Colombian ethanol output to surge in 2009

Colombian ethanol output is expected to more than double to 2.42
million liters a day by the end of 2009 as new projects come onstream,
Agriculture Minister Andres Fernandez Acosta said on Wednesday.

He told Reuters in an interview that Colombia, the number two
ethanol producer in Latin America after Brazil, was seeking new
investors to join projects to boost ethanol production capacity and
create jobs in the South American country.

Fernandez Acosta, visiting London to promote biofuel investments in
Colombia, said six new projects this year would add 1.37 million liters
a day of new production to the present level of 1.05 million liters a
day. He gave no details.

Colombia is seeking to boost its ethanol and biodiesel production to
meet stringent targets for blending biofuel with petrol in the coming
years.

“We’re doing all we can to motivate national and foreign investment
in biofuels,” Fernandez Acosta said as he wrapped up a four-day trip to
London.

Companies which invest in building biofuel capacity in Colombia
would benefit from a low tax rate of 15 percent, as long as the
investment was for at least $16.4 million or involved creating 500 or
more jobs.

Foreign companies have already invested in ethanol projects in
Colombia. London-based soft commodity merchant ED&F Man invested
with a Latin American partner in a $240 million project being developed
to make ethanol in the central Boyaca region.

In Colombia, sugarcane is the feedstock used to manufacture fuel ethanol, while palm oil is used to make biodiesel.

Fernandez Acosta said Colombia had the potential to grow sugarcane
for biofuel production in an area of 3.9 million hectares, sharply up
from 478,000 hectares today.

“Our main goal is to generate jobs and have an environmentally friendly policy,” the minister said.

He said Colombia’s fuel ethanol industry, derived from sugarcane, now employed some 89,000 people.

Fernandez Acosta said that by 2012, at least 20 percent of vehicles
assembled or imported to Colombia should have “flex fuel” engines
capable of using a blend of up to 85 percent biofuel. (Reuters)

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