Biofuels International August 2012

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August 2012 Issue 6 • volume 6

Palm oil billionaires TM

Facebook may have stolen the limelight, but the world’s second largest IPO this year was generated by the palm oil industry

Crore blimey!

Renewed support towards a mandatory ethanol blend for biofuels has started to rumble again in India

Staying positive

Despite pressure from multiple fronts, the US biodiesel industry continues to look on the bright side

biofuels international

Regional focus: biofuels in Asia

January 2008 0

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international

Issue 6

volume 6

August 2012 Horseshoe Media Limited Marshall House 124 Middleton Road, Morden, Surrey SM4 6RW, UK www.biofuels-news.com Associate publisher & Editor Margaret Dunn Tel: +44 (0)208 687 4126 margaret@biofuels-news.com Deputy Editor James Barrett Tel: +44 (0)208 687 4146 james@biofuels-news.com STAFF WRITER Keeley Downey Tel: +44 (0)208 687 4183 keeley@horseshoemedia.com INTERNATIONAL Sales MANAGER Shemin Juma +44 (0)203 551 5751 shemin@biofuels-news.com US SALES MANAGER Matt Weidner +1 610 486 6525 mtw@weidcom.com South American sales representative Roberto Bieler +55 21 3268 2553 +55 21 9465 2553 rbieler@farbitec.com PRODUCTION Alison Balmer Tel: +44 (0)1673 876143 alisonbalmer@btconnect.com SUBSCRIPTION RATES £195/€275/$370 for 10 issues per year.

Contact: Lisa Lee Tel: +44 (0)208 687 4160 Fax: +44 (0)208 687 4130 marketing@horseshoemedia.com No part of this publication june be reproduced or stored in any form by any mechanical, electronic, photocopying, recording or other means without the prior written consent of the publisher.

Whilst the information and articles in Biofuels International are published in good faith and every effort is made to check accuracy, readers should verify facts and statements direct with official sources before acting on them as the publisher can accept no responsibility in this respect. Any opinions expressed in this magazine should not be construed as those of the publisher.

ISSN 1754-2170

c ntents

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3 Comment 4 Bioethanol news 11 Biodiesel news 16 Technology news 21 Green page 22 People on the move 23 Incident update

A summary of the recent major explosions, fires and leaks in the biofuels industry

25 Staying positive

Despite pressure from multiple fronts, the US biodiesel industry continues to look on the bright side

28 E15 finish line on US horizon 29 The road ahead for E15 implementation 30 Farm bill battle ends 32 China: why the sudden interest?

35 India battles the biofuels blend 37 Crore blimey!

Among the backdrop of new facilities and government lobbying, new support towards a mandatory ethanol blend for biofuels has started to rumble again in India

38 Plant update: North Asia and India 40 Ready and waiting

Michael Martens, Implico’s managing partner, speaks to Keeley Downey about the company’s activities across Asia and the challenges it faces in the region

41 Coming to fruition

Keeley Downey speaks to Novozymes’ VP of Bioenergy, Poul Ruben Andersen, about the company’s involvement in one of the world’s first commercial-scale bioethanol plants

43 Palm oil billionaires

Facebook may have stolen the limelight, but the world’s second largest IPO this year was generated by the palm oil industry

45 Averting jatastrophe

A lack of confidence in jatropha feedstock has gripped many within the biofuels industry, but can it rebound from early set-backs and become a bountiful source of renewable fuel?

50 BP at the Olympics: giving it 124% 52 Butanol’s big moment

A US patent infringement could hold back biobutanol growth for years, jeopardising profitability, industry maturation and biofuel blend targets

55 Dealing with the badly behaved

Ethanol producer Conestoga Energy Partners is just one example of a company that has benefitted from a culture change within the organisation

international

August 2012 Issue 6 • volume 6

Palm oil billionaires TM

Facebook may have stolen the limelight, but the world’s second largest IPO this year was generated by the palm oil industry

Crore blimey!

Renewed support towards a mandatory ethanol blend for biofuels has started to rumble again in India

Staying positive

Despite pressure from multiple fronts, the US biodiesel industry continues to look on the bright side

57 Thinking outside the box

Biaktor’s Guus Keder speaks to Keeley Downey about his company’s

unique approach to biodiesel production that can support developing nations’ economies

60 Events

Ad index

Regional focus: biofuels in Asia

Front cover courtesy of Brodie International

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Want to know who’s really reading your advert?

Now you can..

Biofuels International is the industry’s ONLY audited magazine.

Our BPA audit assures you that our media figures are correct.

This information proves you’re saying the right thing to the right people in the right place. international

September 2011 Issue 7 • volume 5

A long time coming

It is a year and a half late, but the EU has now approved seven certification schemes for biofuels that meet the RED criteria

Biobutanol war

Biobutanol companies are competing against each other, but not yet against bioethanol

www.biofuels-news.com

Includes biomass supplement TM

Regional focus: biofuels in Canada FC_Biofuels_Sept_2011.indd 1

08/09/2011 12:44

2 may 2012 biofuels international Bioenergy Insight July 2011 • 43

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A matter of life and death

A

Margaret Dunn Associate publisher

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World Health Organisation (WHO) study, published in June, has now classified diesel exhaust as a cause of cancer.

Following a week-long meeting, WHO experts concluded there was sufficient evidence that diesel exhaust can cause lung cancer and increase the risk of bladder cancer.

Petrol exhaust remains a ‘possible’ carcinogen, a WHO status that has not changed since a 1989 evaluation.

These findings are a particularly worrying development for Europe considering that in 2012 diesel consumption represents about 65% of all fuels used in transport.

This could imply that governments should be promoting petrol over diesel, but at the moment this is not the case.

Under current EU law petrol is taxed at a minimum of €0.36 per litre, whereas diesel is a minimum of €0.33 per litre.

Not a huge difference, but member states can play with the tax level to promote one

over the other and also to willingly distort the internal market. For example, diesel/ petrol taxes in eurocents per litre in Luxemburg is 32/46, in Germany, 47/66, whereas in the UK, 66/66. The highest tax for petrol is in the Netherlands (€0.80) which has a diesel tax of only €0.42.

However, under a proposed directive that would change the way fuel taxes are calculated, this is set to change.

The proposal, approved by the European Commission last year, would base rates not on volume but on energy content and carbon dioxide emissions.

The proposal would effectively raise the minimum tax rate for diesel across the bloc from €0.33 to €0.41 per litre by 2023. Whatever rate national governments opt for, the new criteria would oblige them to tax diesel more than petrol because of its energy profile.

This would be a huge benefit to the ethanol sector by levelling the playing field between the biodiesel and petrol market places.

However, a year on from

the draft energy taxation directive, and it is still suffering setbacks. MPs are concerned that a period of high fuel costs and economic uncertainty is not the time to bring in such changes.

This is a blow to the biofuels market. At present biodiesel and bioethanol are subject to heavy taxation rate, despite their relatively low energy content.

Under the new rules a fuel made from biomass, for example, does not emit any CO2, so will be exempt as long as it complies with the sustainability criteria enshrined in the Renewable Energy Directive.

For now industry associations continue to lobby for this change, but don’t expect it to happen quickly.

It took 10 years to adopt the energy taxation law currently in force and it will take until at least 2018 and possibly an additional five years, for the tax difference between petrol and diesel to disappear.

Margaret Dunn

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biofuels bioethanol news

Aemetis to pursue next generation biorefinery following acquisition US-based advanced fuels and renewable chemicals company Aemetis has acquired ethanol plant owner Cilion, which includes a 55 million gallon per year production plant.

The acquisition is set to advance Aemetis’ plans to use the existing ethanol plant’s infrastructure to create a next generation biorefinery producing advanced biofuels and renewable chemicals, in addition to ethanol and animal feed products.

Other Cilion assets included in the deal are spare parts

Aemetis’ newly acquired ethanol plant in Keyes, California

and equipment for use at the plant, which is based in Keyes, California.

Aemetis was already working with Cilion after signing a multi-year project and lease agreement in 2010 to upgrade, restart and operate a Cilion biofuels plant, which

restarted in April last year.

‘The acquisition of the Keyes plant accelerates our plan to expand this world-class ethanol production facility into a next generation biorefinery capable of producing advanced renewable fuels and biochemicals,’ says chairman and CEO of

Aemetis Eric McAfee.

In conjunction with the acquisition Third Eye Capital, Aemetis’ existing senior lender, provided a $15 million term loan and an $18 million working capital financing facility to assist in the purchase and to provide on-going working capital. l

Major global biofuels agreement signed at Rio+20 An agreement has been signed by the Netherlands and Brazil at international sustainable energy conference Rio+20, designed to boost biofuels development between the two countries.

Dutch state secretary for infrastructure and environment Joop Atsma co-signed with Brazil’s chief negotiator at Rio+20

Luiz Figueiredo Machado, which will also see the two countries share knowledge of electricity generation from biomass.

State secretary Atsma was reported as saying: ‘The Netherlands only wants to use fuels that are produced in a manner that has no negative impact on agriculture, food production or nature, for example. It is therefore important we inform countries and companies that produce biofuels of our requirements in terms of sustainability

in order for them to take them into account during their production process.’

Atsma is in no doubt this agreement with Brazil sees ‘perfect alignment’ between supply and demand requirements.

Currently 4.5% of imported fuel into the Netherlands is made from renewable sources and is set to rise due to increasing demand and EU 2020 target attainment. l

Market conditions force two Nebraska ethanol plants to suspend production US-based oil refiners Valero Energy (VE) and ethanol producers Nedak Ethanol (NE) have both temporarily closed their ethanol plants in Nebraska recently.

VE spokesman Bill Day cited ‘poor profit margins’ returned by its facility, which produces up to 110 million gallons of biofuel annually, as the reason behind the suspension. There were no signs that VE’s other nine ethanol plants would suffer a similar fate.

‘We started this organised shutdown because of poor margins in the ethanol industry,’ adds Day. ‘Corn prices have gone up and ethanol margins have gone down. Corn basis levels are high.’

The US Agriculture Department has forecast corn supplies to hit a 16-year low by the end of this summer.

NE has also suspended ethanol production in Nebraska so it can monitor the corn and ethanol markets while conducting its regular spring maintenance.

‘The early months of the year usually have fewer miles driven by consumers,

which reduces the demand for gasoline and ethanol,’ says NE president Jerome Fagerland. ‘Normally consumer driving increases by the Memorial Day holiday but it has been less so this year. We are also experiencing a much stronger local basis for current corn deliveries, resulting in relatively higher local corn prices.’

NE is still determining what impact the halt in production will have on its workforce and whether or not redundancies will have to be made, but Fagerland is confident his plant ‘will resume production soon’. l

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Blue Sugars target Brazilian ethanol producers US-based producer of cellulosic ethanol Blue Sugars is set to provide three Brazilian sugarcane mills with its technology by 2015.

It has been reported that at least five Brazilian ethanol producers have visited Blue Sugars’ demonstration plant in Wyoming throughout this year to evaluate the technology on offer.

Blue Sugars, formerly known as KL Energy, has been working with Petrobras since 2010 and Brazil is a commercial focus as the country offers routes to the cheapest crop residues for ethanol production in the world as raw material is plentiful.

Petrobras will install

Blue Sugars is preparing to roll out its technology to Brazilian sugarcane mills

Blue Sugars’ technology at one of its mills so it will be able to produce 10 million gallons of fuel a year from

120,000 tonnes of bagasse.

Petrobras also shipped in 24,000 gallons of ethanol from Blue Sugars’

Epec boost second generation ethanol platform with new investment US-based champions of second generation ethanol Epec Biofuels has formed a supply chain partner agreement with Biodimensions Delta Biorenewables (BDB).

Epec provides an industry integration platform to realise the commercial reality, from production to utilisation, of second generation ethanol from sweet sorghum feedstock. BDB is a joint venture company that assesses the potential of sweet sorghum as a domestic industrial sugar crop.

‘After our first visit to BDB, it was obvious that its work and people are on the cutting edge of developing sweet sorghum as the feedstock for a new sugar platform,’ says Epec CEO Ron Miller. ‘Since effective ethanol

biofuels international

production begins by fermenting sugars, BDB’s developing capabilities to produce domestic industrial sugar feedstocks is the cornerstone of what will become the foundation for future ethanol production.’

‘Epec’s investment will move our programme from the R&D stage to commercial demonstration,’ says BDB technology manager Randy Powell. ‘Their core competencies are a natural complement to our own, making it an attractive investment partner. Both companies are now better positioned to develop new products, deploy sweet sorghum production and processing technology and advance the interest of an emerging sweet sorghum industry.’

The total amount of Epec’s investment had not been disclosed at time of writing. l

facilities to supplement volumes during the global Rio+20 sustainability summit this year. l

New Sundrop biofuels plant to use ExxonMobil technology Advanced biofuels producer Sundrop Fuels (SF) is set to use ExxonMobil technology at the site of its first commercial ‘green gasoline’ plant in Louisiana, US. The plant will use sustainable forest waste combined with hydrogen from clean-burning natural gas to produce up to 50 million gallons annually of what SF claims will be the ‘world’s first ready-to-use, renewable green gasoline’.

SF has confirmed it will use ExxonMobil’s methanol-to-gasoline technology within the facility, with SF CEO Wayne Simmons claiming it will give the project ‘a proven fuels synthesis method’.

‘Our first facility will provide America with millions of gallons of renewable gasoline and establish our transformative fuel production process, while supporting Louisiana’s natural gas and sustainable forestry industries,’ he adds. ‘Our location decision also underscores Louisiana’s commitment to the advanced biofuels industry, and we all look forward to helping the nation meet growing demand for renewable, domestically produced transportation fuel.’

Ground on the project is due to be broken before the end of this year, with SF hopeful the facility will be operational towards the end of 2014. l

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biofuels bioethanol news

Poor market conditions delay Columbia Pacific ethanol production A redeveloped Columbia Pacific ethanol plant has delayed production due to being confronted with what it calls ‘declining market conditions’.

Columbia Pacific had hoped to begin ethanol production in February but has now taken the decision to wait out a combined slump in ethanol price while corn feedstock price remains high.

General plant manager Dan Luckett was quoted as saying: ‘A lot of plants are currently breaking even at best. US analysts believe the fourth quarter will turn

out well, so we are hoping to start up around October.’

Around 50 employees have been laid off due to the decision to delay production, but Luckett has said the plant will look to recall most of them once it becomes online. The company believed ‘the storm would last six to 12 weeks, but we’re now looking at six months’.

Columbia Pacific will now work on maintaining the facility and potentially make minor upgrades. The facility, previously known as Cascade Grain following a $200 million (€158.4 million) overhaul in 2008, can produce around 120 million Poor market conditions have caused Columbia Pacific to postpone reopening its gallons of ethanol per year. l new ethanol plant

New biofuels demonstration plant nears completion US-based drop-in petrol producer Primus Green Energy (PGE) has almost completed construction on a new demonstration plant in New Jersey.

PGE uses natural gas and biomass to produce its fuel and the final of four reactors will soon be in place to wrap up construction on the $12 million (€9.4 million) project. The demonstration plant will serve as a model for PGE’s first commercial plant, on which it expects to break ground for in 2013.

The plant will initially use natural gas as its main feedstock, but PGE claims it will be adapted to use premium wood pellets too.

‘We have gone from the concept to the demonstration stage in only five years and now, with this plant, we can further refine our technology with the goal of moving us toward commercialisation next year,’ says PGE CEO Robert Johnsen.

‘Although we consider ourselves a biofuels company, we will be using natural gas as a bridge to biofuels’ he adds. ‘Our initial use of natural gas will enable us to build a profitable plant that will validate our proprietary technology, which we can later adapt for use with biomass as a feedstock.’ l

Gevo and Beta plot joint future bioisobutanol projects Chemical and biofuels company Gevo has signed a joint development agreement with Beta Renewables to develop an integrated process for the production of bio-based isobutanol from cellulosic biomass.

The agreement anticipates production plants will be located where cellulosic feedstocks like switchgrass, miscanthus, agriculture residues and others will be readily available. Depending on the success of the project, the commercialisation of combined technologies could also be considered for isobutanol-based jet fuel and chemicals.

‘Gevo has always said that we are feedstock agnostic and, when the technology and feedstock supply chain are ready, we would use our isobutanol process with cellulosic feedstocks. This allows us to access a larger carbohydrate pool as feedstock for isobutanol production, which helps keep costs down and enables

production facilities in regions of the world rich in biomass resources,’ says Gevo COO and president Chris Ryan.

‘With the success of our start-up Luverne plant and Beta Renewables’ cellulosic sugar technology, we’re ready to be positioned at the forefront of cellulosic isobutanol and isobutanol derivatives, such as jet fuel, through the integration of the companies’ respective technology platforms. We look forward to a range of collaborations with Beta Renewables, including partnering to meet the requirements of the US government’s Defence Production Act Title III project.’

The companies will also evaluate future opportunities to partner on other US and international projects with a long-term goal of developing a licensable package for future interested third parties.

Beta Renewables is currently building a 20 million gallon per year biorefinery in Crescentino, Italy that will produce cellulosic ethanol as well as ‘green electricity’. Construction has begun and plant startup is targeted for the end of 2012. l

6 august 2012 biofuels international

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Isobutanol gaining more popularity with US plants More US fuel plants are potentially considering retrofits to be able to produce isobutanol biofuel on-site.

Technology provider Butamax Advanced Biofuels has signed up four ethanol plants for potential retrofits, bringing the total of what it is calling ‘the early adopters group’ to seven interested parties overall. The latest plants are Granite Falls Energy, Platinum Ethanol, Little Sioux Corn Processors and Siouxland Ethanol.

‘Biobutanol is an exciting next step in the evolution of biofuels,’ says Platinum

Ethanol owner Ron Fagen.

‘It presents a significant opportunity for companies such as ours to produce and market a highervalue product and reduce greenhouse gas emissions.’

Butamax says it will break ground on at least one plant next year and have it completed in 2014. A deal has been struck with engineering and construction company Fagen to assist with any conversions.

Isobutanol is an alcohol produced from either corn, wheat or sugarcane and can be used to make car fuel, chemical products and potentially jet fuel. l

Gevo and BioFuel Energy collaborate to produce isobutanol

‘The capacity of BioFuel’s plants would allow us to begin delivering isobutanol at the scale that refinery customers are likely to demand,’ says Patrick Gruber, CEO of Gevo. ‘BioFuel Energy has agreed to explore a possible retrofit of their assets to produce isobutanol.’

Although Gevo and Biofuel Energy signed a development agreement earlier this year, the companies only recently completed their preliminary evaluation of technical feasibility.

The companies plan to continue working to develop large-scale production of isobutanol at an existing or future BioFuel plant. Specific objectives include a more rigorous assessment of technical feasibility and the development of timelines for engineering, regulatory approvals, financing and construction.

The two companies will also explore the potential for seeking Advanced Biofuel status for isobutanol, which would allow domestic cornbased biofuels to compete more directly with biodiesel and imported ethanol produced from sugarcane.

Gevo recently began the start up of its first commercialscale isobutanol plant in Luverne, Minnesota with plans for another startup in 2013 at its Redfield, South Dakota joint venture. l

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Renewable chemical producer Gevo has announced a collaboration with USbased ethanol producer BioFuel Energy to explore high-volume production of isobutanol.

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biofuels bioethanol news

UK feedstock farmers receive Red Tractor boost A biofuels scheme has gained European approval so that UK feedstocks can now have Red Tractor status.

The proposal, named The Red Tractor Crops and Sugar Beet Scheme, will ensure traceability on feedstocks back to individual UK farms and has been backed by the European Commission, ensuring recognition across all 27 member states. It has taken two years of lobbying

by Red Tractor alongside the UK agriculture body NFU to get the proposal through.

The scheme hopes to give crop and sugar beet producers a boost in the biofuels market

while keeping the burden of new EU regulations to a minimum by offering a route for farmers to demonstrate they meet sustainability requirements for biofuels crops under the Renewable Energy Directive (RED).

'Our standards are known and trusted in supply chains and we, alongside the NFU, wanted to ensure this strength works to our members' advantage,' says chairman of the scheme Matthew Read.

'Farmers can, through their membership, retain access to the European market place for their crops, without the need for additional audits and form-filling for every company they trade with.' l

news in brief DuPont awards construction contract for cellulosic ethanol plant International engineering and construction services company KBR has been awarded a contract by chemical producer DuPont to help bring its first cellulosic ethanol plant in Nevada, Iowa to realisation.

KBR will provide front-end engineering, along with engineering and procurement services to DuPont’s Industrial Biosciences Group, with the value of the contract not disclosed at time of writing.

The ethanol facility is expected to produce 27.5 million gallons of ethanol a year and also designed to process 1,300 tonnes of corn stover per day.

Construction is scheduled to begin later this year and expected to be finished within 18 months’ time. l

Petrolneos Fuels awards Lewis Tankers with biofuels transport contract UK-based road tanker operator Lewis Tankers has won a two-year contract to transport biofuel on behalf of Petrolneos Fuels (PF).

PF currently imports bulk quantities of bioethanol in its natural form and mixes it with 1% petrol. Lewis Tankers will collect fuel from PF’s storage tanks at Grangemouth Docks, Yorkshire and deliver it to its Grangemouth refinery, operating from its own base in the same area.

Lewis Tankers will also, as part of the contract, transfer the petrol used in the mixing process from the PF terminal to the docks before new bioethanol shipments arrive.

PF claims to currently supply around 9 million litres of fuel a day and Lewis Tankers operates over 80 tankers from nine bases situated around the UK. l

Greenergy Holdings to invest big in Filipino biofuels company Public-listed Greenergy Holdings has confirmed a planned PHP25 million (€476,550) investment in local Philippines biofuel company Isabela Alcogas.

Greenergy’s board of directors disclosed to the Philippine Stock Exchange that the company had the ‘green light’ to subscribe the PHP25 million worth of Isabela Alcogas shares, with authority to even go up as high as PHP50 million.

Isabela Alcogas manufactures and trades biofuels including ethanol and is planning to build a new cogeneration bioethanol and power plant on 15,000 hectares of land acquired through ‘usufruct’ rights.

The investment by Greenergy is part of a 10-year, $1.3 billion (€1.03 billion) project to invest in renewable energy projects throughout the Philippines, including an MoU signed with China-based Tianjin Tianbao Investment and Development for joint wind activities. l

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Poet produces corn oil in South Dakota Ethanol manufacturer Poet is now producing corn oil, as well as ethanol at its refinery in Groton, South Dakota.

‘It is one more value-added product we can produce from a kernel of corn,’ says Kelly Kjelden, general manager.

‘Poet is always looking for the next step to add value, to be more efficient and to make the plant more viable and profitable. Being able to extract corn oil gives us another revenue stream.’

The reddish-coloured oil is shipped by truck out of the plant and then by rail to refineries, which make biodiesel fuel.

It can also be sold as animal feed, but is not for human consumption, yet, Kjelden adds.

Construction began in late December to install the extraction equipment, and production began in March.

‘It was a pretty short construction phase,’ Kjelden says. ‘It involved installing a separation system, piping and tanks.’

The system is highly automated and did not require additional employees. The plant, which was built in 2003, processes about 17 million bushels of corn a year.

While Poet does not release specific corn oil production numbers by plant, it has released company wide figures.

About 235 million pounds of corn oil per year, enough for 31 million gallons of biodiesel, is made at 14 Poet plants. Poet has 27 ethanol production facilities in seven states.

The Groton plant produces about 50 million gallons of ethanol a year.

Before the oil extraction system was installed, the oil was a component of DDGS. The Groton plant produces both wet distillers grain, which is purchased by local livestock producers, and dried distillers grain, which is marketed worldwide under the Dakota Gold label.

‘The oil is worth more by itself than it is in the distillers grain,’ Kjelden says. ‘DDGS

sells for about $160 (€130) a tonne. The oil sells for about $960 a tonne.

Kjelden says the value of DDGS does not drop significantly when the oil is extracted. It is still a highquality, high-protein animal feed.

Poet’s patented BPX cold starch conversion process reduces the amount of free fatty acids in the oil, which is valued by biodiesel producers, Kjelden says The BPX system was installed in 2005. Previously, the plant had to use heat in the fermentation process to produce ethanol.

Extracting corn oil gives the plant another product making it more versatile. l

Bioethanol provider renews contract to supply Australian race event Australia-based sugar refiner and renewable energy provider Sucrogen has agreed to support the Townsville 400 V8 Supercars event with bioethanol fuel and sponsorship for the next two years.

Sucrogen Bioethanol’s (SB) 85% ethanol blend fuels the cars at every event and is made from molasses, a by-product of its sugar production.

‘We are delighted that E85 has been embraced with

enthusiasm by all race teams, as it demonstrates that consumers don’t have to worry about comprising performance in becoming more sustainable,’ says SB general manager Garry Mulvay.

‘Surcogen has been an outstanding on- and off-track partner in the past and we are pleased that our brand can help it maximise leverage across a broad range of platforms while also helping to deliver an important message to the public about sustainable energy,’ adds V8 Supercars CEO David Malone.

The agreement sees the partnership extend to a fifth year in total. l

Sucrogen will continue to supply its bioethanol to Queensland’s Townsville 400 V8 Supercars event

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biofuels bioethanol news

South Africa edges closer to mandatory biofuel use The South African Department of Energy (SA DoE) is soon to publish its final set of mandatory regulations concerning blended biofuels use.

As well as revealing the initial ratio of blended fuels using bioethanol and biodiesel, the regulations will also define who, from cane farmer to dispenser, gets paid what in its production.

The SA DoE issued draft regulations a year ago and has reviewed feedback from concerned parties affected by the proposal.

‘We have also considered comments from the office of the chief state law adviser and are now in the process of finalising these regulations to obtain the minister of energy’s approval to publish

South Africa’s new biofuels regulation will determine how much sugarcane farmers will be paid

final mandatory blending regulations. It is anticipated that the final regulations will be published before the end of July,’ the SA DoE said in a statement.

It also said that financial support for biofuels manufacturers will be part of the regulatory system.

According to the South African Sugar Association

there are currently 29,130 registered sugarcane growers annually producing an average of 19.9 million tonnes of cane viable for use as a feedstock. l

Protabit scoops award to advance biofuels research

New large UK biorefinery project put back until fourth quarter

US-based Protabit, an off-shoot from the California Institute of Technology, has been awarded a Small Business Innovative Research grant (phase one) for engineering cellulose enzymes.

Vivergo Fuels has confirmed that the start-up of its proposed new biorefinery in eastern England will be delayed until towards the end of 2012.

The computational protein software platform designers will use the award from the National Science Foundation to engineer cellulose enzymes, which are used in the production of biofuels from non-edible corn stover biomass, via its Triad programme.

‘We are pleased to receive this grant, which

will enable us to accelerate our development of novel cellulases for second generation biofuels,’ says Protabit CEO and cofounder Barry Olafson.

‘Triad’s computational capabilities will provide a rich source of highperformance enzyme sequences for evaluation and testing. Our research seeks to help reduce America’s dependence on foreign oil without impacting the global food supply.’

Triad is the result of input by many leaders in the field of enzyme research including chair of the Division of Biology at Caltech Stephen Mayo, who also cofounded Protabit. l

The biorefinery, claimed to be one of the biggest in Europe upon its completion and based near Hull, is set to use over one million tonnes of feed wheat to produce 420 million litres of bioethanol a year. An approximate by product of 500,000 tonnes of mid-protein animal feed is also set to be generated.

‘Delivering a project of the scale and size of this plant is a complex and challenging process,’ the company said in a statement. ‘While some

aspects of the construction and commissioning programme have run very smoothly others have encountered more difficulties, and therefore timescales have been revised accordingly.’

Vivergo Fuels is partowned between British Petroleum, Associated British Foods and DuPont. l

The plant will process over one million tonnes of wheat when it comes online later this year

10 august 2012 biofuels international

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South Africa aims for 50% aviation biofuels by 2020 South African Airways (SAA) is set to explore the implementation of a voluntary carbon offset programme that could also support the development of forestry in South Africa.

The state-owned airline, which works on a global scale, is vulnerable to policies in other countries that impose penalties and taxes on carbon emissions. Public enterprise minister Malusi Gigaba believes that the SAA requires biofuels to make up half of its fuel supply by 2020 to avoid future penalties.

‘This would create a pressing demand for an

extremely large quantity of biofuels which can form a base load against which a fully vertically integrated biofuels industry can develop in South Africa as well as in the Southern African region,’ he says.

Gigaba’s department is working with a supply chain and technical working groups to develop a strategy for meeting aviation biofuels requirements, with initial findings set to be released by the end of the third quarter of this year.

Under the European Union Emissions Trading Scheme all airlines flying in EU airspace have to currently pay 15% of their polluting carbon emissions for 2012. l

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Biomass Biodiesel Bioethanol Cogeneration From Basic Engineering to Full Turnkey Project Single Point Responsibility through EPC or EPCM+© with guaranteed: ✔ Process Performances ✔ Time Schedule ✔ Budget

Engineers & Contractors Brussels • Belgium Tel.: +32 (0)2 634 25 00 Fax: +32 (0)2 634 25 25 E-mail: info@dsengineers.com South African Airways is looking to biofuels to alleviate it from jet fuel taxes

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Reliability through Experience

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biofuels biodiesel news

USDA partners with GE Aviation for biojet fuel The US Department of Agriculture (USDA) has joined forces with jet engine producer General Electric (GE) Aviation, in addition to the Ohio Aerospace Institute, air carriers and producer groups, to produce renewable jet fuel from agricultural products.

The biojet will be provided at GE Aviation’s Cincinnati, Ohio-based facilities and GE Aviation plans to buy around 5 million gallons of the biojet, starting in 2015.

Agriculture secretary Tom Vilsack says this strategy will ‘develop innovative ways to use agricultural products to help reduce our reliance on foreign oil’.

‘USDA’s collaboration with General Electric Aviation will bring together multiple sectors of Ohio’s economy, including agricultural producers, to foster new innovations in the field of renewable fuels while bolstering new economic opportunities in the Midwest,’ Vilsack adds.

Dedicated to reducing the nation’s dependence on fossil fuels, the USDA also recently awarded the Ohio Soybean Council with a Value Added

Producer Grant. The funds will be used to develop a pilot project that will refine soyabean oil-based biojet fuel.

The department believes this project has the potential to launch renewable jet fuel into the commercial market.

The USDA is also working to produce renewable jet fuel for the military; it has partnered with the DoE, Department of the Navy and the Federal Aviation Administration. And, in August 2011, the department partnered with the DoE and the navy to invest $510 million (€405 million) for the production of drop-in aviation and marine biofuels for both commercial and military applications. l

New algae strain could boost Australian biofuels production A new strain of microalgae species, which could benefit the biofuels industry has been evaluated by researchers at the South Australian Research and Development Institute (SARDI).

The breakthrough comes six years after bioprospecting across several thousand kilometres of South Australian waterways and into the waters of the Great Australian Bight, followed by laboratory and small-scale outdoor trials.

It is hoped by researchers that this particular strain of microalgae will give South Australia a head start on creating third generation biofuels.

‘The flagship strain stands head and shoulders above the rest. It is a specific strain of Nannochloropsis (green algae), with an unusually high lipid and protein content,’ says SARDI algae research team leader Sasi Nayar.

‘These attributes mean that the microalgae has tremendous commercial potential with application

New algae research could put Australia on the path to producing ‘third generation’ biofuels

across the full range of oil uses, from biofuels to high value co-products such as animal and human food supplements and skin and anti-ageing creams. We are at a stage where we now know a lot about this species and its optimal growing

conditions and we are ready to scale up to commercial level to refine the production systems to be used.’

The research partners are now looking for investors to help take the research to commercial pilot scale and then full commercial scale.

Microalgae is a non-food feedstock which does not compete with traditional agriculture for land and resources and it is carbon neutral because it absorbs or recycles carbon as it grows, rather than emitting new carbon into the atmosphere. l

12 august 2012 biofuels international

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driven by nature

BioMCN, first in second generation biofuels BioMCN is the largest second generation biofuels producer in the world. With a current capacity of 250 million liters of bio-methanol per year it is already more than sufficient to fulfil the entire 2010 Dutch biofuel obligation for gasoline.

This makes bio-methanol ideally suited to play an important and lasting role in the transition to sustainable transportation fuels with low CO2 emissions. It can be used as a raw material for other biofuels and fuel additives (e.g. MTBE), and also as a fuel in its own right.

Through an innovative process, bio-methanol is made from crude glycerine- a residue resulting from processing vegetable oils and animal fats. Because bio-methanol is made from a residue, its renewable energy content is entitled to be counted twice in accordance with the Renewable Energy Directive.

BioMCN aims to expand its role as leading producer of second generation biofuels, and to promote the importance of biomethanol as a sustainable source of energy, both in Europe as well as in other parts of the world.

In comparison to regular methanol, bio-methanol reduces CO2 emissions by 78%.

For more information about BioMCN and bio-methanol, please visit our website: www.biomcn.eu

biofuels international

BioMCN, Oosterhorn 10, NL – 9936 HD Farmsum T +31 (0)596 64 77 00

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BIO applauds defense department’s domestic advanced biofuels opportunity The US Department of Defense (DoD) has announced a public-private partnership opportunity to support an integrated domestic advanced drop-in biofuel biorefinery.

The funding opportunity is designed to share the cost of establishing one or more first-of-a-kind biorefineries and feedstock supply chains to provide the US military with already certified blends of biofuels.

The Biotechnology Industry Organisation (BIO) has applauded this decision as it believes the domestic advanced biofuel industry can play a

huge part in promoting energy security, which is seen as critical for military readiness and national security.

‘Ensuring the reliability and affordability of fuel supplies through diversification to advanced drop-in alternative fuels is essential to sustain the US military’s readiness, since oil price volatility has already negatively impacted military readiness. This year alone, the $30 (€24.4) increase in oil prices resulted in more than $3 billion in additional, unplanned costs to DoD,’ says BIO’s executive VP of industrial and environmental, Brent Erickson.

Erickson also believes this announcement will relieve the

pressure on private companies which have made substantial investments into researching and developing advanced biofuels over the years.

‘Building new advanced biofuel biorefineries requires large capital investments at a time when capital formation has been hampered by the recent economic downturn,’ he adds.

‘Public-private partnerships such as this can help attract the additional private investment needed to complete the job. The DoD has used these partnerships many times in the past to ensure that we maintain a domestic capacity to produce materials that are vital to national security.’ l

Brazilian renewable jet fuel tested in Azul flight Azul Brazilian Airlines (ABA) hosted a demonstration jet flight using fuel made from locally-sourced sugarcane recently.

ABA has been working with sustainable fuel producers Amyris since 2009 on renewable jet fuel developments and the Embraer E195 flight left Campinas

Viracopos airport, landing safely at the Santos Dumont airport in Rio on 19 June.

‘Our commitment to reducing our dependency on volatile petroleum products goes beyond reducing our costs,’ says ABA COO Flavio Costa. ‘The main objective is to innovate in our service offerings, using the best technologies to reduce our carbon footprint. We also want our customers to know that

they are not just choosing an airline that is merely concerned about the environment, but is taking steps to preserve it.’

A lifecycle analysis and sustainability study developed by the Institute for International Trade Negotiations indicated that Amyris’ renewable jet fuel could reduce greenhouse gas emissions up to 82% when compared to conventional fossil-derived jet fuel.

‘Our renewable jet fuel has been designed to be compliant with Jet A/A-1 fuel specifications. To that end, we have successfully undertaken a series of tests that measure its performance,’ says Amyris CEO John Melo. ‘This demonstration flight caps a major milestone in our jet fuel programme and allows us to pursue both our certification and commercialisation goals.’ l

Biox to build 100mly biodiesel plant at IMTT Bayonne terminal Renewable energy company Biox will build its second biodiesel production facility within International-Matex Tank Terminals’ (IMTT) Bayonne terminal at New York Harbor after the two companies signed definitive agreements.

Biox designs, builds, owns and operates biodiesel

production facilities. Its first facility is located in Hamilton Ontario. The $60 million (€47 million) Bayonne plant will be Biox’s second project, with a planned 100 million litre a year production capacity.

Under the agreements, Biox has secured 3.5 acres of IMTT’s 600-acre Bayonne terminal. The agreements include a long-term land lease agreement for the plant, as well as long-term leases on existing storage tanks at

IMTT New Jersey terminal.

‘With this second facility our production capacity will grow by almost 150% from existing levels,’ explains Biox CEO Kevin Norton, who says the biodiesel sector within North America ‘has evolved due to the mandated minimum volumes’.

‘IMTT is an ideal partner for our next facility. We have been working with them for more than five years using their Bayonne terminal as

a distribution and blending site for product produced in Hamilton. Based on that long standing relationship, we have already conducted the early stage planning for this next facility, including the design tie-ins and site specifications prior to signing these agreements.’

Biox is currently carrying out the planning and permitting phase and expects construction of the plant to be finalised by December 2013. l

14 august 2012 biofuels international

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New US government funding for biofuels growth A $62 million (€49.2 million) development is the latest effort by the US government to invest in biofuels.

Around half that figure will be made available via federal funding to advance the development of biofuels to replace diesel and jet fuel used in both the military and the commercial and shipping sectors.

The rest of the investment will be used to fund research into early-stage biofuel production as the US looks to end an over-reliance on foreign oil imports.

The $30 million outlined for the production of advanced aviation and

marine biofuels to power military and commercial transportation comes from the $510 million earmarked by the navy and the US departments of Energy and Agriculture for such projects over the next three years.

The government has stipulated that individuals looking for funding under the new announcement will have to submit a design and business plan for a commercial-scale biorefinery, identify and secure project sites, and take additional required steps. Those who pass that first step will then have to submit additional information on the construction or retrofitting of a biorefinery. l

Thai energy advocates call for biofuels investment Experienced energy advocates in Thailand have called for the country to step up its development on biodiesel and ethanol production by working with nearby countries.

more serious about joint development of biofuels as, in the future, oil prices will definitely increase.’

That point was backed up

by Thammasat University economist Praipoi Koomsap who is worried about Thailand’s crude oil supply from the Middle East if continuing conflicts Former executive director occur in the region. of the Petroleum Institute He says Thailand of Thailand, Khunying imports over 50% of its Thongtip Ratanarat, crude from that part of believes joint development the world, and as energy programmes with the demands are rising about likes of Indonesia and 5% a year, Asean should Malaysia would help start thinking seriously reduce Thailand’s about alternative fuels. reliance on oil imports.

Thailand currently imports Ratanarat was quoted THB800 billion ($25.1 as saying: ‘We should get billion) per annum of oil. l

biofuels international

news in brief Enterprise Holdings to use biodiesel in airport fleets US-based Enterprise Holdings (EH), which compromises Enterprise Rent-a-Car, National Car Rental and Alamo Rent-a-Car, is set to convert its fleet to biodiesel operations.

EH has already made the switch in more than 50 North American markets, focusing firstly on airport shuttle buses that are working within a five-mail radius of a biodiesel fuelling station.

At time of writing about 70% of EH’s airport shuttle fleet now runs on biodiesel, with 50% using 5% biodiesel (B5) and 20% using a B20 mix.

A spokesperson for EH believes that, by the end of 2012, around 80% of its shuttle fleet will be running on biodiesel, while a further investment into compressed natural gas will offer another alternative. Thirty EH buses are using the gas in southern California, with another 10 coming online later in the year. l

New England biodiesel facility almost operational US-based Greenleaf Biofuels is due to fully open what it is claiming to be the ‘biggest biodiesel facility in New England’.

Construction began eight months ago and the plant is expected to produce around 10 million gallons of biodiesel a year. Greenleaf is hopeful it will be online by September and its Waterfront Street location has links to both rail lines and a nearby port.

‘Eight months ago everything was just a plan on a piece of paper and now its much more of a reality. We are also on time and on budget, which is a diffcult thing to achieve,’ says Greenleaf owner Gus Kellogg.

It is believed the plant will be using recycled vegetable oil, animal fats and used cooking oil as feedstock. l

US coast guard tests biofuel as part of navy partnership US coast guard buoy tender Henry Blake, based in Everett, Washington, has completed its first trip powered in part by biofuel.

Officials say this represents the first Coast Guard ship to test biofuel after Henry Blake made its journey around local navigation aids on Puget Sound powered by a 50/50 blend of diesel and algae oil.

The Coast Guard has partnered with the US navy to research algaebased biofuels for ships and the navy demonstrated its ‘Great Green Fleet’ at a military exercise in Hawaii on 29 June. It was the navy that provided the fuel to the Coast Guard.

Chief of energy reliability at the Coast Guard’s office of energy management, Sam Alvord, was quoted as saying: ‘We know these fuels are coming and, when they become available through the Defense Logistics Agency, we’ll be a consumer of them. The Henry Blake vessel was a good test ship as its engines rev high as it moves from buoy to buoy, but remains idle during any undertaken buoy maintenance’.

The Coast Guard says its tests will be a full evaluation that will last throughout the summer. l

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biofuels technology news

BDI wins biodiesel plant commission

Outotec launches two new products

BDI BioEnergy International, a technology supplier and plant manufacturer, has been commissioned

by EcoMotion France, a subsidiary of Saria and of Intermarché, one of France’s largest supermarket chains, to build a multi-feedstock biodiesel plant in Le Havre port, France.

Sustainable technology manufacturer Outotec has developed two new systems: one improves equipment safety and maintenance productivity, while the other provides for enhanced sealing performance.

The facility will handle waste materials such as locally collected animal fats and used cooking oil to produce 75,000 tonnes a year of biodiesel, instead of rapeseed oil – the main biofuel feedstock used in France.

The commission involves the entire biodiesel process as well as the assembly and the installation of the plant.

BDI’s chief sales offer Edgar Ahn says the new commission ‘demonstrates that there continues to be potential for new plants in the biodiesel sector’.

He continues: ‘We do, however, think that there is a definite emphasis on plants that are able to process waste materials and thus help to promote environmental protection on a sustained basis.’ l

Outotec’s safe and reliable hydraulic Inching Drive is an auxiliary drive that has been developed to ensure efficient mill installation and maintenance. The drive is capable of rotating the mill in either direction during maintenance operations; the drive system consists of a planetary gearbox powered by a hydraulic drive motor.

The system’s portability makes it applicable to numerous mills, and therefore fewer inching drives are required in a multi-line plant. The joystick control allows for variable speed mill rotation, enabling precise mill positioning during installation and maintenance. The captive key interlock prevents operator bypass and ensures safety of personnel and equipment.

The new Outotec Barricade seal arrangement solves a number of issues surrounding the effective sealing of grinding mill main bearings. It replaces and improves various older seal arrangements with its unique design incorporating uniform lip tension and seal stability for improved sealing performance.

The Barricade arrangement is now standard supply for all new Outotec mill installations. In addition, it can be retrofitted to many existing mills, improving safety, reducing environmental infringements and improving bearing lubricant quality. l

Incitor receive backing for Patent granted for next generation biofuels project low-temperature biofuel in Wisconsin demonstration US-based biomass company Incitor will use new funding to demonstrate its low-temperature biofuel production technology.

The funding amounts to $1.5 million (€1.1 million) and comes from an investment group, led by Cottonwood Technology Fund, that hopes to finance an up to 30,000 tonne per year facility.

Incitor claims its lowtemperature process can break down almost any biomass from agricultural, solid, wood or algae waste to create bio-based chemicals,

petrochemical replacements and its ‘third generation’ biofuel called Alestron.

‘We believe Incitor’s low cost chemistry brings new economics to the biofuels and biochemicals industries,’ says Cottonwood MD David Blivin.

‘In addition, the inclusion of methanol and ethanol in their synthetic process creates interesting opportunities to create higher value products from ethanol and natural gas.’

It is believed that the use of this technology will allow biofuel production at around $2 a gallon, while reducing production costs of certain industrial chemicals by about 80%. l

Next generation biofuels research at the Great Lakes Bioenergy Research Centre in the US has been awarded its first patent.

The Centre has been working with biotechnology provider Lucigen’s renewable fuels division C5-6 Technologies and the patent covers their research into a heat-resistant enzyme that breaks down sugars found inside the cells of plants, which can then be made into biofuel.

Intellectual property manager David Pluymers at the Centre was quoted as

saying: ‘It’s a good technology and, as much as anything, it marks an important milestone for us as we’ve been at this for nearly five years now.’

The Centre’s overall mission is to find and develop technologies that can enable transportation fuels to be made affordably from plants that aren’t also food sources.

The new patent concerns an isolated enzyme that is found in bacteria from remote hot springs in Russia.

Lucigen and C5-6 were founding partners of the Centre, which was opened by the US Department of Energy in 2007 with an initial grant of $125 million (€98.4 million). l

16 august 2012 biofuels international

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Reliable Technology from Sulzer Pumps for a More Sustainable World

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biofuels technology news

New software measures curly, elongated particles Laboratory instrumentation manufacturer Fluid Imaging Technologies of Maine, US has introduced a new particle analysis software for use alongside its FlowCAM – a particle imaging and analysis system that measures curly and long particles such as cellulose fibres.

VisualSpreadsheet V3.2 features a suite of shape characterisation properties that yields accurate measurement data of elongated and curved particles and microorganisms.

The VisualSpreadsheet V3.2-enabled FlowCAM replaces cumbersome, manual

microscopy and volumetricbased systems such as laser diffraction that assume all particles to be spherical with a modern, high-speed approach that bases measurements on actual, individual images, which permits the amount of curl or straightness to be reliably calculated.

The new VisualSpreadsheet V3.2 is an easy to use spread sheet-based interface for viewing the images and measurement data and analysing the data in a variety of custom graphs and overlays while also filtering and sorting in real time without re-running the sample.

The particle analyser software comes installed with the FlowCAM instrumentation and is backwards compatible for retrofit on FlowCAM models in the field. l

FEC Solutions’ new system for corn oil handling Corn oil developer and marketer FEC Solutions is now partnering in the development and commercialisation of a new technology system designed to remove fatty acids and moisture from corn oil.

‘With expectations that 80% of ethanol plants will be extracting corn oil from their DDGS by the end of 2012, the time has come to focus on adding value to the corn oil

stream,’ says Joe Riley, GM of FEC Solutions. ‘Ethanol plants can increase demand for their corn oil while end users of corn oil can find value through decreased free fatty acids and moisture.’

The system, called Corn Oil One, is designed for installation at ethanol plants and can easily be integrated into the current structure of the facility. Once the system is installed, the ethanol plant can immediately begin producing corn oil with less than 1% free fatty acids and moisture. l

The Valence Group launches stock performance tool The Valence Group, an investment bank offering M&A advisory services to companies and investors in the chemicals and materials markets, has launched a new standard and share performance tool for the diversified global chemicals industries.

FlowCAM detects and measures long and curly particle cell fibres

The Valence Global Chemicals Indices break down the overall chemicals sector into more than 30 sub-sectors in order to track their individual share performance. This then enables the measurement of stock performance relative to each other, as well as to broader share price indices.

Sub-sector developments can be extracted and analysed in many ways. For example, while the fertiliser industry has been the best performer over the past five years reflective of the increasing need for food and rising commodity prices globally, the biofuels industry has been the worst performer. This can be attributed, in part, to scepticism over government resolve to support alternative energy sources and the on-going debate over diverting resources, such as corn, from the food chain to biofuels production.

The group says its Valence Global Chemicals Indices facilitate the comparison of specific companies to the performance of a directly relevant peer group, rather than a less comparable broad ‘chemicals’ index. The various indices can also provide useful leading economic indicators, as chemicals are often key elements of many production processes, applied at a very early stage in the manufacturing and supply chain. l

18 august 2012 biofuels international

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New enzyme research could boost next generation biofuels production A team of researchers at the US Department of Energy’s Bioenergy Science Centre believes it has identified key new proteins which could aid in the production of next generation biofuels.

Analysis of eight species of heat-loving bacteria from the genus Caldicellulosiruptor has revealed it may be possible to break down complex plant material, like switchgrass, using

those instead of having to introduce commercially-produced enzymes to break down the cellulose.

The research team was made up of participants from Oak Ridge National Laboratory, the University of Georgia and North Carolina State University.

‘We had found that not all members of this group were able to equally degrade cellulose as others were,’ says North Carolina’s Sara BlumerSchuette. ‘The main aim of this project was to figure what the true determinants were for strongly celluloytic bacteria

Protabit receives NSF award for biofuels research Protabit, part of the California Institute of Technology, has been awarded a grant from the National Science Foundation.

The Small Business Innovative Research Phase One grant will be used to engineer cellulase enzymes that are used in the production of biofuels from non-edible

corn stover biomass.

Protabit is the developer of Triad, a computations protein design software platform that is used to generate new enzymes for experimental evaluation.

Of the grant, Protabit’s CEO and co-founder Barry Olafson says: ‘[The grant] will enable Protabit to accelerate its development of novel cellulases for second generation biofuels.’ l

from this genus — what made them celluloytic versus the others.’

The team compared eight related, yet variable, species of plant and discovered which genes were unique to each one in terms of ability to break down cellulose. The new proteins found, and determined to be adhesions, helped the bacteria break large chunks of plant material apart more efficiently.

Blumer-Schuette claims these proteins ‘maintain a tight interface between the bacterium and cellulose and degrade biomass found in their environment’. l

Gevo shares rise after favourable court ruling Shares in US-based renewable chemical and advanced biofuels company Gevo rose after a favourable court ruling in a patent case.

A US district judge dismissed claims by Butamax Advanced Biofuels that one of Gevo’s fuel blending products infringed in one of its own patents.

The ruling means Gevo can now resume sales of the product to any potential customers.

Gevo shares were up $1.84 (€1.45) and trading at $7.76 by mid-afternoon on 20 June, which was up 31%.

Gevo VP and general counsel Brett Lund was quoted as saying Butamax’s claims ‘lacked merit’ and were nothing but ‘attempts to derail Gevo’s progress’. l

Lee Enterprises and Genscape partner Renewable fuels consulting firm Lee Enterprises has formed a strategic alliance with Genscape, merging its RIN 9000 verification programme into Genscape’s RIN Integrity Network.

The two companies will then work together to make the Genscape programme the industry standard.

The partnership comes following Lee Enterprises’ CEO

biofuels international

Wayne Lee’s understanding that ‘there was some confusion in the marketplace as to which RIN programme to utilise, and that feeling of almost everyone in the industry was that this confusion was unhealthy in this market at a time when the industry needs immediate help with RINS’.

The formation of this alliance will include services from Lee Enterprises, Christianson & Associates, Jess Hewitt of Gulf Hydrocarbon and Brian Mattingly/Mike Shook of AP Innovations. l

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biofuels technology news

Dyadic Netherlands to develop enzymes for EU-funded research consortium The European Community’s Seventh Framework Programme (FP7) of the European Community for Research, Technology Development and Demonstration Activities has awarded a €3.5 million grant to the Bio-Mimetic Project, a new multidisciplinary research consortium.

A new member of this project is enzyme developer and manufacturer Dyadic International’s Netherlands-based R&D centre.

The European consortium is commencing a three-year research project entitled ‘New Bio-Inspired

Processes and Products from Renewable Feedstock’, which will employ environmentally-friendly technologies to convert the renewable agricultural waste stream – lignin – into high-value sustainable commercial products such as adhesives, detergents and cosmetics.

As part of the Bio-Mimetic Project, Dyadic Netherlands will receive approximately €400,000 to develop enzymes using Dyadic’s patented and proprietary C1 platform technology to degrade and modify lignin so that it can be used to create high value commercial products.

In addition to Dyadic Netherlands, the project’s consortium consists of Fraunhofer Institute IFAM, The University of Rome Tor Vergata, Mavi

Sud, Gulgi, Compagnie Industrielle de la Matiere Vegetale, Procter and Gamble Eurocor, Ciao Tech, and the University of Manchester. Procter & Gamble Technical Centres will serve as the coordinator of the consortium.

General manager of Dyadic Netherlands Wim van der Wilden says: ‘We are very pleased to have the opportunity to work with such fine organisations on a highly innovative project where we can demonstrate the efficiency and productivity of our C1 technology to use green chemistry to find commercial applications for lignin. If successful, this project will be a promising step forward in using this renewable waste stream to replace traditional toxic, expensive and high energy consuming processes.’ l

20 august 2012 biofuels international

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Balls deep in biodiesel

‘Convert like an Egyptian’

Arlington’s Tierra Verde Golf Course in Texas, US is, ahem, swinging into renewable action and recycling its waste cooking oil produced in the clubhouse kitchen.

A biofuel production method thought up by a young female student is about to be developed further in the UK.

The cooking oil is being made into biodiesel onsite and then reused as fuel in the facility’s lawn mowers. The glycerine by-product can be used to make soap – a product that can be putt to use elsewhere in the complex.

With such significant savings, it is now the course’s onsite manager Mark Claburn’s driving ambition to collect more waste cooking oil from nearby restaurants. l

Egyptian student at the Zahran Language School in Alexandra, Azza Abdel Hamid Faid, won the European Fusion Development Agreement award at the 23rd European Union Contest for Young Scientists last September.

Sixteen-year-old Faid’s project taps into Egypt’s high consumption of plastic-based `products, estimated to be around 1 million tonnes a year – by breaking them down and making biofuels.

As the winner of the award she will now spend one week at the European Torus facility

UCO is being put to good use at the Tierra Verde Golf Course

Plastic feedstock: plastic can be treated with calcium bentonite to make biofuels

where she will receive help in furthering her idea.

Nourwanda Sorour, Faid’s mentor, was reported as saying: ‘Plastic waste is a real problem in Egypt – and in most developing countries – and this project is simply converting the problem into a solution.’

The cheap catalyst calcium bentonite breaks down the waste plastic, a process which produces products including methane, propane and ethane.

These gaseous elements can then be converted into ethanol and used as a biofuel.

Faid said: ‘I will pursue my efforts to get my project patented this year through the Egyptian Patent Office and also to see the idea become a tangible project on the ground.’ l

Excitement over ethanol Filling up at the fuel pump got a lot more exciting for Burwood’s motorists at the beginning of July.

A frenzy over fuel broke out at Woolworths Caltex Burwood petrol station in New South Wales, Australia when it began giving away petrol fuel blended with ethanol.

Motorists went crazy for the E10 blend which, from 10.30am until 11.30am was

biofuels international

going for, well, $0.00.

At one point these free fuel fanatics had westbound traffic at a standstill.

Woolworths Caltex Burwood says it offered the promotion to help motorists realise the advantages of E10 fuel.

A recent report found that ethanol-blended petrol can be used in around three quarters of passenger and light commercial vehicles, but accounts for just 36% of petrol sales in the Australian state. l

Free e!

E10 her

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biofuels business briefs

technology technology news newsbiofuels biofuels

People on the move

Xebec Xebec Adsorption Adsorption branches branches out out to to the the UK UK Canada-based Codexis appoints new Canada-based purifi cation,and separation, president CEO purifi separation, John cation, Nicols became dehydration, and the dehydration, andCEO new president and filtration equipment of industrial enzymes filtration equipment manufacturer Xebec developer Codexis on 13 manufacturer Xebec Adsorption June. He hashas alsoopened been Adsorption opened to has the ce company’s aappointed new sales offi to aboard new of sales office to directors. provide enhanced Before enhanced joining Codexis provide service to the UK20 years Nicols spent over service to the UK biogas market. at speciality chemicals biogas market. company Albermarle, where

he most recentlyisserved This new initiative in This new to initiative is in as senior VP strategic response theofgrowing response to the growing development and market in the UK forcatalysts. biogas market in the UK for the biogas Nicols took over upgrading to renewable upgrading to renewable catylsts division in January natural gas, a carbon neutral natural gas,since a carbon 2007 and then fuel source.

The of ce neutral will fuel source.

The of$278 ce will sales have grown handle all sales, marketing, handle sales, marketing, millionall (€226 million). technical and after-sales technical and after-sales During his career support for the UK. at support forand the UK. managed Albermarle, Nicols ‘The UK Europe are ‘The UK and Europe are multiple divisions of the poised to fully develop the company, including poised to fully develop the use of green gas. Biomethane VP, of catalysts; VP, fine Gas use green gas.

Biomethane injected into the National chemistry; division VP, injected intoand the National Gas Grid is a huge step forward global retardants.

Grid is aflame huge step forward for both the industry and the for both the industry and the

environment,’ Nicols has Tony a B.S.Hales, degree environment,’ Tony Hales, Xebec project director, says. in chemical engineering from Xebec project director, says.

Xebec offers  ve standard the Polytechnic Institute of Xebecbiogas offersupgrading ve standard sizes New of York University and sizes of biogas upgrading /h up systems from 200 m3Sloan an M.B.A. from the systems 200 combines m3/h up 3 /h, and to 2,000 of mfrom School Management 3 and combines to 2,000 m /h, best in class recovery, purity at the Massachusetts best in class recovery, purity and energy Institute ofconsumption.

Technology. l and energy consumption.

These systems are either These systems either skid-mounted orare containerised OriginOil prepares for skid-mounted or containerised with an extremely small of its commercialisation with an extremely technology footprint, offer highsmall upfootprint, offer high upAlgae-to-renewable oil time and low maintenance time and lowdeveloper maintenance technology and operations cost. and cost.

OriginOil has appointed Theoperations solutions Xebec The solutions Anthonyinclude FidaleoXebec to its provides natural provides include natural board directors. gas andofbiogas puri cation, gas and biogas purias cation, Fidaleo will serve natural gas dehydration, natural gas dehydration, the company’s third for hydrogen purication hydrogen puri cation for independent director. fuel cell and industrial fuel and industrial Hecell was most recently CFO applications, and specialised applications, and specialised and executive VP of EOS solutions for other gases. solutions other gases.

Petro,also an for early stage oil and Xebec offers compressed Xebec also offers compressed gas exploration company. air treatment solutions. To is a finance executive airHe treatment solutions.

To date, Xebec has supplied with than over 25has years’ date, Xebec supplied more 8,000 adsorption experience as a than certified more than 8,000 adsorption systems to more 1,300 public accountant, having systems toworldwide. more than 1,300 customers ● customers worldwide. ●

Dow Dow Water Water && Process Process expands expands biodiesel biodieselsolutions solutions After acquiring Rohm It also provides Amberlite After acquiring Rohm It also provides Amberlite BD10DRY technology, a Bioein and Haas July this rt joins GTI nerg y expe BD10DRY technology, a and Haas in July this simple and cost-effective Al ns has year DowDarzi Water & joined Gas Techn ology Instit ute (GTI), simple and cost-effective solution for biodiesel year Dow Water & lopment and a rch, deve training organ isation, as Processresea Solutions has solution for biodiesel puri cation designed to an R&D direc tor.has Process Solutions puri cation designed to expanded its portfolio maximise process yield.

In his new role, Darzins will be responsible for yield. expanded its portfolio maximise process Forased 50 years Dow Water & of solutions, including expanding the company’s bio-b resea effort s For 50Solutions yearsrch Dow of solutions, including Process hasWater been & in altern ative energ y and biodiesel capabilities. renewable fuels.

Process Solutions has been biodiesel capabilities.

Darzi ns previously servedproviding DuPont’s innovative biochemic water

alwater providing innovative It now offers theand Dow and process solutions to both sciences engineering divisi on and has years of to both It nowexpe offers theesolid Dow and processand solutions Amberlyst BD20 communities industries rienc in technical, mana gement and busin ess Amberlyst BD20 solid communities and industries deve catalyst FFAlopm esteri cation alike.

A differentiated ent roles. catalyst Prior FFA esteri alike. A differentiated technology that business unitwable of The Dow to offers that cation he was with Natio nal Rene technology offers businessCompany, unit of TheDow Dow Energ ythat biodiesel producers the where heChemical Labo ratory managed the applied biodiesel producers the Chemical Company, Dow scien exibility to ces produce group in the National Water & Process Bioen ergy CentSolutions re. exibility tonsproduce Watera &broad Process Solutions Darzi hold biodiesel from inexpensive portfolio a Ph.D. in microoffers biology and immu nologof yof biodiesel from inexpensive offers a broad portfolio from the low-quality feedUnive stocks exchange rsity of Illinois,ion Chica go. l resins, reverse low-quality feed ion exchange resins, reverse without sacri cingstocks the purity osmosis membranes, without sacri cing the purity osmosis membranes, needed in the end product. ultraltration membranes needed in the end product. ultra ltration membranes The Ambersep BD19 is and electrodeionization The Ambersep BD19 is and electrodeionization a feedstock purication products, with strong a feedstock cation products,inwith strongof worked as CFO, executive compensation committees technology, apuri pre-treatment positions a number technology, a pre-treatment positions in a number VP and CEO at both public to its board.

The step specially designed to be major applicationcompany areas,of step specially designed to be major application and private companies. says this is ‘in preparation used together with Amberlyst including industrial areas, and In the past three months for the commercialisation used together with Amberlyst including industrial and BD20 catalyst technology municipal water, industrial OriginOil has life added of its breakthrough platform BD20 catalyst technology municipal water, industrial that extends timetwo and processes, pharmaceuticals, independent technology and thewater extension that extends life time and processes, pharmaceuticals, improves the directors operability of power, residential and and chartered audit and of of its market applications’. l improves the operability power, residential water●and the downstream process. waste and water reuse. the downstream process. waste and water reuse. ●

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22 august 2012 biofuels international

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A summary of the recent major explosions, fires and leaks in the biofuels industry Date

Location

Company

Incident information

11/07/12

Columbus, Ohio, US

Greenlight Biodiesel

An ethanol-filled train derailed at around 2am.

Three rail cars each carrying 30,000 gallons of ethanol caught fire and exploded.

It is not yet known what caused the incident which injured two people.

Residents living in the nearby area were evacuated.

30/06/12

Niles Township, Michigan, US

N/A

A tanker truck carrying 8,400 gallons of ethanol collided with a pickup truck at around 3am.

None of the ethanol leaked during the crash, although the US 12 road was closed for over almost four hours before being reopened at around 6.45am.

The pickup truck driver sustained minor injuries and was taken to hospital.

15/05/12

Tracy City, Tennessee, US

N/A

An ethanol spill in Tracy was caused by an overfilled rail tanker, fire officials have confirmed.

Ethanol began leaking at around 5.20pm and both police and the fire department were called to the scene.

The region was cordoned off and foam applied around the tanker to prevent explosion. Five households were evacuated and returned later that evening.

However, when a HAZMAT team arrived to move the tanker, which had not overturned or been damaged, it began leaking again at around 1.20am the next day. The team says it carried out its procedure again before successfully transferring the remaining ethanol to another rail car.

15/06/12

Pemiscot County, Missouri, Natural Biodiesel US Plant

An explosion at the Natural Biodiesel Plant left one 56-year-old man injured.

The explosion was reported at around 8.15am and left a small fire burning.

The explosion is being ruled as an accident.

Don’t miss out on the September issue! Next Editorial to cover:

• Regional focus: Canada

issue

• Biotechnology Increasing biofuels production enough to meet the rapidly approaching targets is an ambitious goal, made even harder by the importance of not affecting the availability or cost of food. Biotechnology can play a significant role in boosting crop yields as well as harnessing the energy potential of nonfood crops.

• Sustainability Certification and qualifying criteria are big business. This section will take a closer look at recently approved schemes, provide an update on the latest views on indirect land use change and look at those producers that are now officially classed as ‘sustainable.’

biofuels international

Deadline contributions for advertising: 24th August For details on advertising please contact Shemin Juma, +44 (0)203 551 5751 • shemin@biofuels-news.com For details on editorial contribution please contact Margaret Dunn, margaret@biofuels-news.com • +44 (0)208 687 4126

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personnel biofuels

5th Biofuels International conference

Just announced Previous participants include BP Total Shell European Commission Environment Minister EPURE EBB PKN Orlen

Statoil Neste Oil St1 Biofuels Petrotec International Energy Agency INEOS Bio Mabanaft Oxem

3B Biofuels EOP Biodiesel Tereos TNO Renewables Bentley Motors Saab Motors Port of Amsterdam Port of Ghent

21st & 22nd November • Antwerp March 2012 Issue 2 • volume 6

international

Sales slowdown

New scrutiny in the market amid cases of RIN fraud is having an impact on the number of transactions, as well as the price

TM

Be part of the programme!

To nominate a speaker or to sponsor a session contact:

Painting the sky green Now the aviation sector is finally getting the attention it deserves, what airlines are making the most progress?

The great debate

Sustainability is about much more than just a certificate

Conference information Margaret Dunn • +44 (0) 208 687 4126 • margaret@biofuels-news.com

Regional focus: biofuels in eastern Europe

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Organised by market leading Biofuels International magazine

Sponsorship opportunities Shemin Juma • +44 (0) 203 551 5751 • shemin@biofuels-news.com

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24 august 2012 biofuels international biofuels international june 2012 59

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Despite pressure from multiple fronts, the US biodiesel industry continues to look on the bright side

Staying positive

A

pessimist would say if it wasn’t for bad luck some people would have no luck at all. Good then that the US biodiesel industry remains an assembly of optimists, with the hard times of 2010 no doubt already draining any lingering pessimists from their ranks.

There is a federal mandate requiring biodiesel consumption, with this year’s Renewable Fuels Standard setting demand for biomass-based diesel at one billion gallons. Otherwise, the pincer action of weak fundamentals and high costs for feedstock might again have a more traumatic effect on biodiesel producers in the US. Industry sources explain there have been operating cutbacks at US biodiesel plants due to poor market conditions, with traders and brokers talking of a supply glut. Storage tanks are full, they say, due to a sharp supply buildup in late 2011 to capture a now expired tax credit while domestic demand has remained weak.

Weak demand is not isolated to biodiesel, with total oil products supplied to the US market trailing the year ago period by 3.1% through late June, according to data from the Energy Information Administration.

Petrol demand is down 5.1% for that period while distillate fuels supplied to market is 2.9% lower compared with the 2011 consumption rate.

Demand for fuels in the US has been hobbled by sluggish economic growth, which has an outsized impact

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on diesel’s consumption rate because diesel is primarily used in commercial and industrial settings in the US. Therefore, limited economic expansion which is the case now cuts into demand for diesel and biodiesel.

The US Bureau of Economic Analysis reports a 1.9% annualised growth rate in first quarter US Gross Domestic Product, which was down from a 3% expansion rate in the fourth quarter 2011.

Historically, slowing GDP

projections for an annual growth rate between 2.4% and 2.9%. They also adjusted down their expectations for US GDP growth in 2013 from 2.7% to 3.1% projected in April to 2.2% to 2.8%.

Longer term, the overseers of US monetary policy project annualised growth between 2.3% and 2.5%.

‘Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook,’ the late

‘Storage tanks are full due to a sharp supply buildup in late 2011 to capture a now expired tax credit while domestic demand has remained weak’ growth has dampened demand for diesel.

At the conclusion of their late June meeting, the Federal Open Markets Committee said in a statement it ‘expects [US] economic growth to remain moderate over coming quarters and then to pick up very gradually.’

Federal Reserve Board members and bank presidents also released downwardly revised projections for US GDP growth, now expecting the US economy to expand between 1.9% and 2.4% this year compared with April

June FOMC statement read.

Recent production cutbacks talked about in the market are not yet reflected in the data, which lags. Data from the Environmental Protection Agency shows the US biodiesel industry produced 114.9 million gallons of biodiesel in May, the highest production rate of the year.

Cumulatively during the first five months of 2012, EPA reports total production at 445.8 million gallons.

Just like ethanol, the Midwest region supports the greatest amount of biodiesel

production, responsible for nearly 70% of all output.

May’s climbing production should ease to some extent considering the challenging market conditions, although the industry remains in a growth stage. Infrastructure continues to expand and newer production plants might keep producing despite the oversupply.

Last year, the biodiesel industry produced nearly 1.1 billion gallons of biomass-based diesel, according to the National Biodiesel Board. Last December, right before the $1 (€0.8) per gallon Biodiesel Mixture Excise Tax credit expired on the final day of 2011, saw the US biodiesel industry’s greatest output for the year at 109 million gallons, based on data from the EIA. Output during fourth quarter 2011 accounted for 33% of total production last year according to the EIA, with its data showing more conservative output figures compared with the EPA. Still, climbing feedstock costs are a drag on margins, with scorching temperatures and drought conditions in June to early July in the Midwest farm-belt wreaking havoc on crops. This is hurting margins for both biodiesel and ethanol producers in the US, with several US ethanol producers in June announcing temporary plant closures in the face of negative margins.

Vegetable oils constitute the majority of feedstocks used

by US biodiesel producers, with the EIA showing vegetable oil made up 66.3% of feedstock inputs in 2011.

For the first four months

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biofuels regulations Chicago spot biodiesel and spot ULSD

Distillate fuels supplied to market

2012 biodiesel RINs USGDP distilliate demand

of 2012, EIA data shows vegetable oils accounted for 70.7% of the raw material used in producing biodiesel.

Soyabean oil remains the primary feedstock for the US biodiesel industry, so far in 2012 used in producing half of the country’s biodiesel.

Canola oil accounted for 14.4% of the feedstock total during early 2012, running above the 10.6% used in 2011. Yellow grease was the next highest feedstock used

by US biodiesel producers, with the recycled feedstock use at 6.6% of all feedstocks during the first four months of 2012 compared with 5.9% usage for all of 2011.

There is a trend developing in which corn oil feedstock increases its share of inputs, as ethanol producers continue to add technology at their plants to capture higher levels

of corn oil. For 2011, corn oil accounted for 3.8% of all feedstock inputs, with that figure up at 6.3% during the first four months of 2012.

Fraud is another threat for the industry that has been building since late 2011, with the US government convicting the first person, Robert R. Hailey, in connection with a scheme in which $9 million of fake EPA compliance credits were sold into the market.

Hailey, the owner of Clean Green Fuels, was convicted on 25 June of wire fraud, money laundering and a violation of the Clean Air Act. The compliance credits or Renewable Identification Numbers (RINs) are created when an approved renewable fuel is produced or imported into the US. RINs move with the fuel through the supply chain, but can also

be separated and traded in the open market. Obligated parties under the RFS, which include oil refiners, blenders and importers, need to report RINs annually with the EPA to show they are in compliance with the federal mandate; and many obligated parties would simply buy RINs in the market instead of acquiring the renewable fuel.

Hailey’s company produced no biodiesel but sold RINs, with biodiesel RINs trading as high as $2 at one point in 2011. Today biodiesel RINs are trading just below $1.20 while RINs from small producers are trading at a $0.15 or more discount to those from larger producers, with the fraud prompting buyers to seek name recognition when making the trade.

The EPA has announced two other cases involving

RIN fraud. Texas-based Absolute Fuels allegedly sold $40 million worth of invalid biodiesel RINs into the market while Houston-based Green Diesel is accused of generating 60 million invalid biodiesel RINs. Insiders suggest there will be more cases of biodiesel RIN fraud announced in the coming months that could prompt obligated parties to be even more selective in their market purchases that would further dampen demand for biodiesel. l

For more information: This article was written by Brian Milne, refined fuels editor for Telvent DTN and editor of OilSpot, a weekly TDTN newsletter for fuel marketers, buyers and sellers. Milne has been a journalist and editor for 16 years, focusing on the energy markets for 14 of those, www.telventdtn.com, +1 952 851-7216

26 august 2012 biofuels international

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February 2011 Issue 1 • Volume 2

High standards

A new fuel stand ard will boost assurance in the US pellet market in 2011

A special relations

hip Why US pellet make so sweet on Europ rs are e The number one

Regional focus: bioen ergy in North Amer ica ion

source of informat

internationally for

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Bioenergy Insight now comes out six times a year — subscribe now to receive the magazine at 2011 prices!

For just £120/€185/$240 a year subscribing to Bioenergy Insight will keep you on top of l Bioenergy news l Regulations and legislation l Technical and bioenergy updates — including pellets, biogas, biopower, biofuel plants and more l Regional insights l Interviews with leading biomass users and producers l A dedicated insight into energy feedstocks l A list of biopower and pellet plants under construction Can you afford to miss out?

For subscriptions please contact Lisa Lee, Subscription Manager +44 (0) 20 8687 4160 or at marketing@horseshoemedia.com

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2 may 2012 biofuels international Bioenergy July 2011 • 4327 biofuelsInsight international august 2012

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E15 finish line on US horizon Final approval regarding E15 petrol blends has been granted by the US Environmental Protection Agency (EPA) but it may still be some time before consumers can begin selecting it at the pumps

T

he approval means US retailers and producers will be able to sell fuel consisting 85% petrol and 15% ethanol, up-scaling from the current E10 model allowed throughout the country. The EPA, which first set the wheels in motion for this update in January 2011, has now completed a series of steps to ensure the new blend will be properly marked and sold.

Jumping the hurdles

The E15 blend has been approved for use in light trucks and cars that have been manufactured from 2001 onwards, but it is banned from being put into older vehicles, motorcycles and light equipment. The approved modes of transport make up 62% of the vehicles currently ‘on the road’ across the US. The EPA has stated that other federal, state and local requirements will still need to be addressed before E15 will be able to be introduced nationwide, however. For example, dispenser and tank compatibility with E15 must be considered by marketers of the fuels. Also, several states do restrict the sale of some petrol-ethanol blends so changes to those laws will be required.

Other hurdles to the widespread adoption of E15 include pending litigation, threats of congressional intervention to prevent its sale and a

requirement that E15, particularly in the summer months, meet stricter federal evaporative emissions standards, known as Reid Vapour Pressure (RVP).

Most current summer petrol formulations would likely exceed federal limits when blended with 15% ethanol. An RVP waiver for 10% ethanol blends is in place allowing for year-round sale and the EPA thinks the waiver should be extended to E15 as well, given that RVP differences are indistinguishable between 10% and 15% ethanol blends.

US department of agriculture secretary Tom Vilsack was quoted as saying: ‘I think there are a number of stations, particularly in the Midwest, that will be very interested in introducing E15, and there will certainly be encouragement from the renewable fuel industry for it to be done as quickly as possible.’

The first retailer in the US to sell E15, according to the RFS, will be Zarco 66 Oasis station in Lawrence, Kansas.

There are also proposed plans to offer E15 at a second retail station in Kansas at Ottawa.

Help is at hand ‘It is no secret that some in the petroleum industry, and other anti-biofuel voices, will mount an all assault to prevent E15 from entering the market,’ adds Renewable Fuels Association (RFA) president Bob Dinneen. ‘But America’s ethanol industry is fully committed to working with

stakeholders across the supply chain, and with consumers directly, to offer American drivers choices at the pump, lower cost choices at that.’

The RFA will be working closely with both the EPA and fuel retailers to ensure potential E15 hurdles are overcome.

However any retailers or providers wishing to offer E15 must initially register with the EPA and show how they will adhere to the RFA’s EPA-approved misfuelling mitigation plan.

The conditions of that plan are: • Labels must be placed on E15 retail dispensers indicating that E15 use is only for MY2001 and newer motor vehicles • Product Transfer Documents must accompany all transfers of fuels for E15 use • Parties involved in the manufacture of E15 must participate in a survey of compliance at fuel retail dispensing facilities to ensure proper labeling of dispensers • Parties must submit a plan addressing conditions to EPA for approval.

The RFA will also initiate a nationwide fuel survey programme to check things like proper labelling, ethanol content and vapour pressures are being handled by fuel stations in the right way.

‘We are committed to ensuring a safe and smooth introduction of E15 for consumers and retailers,’ says Dinneen. ‘Change often breeds confusion but we will proactively work with those retailers to educate consumers on the appropriate use of E15 and the benefits of greater domestic ethanol use. We believe it is possible that gallons of E15 could be sold under the waiver conditions before the end of the summer.’ To

help speed up compliance the RFA will offer approved and necessary E15 pump labels free of charge to retailers.

Missing link?

There has also been a new development for midlevel ethanol blends completed by scientific standards development body ASTM International, which it claims could serve as the missing link necessary for blender pumps to become widely used in all US states.

The standard has been called ‘Blending Mid-Level Ethanol Fuel Blends for Flexible-Fuel Vehicles with Automotive Spark-Ignition Engines’ and provides technical guidance for retailers and blenders who wish to offer fuel blends containing ethanol volumes between 15 and 51%.

ASTM says the reason for the standard was because, although some states primarily in the Midwest had formed their own regulations to allow blender pumps to dispense mid level ethanol blends, other states were reluctant to follow suit without appropriate ASTM guidance.

‘All of the state regulators who initially had apprehension about blender pumps weighed in on this document and said it was exactly what they needed to help usher blender pumps into their state. So this new standard should ease any concerns,’ says RFA VP of technical services and ASTM committee member Kirsty Moore.

‘Those working in states with previously existing blender pump regulations may continue with the policies already in place, or choose to adopt the ASTM standard,’ she adds.

‘We want blender pumps legal in every state because, currently, there are fewer than 500 locations in the country.’ l

28 august 2012 biofuels international

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The Petrol Marketers Association of America discusses its members’ mixed emotions towards E15

The road ahead for E15 implementation

A

few years ago when the Environmental Protection Agency (EPA) granted partial waivers for E15 use in vehicle model years 2001 and newer, many wondered what this new fuel would mean for the retail motor fuels industry.

The Renewable Fuels Standard (RFS), established by the federal Energy Policy Acts of 2005 and 2007, requires 36 billion gallons of renewable fuels to be blended into conventional motor fuels by 2022. Corn-based ethanol makes up much of the RFS which requires 15 billion gallons in the nation’s fuel supply by 2015.

Currently, the nation consumes approximately 140 billion gallons of petrol each year. Even if every gallon of petrol were blended with 10% ethanol, refiners would hit the ‘blend wall’ around 14 billion gallons. Refiners are expected to hit this wall next year (at current 10% ethanol blended consumption). To meet these requirements, the ethanol community proposes to move the ethanol blend limit from 10% to 15%.

In a recent Congressional hearing, the Renewable Fuels Association’s (RFA) Bob Dinneen said: ‘Congress shouldn’t make changes to the RFS because it’s working by decreasing US dependence on foreign oil….

The US just can’t frack our way to energy independence – alternative fuels should be a major component to US energy independence.’

While this is true, increased

biofuels international

ethanol blends still pose a threat to retailers who may have older underground storage tank (USTs) systems and equipment. E15 has yet to fulfill Underwriters Laboratories’ stamp of approval for legacy equipment

2012’ (H.R. 4345, S. 2264), which will provide a legal and regulatory pathway for retailers to sell EPA-approved fuels including E15 by granting the EPA administrator the authority to issue guidelines to determine whether new

‘If a motorist ignores the labels and fuels a 2000 model year or older vehicle with E15, the retailer should not be held liable if they correctly have the E15 label in place’ which is the gold standard with respect to produce safety. This is a major obstacle because several federal regulations, state laws, local ordinances and insurance policies require UL-certified equipment. Retailers that decide to sell E15 could be held liable to pay for cleanup costs if a leak occurs due to the increased ethanol blends, and insurance companies may deny coverage.

In order to ease the transition into mid-level ethanol blends, the Petrol Marketers Association of America (PPMAA) continues to urge Congress to pass the ‘Domestic Fuels Act of

and existing underground storage tanks and dispensing equipment are compatible with EPA-approved fuels.

It also provides misfuelling protection for retailers who abide by EPA’s E15 labelling requirements. For instance, if a motorist ignores the labels and fuels a 2000 model year or older vehicle with E15, the retailer should not be held liable if they correctly have the E15 label in place. The legislation satisfies this concern so that retailers can offer E15 with confidence. Secondly, if a retailer stores and dispenses E15 in equipment that satisfies EPA’s compatibility

requirements then that retailer will not be held liable. While Congressional action is needed, there will still be work needed at the state and local levels as well as the Weights and Measures and OSHA fronts.

The ‘800 pound gorilla’ in the room Car manufacturers, such as Ford, GM, Chrysler, Toyota and most others do not support E15 in 2001 and newer model years. Lexus and Toyota have placed explicit E15 warnings on their gas caps to alert 2012 model year purchasers that E15 is not an approved fuel for use in their vehicles. This gives PMAA member companies cause for concern because they do not want to be held liable. Without a clear and concise liability protection law from the federal government, many retailers may be reluctant to offer E15.

PMAA member companies are not married to petroleum products and have recommended to those who want to offer E15 to first obtain legal and regulatory expertise to assure compliance with the many applicable local, state and federal regulations. Only time will tell if E15 is to be accepted in the marketplace and petroleum marketers will be in the driver’s seat to bring new fuels to motorists as long as legal certainty warrants. l

For more information: This article was written by Rob Underwood, PMAA’s director of Government Relations, www.pmaa.org

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biofuels regulations

Farm bill battle ends

T

he US biofuels industry is rejoicing after several potentially harmful amendments were dismissed by the Senate as it completed work on the 2012 Farm Bill in June.

Senators filed hundreds of suggested amendments for consideration under the bill, but three of the strongest that would have made it difficult for the US Department of Agriculture (USDA) to assist the biofuels industry were rejected.

Looking after the next generation One amendment which would have repealed the Biorefinery Assistance Program (BAP) was proposed

by Senator Pat Toomey.

The programme, which exists under the Energy Title of the Farm Bill and provides incentives for the construction and development of next generation biorefineries, was saved by a majority vote of 63 to 33 and Toomey’s amendment was not sanctioned.

In a statement, Tom Buis, CEO of Growth Energy (a company that champions and supports ethanol producers) said: ‘The BAP is instrumental in the production of the next generation of ethanol. By rejecting this amendment the Senate has clearly shown it understands the importance of advanced biofuels and the benefits of cleaner air, job creation and energy security.’

The BAP has existed as part of the first Farm Bill in 2008 and has helped companies, including Sapphire Energy and Ineos New Planet Bioenergy, build new biorefineries throughout the US. The new jobs that these projects created should also not be

ignored as a part of this process; the new Sapphire plant in Columbus employs 60 operational personnel and several hundred jobs were created indirectly through its construction.

Solar failure Another senator, Jim DeMint, presented the idea of an amendment that would have prohibited the Secretary of Agriculture from making any loan guarantees. He pointed towards a failed solar company called Solyndra, which had received a Department of Energy loan guarantee of $535 million (€436 million) before eventually filing for bankruptcy in 2011, as an example to back up his statements.

‘There are many programmes that guarantee loans that expose the American taxpayers to millions of dollars,’ he said before adding the bill should not prohibit the programmes themselves, nor crop insurance and other important things farmers rely on but just the liability put onto American taxpayers.

However the Senate dismissed the amendment by 84-14 votes and is planning to save taxpayers $24 billion, in part by replacing $5 billion in yearly crop subsidies with less costly crop insurance to protect farmers against bad weather or unexpected price drops.

Ingrained funding system A third example of an amendment that would have been detrimental to the biofuels industry was broached by senator Tom Coburn. He was keen to cut funding for the Market

Access Programme by 20% and impose limitations on how international activities could use such funding.

The US Grains Council (USGC) claimed any such cuts would negatively impact international distillers grains marketing. The proposition was voted out by a margin of 69-30.

‘Market Access Programme funding, in conjunction with other smaller funding programmes, has been an important contributor to the success of US coarse grains and DDGS (dried distillers grains with solubles) exports worldwide,’ says USGC chairman Wendell Shauman. ‘Without it US grain exports will face a much tougher uphill battle.’

McConnell and Harry Reid, and the Senate’s agriculture committee’s Pat Roberts and Debbie Stabenow for ‘reauthorising the Farm Bill with a strong Energy Title with mandatory funding’.

‘An “all-of-the-above” energy strategy must include renewable energy and create opportunities for every region, especially rural areas. We look forward to working with the House as they move through the legislative process,’ it added.

And the executive vice president of Biotechnology Industry Organisation, Brent Erickson, welcomed the new bill and praised the future use of under-used farmland for energy crops.

‘Farm Bill energy

US farm bill to benefit biofuels industry

Round up The final version of the Senate’s 2012 Farm Bill was passed in late June by a bipartisan vote of 6435, with the energy title remaining firmly in the mix.

The Agriculture Energy Coalition, a group that believes in forward-thinking farm policy that also must invest meaningfully in the energy economy including renewables, released a statement following the bill’s completion. It thanked the Senate leaders, Mitch

programmes play an essential role in helping new companies unlock private investment capital for the construction of innovative biorefineries, putting underutilised farmland back into production of next generation energy crops and revitalising rural America,’ he said.

The bill has now moved up to the House of Representatives for another review, with congressional leaders aiming to reach a final deal before the start of October. l

30 august 2012 biofuels international

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biofuels china Companies all around the globe are looking to the world’s biggest energy consumer for partnership and research opportunities to help make second generation biofuels a reality

China: why the sudden interest?

T

his year is a big one for China as a new generation of leadership prepares to move into key government and communist party positions. The new generation of leadership will be making all key decisions for the world’s largest country for the next 10 years. The upcoming changes will occur at the 18th Chinese Communist Party National Congress in October when the rest of the world will be closely watching developments in Beijing.

The forthcoming leadership reshuffle will affect all areas of the economy and have a global effect over the next few years.

Prospects for the biofuels sector are uncertain, although domestic and international cooperation continues to grow as China looks for new ways to reduce urban airborne pollution.

Taking biofuels to a higher level China’s plans to develop the use of biofuel as an aviation fuel has received the most domestic attention, especially since the test flight of an Air China Boeing 747-400 in October 2011, which used aviation biofuel for the first time.

The flight lasted one hour and involved the use of 13.1 tonnes of biofuel produced by PetroChina from locally grown jatropha in one of the plane’s

four engines. The three other engines used conventional jet fuel for the flight, which took off and landed at Beijing Capital International Airport.

A second test flight will take place during the third quarter of this year. The aim is to demonstrate to the Chinese

completion in 2014 that would produce 60,000 tonnes a year.

Sinopec, the country’s largest aviation fuel producer also plans to produce aviation biofuel. Earlier this year the Civil Aviation Administration of China announced that Sinopec had developed

‘Around 90 new airports are due to be built in China’ government and the public, along with regulators and airlines around the world, that biofuel produced in China is suitable for aviation use on commercial flights.

Biofuel made from jatropha will also partly be used for the second test flight, which is expected to involve a longer trans-Pacific trip.

The potential to develop jatropha for aviation fuel, as well as blending in petrol, is large in China where huge stretches of barren land are available to grow the plant.

Around 90 new airports are due to be built in China, meaning that the use of biofuel as aviation fuel has huge potential due to the forecasted rapid increase in commercial flights over the next decade and beyond.

PetroChina, a leading state-run oil and energy company, has announced plans to build a refinery for aviation biofuels for

an aviation biofuel that the agency will examine through laboratory research and test flights before approval is given for the fuel to be used for commercial flights.

Sinopec supplies 70% of the almost 20 million tonnes of aviation fuel used in China each year. The company has said it expects to produce 12 million tonnes of aviation fuel from biofuel by 2020, equivalent to one third of forecasted national aviation fuel demand that year.

The Sustainable Aviation Fuel Cooperation became part of the bilateral US-China Energy Cooperation Programme in 2011 and aims for the commercial development of aviation biofuel in both countries.

China’s State Forestry Administration is managing the PetroChina aviation biofuel project, which also involves Boeing and Honeywell. Production is

located in southwest China where there is a suitable climate and marginal land to grow jatropha.

Ethanol production In spite of the high profile that aviation biofuel is gaining, market production growth remains modest. Single digit bioethanol output growth is forecasted in China this year, while production of biodiesel is not expected to show any increase due to a shortage of raw materials.

Government guidelines for biofuel production remain unchanged and stipulate that biofuel production should not compete for crops intended for human consumption or for land used to grow crops for food production.

The United States Department of Agriculture (USDA) estimates that bioethanol production in China will grow around 8% in 2012 to reach about 2.4 billion litres.

China has five bioethanol plants, of which four use maize and wheat feedstock while the other plant uses cassava. Total production was about 2.25 billion litres in 2011, up around 6% from the previous year.

According to the USDA, the four grain-based plants produced a total of 2.1 billion litres of bioethanol last year, mostly using maize as feedstock. The cassava plant produced about 150 million litres.

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Currently most bioethanol is believed to be used in 10 provinces. A 10% blend of bioethanol was made mandatory in Heilongjiang, Jilin, Liaoning, Henan, Anhui and Guangxi provinces in 2008. In addition, bioethanol use was made mandatory in 27 cities in Hubei, Hebei, Shandong and Jiangsu provinces. All bioethanol used has to be locally produced.

COFCO is believed to be China’s largest bioethanol producer. In addition to its Guangxi plant, which supplies ethanol to Sinopec and PetroChina to blend as E10, the corporation holds shareholdings in two ethanol plants. One is in Jilin Province in northeast China and the other is a 20% stake in a 440,000 tonnes per year Anhui BBCA Biochemical of Bengbu in Anhui Province in east China, which uses maize as feedstock.

Bioethanol production is expected to enter a new growth phase shortly with COFCO and a number of other companies preparing to manufacture cellulosic ethanol using cost-effective waste materials.

COFCO’s Bioenergy and Biochemical Division and TMO Renewables in the UK have set up a joint testing programme to manufacture ethanol from cassava residue and cassava stalk using TMO’s new process technology that converts biomass to bioethanol.

The agreement involves finalising a design package for the first fully commercial second generation ethanol plant in China. COFCO plans to use waste residue from its 200,000 tonnes per year cassava ethanol plant at Beihai in Guangxi province in southwest China to produce 30,000 tonnes a year of second generation ethanol in a new adjacent facility, where the residue will be supplemented with cassava stalk.

Surrey-based TMO recently

biofuels international

announced it is processing an initial shipment of cassava stalk from China at the company’s demonstration facility in Guildford Science Park. TMO is finalising the process design using optimised energy and mass balances for cassava stalk at scale. The company will then develop plans and process engineering designs to develop a full commercial plant with COFCO and other Chinese clients.

‘With more and more countries seeking affordable fuels, abundant cassava stalk will play a vital role in expanding cellulosic biofuels production,’ says TMO acting CEO Robert Parker.

CNOOC New Energy Investment, a wholly owned subsidiary of China National Offshore Oil Corporation (CNOOC) which also produces biodiesel, also has signed an agreement to use TMO’s process technology to launch bioethanol production.

CNOOC’s scheme involves building an integrated 180,000 tonne per year plant equipped with both first and

second generation production facilities that also will make bioethanol from cassava residue and cassava stalk.

Biodiesel China’s consumption of biodiesel remains well below the nation’s large production capacity due to a widespread shortage of feedstock materials.

USDA estimates that China’s biodiesel capacity stands at around 3.4 billion litres this year while the industry’s actual production output is forecasted to reach 568 million litres in 2012.

Waste cooking oil and residue from vegetable oil crushing plants are the main materials used for biodiesel production at present.

However, price levels for these feedstocks are too expensive at present as animal feed and chemical producers are the major consumers and willing to pay higher prices for supplies.

In 2011 the Chinese government launched a crackdown on the illegal

use of used cooking oil by restaurants which resulted in a larger volume of used cooking oil becoming available for biofuel production.

However, the absence of government subsidies or mandatory blending ratios supporting biodiesel use meant that many diesel fuel users failed to switch to biodiesel even when adequate supplies were available.

‘Used cooking oil is still the main feedstock but prices are not economical to use for biofuel,’ the diplomat commented. ‘Used cooking oil can be used to make solvents and paints. It is also re-used illegally for cooking. These customers pay higher than biodiesel manufacturers.’

Raw material supplies have proved a problem for CNOOC Biolux Nantong Bioenergy Protein Feed, which is a joint venture of CNOOC with Biolux Biofuel Biotreibstoffproduktionsund Handels of Austria.

CNOOC opened its 60,000 tonnes per year Hainan biodiesel plant in August 2010 in a joint venture with

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biofuels china Biolux. The Hainan plant supplies Sinopec with biodiesel made from jatropha to blend and distribute in Hainan, southern China.

Following construction of the Hainan facility, CNOOC has built a larger, second plant as a joint venture enterprise with Biolux. Under the joint venture agreement, Biolux is proving the production technology for the 250,000 tonnes a year biodiesel plant supported by an investment of €1 million.

The plant is intended to be the first biodiesel unit in China to use cottonseed as feedstock. Supplies are due to be purchased from farms in Jiangsu, Hunan, Hubei and Anhui provinces.

CNOOC Biolux Nantong Bioenergy Protein Feed has faced material supply problems since its inception.

The plant originally planned to use canola seed and then

switched to use cotton seed, eventually contacting foreign companies when local cotton seed growers seemed unlikely to provide raw materials.

‘The CNOOC Biofluel problem is typical,’ comments the diplomat. ‘Large Chinese companies and

the government are doing research for feedstock but none are so successful that they have reached commercialisation.

CNOOC Biolux also plans to utilise used cooking oil as feedstock if cotton seed procurement proves

difficult. The company plans to use the cooking oil as a second raw material source should sufficient cottonseed not be available.

Biodiesel from the plant will be supplied to Sinopex for blending and sales through its service station network. l

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34 august 2012 biofuels international

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India battles the biofuels blend

by Partha Pratim Basistha

O

n 2 September 2002, over 2,000 people gathered in remote Monroe, Wisconsin to celebrate the opening of Badger State Ethanol, built by the design-build team of Fagen Witchita Falls, Wisconsin, and ICM from Colwich, Kansas.

India is the world’s fourth largest consumer of petroleum products after the US, China and Japan and the sixth largest importer of crude oil. Seventy five percent of India’s crude oil is met from imported sources.

Petroleum products consumption grew by 2.9% during 2010-11, led by transportation fuels and demand is expected to remain firm. This is despite news that the Indian GDP growth rate dropped to 6% from 2010-11, suggesting that the country’s economy remains under pressure. The growth rate is expected to stay reduced in the coming years, just 6% from 2012-2016.

The growing consumption of petroleum products has meant a burgeoning oil import bill for the government. Volatility in global crude oil prices led by recent geopolitical tensions has been hiking India’s oil import bill even higher. The average price of Indian crude has increased to $110/bbl (€90) from $36/bbl in 2004 and $85/bbl during 2010.

Expensive imported crude oil has translated into higher inflation for the Indian economy. To neutralise the financial impact of costly imported crude, the Indian government is trying to make it mandatory to blend

biofuels international

5% ethanol with petrol under its ethanol blending programme (EBP).

The blend struggle The initiative to allow blending ethanol with petrol was mooted back in 2002, amidst the rising cost of crude imports.

State owned oil marketing company Indian Oil (IOCL) found that ethanol blended with petrol reduced carbon

reduce the stockpile the Indian government made 5% ethanol blends mandatory.

The decision was done with the intention that the blending programme would directly benefit the farmers by assuring the sugar industry a stable and reasonable return for the molasses, the feedstock used for production of ethanol and then passing a significant part of the same to the farmers.

The government allowed

oil companies and ethanol suppliers followed by floating of expression of interest by the OMC for supply of ethanol.

Since, EPB was conceived to directly benefit the farmers, India’s Ministry of Petroleum and oil marketing companies has put a specific condition to the sugar mills under which ethanol has to be produced from domestic molasses only.

It is therefore required that molasses cannot be imported by ethanol producers and it will only have to be produced from molasses not from sugarcane juice or food grains.

Supply and offtake

emissions. The company also found that the anti-knocking properties of ethanol improved the life of the engines. Based on the positive findings, the government allowed ethanol blends. Price for procurement of ethanol was set at Rs21.50 (€0.3) litre by the government. However, the initiative struggled as the Indian sugar industry found the price for blending commercially unremunerative.

The idea was reinitiated by the government in 2007-08 when India had a bumper sugar production at 28 million tonnes with supply outstripping demand. To

three state owned oil marketing companies, IOCL, Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) to procure ethanol from the sugar mills for blending for domestic consumption.

The decision to allow the blending programme was further reiterated by the Indian government’s Cabinet Committee of Economic Affairs (CCEA) during 2010.

The CCEA set a new interim pricing of Rs27 a litre under which ethanol will be supplied to the oil companies. During December 2010 the first fully fledged supply agreement was formed between the

Ethanol is supplied by the sugar mills on the basis of tenders floated by the oil marketing companies. There are 144 number of ethanol producers in India across the states of Uttar Pradesh (UP), Maharashtra, Bihar, Punjab, Andhra Pradesh, Odisha, Tamil Nadu, Gujarat and Karnataka. The producers have a combined ethanol production capacity of 65,27,000kl per day across 300 working days and 195.81 crore litres per annum.

The largest concentration of ethanol producers is in the northern Indian state of UP, which is also the major sugar producer in India followed by the western Indian state of Maharashtra.

Major producers in UP are, Balrampur Chini Mills, Dhampur Sugar Mills, Simbhaoli Sugars, Manakpur Chini Mills. Major producers in Maharashtra are Natural Sugar and Allied Industries, Purti

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biofuels biofuels in India Power and Sugar, Saswad Mali Sugar Factory, Vikas SSK and many others. Out of the total 144 mills, 89 supply ethanol to the oil marketing companies. India produced 1,681 million litres of ethanol during 2011. It is expected to produce 2,170 million litres in 2012. For 2013 the target is 2,239 million litres.

The ongoing challenge Indian producers believe they could meet a 10% blending demand if this was set by the government.

However, the major issue producers face is delayed adherence by the oil marketing companies in off taking the contracted quantity of ethanol delivered at their depots’. According to Arvind Jain, VP of marketing at Dhampur Sugar Mills ‘the oil marketing companies have inadequate ethanol storage capacities at their blending depots’.

Each depot has two to three tanks with capacities ranging between 70-200kl which on many occasions falls short in holding the volumes of contracted

ethanol. The tanks are able to store ethanol only for 10-15 days which otherwise should be having a holding capacity for one to two months.’

In order to transport the ethanol from producer’s plants to the blending depots, suppliers must obtain excise permits. This is a lengthy process that is preventing producers from supplying the ethanol on time.

If adequate storage capacity was available, producers would be able to hold onto the stocks while the permits were being obtained.

Jain points out: ‘The multiplicity of taxes and levies on ethanol across states, comprising central excise, state excise taxes, export fees (imposed by state of Uttar Pradesh) and the maturation fees all add to the cost of producing and transporting ethanol.’

Fixed transportation costs are paid by the oil marketing companies to the producers, according to the tender clause. However the actual freight costs are much higher owing to high fuel costs.

The other major issue, according to ethanol

producers, is emphasis on signing ‘one sided’ agreements by the oil marketing companies with the suppliers. According to Dilip Sekaria, senior general manager of marketing at Balrampur Chini Mills, the company has to supply contracted volumes. If it fails to do so, they will not get paid the full amount, even if the blame lies with the oil company.

Inadequate storage, reduced petrol demand or permitting issues can cause delays, but regardless, the ethanol producers are usually still left footing the bill.

To make production remunerative, ethanol producers believe that the government should have a pricing policy at Rs28 or Rs32. In response, the Indian government set an expert panel, recommending that the ethanol procurement price is lower than petrol price. However, to ensure more supplies of ethanol for the programme, it will be important for the government to announce the formula for the final price, which is still pending.

Policy support The growing Indian economy is expected to boost ethanol’s demand in the future. However, the market still needs the right pricing and policy support.

To encourage ethanol consumption, the Indian government has approved a national biofuels policy.

According to the policy the government has plans for 20% ethanol blending programme by the year 2017 from 5% at present. A high level National Biofuel Coordination Committee (NBCC) is being set up, headed by the Prime Minister of India for policy guidance/review on different aspects of biofuel development, promotion and utilisation.

States will also have to play their role in encouraging consumption of ethanol blends. So far 20 states and four union territories have been identified for blending.

However, out these only 13 states comprising, Bihar, UP, Uttarkhand, Haryana, Punjab, Delhi, Gujarat Maharashtra, Goa, Andhra Pradesh, Karnataka and Kerala have taken up the EPB programme. l

36 august 2012 biofuels international

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Among the backdrop of new facilities and government lobbying, new support towards a mandatory ethanol blend for biofuels has started to rumble again in India

Crore blimey!

by James Barrett

E

thanol is big business in India and is set to become an even more desirable product before the end of this decade. After a hesitant start, when the Indian government withdrew an initial mandatory 5% ethanol blend due to a reduction in sugarcane production in 2004, a national biofuels plan sets a 20% blended bar to come into effect by 2017.

Cautious ways ‘New policies take a rather long time to come to fruition in this country,’ explains business consultancy Ethanol India’s chief consultant Deepak Desai. ‘As a country we tend to be cautious when dealing with brand new ideas or adventurous projects but, in terms of biofuels from ethanol, we are certainly moving in the right direction.’

The 5% blending system came back into play as an unforced option by 2007 and a 10% version was also allowed to those who could supply it, with the majority of ethanol-based fuel coming from the molasses taken from sugarcane feedstock.

Statistics from last year moving in 2012 placed India’s total alcohol production at 250 crore litres (one crore = 10 million), of which fuel ethanol amounted to 100 crore litres.

‘The demand for alcohol is greater than what the industry has been able to supply, especially when it comes to providing ethanol for fuel,’ adds Desai. ‘I’ve

biofuels international

India looks to biofuels as a way to ease reliance on oil imports

seen the execution of seven new plants over the past few years and there are working assignments for another potential 14 moving forward.’

And, as the moreestablished chemical industry also needs bountiful supplies of alcohol to keep going, the ethanol industry needs to sway attentions to itself by continuously lobbying government and advancing its profile.

New kid on the block The latest facility to come online in India is based in Maharashtra and named SaiKrupa Sakhar Karhana (SSK). SSK MD, Rajkumar Dhamdhere, is hopeful the plant will be able to produce a lot of ethanol to help reduce Indian dependency on conventional energy sources and to lessen petroleum imports.

‘We’ll be aiming to produce

about 65,000 litres of alcohol a day, from which ethanol can be made, mainly from molasses and also corn starch,’ says Dhamdhere.

‘We’ll be processing around 7,500 tonnes of feedstock to achieve this projected target.’ The main aim will be to supply the transportation industry by blending the created ethanol with diesel.

‘Once all our operations are running smoothly, we will look into increasing our output from 65,000 litres to 100,000,’ adds Dhamdhere.

Changing seasons One reason the alcohol-forfuel industry is not increasing is due to the money that can be made from exporting feedstock. ‘When seasons change and Indian prices for crops and their by-products drop, molasses becomes more valuable as an export than even alcohol,’ says Desai.

In 2010 an initial expectation that a poor sugarcane harvest was due led to lowered estimates for products like molasses. Mills were selling it for anything they could get and rates dropped from Rs5,200 a tonne (€77) at the start of the season to Rs2,200 towards the end. Alcohol prices, particularly extra-neutral versions, sold at a high of Rs25 per litre back then.

‘Nowadays a good price for alcohol would be around Rs35- 37 per litre, with ethanol in the same region.

But I would like to see the price of ethanol be based on the price of the raw material that is contracted every year,’ says Desai, who also wants to see the government resolve its stance on the current 5% ethanol option and make it mandatory again.

Any move by the government to do that will overrule the recommendation of the Prime Minister’s Economic Advisory Council (PMEAC) that blending stays optional as the country deals with a ‘fickle biofuels supply’. However, the new and renewable energy ministry believes the PMEAC’s statement should be dismissed and has recommended that oil companies should have to provide biofuels with a mandatory 5% blend.

Biofuels are seen as a way of releasing imported oils’ stranglehold on India and such decisions would put India into the select band of other countries who have mandatory bio-petrol initiatives already, like the US and the UK. l

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biofuels plant update

Plant update: North Asia and India Bio-Dynamic Group and Shanghai Zongwei Biochemistry

Location Harbin city, Heilongjiang Province, China Alternative fuel Cellulosic ethanol Capacity 28mgy, expanding to 56mgy by 2013 Feedstock Kenaft Construction / expansion / Construction acquisition Project start date 2011 Completion date 2013

COFCO Location Zhaodong, Heilongjiang Province, China Alternative fuel Cellulosic ethanol Capacity 50,000 tonnes a year Construction / expansion / Construction acquisition Project start date December 2011 (broke ground) Completion date 2013

Celanese Corp.

Location Nanjing, Jiangsu Province, China Alternative fuel Ethanol Construction / expansion / Celanese will upgrade its existing acquisition integrated acetyl facility Project start date March 2012 (received government approval) Completion date Mid-2013

China New Energy and Jilin Tianshun Biochemical Development Co. Location Alternative fuel Capacity Construction / expansion / acquisition

Project start date Completion date Investment

Jilin Province, China Ethanol and butanol 50,000 tonnes a year Upgrade Jilin Tianshun’s existing facility into a commercial-scale ethanol and butanol distillery May 2012 (signed deal) End of 2013 $31.8 million (€26 million)

Algae.Tec and Shandong Kerui Location Dongying, Shandong Province, China Alternative fuel Biodiesel Capacity 33 million litres Feedstock Algae Construction / expansion / Construction of a 250-module algae acquisition biofuel facility Project start date January 2012 (JV signed) Completion date $40 million (€33 million)

FuturaGene Location Feedstock Construction / expansion / acquisition Completion date

Shanghai, China Eucalyptus and poplar Construction of a new biotech R&D centre December 2011

Shengquang Group Location Alternative fuel Feedstock Construction / expansion / acquisition Completion date Investment Comment

China Bioethanol Agricultural waste Construction July 2012 $100 million (€82 million) Novozymes will supply its enzymes to the plant

Southern Biodiesel Technologies Location Alternative fuel Capacity Construction / expansion / acquisition Completion date

Devanahalli, India Biodiesel 50 tonnes a day Construction Q1 2012

World Health Energy Holdings and Prime Location

Alternative fuel Feedstock Construction / expansion / acquisition Project start date

Investment

The proposed sites for development of either Tamil Nadu or Karnataka, India Biodiesel Algae Construction March 2012 (the two companies signed a LOI) $100 million (€82 million)

IndianOil, LanzaTech and Jindal Steel & Power Location India Alternative fuel Biojet Construction / expansion / The construction of a demo-scale biojet acquisition plant, but first LanzaTech plans to

open an India-based office during 2012 Project start date January 2012 (announced) Completion date Mid-2013

World Health Energy Holdings and SHK Energy Projects Location Alternative fuel Feedstock Construction / expansion / acquisition Project start date Completion date

India Biodiesel Algae Construction April 2012 (announced) 2013 (planned operation)

*This list is based on information made available to Biofuels International at the time of printing. If you would like to update the list with any additional plant information for future issues, please email keeley@horseshoemedia.com

38 august 2012 biofuels international

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Michael Martens, Implico’s managing partner, speaks to Keeley Downey about the company’s activities across Asia and the challenges it faces in the region

Ready and waiting

I

ndia, in terms of biofuels, is very much like Europe, the managing partner of software solutions provider Implico, Michael Martens, observes.

Back in 2011 Germany implemented an E10 blend at the pump and motorists were wary, leading to production chaos and shortages of conventional petrol. This even resulted in some politicians calling that the mandate be scrapped altogether.

A similar story can be seen in India. ‘If you look at what has happened in the European biofuels industry over the last 10 years, there are similar problems in developing India’s biofuels market,’ Martens says.

The Indian government has established an ambitious target for the nation to be blending 20% of all biodiesel into regular fuel by 2016-17.

However, today the country has not even reached B5 in its regular diesel, causing Martens to speculate that ‘globally the industry is not yet ready to deliver this amount of biofuel’.

India’s crop conundrum Part of this reluctance to adopt biofuels stems from the food versus fuel debate. The nation has a huge population growth, between 8 and 9%, and this is already in line with the 8-9% consumption growth.

Martens poses the question: ‘How do you decide where to put the sugarcane? Feed the people or put it in your cars? Most people say feed the people first; a common view on the biofuels problem.’

As a result, the government began to establish biofuels crops on wasteland – what seemed to be a suitable solution in terms of addressing climate change and improving energy security, while at the same time saving ‘good’ land for the production of food crops. Nevertheless, it soon came to light that any crops harvested on these otherwise useless wastelands did not have efficient energy output due to poor soil quality.

So in order to try and meet its biofuels goals with high energy crops while keeping its people fed, India turned away from edible feedstocks such as sugarcane and palm oil, and headed into the ocean. Even if the initial algae-to-biodiesel tests did not appear promising, the direction seems to be right; algae will definitely become an important part of the renewable energy mix.

In March earlier this year public holding company World Health Energy Holdings signed a letter of intent with Indian industrial and transport company Prime to develop a $100 million (€81.6 million) 250 acre algae production area and biodiesel production plant.

Ready for biofuels?

For the time being at least, Implico’s automation technology will only be required for the oil and gas sector in India, and not yet the biofuels industry.

Nevertheless, Martens ensures that his company is ‘ready to face these problems’. He says: ‘If the

industry really wants to deliver biofuels, we are ready.

‘As with any fuel retailer around the world, the companies in India will need to accommodate the needs of customers who expect a range of energy sources offered at the point of sale.

Companies who insist on selling nothing other than standard crude oil-based petrol at the pump will simply disappear from the market, regardless of the size of their infrastructure. The winners will be the dynamic companies, the ones who have set up their futureproof supply chain in good time; a supply chain that is, above all, highly flexible and capable of assimilating any type of new product or service both quickly and easily.’

Elsewhere in Asia While biofuels is struggling to penetrate India’s transportation fuel market, quite the opposite is happening 2,000 miles away in Malaysia and nearly 3,000 miles away in Indonesia. Here, biodiesel is in incredibly high demand.

On 1 June 2011 Malaysia introduced its B5 mandate, which began in Putrajaya. It is expected the biodiesel blend will be rolled out nationwide by the end of 2013, and the government predicts that around 50,000 tonnes a month of biodiesel will be consumed domestically by the end of this year. If these predictions are true, Malaysia would need a monthly supply of 7.6 million litres of palm oil-derived

biodiesel, slashing traditional diesel use by almost 91.2 million litres a year.

With the implementation of this target, Malaysia became the second country to introduce B5, behind only its neighbour Indonesia, which has been blending 5% biodiesel into its conventional diesel transportation fuel in select regions since 2006.

Last year Indonesia manufactured 2.2 million tonnes of biodiesel from palm oil – 10.5% of its total biodiesel production. This is more than double its 2010 production volume of 1 million tonnes and a significant rise from 2007 when just 1% of its biodiesel was made from crude palm oil.

Implico is cashing in on this demand for palm oil with its automation system OpenTAS, which has been adapted for use in the palm oil industry.

As Martens explains: ‘Palm oil is very similar to regular oil found in the oil and gas industry. It has exactly the same needs; how it needs to be measured and how the entire flow for the supply chain is processed, for example. The only difference is the upstream area as the fruits need to be dealt with.

After the oil is squeezed from the fruit, the same supply chain rules follow. The supply flow for the palm oil industry is exactly the same that we have for the oil industry so we have no different.’

Today Implico’s OpenTAS system is installed at Sime Darby’s palm oil plantation and palm oil refinery production facility in Malaysia. l

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Keeley Downey speaks to Novozymes’ VP of Bioenergy, Poul Ruben Andersen, about the company’s involvement in one of the world’s first commercial-scale bioethanol plants

Coming to fruition

T

he number of motorists on China’s roads are to increase dramatically from today’s 130 million to more than 200 million in 2020.

This substantial growth will lead to a rise in demand for transportation fuel.

But with an abundance of agricultural residues, China has the materials to be able to replace 40% of its yearly vehicle fuel consumption with second generation biofuels by 2030, (Bloomberg New Energy Finance), significantly slashing CO2 emissions in the process.

And according to a 2009 study

by Novozymes and McKinsey, China can cut its petrol usage by 31 million tonnes by 2020. This would reduce its reliance on imported fossil oil by 10% and help eliminate 90 million tonnes of CO2.

With such renewable potential, the Chinese government has implemented what can only be described as an ambitious target to improve its energy efficiency by 20% and increase the production of cellulosic biofuels.

Under its five-year plan, China has a specific goal of increasing fuel ethanol production from its current level of approximately 1.7 million tonnes a year to 34 million tonnes a year over the next five years. The majority of this should come from second generation feedstocks.

One company that believes this five-year plan is realistic is biotech enzyme producer Novozymes. ‘There is definitely a lot of agricultural waste in China and the technology is there. Now it’s just simply a matter of getting the ethanol plants built,’ says Poul Ruben Andersen, VP of bioenergy at Novozymes.

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Novozymes and Shengquan partnership Today, China’s first commercial-scale cellulosic ethanol plant, of which Novozymes is involved, is preparing to come online.

China’s Shengquan Group is behind the development – a $100 million (€81 million) facility located in Jinan, in the Shandong province.

to be up and running later this month when it will produce 20,000 tonnes a year of cellulosic ethanol.

‘In effect it’s going to be the world’s first commercial-scale bioethanol plant,’ Andersen says. ‘For Novozymes to be involved shows that we are now breaking through in second generation and cellulosic ethanol. Our 10year long effort of developing

‘Shengquan Group’s plant is going to be the world’s first commercial-scale bioethanol plant. We are now breaking through in second generation ethanol’ Paul Ruben Andersen, Novozymes

Under an agreement that was announced in April and finalised in June, Novozymes will supply its enabling enzyme technology to the plant.

Asked how the agreement came about, Andersen says: ‘Shengquan is producing furfural and xylitol from corn crops. What is left is a fairly pure cellulose stream by-product that can then be converted into fermentable sugar and turned into ethanol.

This is a good example of taking a waste by-product and upgrading it to something useful and valuable.’

Shengquan broke ground on the facility in mid-2011 and the plant is on schedule

the enzymes that will be needed for this process together with our partners is coming to fruition.’

The enzymes that Novozymes will supply to this plant will come from its China-based production facilities. The company currently has two production units in China; one is in Suzhou close to Shanghai and the other is in Tienjin.

‘We have expansion plans and as the demand for second generation and cellulosic ethanol increases, we plan on constructing new enzyme facilities in China and in other parts of the world,’ says Andersen.

Novozymes also has enzyme production facilities in Denmark, – its headquarters – the US and Brazil.

First steps to commercialisation Back in 2009 Novozymes took what was then its first steps towards the commercialisation of cellulosic ethanol in China when it signed a memorandum of understanding with COFCO, a producer and supplier of processed agricultural products, and Sinopec, the world’s third-largest oil refinery.

As part of the agreement COFCO and Sinopec built the demonstration-scale cellulosic ethanol plant and Novozymes provides the enzymes. The plant has been operational for a number of years, producing ethanol from corn stover.

Novozymes supplies its Cellic CTec enzyme product range to the plant; in February 2010 it launched its new Cellic CTec2 enzyme product before releasing its most recent upgrade – the Cellic CTec3 – in February this year. Speaking about the company’s enzyme product range, Andersen says: ‘That’s really the central part in our role and we will continue to develop more and more efficient, cost effective cellulases. In the coming years we will release a CTec 4 and 5.

‘The enzyme range is mixtures of different cellulases that act in different ways.

Cellulose is a complex substrate so a mixture of different cellulose enzymes is needed to give the optimal performance. That is what we are trying to figure out – cracking the code and figuring out what specific cellulose enzymes work best

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biofuels asia in breaking down cellulose to sugar that can then be converted into ethanol.’

Following the success of the demonstration-scale project, COFCO is now looking to ramp up capacity to commercial volumes with the construction of a largescale production facility in northeastern China – the ‘corn belt of China’, according to Andersen. He says this plant will be ‘one of the first major plants in China’, producing 50,000 tonnes a year of cellulosic ethanol. COFCO plans to break ground on the large-scale plant either towards the end of this year or early 2013. Novozymes will provide its Cellic CTec range of enzymes to the project, also.

This plant, like its small-scale sibling, will use corn stover. ‘This is one of China’s widely available feedstocks from the corn production,’ Andersen explains. ‘But our technology also works on other cellulosic materials including rice, wheat and cotton straw, even forestry waste. It even works on household waste such as paper and cardboard, which contain quite a lot of cellulose.’

And in addition to utilising waste materials, Andersen highlights another advantage of cellulosic ethanol: ‘In cellulosic ethanol, it is estimated that the CO2 savings can get close to 100% relative to fossil fuels.’

biofuel. ‘We are also working in India’s biofuels space,’ confirms Andersen. ‘We have been collaborating with Praj for the past few years.’

And, elsewhere in India, Novozymes has partnered with

Bangalore-based technology company Sea6 Energy to jointly develop a seaweed-tobiofuel production process.

According to a study by Bloomberg New Energy Finance, India has enough

agricultural residues to substitute more than 40% of its petrol usage in 2020. ‘We believe there is potential in India and China; there is a lot of agricultural waste there to be utilised,’ says Andersen. l

Novozymes has two production plants in China, one in Suzhou and the other in Tianjin

Cashing in on India But China is not the only Asian region of interest to Novozymes. The company is also aiming at taking advantage of India’s plentiful supply of sugarcane bagasse, wheat straw and municipal solid waste (MSW).

Construction company Praj is currently contemplating the construction of a biomass-tobiofuel demonstration facility, with Novozymes supplying the enzymes that will convert the agricultural products into

Novozymes plans to build more enzyme production facilities in China

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Facebook may have stolen the limelight, but the world’s second largest IPO this year was generated by the palm oil industry

Palm oil billionaires

by Nicholas Zeman

T

he biofuels sector rarely has a public offering that grabs the world’s attention the way Malaysia’s Federal Land Development Authority did in June. Felda was a market star in early summer, when its shares soared over 15% in the days after its debut on 26 June, raising over $3.1 billion (€2.5 billion). It has been a headline-maker in hundreds of newspapers and financial magazines ever since, as a bright spot in an otherwise dismal market atmosphere.

Felda is a diversified agricultural processing firm with transport and production operations all over the world, but its golden goose is palm oil, quickly becoming one of the leading feedstocks for biodiesel production. But palm oil is a controversial product accused of causing the destruction of some of the planet’s most ancient and glorious forests in southeast Asia.

The US has effectively banned palm oil as a feedstock for biodiesel production and the European Commission is currently in the midst of a heated indirect land use change (ILUC) debate that could have very negative consequences for palm methyl esters (PME). In addition, numerous non-governmental organisations (NGO), like Greenpeace, have aggressive campaigns meant to stop the clearing of rainforests in southeast Asia for palm oil production.

The recent $3.1 billion IPO, however, suggests that the palm oil business is not hurting from any governmental

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or environmental regulations, and the tone of the company’s business atmosphere has certainly been buoyed by the recent stock market success. ‘The IPO has garnered a lot of attention,’ says Randall Besecker, a biodiesel industry veteran and salesman at the Felda Iffco plant in Cincinnati, Ohio. ‘I think we will get a lot more name recognition in business circles in the US and Europe with people who usually wouldn’t even know who we are or that we are here.’

With a nameplate capacity of 60 million gallons a year, the facility is one of the oldest and largest biodiesel producers in the US. But it does not make biodiesel out of palm oil. ‘You can’t register PME with EPA for RFS2,’ Besecker explains.

In addition, Felda Johor Bulkers is the world’s largest vegetable oil terminal with 495 storage tanks and a 863,000-tonne storage capacity at any one time.

Currently, it handles 40% of Malaysia’s total palm oil exports. Last year, it handled

9.02 million tonnes vegetable oils from Felda and other long-term clients valued at MYR20 billion (€5.1 billion).

This year, it expects to handle 9.2 million tonnes.

The Felda group owns 70 palm oil mills, seven refineries and a string of other manufacturing plants nationwide. It produces about 3 million tonnes of crude palm oil annually, or about 8% of world output.

‘We got the announcement in January or February that Canadian canola had been approved as a pathway under RFS2, and I am sure that there has been some lobbying efforts for EPA to grant palm similar benefits under RFS2, but I have seen no movement from EPA that suggests that would happen,’ Besecker says. ‘It would definitely affect our business because as the number one importer of palm oil to the US, I’m sure that we would be a supplier to other biodiesel producers.’

In July, palm oil futures, at $963 per tonne, were trading at nearly $200 cheaper than either soya or canola at $1,181 and $1,182, respectively.

Trade relations While the RFS2 has caused international trade conflict, there have been ongoing discussions of a US-Malaysia free trade agreement for years. The possibility of an exclusive deal seems to be stale now, with talks focusing on a larger ‘Asia Pacific’ free trade theme. And like RFS2 and biodiesel, palm oil itself has caused a lot of friction for trade relationships worldwide.

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biofuels feedstocks Indonesian palm oil Producers recently asked the country’s government to pursue World Trade Organisation action against the EU for its Renewable Energy Directive. ‘As a member of the Indonesian Palm Oil Producers, we will support their initiative,’ says Iris Chan of Wilmar, Asia’s largest agricultural processing firm. ‘We are in favour of free and fair trade that can bring value benefits to consumers.’

Wilmar certainly supports free trade. We believe that an Asia Pacific Free Trade Agreement with the US and Canada will benefit both Malaysian and Indonesian palm oil.’

Anti-deforestation campaigners like Green Peace, Friends of the Earth and the Natural Resources Defense Council have said it is ‘quite indisputable’ that the use of soya or palm oil for biodiesel is even dirtier than conventional fossil fuels because forests in Asia and South America are ‘being destroyed by the expansion of plantations to meet the European market.’ This is the central issue of the ILUC debate; concerns over the conversion of agricultural lands used traditionally for food production for biofuels.

In turn, critics say, this practice causes the expansion of farming activities in the Third World, often at the expense of tropical forests.

It is a touchy issue for palm oil producers. ‘We do not wish to comment on disputable statements that are not scientifically verified,’ Chan says. ‘Rather, we remain guided by and comply to the 2007 Energy Independence and Security Act which sets the standard for biofuels to achieve 50% reduction in GHG emissions relative to fossil fuels.’

Despite market access complaints from Asian producers, biodiesel imports into Europe from southeast Asia in particular have grown significantly over the last three

years, and there are currently no restrictions on palm oil entering the EU, says Isaac Valero Ladron, a climate action spokesman for the European Commission. ‘There will, however, be a proposal on ILUC by September, but we are not prepared to discuss the details at the moment.’

While palm is excluded from some benefits under RED, the directive had not hurt the market for PME in Europe.

‘ILUC is not a palm oil specific phenomenon but affects all biofuel feedstocks.

According to the IFPRI study released by the European Commission, the ILUC impact is almost the same size in all vegetable oils,’ Finland’s

for PME, and all three companies said the biggest market for their products was Europe followed closely by Asia Pacific.

World demand for biodiesel stood at around 21 million tonnes in 2011, Neste Oil says, and is expected to grow steadily in 2012 as a result of rising levels of mandated content and growing demand for fossil diesel. By 2020, the global market for biodiesel is projected to double to over 40 million tonnes per year, of which Europe will probably account for around half.

‘Demand for renewable fuels is largely dependent on officially mandated requirements to use renewable

‘Despite market access complaints from Asian producers, biodiesel imports into Europe from southeast Asia in particular have grown significantly over the last three years, and there are currently no restrictions on palm oil entering the EU’ Neste Oil, which produces renewable diesel from palm oil in Singapore, says. ‘The EU has not decided how to tackle ILUC in regulations.

Some considered policy options would have a positive impact to palm oil usage for biofuels and some negative.’

Market players Biofuels International asked Wilmar, Felda and Neste Oil about the global demand

energy, which are steadily spreading worldwide,’ Neste Oil adds. ‘Biodiesel imports into Europe from Argentina and southeast Asia in particular have grown significantly over the last three years.’

The main markets for Neste’s NExBTL renewable diesel are Europe and North America, and ‘it is sold to corporate customers as a premium-quality biocomponent for blending

purposes.’ Neste Oil signed new sales contracts in 2011 in northern, central, and southern Europe, and overall sales volumes rose 133% compared to 2010.

Around 628,000 tonnes of NExBTL renewable diesel was supplied to a total of six countries in Europe, compared to four countries in 2010.

‘The improved availability of International Sustainability and Carbon Certification (ISCC) certified raw material, required for the German market, was one of the factors that contributed to this positive development,’ Neste Oil says.

But all the developments for palm oil market players are not positive. While Felda’s initial price was MYR4.55 and was trading at press time for MYR5.35, a major gain in the short time since its debut, Wilmar has been pounded since early March when its share price was hovering near $6. Now it is trading for $3.55, but the company would not speculate on why its stock has been sold off while a company like Felda, with many similarities, has attracted so much investor interest. ‘There are many factors affecting stock price,’ Chan says. ‘For Wilmar, we should note that it is involved in other commodities apart from palm oil.’

Neste Oil has also seen an extremely volatile year for its shares with a high of €10.72 and low of €6.14. It was trading on 16 July for €8.85 with some serious swings of more than 10% since Felda’s IPO. In addition, Australia-based Mission New Energy was delisted from NASDAQ earlier this year and nobody from its offices in Australia and the US was available for comment.

Mission was reported to have partnered with Felda last year to establish Asia’s first fully integrated International ISCC certified palm biodiesel supply chain. To date, Felda has completed ISCC certification of two mills and eight palm oil plantation. l

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A lack of confidence in jatropha feedstock has gripped many within the biofuels industry, but can it rebound from early set-backs and become a bountiful source of renewable fuel?

Averting jatastrophe

by James Barrett

I

t can be difficult when your stock falls in other people’s eyes: the once bright, young thing full of hope and promise that doesn’t deliver expected results; the new kid on the block, full of swagger and forward thinking ideas, who eventually slinks off to lick their wounds after failing to evoke change.

In the biofuels arena that sentiment could be used to describe the trepidation surrounding Jatropha Curcasproduced fuel. With its high-oil output, ability to grow in dry conditions without displacing food crops and a resistance to pests, jatropha was hailed as ‘revolutionary’ back in the mid-2000s. Since then, however, it has been facing an uncertain future as many questioned its validity as a long-term biofuels solution.

Don’t run before you can walk One of the biggest reasons for jatropha’s current decline in stock may come down to a simple statement: ‘Too much too soon’. While there is no denying jatropha’s potential as an abundant, sustainable fuel source, many believe that not enough due care and attention was taken before unleashing it as the ‘next best thing’.

‘There was no practical experience to back up the business propositions,’ says Klaus Becker of JatroSolutions, a tropical plant consultancy established at the University of Hohenheim, Germany. ‘The world went crazy for jatropha as a biofuels feedstock less than 10 years ago. When you compare that to crops like wheat and

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Jatropha could still become one of the most valuable feedstocks in the world

potatoes for example, which have been correctly harvested for many years, you can start to see where the problems lie.’

Businesses, farmers and investors were all joining in the jatropha revolution off the back of test results based on a small number of jatropha plants in wildly different scenarios. It appears it was a proposition led by businessmen rather than scientists.

‘It is a wild plant and thus cannot be instantly tamed.

In this context, you cannot expect an instant consistent feedstock, produced from different countries, to fulfil global demand by planting

hectare upon hectare of jatropha and simply harvesting the seeds,’ Becker adds.

It is also way behind the likes of palm oil as a biofuels feedstock which has 50 or 60 years of breeding history behind it. It seems jatropha has suffered simply because testing on wild plants with no scientific basis has led to unreliable results and, subsequently, financial or reputational damage to all those that jumped on the bandwagon.

One example had oil and biofuels producer D1 Oils put a lot of stock into jatropha four years ago and based much of its business model on the

success of the feedstock.

However, towards the end of 2011, D1 chairman Stephen Rudofsky admitted jatropha had been ‘a disappointment to the investment community’ as D1 shares went from a high of 565p in 2005 to just under 2p last autumn.

D1 has changed its focus from jatropha and is now exploring other sources, like castor and neem oils, after rebranding itself as a company that will use a range of non-edible oilseeds.

Rudofsky has been quoted as saying that a key element to the strategy will be to ‘diversify from reliance on jatropha, with

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biofuels feedstocks a view to achieving high volume usage of available storage and processing facilities, and creating a wider supplier base’.

However CFO at jatropha biotechnology research company JOil, Sriram Srinivasan, feels there is a correlation between jatropha and the rise of palm oil, meaning not all will be shying away from the under-performing crop.

‘While jatropha is a standalone biofuel plant, I see parallels in its evolution with palm oil,’ he says. ‘I believe that the long road travelled to perfect palm oil breeding and crop development is the reason it has become a high-yielding crop today.’

Another parallel Srinivasan hints at is that the wild variety of palm yielded less than 1 tonne per hectare a year compared to the commercial variety of about 10 tonnes: ‘We’ve found a lot of potential in jatropha. Wild seedlings produce 0.10 tonnes per hectare a year, whereas our inter-species hybrids are returning more than two tonnes of seeds per hectare in the first year of our field trials.’

Persevering pioneers So it seems all is not lost as there are encouraging signs for a jatropha comeback if projects are approached sensibly. There are still companies out there working with the crop, taking their time and believing it can still be a long-term viable source for energy.

There are around 500 different sub-species of jatropha around the world and companies like JOil, JatroSolutions and energy crop company SG Biofuels (SGB) continue global-based research into projects that could provide valid ways of getting the crop back to the top.

‘Jatropha production is still in its early development stages but we believe we are seeing

Tests are on-going throughout the world to help unlock jatropha’s potential

the start of an industry for it as a viable bioenergy crop,’ says Srinivasan. ‘JOil is seeing interest from regions such as Southeast Asia, especially Indo China countries and Indonesia, Latin America, Africa and India, where we have two pilot farms.’

Those Indian satellite breeding farms, spread across 50 acres, are not just primed for large-scale capacity but also for JOil’s work on climate-specific breeding where it conducts field trials and agronomic research.

And commercial plantation is high on the agenda for JOil after it announced this spring that it has developed a genetically modified jatropha plant with high oleic acid content in the seeds. Oleic acid is a highly desirable oil component in the creation of biofuels as it gives a good balance between oxidation stability and cold flow properties.

In a statement, research team leader Ye Jian said the seeds contained 75% oleic content compared to the regular 45% in unmodified ones. The breakthrough will be

used to help JOil’s medium- to long-term business ventures as it focuses on traditional breeding to raise seed productivity, ultimately for commercial plantation.

Elsewhere, SGB has recently extended its genomics research centre in San Diego, US and will also deploy additional JMax Knowledge Centres in Brazil and India with a view to finding long-term jatropha fulfilment.

These centres are essentially outdoor classrooms where SGB’s agronomists and technical teams conduct training and field tours with customers and growers, while advancing hundreds of jatropha hybrid varieties in various growing environments.

‘We have centres in Guatemala, which was home to the first ones we opened, Brazil and India,’ explains VP of SGB communications Brian Brokowski. ‘All three countries offer the best opportunities to test jatropha varieties across many different types of climate and soil conditions.’

Another benefit of the localised centres that SGB and its teams earn is to get

to know the local agronomic landscape; the soil preparation techniques, how to prune in a ‘live’ environment as well as bonding with local farmers.

And Brokowski adds that SGB is heavily investing in new technology to further its research back at the aforementioned genomics centre: ‘We use a state-of-theart genotyping pipeline which aids in our genomic selection.

As hybrid varieties are created we can evaluate what results it can produce without having to wait for plants to mature.’

Back at JatroSolutions Becker says his company continues to focus on finding a natural answer to any potential hybrid jatropha seed solution.

‘We are looking at the DNA from all different jatropha plants to try and find the best solutions,’ he explains.

‘We don’t initially modify the genes of any plant as we want to try and find a naturally advantageous singular source for fuel and energy production.

We do look at splicing sets of genes together once we’ve exhausted all singular paths of recourse however.’

JatroSolutions is also part

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of many international projects involving jatropha outside the laboratory in places like China, Egypt and Burkina Faso.

Another sees JatroGreen, a joint venture between JatroSolutions and Green Island since 2007, conducting a research and demonstration project in Madagascar.

Over 1,000 hectares of jatropha plants had been planted by 2010 and the oil cultivated from the seeds is all used within the country. There is also a view to supply small biogas plants to improve both the health and wealth of the 17 million strong population and their environment.

‘In the next 10 years or so, there could be as many as 20 million hectares of jatropha growing on wasteland or in unsuitable food crop soil.

The fact that local farmers and land owners will also benefit financially is hugely important too, as local supplies and crops could also aid the initiatives,’ he adds.

Let them eat cake Another source of income and product which could further improve the stock of jatropha is from the seedcake by-product it can provide.

D1 Oil is doing this with its pomgamia oil project and turning the leftover cake by-product into an alleged $100 a tonne revenue stream.

And JatroSolutions is currently part of a combined German-Chinese partnership that is looking into the validity of using jatropha meal, a high protein seedcake, as a valuable secondary feedstock. The seedcake in its natural form is toxic, but Becker clarifies the reason behind the research.

‘We can detoxify the cake and reuse it for things like fish meal, for example. A positive result in this area could even mean jatropha seedcake could become a sensible alternative to soyabean meal,’ he reflects after claiming that several feed trials have been

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successfully tested on rainbow trout and carp species.

And both Srinivasan and Brokowski concur with Becker that any resultant seedcake could be used for animal feed and also as ‘biomass or a low-end fertiliser if left unprocessed’.

Jatropha: can it give you wings?

As well as biodiesel for land transportation and the shipping industry, jatropha crude oil could also be potentially processed into biojet fuel for the aviation sector. As a drop-in replacement for biojet fuel, which performs well without needing modifications, it has been used in successful test flights by several airlines.

A study conducted by the Michigan Technological University, along with UOP Honeywell, demonstrated that aviation biofuels made from jatropha enable a reduction in carbon emissions of between 65 and 80% compared to petroleumderived aviation kerosene.

Harsh land proves a good breeding ground

There has been a jatropha biofuel demonstration flight completed by Brazilian airline TAM, as a 45 minute flight took off and returned to the Galeao Jobim International Airport in Rio de Janeiro on a 50/50 blend of biofuel and regular kerosene. TAM confirmed it would delve more into the development of jatropha-based jet biofuels, believing that around one

million hectares would be needed to attain a commercial scale sufficient to meet 20% of domestic consumption.

SGB is almost a year into a partnership with JetBio, and other aviation leaders including TAM, which aims to deploy jatrophabased jet fuel in Brazil.

It is also working with energy crop project developer Bioventures Brasil on a

It appears jatropha could rise again and become a valid player in the biofuels industry

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biofuels feedstocks multi-phased programme leading to the deployment of 75,000 acres of intercropped jatropha plantations in the central-west region of Brazil. The crude jatropha oil produced will be converted into biokerosene to supply customer airlines.

SGB CEO Kirk Haney believes his company’s input makes the overall project ‘the strongest platform to develop a successful jatropha project’ and that the project will provide a more cost-effective source of fuel compared to volatile oil prices which drive up the cost of energy.

There have been a lot of other initiatives in this field worldwide throughout 2012, including another flight powered by ‘green jet fuel’ at the recent United Nations Rio+20 sustainability conference, and the US Air Force purchase of 11,000

gallons of alcohol-to-jet fuel in July, so it seems a real head of steam is being built up.

Thriving future Back in 2010 Australia-based biodiesel producer Mission NewEnergy sold 60 tonnes of unrefined jatropha oil to a European customer from its jatropha plantation for use as a sustainable fuel. Its CEO, Nathan Mahalingam, said at the time: ‘Over the next 30 years, the acreage cultivated by our farmers is expected to produce an estimated 20 million barrels of sustainable non-food oil supply. If sold at the same price, the market value of our jatropha oil supply would be over $2.4 billion.’

That, coupled with all this other activity, means jatropha could still be one of the most promising biofuels and energy crops the world will see.

Srinivasan believes this view is catching on and has been echoed by respected scientists, leading energy companies and plantation owners ‘who believe that jatropha has the potential to become a commercial feedstock for the biofuels sector, if it is backed by science’.

The economic benefits are also there for all to see. By the end of 2011 jatropha oil was reported to be sold at about $60 a barrel. ‘This is less than half the price of palm oil, which sold at an average of $160 a barrel. However, the challenge remains in the supply-side of the equation – too little jatropha is being produced to meet potential demand for it as an alternative fuel,’ he adds.

‘All this is good news but we must still err on the side of caution,’ maintains Becker. ‘There is still no point rushing out and planting

20,000 hectares of jatropha after reading such positive stories as people still won’t be able to sustain any real input. A viable long-term seed or hybrid solution must be discovered and tested, then everyone in the process – researchers, farmers, producers and consumers – will benefit hugely.’

Brokowski believes that, based on the progress being made, commerciallyfocused jatropha plants for biofuels could possibly be blossoming all over the world in about 10 years.

‘Several media outlets predict jatropha will be a huge player in the future and others have it providing cost parity with petrol before the end of this decade. It is fantastic to see so much progress already being made and collectively the industry appears to be thriving,’ he concludes. l

48 august 2012 biofuels international

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Targeted at every individual involved in fuel management, operations and maintenance, including airlines, storage terminal operators, fixed base operators, servicing companies and oil majors.

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biofuels olympics

BP at the Olympics: giving it 124%

by James Barrett

B

P, ahead of the start of the 2012 Olympic Games in London, announced it will use its position as event partner to springboard its latest advance in biofuels technology.

As the official supplier of oil and gas to the Games, BP will provide fuels and lubricants to a fleet of over 5,000 BMW-supplied vehicles throughout July and August including one based on a 24% biobutanol-blended petrol.

And, if all goes well, BP executives are hopeful to offer consumers all over the globe the chance to use such biobutanol blends within the next three years.

As well as biobutanol, BP will use biofuels made from cellulosic ethanol and sugar-to-diesel routes.

It has taken six years of research to get to this point, but BP Biofuels CEO Philip New believes it will ‘redefine biofuels’.

‘We feel we’ve created breakthrough technologies and, by incorporating them in the fuels for London 2012, we take what we feel is the next generation of biofuels from the laboratory to the road,’ he adds.

Going for ‘green’ A lot of BP’s cellulosic ethanol feedstock comes from grass plants grown on low-grade land in southern US which can produce up to three or four times more gallons of ethanol per hectare when compared to corn.

And the sugar-to-diesel strand of BP’s biofuels division, which turns sugar

BP’s Hammersmith petrol station housed a biofuels test pump

primarily from sugarcane into bio-oil ripe for conversion, can be used in a variety of diesel applications.

‘There is no competition between food and fuel with our crop growing, which is also an enormous plus,’ says New. ‘The grass is high-yielding, which is an advantage to local economies, and our sugar-to-diesel process can potentially deliver up to 60% carbon reduction compared to fossil fuels.’

The biobutanol fuel for the Games is being produced via low-grade wheat in a demonstration plant in Hull, UK in conjunction with science and engineering company DuPont and comes from a special micro-organism via advanced fermentation of plant sugars.

The 24% represents a huge leap from the ‘allowed’ blends in other countries. ‘Biobutanol is already allowed up to 15% in France and Germany and 16% in the US, but it has

The Vivergo in Hull is the UK’s largest biofuel facility

always met resistance from car manufacturers which claim blended fuels can affect performance,’ says BP VP of fuel marketing Jackie Fionda.

New adds that as well as getting more miles to the gallon, the other key benefit to biobutanol is its instant ability to fit into today’s infrastructure: ‘We haven’t seen any problems throughout the supply chain, from storage to delivery to performance, and we believe

it is easier on an engine than some versions of ethanol is.’

BP tested the 24% blend in over two million miles of road-based outings in a variety of vehicles and has even conducted field tests at certain petrol stations throughout the UK. So, just like the athletes competing at this year’s Games, BP has made sure it should have the stamina to back up its claims. l

50 august 2012 biofuels international

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Storage – we have it covered At the end of this year Tank Storage magazine will be the ONLY industry audited publication – giving you hard data about who, and how many, potential customers are seeing your adverts.

Make the right choice magazine David Kelly, Advertising Sales Manager t: +44 (0)20 8687 4139 e: david@tankstoragemag.com www.tankstoragemag.com biofuels international

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biofuels biobutanol A US patent infringement could hold back biobutanol growth for years, jeopardising profitability, industry maturation and biofuel blend targets

Butanol’s big moment

by Nicholas Zeman

O

n 2 September 2002, over 2,000 people gathered in remote Monroe, Wisconsin to celebrate the opening of Badger State Ethanol, built by the design-build team of Fagen Witchita Falls, Wisconsin, and ICM, Colwich, Kansas.

It was the celebration of the emergence of the ethanol industry, built by a design and engineering partnership eventually responsible for 60% of US ethanol production capacity.

Now in the midst of a heated intellectual property dispute over ‘revolutionary technology,’ the two have taken sides. Butamax, BP’s butanol development company, is suing Gevo – backed by France’s Total SA and major chemical maker Lanxess – on patent infringement claims. ICM is Gevo’s design-build partner, while Fagen has teamed with Butamax.

Meanwhile, plants have closed again in 2012 as corn goes up and petrol declines – corn ethanol gets the worst of both worlds. So plants like Butamax’s ‘early adopters group’, the very name of which suggests a very large change coming for oxygenate petrol blend components, are looking to new technologies to diversify operations.

These eight companies, says Butamax CEO Paul Beckwith, representing over a million gallons a year of production capacity, reflect an industry with a need for valueadding new technologies.

BP is showcasing its biobutanol, developed jointly with DuPont, at the London 2012 olympics

52 august 2012 biofuels international

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Despite ethanol’s current problems, Fagen says the ethanol industry is here to stay. ‘The US ethanol industry provides more than 10% of our domestic motor fuel, and there is no other currently available source able to produce that volume of fuel,’ Ryan Manthey, general counsel for Fagen, says.

While Fagen and ICM are on different sides, Fagen says it would ‘caution against’ driving a wedge between the companies. ‘The relationship between these two pioneers in the biofuels industry is strong,’ Manthey adds. ‘The mere fact that Fagen and ICM are working with different biofuel technology providers in no way impacts our longterm commitment to working together to build and sustain the ethanol industry. You need only look to the recent completion of the first FagenICM ethanol plant in Hungary for proof of this. In fact, work is currently underway on a second Hungarian plant.’

Nevertheless, it has only been six years since Fagen and ICM were experiencing a peak of ethanol facility construction, and now a technology exists to retrofit virtually all of those plants to make a higher quality fuel at a lower cost. ‘We’re working very closely with the ethanol industry and there is a very high interest,’ Beckwith says. ‘This hasn’t been done before, because the technology didn’t exist.’

to face. On 13 July, however, the API issued a ‘warning’ to Kansas drivers to not use E15 now being sold at a Zarco 66 station in Lawrence, Kansas.’

This ‘warning’ is based on a highly questionable study funded by API and other oil interests, in which some vehicles failed testing, including tests conducted on old fashioned petrol not containing ethanol.

Besides resistance from oil companies, the industry faces other tests as it moves forward. Last December, the Volumetric Ethanol Excise Tax Credit (VEETC) ended.

butanol is a very efficient way for them to fulfill their obligations,’ Beckwith says.

And the fuel seems to be gaining momentum. DoE sees butanol as a major component of fulfilling RFS2, partly because butanol is a chemical that can be produced using much of the ethanol infrastructure in the US. It gets better prices and has many more applications, particularly in rubbers and plastics.

Meanwhile, the federal government seems to be phasing out its support of corn-based ethanol in terms of tax breaks and RIN credits;

‘It has only been six years since Fagen and ICM were experiencing a peak of ethanol facility construction, and now a technology exists to retrofit virtually all of those plants to make a potentially higher quality fuel at a lower cost’

RFS2 One thing that echoes Manthey’s comments is that the US Environmental Protection Agency (EPA) announced its final regulations regarding the approval of sales of E15 in June, which was championed by the Renewable Fuels Association. But it was met with resistance from the petroleum sector, representing the many market challenges ethanol continues

biofuels international

This gave blenders – those selling fuel with a 10% ethanol blend – a $0.45 per gallon federal tax break.

RFS2 labels biobutanol an ‘advanced biofuel’ and it generates 1.3 renewable identification numbers (RINs) per gallon. RFS2 calls for 4 billion gallons of advanced biofuels per year, by 2022. ‘Because suppliers have to supply RINs to the EPA, we think

several projects at the DoE and the National Renewable Energy Laboratory, Colorado, are devoting more time and expenses to the development of biobutanol, now projected to play a major role in the fulfillment of RFS2 obligations.

A team of scientists from Cobalt Technologies, Mountain View, California assembled at the NREL to ‘supersize’ its process for making renewable butanol. ‘Cobalt had proven

in the lab that its anaerobic microorganism could take organic feedstocks and convert them into biobutanol, through a Cobalt-US navy process, can be made into jet fuel,’ NREL says.

Colbalt is a small company that represents a large, competitive field of scientists looking to constantly improve the process for a market poised to experience explosive growth, backed by Fortune 500 companies and US renewable energy policy.

As details of the technology have been improved, more and more plants have become interested in incorporating the retrofit now being offered

by Butamax and Gevo.

Superior properties Butamax says that butanol is simply a better fuel than ethanol: pipeline ready, more market versatility and attractiveness to refiners.

With ethanol, refiners have to change the blending of petrol to exclude certain components, like benzine and isobutene. ‘Those are high volatility components that don’t have to be removed if you are blending butanol.

With butanol you can double the amount of renewable energy in the petrol pool without making any vehicle changes,’ Beckwith says.

‘With ethanol you have to start making changes if you go above E10 or E15, and there’s some disagreement over which one that is.’

For one, blenders can blend more ‘like’ components, Gevo adds, and can make more petrol out of a barrel of crude oil. One thing Gevo and Butamax do agree on is that ethanol producers should retrofit their assets to produce the burgeoning fuel.

‘Producers can change their manufacturing process and have a more versatile, more valuable component,’ Beckwith says. ‘When refiners take those compounds out of crude oil they have to

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biofuels biobutanol

Big River Resources, one of the ethanol plants in Butamax’s early adopters group

find other markets for them besides the petrol market, and those are less attractive than the petrol market. We can do a retrofit at a cost of about 20% to 30% of the original build cost, and we think that is a good investment for an ethanol plant to have a superior product.’

Also, most petrol is blended to a 3.7 oxygen content, 10% ethanol, whereas you can blend up to 16% butanol without going over that oxygen limit, Beckwith says.

On a fundamental level, the properties of butanol are much more similar to petrol than ethanol,’ he explains.

So does Butamax see a large-scale adoption of butanol technology as an end of the traditional ethanol industry? ‘I will say the opportunity is always there for ethanol producers to convert their processes.

Ethanol has some very good features,’ Beckwith says. ‘It has good quality, but high volatility. So butanol has an advantage when it comes to vapour pressure and as a component oil refiners can use it to make more petrol from a barrel of crude.’

Because of these properties, butanol has logistical advantages, and can leverage the existing petroleum transportation infrastructure with greater

force. ‘Our testing indicates that butanol is pipeline compatible,’ Beckwith says.

Pipeline accessibility offers a significant cost advantage compared to rail and truck shipping opportunities.

There is also no compromise in the quality of ethanol’s valuable co-product, distillers’ grains, (DDGS). In fact, Gevo says, feed businesses are interested in the company’s technological expertise. ‘For the companies in the feed business, certain nutrients are desired in manufacturing different formulas – acids, proteins, nutrients. There are different ways to do this but we haven’t pinpointed exactly the pathway in creating many different formulas for DDGS,’ says Chris Ryan CEO for Gevo. ‘We get exactly the same products as the ethanol process because we’re doing the same thing, which is removing the starch from corn for fermentation.’

Emerging sector Butanol has more energy content and better benefits under RFS2, and is an emerging force as a stock investment theme as well. An imaginary fund of companies with some involvement in butanol development would hold some big names. BP was trading at $41. 37 (€34)

at press time, and has been rising steadily in 2012.

Lanxess $53.89, Total SA $36.12 Dupont $48. 35 – all of these have significant stakes in the development and marketing of biobutanol.

It is an area with a lot of action. Every other week, if not day, there is a press release or news piece from the two companies touting a new partnership Gevo has formed to leverage a new market, or a new patent that has been issued to Butamax for instance. The US Air Force was testing jet fuel made by Gevo in July. Another project integrates technology from Italy’s Beta Renewables, with Gevo’s GIFTR and ATJ products, for the conversion of cellulosic feedstocks such as switchgrass, miscanthus, agriculture residues and other biomass. This is significant for investors because butanol gets even greater RFS2 programme benefits when it is made form cellulosic materials.

Butamax’s latest patent issued from a series of applications covering a full range of ‘modified Kari enzymes,’ the company says, which provides enzymes modified to provide production efficiencies through the fundamental isobutanol biosynthetic pathway invented by Butamax.

Several of Butamax’s patents, however, have been ruled as invalid in the past and were rejected by the trademark office, Gevo says.

Nevertheless, Butamax now has the advantage in the marketplace as Gevo was ordered to halt shipments of its products, pending appeal.

Intellectual property in the chemical engineering space – especially enzymes and yeasts – is a major aspect of the case, Ryan says.

‘One of the routes to better butanol production is the development of new yeasts.

That’s what we are a yeast development company,’ Ryan says. ‘We are always

involved in experimentations manipulating yeasts; making it express nutrients at a higher level is one aspect of Gevo’s continuous work. There are also things that can be done after the fermentation process.’ Gevo says it can do its retrofit for about $1 per gallon of production capacity.

Gevo’s IPO $4.47, last year was billed as a major offering in the entire ‘clean tech’ sector and analysts at Ardour Global, NASDAQ and other funds and investment banks touted it as a star. The markets have watched its stock feverishly. Gevo’s stock rose 59% on the day news broke that a district court had denied Butamax’s patent infringement lawsuit, but then the judge backtracked.

‘The back and forth has been very stressful,’ Ryan says.

As the roller coaster Gevo’s stock price has been on with every new development in the patent infringement saga manifests itself, it is easy to see what the DoE and the market itself sees in the value to leverage butanol technology in the renewable fuels space.

‘We were the first company to identify the opportunity and invented the fundamental technology,’ says Beckwith.

That is Butamax’s complaint.

Speculation says, however, that the case being held up in court for two or three years could have devastating consequences for many companies involved in the butanol and ethanol sectors, along with fulfilling the requirements of RFS2.

‘We’ve got a lot further to go before this is concluded. It’s a very complicated litigation process,’ Beckwith says.

But the market is impatient.

‘Everybody wants this over with. We’ve prevailed in all of the decisions so far in the patent, in the reversal of the trademarks,’ Ryan says. ‘Gevo can pursue the development of its products in every market except automotive petrol.’ l

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Ethanol producer Conestoga Energy Partners is just one example of a company that has benefitted from a culture change within the organisation

Dealing with the badly behaved

A

ccording to the American Society for Training and Development (ASTD), US companies spent over $171.5 billion (€136 billion) on learning and development programmes for employees in 2010, the latest statistics available.

Within this expenditure, management and supervisory learning is the leading type of content. And while the return on investment is substantial, companies find that in today’s workforce of blended generations, managers are increasingly forced to operate as referees instead of leaders.

‘A company, or department within a company, is often held hostage by one or two employees,’ notes Betsey Upchurch, CEO of P4 Consulting. ‘Managers spend an inordinate amount of time trying to get the badly behaved in line and to comply with requirements. Then they spend more time trying to smooth over the conflict and work around these people. Their priority is to get something, anything done.’

That something often does not actually forward the success or profitability of the company. In fact, by not holding people accountable, otherwise good employees become less accountable and more disgruntled.

Upchurch has spent the last 25 years working with companies on culture change and aligning values. She notes that

biofuels international

the common threads are a need for accountability and consequences – and a corporate culture that aligns with these concepts. ‘If you really want to change bad behaviour to good, your priority has to be to set enforceable boundaries and then provide consequences for not adhering to them. You have to establish appropriate consequences, and deliver them with empathy.’

Easier said than done.

What exactly is an enforceable boundary, how does a manager choose the right tool, and what influence is necessary to make it succeed? Will it work for the new hire as well as the 15-year veteran? And do managers today even have the basic skills to implement such an approach?

Maybe not, according to the Corporate Leadership Council, which services over 240,000 executives.

‘To be effective, employees need skills in judgment, influence and collaboration, yet the majority lack these critical skills. Two-thirds of CEOs site a lack of the right skills as their biggest talent challenge today.’

‘I see more and more companies stepping up to this challenge,’ comments Upchurch. ‘It is possible to teach judgment and to train managers to influence the team dynamics for a better result. It requires guidance and practice, but it is doable for mangers – from front line leaders to the corner office.

‘It is amazing how fast

bad behaviour stops when the offender figures out that they are causing their own pain and that they can change that,’ says Upchurch. ‘Whether it is an occasional outburst or continuous childishness, when a person is in the midst of it they don’t know better. The most effective management is to let them suffer the consequences of their behavior, help them see better ways of managing their own life, and have empathy for their predicament.’

In August 2010 Kansasbased ethanol producer Conestoga Energy Partners began working with P4 Consulting in a culture change effort.

With profitable production facilities but knowledge its people were struggling with high turnover and costly mistakes, Conestoga asked P4 Consulting to help it create a culture of excellence. Through coaching of its top executives, clarification of core values and alignment of leadership and culture, P4 was able to help reduce overtime and maintenance expenses, and free company leaders to focus on future opportunities rather than fire fighting.

Looking back on the Conestoga successes, Upchurch says: ‘People are always doing the best they can with what they have.

Our job is to give them the attitudes and skills to keep doing better. One of the most cost effective ways to

improve the bottom line is to create effective people who care deeply about success.’

In the high-tech sector, comments by Anne Fernandez, Propulsion Technanogy, were typical of those of ethanol producer clients: ‘The challenges you realise and overcome individually and as a team stick…You continue to apply the tools after the programme.’

Often business leaders focus on mechanical, technical, and technological improvements and miss the ‘low-hanging fruit’ of optimising their team’s human performance. P4 senior partner Mark Rowland observes: ‘Corporate teams are the only competitive teams that don’t schedule regular practices and use professional coaches.

That costs performance, effectiveness, and competitive advantage.’

He elaborates: ‘If your team is great and your plant has problems, you tune up or repair the technical end.

If your plant has received your attention and your team is not at the absolute top of its game, you’re missing opportunities for effectiveness, efficiency, and profits.’

Upchurch offers the following process for a work situation: 1. Make the expectations clear. ‘For this job, you are expected to coordinate with Donna and get this task done by the last Friday of the month.’ ‘You

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biofuels personnel are expected to be at work on time.’ ‘We treat each other with respect.’

2. Set enforceable boundaries. ‘If you are disrespectful, people will not want to work with you.

That means that you will have a hard time gaining their full cooperation.

More importantly, I cannot allow the people here to be treated with disrespect.

So, if you continue to express your frustration in disrespectful ways, I will ask you to take a break by going home for the day. And, we will not be paying you for time you are not at work.’ Please note: consequences are the natural result of bad behaviour and the only one who feels the pain is the

Upping production by 40% Case study: Novozymes, a biotech manufacturing company, needed to up production by 40%, increase the number of products it could manufacture, and reduce the number of employees by 30% through attrition. Every person would need to take on more responsibility. The front line would have to be able to work independently and proactively. In order to accomplish this, P4 Consulting introduced its ‘Step Up to Supervision’ process creating skilled leaders who, in turn, created an engaged and responsible front line. As a direct result, the company met and exceeded its initial goals while scoring even higher on its employee satisfaction surveys.

offender. Consequences are not punishment.

3. If the behaviour occurs then enforce the consequences with empathy. Judgment about the person inhibits your ability to have empathy.

It takes a lot less energy on your part to empathise with the predicament the person has gotten themselves into than to judge and be angry. ‘I’m sorry you felt so frustrated that you could not control

your anger. As I have said, we cannot allow people to be treated that way here. You are dismissed for the day. I know it will hurt to get a short paycheck this week, so I hope you can find other ways to deal with your frustration. If you need help with that, let me know.’

Please note: We don’t inflict our help on them, just offer it as a choice for them to consider.

When they are ready to accept help, they will ask.

If they aren’t ready, you are wasting your time. l

For more information: This article was written by Ellen Babers, P4 Consulting, +1 970-459-1160, ellen@p4consult.com

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56 august 2012 biofuels international

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Biaktor’s Guus Keder speaks to Keeley Downey about his company’s unique approach to biodiesel production that can support developing nations’ economies

Thinking outside the box

W

hile many biofuel companies in the Western world speak of helping third world countries grow their economies, many are in fact doing the opposite.

Instead of establishing a local supply chain, a number of companies purchase the initial product from developing nations but then add value elsewhere, in Rotterdam, Finland or the UK, for example.

Transporting the feedstock from the country of origin (e.g. Malaysia) to the place of the refinery (e.g. Rotterdam) before shipping it to the place of consumption (e.g.

Europe), also has detrimental effects on the environment.

This highly uneconomical transportation method is taking 50% of the total energy just to get the biodiesel into fuel tanks – an extremely low efficiency scenario. In addition, the issues of land use change and deforestation are forever present in biofuels debates today, leading to the belief that biodiesel creates a negative carbon impact.

Keeping it local So instead of establishing large-scale, centralised production facilities that are forcing industry players to source a commodity (the oil-based feedstock), thus leading to significant price fluctuations for that commodity, what about bringing refining capabilities to where the oil is being produced?

biofuels international

This is the thought process of Biaktor, a subsidiary of Indra Scientific, a private company developing next generation technologies.

Biaktor believes the most effective way to stimulate economic activity in developing nations is to move the refining operations to the plant oil production countries.

Biaktor has developed a small-scale intensification reaction unit, a scalable/ modular piece of technology that intensifies the transesterification process of biodiesel production.

Biaktor says its technology has a small footprint, low energy use, is simple to operate, robust and, above

all, transportable. ‘We have developed a system that allows for the production of biodiesel with a relatively small technical infrastructure to the areas where the plant oil is being produced,’ explains Guus Keder, Indra Scientific’s CEO. Biaktor’s technology is ideal for use in countries such

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biofuels asia as Asia, India, Africa, and Central and South America where it can help to establish economies. The small-scale modular biodiesel production plants produce less than 10 million litres a year of biodiesel but all of it is consumed locally. The crops are grown locally and harvested using local labour before the oil is converted into biodiesel using Biaktor’s technology.

A key factor to this process is that the biodiesel stays in the country and is consumed locally, satisfying an important proportion of transportation fuel requirements.

Keder says: ‘This means the biodiesel is produced locally, consumed locally with accessible technology, adding value in the right place and creating local economies. The CO2 footprint of our model is much smaller because there is no transportation of the biodiesel or plant oil.’

Waste-to-power One quarter of the world’s population does not have access to electricity; 80% of these people live in rural areas of developing nations.

Of 47 countries with per capita <$2 (€1.6) per day, 38 are net importers of oil and 35 import 100% of their oil.

According to Biaktor, these nations will undergo the greatest growth in energy demand over the next 20 years, and are least capable of supporting inevitable increases in energy costs.

‘As well as moving biodiesel production to the plant oil producing regions, there is something else that our technology can do,’ says Keder. ‘Crude plant oil constitutes half of the energy that is produced by the crop.

The other half is discarded because it is cellulosic-type energy that cannot be used to make biodiesel. This is sometimes used as local fuel or fertiliser but the energy is not extracted very well.

Biaktor has started looking

at what can be done with this waste so that we can not only bring the refining capacity for biodiesel to those countries, but we can also bring technology that can be used to convert this waste biomass into useful energy.’

Asia Biaktor believes its technology can benefit a whole host of countries, but is starting out in Asia. In 2010 it partnered with Alpha Biofuels, a Singaporebased biodiesel producer that has incorporated Biaktor’s technology inside its system, which manufactures biodiesel from used cooking oil. Keder describes Alpha Biofuels as the ‘system integrator for our technology’.

Alpha Biofuels has currently integrated two of Biaktor’s Bx Series modules into its system. The exact amount of biodiesel being produced is unknown but one unit can produce around 1,000 litres per hour, and the second produces between 50-100 litres per hour.

‘At village level, or a large building or shopping mall that produces a lot of used cooking oil, Alpha Biofuels can collect this feedstock, manage it itself and produce somewhere between 50-100 litres of biodiesel per hour,’ says Keder, speaking specifically about the smaller unit. Together Biaktor and Alpha Biofuels are ‘working on a couple of enquiries and trying to finalise some deals for between three and five more units’, adds Keder. ‘We are now looking to build relationships in China and other southeast Asian

countries that are interested to utilise used cooking oil as a feedstock for making biodiesel and just looking to upgrade a waste into useful energy.’

Africa’s potential But Asia is not the only region Biaktor is looking to penetrate in the near future, and used cooking oil is not the only feedstock suitable for processing in its modular systems. ‘From our point of view jatropha would be an ideal energy source; the nuts can be pressed for oil but then the press cake contains a lot of energy that can be harvested with our thermal conversion technology,’ says Keder. ‘Jatropha can grow in areas where you can’t grow food so there’s no competition between food and jatropha.’

Although Biaktor has not yet managed to integrate its technology into the African biofuels market, similar projects are already underway. Keder hopes his company will soon be doing something similar, with plans

to establish a demonstration facility there next year.

For example, Mali Biocarburant is a project promoting the sustainable production of biofuels in Mali, west Africa, and since it started around two to three years ago has doubled the local farmers’ income.

The project involves an association of around 2,000 farmers who either establish small jatropha plants in between their other, food crops so as to not sacrifice any precious land, or they create a jatropha hedge around their corn fields.

As Keder explains: ‘This is a very efficient system; it has a huge impact on the local economy and also the jatropha keeps animals and birds away from the food crops as it’s poisonous.’

Third world countries can benefit greatly from producing and utilising their own biodiesel. It helps the community become selfreliant, as well as bringing jobs to the local area and income along with it. l

Biaktor’s Bx Series biodiesel reactor

58 august 2012 biofuels international

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Upcoming biofuels events August 2-4

Holiday Inn Atrium, Singapore

International Conference on Next Generation Technologies for Bioenergy and Biomass Utilisation

8-10

The American Coalition for Ethanolâ&#x20AC;&#x2122;s 25th Ethanol Conference

Omaha, Nebraska, US

September 11-12 The Renewables Event

NEC Birmingham, UK

12-14 Oils & Fats Asia

Kuala Lumpur, Malaysia

18-19 World Biofuels Markets Brazil

Sao Paulo, Brazil

26-27 Lignofuels 2012

Stockholm, Sweden

OCTOBER 16-19 Biofuels 2012 7th Annual Meeting

Amsterdam, the Netherlands

22-24 Asia Future Energy Forum & Exhibition

Marina Bay Sands, Singapore

23-25 Expobioenergia

Valladolid, Spain

29-31 Advanced Biofuels Markets

San Francisco, US

30-1

Singapore

10th Annual Roundtable Meeting on Sustainable Palm Oil

November 5-8

F.O. Lichts 15th Annual World Ethanol & Biofuels 2012

Munich, Germany

21-22 5th Biofuels International Conference

Antwerp, Belgium

27-29 National Advanced Biofuels Conference & Expo

Houston, Texas

December 3-5

Canadian Renewable Fuels Summit 2012

Ottawa, Ontario

January 2013 21-22 Fuels of the Future 10th International Conference

ICC Berlin, Germany

February 18-20 RFA National Ethanol Conference

Las Vegas, Nevada, US

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Tank STorage

TELUS CONVENTION CENTRE, CALGARY

16 - 17 OCTOBER 2012

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ThE LEADING EvENT For ThE CANADIAN TANk STorAGE SECTor Consisting of a two-day Conference and Exhibition, Tank Storage Canada provides an unrivalled opportunity for terminal operators, traders, regulators as well as equipment suppliers to come together to network and do business in this vital region.

The technologies and services on display at the exhibition will include everything from tank design, construction and maintenance, through to innovations in automation, certification, inspection, loading equipment, metering, measuring, pumps and a lot more.

The Conference will attract terminal and pipeline operators, as well as traders, analysts, regulators, renewable energy producers and technical experts. They will come together to discuss the key issues impacting the sector.

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For more information on exhibiting at Tank Storage Canada, please contact: SharĂŠ Mason â&#x20AC;&#x201C; International Sales & Marketing Manager T: +44 (0)20 8843 8819 F: +44 (0)20 8892 1929 E: share@stocexpo.com biofuels international

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