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E10 to roll out in October... but Gov't to forgo legislation for mandatory use for now
published: Friday | August 1, 2008
John Myers Jr., Senior Business Reporter
Potopsingh
[COLOR=orange! important][COLOR=orange! important]Jamaica[/COLOR][/COLOR] is pushing ahead with its plan roll out an ethanol and gasolene blend of [COLOR=orange! important][COLOR=orange! important]motor [COLOR=orange! important]vehicle[/COLOR][/COLOR][/COLOR] fuel to consumers by October, but will not enact legislation to make its use mandatory until the country has had an agreement with the UN's climate change agency to earn carbon [COLOR=orange! important][COLOR=orange! important]credits[/COLOR][/COLOR] from the scheme, officials say.
The sale of the E10 blend - so called because it will be a mix of 10 per cent ethanol with 90 per cent gasolene - will begin in the eastern half of the island, from the parishes of Portland and St Thomas up to Manchester, moving to the rest of the country next April.
Mandating
"In terms of mandating that it must be used, (that) will have to be delayed for a while," said Dr Ruth Potopsingh, the managing director of the Petroleum [COLOR=orange! important][COLOR=orange! important]Corporation[/COLOR][/COLOR] of Jamaica (PCJ), the government company that oversees energy related projects.
Jamaica use imported oil for up to 90 per cent of its energy needs and officials fear that its petroleum bill could reach in the region of US$5 billion this year.
Displacing 10 per cent of gasoline with cheaper, locally-produced ethanol, therefore, has not only positive environmental implications but strong economic incentives.
Moreover, policymakers see the move to the production of ethanol as prop for the inefficient and loss-making sugar industry in the face of the erosion of its preferential markets in the European Union.
In fact, only last month the government reached an agreement for the transfer of five sugar factories and several hundred acres of land, as well as, the 40-million-gallon a year state-owned ethanol refinery to the Brazilian-based ethanol producer, Infinity BioEnergy Limited.
While Infinity will produce some sugar for the domestic and export market, its pre-occupation will be on ethanol, for which Jamaica and other Caribbean Basin producers have a preferential market in the United States.
Bad strategy
The PCJ's Potopsingh explained that mandating the use of E10 in vehicles here ahead of Jamaica's application to the United Nation Framework Convention on Climate Change's (UNFCCC) Clean Development Mechanism (CDM) for the project to be considered for carbon credits would be bad strategy.
If the project was already implemented and operational it would weaken Jamaica's chances of get tingUN cash to finance its development.
"....You have to prove that without the trade in carbon credits we would not have been able to make the project feasible," Potopsingh said.
"We could do with any carbon credits that we could gain from the use of ethanol because we have costs that would need to be recovered," she added. "And this is a good way to recover those costs, as well as, to (acquire [COLOR=orange! important][COLOR=orange! important]funds[/COLOR][/COLOR] to) put back into other renewable energy projects."
There will, however, be initial legislation outlining the quality standards to be met by E10, how the petrol pumps at service stations are to be fitted as well as, what is required (as it relates to) the quality of the product, the way pumps are fitted, safety issues and environmental issues, Potopsingh said.
The length of the delay in enacting mandatory legislation for the use of E10, Potopsingh said, will depend on the time it takes for the island's application to be considered by the UNFCCC. There is a backlog of applications from other countries.
Jamaica trades credits under the CDM from its 20 megawatt wind farm in Manchester, which has grossed more than US$3 million so far.
With plans to expand Wigton's generating capacity by 18 MW at a cost US$47.6 million, Jamaica stands to earn an additional US$919,000 per year from the green energy project, based on a calculation of euro20 per tonne of avoided carbon emissions.
More wind energy plants
The PCJ also has plans to build three more wind energy plants at an adjoining property in Wigton (20 MW), Munro/Hampton (20MW) and Great Valley (40 MW) at a combined estimated cost of US$208 million.
These renewable energy projects have the potential to earn an estimated US$4 million annually from carbon credits.
If plans materialise to generate electricity from two hydro sources with a combined capacity to generate two megawatts of power, then an additional US$664,840 could be earned from trading carbon credits annually. john.myers@gleanerjm.com
published: Friday | August 1, 2008
John Myers Jr., Senior Business Reporter
Potopsingh
[COLOR=orange! important][COLOR=orange! important]Jamaica[/COLOR][/COLOR] is pushing ahead with its plan roll out an ethanol and gasolene blend of [COLOR=orange! important][COLOR=orange! important]motor [COLOR=orange! important]vehicle[/COLOR][/COLOR][/COLOR] fuel to consumers by October, but will not enact legislation to make its use mandatory until the country has had an agreement with the UN's climate change agency to earn carbon [COLOR=orange! important][COLOR=orange! important]credits[/COLOR][/COLOR] from the scheme, officials say.
The sale of the E10 blend - so called because it will be a mix of 10 per cent ethanol with 90 per cent gasolene - will begin in the eastern half of the island, from the parishes of Portland and St Thomas up to Manchester, moving to the rest of the country next April.
Mandating
"In terms of mandating that it must be used, (that) will have to be delayed for a while," said Dr Ruth Potopsingh, the managing director of the Petroleum [COLOR=orange! important][COLOR=orange! important]Corporation[/COLOR][/COLOR] of Jamaica (PCJ), the government company that oversees energy related projects.
Jamaica use imported oil for up to 90 per cent of its energy needs and officials fear that its petroleum bill could reach in the region of US$5 billion this year.
Displacing 10 per cent of gasoline with cheaper, locally-produced ethanol, therefore, has not only positive environmental implications but strong economic incentives.
Moreover, policymakers see the move to the production of ethanol as prop for the inefficient and loss-making sugar industry in the face of the erosion of its preferential markets in the European Union.
In fact, only last month the government reached an agreement for the transfer of five sugar factories and several hundred acres of land, as well as, the 40-million-gallon a year state-owned ethanol refinery to the Brazilian-based ethanol producer, Infinity BioEnergy Limited.
While Infinity will produce some sugar for the domestic and export market, its pre-occupation will be on ethanol, for which Jamaica and other Caribbean Basin producers have a preferential market in the United States.
Bad strategy
The PCJ's Potopsingh explained that mandating the use of E10 in vehicles here ahead of Jamaica's application to the United Nation Framework Convention on Climate Change's (UNFCCC) Clean Development Mechanism (CDM) for the project to be considered for carbon credits would be bad strategy.
If the project was already implemented and operational it would weaken Jamaica's chances of get tingUN cash to finance its development.
"....You have to prove that without the trade in carbon credits we would not have been able to make the project feasible," Potopsingh said.
"We could do with any carbon credits that we could gain from the use of ethanol because we have costs that would need to be recovered," she added. "And this is a good way to recover those costs, as well as, to (acquire [COLOR=orange! important][COLOR=orange! important]funds[/COLOR][/COLOR] to) put back into other renewable energy projects."
There will, however, be initial legislation outlining the quality standards to be met by E10, how the petrol pumps at service stations are to be fitted as well as, what is required (as it relates to) the quality of the product, the way pumps are fitted, safety issues and environmental issues, Potopsingh said.
The length of the delay in enacting mandatory legislation for the use of E10, Potopsingh said, will depend on the time it takes for the island's application to be considered by the UNFCCC. There is a backlog of applications from other countries.
Jamaica trades credits under the CDM from its 20 megawatt wind farm in Manchester, which has grossed more than US$3 million so far.
With plans to expand Wigton's generating capacity by 18 MW at a cost US$47.6 million, Jamaica stands to earn an additional US$919,000 per year from the green energy project, based on a calculation of euro20 per tonne of avoided carbon emissions.
More wind energy plants
The PCJ also has plans to build three more wind energy plants at an adjoining property in Wigton (20 MW), Munro/Hampton (20MW) and Great Valley (40 MW) at a combined estimated cost of US$208 million.
These renewable energy projects have the potential to earn an estimated US$4 million annually from carbon credits.
If plans materialise to generate electricity from two hydro sources with a combined capacity to generate two megawatts of power, then an additional US$664,840 could be earned from trading carbon credits annually. john.myers@gleanerjm.com
