THE CARIBBEAN
Chart 2.1c: Projected Demand for Biodiesel
Source: Solera, 19
1100.0 1000.0 900.0 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0
0 2005 2006 2007 2008 2009 2010
Ethanol Total
Prepared by Garten Rothkopf
E) RESEARCH & DEVELOPMENT32
Specialists from the School of Electrical Engineering and the Department of Engineer- ing at the University of Costa Rica have commenced work on an initiative, the Biodiesel Project, which aims to discover more efficient ways of extracting biodiesel from veg- etable oil. The project targets the development of production methods, classifies the raw materials to be used, and assesses the profitability of biodiesel production given the country’s characteristics. In addition, researchers in the university’s Organic Chem- istry Laboratory in the School of Chemistry are looking at the characteristics of palm oil, its potential alternative uses, and the microbial degradation of biodiesel made from palm. According to the university’s Vice-Rector for Research, 10 projects have been completed. All but one are in the field of biofuels. They include:
• Fuel Oil from African Palm;
• Biomass Fuel;
• Synthetic Fuel with a base of Agroindustrial Products; and
• Agroindustrial Modules of Mini Ethanol Distilleries as a Base for Petroleum Substi- tution.
F) CONCLUSION
Costa Rica, like a number of other countries in the region, has developed mainly as an exporter of ethanol, and domestic consumption still lags significantly. The develop- ment and implementation of a thorough biofuels law, with the addition of significant incentives and public education campaigns, will allow for the development of a robust domestic market. Costa Rica has huge potential for the development of a biofuels industry, and lessons learned from past attempts at biofuels production, coupled with above-average infrastructure and private sector know-how, will be advantageous in achieving this goal. The legal framework is positive, although clarification and suc- cessful implementation will be required to assure success.
Endnotes
1 Allan Chin Wo Cruz, Costa Rica: Experiencia en la Utilización de Biocombustibles (Brazil: Min- istry of Environment & Energy 2006), 13.
2 Ibid, 16.
3 Ibid, 14.
4 Luiz Augusto Horta Nogueira, Perspectivas de un Programa de Biocombustibles en América Central: Proyecto Uso Sustentable de Hidrocarburos (Santiago: United Nations/ CEPAL, 22 March 2004), 36.
5 Costa Rica: Experiencia en la Utilización de Biocombustibles, 15.
6 Costa Rica, Asamblea Legislativa de la República De Costa Rica, Proyecto de Lay: Para Pro- mocionar la Investigación, Desarrollo, Generación y Uso de Biocombustibles y Derivados Oleo- químicos, Expediente No. 15.853 (San Jose: Departamento de Servicios Parlamentarios, 26 April 2005), 25-29.
7 Brazil, “Atos em Vigor Assinados com a República da Costa Rica,” Ministério das Relaãoes Exteriores, n.d., 30 Oct. 2006 < http://www2.mre.gov.br/dai/bicostarica.htm>.
8 Brazil, Ministério das Relações Exteriores, Assessoria de Imprensa do Gabinete, Visitas do Vice- Presidente da República à América Central e ao Haiti (Brasília: Ministério das Relações Exteri- ores, 6 May 2006), 1 Nov. 2006 <http://www.itamaraty.gov.br/portugues/imprensa/nota_detalhe.
asp?ID_RELEASE=3718>.
9 Costa Rica: Experiencia en la Utilización de Biocombustibles, 6.
10 Ibid, 9.
11 “The Saudis of the Southern Hemisphere,” Forbes, 9 Oct. 2006, 1 Nov. 2006 <http://www.forbes.
com/2006/10/06/ethanol-brazil-biz-energy_cx_da_1009latin_energy06.html>.
12 Costa Rica: Experiencia en la Utilización de Biocombustibles, 6.
13 Nogueira, Perspectivas de un Programa de Biocombustibles en América Central: Proyecto Uso Sustentable de Hidrocarburos, 35.
14 United States, “World Factbook: Costa Rica,” Central Intelligence Agency, Oct. 2006 <https://
www.cia.gov/cia/publications/factbook/geos/cs.html>.
15 Ibid, 29.
16 United Nations, Food and Agriculture Organization, FAO STAT, 31 Oct. 2006 <http://faostat.
fao.org/site/336/DesktopDefault.aspx?PageID=336>.
17 F.O. Licht, World Ethanol Markets: the Outlook to 2015 (Kent: FO Licht, 2006), 12.
18 Nogueira, Perspectivas de un Programa de Biocombustibles en América Central: Proyecto Uso Sustentable de Hidrocarburos, 31.
19 Ibid, 35.
20 Ibid, 29.
21 Bill Lilliston, CAFTA’s Impact on US Ethanol Market (Minneapolis: Institute for Agriculture &
Trade Policy, June 2005), 9.
22 Nogueira, Perspectivas de un Programa de Biocombustibles en América Central: Proyecto Uso Sustentable de Hidrocarburos, 30.
23 Allan Chin Woo Cruz and Orlando Vega Charpentier, “Primer Informe Técnico: Perspectivas de la Producción y Uso del Biodiesel,” Comisión Técnica de Trabajo para el Estudio del Biodiesel, Jan. 2006, 18.
24 Comisión Técnica de Trabajo para el Estudio del Biodiesel, 15.
25 United Nations, Food and Agriculture Organization, FAO STAT, 31 Oct. 2006 <http://faostat.
fao.org/site/336/DesktopDefault.aspx?PageID=336>.
26 Nogueira, Perspectivas de un Programa de Biocombustibles en América Central: Proyecto Uso Sustentable de Hidrocarburos, 36
27 Oscar Coto, “Proyecto SUBBE: Uso Sostenible de Biomasa y Bioenergía en Costa Rica,” Semi- nario de Presentación de Resultados, Centro Agronómico Tropical de Investigación y Enseñanza;
University of Jyväskylä (Finland), San José, 24 May 2005.
28 “Ethanol Sales Begin Today,” Costa Rica Blogs - Newsfeed, 10 Feb. 2006, 1 Nov. 2006 <http://
american-european.net/blogs/costa-rica-news/business-and-economy/2006/02/10/ethanol-sales- begin-today/>; “The age of Ethanol?” Latin Business Chronicle, 5 Oct. 2006, 1 Nov. 2006 <http://
www.latinbusinesschronicle.com/app/article.aspx?id=427>; and “Plan Piloto de la Gasolina Regu- lar con Etanol en Guanacaste y el Pacífico Central,” RECOPE, 5 Feb. 2007 <http://www.recope.
go.cr/nuestra_actividad/proyectos/etanol.htm>.
29 Comisión Técnica de Trabajo para el Estudio del Biodiesel, 16.
30 World Ethanol Markets: the Outlook to 2015, S-2, S-3.
31 Brent D. Yacobucci, CRS Report for Congress Ethanol Imports and the Caribbean Basin Initia- tive (Washington: Congressional Research Service (CRS), 10 Mar. 2006), 4-5.
32 César Augusto Parral, “Investigan Nuevas Fuentes de Energía,” Girasol (Año 8, No. 29) Octo- ber/ December 2005, 3-4.
A) INTRODUCTION
Historically, Cuba’s sugar industry has been a primary contributor to the nation’s econ- omy. However, economic isolation, industrial inefficiencies, and fluctuations in the international sugar market have hurt its competitiveness. The industry has down- sized drastically in order to survive. Increasing global demand for ethanol may be the catalyst capable of reviving Cuba’s faltering industry. While Castro’s government has declared interest in biofuels development, the country has yet to draft the legal or regulatory framework to support it. In order for a biofuels industry to be viable, the country will need to invest heavily in production facilities and allow foreign entities to participate in the sector’s development.
B) GOVERNMENT POLICIES
Once one of the world’s most prolific sugar producers, Cuba has struggled to overcome a series of geopolitical setbacks. U.S. President Eisenhower reduced Cuba’s sugar im- port quota by 7 million tons in 1960, a Cold war maneuver that led to the nationaliza- tion of $850 million in US assets.1 Throughout the subsequent decades and the US embargo, Cuba and Cuba’s sugar industry relied overwhelmingly on economic and energy assistance from the Soviet Union. After the Soviet collapse, Cuba’s oil imports declined from 13 million to 5-6 million tons per year, forcing Cuba to acquire energy resources on the international market.2 Lacking the necessary financial and technical resources to sustain the inefficient sugar industry, Cuba was forced to close 71 of its 156 factories by 2003.3 While significant investments in tourism and oil have helped to diversify Cuba’s economy, the sugar industry still employs thousands of laborers, and government officials are investigating ethanol production as a means of revitalizing the industry.
While Cuba does not yet have enabling legislation, the nation has political momentum to develop domestic biofuels. According to Ulises Rosales del Toro, Cuba’s sugar min- ister, the country plans to increase production by at least 25% this year and will triple production to 3 million tons within the next few years.4 However, in order to achieve such a goal, the industry will require substantial investment to upgrade outdated and inefficient facilities, requiring relaxation of Cuban investment laws that have prohib- ited foreign investment in the country’s sugar industry since 1959.
C) CURRENT SITUATION Energy Matrix
Oil constitutes more than 70% of Cuba’s primary energy supply, rendering the country vulnerable to fluctuations in international oil prices and supply shocks.
Source: World Factbook
Prepared by Garten Rothkopf