October 2014 Ethanol Producer Magazine

INSIDE: DOE-USDA GRANTS TARGET DEDICATED ENERGY CROPS OCTOBER 2014

Entering the Biorenewable Age Project Liberty Grand Opening Takes Nation a Step Closer Page 34

Biomass Storage: Both Sides of the Bale Pelletizing Reduces Stover Transportation Costs Page 36

Proven Wet Method Not Mainstream Yet Page 40

www.EthanolProducer.com

OUR OWN KIND OF SUPER HEROS. Congratulations to our friends at POET-DSM as they commence operations on their first commercial-scale, cellulosic ethanol plant.

Together we’re making progress towards the next generation of sustainable, renewable fuels.

Learn more at GrowthEnergy.org

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CONTENTS

AUGUST 2014

VOLUME 20 ISSUE 10

DEPARTMENTS 6

EDITOR'S NOTE

7

AD INDEX

10

THE WAY I SEE IT

FEATURES

Biomass Transformations

By Tom Bryan

With Consolidation Comes Strength

By Mike Bryan

11

EVENTS CALENDAR

12

VIEW FROM THE HILL

14

16 18

The Future is Here

By Bob Dinneen

DRIVE

R&D

PROJECT

U.S. DOE grant passes out grants to 10 feedstock projects, including sorghum, switchgrass, poplar and miscanthus

By Katie Fletcher

Poet-DSM celebrates completion of Project Liberty with grand opening

By Anna Simet and Holly Jessen

36

40

Boosting Biomass for Bioenergy

Victory For Project Liberty

GRASSROOTS VOICE

It's Not Me, It's You

By Ron Lamberty

GLOBAL SCENE

Ethanol Slashes GHG Emissions

By Bliss Baker

BUSINESS BRIEFS

22

COMMODITIES

24

DISTILLED

50

TALKING POINT

54

34

Drilling Into the Details of Corn Stover Biomass

By Adam Wirt

20

52

28

DENSIFICATION

PROFILE

Fourfold improvement in bulk density improves transportation efficiency

By Susanne Retka Schill

Wet biomass advocate touts advantages of proven storage method

By Holly Jessen

Stover Pellets Pack In the Pounds

Ahead of His Time

CONTRIBUTIONS

DDGS Already a Proven Ingredient in Aquafeeds

By Kurt A. Rosentrater

BUSINESS MATTERS

Sustainability Assessments Likely to Increase

By Sara Hessenflow Harper

42

46

MARKETPLACE

CONTROLS

CORN OIL

Carbon Green BioEnergy lifts subgrade performance to above nameplate

By Mitch Miller

Biodiesel from corn distillers oil scores the lowest carbon intensity rating

By Geoff Cooper

Control System Upgrade Yields Greater Sustainability and Output

Capturing the California ‘Golden Gallon’

ONLINE EXCLUSIVE

To maximize throughput and yield, start with liquefaction Novozymes offers five tips for optimizing enzyme use -By Laurie Duval PHOTO: POET DSM

To check it out online, visit www.EthanolProducer.com and click on the October issue, under contributions, or visit http://tinyurl.com/epmenzymes.

Ethanol Producer Magazine: (USPS No. 023-974) October 2014, Vol. 20, Issue 10. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

4 | Ethanol Producer Magazine | OCTOBER 2014

Put BetaTecÂŽ natural hop extracts to work in your fermentation process to replace antibiotics and enhance yeast propagation.

IsoStabÂŽ is the natural way to effectively control gram-positive bacteria while eliminating antibiotics and harsh chemicals. Plus, antibiotic-free DDGS adds value to your co-products. VitaHopÂŽ Silver yeast nutrient enhances yeast performance and vitality, inducing faster fermentations and larger yields. Combined with BetaTecÂŽ fermentation expertise and training, these technologies will significantly increase your plantâ&#x20AC;&#x2122;s efficiency.

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EDITOR'S NOTE

Biomass Transformations Call us lucky or good, with the timing of this issue focused on biomass feedstocks. At press time in early September, a grand opening was

Tom Bryan

President & Editor in Chief tbryan@bbiinternational.com

held for Project Liberty, Poet-DSM’s high-profile cellulosic ethanol plant in Iowa. Our team was there and we’ve got photos, starting on page 34. In addition, the National Advanced Biofuels Conference & Expo is taking place in Minneapolis, Minnesota, Oct. 13-15, and our theme complements the agenda by design. And finally, October marks the earliest stages of America’s corn harvest, and with it another round of stover collection campaigns—trial runs no more.

While corn fiber and stover are, respectively, the favorite feedstocks of today’s advanced and cellulosic ethanol runs, we can’t ignore the promise of dedicated energy crops. So we begin this month with a vital energy crop roundup. In “Boosting Biomass for Bioenergy,” on page 28, EPM Staff Writer Katie Fletcher summarizes the energy crop research supported by the DOE-USDA Plant Feedstock Genomics program, which aims to accelerate the rise of super bioenergy plants. These resilient future crops, like energy sorghum, switchgrass, poplar and miscanthus, are being designed for superior agronomic performance. They’ll make fabulous ethanol feedstocks, say scientists, because they have the latent potential to grow fast with low inputs and big yields. Time will tell.

Until those megaplants get here, producers of next-generation ethanol will make do with the nonstarch components of corn, mostly stover. Transporting and storing all those stalks and leaves is cumbersome, though, and that makes densification strategies attractive. In “Stover Pellets Pack in the Pounds,” on page 36, we learn that pelletizing corn stover improves the material’s bulk density four-fold, and also renders its sugars more accessible during enzymatic conversion. Stover pelletizes easily, reports EPM Senior Editor Susanne Retka Schill, but bringing a densified feedstock to an ethanol plant’s door brings its own set of challenges.

For broader perspective, we report on another alternative to dry biomass storage.

In “Ahead of His Time,” on page 40, EPM Managing Editor Holly Jessen profiles Jim Hettenhaus of CEA Inc., who has been a purveyor and champion of biomass wet storage for years. And if you think pelletization of corn stover offers strong benefits, consider the upside of wet storage. Hettenhaus tells us that wet biomass takes up 10 times less space than dry biomass and loses less of its volume during storage. And that’s not all. Wet storage, not surprisingly, allows biomass to be collected wet, doing away with dry-time scheduling. Hettenhaus says a wet approach also results in improved feedstock quality and process performance. Ultimately, he says, producers are wasting time, energy and money drying biomass only to get it wet again during the fermentation process.

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | OCTOBER 2014

TWITTER.COM/ETHANOLMAGAZINE

VOLUME 20 ISSUE 9

ADVERTISER INDEX

EDITORIAL President & Editor in Chief Tom Bryan tbryan@bbiinternational.com Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com

2015 International Fuel Ethanol Workshop & Expo 2015 National Ethanol Conference

Managing Editor Holly Jessen hjessen@bbiinternational.com

Agra Industries BetaTec Hop Products

Senior Editior Susanne Retka Schill sretkaschill@bbiinternational.com

Bilfinger Water Technologies

News Editor Erin Voegele evoegele@bbiinternational.com

Buckman

Staff Writer Katie Fletcher kfletcher@bbiinternational.com

Fagen Inc.

DuPont Industrial Biosciences Fluid Quip Process Technologies, LLC

Copy Editor Jan Tellmann jtellmann@bbiinternational.com

Growth Energy ICM, Inc.

ART

Inbicon

Art Director Jaci Satterlund jsatterlund@bbiinternational.com

INTL FCStone Inc.

Graphic Designer Raquel Boushee rboushee@bbiinternational.com

Methes Energies

Louis Dreyfus

MoleMaster Services Corporation

PUBLISHING Chairman Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com

Nalco, an Ecolab Company

New Holland Agriculture

Phibro Ethanol Performance Group

POET-DSM Advanced Biofuels

Renewable Fuels Association Seneca Companies

SALES

Sulzer Pumps Solutions, Inc.

Vice President of Operations Matthew Spoor mspoor@bbiinternational.com Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager Chip Shereck cshereck@bbiinternational.com

Tower Performance, Inc.

Vogelbusch USA, Inc

WB Services, LLC

West Salem Machinery Co.

WestAgro Executive Brands

3 53 20 5 32 27 56 13 48 2 11 8-9 44 39 24 49 45 33 17 19 55 30 25 38 31 21 47 26

Marketing Director John Nelson jnelson@bbiinternational.com Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com Traffic & Marketing Coordinator Marla DeFoe mdefoe@bbiinternational.com

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to hjessen@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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COPYRIGHT Š 2014 by BBI International TM

OCTOBER 2014 | Ethanol Producer Magazine | 7

The same DONG Power P ower your old Energy ethanolwho plant ethanol pioneered clean with New Ethanol with power shrinks your production. production. carbon score.

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THE WAY I SEE IT

With Consolidation Comes Strength

By Mike Bryan

The consolidation of the ethanol industry is happening fast and, as a result, it is a stronger industry than it was even 10 years ago. Consolidation brings financial strength, greater vertical

integration and diversification. It was the individual farmers who built this industry one plant at a time. Now even those individual farmers are banding together and buying other ethanol plants and consolidating their base.

A few examples of consolidation are cooperatives like Big River Resources. They began in 1992 in West Burlington, Iowa, with one plant. The cooperative now owns four plants and employs 240 people. Poet had a humble beginning in Wanamingo, Minnesota, in 1983, and it now operates 27 ethanol plants that produce over 1.7 billion gallons annually.

Valero, based in Houston, Texas, owns 11 ethanol plants across the United States with capacity to produce over 1.3 billion gallons of ethanol annually.

Consolidation happens in every industry, because in today’s world, it’s difficult to compete as a small stand-alone operation unless the conditions are ideal. With consolidation comes the ability to have ready cash to take advantage of opportunities as they arise. Often consolidation provides the ability for costsaving vertical integration and product diversification. This allows companies the ability to capitalize changes in market conditions and shift production towards growth markets.

I’m not inferring that unless an ethanol plant is part of a larger cooperative or corporation, it cannot survive or even thrive. What I am saying is that they are more vulnerable to

changes in the market, to rises in grain prices or reductions in oil prices or both, simultaneously.

Vertical integration helps not only the multiplant conglomerates but the individual stand-alone plants as well.

Corn oil extraction provides the opportunity to add another product line. A number of ethanol plants are now exploring biodiesel production with the extracted corn oil. As the cellulosic technology continues to develop, ethanol plants of all sizes will be able to extract more ethanol per bushel by converting the cellulose contained in the distillers grains. This will provide an even better, higher-protein distillers grains that is worth more per ton.

There is strength in numbers, and owning multiple ethanol plants allows for greater consistency in the production process, as well as the consolidation of maintenance procedures and increase purchasing power to help keep costs down. When you are negotiating for unit trains of grain it’s almost always more cost-effective than negotiating for truckloads of grain.

So, while the individual stand-alone plant still can flourish, we will likely continue to see continued consolidation. I believe, in the long run, this consolidation will be what keeps the industry strong and profitable, with greatly improved economies of scale.

That’s the way I see it.

Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com

10 | Ethanol Producer Magazine | OCTOBER 2014

EVENTS CALENDAR National Advanced Biofuels Conference & Expo October 13-14, 2014 Hyatt Minneapolis Minneapolis, Minnesota Produced by BBI International, this event will feature the world of advanced biofuels and biobased chemicals— technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. With a vertically integrated program and audience, this event is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products.

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International Biomass Conference & Expo April 20-22, 2015 Minneapolis Convention Center, Minneapolis, Minnesota Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries.

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International Fuel Ethanol Workshop & Expo June 1-4, 2015 Minneapolis Convention Center, Minneapolis, Minnesota The FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine.

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VIEW FROM THE HILL

The Future is Here

By Bob Dinneen

Walt Disney once said, “If you can dream it, you can do it.” Disney’s ethos is true today as cellulosic

ethanol emerges from a long-shot idea into a full-fledged reality.

Cellulosic ethanol production came to Iowa this summer as Quad County Corn Processors produced ethanol from cornkernel fiber at its bolt-on facility in Galva. I had the honor of being present as it debuted the completed Adding Cellulosic Ethanol (ACE) project, which enables Quad County Corn Processors to produce 6 percent more ethanol from the same kernel used to make conventional ethanol.

The state-of-the-art facility is a prime example of nextgeneration biofuels being built on the solid foundation of conventional ethanol. In 2002, Quad County Corn Processors began conventional ethanol production. It cultivated its production process for more than 12 years and established the baseline technology needed to develop and refine its patented cellulosic technology. Its hard work paid off and it now has the technology to produce 2 MMgy of cellulosic ethanol.

Quad County Corn Processors isn’t the first—or the only— company to break onto the cellulosic scene this year as technological advancements are being made with other feedstocks as well. PoetDSM is producing cellulosic ethanol using corn-crop residue at its facility in Emmetsburg, Iowa. DuPont Cellulosic Ethanol is working to create cellulosic ethanol from corn stover and Abengoa Bioenergy developed the technology to produce cellulosic ethanol from agricultural residue, dedicated energy crops and prairie grasses. Additional projects are under way in more than 20 states.

12 | Ethanol Producer Magazine | OCTOBER 2014

We are witnessing a turning point in next-generation biofuels as cellulosic ethanol begins entering the market. But we can’t stop here. The future of domestically produced cellulosic ethanol requires continued investment and investors require certainty.

The continued development and expansion of Americanmade advanced biofuels depends on the Renewable Fuel Standard.

A stable RFS will give investors the certainty they need to develop additional cellulosic plants in the United States. Conversely, an unstable or weakened program will lead investors to move their projects abroad, sacrificing American jobs. The United States prides itself on innovation and advancement. Today, 67 percent of advanced biofuel ventures are based in the United States, ahead of China, Germany, France and Brazil. Americans must fight for a strong RFS so the United States can continue to lead the world in the advancement of next-generation biofuels.

It’s important to note that this milestone in cellulosic production didn’t come without setbacks. Thomas Watson, founder of IBM, once said that “the way to succeed is to double your failure rate.” We hit some stumbling blocks along the way but the reward is seeing these plants come online and realizing that the future of ethanol is here today.

It’s no longer just a dream.

Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835

DRIVE

Drilling Into the Details of Corn Stover Biomass

By Adam Wirt

Biomass is one of the most abundant natural resources. It comes in many varieties, including virgin woods,

energy crops, agricultural residues, food waste and even municipal and industrial wastes. Though not all biomass is created equal, it is almost always organic, and under the right conditions, it’s a sustainable source of energy that produces significantly fewer carbon emissions than fossil resources.

When it comes to turning biomass into biofuels, the key is to convert energy stored in the biomass from the sun through photosynthesis into a more readily usable form. In the case of Project Liberty, that’s ethanol.

Because the goal usually is to maximize yields in this conversion, the best choice of biomass may be different, depending on the proximity of the biorefinery to its biomass source. Proximity is important, because transportation can push the per-unit cost of biomass beyond the profitability point.

At Project Liberty in Emmetsburg, Iowa, we chose corn stover—a mix of cobs, stalks, husks and leaves—because it is readily available and it is a byproduct of the corn harvesting process. It requires no farming inputs, such as extra tillage, planting or fertilizing, so it has minimal to no effect on agronomic soil sustainability when it is removed responsibly from the field.

In addition, synergies between the cellulosic and grain-ethanol refineries, in terms of the excess energy created in the cellulosic process can be shared with Poet Biorefining’s Emmetsburg corn-ethanol facility to reduce greenhouse gas emissions significantly. Our plan in choosing Emmetsburg was to give our first project using the cellulosic conversion process its best chance of success.

Although corn stover is a byproduct of corn and is harvested from fields that are ideal for farming, many biomass feedstocks, such as miscanthus, switchgrass and other energy grasses, can be cultivated from more marginal farmlands in arid locations, which require fewer inputs and attention. Many also can produce two crops per year, which can be attractive for harvesting and storage.

Because Poet has been a pioneer in biomass harvesting and soil agronomics research since 2006, the company had amassed a significant knowledge base. This experience helped all involved understand not

only the agronomic details of harvesting corn stover, but also the “soft” elements, which include relationship building and working with and educating farmers about sustainably removing this important element in soil conservation from their fields. As farmers (called growers in the Poet-DSM system) understood the financial and farm-related benefits of stover harvesting, more than 300 area growers have now readily committed to providing their biomass to help in feeding the Liberty biorefinery’s annual needs.

One of the changes that would be required of the growers was in harvesting the stover. When looking for sustainable harvest methods, we researched several different collection methods to find the one that best met our main criteria: minimal nutrient removal, leaving enough residue for erosion control, and maintaining current soil organic matter and carbon levels.

The most ideal method, due to lower dirt contamination levels, fewer passes over the field and smaller nutrient impact, was second pass baling. These bales contain less contamination because the material isn’t being raked or chopped. Since raking is avoided, at least one additional pass across the field is eliminated, compared to traditional stover baling.

By using this method, only 20 to 25 percent of the above-ground corn residue is collected.

When it comes to handling and storage, biomass is bulky and requires significant space, especially since corn stover is harvested once annually. Because of the desired composition as a feedstock and to maximize the sustainability of stover harvesting, Project Liberty utilizes EZ Bales, a 1-ton bale comprising roughly 33 percent cobs, 43 percent husks and leaves, 16 percent stalks and 8 percent ash. The EZ Bale process typically results in less nutrient replacement per ton of removed biomass than traditional stover collection processes. Although Project Liberty has a 22-acre stackyard for buffering biomass, the majority of the EZ bales are decentrally stored in grower fields, both to reduce the risk of loss due to fire and limit dedicated acreage at the biorefinery.

As of press time, our Poet-DSM team has already begun producing ethanol using Project Liberty’s cellulosic process. We look forward to working with other industry producers in expanding the number of cellulosic ethanol biorefineries in the U.S. and abroad.

Author: Adam Wirt Biomass Logistics Director, Poet LLC 605-965-2219 Adam.Wirt@POET.com

14 | Ethanol Producer Magazine | OCTOBER 2014

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GRASSROOTS VOICE

It’s Not Me, It’s You

By Ron Lamberty

No, that’s not a misprint. Most of us have heard (or delivered) that phrase’s opposite at some point in our lives, “It’s not you, … it’s me.” But this

isn’t an “advice for the lovelorn” column, and I have no interest in starting one. The title of this article means exactly what is says.

Earlier this year, Brian Jennings wrote about the American Coalition for Ethanol’s “Power by People” campaign and how we are focusing on the stories of the people who built the ethanol industry and people from communities surrounding ethanol plants who have benefitted from the creation of these large locally owned energy production businesses in their neighborhoods. We are focusing on these stories, delivered by these people, because no matter how well ACE and other groups tell them, people almost always respond better to their peers who have been there and done that.

ACE’s market development efforts have always tried to follow similar advice. Part of that job is helping fuel distributors and convenience store owners and operators understand ethanol. But it is equally—or maybe even more important—to help ethanol people understand fuel marketers and retailers.

At the ACE Conference in Minneapolis in August, attendees learned a lot about what fuel marketers want and need from two of the most successful ethanol retailers in the nation. Kent Satrang, CEO of PetroServe USA, and Bruce Vollan, vice president of Vollan Oil, told conference attendees why they installed blender pumps and why they sell E85, E15 and other high ethanol blends to their customers. They said it wasn’t that difficult, customers like it, no one has complained or sued them, and that E85, E15, and E30 have made them more profitable. They also said their sales of ethanol were well (nearly 300 percent) above any so-called “blend wall,” and that renewable identification numbers (RINs) added to their profits and weren’t that difficult to keep track of.

16 | Ethanol Producer Magazine | OCTOBER 2014

Those statements are 180 degrees opposite what the American Petroleum Institute and other petroleum groups have been telling Congress and America. They’ve said selling 15 percent ethanol or more was unbelievably expensive, customers don’t want it and retailers will get sued and have to pay for all sorts of damage. Oil apologists continue to say it’s impossible to sell more than 10 percent ethanol and that RINs are expensive and very hard to track. It’s frustrating to know that a lot of important and influential people actually believe those Big Oil lies, even though there aren’t any real people out there who can validate their claims. Apparently “making something up and saying it frequently” is the standard of truth required by much of the U.S. media and Congress.

Satrang and Vollan didn’t talk about politics much when asked what we can do to help them, other than mentioning frustration with Reid vapor pressure regulations that causes them to have to relabel E15 dispensers twice a year. Their bigger concerns were oil companies and petroleum groups that keep putting up more roadblocks to keep station owners from selling E15 and higher blends of ethanol.

Our industry has created a number of programs that were supposed to convince retailers to sell higher blends of ethanol.

Unfortunately, many of those programs have been based on what we think fuel retailers need, not what they told us they need. Ultimately, we will only see real marketplace movement, when we talk to fuel retailers and tell them, “It’s not me, it’s you,” and then create programs that address what marketers really need.

Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605-334-3381 rlamberty@ethanol.org

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GLOBAL SCENE

Ethanol Slashes GHG Emissions

By Bliss Baker

United Nations Secretary-General Ban Ki-moon was to host important climate change meetings in New York with the aim of mobilizing political will for a universal and legally binding comprehensive climate change agreement for 2015. The meetings were

carefully downplayed so expectations would be kept in check, however, many see these meetings as a critical next step in developing a concrete framework for combating the impacts of climate change.

Evidence of the impacts of climate change continues to mount and climate change deniers are finding it increasingly difficult to find a receptive audience for their views. There is a growing recognition that affordable, scalable solutions are now available, which will enable us to mitigate the impacts of climate change in an economically sustainable way.

There is a sense that change is in the air. Ki-moon invited global leaders, from government, finance, business, and civil society to Climate Summit 2014 to galvanize and catalyze action to combat climate change.

He asked these leaders to bring bold announcements and actions to the summit that will reduce emissions, strengthen climate resilience and mobilize political will for a meaningful legal agreement in 2015.

It provided a unique opportunity for global leaders to champion an ambitious vision, anchored in action that will enable a meaningful global agreement for the coming year.

In an open letter to the secretary-general leading up to the meetings, the Global Renewable Fuels Alliance provided attendees with current data on the global greenhouse gas (GHG) emissions reductions being generated annually from global ethanol production. The letter urged attendees and the UN to focus on the opportunities available today for emission reductions, particularly in the transportation sector. The GRFA called on the secretary-general to take a leadership role fostering biofuels friendly policies that would build on the current GHG reductions that the industry is delivering each year.

The GRFA, in partnership with S&T Squared Consultants Inc., an internationally renowned energy and environmental consulting firm, is forecasting that global ethanol production and use in 2014 will reduce

18 | Ethanol Producer Magazine | OCTOBER 2014

GHG emissions by over 106 million metric tons. The data also shows the reduction in global GHG emissions from global ethanol production continues to increase yearly. This year’s figure reveals that 90.38 billion liters of global ethanol production and use in 2014 will reduce global GHG emissions by over 291,000 metric tons per day. Compared to 2013, this is an increase of more than 7,000 metric tons per day in GHG emission savings.

In 2013, global ethanol production and consumption resulted in 100 million metric tons of GHG emissions reduction, which was equal to 20 million cars being removed from the world’s roads.

This year, global ethanol production and consumption will result in 106.4 million metric tons of GHG emissions reduction, which is equal to: • 21,279,808 cars being removed from the world’s roads in 2014.

• 58,300 cars being removed from the world’s roads daily.

• Removing the annual emissions from 14 average-sized, coal-fired power plants, which could power approximately 28 million homes.

In a letter to Ki-moon, GRFA said that biofuels like ethanol are the only cost-effective and commercially available alternative to crude oil and are proven to reduce harmful GHG emissions and help in the fight against climate change.

It is estimated that the transportation sector produces 25 to 30 percent of the world’s GHG emissions, making it a priority for policymakers worldwide. There are few alternatives available to reduce emissions in this sector other than biofuels that can readily replace diesel and gasoline. Global production of biofuels has grown steadily in the past decade and today replaces over 1 million barrels of crude oil per day.

According to the International Energy Association, biofuels could make up 27 percent of the world’s transport fuels by 2050 and eliminate 2.1 gigatons of CO2 emissions, but strong policies must be put in place in order to meet this target. Developing a strong climate change framework at the UN meetings would be a critical starting point for reaching this important target if we are to meet the challenges we face related to climate change and global warming.

Author: Bliss Baker Global Renewable Fuels Association 647-309-0058 info@globalrfa.org

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Advanced Biofuels

BUSINESS BRIEFS USGC announces regional director

The U.S. Grains Council has promoted Kevin Roepke to USGC regional director of South and Southeast Asia, based Roepke in Kuala Lumpur, Malaysia. Roepke has served as the USGCâ&#x20AC;&#x2122;s director of trade development in the China office since January. As regional director of South and Southeast Asia, Roepke will identify and address all relevant trade, technical and policy factors relevant to building and maintaining the market for U.S. coarse grains and co-products. Roepke joined the USGC in 2011 as the manager of international operations for marketing. Prior to joining the USGC, he served in various trading and merchandising positions with Archer Daniels Midland Co.

Benson Hill Biosystems, CTC announce partnership

Benson Hill Biosystems, an agricultural biotechnology company, and Centro de Tecnologia Canavieira, a market leader in Brazilian sugarcane, have announced the establishment of a partnership to develop and commercialize traits to increase sugarcane crop yield. The

People, Partnerships & Deals

partnership will involve translation of Benson Hillâ&#x20AC;&#x2122;s technology from its Setaria viridis model plant platform to CTCâ&#x20AC;&#x2122;s commercial sugarcane varieties for further development and commercialization.

NCGA announces board members, presents award

Delegates attending the National Corn Growers Associationâ&#x20AC;&#x2122;s Corn Congress in Washington Shimkus recently elected five farmers to serve on the corn board. Taking office on Oct. 1, the start of NCGAâ&#x20AC;&#x2122;s 2015 fiscal year, is new board member Jim Zimmerman of Wisconsin. Current board members Bob Bowman of Iowa, Lynn Chrisp of Nebraska, Kevin Skunes of North Dakota and Paul Taylor of Illinois were re-elected. In addition, Martin Barbre, organization president, presented NCGAâ&#x20AC;&#x2122;s 2014 Presidentâ&#x20AC;&#x2122;s Award to Rep. John M. Shimkus, R-Ill. The award is given annually at NCGAâ&#x20AC;&#x2122;s Corn Congress meeting in Washington to a leader who has worked to advance issues important to corn growers and agriculture.

$*5$

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20 | Ethanol Producer Magazine | OCTOBER 2014

Lawrence Livermore scientists named to â&#x20AC;&#x2DC;Most Influentialâ&#x20AC;&#x2122; list

Lawrence Livermore scientists Charles Westbrook and William Pitz have been named to Thomson Reuters list of "The World's Most Influential Scientific Minds." Their area of research is in developing chemical kinetic mechanisms for conventional fuels such as gasoline and diesel fuel, and for next-generation fuels, such as new types of biofuels being considered as potential replacements for fossil fuels. The chemical kinetic mechanism Westbrook and Pitz developed is used in computer codes to simulate combustion in internal combustion engines used in cars and trucks. These engine simulation codes can be used to optimize engine design to increase efficiency and reduce pollutant emissions.

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Tucker

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Cool Planet announces construction, operations team

Cool Planet Energy Systems has announced the team that will lead construction and operations of its first commercial plant in the U.S. Randy Tucker will serve as vice president of capital projects, with overall responsibility for directing the project. He is joining the company after more than 25 years in project management and technical leadership roles. Before joining Cool Planet, he served as vice president of IT services for Peabody Energy. Robert Djelveh will serve as vice president of supply chain. He is an internationally recognized leader in supply chain management and procurement, having worked extensively in Europe, North America and Asia. Most recently, he co-led PricewaterhouseCooper’s and PRTM’s supply chains and energy groups in China. Rex

Downen will serve as construction manager on-site at the facility in Alexandria, Louisiana. He brings more than 30 years of experience as a project manager and site construction manager Palculict in the oil and gas, petrochemical and power generation industries.

He has managed refinery construction and other large scale projects for ConocoPhillips and others. Tim Palculict will serve as plant manager, with responsibility for plant operability, bringing the plant online and leading the plant’s operations. Palculict has more than 25 years of experience in plant management, having started up 12 plants in the fuel and petrochemical industries. He began his career with Mobil and has managed plant operations for a number of companies.

Hankinson Renewable Energy joins RFA

Hankinson Renewable Energy has joined the Renewable Fuels Association.

The 132 MMgy North Dakota-based ethanol facility has 51 full-time employees and produces 400,000 tons of dried dis-

tillers grain with solubles each year. The plant is owned by Guardian Hankinson LLC, a joint-venture that includes ethanol producers Chippewa Valley Ethanol Co., Heartland Corn Products, Dakota Ethanol LLC, and Kaapa Ethanol LLC. Guardian Hankinson LLC is the third venture by Guardian Energy Management LLC following the acquisition of Guardian Energy LLC in Janesville, Minnesota, and Guardian Energy Holdings LLC in Lima, Ohio.

US Water Services adds team member

U.S. Water Services Inc. has announced the addition of Shawn Easterly to the its ethanol process technologies team. EastEasterly erly will provide energy center consultation and services to biofuels plants across the United States focusing on throughput, production efficiencies, and system optimization.

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OCTOBER 2014 | Ethanol Producer Magazine | 21

COMMODITIES

Prices & Market Analyses

Natural Gas Report

Cold winter could mean return to high regional basis prices Aug. 25—While cold weather can’t easily be predicted this far from the heating season, the cold weather of last year did deliver some lessons about the state of the market and regional risks. As inventories were rapidly depleted from December through January, the balance between storage inventory and transported gas from outside the market area began to shift. With limited remaining storage reserves, demand in those regions that were pummeled by cold was increasingly satisfied by gas transported on interstate pipelines, and prices rose to find levels that would either justify additional deliveries from generally uneconomic sources of supply or by rationing demand. Prices in Chicago traded at more than $25 per MMBtu on three separate occasions this past winter, while the wellsupplied Henry Hub in Louisiana never topped $10 per MMBtu. With storage inventory levels lagging behind the five-year average level as well as the inventory level of 2013, analysts were fairly confident that entering the upcoming winter, stocks would remain behind historical norms. Although production levels are running 2.5 billion cubic feet per day stronger than the prior year and may soften the bite of early and late winter demand, the reality is that another winter with extended cold could mean a return to high regional basis prices as storage inventories are more susceptible to a spike in consumption. By fixing the basis price for some portion of the gas supply portfolio, the end-user loses out if

by Ben Straus

the differential between the regional index price and the New York Mercantile Exchange futures contract falls but benefits if the spread widens.

Prices for Ventura, Iowa, which illustrate that based on historical values, the difference between the historical high and low for realized spot basis over the past five years current levels may still argue in favor of considering a basis hedge.

Corn Report

New contract lows hit in nearby corn futures

by Jason Sagebiel

Aug. 25—August proved to be a month of making new contract In other bullish news, one should expect to continue to see prices erode lows in nearby corn futures. Soybeans had the same type of trade but into the fall. the contract lows were for new crop. Mild temperatures and scattered moisture in August despite a dry July triggered some sell-off.

Benefitting from the price decline have been all end-users of corn.

With underlying prices staying supported in commodities like ethanol, cattle, hogs and poultry margins in these industries have been exuberant.

So, the need for corn is ever-present, as illustrated by the tight basis levels in the marketplace in the latter weeks of August.

In the meantime, various private analysts have released final yield estimates with many predicting a national yield above the 170-bushelper-acre mark. The USDA released the August yield figure at 167.4 bushels per acre and that is expected to increase in September, according to most traders. The new carryout-to-use ratio would be 13.5 percent, the highest since 2008-’09.

With a big crop looming, look for new crop carry-out to increase but, as always, low prices should encourage future demand into 2015 thus supporting prices. However, do not rule out a cool, wet fall, which could very well push prices back to the $4 mark like observed in 2009.

22 | Ethanol Producer Magazine | OCTOBER 2014

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $2.172 Region

Spot

Rack

West Coast

2.370

2.450

Midwest

2.320

2.464

East Coast

2.235

2.504

DDGS Report

SOURCE: DTN

Regional Gasoline Prices ($/gallon)

China is still the big story in DDGS market

by Sean Broderick

Aug. 25—As Labor Day approached, there was still no approval to admit DDGS into China with Syngenta’s MIR 162 trait.

Although the last date for departure under whatever “old terms” were was moved from July 24 to Aug. 18, it was announced that ports of entry should start more aggressively enforcing the date on the bill of lading.

There is still a significant amount of tons on contract, but not yet shipped, and whose contracted value far exceeds today’s market value. Shippers have been working with the Chinese General Administration of Quality Supervision, Inspection and Quarantine office to try and find resolutions.

After a more than 50 percent drop in price in July and August, DDGS rebounded a bit, with poultry and hog producers incorporating it more into diets. July and the first half August were also very poor months

for barge logistics, which backed up trucks at the plants. But the river logistics have improved drastically since then and smaller pieces of bulk export business have shown up at the Gulf. Both of these events combined with the market being oversold to push prices higher. One thing that has not changed, however, is rail logistics. Cars are still moving slow.

Moving ahead, the freight situation is going to be a crucial part of pricing. Ethanol plants expect more reasonably priced corn with what looks to be a bumper crop both here in the U.S. and in most countries abroad. There will be plenty of DDGS production, and, without China as a significant buyer, a lot of DDGS will need to move here in the U.S.

Front Month Futures Price (RBOB) $2.738 Region

Spot

Rack

West Coast

2.846

2.969

Midwest

2.756

2.913

East Coast

2.667

2.770 SOURCE: DTN

DDGS Prices ($/ton) Location

Oct 2014

Sep 2014

Oct 2013

Minnesota Chicago

120

95

215

130

105

255

Buffalo, N.Y.

115

130

255

Central Calif.

167

163

273

Central Fla.

155

140

Corn Futures Prices

(Dec Futures, $/bushel) Date

High

Low

Close

Aug 25, 2014

3.70 1/4

3.65 1/2

3.67 1/2

July 25, 2014

3.72

3.64 3/4

3.71 3/4

Aug 26, 2013

5.08 1/4

4.79

5.00 1/2 SOURCE: FCStone

Cash Sorghum ($/bushel) Location

Ethanol Report

Ethanol prices supported by stable corn prices

by Rick Kment

Aug. 25—Despite the focus on potential record corn production this growing season, corn futures are showing an amazing sense of stability at the end of August.

This is creating the potential for light-tomoderate buyer support to step into the complex, and prices are slowly moving higher from market lows, which developed in early August.

Ethanol prices have seen similar gains, rallying 14 cents per gallon off lows set the first week of August. However, gains are not expected to be strong and may be

275 SOURCE: CHS Inc.

held in check by slowing demand following Labor Day weekend. Current buyer interest remains stable as ethanol production is expected to remain strong, while supplies could deviate in a moderate range through the fall months. The outlook for ethanol markets continues to be driven by longer-term corn prices, due to healthy production plant margins, and the expectation that continued economic growth will help sustain and stabilize gasoline demand and ethanol blending activity heading into 2015.

Aug 30, 2013

July 25, 2014

Aug 22, 2014

Superior, Neb.

5.32

3.55

3.34

Beatrice, Neb.

5.42

3.28

3.31

Sublette, Kan.

5.68

3.53

3.51

Salina, Kan.

5.32

3.52

3.51

Triangle, Texas

5.80

3.55

3.56

Gulf, Texas

5.42

5.04

4.79

SOURCE: Sorghum Synergies

Natural Gas Prices ($/MMBtu) Location

May 30, 2014

Aug 28, 2014

Aug 28, 2013

NYMEX

4.54

4.04

3.57

NNG Ventura

4.51

3.97

3.68

Calif. Citygate

4.97

4.46

3.81

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production (1,000 barrels) Per Day

Month

End Stocks

APR 2014

928

27,837

17,356

MAR 2014

907

28,116

17,349

APR 2013

855

25,662

17,645

SOURCE: U.S. Energy Information Administration

OCTOBER 2014 | Ethanol Producer Magazine | 23

DISTILLED

Ethanol News & Trends

EPA extends 2013 RFS deadlines for third time

The U.S. EPA has taken action to extend the 2013 renewable fuel standard (RFS) compliance deadlines for a third time. On July 31, the administration published a direct final rule and parallel notice of proposed rulemaking (NPRM) to extend the annual compliance and attest engagement reporting requirement deadlines for regulated parties. Under the rulemaking, the new annual compliance reports deadline will be 30 days following the publication of the final 2014 RFS rule in the Federal Register.

The new deadline for the attest engagement reports will be 90 days following the publication of the final 2014 RFS rule in the Federal Register.

The statutory deadline for 2013 RFS compliance would have been Feb. 28, 2014. In its final rule establishing the 2013 RFS, the EPA extended the deadline until June 30. That rule was published in August 2013. On June 6, the EPA published rulemaking to extend the 2013 RFS compliance deadlines for a second time. That rule extended the compliance deadline for the 2013 RFS through Sept. 30 and the associated deadline for submission of attest engagement reports through Jan. 30, 2015.

68%

Crude Oil & Ethanol comprise about of flammable liquids currently transported by rail

334,869

Tank Cars are in service in the U.S.

272,119 are DOT-111

29,780

2008:

292,000

Rail Carloads of Ethanol INCREASED TO

Tank Cars are in service hauling Ethanol

Over 40% to

409,000

Carloads in 2011

most are DOT-111

SOURCE: DOT PHMSA

PHMSA publishes tank car proposal The U.S. Department of Transportationâ&#x20AC;&#x2122;s Pipeline and Hazardous Materials Safety Administration recently released a notice of proposed rulemaking (NPRM) that aims to improve the safety of rail transportation of flammable materials, particularly crude oil and ethanol.

Among the components of the NPRM is a provision that would require the phase out of old DOT-111 tank cars for the shipment of packing group I flammable liquids within two years. The rulemaking also proposes to define the term high-hazard flammable trains (HHFT) as a train carrying 20

or more tank carloads of flammable liquids and would require carriers to perform a routing analysis for HHFTs that would consider 27 safety and security factors. HHFTs could also be subject to speed restrictions. In addition, the proposal also calls for enhanced standards for both new and existing tank cars.

Representatives of the ethanol industry have criticized the rulemaking for failing to distinguish between products like ethanol that feature an admirable safety record and products for which legitimate and serious concerns have been raised, such as Bakken crude oil shipped from the Midwest.

DISTILLED

EKAE to add renewable diesel production

Brazil Ethanol Statistics 2011 Ethanol production (in billion liters)

East Kansas Agri-Energy LLC has announced plans to integrate renewable diesel production at its 40 MMgy ethanol plant in Garnett, Kansas. Construction on the 3 MMgy addition is expected to begin soon and take 12 to 15 months to complete. According to EKAE, the capacity of the facility could double in the future. WB Services is serving as technology partner on the project.

Once complete, the facility will take in corn distillers oil already produced at the plant as feedstock, along with other feedstocks purchased on the market. â&#x20AC;&#x153;This is about maximizing revenue, leveraging activities that we already do every day, and enhancing the value of products we already produce now,â&#x20AC;? said Jeff Oestmann, president and CEO of EKAE. â&#x20AC;&#x153;Adding renewable diesel capability aligns perfectly with our business strategy of diversifying our energy portfolio and creating additional enterprises that are sustainable on their own.â&#x20AC;?

2012

2013

2014

2015

22.89

23.51

27.64

25.60

26.89

Fuel ethanol imports (in billion liters)

1.10

0.53

0.13

0.36

0.40

Fuel ethanol exports (in billion liters)

1.08

2.50

1.95

0.90

1.00

Number of refineries

418

408

399

390

390

SOURCE: USDA FAS GAIN

Brazil production, exports expected to increase slightly next year An annual report on Brazilâ&#x20AC;&#x2122;s biofuel sector has been filed with the USDA Foreign Agriculture Serviceâ&#x20AC;&#x2122;s Global Agricultural Information Network, predicting Brazilian ethanol production will increase 5 percent next year, reaching a total of 26.86 billion liters (7.10 billion gallons). According to the report, Brazil is expected to produce 25.61 billion liters of conventional ethanol this year, down slightly from 27.54 billion liters in 2013. Brazilian exports are expected to increase 200 million liters next year, reaching 1.8 billion liters.

The ethanol blend level in Brazil is currently set at 25 percent. According to the report, the Sugar and Alcohol Millers Association of Sao Paulo State (UNICA) has requested the blend be increased to 27.5 percent. While the government has conducted technical studies on increasing the blend, those results werenâ&#x20AC;&#x2122;t expected until late September. Even if the studies recommend an increase in the blend level, the GAIN report indicates it is unlikely the new blend level would come into effect before the end of the year.

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OCTOBER 2014 | Ethanol Producer Magazine | 25

DISTILLED

California funds sorghum development Calgren Renewable Fuels LLC, Aemetis Inc. and Pacific Ethanol Inc. each received a $3 million matching grant from the California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program to support the development of sorghum feedstock.

Although each of the three ethanol producers will use the money in different ways, one of the main goals is to encourage California farmers to grow the crop.

Sorghum is appealing as an ethanol feedstock because it requires less water to grow and California is in the midst of a drought, said Lyle Schlyer, president of Calgren Renewable Fuels.

Some of the grant money will be spent on university-led agronomic studies of sorghum.

The ethanol plants will also be working with sorghum seed companies, to identify what seed varieties would grow the best in California. In addition, Schlyer said some equipment will also be purchased to allow ethanol producers to better handle the grain on site.

EU Ethanol Statistics 2011

2012

2013

2014

2015

Fuel ethanol production (in billion liters)

4

4.39

4.81

5.19

5.25

Fuel ethanol imports (in billion liters)

1.29

0.83

0.6

0.48

0.51

Fuel ethanol exports (in billion liters)

0.1

0.1

0.08

0.19

0.13

Fuel ethanol consumption (in billion liters)

5.7

5.68

5.57

5.64

5.7

Number of faciliites

8

70

71

70

70

Capacity utilization

57%

57%

61%

62%

63%

SOURCE: USDA FAS GAIN

Report provides EU policy update The European Union has filed its annual biofuels report with the USDA Foreign Agricultural Service’s Global Agricultural Information Network, reporting that the European Commission aimed to reach an agreement on future biofuel policy by October.

The EU Energy Council reached a political agreement on biofuels policy in mid-June that would cap conventional biofuels at 7 percent. The agreement would also support a transition to second- and third-generation biofuels. The council is expected to reach an agreement with the European Commission and parliament on that policy soon.

According to the report, the expansion of European ethanol demand is dwindling, and is not forecast to reach the record of use set in 2011. The drop in demand is attributed to lower transportation use, adjusted blending mandates and blending of doublecounted biofuels.

Although advanced biofuel production benefits from support programs in the EU, the report indicates European deployment is lagging behind the U.S. Political uncertainty is described as the main obstacle to investments and commercialization in the advanced biofuel sector.

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• Alternative to antibiotic treatments: DeLasan CMT controls bacteria during the initial fill stage of the fermenter. As a result, no other products are needed to control bacteria.

• Cost effective: Because DeLasan CMT is effective at very low dosage rates, the program cost is normally less than the cost of antibiotic treatments.

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• Easy to feed and test for: DeLasan CMT is added directly into the corn mash. No premixing is required. The control test is a modified total chlorine test already in common use.

• Complete consumption: Unlike some treatment products, DeLasan CMT is completely consumed in the fermenter. It contributes no sodium, chloride, or sulfate to the backset. It does not harm yeast when used at recommended levels.

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DISTILLED

Lowfat DDGS in swine diet studied Researchers at the University of Illinois are evaluating the use of new low-fat distillers dried grains with solubles (DDGS) in swine diets. “Dietary fat concentration has been shown to be a factor in the digestibility of nutrients,”said Hans Stein, a professor of animal sciences at University of Illinois. “Because DDGS supplies a significant amount of protein in swine diets, we wanted to investigate if amino acid digestibility is compromised in diets containing low-fat DDGS.” The team compared amino acid digestibility in growing pigs fed diets containing conventional DDGS or one of two sources of low-fat DDGS. “We observed that the standardized ileal digestibility of almost all amino acids was greater in conventional DDGS than in either source of low-fat DDGS,” Stein said, noting that adding dietary fat to diets containing lowfat DDGS didn't improve the digestibility of amino acids. While that result conflicts with previous data, Stein said the differences in fat levels between diets without or with added fat were much greater in previous experiments than in the current study.

Bolt-on cellulosic projects Company

Location

Feedstock

Facility type

Capacity (Mmgy)

Edeniq

CA

Corn stover

Demonstration

3

Front Range Energy

CO

Corn fiber

Commerical

0.5

Flint Hills Resources

IA

Corn fiber

Commerical

~5

GranBio

Brazil

Bagasse

Commerical

22

ICM

MO

Corn fiber

Pilot

TBD

Poet-DSM

IA

Corn stover

Commerical

25

Quad County Corn Processors

IA

Corn fiber

Commerical

2

Raizen

Brazil

Bagasse

Demonstration

11

Usina Vale

Brazil

Bagasse

Demonstration

0.2

Usina Santa Maria

Brazil

Bagasse

Commerical

3

SOURCE: UC DAVIS, "THREE ROUTES FORWARD FOR BIOFUELS: INCREMENTAL, TRANSITIONAL, AND LEAPFROG"

UC Davis study charts 3 paths forward for advanced biofuel development

A study, titled “Three Routes Forward for Biofuels,” released by the Institute of Transportation Studies at the University of California, Davis, examines how different routes for biofuel development can help meet clean fuel and emission standards.

The study considers an incremental route where small improvements are made at existing plants, a transitional route in which cellulosic bolt-on production and other innovations leverage existing investments, and a leapfrog

Some chemical companies focus on this

route that focuses on major technological breakthroughs in cellulosic and algae pathways at new, stand-alone biorefineries.

Researchers found that moving toward a large-scale, sustainable biofuel future will require continued technology development and a favorable policy environment that encourages innovation and investments in large-scale leapfrog solutions. Incremental and transitional routes, however, should not be ignored and may play a critical role in future progress.

or that

.

Buckman takes a wider view.

Some chemical companies focus only on process.

Some focus solely on water treatment. Buckman takes a comprehensive approach and looks at the bigger picture — return on investment and environment.

We look at every aspect of your plant’s operation,

tailoring chemistries to boost production and increase profitability — from evaporator efficiency to corn oil recovery to water treatment issues. To find out more or to schedule a system audit, contact your Buckman representative or email ethanol@buckman.com.

© 2014 Buckman Laboratories International, Inc. All rights reserved.

OCTOBER 2014 | Ethanol Producer Magazine | 27

R&D

HARVEST TIME: Biomass sorghum has received a lot of interest to date.

PHOTO: GENERA ENERGY INC.

28 | Ethanol Producer Magazine | OCTOBER 2014

R&D

Boosting Biomass for Bioenergy Many dedicated energy crops hold promise as feedstocks for next-generation ethanol. Extensive R&D is still needed, however, to overcome the challenges in making these plants viable for commercial applications.

By Katie Fletcher

The bottom line is that there’s no such thing as a one-size-fits-all energy crop. “Some of these have a longer history of research behind them, like switchgrass and poplar, so there is more to go on, but we are always looking for new crops that might fill the niche,” says Cathy Ronning, program manager at the U.S. DOE, adding that the agency isn’t placing its bets on any certain crop.

This year, $12.6 million was awarded to 10 projects developing new cultivars of regionally adapted bioenergy feedstock crops, and in researching the complex interactions between bioenergy feedstock plants and their environment.

A number of them build on existing knowledge of some of the dedicated energy crops with cellulosic ethanol feedstock potential including sorghum, switchgrass, poplar and miscanthus.

The 10 projects were selected through the DOE-USDA Plant Feedstock Genomics program, which was created in 2006, combining the DOE’s know-how in genomic sequencing and biofuel production analysis and the USDA’s experience in crop improvement. The program supports the fundamental research of these energy crops for bioenergy production. “In the past few decades, there has been tremendous advances in genomics and systems biology approaches,” Ronning says. “We believe we can use these technologies to speed up the development

of these plants in a sustainable and adaptable manner to produce feedstock plants that require fewer inputs, specifically like fertilizer and water.”

Seeking Sustainability

Dedicated energy crops naturally produce more biomass per acre and require less fertilizer, water and other resources than annual field crops. Many can grow in less than optimal conditions with little management, using only marginal lands to retain land for food crops.

Some farmers are hesitant to plant the crops, however, because of unfamiliarity with growing practices for existing varieties. Also, the logistics of harvest, transportation and storage for large-scale commercialization of dedicated energy crops has not been fully worked out for commercial-scale biorefineries. Ultimately feedstock is the single largest cost driver for biofuels and, in many cases, the main barrier to cost competitiveness and scalability.

Genera Energy Inc. is a company focused on managing this supply chain with various producers and developers to overcome challenges like scalability. “Some can take a wide range of feedstocks on any given day, others are more restrictive, and balance is needed of all the agriculture concerns upstream with downstream technology provider requirements on their technology,” says Sam Jackson, vice president of business develOCTOBER 2014 | Ethanol Producer Magazine | 29

R&D

opment with Genera Energy.

Ceres Inc. also works to improve commercial development with product lines and development programs for high biomass sorghum, sweet sorghum, switchgrass and miscanthus. “We have collaborated with a number of industry participants involved in cellulosic biofuels and biopower production,” says Gary Koppenjan, communications director with Ceres. “These tests have confirmed that biomass from our energy grasses can be converted and processed into various fuels or biobased products, and have provided data we have used to further enhance our energy crops for use with these conversion technologies.”

Sorghum’s Scalability

John Mullet, a professor at Texas A&M University, College Station, received $1.23 million for a project focused on improving two main categories of traits that affect the yield of high biomass energy sorghum: water use efficiency and drought resiliency. “You need a combination of those two traits in order to build an ideal energy crop for the U.S.,” Mullet says. “Water in a nonirrigated system is the primary limitation determining yield. That’s why this proj-

GENETIC DIVERSITY: Sorghum is used for multiple uses in a variety of forms, including sweet, forage, grain or highbiomass. Sweet sorghum and high-biomass sorghum are among the 10 DOE-selected projects.

PHOTO: ROY KALTSCHMIDT, LAWRENCE BERKLEY NATIONAL LAB

ect focuses on improving the plant’s ability to use water to make biomass.”

Ceres has begun commercial development of sorghum. “There are well-established agronomic systems for sorghum, it’s high-yielding, grows quickly and fits well in with crop rotations, so it has received the most commercial interest to date,” Kop-

penjan says. “We have focused our efforts in Brazil where there is existing infrastructure and significant opportunities today for new energy crops to complement first generation feedstocks and increase bioenergy production.”

Mullet says currently most of the sorghum being used for ethanol production

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R&D

GOING GREEN: Switchgrass grows at Great Lake Bioenergy Research Center's fields at the Arlington Agricultural Research Station in Arlington, Wisconsin.

PHOTO: MATTHEW WISNIEWSKI, GREAT LAKES BIOENERGY RESEARCH CENTER

says.

PERENNIAL FEEDSTOCK: The rapid growth and high biomass yield of miscanthus make it an ideal contender for biofuel production.

PHOTO: GENERA ENERGY INC.

in the U.S. is grain sorghum, but research estimates energy sorghum can produce twice as much biomass and biofuels when optimized. “We think it is a very promising commercial product, longer term,” Mullet

Another project selected to improve sorghum yield received $1.34 million. Patrick Brown, a quantitative geneticist at the University of Illinois, Urbana-Champaign, is working with a biochemist to characterize novel genetic variants that affect lignocellulosic composition and saccharification yield in bioenergy sorghum and closely related perennial grasses. “We are going to look at sorghum lines, and we are going to evaluate them for their agronomic performance,”

Brown says. “Ultimately, what is really of interest is the economic yield per acre of different lines.”

Modified Miscanthus

The perennial miscanthus is being studied by Erik Sacks, at the University of Illinois, Urbana-Champaign, quantifying phenotypic and genetic diversity of miscanthus sacchariflorus. His project is receiving $1.5 million, and the goal is to develop molecular markers associated with traits of

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OCTOBER 2014 | Ethanol Producer Magazine | 31

R&D that can enable plant breeders to quickly develop improved biomass cultivars of miscanthus giganteus and closely related sugarcanes and energy canes.

Right now large-scale production is not commercially feasible for miscanthus because establishment costs are much higher than other energy crops, according to Koppenjan. “In miscanthus, we are developing seed-propagated varieties that have the same high-yielding attributes of current types of miscanthus, yet with establishment costs more comparable to other energy crops,” Koppenjan says.

Chemtex International Inc. is one company that plans to use the crop, among other energy grasses, as a feedstock at its 20 MMgy biorefinery in Clinton, North Carolina.

cultivars in northern latitudes where they have higher yield potential, due in part, to their significantly later flowering time at these latitudes. Lowland switchgrass is not adapted to the colder winter conditions, however. Research has found that within the collective genetic diversity of the population, alleles, or alternative forms of the same genes, are present that confer cold tolerance. “If these alleles could be catalogued and converted into molecular markers, they would facilitate accelerated breeding and provide a mechanism to improve the efficiency of breeding switchgrass cultivars with high biomass and cold hardiness,” Buell says. This research has the potential to be applied in breeding programs for switchgrass that can thrive in northern climates.

Strengthening Switchgrass Poplar Potential

SWITCHGRASS SLURRY: A beaker contains switchgrass that has been pretreated and hydrolyzed to prepare it for fermentation to ethanol.

PHOTO: MATTHEW WISNIEWSKI, GREAT LAKES BIOENERGY RESEARCH CENTER

Switchgrass is another feedstock for cellulosic ethanol at Chemtex’s facility.

Abengoa’s 25 MMgy biorefinery also plans to utilize switchgrass as a feedstock, among others. Research conducted by Robin Buell, a plant biologist at Michigan State University, East Lansing, received $1 million to identify traits associated with cold hardiness in switchgrass. One of the proposed mechanisms to increase switchgrass biomass is to grow lowland switchgrass

Woody biomass also falls under the umbrella of energy crops with bioenergy production potential. Amy Brunner’s research at the Virginia Polytechnic Institute and State University received $1.43 million for a project that uncovers divergent and convergent regulatory networks that control growth responses to day length and nutrient stress in poplar. “The whole goal is to minimize water and nitrogen use, but maximize biomass production,” Brun-

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32 | Ethanol Producer Magazine | OCTOBER 2014

POPLAR PLOT TWIST: Poplars grow at GreenWood Resources Inc.â&#x20AC;&#x2122;s Advanced Hardwood Biofuels Northwest demonstration site near Jefferson, Oregon.

PHOTO: DARRELL KILGORE OF WASHINGTON STATE UNIVERSITY AND THE USDA ADVANCED HARDWOOD BIOFUELS NORTHWEST PROJECT

ner says. â&#x20AC;&#x153;We are really focusing on understanding how these two abiotic signals are perceived by poplar and, hopefully, identify different genes and networks, which could then be used in the future to improve the crop.â&#x20AC;?

Greenwood Resources Inc. is currently supplying ZeaChem Inc.â&#x20AC;&#x2122;s 250,000 gallonper-year cellulosic biorefinery with hybrid poplar trees from their farms within the vicinity of the plant in Boardman, Oregon.

Building a Portfolio

Researchers and developers seem to agree that building a portfolio of feedstocks is required for biofuel and biopower production. â&#x20AC;&#x153;What we want to see is really high-yielding and durable, sustainable varieties of these crops in multiple regions,â&#x20AC;?

Ronning says.

Although current focus remains on improving and developing dedicated energy crops, potential for other feedstocks, like

tropical grasses and even tobacco, are being considered for the future. â&#x20AC;&#x153;I think there are all sorts of opportunities, and as time goes forward there may be other crops that pop up here and there as potential biomass producers,â&#x20AC;? Jackson says.

Author: Katie Fletcher Staff Writer, Ethanol Producer Magazine 701-738-4920 kďŹ&#x201A;etcher@bbiinternational.com

SMART IS HELPING ALTERNATIVE

ENERGY BECOME MAINSTREAM.

As ethanol becomes more and more important in American energy production, its next phase of evolution is essential. Thatâ&#x20AC;&#x2122;s why New Holland stands behind the advancement of cellulosic ethanol and congratulates those leading the cause. Itâ&#x20AC;&#x2122;s the kind of SMART thinking that continues to bring ethanol into our daily lives.

0ROUDLY SUPPORTING AMERICA S ENERGY INDEPENDENCE .%7(/,,!.$ #/- .! Š 2014 CNH Industrial America LLC. All rights reserved. New Holland Agriculture is a trademark registered in the United States and many other countries, owned by or licensed to CNH Industrial N.V., its subsidiaries or affiliates.

VIP TOUR: Various officials, including, at left, Feike Sijbesma of Royal DSM, King Willem-Alexander of the Netherlands, and, behind them, Jeff Broin of Poet, walk through the plant.

PHOTO: TIM PORTZ, BBI INTERNATIONAL

FEEDSTOCK TRANSFORMATION: Project Liberty had produced 1,000 gallons of cellulosic ethanol as of the grand opening, according to Steve Hartig, Poet-DSM general manager.

PHOTO: POET-DSM

GETTING IT DONE: Poet’s CEO Jeff Lautt spoke about what it took to make the $250 million project a reality. At his left is Netherlands’ Ambassador to the U.S. Rudolf Bekink.

CONSISTANT ADVOCATE: Project Liberty, which the USDA invested in, demonstrates that the U.S. is ready for advanced biofuel production, said USDA Secretary Tom Vilsack.

PHOTO: POET-DSM

PHOTO: POET-DSM

BIG TURNOUT: Feike Sijbesma, Royal DSM’s CEO and board chairman, said many told DSM and Poet that the companies were embarking on an impossible task to produce ethanol from agricultural residue.

STEP-BY-STEP: Stover bales are shredded, sent into the pretreatment system and then held in “sac alley” for 120 hours for optimal enzyme performance, according to Beau Schmaltz, operations and engineering manager.

PHOTO: POET-DSM

PHOTO: TIM PORTZ, BBI INTERNATIONAL

34 | Ethanol Producer Magazine | OCTOBER 2014

Victory For

CELEBRATION

Project Liberty What was once only a dream has become a reality with the grand opening ceremony of Project Liberty.

By Holly Jessen

It’s no coincidence that Project Liberty’s name includes a word that means freedom, said Feike Sijbesma, Royal DSM’s CEO and board chairman, during the Sept. 3 event.

GOLDEN PILES: It takes about eight days for a bale of corn stover to be transformed into cellulosic ethanol.

PHOTO: POET-DSM

Poet-DSM Advanced Biofuels LLC’s Emmetsburg, Iowa, cellulosic ethanol plant is an opportunity for freedom from addiction to fossil fuels, freedom from the cycle of pollution and freedom to create jobs in the Midwest and around the world. “We are … witnessing the start of the shift of the fossil age we have lived in, and we still live in, to the biorenwable age we are entering today,” he said. “The fossil age will inevitably come to an end one day.”

About 3,000 people attended the celebration, including speakers USDA Secretary Tom Vilsack, King Willem-Alexander of the Netherlands, where DSM is headquartered, Iowa Gov. Terry Branstad, Michael Knotek, U.S. DOE Deputy Undersecretary of science and technology, and other officials. The 20 MMgy cellulosic ethanol plant, which will eventually expand to 25 MMgy, first produced biofuel in August.

Jeff Broin, Poet’s founder and executive chairman, asked farmers in attendance to stand up, recognizing that the company could not do its job without them. “What we see around us today is a symbol of what can be accomplished through the miracle of nature, the work of the farmer and the power of human ingenuity.”

The $250 million project developed over 10 years of research and development, seven years of feedstock collection and three years of building and refining a partnership with Netherlands-

based Royal DSM, said Poet’s CEO Jeff Lautt.

Construction of the plant took a thousand truckloads of concrete, millions of pounds of steel and the work, sweat and dedication of hundreds of construction workers to complete.

Branstad noted that the state of Iowa estimates a $24.4 billion impact on the state in the next 20 years, adding that with enough innovation and hard work a dream like this can become reality. “And we’re not done dreaming, not by a long shot,” he said.

Poet founder and chairman Jeff Broin spoke about how his father began experimenting with ethanol production on a kitchen stove at the family farm. “Neighbors thought we were crazy when we bought a closed plant in Scotland, South Dakota,” he said. “And they thought we were every crazier when we went around talking to farmers about the possibilities. We were told we’d never get enough biomass, that ethanol would never been cost competitive, and that it was a fantasy fuel. Well, we became used to being called crazy, and here we are today with something I never could have dreamed of. Project Liberty has been a fantasy, but today, it is real. … Hundreds of years from now, it is my hope that people will say this all started because of some crazy people in a small town in Iowa had a dream.”

Authors: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com Contributor: Anna Simet Managing Editor, Biomass Magazine

OCTOBER 2014 | Ethanol Producer Magazine | 35

DENSIFICATION

1012

to lbs per cubic foot

3840

to lbs per cubic foot

DENSIFICATION

Stover Pellets

Pack In

the Pounds Densification reduces transportation cost, improves storability and could open new markets.

Are pellets the future for corn stover?

By Susanne Retka Schill

Pelletizing corn stover offers some tantalizing prospects. Where

it is virtually impossible to load a truck to maximum weight with bales, one could with pellets.

The densification process improves bulk density by a factor of four. On top of that, stover pellets should be able to be stored and handled much like corn, essentially turning them into a commodity that could be shipped anywhere.

The wood products industry has done this, taking the waste stream from sawmills and densifying sawdust into pellets. In some cases, forest slash and thinnings are used as well. Premium pellets are catching on in U.S. regions where high propane and fuel oil costs make pellet heat very affordable. And, the pellet industry is booming right now in the Southeast, where producers are filling the holds of ships with industrial wood pellets bound for European power generators, for cofiring or replacing coal.

There is a science to pelletizing. Particle size and distribution, moisture and components such as lignin, protein and starches are critical factors in densification. The lignin in wood, for example, essentially melts under the pressure and heat in a pellet die binding particles together.

Starch is the preferred binder for medicine tablets and the protein in alfalfa binds feed pellets.

Researchers at Idaho National Laboratory have studied the components and processes in densification, along with the systems in use to manufacture different forms, such as briquettes, range cubes, tablets or pellets. Among the many crops

examined, some require binders due to low lignin content, such as switchgrass or miscanthus.

Corn stover makes a good durable and dense pellet, reports Jaya Shankar Tumuluru, an expert on pelletizing biomass materials at INL. He was the lead author in a 2011 paper on biomass densification systems for bioenergy application. “Stover pelletizes without binders, at a reasonable energy consumption,” he says. The lignin and water-soluble carbohydrates in stover make it easier to pelletize than some energy crops. Under the pressure of a pellet die, the moisture and steam help create binding forces, and along with that, the spherical shape of finely ground stover helps with densification. INL research has shown that pelletizing corn stover doesn’t introduce recalcitrance and, indeed, may improve an enzymatic conversion process by breaking down some of the structures in the cellulose and hemicellulose to make the sugars more accessible, he adds.

“Currently the transportation cost saving does not totally offset the costs associated with the pelleting and regrinding at all transportation distances,” he says. “But that said, we have not quantified additional advantages such as handling and storage benefits of pellets in terms of cost per ton,” he continues. “If these costs are quantified, then we think the costs can be tipped in favor of pelletization.” After all, pellets pack the same weight in about one-fourth the volume. Stover pellets weigh 38 to 40 pounds per cubic foot compared to 10 to 12 pounds per cubic foot for bales. Pellets provide other storage OCTOBER 2014 | Ethanol Producer Magazine | 37

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DENSIFICATION

FULL-SIZE DEMO: Pellet Technologyâ&#x20AC;&#x2122;s R&D center in Gretna, Nebraska, houses commercial-scale equipment, including a standard 5-ton-per-hour pellet mill and a 15-ton-per-hour bale shredder. The layout and product flow would be similar in a larger production facility, but with multiple shredders and pellet mills.

PHOTO: PELLET TECHNOLOGY

advantages besides a much smaller footprint, he adds. â&#x20AC;&#x153;The 5 to 10 percent moisture content improves storability, plus pellets have good flow characteristics in handling systems,â&#x20AC;? he says. â&#x20AC;&#x153;A corn grain handling system should be able to handle stover pellets.â&#x20AC;?

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Applied Technology

A Nebraska company is aiming to be among the first to turn cumbersome bales into a storable and transportable commodity, with biorefineries only one of several potential markets. Stover pellets could become a replacement for coal in power generation, and they could revive traction for stover in the feed market. â&#x20AC;&#x153;With our technology, 75 percent [of the process] is the same, whether the pellet is going to biochemical, biocombustion or feed,â&#x20AC;? says Russ Zeeck, chief operating officer of Pellet Technology USA. He founded the company six years ago after selling his interests in the ethanol industry where he had worked for 15 years. Studying the cellulosic space, he launched a corn stover based-business, partly because stover itself is a very consistent biomass for cellulosic processes, and partly because, in his assessment, stover will dominate the biomass feedstock scene as energy crops take time to gain ground.

Pellet Technology has collaborated with ICM Inc. to realize its goal. Earlier this year, the two companies announced an agreement for ICM to become the engineering, procurement and contracting agent for future facilities and a strategic partner for the development and commercialization of the technology. ICM has helped with engineering and fabrication of system components, and handled last yearâ&#x20AC;&#x2122;s expansion of the R&D center in Gretna, Nebraska. Pellet Technology expects to be announcing the first commercial facility soon, Zeeck reports, and should be breaking ground on a full-scale 200,000 ton per year plant in the Midwest by the beginning of the new year.

The initial target market is for feed. â&#x20AC;&#x153;Why we went with feed is because farmers have issues with stover on the field now,â&#x20AC;? explains Joe Luna, Pellet Technologyâ&#x20AC;&#x2122;s biomass and site coordinator. And, though the price of corn has dropped considerably since the droughtdriven peak of $8 per bushel sent feeders looking for alternatives, emerging technology in the ethanol industry is likely to impact the livestock industry as well. Low-oil distillers grains is already affecting rations, and the expected move toward removing fiber will require further adjustment. Pellet Technology has patented an engineered feed pellet that transforms stover into a nutrient-dense feed and almost doubles its digestibility, Luna says.

And, high-protein distillers grains and syrups from the ethanol process are used in some feed formulations.

A big part of Pellet Technologyâ&#x20AC;&#x2122;s intellectual property surrounds the grinding and handling of stover. â&#x20AC;&#x153;Stover is not an easy animal,â&#x20AC;? Zeeck says, explaining that when ground, stoverâ&#x20AC;&#x2122;s very light specific gravity means it handles very differently from ground corn. Engi-

DENSIFICATION

DIFFERENT ANIMAL: Systems had to be reengineered by Pellet Technology and partner ICM to successfully grind and convey ground stover. The feedstock has a very light specific gravity creating very different handling characteristics when compared to ground corn.

Creating Opportunity Since 1851.

PHOTO: PELLET TECHNOLOGY

neering solutions had to be found for material handling, transitions and mixing, with a watchful eye on dust control in anticipation of permitting requirements. Another important goal was to reduce the 10 to 12 percent loss factor observed in the typical tub grinders that served as the platform for Pellet Technology’s modifications.

Another focus was on developing a consistent product, Luna explains. “In the traditional method of handling corn stalks—tub grinders—there’s a pulverizing action, a lot of dust produced and particles anywhere from dust to 2 inches long, depending on the screen size.

Part of our intellectual property is to have tight control on particle size.” The process also needed to successfully handle bales of different types and sizes, coming from places like northern Nebraska or eastern Iowa. Real world conditions mean those bales will vary from 10 to 50 percent moisture, with some having been sheered once in the field, some twice and some not at all.

The pellet process was also extensively modified. Luna explains the company started with a standard pellet press. “We changed the roller, the die and the feed system,” he explains. “We do not use steam in our pelleting, and we control our die temperature.” Heat created by friction needs to be controlled to avoid degrading components that impact yields in a biochemical process, he explains, or to avoid affecting the Btu content for cofiring applications.

Zeeck and Luna envision Pellet Technology being an add-on for first- or second-generation ethanol facilities, or deployed in co-op fashion. Farmers would bring baled stover in to strategically located facilities where it is pelletized for the intended market and stored for later shipment. Building on the familiar grain-handling model, such a system could aid the development of the biomass market, giving sellers alternative markets and buyers more sources. Sustainability will be a concern, Zeeck adds, to ensure soil and conservation goals are met for farmers. And, though feed is the initial market, there is tremendous potential for growth in the biomass market, based on the sheer volumes that will be required, he adds. “We’re talking to one biochemical developer who alone is looking at 800,000 tons of stover per year.”

Author: Susanne Retka Schill Senior Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com

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OCTOBER 2014 | Ethanol Producer Magazine | 39

PROFILE

Ahead of His Time The idea of wet biomass storage has yet to catch on in the cellulosic industry, despite long-term use in the pulp and paper industry.

By Holly Jessen

Jim Hettenhaus is a passionate advocate of wet biomass storage. A longtime member of the

ethanol industry who helped plan the first Fuel Ethanol Workshop, he is the managing director of CEA Inc., a consulting business.

Hettenhaus has been talking about the advantages of wet biomass storage over dry bales for years now. It’s a sustainable, economic and reliable method with a favorable life cycle with the added benefit of being used successfully on sugarcane bagasse bound for pulp and paper mills, he says.

Back in the late 1990s, he started work with others on a National Renewable Energy Laboratory-sponsored study of wet biomass storage, followed by doing work for the USDA in the 2000s. He’s spoken about the advantages of wet biomass storage at multiple conferences, including this year’s FEW. He has also had many conversations about it, some with developers actively working to build cellulosic ethanol plants.

So far, however, the major players in building cellulosic ethanol plants are utilizing dry bales for feedstock storage. Hettenhaus believes that’s because change is difficult to embrace as dry bales is the storage method understood in the agriculture industry. “It’s so easy to do what they are doing now,” he says.

In addition, nearly two decades ago, when he started investigating the idea of wet biomass storage, it was thought that the cellulosic industry would be established by the mid- to late-2000s. Now the reports

40 | Ethanol Producer Magazine | OCTOBER 2014

commissioned by the USDA and NREL are many years old and contain dated information about transporting biomass via railroad, a proposition that obviously wouldn’t be viable today. Still, the concept of wet biomass storage is as relevant as ever. “I just think that I was too soon, too soon, too soon,” he says.

One of the big advantages of wet biomass over dry is protection from the risk of fire, he says, citing multiple instances of bale fires. In addition, wet biomass takes 10 times less storage space than dry biomass and results in less than 5 percent storage loss, compared to more than 10 percent in dry bale storage. It also allows biomass to be collected wet in the field, rather than relying on the uncertain schedule of field drying.

For a reliable supply of biofuel feedstock, Hettenhaus doesn’t believe dry bales are the way to go, with the exception of Idaho and further west, where conditions are dry and irrigation is used. Finally, it has a positive effect on processing cost due to reduced ash and soluables content, improved feedstock quality and increased feedstock yield.

From 2005 to 2008, a stover storage validation trial was conducted using a modified version of the Ritter method. About 700 dry tons of corn stover was piled 35 feet high in Imperial, Nebraska, and samples were analyzed and converted to ethanol at a Purdue University laboratory, using standard methods. Although there are many methods for wet biomass storage, Hettenhaus says, one is to wash and shred the biomass, pumping a slurry with 3 per-

cent stover solids to a storage pad. As the liquid drains though the pile, it is recirculated until the pile reaches the desired height.

Water circulation compresses the pile and removes dirt and soluable material that would have to be hauled away at the end of the process anyway. “I’m not a plant operator anymore but if I were, I’d jump up and down, I’d say, ‘Why aren’t you washing this? … You need to remove this before it gets into the plant,’” he says, adding that the residue removed contains nutrients, which can be returned to the fields as fertilizer.

Another big advantage was that the holocellulose (cellulose and hemicellulose) concentration increased from 59 to 68 percent. And, fermentation actually starts in the pile. “Wild organisms begin the fermentation of the small amount of soluble sugar in the pile, forming organic acids,” he says.

“The acids lower the pH and the anaerobic conditions preserve the corn stover pile.”

The Ritter method works on corn stover, straw, grasses, kenaf, and bagasse. It’s not a new storage method. “Bagasse is the feedstock most widely stored in this manner to supply pulp mills in sugarcane growing areas (such as) Central and South America, South Africa, India and Thailand,” he says, adding that the method has been used for more than 50 years.

The NREL sponsored report, which was published in 2003, included information about the results of successful wet storage studies that were conducted using sugarcane bagasse. “Between 1920 and 1960, many skeptics expected the material

PROFILE

to rot in a wet pile,” the report said. “When the method was a huge success, a number of studies were undertaken to better understand the wet storage process, where the material is completely saturated to its water-holding capability.”

Two particularly well-documented studies took place in Argentina and South Africa. In Argentina in 1969 and 1970, wet stored bagasse showed, to the researcher’s surprise, no measurable yield loss and the advantage of improved feedstock quality and consistency, better pulping results and a better final product quality. The South African study, which was conducted several years later, found that pulp produced from bagasse stored using the Ritter method was superior in physical strength, freeness and chemical consumption.

Hettenhaus would like to see the biofuel industry take a page from years of successful wet storage by pulp and paper mills. If wet biomass storage were utilized by the cellulosic ethanol industry, the biomass collection area could shrink to the local dry mill corn supply. In addition, harvesters could go to a one-pass harvest of corn stover.

Finally, the way he looks at it, it’s a wasted step to dry biomass only to get it wet again during the fermentation process. “I think we are missing an opportunity there,” he says.

Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com

OCTOBER 2014 | Ethanol Producer Magazine | 41

CONTROLS

PHOTO: SIEMENS

Control System Upgrade Yields Greater Sustainability and Output Carbon Green BioEnergy details turnaround effort.

By Mitch Miller

When my team formed Carbon Green benchmark plant turnaround that is yielding outstanding results for the company and the community.

BioEnergy LLC, we had a vision to own and operate an ethanol plant. We raised enough equity to Restart Challenge purchase a mothballed, two-year-old plant in Lake Odessa, Michigan, that had been sitting idle since it went bankrupt in 2008. CGB purchased the plant in 2009 at a time when many thought the ethanol boom was going bust. However, we strongly believed in the future of ethanol as a sustainable, clean fuel that creates jobs and reduces the countryâ&#x20AC;&#x2122;s dependence on foreign oil. Today, our vision for the future has fueled a

In June 2009, CGB took possession of the plant and needed to get it back up and running in a matter of months. This was no small task, as the facility had to be repaired, cleaned, tested, inspected and certified after being unused for a period of time. Once the plant was cleared for production, CGB discovered it wasnâ&#x20AC;&#x2122;t operating at capacity. It was producing 37 MMgy when its nameplate capacity was 50 MMgy. We

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

42 | Ethanol Producer Magazine | OCTOBER 2014

CONTROLS

How Sustainable is CGB's Ethanol Production?

Ethanol Production Creates Food & Fuel

• 100 percent of Carbon Green BioEnergy’s corn starch is used for ethanol production. The plant produces enough E85 to fuel a 2012 Chevy Malibu for 1 billion miles.

• 100 percent of the corn’s protein, fat and fiber is made into DDGS, enough to provide a highly nutritious livestock feed to as many cattle needed to feed 2.2 million people annually.

• CGB uses brewery waste from nearby Beer City USA in Grand Rapids, Michigan, to make ethanol and distillers dried grain.

• Uses only corn from local farmers, mostly within 50 miles.

• CGB uses waste heat from the DDGS drying process to make steam for the plant.

• With tighter process controls, CGB has increased ethanol production without increasing water consumption.

• 2014 energy return on investment is 2.82. The plant gets 2.82 Btu in output for each Btu of input.

Plant

at-a-Glance

• Produces 55 million gallons of ethanol/year.

• Buys 18 million bushels of corn/year from 450 local farmers ($100 million).

• 4 million bushels of grain storage.

• Near zero waste.

• Blends 500,000 gallons of E85 onsite each month.

knew we had to increase the plant’s efficiency and productivity across the board to make it sustainable and profitable in the long term.

One of our main goals has been to enhance the local economy and community by working every day to improve our plant and our process.

We want to be part of the solution to our energy needs in the United States and so we embarked on a plant overhaul that included: • Upgraded process control system.

• Increased grain storage capacity from 400,000 bushels to 4 million bushels.

• Used the heat and steam from drying the distillers grain to supply a heat recovery steam generator that creates electricity for the plant.

• Streamlined production by increasing throughput to a point where we're diluting our natural gas cost and our electrical cost-pergallon of ethanol produced. For example, a motor running is going to draw its electricity base load to power a pump. Once that motor is running at an optimal speed, the efficiency goes way up and you can pump 600 gallons a minute versus 500 gallons a minute.

The plant was built with an APACS-plus process control system that was reaching its end-of-life. This means the original equipment manufacturer would not support the technology and software for the long-term. We had three options: • Keep the existing system, and stock up on spare parts and hope for the best.

• Replace the entire process control system and hardware, which would be costly.

• Take a hybrid approach of upgrading the software while keeping the existing hardware.

The hybrid path is the one that we chose. It enabled us to upgrade the process control platform and interfaces, while keeping existing automation equipment, hardware and input/output (I/O) intact–– the communication between the process control system and a field device like a motor, pump or flow meter. The hybrid approach allows us to continue to have the latest software and support while using our relatively “new” and existing hardware and I/O. We chose to migrate to a Siemens PCS 7 APACS-plus OS to realize the following advantages: • Upgraded human machine interface (HMI) graphic screens provide a more user-friendly interface. HMIs are computer graphic interfaces used to monitor and control processes on the plant floor.

• Reduced configuration, startup time and maintenance complexity.

• Updated client or server architecture while using the existing APACS-plus control system.

• New process control (PC) operating system.

The HMI upgrade enabled us to extend the life in our installed APACS-plus control system assets with no disruption to production, all while using a new PC operating system. We didn’t need to make changes

OCTOBER 2014 | Ethanol Producer Magazine | 43

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to the APACS-plus project configuration or field I/O hardware, which reduced testing, outage time and cost. We ran the former HMI system and the new system side-by-side for three months to ensure we were confident the system was performing as designed. We fully transitioned to PCS 7 during a scheduled twoday plant shutdown.

Additionally, Siemens supplied many of the premium efficiency electrical motors that power the pumps and processes within the plant and are connected to the PCS 7 to ensure the most in uptime and energy efficient operations. The Siemens system helps our staff with troubleshooting and operational consistency and efficiency. The team here really likes that. They also like that it's quicker and there's no lag in the control system. Itâ&#x20AC;&#x2122;s pretty bulletproof.

Trident Automation Inc., Kaukauna, Wisconsin, was involved with the startup of the original system so they were familiar with its features and functionality and were instrumental in making the migration seamless.

They also helped to effectively and quickly train the operators on the new enhancements available in the new system.

Results

Carbon Green BioEnergy has increased its production from 37 MMgy in 2009 to 55 MMgy todayâ&#x20AC;&#x201D;and we intend to increase production to 60 MMgy by 2015. Other benefits from the new system include: â&#x20AC;˘ Enhanced trending and data analysis make it easy for operators and the process/ management team to manage production and troubleshoot.

CONTROLS

• Alarm management tools help to identify issues more accurately and improve production. Think of an alarm that tells you a motor needs maintenance, or a process is not running optimally. This helps the maintenance team to fix or repair a problem before it stops production.

• The historian interface has improved the ability to fine-tune the process and improve consistency and energy efficiency by looking at a process over time and understanding how to make it more consistent.

• The Siemens software update service enables us to keep our control software up-todate at a fraction of the cost of buying new.

This enables CGB to streamline its Microsoft security patches and keep the Microsoft operating system current.

Since we installed the PCS 7, we’ve been able to more quickly debottleneck the facility and improve energy efficiency. Basically, we’ve been able to take the waves or variances out of the process and it has enhanced the controllability and reliability of the plant.

With the plant running optimally, we support 450 local farmers, most within 50 miles of the plant, by purchasing 18 million bushels of corn annually at a market value of more than $100 million. This helps the local agricultural community have a stable buyer at fair market price. Growing corn in the area is profitable again and this is good news for the community.

Author: Mitch Miller CEO, Carbon Green BioEnergy, LLC 616-374-4000 mmiller@cgbioenergy.com

A Strong Partnership For over 15 years, Nalco has used an approach that includes mechanical, operational and chemical expertise combined with innovative technology to help ethanol producers find solutions to water and process challenges. When Nalco joined the RFA in 2005, the industry was just beginning to understand its potential. Today, we’re proud to be part of an industry that produced over 14 billion gallons of ethanol in 2013.

Going forward, we’re committed to partnering with producers to strengthen the business by driving operational efficiencies and sustainability. . . whether it’s conserving more than a billion gallons of water each year, finding new ways to increase corn oil recovery, or introducing better feed and control technology for final ethanol corrosion inhibitor treatment.

Together, we’re fueling a very bright future.

Reinventing the Way Water is Managed ©2014 Ecolab USA Inc. Ecolab, Nalco and the logo are trademarks of Ecolab USA Inc.

OCTOBER 2014 | Ethanol Producer Magazine | 45

CORN OIL

Capturing the California 'Golden Gallon' Ethanol producers need to learn their corn oil destination by working with marketers.

By Geoff Cooper

Biodiesel produced from corn distillers oil (CDO) is assigned an extremely low carbon intensity (CI) score under the California Low Carbon Fuel Standard, making it a tremendously attractive compliance option for regulated parties.

In fact, at just 4.0 grams of CO2-equivalent per mega joule (g/MJ), CDO biodiesel has the lowest CI score of any approved LCFS fuel pathway listed in Table 6 in the CI lookup tables. As an illustration of the high compliance value of CDO biodiesel, consider that blending just 1 gallon generates the same amount of LCFS credit in 2014 as blending nearly 13 gallons of ethanol with a CI score of 85 g/MJ. For these reasons, CDO biodiesel has earned the nickname of â&#x20AC;&#x153;the golden gallonâ&#x20AC;? in the California market.

California Air Resources Board data show that use of CDO biodiesel has increased exponentially in the state, rising from virtually zero in 2011 and 2012 to more than 6 million gallons in each of the two most recent quarters for which data is available.

In the first quarter this year, CDO-derived biodiesel accounted for more than 40 percent of the total volume of biodiesel used in California, according to CARB data.

PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

In normal functioning markets, the high compliance value of CDO biodiesel would be reflected in the price buyers (i.e., regulated parties) are willing to pay for the fuel. Anecdotal evidence suggests sellers of CDO biodiesel may indeed be receiving a premium price

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

46 | Ethanol Producer Magazine | OCTOBER 2014

CORN OIL

for the fuel in the California market, but the size of such premiums is not publicly reported. However, because the market value of LCFS credits is a known variable, the theoretical price premium for CDO biodiesel can be easily approximated. For example, if the market price for one LCFS credit is $50 (the average price during Q1), regulated parties should be willing to pay a 59-cent-per-gallon premium for CDO biodiesel over forms of diesel that exactly meet the 2014 diesel CI requirement of 97.05 g/MJ. Average credit values peaked at $79 in December 2013, meaning regulated parties should have, in theory, been willing to pay a 94-cent-per-gallon premium for CDO biodiesel at that time.

It does not, however, appear that price premiums for CDO biodiesel are being shared with the upstream supply chain.

There is no evidence that suppliers of the CDO feedstock (i.e., corn ethanol plants) are receiving any premium value for oil that is processed into biodiesel and delivered to the California market. Given that roughly 7.5 pounds of CDO are needed to produce 1 gallon of biodiesel, the CDO biodiesel premium associated with a $50 LCFS credit price would be equivalent to a price premium of nearly 8 cents per pound of CDO (versus CDO destined for other markets or uses where no compliance value exists).

Of course, the biodiesel producer selling CDO biodiesel into California at a premium would not likely pass along 100 percent of the â&#x20AC;&#x153;golden gallonâ&#x20AC;? premium to the CDO supplier. Still, even if the biodiesel producer and the CDO producer split the premium 50/50, the CDO producer would theoretically see a four-cent-per-pound

increase in the value of every pound of CDO provided to a biodiesel producer who is selling CDO biodiesel into California (assuming a credit value of $50).

When Theory Meets Reality

Like other products manufactured by corn ethanol facilities, CDO is often

distributed by third-party marketing firms.

Thus, the ethanol producer may not know whether his CDO is ultimately being used as animal feed or as feedstock for biodiesel (let alone feedstock for biodiesel that will be sold in California). Further, CDO is a commodity, and, like all commodities, its market price is determined by a complex

OCTOBER 2014 | Ethanol Producer Magazine | 47

CORN OIL

Gallons

Corn Distillers Oil-Derived Biodiesel Used for LCFS Compliance 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 Q1 2011

Q2

Q3

Q4

Q1 2012

Q2

Q3

Q4

Q1 2013

Q2

Q3

Q4

Q1 2014

SOURCE: RFA

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48 | Ethanol Producer Magazine | OCTOBER 2014

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set of supply and demand factors. As long as the primary use of CDO is as an animal feed ingredient, its market value will be largely determined by feed market dynamics and competing fats and oils. Thus, it will be difficult for corn ethanol facilities to capture the LCFS premium value for their CDO until demand for CDO-derived biodiesel in California is substantial enough to reorganize the CDO market structure.

Still, given the extremely high compliance value of CDO biodiesel in California, it may behoove ethanol producers who extract CDO to work with their marketers to track more closely the ultimate use of their CDO and consider efforts to better capture some of the additional value associated with the feedstock.

Finally, it should be noted that the life-cycle analysis behind CARBâ&#x20AC;&#x2122;s CI value for CDO biodiesel has been the subject of heated debate. Some have argued that CARB essentially treated CDO as a waste product from an ethanol dry mill, and thus the bulk of corn germ (oil) production and processing emissions (including prescribed indirect land use change emissions) were improperly allocated to the other products

CORN OIL

manufactured by the ethanol plant (i.e., fuel ethanol and distillers grains). Given the debate over CARB’s life-cycle analysis of CDO biodiesel, it is possible that the fuel’s CI score may be revised in the future to reflect potential changes to CARB’s calculations.

Author: Geoff Cooper Senior Vice President, Renewable Fuels Association 636-594-2284 GCooper@ethanolrfa.org

Theoretical CDO Biodiesel Premium and Equivalent CDO Premium at Various LCFS Credit Prices If LCFS Credit Price is... CDO-derived Biodiesel Premium Should Be... Equivalent CDO Premium Would Be...

MMT CO2e $/gallon $/pound $ 20 $ 30 $ 40 $ 50 $ 60 $ 70 $ 80 $ 90 $ 100

$ 0.235 $ 0.352 $ 0.469 $ 0.587 $ 0.704 $ 0.822 $ 0.939 $ 1.056 $1.174

$ 0.031 $ 0.047 $ 0.063 $ 0.078 $ 0.094 $ 0.110 $ 0.125 $ 0.141 $ 0.156

SOURCE: RFA

References:

-Table 6. Carbon Intensity Lookup Table for Gasoline and Fuels that Substitute for Gasoline, Table 6. http:// www.arb.ca.gov/fuels/lcfs/lu_tables_11282012.pdf

-LCFS Reporting Tool Quarterly Summaries. http://www.arb.ca.gov/fuels/lcfs/ lrtqsummaries.htm

-LCFS Credit Trading Activity Reports. http://www.arb.ca.gov/fuels/lcfs/ lrtmonthlycreditreports.htm

-Life Cycle Associates LLC prepared a detailed discussion and analysis of the problems with CARB’s CDO biodiesel analysis, available here: http://www.arb. ca.gov/lists/lcfs11/5-unnasch_-_lcfs_corn_oil_bd_ comments.pdf

ONLINE EXCLUSIVE To maximize throughout and yield, start with liquefaction Novozymes offers five tips for optimizing enzyme use.

By Laurie Duval To read, visit www.EthanolProducer.com and click on the October issue, under contributions.

Or visit http://tinyurl.com/epmenzymes

OCTOBER 2014 | Ethanol Producer Magazine | 49

TALKING POINT

DDGS Already a Proven Ingredient in Aquafeeds

By Kurt A. Rosentrater

In recent months, the buzz has been about using various fractions from DDGS as protein ingredients in feeds for the aquaculture industry.

Indeed, there are some very interesting value-added ingredients coming down the pipeline. Unbeknownst to many, however, traditional DDGS has already been proven time and again as working very well as a protein source in a variety of aquafeeds. As with any feed ingredient, though, it must be used at the proper level, and in proper combination with other ingredients as part of a complete, balanced diet. Formulations vary, depending upon the species and the age of the fish—similar to any other livestock species. A broad look at the industry and a bit of history are in order.

Aquaculture is the fastest growing animal food-producing sector globally. The industry has been growing by nearly 7 percent per year for almost 40 years. In fact, it has been the only food producing sector growing at a rate greater than human population growth. Most of this growth has been outside the U.S. and, although there is considerable potential here in the U.S. for fish production, it has been slow to DDGS Inclusion in Fish Diets Landmark Studies Species Tilapia

Catfish

Rainbow Trout Prawns

DDGS (%)

Citation

19 – 29

Tudor et al., 1996

30

Coyle et al., 2004

0 – 49

Wu et al., 1996

0 – 82.23

Wu et al., 1997

100 (distillery solubles)

Kohler and Pagan-Font, 1978

100%

Tidwell et al., 2000

35

Webster et al., 1992

0 – 30

Webster et al., 1993

0 – 70

Webster et al., 1991

3.3 – 6.6 (thin stillage - wheat)

Thiessen et al., 2003

40

Tidwell et al., 1993

40

Tidwell et al., 1998

100

Coyle et al., 2003

100

Coyle et al., 2004

50 | Ethanol Producer Magazine | OCTOBER 2014

materialize. China has by far been the world’s leader in aquaculture production, but other countries around the world have also become large players, including Indonesia, Vietnam, Bangladesh and several South American countries. Even though many countries have rapidly increased production during the past decade, China is still the largest producer of fish.

For a typical fish production operation, in the U.S. or abroad, feed costs represent between 40 and 70 percent of all operating costs, depending on the specific farm. Historically, fish meal has been one of the most important ingredients in aquatic diets, supplying essential proteins, amino acids, fatty acids, minerals and other nutrients. In recent years, as the demand for fish meal has grown in tandem with the growth of aquaculture, the price of fish meal has skyrocketed, hovering between $1,500 and $2,000 per metric ton for the past four years. The increases in both demand and price have propelled the search for wild marine and fisheries stocks, even though wild capture has not increased significantly for many years.

A logical solution to this dilemma is to use plant-based cereal and oilseed ingredients. There are many to choose from. There are also challenges with many of these alternatives, however, including unwanted nutrients and antinutritional factors (e.g., trypsin inhibitors,

Cost vs Inclusion Rate

TALKING POINT

protease inhibitors, lectins, gossypol), nutrient variability, poor nutrient balances (e.g., amino acid profiles, fatty acid profiles), cost-intensive processing to convert them into usable form, low-volume production and poor effectiveness in fish performance. At the moment, soy-based ingredients are the leading contenders for fish meal replacement.

DDGS is also an effective protein source for aquaculture feeds.

Advantages include its wide availability, moderate protein level, complementary amino acid profile (depending on supplementary ingredients), and effectiveness in many fish species when used in proper conjunction with other ingredients. The greatest advantage, however, is that DDGS is generally one-tenth to one-twentieth the price of fish meal, and approximately one-half the price of soybean meal. The economics are hard to argue with.

Many feeding trials have investigated the use of DDGS in aquafeeds over the years. In fact, the Distillers Grains Technology Council funded the first feeding trials as far back as the 1950s, and found that distillers dried solubles could be effectively used in catfish and rainbow trout diets up to 21 percent inclusion levels. Most early aquaculture research used DDGS from beverage distilleries, because the fuel ethanol industry was so small back then. But, the idea gained traction in the 1990s and 2000s as the fuel ethanol industry grew, and the quantity of DDGS grew. Some of the landmark studies, listed in the accompanying table, found DDGS (or even thin stillage or solubles in some cases) can be successfully used in a variety of fish diets, with fairly high inclusion levels.

The economics of using DDGS to partially offset fish meal are quite astounding. For example, if fish meal were used in an aquafeed at 40 percent inclusion, and DDGS increasingly replaced that fishmeal (from 0 to 100 percent), the relative cost of the diet would decrease, as shown in the accompanying graph. At 100 percent fish meal replacement, the total diet cost would be reduced by almost 90 percent. Overlaid on this graph, I also show some of my research teamâ&#x20AC;&#x2122;s results over the past decade. Depending on the species and the other ingredients used, we successfully used 20 percent DDGS inclusion in tilapia diets with no difference compared to a fish meal-based control diet; we have been able to use up to 40 percent DDGS in yellow perch diets, and we have even been able to achieve up to 60 percent DDGS inclusion in rainbow trout diets. All of these studies were conducted using traditional DDGS, not fractionated products.

Using DDGS in aquafeeds is not quite a slam dunk, however.

Some of the challenges associated with using DDGS include both feed

PHOTO: JAY FISHBACK

manufacturing as well as fish performance considerations. In terms of processing, the big question is how much DDGS can be used in a formulation without hindering the extrusion process or sacrificing pellet quality. We need to have cohesive, stable, floating pellets. This can be achieved with high levels of DDGS, but there is an art in operating the extruder so that high quality pellets can be produced. In terms of feeding trials, we need to determine how much DDGS the fish can eat, what level will result in optimal fish growth and feed conversion, what else must be added to the ingredient matrix, and what level will result in optimized production costs. In terms of feeding recommendations, it appears that using 20 percent DDGS inclusion is about optimal, both for feed manufacturing operations, as well as fish performance (this is true for many fish species, actually). And this has been borne out by much research in the past decade, both by my team as well as other researchers.

DDGS is a viable protein ingredient for aquafeeds when used as one component of a balanced feed. We need to convince aquaculture producers as well as aquafeed manufacturers that real economic benefits can be realized by using DDGS as a protein source, and feed quality and fish performance will not suffer if done correctly.

Author: Kurt A. Rosentrater

Executive Director, Distillers Grains Technology Council 515-294-4019 karosent@iastate.edu

OCTOBER 2014 | Ethanol Producer Magazine | 51

BUSINESS MATTERS

Sustainability Assessments Likely to Increase

By Sara Hessenflow Harper

With today's low corn prices and high production levels, ethanol producers are likely not thinking about supply-chain sustainability. But it's always smart to

prepare for the future. Because corn is a key part of the ethanol supply chain, awareness of the long-term forecast is essential.

The next few decades promise to be an incredible time of volatility, opportunity and risk. For food companies, ethanol manufacturers and retailers, the key to minimizing the negatives, capturing new markets and keeping projected cost increases lower than competitors is in having a deep understanding and better risk management of their supply chain.

This includes the ability to find and create new shared value streams with the most resilient, productive and sustainable companies in the supply chain. Data collection is a critical enabler of this competitive advantage pathway.

Sustainability, at its simplest, is the ability to meet the needs of the present without comprising the ability of future generations to meet their own needs.

Further evidence of how important the role of data collection and analysis is becoming in the food and agricultural space (among many others) is in a new survey out on what high level corporate executives have on their "top of mind" for the next year. Three main themes emerged: 1. Supply chain management is becoming more complex.

Consumer goods and retail executives ranked this as their No. 1 challenge and the one most likely to receive increased funding this year.

2. There is a big shift in executive attention toward the need for data and the impact data analysis has in helping understand and secure supply chains.

3. Sustainability and corporate social responsibility issues are increasingly driving decisions.

Notable findings from the survey include: • 56 percent of consumer goods and retail business leaders cited data analytics as being important to their firm’s strategy, making it the highest-ranked strategic area in the survey.

• 44 percent of business leaders cited traceability and transparency around end-to-end value chains as a top goal for their company just ahead of reducing waste and emissions (42 percent) and sustainable sourcing (41 percent).

• 52 percent of respondents reported that they have a strong or good capability to meet their sustainability agenda. Reputation and 52 | Ethanol Producer Magazine | OCTOBER 2014

brand (41 percent), consumer demand (34 percent) and competition (28 percent) were cited as three main drivers behind sustainability.

• 56 percent said health, corporate social responsibility and sustainability priorities are very important to their business.

• 42 percent placed supply chain management at the top of their list for increased investment over the next 12 months.

The take-away from this survey is that the folks who ultimately buy commodities feel the need to invest in gathering information to make informed decisions about their supply chain, sustainability priorities and increased transparency. The only way to do this is through gathering data from the ground up, which means the push for sustainability assessments or audits is only going to increase.

We speak often to farmers, agricultural associations and food companies on how important it is to capture data and to make sure it is working for them first, before reporting it on to the larger supply chain.

Taking a more systematic approach toward layering a wider array of data (like sustainability and financial) into long-term business planning processes can help individual farm operations and food companies make better decisions and reduce long-term costs the same way it helps large corporations. It will also get these entities ready for the sustainability reporting onslaught that is coming their way.

The decision before the agricultural industry is increasingly becoming how and who will provide data about their growing performance, not if data will be collected.

As the retail industry continues to ask questions about the sustainability of the products they sell, fuel and shipping will also be impacted. So, in addition to agriculture, ethanol and other fuels will be looked at with the sustainability lens as well. This is a good thing if businesses can demonstrate environmental consciousness using data.

Now is the time to start thinking about your sustainability plan to position yourself to be the market leader.

Authors: Sara Hessenflow Harper Sustainability Director, Vela Environmental, Kennedy and Coe LLC 202-544-8200 sharper@kcoe.com Contributor: Donna Funk Principal, Kennedy and Coe

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