed by Steven Holl, an American architect, that he aims to make the first building in China with a platinum ranking -- the highest available -- on the international Leadership in Energy and Environmental Design rating system for "green buildings."
"China is a big country," says Mr. Wang, who founded Vanke 25 years ago. "It should try to shoulder the responsibilities of a large country, and therefore China's companies need to shoulder their own responsibilities."
In 2004, Vanke's Mr. Wang and about 60 other businessmen founded the Society of Entrepreneurs and Ecology to promote awareness and action on climate change and other environmental issues. It now has 160 members, each of whom pays 100,000 yuan ($14,620) in annual dues. That means an annual budget of at least $2.3 million, not including other contributions like free rent -- a hefty sum for a Chinese NGO.
SEE uses the funds for reforestation programs in China and educational efforts, and to help support more than 150 smaller environmental groups around the country.
On Dec. 8, at the beginning of the Copenhagen climate summit, the group joined several other organizations representing 200 business members to issue a communiqué pledging to reduce their companies' emissions and calling on governments to reach a deal including binding legal benchmarks.
Yang Peng, SEE's secretary-general, says the growing green consciousness is a natural outgrowth of China's development.
"In the past, people just wanted to get enough to eat. Now, many people live in nicer homes, and they're more concerned about the environment," he says. "Low carbon is a new idea, but it's spreading very fast."
Most of the focus in assessing China's climate-related practices has been on the government. That is logical, since Beijing, in addition to setting policy, plays an enormous direct role in the economy. The government has pledged to reduce China's carbon emissions relative to the size of its economy, but has refused to commit to outright emissions cuts. Some foreign officials and scientists have criticized China's stance and said it contributed to the failure of the Copenhagen summit to reach a breakthrough. China says it played a constructive role at the summit, but can only agree to a deal that treats developing nations fairly.
But the participation of private businesses and regular citizens in the world's most populous nation will also be a major factor in China's climate impact.
Until recently, there was little of the sort of nongovernmental activity on climate change and other environmental issues that is common in more-developed places like Europe, Japan and the U.S. Now, climate experts take heart in the increasing activities of some executives, educators and others -- even if it is too early for them to have had major impact, and abundant examples remain of indifference and waste.
"We are starting to see a growing level of awareness of climate change among people" in China, says Barbara Finamore, China program director for the Natural Resources Defense Council, a New York-based environmental organization. Ms. Finamore points to educational efforts in schools and by the state media to make people aware of climate issues, as well as "forward-looking companies who recognize the importance of this issue and are taking a leading role in trying to encourage their government to do more."
Some executives are changing their personal, as well as corporate, behavior. Zhang Yue, chairman of Broad Air Conditioner Co., was one of China's first entrepreneurs to buy a private jet, back in 1997. About five years ago, he became aware of the huge volume of carbon dioxide produced by a single 1,900-mile trip on the jet. Since then, he has heavily restricted the jet's use, and he often takes commercial flights.
Mr. Zhang has also made emissions reduction a central mission of his company. Broad is a major producer of giant air conditioners used in buildings, and it specializes in chillers that don't use electricity, instead relying on other energy sources like natural gas and waste heat. Broad says its air conditioners have only 20% the carbon-dioxide emissions of electric models.
Still, Mr. Zhang, who considers himself a pioneer on climate-change issues in China, is pessimistic about the overall level of awareness in the country.
"Public understanding of energy conservation and emissions reduction is still woefully behind," he says, adding that more education and publicity of the issue by the government is needed.
Others see progress already. Huang Ming, the chairman of Himin Solar Energy Group Co., China's largest maker of rooftop solar water heaters, says the desire among some of his customers, particularly educated, urban residents, to use more-environmentally friendly devices is helping to boost Himin's sales.
If property companies like Vanke change their behavior, it could have an especially strong impact, since China has the largest building market in the world by floor space. Building operations create about one-sixth of China's total carbon emissions, according to the China Greentech Report 2009, published by a business consortium.
A separate report in October by the NRDC and Boston Consulting Group estimated that "moderate" energy conservation, affecting 5% of China's existing buildings and 60% of new buildings, would have an environmental impact equivalent to halting global air traffic for four months.
Write to Jason Dean at jason.dean@wsj.com
Wednesday, 30 December 2009
Shell, Other Oil Firms Bolster Biofuels Spending
By RUSSELL GOLD
Royal Dutch Shell PLC has roughly doubled its financial support for biofuels start-up Codexis Inc. in the past year, the latest sign that oil companies are slowly and selectively increasing their interest in plants-to-fuels research.
Shell is on pace to spend $60 million in 2009 to fund research at Codexis, nearly twice the amount as the year before, according to regulatory filings. Codexis filed paperwork this week for a $100 initial public offering. The start-up is developing microbes to speed up the chemical reactions that turn inedible plants, such as grasses or stalks, into ethanol and diesel.
Other crude-oil companies also have increased spending on biofuels. Exxon Mobil Corp. said this summer it would spend $600 million over five or six years on a partnership with Synthetic Genomics Inc. to develop a way to turn algae into motor fuels. Chevron Corp. entered into a relationship in October with Mascoma Corp. to investigate plant-based fuel. And BP PLC created a venture with Verenium Corp. this year to build a fuel plant in central Florida next year.
Of course, this spending is tiny in comparison with these oil companies' annual capital budgets, which in some cases top $20 billion a year. But the funds are significant for biofuels research and are expected to accelerate efforts to determine if plants can be economically turned into motor fuels on a large scale.
Big oil companies don't appear to be interested in generating niche fuels. Rather, they are targeting investments at companies such as Codexis that can make a significant dent in a global 80-million-barrel-a-day fuel market. And they are steering clear of biofuels such as corn-based ethanol made from edible crops.
These investments are "proof that the oil industry sees the writing on the wall; they know they need to adapt," says Paul Dickerson, a partner at the law firm Haynes and Boone LLP and a former chief operating officer at the Energy Department's Office of Energy Efficiency and Renewable Energy. "We are not going to stop using oil, but these companies are aware that other energy sources are gaining traction, and they need to diversify their business plans just as America needs to diversify its energy supply."
Oil company interest in biofuels may be the industry's best chance right now. The industry was effectively frozen out of capital markets during the economic downturn and some advocates have been discouraged by the level of federal support.
The funding freeze has prevented the industry from fulfilling lofty goals. Two years ago, Congress envisioned that the industry would produce 100 millions gallons of biofuels from nonedible plants in 2010 and 250 million gallons in 2011. But few believe it can generate much more than 15 million gallons next year.
Codexis is developing enzymes to break down plant fibers into sugars. These sugars can then be turned into ethanol and diesel. Shell has a 20% stake in the company and Chevron owns another 5%. Codexis executives declined to be interviewed. The enzymes developed by San Francisco-based Codexis could be used, under an existing agreement, by Iogen Energy Corp., a biofuels company half owned by Shell.
If Codexis goes ahead and issues stock on the Nasdaq Stock Market—it filed once before in 2008 before pulling back when stock markets started falling—it would be the first biofuels company to hold an U.S.-listed IPO since December 2007 when China-based biodiesel maker Gushan Environmental Energy Ltd. debuted on the New York Stock Exchange, according to investment bank Dealogic.
Write to Russell Gold at russell.gold@wsj.com
Royal Dutch Shell PLC has roughly doubled its financial support for biofuels start-up Codexis Inc. in the past year, the latest sign that oil companies are slowly and selectively increasing their interest in plants-to-fuels research.
Shell is on pace to spend $60 million in 2009 to fund research at Codexis, nearly twice the amount as the year before, according to regulatory filings. Codexis filed paperwork this week for a $100 initial public offering. The start-up is developing microbes to speed up the chemical reactions that turn inedible plants, such as grasses or stalks, into ethanol and diesel.
Other crude-oil companies also have increased spending on biofuels. Exxon Mobil Corp. said this summer it would spend $600 million over five or six years on a partnership with Synthetic Genomics Inc. to develop a way to turn algae into motor fuels. Chevron Corp. entered into a relationship in October with Mascoma Corp. to investigate plant-based fuel. And BP PLC created a venture with Verenium Corp. this year to build a fuel plant in central Florida next year.
Of course, this spending is tiny in comparison with these oil companies' annual capital budgets, which in some cases top $20 billion a year. But the funds are significant for biofuels research and are expected to accelerate efforts to determine if plants can be economically turned into motor fuels on a large scale.
Big oil companies don't appear to be interested in generating niche fuels. Rather, they are targeting investments at companies such as Codexis that can make a significant dent in a global 80-million-barrel-a-day fuel market. And they are steering clear of biofuels such as corn-based ethanol made from edible crops.
These investments are "proof that the oil industry sees the writing on the wall; they know they need to adapt," says Paul Dickerson, a partner at the law firm Haynes and Boone LLP and a former chief operating officer at the Energy Department's Office of Energy Efficiency and Renewable Energy. "We are not going to stop using oil, but these companies are aware that other energy sources are gaining traction, and they need to diversify their business plans just as America needs to diversify its energy supply."
Oil company interest in biofuels may be the industry's best chance right now. The industry was effectively frozen out of capital markets during the economic downturn and some advocates have been discouraged by the level of federal support.
The funding freeze has prevented the industry from fulfilling lofty goals. Two years ago, Congress envisioned that the industry would produce 100 millions gallons of biofuels from nonedible plants in 2010 and 250 million gallons in 2011. But few believe it can generate much more than 15 million gallons next year.
Codexis is developing enzymes to break down plant fibers into sugars. These sugars can then be turned into ethanol and diesel. Shell has a 20% stake in the company and Chevron owns another 5%. Codexis executives declined to be interviewed. The enzymes developed by San Francisco-based Codexis could be used, under an existing agreement, by Iogen Energy Corp., a biofuels company half owned by Shell.
If Codexis goes ahead and issues stock on the Nasdaq Stock Market—it filed once before in 2008 before pulling back when stock markets started falling—it would be the first biofuels company to hold an U.S.-listed IPO since December 2007 when China-based biodiesel maker Gushan Environmental Energy Ltd. debuted on the New York Stock Exchange, according to investment bank Dealogic.
Write to Russell Gold at russell.gold@wsj.com
Theolia Sells French Wind Power Assets To Boralex
PARIS (Dow Jones)--French wind energy company Theolia SA (TEO.FR) Tuesday said it has sold wind power assets in France with a capacity of 47 megawatts to Canada's Boralex Inc. (BLX.T).
Financial details of the transaction weren't disclosed.
The assets include a seven-megawatt wind farm in operation since December 2006, as well as two wind projects with capacities of 30 megawatts and 10 megawatts respectively.
The commissioning of both wind projects, which will be built by Theolia, is expected by mid-2010, the company said.
Theolia added that it expects to exceed its target to sell 200 megawatts of wind projects and assets in 2009 following this deal.
Earlier Tuesday, Theolia reached a debt deal with its main bondholders, including a project for a capital increase of up to EUR100 million, in a move to reduce its debt and to ensure funding for its projects.
Theolia shares closed down EUR0.21, or 6.5%, at EUR3.03.
Company Web site: www.theolia.com
-By Elena Berton, Dow Jones Newswires; +33 1 40 17 17 65; elena.berton@dowjones.com
Financial details of the transaction weren't disclosed.
The assets include a seven-megawatt wind farm in operation since December 2006, as well as two wind projects with capacities of 30 megawatts and 10 megawatts respectively.
The commissioning of both wind projects, which will be built by Theolia, is expected by mid-2010, the company said.
Theolia added that it expects to exceed its target to sell 200 megawatts of wind projects and assets in 2009 following this deal.
Earlier Tuesday, Theolia reached a debt deal with its main bondholders, including a project for a capital increase of up to EUR100 million, in a move to reduce its debt and to ensure funding for its projects.
Theolia shares closed down EUR0.21, or 6.5%, at EUR3.03.
Company Web site: www.theolia.com
-By Elena Berton, Dow Jones Newswires; +33 1 40 17 17 65; elena.berton@dowjones.com
Iran 'close to deal' for Kazakh uranium
Daniel Nasaw, Washington
The Guardian, Wednesday 30 December 2009
Iran is said to be close to an agreement to buy more than 1,300 tons of uranium ore from Kazakhstan, a move that would allow the country to pursue its nuclear programme without conditions imposed in a UN-brokered uranium-for-fuel swap.
The deal, thought to be worth about $450m (£280m) for Kazakhstan, could yield nuclear fuel to keep Iran's medical and research reactors churning, and, western countries fear, further its nuclear weapons programme. The transfer of purified uranium was reported by the Associated Press, which cited a report produced by an unnamed member state of the International Atomic Energy Agency.
"The price is high because of the secret nature of the deal and due to Iran's commitment to keep secret the elements supplying the material," a two-page summary of an intelligence report said. An official of the country which drew up the report said "elements" refers to rogue officials in the Kazakh government brokering the deal.
Iran is under three sets of UN security council sanctions for refusing to freeze its enrichment programme that could be used to make nuclear weapons. Tehran denies such aspirations. Any attempt to import such a large amount of uranium ore would be in violation of those sanctions, which ban exports to Iran of all items, materials, equipment, goods and technology that could contribute to its enrichment activities.
In New York, Burkina Faso's UN ambassador Michel Kafando, a co-chair of the security council's Iran sanctions committee, referred questions about a potential deal between Iran and Kazakhstan to his sanctions adviser, Zongo Saidou. Saidou told AP that, as far as he knew, none of the UN's member nations had alerted the committee about any such allegation.
The material Iran is trying to get needs to be converted to a uranium gas, which is then processed into nuclear fuel or enriched uranium for nuclear weapons.
Iran's Tehran research reactor, which produces medical isotopes and operates under the IAEA safeguards, will run out of fuel in 18 months, and the ore deal suggests Iran wants a stock of fuel to keep it running.
The Guardian, Wednesday 30 December 2009
Iran is said to be close to an agreement to buy more than 1,300 tons of uranium ore from Kazakhstan, a move that would allow the country to pursue its nuclear programme without conditions imposed in a UN-brokered uranium-for-fuel swap.
The deal, thought to be worth about $450m (£280m) for Kazakhstan, could yield nuclear fuel to keep Iran's medical and research reactors churning, and, western countries fear, further its nuclear weapons programme. The transfer of purified uranium was reported by the Associated Press, which cited a report produced by an unnamed member state of the International Atomic Energy Agency.
"The price is high because of the secret nature of the deal and due to Iran's commitment to keep secret the elements supplying the material," a two-page summary of an intelligence report said. An official of the country which drew up the report said "elements" refers to rogue officials in the Kazakh government brokering the deal.
Iran is under three sets of UN security council sanctions for refusing to freeze its enrichment programme that could be used to make nuclear weapons. Tehran denies such aspirations. Any attempt to import such a large amount of uranium ore would be in violation of those sanctions, which ban exports to Iran of all items, materials, equipment, goods and technology that could contribute to its enrichment activities.
In New York, Burkina Faso's UN ambassador Michel Kafando, a co-chair of the security council's Iran sanctions committee, referred questions about a potential deal between Iran and Kazakhstan to his sanctions adviser, Zongo Saidou. Saidou told AP that, as far as he knew, none of the UN's member nations had alerted the committee about any such allegation.
The material Iran is trying to get needs to be converted to a uranium gas, which is then processed into nuclear fuel or enriched uranium for nuclear weapons.
Iran's Tehran research reactor, which produces medical isotopes and operates under the IAEA safeguards, will run out of fuel in 18 months, and the ore deal suggests Iran wants a stock of fuel to keep it running.
Munich Re Sees Climate-Related Losses Mounting
By ULRIKE DAUER
FRANKFURT -- Munich Re AG, one of the world's largest reinsurers, Tuesday said economic and insured losses caused by climate change will continue to grow, and called for a near-term deal to ensure a substantial reduction in global greenhouse-gas emissions.
"We need as soon as possible an agreement that significantly reduces greenhouse gas emissions because the climate reacts slowly and what we fail to do now will have a bearing for decades to come," said management board member Torsten Jeworrek.
"In the light of these facts, it is very disappointing that no breakthrough was achieved at the Copenhagen climate summit in December 2009," Mr. Jeworrek said, pointing to the marked increase--more or less tripling--in major global weather-related natural disasters since 1950.
Reinsurers and primary insurers provide insurance protection against losses caused by large natural and man-made disasters.
Munich Re said it will step up its own initiatives in the matter, including investments of up to €2 billion in renewable energy and a strong commitment to the Sahara solar power project Desertec, which aims to come up with a feasible plan for generating solar power in the Sahara within the next three years.
Munich Re said losses caused by natural disasters cost the global insurance industry around $22 billion in 2009, helped by substantially lower U.S. hurricane activity than a year earlier, when the insurance industry had to pay around $50 billion for damage caused by natural disasters such as winter storms, hurricanes, cyclones, floods and earthquakes.
The figures are similar to estimates by Swiss peer Swiss Reinsurance Co., which estimated at the end of November that the bill the insurance industry had to pay for natural disaster losses in 2009 amounted to around $21 billion.
Munich Re said "severe weather events accounted for 45%, or nearly half, of global insured losses" in 2009. It also said this year's lower bill for natural disasters and the absence of "severe hurricanes and other mega-catastrophes" shouldn't be taken lightly, as there was a large number of moderately severe natural disasters.
"In particular, the trend toward an increase in weather-related catastrophes continues, while there has fundamentally been no change in the risk of geophysical events such as earthquakes," said Peter Hoeppe, who heads Munich Re's Geo Risks Research unit.
Earlier this month, leaders of the U.S., China and other major economies agreed on a new climate accord in Copenhagen, though many have said it wasn't ambitious enough and a future round of negotiations is now required to hash out the details. The accord contained no specific targets to reduce greenhouse gas emissions by 2050. A proposed 50% cut that was in earlier drafts was removed.
The pact calls on developed nations to provide $30 billion to help developing nations deal with the effects of climate change from 2010 to 2012. By 2020, rich nations aim to jointly mobilize $100 billion a year for poor nations.
Under the deal, countries have pledged to try to keep atmospheric concentrations of carbon dioxide low enough to keep average global temperatures less than two degrees Celsius above preindustrial levels; many scientists say breaching this threshold could have catastrophic consequences. But the agreement doesn't specify how countries will achieve that goal.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
FRANKFURT -- Munich Re AG, one of the world's largest reinsurers, Tuesday said economic and insured losses caused by climate change will continue to grow, and called for a near-term deal to ensure a substantial reduction in global greenhouse-gas emissions.
"We need as soon as possible an agreement that significantly reduces greenhouse gas emissions because the climate reacts slowly and what we fail to do now will have a bearing for decades to come," said management board member Torsten Jeworrek.
"In the light of these facts, it is very disappointing that no breakthrough was achieved at the Copenhagen climate summit in December 2009," Mr. Jeworrek said, pointing to the marked increase--more or less tripling--in major global weather-related natural disasters since 1950.
Reinsurers and primary insurers provide insurance protection against losses caused by large natural and man-made disasters.
Munich Re said it will step up its own initiatives in the matter, including investments of up to €2 billion in renewable energy and a strong commitment to the Sahara solar power project Desertec, which aims to come up with a feasible plan for generating solar power in the Sahara within the next three years.
Munich Re said losses caused by natural disasters cost the global insurance industry around $22 billion in 2009, helped by substantially lower U.S. hurricane activity than a year earlier, when the insurance industry had to pay around $50 billion for damage caused by natural disasters such as winter storms, hurricanes, cyclones, floods and earthquakes.
The figures are similar to estimates by Swiss peer Swiss Reinsurance Co., which estimated at the end of November that the bill the insurance industry had to pay for natural disaster losses in 2009 amounted to around $21 billion.
Munich Re said "severe weather events accounted for 45%, or nearly half, of global insured losses" in 2009. It also said this year's lower bill for natural disasters and the absence of "severe hurricanes and other mega-catastrophes" shouldn't be taken lightly, as there was a large number of moderately severe natural disasters.
"In particular, the trend toward an increase in weather-related catastrophes continues, while there has fundamentally been no change in the risk of geophysical events such as earthquakes," said Peter Hoeppe, who heads Munich Re's Geo Risks Research unit.
Earlier this month, leaders of the U.S., China and other major economies agreed on a new climate accord in Copenhagen, though many have said it wasn't ambitious enough and a future round of negotiations is now required to hash out the details. The accord contained no specific targets to reduce greenhouse gas emissions by 2050. A proposed 50% cut that was in earlier drafts was removed.
The pact calls on developed nations to provide $30 billion to help developing nations deal with the effects of climate change from 2010 to 2012. By 2020, rich nations aim to jointly mobilize $100 billion a year for poor nations.
Under the deal, countries have pledged to try to keep atmospheric concentrations of carbon dioxide low enough to keep average global temperatures less than two degrees Celsius above preindustrial levels; many scientists say breaching this threshold could have catastrophic consequences. But the agreement doesn't specify how countries will achieve that goal.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
Environment preview of 2010
After the debacle at Copenhagen, the world will be hoping that global leaders can make up for lost time this year
By Louise Gray, Environment CorrespondentPublished: 8:00AM GMT 29 Dec 2009
1. Post Copenhagen
Already Gordon Brown is pushing for another meeting of world leaders to sort out the mess as soon as possible. However he is dead set against the UN process that ended in such confusion last time. Instead it is likely that high level meetings, many behind closed doors, will be held throughout the year under the guise of the Major Economies Forum, G8 and other groupings.
The key sticking point is over how to reduce carbon emissions. Developed countries will be announcing how much they are willing to reduce greenhouse gases by 2020 at the end of January. The EU is willing to increase its target from 20 to 30 per cent by 2020 if other rich nations like the US, Japan and Australia also increase ambition. This horse trading will be a key part of strengthening world action against climate change.
Other points in the Copenhagen Accord that will take immediate action include handing out some of the $30 billion (£24bn) promised to poor nations by 2012 to help them reduced emissions and adapt to climate change. Work will also start on a scheme to save the rainforests by paying poor nations not to chop down trees.
Meanwhile the official UN process will shuffle on. The UN Framework Convention on Climate Change (UNFCCC), that is in charge of talks, will meet in June in Bonn and again in November in Mexico. It is hoped that progress will be made on the Copenhagen Accord so that it can be made a legal treaty by the end of the year.
2. Climate change
This is still the main issue for the environment in 2010. As well as the Copenhagen Accord, every department in the British Government will be working to address the problem of climate change by reducing emissions and protecting nature. The Committee on Climate Change will issue further instructions on how the UK is expected to meet its current target of cutting emissions by 34 per cent on 1990 levels by 2020. This will include further measures to encourage people from cars to public transport, including looking at road tolls and high speed trains.
3. Tory green policy
If David Cameron's party take power they have promised to introduce measures to cut household energy consumption. This would see the Government link up with major retailers like M&S and Tesco to offer households a full "green make-over". Loans to install insulation as well as more expensive measures like solar panels can be paid back over time from the savings made on energy bills. The Tories claim six billion homes will have access to £6,500 worth of energy saving measures.
4. Recycling and bins
The UK is running out of holes in the ground to dump rubbish and local authorities are likely to ramp up the drive to increase recycling rates. Households will be expected to separate their food waste for collection and could even be fined for failing to sort rubbish properly. This has proved unpopular so far. The Tories are trying a new track by offering to pay people who recycle correctly instead.
5. Green farming
Reform of the Common Agricultural Policy in 2013 could transform how the land is managed. British farmers will be monitoring progress in Brussels closely and making sure that food production in industrialised nations continues to be supported. The role of the environment in farming is likely to have much greater importance under the new CAP and already farmers are being asked to leave field margins for birds and use less chemicals. In Britain the conservationists and National Farmers Union have agreed to trial a scheme this year known as the Campaign for the Farmed Environment. Farmers will leave fallow a certain amount of land for wildlife to make up for the loss of set aside land. If they fail to prove they can protect nature on farms voluntarily then the Government has threatened to made it compulsory.
6. Frankenstein Foods
The Food Standards Agency has launched a mass public consultation on genetically modified (GM) foods. This will report back some time in 2010 and is likely to spark up the continuing debate around the controversial issue. Scientists, including the Royal Society, have made it clear that they think GM is part of the answer to food security in the future. But whether the public will countenance "Frankenstein foods" in their diet or on their farmland is another question. The Government is in favour of further research but afraid of backing GM too much in case of a public backlash. Universities in Britain continue to work on new varieties and new experiments will begin this year, despite public unease. The campaign to get more people growing-their-own, led by civil society groups including the National Trust, will continue into the New Year with more families encouraged to produce their own fruit and vegetables.
7. Energy Policy
The Government has announced 10 sites for possible nuclear power stations and energy companies will be coming forward with their bids. But despite Government backing their could be resistance from local communities as questions remain over the safety and cost of nuclear. Wind farms and bio mass projects will mushroom as the Government struggles to reach its target in producing more energy from green sources. The Severn Barrage is the only tidal project expected to go forward this year although there will be more research and development in this area. Households will be encouraged to set up their own renewable energy projects through a new Feed-In Tariff, although at the moment environmental groups are concerned that the reward for feeding energy into the grid is still too low.
Other big issues coming up this year will include Britain's response to the continued in flooding, the threat of animal disease, the decline of bees and the possible extension of the country's national parks.
By Louise Gray, Environment CorrespondentPublished: 8:00AM GMT 29 Dec 2009
1. Post Copenhagen
Already Gordon Brown is pushing for another meeting of world leaders to sort out the mess as soon as possible. However he is dead set against the UN process that ended in such confusion last time. Instead it is likely that high level meetings, many behind closed doors, will be held throughout the year under the guise of the Major Economies Forum, G8 and other groupings.
The key sticking point is over how to reduce carbon emissions. Developed countries will be announcing how much they are willing to reduce greenhouse gases by 2020 at the end of January. The EU is willing to increase its target from 20 to 30 per cent by 2020 if other rich nations like the US, Japan and Australia also increase ambition. This horse trading will be a key part of strengthening world action against climate change.
Other points in the Copenhagen Accord that will take immediate action include handing out some of the $30 billion (£24bn) promised to poor nations by 2012 to help them reduced emissions and adapt to climate change. Work will also start on a scheme to save the rainforests by paying poor nations not to chop down trees.
Meanwhile the official UN process will shuffle on. The UN Framework Convention on Climate Change (UNFCCC), that is in charge of talks, will meet in June in Bonn and again in November in Mexico. It is hoped that progress will be made on the Copenhagen Accord so that it can be made a legal treaty by the end of the year.
2. Climate change
This is still the main issue for the environment in 2010. As well as the Copenhagen Accord, every department in the British Government will be working to address the problem of climate change by reducing emissions and protecting nature. The Committee on Climate Change will issue further instructions on how the UK is expected to meet its current target of cutting emissions by 34 per cent on 1990 levels by 2020. This will include further measures to encourage people from cars to public transport, including looking at road tolls and high speed trains.
3. Tory green policy
If David Cameron's party take power they have promised to introduce measures to cut household energy consumption. This would see the Government link up with major retailers like M&S and Tesco to offer households a full "green make-over". Loans to install insulation as well as more expensive measures like solar panels can be paid back over time from the savings made on energy bills. The Tories claim six billion homes will have access to £6,500 worth of energy saving measures.
4. Recycling and bins
The UK is running out of holes in the ground to dump rubbish and local authorities are likely to ramp up the drive to increase recycling rates. Households will be expected to separate their food waste for collection and could even be fined for failing to sort rubbish properly. This has proved unpopular so far. The Tories are trying a new track by offering to pay people who recycle correctly instead.
5. Green farming
Reform of the Common Agricultural Policy in 2013 could transform how the land is managed. British farmers will be monitoring progress in Brussels closely and making sure that food production in industrialised nations continues to be supported. The role of the environment in farming is likely to have much greater importance under the new CAP and already farmers are being asked to leave field margins for birds and use less chemicals. In Britain the conservationists and National Farmers Union have agreed to trial a scheme this year known as the Campaign for the Farmed Environment. Farmers will leave fallow a certain amount of land for wildlife to make up for the loss of set aside land. If they fail to prove they can protect nature on farms voluntarily then the Government has threatened to made it compulsory.
6. Frankenstein Foods
The Food Standards Agency has launched a mass public consultation on genetically modified (GM) foods. This will report back some time in 2010 and is likely to spark up the continuing debate around the controversial issue. Scientists, including the Royal Society, have made it clear that they think GM is part of the answer to food security in the future. But whether the public will countenance "Frankenstein foods" in their diet or on their farmland is another question. The Government is in favour of further research but afraid of backing GM too much in case of a public backlash. Universities in Britain continue to work on new varieties and new experiments will begin this year, despite public unease. The campaign to get more people growing-their-own, led by civil society groups including the National Trust, will continue into the New Year with more families encouraged to produce their own fruit and vegetables.
7. Energy Policy
The Government has announced 10 sites for possible nuclear power stations and energy companies will be coming forward with their bids. But despite Government backing their could be resistance from local communities as questions remain over the safety and cost of nuclear. Wind farms and bio mass projects will mushroom as the Government struggles to reach its target in producing more energy from green sources. The Severn Barrage is the only tidal project expected to go forward this year although there will be more research and development in this area. Households will be encouraged to set up their own renewable energy projects through a new Feed-In Tariff, although at the moment environmental groups are concerned that the reward for feeding energy into the grid is still too low.
Other big issues coming up this year will include Britain's response to the continued in flooding, the threat of animal disease, the decline of bees and the possible extension of the country's national parks.
Bright future for lighting technology with glowing OLED wallpaper
OLEDs may soon replace lightbulbs in homes and offices with panels of energy-efficient light built into walls
Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 30 December 2009
Wallpaper that can glow with light and bendable flat-panel screens are a step closer thanks to research into organic LEDs (OLEDs), which are widely hailed as the next generation of environmentally friendly lighting technology.
OLEDs use very little power to produce light, even compared with modern energy-saving bulbs. The chemicals they are made from can be painted on to thin, flexible surfaces, allowing them potentially to be used to replace traditional lightbulbs in homes and offices with panels of energy-efficient light built into walls, windows or even furniture. Other uses include flexible display screens, whose very low power consumption would mean they could operate without mains power, for example as roadside traffic warning signs powered by small solar panels.
Lomox Limited, a two-year-old company based in north Wales, awarded more than £450,000 today by the government-backed Carbon Trust to accelerate the development of its OLED technology.
Around a sixth of all the UK's electricity is used for lighting and Lomox claims its OLEDs are 2.5 times more efficient than standard energy-saving lightbulbs. The Carbon Trust said that, if all modern lights were replaced by OLEDs, annual carbon emissions around the world could fall by 2.5m tonnes by 2020 and almost 7.4mT by 2050. Replacing old, incandescent bulbs with OLEDs would generate even greater CO2 savings.
OLEDs have shown much promise in laboratories but must get over two major hurdles to become widespread consumer items: they are expensive to make and they tend to have relatively short lifetimes. "What our technology does, with the seven patents we have, is fix those problems," said Ken Lacey, chief executive of Lomox. He said his company's OLEDs have the potential to last as long as modern fluorescent lights and, for the display sector, as long as LCD panels. Lomox also claims its light matches natural light more closely than other energy-saving bulbs.
The company will focus its efforts on getting the first of its OLEDs to market by 2012, mainly for outdoor lighting. "The early part of the grant is to do the testing and take this out to that marketplace," said Lacey.
Mark Williamson, director of innovations at the Carbon Trust, said: "Lighting is a major producer of carbon emissions. This technology has the potential to produce ultra-efficient lighting for a wide range of applications, tapping into a huge global market. We're now on the look-out for other technologies that can save carbon and be a commercial success."
The grant for Lomox is one of 164 projects supported by the Carbon Trust for small companies working on a range of renewable energy and energy efficiency technologies such as fuel cells, combined heat and power, bioenergy, solar power, low-carbon building technologies, marine energy devices and more efficient industrial processes.
Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 30 December 2009
Wallpaper that can glow with light and bendable flat-panel screens are a step closer thanks to research into organic LEDs (OLEDs), which are widely hailed as the next generation of environmentally friendly lighting technology.
OLEDs use very little power to produce light, even compared with modern energy-saving bulbs. The chemicals they are made from can be painted on to thin, flexible surfaces, allowing them potentially to be used to replace traditional lightbulbs in homes and offices with panels of energy-efficient light built into walls, windows or even furniture. Other uses include flexible display screens, whose very low power consumption would mean they could operate without mains power, for example as roadside traffic warning signs powered by small solar panels.
Lomox Limited, a two-year-old company based in north Wales, awarded more than £450,000 today by the government-backed Carbon Trust to accelerate the development of its OLED technology.
Around a sixth of all the UK's electricity is used for lighting and Lomox claims its OLEDs are 2.5 times more efficient than standard energy-saving lightbulbs. The Carbon Trust said that, if all modern lights were replaced by OLEDs, annual carbon emissions around the world could fall by 2.5m tonnes by 2020 and almost 7.4mT by 2050. Replacing old, incandescent bulbs with OLEDs would generate even greater CO2 savings.
OLEDs have shown much promise in laboratories but must get over two major hurdles to become widespread consumer items: they are expensive to make and they tend to have relatively short lifetimes. "What our technology does, with the seven patents we have, is fix those problems," said Ken Lacey, chief executive of Lomox. He said his company's OLEDs have the potential to last as long as modern fluorescent lights and, for the display sector, as long as LCD panels. Lomox also claims its light matches natural light more closely than other energy-saving bulbs.
The company will focus its efforts on getting the first of its OLEDs to market by 2012, mainly for outdoor lighting. "The early part of the grant is to do the testing and take this out to that marketplace," said Lacey.
Mark Williamson, director of innovations at the Carbon Trust, said: "Lighting is a major producer of carbon emissions. This technology has the potential to produce ultra-efficient lighting for a wide range of applications, tapping into a huge global market. We're now on the look-out for other technologies that can save carbon and be a commercial success."
The grant for Lomox is one of 164 projects supported by the Carbon Trust for small companies working on a range of renewable energy and energy efficiency technologies such as fuel cells, combined heat and power, bioenergy, solar power, low-carbon building technologies, marine energy devices and more efficient industrial processes.
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