Biofuels May/June 2013

international How is Europe reacting to the European Commission’s latest proposals?

May/June 2013 Issue 3 • volume 7

Who’s counting?

The European Commission seeks to create serious structure for the second generation, as a new report finds double and quadruple counting to be ineffective

Waste not, want not Disregarding DDGS simply as a by-product of ethanol production is a narrow minded game

Strange bedfellows

Oil majors have plenty of money and technical expertise, so why have they cut investments in biofuels R&D?

The second line of defense Left uninsured, certain liabilities could badly affect a producer’s financial performance

Reap what you sow Now Europe is being forced into taking cellulosic ethanol seriously, we look at what producers can learn from across the pond

Regional focus: biofuels in southeast Asia Regional focus: biofuels in theand US Australasia

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Daniel Oh, CEO, Renewable Energy Group Daan Peters, Senior consultant, Bioenergy, Ecofys Chris van Niekerk, Associate Director, NIBC Hendrik-Jan van Engelen, Commercial Director, Port of Ghent James Challinor, Senior Analyst – Downstream Oil Research, Wood Mackenzie Hendrik Lemahieu, Secretary-General, Belgian Bio-Ethanol Association Henrik Maimann, Vice President, Dong Energy Christian Koolloos, Business Manager Bio-ethanol, DSM

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international

Issue 3

volume 7

May/June 2013 Horseshoe Media Limited Marshall House 124 Middleton Road, Morden, Surrey SM4 6RW, UK www.biofuels-news.com managing director Peter Patterson Tel: +44 (0)208 648 7082 peter@horseshoemedia.com 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 Assistant Editor 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 PRODUCTION Alison Balmer Tel: +44 (0)1673 876143 alisonbalmer@btconnect.com SUBSCRIPTION RATES £195/€275/$370 for 6 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 may 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

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2 Comment 4 Bioethanol news 12 Biodiesel news 21 Technology news 24 People on the move 25 Incident update 26 Biodiesel trade still sluggish despite subsidies 28 Who’s counting?

The European Commission seeks to create serious structure for second generation biofuels, as a new report finds double and quadruple counting to be ineffective 29 Varying views on North American fuel industries

As the US RFA queries a cellulosic biofuels target for this year, Canada announces a new programme to boost its agricultural sector 30 Renewable energy in UK up despite biofuels drop 31 Giving biodiesel the thumbs up James Barrett caught up with the CEO of a small Michigan biodiesel company to discuss its large future aspirations 32 Refreshing ethanol process James Barrett raised a glass and spoke to Merrick and Company’s VP Steve Wagner as he discovered the story behind its brewing ethanol success 34 Biodiesel’s big decisions Pre-processors, distillation, public or private equity, RIN futures, coldsoak, quality assurance – biodiesel producers face a barrage of variables everyday that affect revenue, sales and, most importantly, profits 37 A diversified solution Corn and RIN price issues still dominate US ethanol, but expanding its feedstock options and customer base would change all that 40 Plant update – ethanol in the US 42 No longer a fledgling industry

Minnesota-based industry analysts Christianson and Partners reviews the lay of the US ethanol land and offers tips to anyone looking to buy or sell facilities 44 Warming to the challenge

Beta Renewables uses heat integration as one way of reducing emissions and keeping its commercial plant profitable 46 Waste not, want not

Pannonia Ethanol’s Steve Moore believes disregarding DDGS simply as a by-product of ethanol production is a narrow minded game 47 Mycotoxin testing protocols can protect ethanol co-products 49 Strange bedfellows

Oil majors have plenty of money and technical expertise, and they need biofuels to blend with their petroleum products, so why have they stopped investing in biofuel R&D? 52 Hitting the sweet spot

Around 40% of ethanol plants were extracting corn oil in 2011 – this has now risen to as high as 75%. Phil Thane looks at the bitter battles between rivals, the differences between the technologies and, importantly, the economics 56 Investing in renewable chemistry startups

In a capital-intensive industry such as industrial biotech, start-ups cannot only gain access to technology and know-how, but also secure significant investments through developing partnerships 58 Financing entrepreneurial innovation

David Berry, a partner with Flagship Ventures, reveals the winning formula that will make biofuel start-ups more attractive to investors 61 Glycerine purification with activated carbon Activated carbons, in their various forms, can purify glycerine to a colourless, odourless standard 63 Pure and simple

How can European biodiesel producers meet EN 14214 standards during tough times?

64 ‘This could be Rotterdam or anywhere’ ILUC and sustainable farming remained hot topics at this year’s eighth annual World Biofuels Markets 66 Just a FEW tasters As the Fuel Ethanol Workshop (FEW) in St Louis, US gradually gets closer to opening, Biofuels International offers a preview of some of the exhibitors taking part 68 Events page Ad index

international How is Europe reacting to the European Commission’s latest proposals?

May/June 2013 Issue 3 • volume 7

Who’s counting?

The European Commission seeks to create serious structure for the second generation, as a new report finds double and quadruple counting to be ineffective

Waste not, want not Disregarding DDGS simply as a by-product of ethanol production is a narrow minded game

Strange bedfellows

Oil majors have plenty of money and technical expertise, so why have they cut investments in biofuels R&D?

The second line of defense Left uninsured, certain liabilities could badly affect a producer’s financial performance

Reap what you sow Now Europe is being forced into taking cellulosic ethanol seriously, we look at what producers can learn from across the pond

Regional focus: biofuels in southeast Asia Regional focus: biofuels in theand US Australasia

Front cover courtesy of De Smet Engineering & Contractors

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biofuels comment

Opposing proposals

T

Margaret Dunn Publisher

he last few weeks have seen two very distinct viewpoints emerge as to how the European Parliament should move forward on its proposals to amend the Renewable Energy Directive.

On the one hand French MEP Corinne Lepage – the lead reporter for the EU environment committee – called for mandatory reporting of indirect land use change (ILUC) factors, whereas on the other Spanish MEP Alejo Vidal-Quadras doesn’t believe the ILUC science is robust enough to be introduced into EU legislation.

What is in agreement is that including ILUC factors would have a de facto advantage to the bioethanol compared with the biodiesel sectors.

So it is understandable that the European Biodiesel Board (EBB) agrees with VidalQuadras that ILUC factors should not be included.

But the European Renewable Ethanol Association (ePure) also agrees that, at the moment, there isn’t enough scientific consensus to bring these in

as a sustainability criterion.

Vidal-Quadras feels that a more constructive approach would be to set a sub-target for advanced biofuels, removing the need for multiple counting.

This is something that ePure strongly supports, too. The results of a report it carried out into the effectiveness of this mechanism is discussed in detail on page 28. As you’ll read, the association believes that in order for lignocellulosic ethanol to become fully commercial, a mandatory, dedicated target for advanced biofuels of at least 2% is required.

Another area where Lepage and Vidal-Quadras disagree is surrounding the controversial 5% cap on food-based biofuels.

Vidal-Quadras has called on MEPs to reject the 5% cap, which would represent a major change to legislation. He feels that as the 5% figure makes reference to the average production level in the EU, there are several member states such as Germany, Spain and France in which the current quota of conventional

biofuels is higher than 5% and which would therefore be more affected than others.

Lepage, on the other hand, has suggested a tightened cap of 4.27% for biodiesel produced from oil crops and no cap for ethanol.

With emotions running high and such a lot of investment at stake, it is unlikely the industry will reach a consensus on these points any time soon.

Industry players need to carry on talking to work together to try and reach an agreement.

Biofuels International is providing a platform for such discussions at its upcoming conference in Antwerp on 11-12 September.

Speakers confirmed so far include representatives from the European Commission, Abengoa Bioenergy, Beta Renewables, Renewable Energy Group, NEN Energy Resources, NIBC, Statoil Fuel and Retail and many more. To have your say, get in touch now at margaret@biofuels-news.com,

Best wishes, Margaret

2 may/june 2013 biofuels international

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TMO goes to Brazil with cellulosic plant project TMO Renewables a UK developer of second generation biofuels technology, and Brazilbased Usina Santa Maria (USM), have entered a joint venture to build a commercial production plant in São Paulo.

Under the agreement TMO, with USM, will build, own and operate the 10 million litre ethanol pilot plant in São Paulo using sugarcane bagasse, with construction

of a full-scale industrial plant potentially in the future.

The plant will be located alongside a sugar mill owned

by USM and is scheduled to go into production in 2014. The bioethanol will primarily be used to power flexi-fuel vehicles in the domestic market.

‘Of the world’s largest economies, Brazil has made the move to encourage flex engine cars that can run on 100% ethanol,’ says TMO CEO David Weaver. ‘Through 10 years of research and development we have created

Biofuels association applauds new Canadian agri-framework Canada saw the official launch of the Growing Forward 2 (GF2) policy framework for its agricultural and agri-food sector this April.

The Canadian Renewable Fuels Association (CRFA) has applauded this launch as ‘good news’ for its industry and for the farmers who work closely with biofuels producers.

GF2 is a C$3 billion (€2.2 billion) investment by federal, provincial and territorial governments and the foundation for government agricultural programmes and services over the next five years.

The framework will focus on innovation, competitiveness and market development to ensure Canadian producers and processors have the tools and resources they need to continue to capitalise on emerging market opportunities.

‘Farmers across the country are clear winners with increased production and promotion of domestic renewable fuels,’ says CRFA president W. Scott Thurlow. ‘Our members are taking the platform created by ethanol and biodiesel technology and using it to develop fuels, plus value-added agricultural and chemical products, from a growing range of biomass.

Programmes like GF2 will help build-out this platform.’

In addition, GF2 includes a suite of business risk management programmes to help farmers in managing risk due to severe market volatility and disaster situations. Governments will also assist the industry in its efforts to research, develop and implement new agricultural risk management tools. l

Flexi-fuel vehicle owners will benefit in Brazil

a process to convert waste to biofuels. We will now prove the effectiveness of our process by building the

first plants of their kind to convert waste-to-ethanol at commercial volume.’ l

Corn drought pushes ethanol producer in potential sale It has been reported that an ethanol company located in south Minnesota, US may have to sell its plant.

Denver-based Biofuel Energy was a victim of the long drought that affected US corn availability and prices last summer and it shut down the plant, which can produce up to 115 millions gallons a year, in September as it became ‘unprofitable’.

‘When those corn prices rise that takes a big chunk out of the profitability for the plants,’ Paula Emberland from consulting firm Christianson and Associates was quoted as saying. ‘That’s about 85-90% of the plant’s overall expense.’

The biofuel producer also owns a plant in Nebraska that can also produce 115 million gallons, but it is unclear whether the company is considering selling both facilities or just the one in Minnesota. l

Poor corn harvests may force facility to close

4 may/june 2013 biofuels international

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Hawaii to host pilot biofuels project Papaya feedstock will play a role in a biofuels and animal feed project in Hawaii that has just received government funds.

The state has invested $200,000 (€153,800) in a conversion project with Florida-based Biotork Hawaii via its USDA Pacific Basin Agricultural Research Centre.

The conversion process, which can now move to pilot stage, takes two weeks and uses organically optimised algae and fungi, with Biotork claiming other potential feedstocks include sweet potato, glycerol, sugarcane, albizia and mango.

‘With this technology, farmers can turn agricultural waste into an additional revenue stream and local production of biofuel can lower Hawaii’s dependence on imported fossil fuels,’ governor Neil Abercrombie was quoted as saying. l

Zimbabwe turns to E85 fuel for transportation Zimbabwe has increased biofuel awareness by approving an E85 blend suitable for the country’s flexi-vehicles.

The blend will contain a 15% unleaded petrol content and is hoped to lower the price of fuel throughout the country, which at the moment stands between $1.51 (€1.15) and $1.59 a litre.

‘The quality specification of E85 conforms to Standard Association of Zimbabwe Standard ZWS964 part 4 and is based on internationally

Multiple benefits are behind Zimbabwe’s move to E85

New butanol for biofuels research begins in US An assistant professor at the Auburn University School of Forestry and Wildlife Sciences has launched a research project into improving butanol production from agricultural and woody biomass.

Maobing Tu believes his study will be a significant stride towards butanol production becoming economically viable across the board, while also providing new insights into the design and manufacture of technology.

‘Butanol is one of the promising advanced biofuels being pursued by industry for the next generation of alternative fuels,’ Tu was quoted as saying. ‘However, cost-effective production of butanol from lignocellulosic biomass is still challenging. In particular, hydrolysate inhibition limits butanol fermentation efficiency.’

The research has been supported by a five year $401,155 (€311,500) National Science Foundation Faculty Early Career Development award.

Both ethanol and butanol for biofuels can be derived from the same biomass but, although butanol is a closer match to petrol than ethanol, its production also releases liquefied toxins and is harder to produce overall. l

biofuels international

recognised quality standards for this type of fuel,’ a statement from the Zimbabwe Energy Regulatory Authority (ZERA) read.

‘We fully support the use of bioethanol blends which reduce environmental emissions as well as enhance energy scrutiny and this is in line with government policy which envisages increased biofuels uptake.’

Industry experts believe this move should result in the reduction of the price of fuel as finance minister Tendai Biti increased excise duty on diesel and petrol by 20% and 25% respectively in March. l

Advanced biofuels committee sets stall out in Canada A new committee focusing on the future of biofuels in Canada has been formed by the Canadian Renewable Fuels Association (CRFA).

CFRA revealed the committee and its members will represent those involved in advanced biofuels, particularly focusing on technology and new projects.

‘Canada is building on the success of its established biofuels industry to create a new wave of biofuels facilities that will deliver economic and environmental benefits,’ says CRFA president W. Scott Thurlow.

‘However, to realise Canada’s full green energy potential, programmes and policies that spur innovation and foster investment are essential.’

The group’s inaugural members are solid waste-tobiofuels company Enerkem, Danish ethanol producer Inbicon and US-based biomass utiliser Mascoma. l

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Ensus idles UK bioethanol for foreseeable future UK-based bioethanol producer Ensus has ‘temporarily’ taken its 450 million gallon capacity facility offline for the second time since it started operations in 2010.

In a statement the company says a ‘poor wheat harvest in the UK last year has had an adverse impact on the quality and price of the crop as a feedstock’ that is used within the plant.

‘Alongside that, unfortunately, the European ethanol market continues to be challenging as the price of ethanol has not risen in line with input costs, while rising gas prices have pushed our costs up considerably too,’

said an Ensus spokesperson.

Biofuels International has been told that the 100-strong staff based in Teeside will remain ‘employed and on full pay’.

The facility needs around 1 million tonnes of wheat a year to run at full capacity but it has been reported as adding between 20% and 30% of maize to supplement its needs after last year’s poor harvest.

‘We remain confident in the long-term future of the biofuels sector. Ensus is able to supply environmentally sustainable ethanol to satisfy demand but, unfortunately, market conditions are working against us at the moment,’ says Ensus CEO Peter Sopp.

‘We believe it is critical that the government continues to support the use of high quality sustainable biofuels.’ l

Feedstock levels to exponentially rise in US for 2013 The US Department of Agriculture (USDA) believes its country’s farmers will grow the most corn since 1936 as they look to take advantage of high prices driven by last year’s drought.

A forecast of 97.3 million acres of corn is set to be sown in 2013 to help boost dwindling supplies, while soyabean plantings have been placed at 77.1 million acres. Wheat crops will rise 1% to 56.4 million acres also.

Bigger harvest yields are viewed as a necessity in the US this year as the impact of a smaller availability forced

some ethanol producers to limit production or even shut down operations completely.

Demand from overseas markets put further pressure on the tight supplies of corn and soyabeans too.

‘We’re looking forward to potentially record plantings, which should relieve some pressure on the livestock and dairy industry that has been under some stress,’ USDA secretary Tom Vilsack says.

‘A drop in commodity prices may reduce the profitability of corn and soyabean growers but, if they get great yields and still get a decent price, they may be in pretty much the same spot that they were in when they had low yields and high prices. It’s really about balance.’ l

news in brief Bioethanol demo plant in Spain goes online Spain-based sustainable technologies provider Abengoa has seen operations at a demo plant that uses its waste-to-biofuels technology begin.

The facility, located in Salamanca, has capacity to treat 25,000 tonnes of municipal solid waste to produce around 1.5 million litres of bioethanol.

The infrastructure of the plant has gone through more than 6,000 continuous hours of tests to validate the viability of the technology before the facility went online.

UK bioethanol plant buys US refinery UK investment company Future Capital Partners (FCP) has agreed to purchase US-based Appomattox Bioenergy.

It is believed FCP will sell the assets to investment vehicle Future Fuels Partnership, which is developing a refinery in Grimsby, and the majority of the plant and machinery may be shipped from Virginia to help build it.

The purchase of the Appomattox is reported to cut the cost of the Grimsby project by £50 million (€59 million) to around £160 million.

The purchase price of Attomattox has not been divulged but some outlets have placed it at $220 million (€171.7 million).

Ethanol plant to disappear in North Dakota An ethanol plant in North Dakota, US is to be dismantled despite optimistic rescue plans.

The Alchem corn-to-ethanol plant, based in Grafton, opened in 1985 but closed in 2007. An energy investment group located in Iowa mooted plans to purchase the facility last year but the idea did not come to fruition.

This news follows the closure of another ethanol plant in North Dakota, the former ADM corn processing facility, in 2012.

Amyris looking to rubber stamp sugarcane usage Renewable energy company Amyris is aiming to obtain certification from global sugarcane sustainability standard Bonsucro.

Amyris is the first advanced biofuels and chemicals company of its kind to join the association as it seeks to pave the way for certification of its products.

‘We are committed to delivering renewable products that enable sustainable growth for our customers and Bonsucro has emerged as a respected certification standard for sugarcane products, so membership paves the way for assuring the sustainability of our supply chain,’ says Joel Velasco, Amyris senior VP.

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Iowa’s earned a reputation for being fertile ground. For bioscience innovation, that is. We’ve got not one but two top research institutions, Iowa State University and University of Iowa. Not only are they producing breakthroughs in plant, animal and human biosciences. Each is transferring patented discoveries to Iowa’s bioscience companies. Which attracts a cluster of the most innovative bioscience leaders in the world. Which attracts more R&D investment. Which produces more patents. Which attracts a skilled talent pool. We call this Iowa’s “agronomic ecosystem.” It’s why Iowa has produced growth rates and profits that far outpaced the nation. And caused Battelle Technology to write, “No other location in the country has such a complete suite of capabilities for bioscience development.”

Find your opportunity at IowaEconomicDevelopment.com. biofuels international

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ISCC gives Asian biofuels access to European market SCS Global Services has announced the expansion of its biofuel certification services in south east Asia.

The third-party environmental certification body will now conduct audits under the International Sustainability and Carbon Certification (ISCC) programme, which will allow biofuel producers in south east Asia to meet the requirements

for export into the European Union under its Renewable Energy Directive.

‘When produced responsibly, as confirmed against international norms, biofuels have the potential to reduce dependency on fossil fuels and provide a low-carbon alternative,’ says Robert Hrubes, executive VP of SCS. ‘Companies that achieve ISCC certification can credibly demonstrate that their product is an environmentally beneficial energy source.’

First commercialscale lignin plant ‘in 25 years’ opens in US A commercial-scale lignin separation plant has been installed by Domtar at its mill in North Carolina, US. The company claims this is the first facility of its type in the country in over 25 years. The production of lignin began in February, with a targeted rate of 75 tonnes a day, for industrial applications such as a biobased alternative to the use of petroleum and other fossil fuels.

‘The possibilities for making a real difference in terms of offering manufacturers a biobased alternative to the use of petro-chemicals is truly exciting,’ says Hasan Jameel, a professor at North Carolina State University’s Department

of Forest Biomaterials. ‘This is a big win for sustainability on two counts – Domtar improves the efficiency of its pulp-making process and, at the same time, the market gets a reliable source of this underused material with so much potential.’

The project was helped to fruition by a grant through the Biomass Research and Development Initiative awarded by the US Department of Agriculture and the US Department of Energy.

‘A big part of this is our focus on partnering with collaborators to develop new products and markets for a wide portfolio of initiatives,’ adds Bruno Marcoccia, Domtar’s director of research and development. l

A number of Asian countries have set national goals related to biofuel usage. The governments of Indonesia, Thailand, Malaysia and the Philippines each have put biofuel mandates in place that require a certain percentage of energy to be produced with biofuels.

Certifications like ISCC can ensure that the expansion of biofuel production will not negatively impact food security and will not create an incentive for deforestation. l

US ethanol plant put on back burner An US biofuels plant owned by Bluefire Renewables has been described as ‘not dead, just dormant’ by Mississippi officials.

Itawamba County Development Council executive director Greg Deakle was quoted as saying that work on the Fulton-based plant has gone on ‘indefinite hiatus’ while Bluefire focuses on other projects.

The project, which has entered its fourth year and secured investment from across the globe, has been site-prepared for construction for a while. The cost of the facility, benchmarked at $300 million (€230.9 million) in 2009, has risen over time and a partnership with Chinese equity company China Huadian Engineering was signed for extra funding in 2011.

However Deakle believes a new project to construct a sugar cellulose plant in Korea has now taken precedence in Bluefire’s eyes.

The ethanol plant planned to use available green and wood wastes as feedstock for the production of around 19 million gallons of ethanol per year.

Bluefire is still paying a monthly lease on the Fulton site. l

New biorefinery demo plant opened in Norway Norwegian finance minister Sigbjørn Johnsen officially inaugurated a biorefinery demonstration plant at Borregaard’s production facility in Sarpsborg this April.

The demo plant started preliminary operations last summer, followed by normal operations in the first quarter of 2013. The plant uses

proprietary Borregaard technology and aims to produce cost-effective and sustainable lignin and bioethanol from new raw materials.

The technology converts the cellulose fibres in biomass to sugars that can be used for second generation bioethanol, while other components of the biomass become advanced biochemicals.

‘If we succeed with this project, we will be able to establish fullscale production of biochemicals

with excellent climate accountability.

This plant is a good example of how new technology can contribute to environmental solutions and also be commercially viable,’ says Borregaard CEO Per Sørlie.

Construction of the plant has cost just under NOK 140 million (€18.5 million), 58 million of which was investment funding from Innovation Norway’s Environmental Technology support scheme. l

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Brazil faces looming transport fuel shortfall A new report from Bloomberg New Energy Finance (BNEF) reveals that Brazil, if recent trends continue, will be unable to meet its domestic light vehicle demand for fuel as soon as 2017.

The report states that demand could outstrip supply by as much as 9 to 12 billion litres per year by 2021, equivalent to 20% of Brazil’s demand, and that the country must either make substantial new investment in sugarcane ethanol production or petrol refining, or it must allow diesel light vehicles on the roads.

Brazil has met the majority of its light fuel demand with ethanol produced from sugarcane according to BNEF data, due to a boom in capital investment for new ethanol projects which reached $6.4 billion (€4.9 billion) in 2008 but which drastically dropped to $256 million last year. Partly as a result, ethanol use fell from 54% in 2009 to 40% in 2012.

‘It was not long ago that Brazil was in a position to brag about nearing energy independence, in large part because of the strong growth of its ethanol sector,’ says Salim Morsy, BNEF lead

analyst for biofuels in Latin America. ‘But investment has slumped since for a variety of reasons, making the country increasingly dependent on foreign gasoline refiners. It’s a costly, potentially untenable, position and it puts Brazil far off track as far as its energy security goals are concerned.’

The use of diesel fuel could help address the looming shortfall, but Brazil currently prohibits the sale of dieselfuelled passenger vehicles.

Passenger vehicles account for more than two-thirds of all vehicles on the roads. Motorists are therefore restricted to petrol, ethanol or some combination of the two – a popular option driving the number of ‘flexi-fuel’ vehicles on Brazil’s roads.

Another alternative open to Brazil is to boost domestic ethanol production through further investment. BNEF estimates that, by 2020, at least 14 billion litres of additional anhydrous ethanol production capacity would be needed to fill the domestic fuel supply gap. Brazil could up its ethanol cane crushing capacity by more than a third (287 million tonnes) by 2021 to address the gap, but this would require around $28 billion in new investment in 2012 currency. l

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Ethanol gateway: will Brazil struggle to meet future demands?

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Cellulosic Australian biofuels project ethanol heads another step closer Australian research company that can be used in this production,’ for cost Agritechnology business manager Derek Agritechnology has found a Robinson was quoted as saying. location as it further develops a competitiveness biofuels demonstration plant.

Robinson says a lot more feedstock ‘needs to be grown’ for projects of this nature to by 2016 A site for the plant has been chosen in reach full commercialisation, with many Ethanol manufactured from non-food feedstock is on course to be cost competitive with corn-based ethanol by 2016, according to an industry survey conducted by research company Bloomberg New Energy Finance (BNEF).

The 2012 results showed: • The cost of cellulosic ethanol production was $0.94 (€ 0.72) per litre • That is around 40% higher than the $0.67 per litre cost of producing ethanol from corn, which dominates the US biofuel market and is competitive with US petrol • By 2016, respondents thought the price of cellulosic ethanol would match that of corn-based ethanol.

Harry Boyle, lead biofuel analyst at BNEF, says: ‘The cellulosic ethanol industry has something of a history of over-promising cost reductions and under-delivering. However, it may be dangerous to assume that it will not become competitive this decade. If our survey proves accurate, cellulosic ethanol will make meaningful inroads into the vehicle fuel market during the last years of this decade.’ l

Orange, New South Wales and it will aim to convert sweet sorghum, native grasses and sugarcane into high quality biofuel.

‘We are a long way off but ultimately we’d like to provide an opportunity for farmers to have a market for feedstocks

companies having one eye on supplying the US Navy with biofuels in the future.

‘It’s not just the US Navy, it is also the Australian Navy and other countries that have inter-operability with the US – that’s a big pie,’ he adds. l

Agritechnology will also continue research into feedstock

Beets to form basis of new ethanol plant The California Energy commission has injected a multi-million dollar boost into a pilot ethanol plant from Mendota Advanced Bioenergy Beet Cooperative.

Mendota will use the $5 million (€3.8 million) to construct a plant that aims to produce 285,000 gallons of ethanol from 10,000 tonnes of beet feedstock. The plant is

reported to be situated in Five Points.

‘Farmers need alternative crops that fit into the rotation for row crops,’ president John Diener was quoted as saying. ‘We also need crops that have long-term viability and that can keep people employed.’

Construction is planned for this summer and the plant is hoped to be operational by the end of the year. Along with sugar beets, about 15% of the ethanol will come from local woody plant matter. l

Zambia loses large biofuels project commitment It has been reported that the Biofuels Association of Zambia (BAZ) described a move by China-based Kaid Biomass (KB) to pull out of the country as ‘unfortunate’.

KB, under the banner of Kaid Biomass Zambia, was due to undertake a $6 billion (€4.5 billion) investment programme in Nakonda and Isoka, but

has called time on the project after four years.

‘This news is unfortunate and it is sad because the project was something that people in Nakonde and Isoka accepted,’ BAZ chairperson Thomson Sinkalawas quoted as saying.

KBZ executive VP Kumbukilina Phiri revealed the reason for the departure was down to the fact the amount of land which had been offered for the project was too small to justify the investment required and what had been spent. l

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Cellulosic ethanol project hits milestone in US ZeaChem, a developer of biorefineries, has announced the production of commercial-grade cellulosic chemicals and ethanol at its 250,000 gallons per year facility in Oregon.

Among the first operational cellulosic biorefineries in the world, Zeachem’s demonstration facility showcases the scalability of biorefining processes and serves as a stepping-stone toward largescale commercial production.

‘We feel we are developing the first truly-integrated biorefineries for the production of a broad portfolio of economical and sustainable biofuels and biobased chemicals,’ says Jim Imbler, CEO of ZeaChem.

Development of its first commercial biorefinery is currently underway, backed by a conditional loan guarantee from the US Department of Agriculture. The facility will have capacity to produce 25 million gallons per year of ethanol and chemicals from woody biomass and agricultural residues. l

Valero brings ethanol plants back online in US US-based ethanol producer Valero Energy has restarted its facility in Ohio and aims to resume operations at another in Indiana ‘soon’.

After the US drought of 2012, that placed extreme pressure on corn levels and prices for both the biofuels and food industries, Valero idled three plants last June but now it is coming back positively.

‘Margins have improved where these plants can be operated at a profitable level,’ Valero executive communications director Bill Day says.

The third plant in the equation, based in Nebraska, restarted in February and all three have an annual capacity of 110 million gallons of ethanol. l

US sugar beet ethanol project receives funding A coalition of farmers in California, US have won support to construct a new ethanol demonstration plant using sugar beets as feedstock.

Beets are seen as a way forward by the CEC

A dozen farmers, with support from university experts and a grant of $5 million (€3.8 million) from the California Energy Commission (CEC), will build the demo facility in Fresno County with an aim of then building the US’ first commercial-scale biorefinery using beet if successful.

‘We’re trying to reduce greenhouse gas emissions and to shift our transportation fuels to a lower carbon content,’ CEC chairman Robert Weisenmiller was quoted as saying. ‘The beets have the potential to provide that.’

The farmers claim ethanol yields from sugar beet is more than twice that taken from corn per acre and John Diener, a grower whose ranch will house the demo plant, adds: ‘This project is also about rural development. It’s about bringing a better tax base to this area and bringing jobs for the people.’ l

US aviation industry to keep biofuel support US development of viable biofuel for the aviation industry has received further long-term support from the government this April.

US Department of Agriculture (USDA) secretary Tom Vilsack and Transportation secretary Ray LaHood signed a five-year agreement with the Federal Aviation Administration, which was announced

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at the Advanced Biofuels Summit.

The federal government and its partners hope to oversee an annual production of 1 billion gallons of drop-in aviation biofuel by 2018.

‘In his state address, president Obama called on us to work together to reduce carbon emissions – developing these alternative jet fuels will do just that, while creating jobs and helping airlines

save money on fuel,’ says LaHood.

The renewed agreement will continue to focus on goals between the Airlines for America, Boeing and USDA’s Regional Biomass Research Centres which include evaluating current and potential feedstock types and systems, developing multiple feedstock supply chains, developing state and local public-private teams and issuing periodic reports. l

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UAE’s biofuel from algae potential announced The Masdar Institute of Science and Technology, an independent university focused on advanced energy and sustainable technologies, presented details on the UAE’s growth and export potential in the biofuels-from-algae sector.

The Algae Research Laboratory and Microbial Environmental and Chemical

Engineering Laboratory (MECEL) has been undertaking research that looks into making new types of fuels that could be used for specialised needs, such as aviation and jet fuel.

‘The algae available in the UAE desert is unique because it is local and can stand a wide change in temperature,’ says Masdar assistant professor Hector Hernandez. ‘It can also live under high salinity ranges, one of the ‘highest’ to date of any algae species, and can be used all year round.’

Industry experts back the UAE to make a ‘strong impact’ in the biofuelsfrom-algae market moving forward.

The Institute believes the cost of producing energy is currently projected between $8 (€6) to $20 per gallon of biodiesel produced from algae but recent technologies and co-production schemes, along with novel growth production schemes, will make the overall cost of producing biofuels from algae a profitable venture in the next three to four years. l

SkyNRG earns RSB certification SkyNRG, a manufacturer of sustainable aviation fuel, has been awarded certification from the RSB Services Foundation, making it the world’s first biofuel operator to earn the RSB certification for its supply chain of renewable jet fuel including separation, blending and logistics.

The audit was conducted by certification body DNV Business Assurance.

‘Curbing the carbon dioxide footprint of jet fuel is key with the continuous growth in aviation around the world,’ says Peter Ryus, CEO of RSB Services Foundation. ‘That is why what SkyNRG

has done with certifying its jet fuel supply chain to adhere to RSB’s rigorous standards is so important. SkyNRG is setting a new precedent for aviation sustainability practices.’

The company, founded in 2009 by Air France, KLM Group, Argos and Spring Associates, supplies more than 15 airlines with its sustainable kerosene.

Maarten van Diijk, a member of the RSB’s board of directors, comments: ‘It is a milestone for sustainable jet fuels in general and a confirmation towards the market that RSB is ensuring that biofuels deliver on their promise of sustainability.

This gives aviation, for the first time ever, the possibility to fly on RSB-certified fuel.’ l

Flying high: SkyNRG’s RBS award was called a ‘milestone’

B99 biodiesel blend heading back to the pumps in US northwest US-based Sequential Pacific Biodiesel (SPB) is to return supplying a B99 biodiesel blend to over 30 local retail outlets throughout Oregon and Washington.

The return to the higher blend ratio marks the conclusion of SPB’s winter blending period, where it produces a B50 blend as the fuel demands for effectiveness.

‘Our winter blending policy eliminates concerns about engine problems caused by gelling and provides a worry-free experience for our customers,’ says SPB sales director Gavin Carpenter.

SPB makes its renewable fuel from recycled cooking oil taken from over 7,000 restaurants and businesses in the northwest of the US. l

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Sentence passed on Absolute Fuels fraudster Full details of the sentence received by Jeffrey Gunselman, the man behind over $40 million (€31.2 million) worth of RIN fraud, have been revealed.

The West Texas native has been sentenced to at least 15 years in prison and ordered to pay out $55 million in restitution by a federal judge.

In a story followed by Biofuels International, Gunselman started a bogus biodiesel company named Absolute Fuels in 2010

and told RIN purchasers to wire monies to his bank account – however he did not have a production facility and he falsely created federal renewable fuels credits until his racket was discovered last year.

Gunselman pleaded guilty last December to 51 counts of wire fraud, 24 counts of money laundering and violation of the federal Clean Air Act. It has been reported that Gunselman, with his ill gotten gains, purchased a $2.65 million house, several top level cars, a $1.6 million jet and a military tank. l

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Wrong kind of tank: Gunselman used his deceit to buy high-end products

Name change for biomassled fuel organisation The Roundtable on Sustainable Biofuels (RSB) has changed its name following a recent meeting of its delegates.

The organisation is now known as Roundtable on Sustainable Biomaterials to reflect its expansion of scope to apply its standards to biomass that is being used for other products in addition to biofuels.

‘There is a large range of biomaterials including bio-plastics, cosmetics, food additives and biochemicals, so by expanding our scope to cover biomaterials, this enables us to promote sustainable production in a whole new range of products and markets,’ says Rolf Hogan, executive secretary of the RSB. ‘But our goal remains to provide and promote the global standard for socially, environmentally and economically sustainable production and conversion of biomaterial.’ l

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Californian biofuels acquisition going Extreme Extreme Biodiesel has entered talks to acquire fellow California-based Promethean Biofuels in a move to increase its presence in the sector.

PB is a cooperative corporation and, apart from the used motor oil and waste vegetable oil collection, its products and services are only available to members of the cooperative.

‘This relationship between us and Promethean has flourished over the past several years, with talks of an acquisition having taken root several months ago,’ says Joe Spadafore, Extreme’s corporate secretary. ‘This is an opportunity to expand in the industry with a means to enter into a cooperative environment through an established company.’ l

EPA releases positive biodiesel figures for February The US Environmental Protection Agency announced in April that 77.6 million gallons of biodiesel were produced in February.

Biodiesel in the US has exceeded targets under the Renewable Fuel Standard

for two consecutive years and the new numbers show a total of more than 80.4 million gallons of biomassbased diesel for February, but that total also includes renewable diesel production.

With the February numbers, year-to-date biodiesel production stands at just under 150 million gallons. l

Green crude from Sapphire finds new customer Algae-based green crude oil producer Sapphire Energy has entered into a commercial agreement with Tesoro Refining and Marketing, a subsidiary of Tesoro.

Tesoro will purchase crude oil from Sapphire’s green crude farm in New Mexico, which recently reached continuous cultivation and crude oil production.

‘In less than one year, we have started up commercial

demonstration to grow algae, produced crude oil from our farm and now will start providing barrels of our oil to be refined for market use,’ says Sapphire Energy CEO Cynthia Warner. ‘This is important for the industry as it validates the benefits and advantages of green crude, confirming its place as a renewable crude oil solution.’

Oil extraction is conducted at Sapphire’s facility by converting wet algae to crude oil, and enables algae to be processed without the need for a drying step. l

news in brief Camelina biofuels company attracts new owner US-based renewable energy company Global Clean Energy (GCE) has acquired Sustainable Oils, a biofuels producer in Montana, from biotechnology company Targeted Growth.

The deal saw GCE exchange a $1.3 million (€996,000) promissory note and 40 million common shares to take ownership of the business that works primarily with camelina seeds.

‘This transaction is in line with our plan to be established as a diversified multi-crop, renewable feedstock producer,’ GCE CEO Richard Palmer says.

Algae.Tec looks to future with new MoU Algae biofuels company Algae.Tec has signed a memorandum of understanding with engineering and construction management business WorleyParsons.

The agreement outlines framework by which WorleyParsons can support Algae.Tec further develop projects in places like Brazil, Australia, the EU and the US. ‘WorleyParsons will bring years of experience in supporting project types that align with ours, so we are pleased to have their support,’ says Algae.Tec executive chairman Roger Stroud.

Standic receives ISCC certification Independent bulk liquids storage and distribution company Standic BV, based in Dordrecht, the Netherlands, has received sustainability certification for biofuels storage.

The company has been awarded ISCC-EU (International Sustainability and Carbon Commission) and the German version ISCC System GmbH. Standic says the certification is ‘essential’ for both itself and its biofuels clients: ‘With these two certificates we can further strengthen our position as an important biodiesel hub in northwest Europe.’

Green Energy looks to expand Asian biofuels reach Portugal-based engineering company Incbio will work with a subsidiary of Green Energy Group to construct a new biodiesel plant in Malaysia.

Incbio and Biofuel Limited will construct and operate an 8,000 tonne facility in Kuala Lumpur via grease trap oil taken from municipal wastewater treatment plants, local councils and waste grease collectors.

‘This order is further proof that by ensuring complete feedstock flexibility, we are bringing the biodiesel industry what it needs,’ says Incbio CEO Jose Marques.

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Biodiesel is current king at Port of Rotterdam Biofuels throughput at the Port of Rotterdam rose by 24% in 2012 when compared to the year before.

The final total last year hit 5.9 million and the port attributes that rise mainly to biodiesel as its import and export volumes both increased by 1.5 million tonnes.

To contrast that figure, the throughput of ethanol dropped

by 17% to 1.4 million tonnes and ETBE fell 8% to 600,000 tonnes.

In a statement the port claims 900,000 tonnes of the total biodiesel came from Asia, while Argentina also contributed significantly. The main final destinations for the biodiesel were Spain, the UK and Germany.

The drop in ethanol levels is placed at the tailing off of E90 imports from the US after the import tariff was adjusted. l

Biodiesel bulk in Rotterdam is abundant

Biofuels research partnership to continue moving forward Microbial developers for the biofuels and green chemicals industries Biotork and the Agricultural Research Service‘s Pacific Basin Agricultural Research Centre (ARS-PBARC) will extend a collaboration to convert agricultural by-products into biofuels and other products.

The pair first began work together in 2011 and started focusing on developing strains of heterotrophic oil-producing (oleaginous) microorganisms capable of converting papaya culls into oil, and use the microbial meal as feed for cattle and fish.

‘Papaya culls were used as a first targeted feedstock in the project because of the large quantities available in Hawaii,’ says Tom Lyons, chief science officer of Florida-based Biotork.

‘The objective, however, was to demonstrate that the approach can be used on any agricultural or industrial by-products for the production of renewable fuels and high protein meal.’

Encouraged by current positive results, ARS-PBARC wants to carry on and look into strain optimisation for a smallscale pilot plant and strain development for the conversion of a number of specific agro-industrial waste streams. l

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Algae-based biofuels ‘a hit’ with consumers in US

Jatropha plantations to increase in West Africa

US-based renewable fuels retailer Propel Fuels and renewable bioproducts company Solazyme claim a 30-day retail pilot programme saw positive results from the general public.

Jatropha developer Joil has signed a memorandum of understanding to develop plantations in West Africa with Agritech Faso.

The project, which marked the first commercial availability of algal-derived fuels, offered SoladieselBD at a B20 blend to consumers through Propel’s Clean Fuel Points in Redwood City, San Jose, Berkeley and Oakland.

Consumers were asked to give feedback via a survey and sales at the participating sites saw a 35% volume increase over those that were not part of the project.

‘The results show strong preference for algaebased fuel,’ says Propel Fuels CEO Matt Horton. l

The pair will explore the development of 250,000 hectares of jatropha plantations intercropped with food crops using Joil’s high-yielding varieties.

Field trials will also be carried out using Joil’s growing materials at Agritech’s plantations in Burkina Faso, Togo and Benin.

‘We and our affiliates have currently planted 4,000 hectares of jatropha curcas intercropped with food crops, with access to more than 100,000 hectares,’ says Agritech CEO William Kwende. ‘Having seen the data from Joil’s jatropha trials in India, which achieved more than two tonnes in the first year, we plan to use its varieties and methods on our plantations.’

A refinery is also mooted to be part of the agreement pending any successful results from the trial. l

New report calls for renewed cooking oil focus for petrol Research commissioned

by Olleco, a UKbased converter of used cooking oil into biodiesel, has shown that the increased use of ethanol in petrol to meet EU sustainability targets is resulting in drivers paying extra at the pump.

The report follows an increase in ethanol supply on behalf of fuel suppliers to meet the Renewable Fuel Transport Obligation (RTFO).

The RTFO requires that, by volume, 5% of the UK’s fuel supply is made up of renewable fuel by 2014.

This will have to increase further under the EU Renewable Energy Directive which requires that 10% of transport energy comes from renewable sources by 2020.

Unlike some other European countries, the UK has not stipulated what fuels should be used to meet its targets. The result is that fuel suppliers are importing increasing amounts of lower priced ethanol.

When the chips are down: could UCO be the answer to UK biodiesel needs?

‘This report shines an unflattering light on the environmental impact and cost to the consumer of the increased use of grainderived ethanol,’ says Olleco CEO Robert Behan.

‘We have a real concern that the potential introduction of E10 in 2013 by fuel suppliers will lead to the elimination of sustainable biodiesel made from UCO and tallow from the UK fuel mix. We are

calling on the government to amend the RTFO to protect the consumer and ensure that what was once a waste product remains in the UK fuel mix as the most sustainable low carbon option.’ l

16 may/june 2013 biofuels international

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UCS sends recommendation to EPA over food-vs-fuel debate The Union of Concerned Scientists (UCS) is urging the US Environmental Protection Agency (EPA) to reduce competition between food and fuel as it implements the Renewable Fuel Standard (RFS).

The science group submitted its recommendation at the start of April with comments on the EPA’s proposed biofuel mandate volumes for 2013. EPA’s proposal calls for so-called advanced food-based biofuels such as biodiesel and sugarcane ethanol to make up for a shortfall in cleaner cellulosic biofuels made from non-food sources, including

Overlooked microalgae gets thumbs up for biodiesel use A study in Spain has pinpointed dinoflagellate microalgae as an ‘easy and profitable way’ of creating biodiesel.

The research was led by scientists from the Universitat Autònoma de Barcelona (UAB), in collaboration with the Spanish National Research Council, and claims that the oft ignored type of marine algae is suitable for cultivation with biodiesel in mind.

Over the course of four years tests were carried out in natural conditions within exterior cultures, with no artificial light or temperature control, and subject to seasonal fluctuations.

‘If we make simple adjustments to completely optimise the process, biodiesel obtained by cultivating these marine microalgae could be an option for energy supplies to towns near the sea,’ Sergio Rossi, a researcher at the UAB, was quoted as saying.

Possible adjustments scientists highlighted included the reusing of leftover organic pulp, the use of air pumps and more efficient cultivation materials. l

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switchgrass and waste materials.

‘The RFS was designed to promote renewable fuels that don’t compete with food supplies,’ says Jeremy Martin, senior scientist with UCS’s clean vehicles programme. ‘We can’t afford additional strains on our food supplies, especially when the drought is expected to continue through 2013.

‘Markets for corn, sugar and vegetable oil are tight,’ Martin explains, ‘and thus any expansion of mandates for any food-based biofuels will put pressure on food prices and accelerate agricultural expansion and deforestation.’

When created in 2007, the RFS contained a 2013 goal of 1 billion gallons of cellulosic ethanol. While the industry is

rapidly commercialising, it is happening slower than anticipated and resulted in a revised goal of 14 million gallons that reflects current production capacity.

In its submitted comments, UCS urges EPA to adopt a more judicious administration of the RFS policy framework, with a mandate floor that grows to 20 billion gallons in 2022 plus whatever cellulosic biofuel production the industry is capable of producing.

‘Cellulosic fuels still offer the best bet for replacing large amounts of oil without disrupting our food supplies,’ Martin says. ‘Along with vehicle efficiency and other technology, cellulosic fuels can help us to cut our projected oil use in half over the next 20 years.’ l

BTT loads first train Botlek Tank Terminal (BTT) has loaded the first train at its new loading/unloading station.

The new station entered service on 2 April and loaded around 1,000 tonnes of biodiesel for export to a Bavariabased refinery in Germany. The fuel was transferred from one of the storage tanks.

In addition to Germany, the station will also be used to load and unload biodiesel going to and coming from Austria and Italy.

The project cost €2 million to build and was completed by a consortium of contractors in six months. It features two 340m tracks and can fill

or empty six wagons simultaneously at a rate of 400 tonnes per hour.

BTT said in a statement: ‘Driven by growing customer demand for rail transport, throughput is expected to rise quickly from around two trains a week at the start to one train a day.

The facility can also be modified to handle other oil products such as aviation fuels, petrol, diesel and edible oils. In the medium-term, throughput could increase to two trains a day.’

BTT’s existing terminal consists of 34 storage tanks with a total storage capacity of 200,000m3. The company is looking to expand this in the near future to a maximum of 750,000m3. l

Keeping busy: new BTT station can handle fuel from multiple countries

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UK biofuels ‘not so hot’ according to new report A new report by UK think tank Chatham House titled The Trouble with Biofuels warns of the detriment to the country via a desire to increase usage.

The author of the report believes that biodiesel made from vegetable oil is worse for the environment than fossil fuels, plus pushes up food prices and hits consumers at the pump, as the UK heads towards an EU target of 5% biofuels in its overall transport fuel mix.

Research carried out for the report believes that UK motorists will have to chip in an extra £460 million (€539.5 million) over the next year to

fill up with a ‘higher costing fuel’ and through ‘having to fill up more often as biofuels have a lower fuel content’.

‘Agricultural biofuels increase the level and volatility of food prices, with adverse impact on the food security of lowincome food-importing countries. They also result in indirect land-use change, the emissions from which are significant,’ author Rob Bailey wrote in the report.

‘Biodiesel from waste products such as used cooking oil or Category One tallow offers the most favourable sustainability characteristics, but the risk of indirect emissions increases at higher levels of use.

Used cooking oil prices have increased following the introduction of double

counting and now periodically exceed those of refined palm oil, potentially creating incentives for fraudulent activity capable of generating indirect emissions.’

The report also believes that, by 2020, the annual biofuel cost to UK motorists is likely to be in the region of £1.3 billion a year if the country is to meet its EU obligations to supply 10% of transport energy from renewable sources.

‘This target may be reduced through the use of double- or (as yet unavailable) quadruple-counted biofuels,’ Bailey added. ‘However, under current rules, this reduction would have to be offset by the increased deployment of renewables in the heat and electricity sectors.’ l

Palm oil slump hits Malaysia Palm oil reserves in Malaysia took the steepest drop in number in more than two years this March.

A report by Bloomberg believes inventories declined by 7% to 2.27 million tonnes from February, the steepest monthly

drop since January 2011.

These details were pulled from estimates from two plantation companies and four analysts.

Exports however went up by 2.1% to 1.4 million tonnes.

The decline may help to halt a 33% slump in commodity price however, as the popular feedstock looks to get back to a healthier position. l

Palm oil levels fell in March

Gulf Akash JV signs agreement with Targray for biodiesel supply Biodiesel provider Gulf Hydrocarbon, in collaboration with Akash Energy, is to supply biodiesel at the Buckeye Terminal in Illinois, US after the JV teamed up with Montrealbased trading and distribution company Targray Industries.

Gulf Hydrocarbon offered biodiesel at the terminal between 2010 and 2012 but shut down operations citing ‘tough economic conditions in the biodiesel market’.

Targray will supply biodiesel to the Buckeye terminal

However, the reinstatement of the biodiesel tax credit has created an improved market and the company

‘now feels there is a viable opportunity to offer biodiesel for blending’, according to president Jess Hewitt.

He adds: ‘We offer biodiesel with and without RINs therefore a customer can choose to take their biodiesel with or without the Renewable Fuel Standard credits.’

Targray will be the exclusive supplier of biodiesel to the JV. The company’s president Andrew Richardson comments: ‘The Gulf Akash JV offers us access to the downstream markets that, until now, we have not actively participated in.’

The existing biodiesel storage tanks at the site are heated and insulated.

The terminal also features automatic loading capabilities, allowing buyers to self-load. l

18 may/june 2013 biofuels international

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Algae and caterpillars confirm plant oil conversion at MSU Researchers at Michigan State University (MSU) believe an engineered plant with oily leaves could improve biofuels production.

Weighty results: bigger caterpillars proved oil levels were boosted

The results of the study show that researchers could use an algae gene, involved in the production of oil, to engineer a plant that stores lipids or vegetable oil in its leaves.

‘Many researchers are trying to enhance plants’ energy density, and this is another way of approaching it,’ Christoph Benning, MSU professor of biochemistry, was quoted as saying. ‘It’s a proofof-concept that could be used to boost plants’ oil production for biofuel use as well as improve the nutrition levels of animal feed.’

To double-check leaves had boosted oil levels within their leaf tissues when spliced with a one-celled algae gene, Benning and his team then fed them to caterpillar larvae which saw them gain more weight than those that just ate regular leaves.

‘Further, if algae can be engineered to continuously produce high levels of oil, rather than only when they are under stress, they can become a viable alternative to traditional agricultural crops,’ he adds. l

New deal hopes to grow carinata feedstock levels in US A new agreement has been signed in the US between Agrisoma Biosciences (AB) and PGF Biofuels.

PGF will now have exclusive rights to distribute resonance carinata, a nonfood industrial oilseed crop, and arrange production contracts with growers in North America and Australia.

AB oversaw more than 6,500 hectares of contracted plantations with 40 growers across Alberta and southern Saskatchewan.

PGF is a subsidiary of Paterson Global Foods and AB president Steve Fabijanski was quoted as saying: ‘Paterson has been at the forefront of the grain handling business for more than a century, working seed sales, relationships with farmers, logistics, transportation, elevation and sales.’

Paterson will manage seed distribution, contract production, collection, processing and sales, while AB will be paid a royalty on sales generated from resonance carinata, which will vary depending on the end products. l

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EU BC&E 2013

21st European Biomass Conference and Exhibition Setting the course for a biobased economy

Bella Center - Copenhagen, Denmark Conference Exhibition

3 - 7 June 2013 3 - 6 June 2013

Conference Programme Online - Register Now! www.conference-biomass.com www.exhibition-biomass.com

20 may/june 2013 biofuels international

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BioGasol ApS Desmet Contractors Do Brasil forms new JV Contractors Do Brasil (DSCB) and Empral Jaboticabal have formed delivers first Desmet a new company which aims to provide the agro, renewable energy and industries with engineering and management services. commercial biochemical The new company, Desmet Empral, will provide projects with conceptual and feasibility studies up to full implementation. pre-treatment design ‘The new entity, Desmet Empral, will give Desmet Engineers and Contractors a unique capacity to efficiently serve both Brazilian and foreign entrepreneurs in Brazil and system Latin America with a complete portfolio of services that now includes the EPC/EPCM Renewable energy company BioGasol ApS has supplied its first commercial biomass pretreatment system to US-based cellulosic sugar producer Sweetwater Energy, which will use the unit in its demonstration facility to produce pretreated biomass for use in downstream processes.

BioGasol’s reactor design allows for a cost-effective controlled conversion of lignocellulosic materials, such as agricultural waste and wood, into replacements for conventional fuel and other oil-based materials – specifically, highly fermentable sugars suitable for producing bioethanol, bioplastics and biochemicals. Its Carbofrac line of pretreatment systems has a small footprint, high throughputto-weight ratio and control of the pretreatment process, maximising yield while limiting production of inhibitors.

According to Sweetwater’s chairman and CEO, ‘BioGasol’s Carbofrac pretreatment reactors provide the ideal platform for producing cellulosic biofuels.

Acquiring this unit, capable of processing 100kg of dry biomass per hour, will bolster our biofuel production capacity and allow us to test and optimise the biomass pretreatment processes in our demonstration facility.’

BioGasol completed the first sale of its Carbofrac 400 pretreatment system, capable of up to 4 tonnes per hour, to Sweetwater in January this year, part of a unit to be supplied to corn ethanol producer Ace Ethanol.

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expertise,’ says Guy Davister, CEO and GM of Desmet Engineers and Contractors.

DSCB is the majority shareholder in the new company. l

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biofuels technology news

Positive court ruling for Gevo hasn’t dampened Butamax resolve

The US District Court for Delaware has entered a final judgement in one of the court battles between Butamax Advanced Biofuels and Gevo.

The long running dispute between the two isobutanol producers, over claims about patent infringements (catchily named 188 Patent and 889 Patent for ease of reference), was settled on 10 April in favour of Gevo.

‘It is hereby ordered and adjudged that final judgment be and hereby is entered in favour of defendant Gevo and against plaintiff Butamax Advance Biofuels with respect to the claims relating to ’188 and ’889 patents,’ said judge Sue Robinson.

The decision could be seen as a crushing blow to Butamax, which first filed an infringement lawsuit at the start of 2011 regarding patent 188. But, that summer, Gevo asked the US Patent and Trademark Office (USPTO) to invalidate that and the patent 889,

which covers methods for lowcost bio-isobutnaol production.

Gevo has been quoted as saying this result is a ‘huge victory for us and our shareholders’, but Butamax thinks it should not be counting its chickens just yet.

‘On 10 April the USPTO issued an Action Closing Prosecution (ACP) rejecting all claims of Gevo’s patent number 8,101,808, in the inter partes re-examination filed by Butamax on 7 May 7 2012,’ reads a Butamax statement. ‘The 808 patent was described by Gevo as “a landmark patent…on its GIFT separation unit, a central element in its fermentation technology”.

‘The significance of this ACP,’ the statement continues, ‘is that the patent re-examination specialist responsible has now heard both sides of the argument with respect to this patent and has concluded that all of the original, amended and added claims are unpatentable.’

The end doesn’t not seem nigh in this stand off. l

Davy Process and Sekab form strategic ethanol partnership UK petrochemical technology company Davy Process Technology and Swedish ethanol player Sekab E-Technology will work together to develop technology for the production of lignocellulosic sugars for onward production of ethanol and other green chemicals.

The collaboration will look into furthering CelluTech, Sekab’s lignocellulosicbased biorefinery technology, created in partnership with Swedish universities.

The technology’s platform includes thermochemical pretreatment, enzymatic hydrolysis to initially produce sugars and other products from lignocellulosic materials. The platform can be adapted to a variety of raw materials such as wood, straw, corn residues and bagasse.

‘We are convinced that the partnership will bring forward process technologies that will deliver premium products for the biofuels and chemical industries,’ Sekab E-Technology executive VP Thore Lindgren says. l

Yellowstone fungus could unlock new biofuels potential After finding a potential feedstock in Yellowstone National Park, a new biofuels start-up is gathering pace in Montana, US. New company Sustainable Bioproducts, funded by a Small Business Innovation and Research grant from the National Science Foundation, will partner with Montana State University to turn a fungus discovered at Yellowstone into sustainable energy.

The fungus, named MK7, thrives in hot temperatures and eats algae. When dry it produces oil and its lipid byproducts are reportedly high in usable enzymes.

‘The most important part of our research now is to test the technology

Tasty: MK7, discovered in Yellowstone, eats algae

further and investigate the feasibility of using this organism to produce biofuels and other products,’ says Sustainable Bioproducts’ founder Mark Kozubal.

Kozubal and his team will use facilities at the university and has received an initial $150,000 (€112,300) from the grant to conduct further research. l

22 may/june 2013 biofuels international

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REG automates energy Genscape launches tax processing expansions to RIN US-based biodiesel producer REG has integrity network services signed a multi-year contract with FuelQuest to help simplify fuel tax calculation for QAP programme and invoicing for its customers.

Zytax Determination reduces processing costs by gaining accuracy, transparency and agility in calculating fuel taxes on invoicing. FuelQuest is an on-demand software and services company for the downstream energy industry.

The technology automates the identification and calculation of taxes for fuel, including biodiesel, petroleum products, natural gas and other products.

‘With Zytax Determination integrated into our JD Edwards back office, we expect to achieve efficient automation of tax calculations for all of our fuel transaction invoices, which will also reduce tax accounting and support costs within the organisation,’ says Jonathon Schwebach, senior manager of tax at REG. According to FuelQuest, one main cause of inaccurate fuel invoices is incorrect tax calculations, which leads to higher internal processing and support costs, as well as increased levels of customer dissatisfaction.

However Zytax Determination, it claims, drives tax determination accuracy, financial control and transparency; enhances the customer experience through reliable and trusted invoicing; lower tax accounting and IT support costs; and enables greater agility to expand into new regions, transaction types, or products, and streamlines maintenance of complex and changing tax rates and rules.

This tax determination solution is suitable for use in a number of industries including fuel retail, distribution, supply and trading. l

Genscape, the first service provider preregistered under the EPA’s quality assurance plan (QAP) programme for both A-RIN and B-RIN assurance, has expanded its QAP programme.

A public version of the company’s RIN Integrity Network dashboard is now available to provide the latest producer information in a consolidated, transparent view for the biofuels industry.

For both A-RIN and B-RIN producers, the QAP programme now incorporates a suite of compliance-based services including annual attestation, direct advice on RFS2 registration and compliance issues with a licensed CPA, RFS2 engineering review by an engineer licensed in the facility’s state, full ASTM 6751 panel test, and RFS2 quarterly report filing.

The EPA requires that renewable

fuel producers participating in a QAP programme complete these compliance measures to maintain its integrity.

Genscape’s auditing technology allows for these services, valued at approximately $10,000 (€7,600) per year, to be included in its existing QAP programme at no additional cost. The company says the expansion reduces the operational burden for the producer while meeting QAP compliance measures.

The RIN Integrity Network provides obligated parties easy access to centralised reporting capabilities and the latest Producer QAP information not available in the EPA’s EMTS system.

The public dashboard features producer information in a visual display and a downloadable list as well as notifications to indicate when information has changed. l

Gamajet tank cleaning solution benefits biomass plants Gamajet’s tank cleaning equipment offers new sustainable cleaning processes for biomassbased plants.

The Gamajet EZ-8 is designed for cleaning tanks within the renewable energy production industry and therefore reduces time and increases plant productivity. The company says it has been found to increase etOH yields by up to 30%.

The equipment can operate for 800-1,000 hours before

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preventative maintenance is recommended, a process that can be carried out in the field to decrease tank downtime.

A saving of up to 80 hours of machine maintenance a year can be realised with the EZ-8.

In addition to time, the cleaning instrument also saves water and chemical consumption – up to 85% per cleaning, according to Gamajet.

It carries out thorough cleaning to maintain product quality, resulting in fewer lost batches to microbial growth and provides optimum fermentation results. l

Gamajet’s cleaning equipment goes for 1,000 hours

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biofuels business brief

People on the move Palmer on board at RSB Services Foundation The RSB Services Foundation has appointed Richard Palmer as the foundation’s newest board member.

Palmer is president and CEO of Global Clean Energy Holding, a biofuels and renewable chemicals feedstock developer.

He is also a trustee and president of the Centre for Sustainable Energy Farming, a non-profit research centre focused on the development of sustainable energy farming practices.

He has over 30 years

of senior level management experience and was educated at the University of Southern California's Marshall School of Business. He holds two Business Management Certificates and is a member of both the American Council on Renewable Energy and the American Society of Plant Biologists.

In similar news, Jason Burroughs has joined the organisation as regional

DSM names new business manager of bioethanol Life sciences and materials company DSM has appointed Christian Koolloos to business manager of bioethanol within the company’s Bio-based Products & Services unit.

The role will see Koolloos Christian Koolloos take responsibilities for DSM’s involvement in cellulosic ethanol, outside of its joint venture with Poet.

He will develop and manage the Enzymeand Yeast business, reporting to Anton Robek, president of bio-based products and services.

Koolloos joined DSM as the commercial manager of yeast in 2011. He has a background in microbiology and molecular cell biology and holds a master’s degree in biology from Utrecht University, the Netherlands.

Vecoplan appoints ns Davison to VP, operatio William Davison has been ons promoted to VP of operati t tha y pan com a at Vecoplan, , ing edd shr s ure manufact recycling and processing tion technologies for the produc h bot from of alternative energy waste and biomass.

Responsibilities of his new g all position include overseein r afte , tion duc pro aspects of s ilitie fac ly dai and vice sale ser William Davison y’s operations at the compan nt, headquarters in High Poi North Carolina. ison served as Prior to his promotion Dav r and before this, GM at Vecoplan’s service directo nance. He has over 25 Sieger Mechanical Mainte in the supervision of years of practical experience electrical production and personnel in mechanical rial sector. ust ind and maintenance for the

director for business development in North America. RSB says the new role will see him expand its outreach in North America in biodiesel, biomass and other biofuel types.

Big Island Biodiesel gets plant operations manager Pacific Biodiesel Technologies’ Hawaii-based production plant has a new operations manager.

John Griffith, In his new role at the Big Island Biodiesel facility in Keaau, will be overseeing daily plant operations to ensure optimal performance and adherence to standard operating procedures.

Griffith has 18 years of experience in plant

operations and managerial work from Hewlett Packard in Oregon. He studied at Lihikai Elementary School and St Andrew High School.

He officially began his new role in February.

Novozymes’ new CEO takes office Peder Holk Nielsen is officially the new president and CEO of Novozymes after taking office on 1 April 2013. His appointment was first announced towards the end of January.

Nielsen has served Novozymes and Novo Industri/ Novo Nordisk for 28 years and has held management positions across business development, R&D, quality management and sales and marketing. Up until his appointment as CEO, he served as executive VP and head of enzyme business from 2007-2013.

He has taken over from Steen Riisgaard, who left his position after 12 years and 33 years at Novozymes and Novo Industri/Novo Nordisk. l

24 may/june 2013 biofuels international

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

Location

07/04/13

San Diego, US

07/04/13 South Roxana,

Illinois, US

06/04/13

Port Moody in British Columbia, Canada

Company Incident information Thousands of gallons of ethanol spilled close to Qualcomm Stadium when a fuel truck overturned.

An estimated 3,000 gallons of the biofuel is thought to have escaped from the truck, which was carrying up to 8,000 gallons when its driver attempted a left-hand turn. He sustained moderate injuries.

The incident occurred at around 7.30pm. Two roads were closed while clean-up teams worked to remove the spilled ethanol.

Midwest Biodiesel Products

A vegetable oil-to-biodiesel plant was damaged after a morning fire broke out at the facility.

It was quickly extinguished and nobody was hurt. The cause was not revealed.

Suncor Energy

A small volume of the 225 barrels of biodiesel that leaked from a storage tank at Suncor Energy’s Burrard Products Terminal entered the Burrard Inlet, it was reported.

The leak was discovered on 6 April and clean-up is now underway. Western Canada Marine Response. was also called to the scene to inspect the spill and help crews with their cleaning efforts.

The majority of the escaped fuel remained within the property of the terminal, contained in a trench. The faulty tank was also emptied to avoid any further incidents.

Around two litres is thought to have flowed into the inlet.

Despite knowing about the leak since 6 April, the public were not notified until sometime afterwards. It is thought minor amounts of product may have been leaking from the tank since the end of March.

There will be an investigation into the cause of the incident.

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biofuels regulations

Biodiesel trade still sluggish despite subsidies

Brian Milne, product manager, Schneider Electric

T

here were signs of increased spot trading for biodiesel in the US early in Q2 after sluggish deal-making activity in starting out 2013, coinciding with a pickup in distillate demand and gains in truck tonnage in March. Key to the pickup is the return of a blending tax credit earlier in the year further supported by a mandate for demand, with production at US biodiesel plants ramping up in March.

Output at US biodiesel plants jumped 58.5% in March from February, with the US EPA reporting production at 127.9 million gallons following February’s output at 80.7 million gallons and 79.9 million gallons in January.

March’s output rate suggests the US biodiesel industry would meet its 1.28 billion gallon demand mandate under the Renewable Fuel Standard for 2013, adjusted above language in the Energy Independence and Security Act of 2007 mandating no less than 1 billion gallons

this far into the programme.

Also underpinning support for the US biodiesel industry was the reinstatement of a $1 (€0.77) gallon tax credit for blending biomass-based diesel into petroleum-based distillate fuels in beginning 2013, which was allowed to lapse at the end of 2011.

Passed on 2 January as part of the ‘American Taxpayer Relief Act of 2012’, the US Congress reinstated the Biodiesel and Renewable Diesel Tax Credit through the end of 2013 while making it retroactive for all of 2012.

The credit is an important factor supporting biodiesel sales considering the wide gap between spot biodiesel and spot ultra-low sulphur diesel fuel prices, with biodiesel prices holding a premium of $1.60 to more than $1.80 gallon at key trading hubs in Houston, Texas and Chicago, Illinois. The loss of the credit prompted slower production at US plants in 2012, especially for smaller operators.

The retroactive feature also allows for producers and marketers that blended qualified biodiesel into petroleum-based diesel fuel last year to file for the tax credit, with those funds potentially rolled back into operations this year. Qualified parties have spoken of a ‘paperwork nightmare’ and a ‘major hassle’ in seeking the credit however, told they must file for the subsidy on the individual income tax forms of each owner of the business.

‘In general, when ATRA was enacted on 2 January

2013, the time had already passed for filing some claims for payment under section 6427(i)(3)(c),’ states an official notice issued by the Internal Revenue Service, with the tax body extending the deadline to collect the 2012 credit from 15 April to 1 July.

After a slow start, demand for distillate fuels picked up the pace in March, with preliminary data from the Energy Information Administration showing implied demand running more than 8% higher than during the corresponding period in 2012. First quarter implied demand ran 2% above the comparable year-ago period, reflecting an expansion in the US economy during the first three months of the year after virtually no growth in the fourth quarter of 2012.

‘Fitting with the expectation for solid gross domestic product growth in the first quarter, [freight] tonnage was strong in March and the quarter overall,’ says Bob Costello, chief economist with the American Trucking Associations—the largest trade association for the US trucking industry representing more than 37,000 members.

‘At 3.9% year-over-year growth, the first quarter increase was the best since the final quarter 2011,’ referring to ATA’s For-Hire Truck Tonnage Index.

Costello offered a more cautious tone for the months ahead, expecting freight tonnage to slow as budget cuts by the federal government forced through sequester

continue and households finish spending their tax returns.

‘The good news for tonnage is housing starts are growing and energy production is good—both of which generates heavy freight. However, these two sectors alone won’t be enough to keep the overall index growing at a 3.9% clip in the second quarter.’

In the US, the vast majority of diesel fuel is consumed through commercial and industrial applications, with the fuel source for personal vehicles still dominated by petrol. This means the performance of the US economy has a major effect on diesel demand.

Early in the second quarter, weaker demand for diesel fuel was already occurring, with EIA data showing implied demand for the four weeks ended 19 April down 2.6% versus the comparable year-ago period.

Diminished fuel demand was occurring just as global economies, including the US, China and the euro zone, were all slowing. US distillate exports tumbled to a 19-month low in April, reflecting weak demand in Europe.

Weakening consumption for distillate fuels dent demand for biodiesel and helps explain limited trading in the spot market. Nonetheless, demand for biodiesel is seen increasing as 2013 marches on, with the blendstock now mostly transferring from supplier to buyer in term deals. Small percentages of biodiesel, typically 1% and 2%, have also been blended with ULSD

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Chicago spot biodiesel and spot ULSD

Houston spot biodiesel, Gulf Coast spot ULSD

Distillate fuels supplied to US market

Biomass-based diesel D4 renewable identification numbers

US distillate exports

and moved on pipelines to the market were it could be further blended up with biodiesel.

This activity has been spurred by obligated parties under the RFS, which include oil refiners, blenders and importers, looking to meet their Renewable Volume Obligation.

The RVO is a set percentage of a supplier’s output of petroleum-based fuel that must be offset by a renewable fuel. The percentage, 9.62% in 2013, is set by the EPA no later

biofuels international

than the end of November of the preceding year. The RVO continues to increase annually.

Obligated parties have some flexibility in meeting their RVO, with the RFS programme including a trading component for credits known as Renewable Identification Numbers (RINs) that can be bought or sold in the market.

A bureaucratic creation aimed at ensuring obligated parties comply with their RVO, a RIN is generated when a qualified

renewable fuel is produced at a US plant or imported, and moves through the supply chain with the blendstock.

The RIN is later submitted by an obligated party to the EPA, the administrator of the RFS, to show compliance in meeting their RVO. A RIN can also be separated and traded in the market, allowing an obligated party to reach compliance with their RVO even if they blend less renewable fuel than their RVO dictates. An obligated party can also carry up to 20% of their RINs into the following year, with this feature aimed at providing the industry flexibility in satisfying the RFS mandate.

There are several RIN types based on the renewable fuel, with D4 RINs used to satisfy the biomass-based diesel category. D4 RINs began the year valued in the low $0.40 range and peaked in

early March at $1.18, with each D4 RIN equivalent to 1.5 gallons of biodiesel.

RINs add value to the holder, with Kinder Morgan saying it expects to begin biodiesel blending at its terminals in Las Vegas, Nevada, and Phoenix, Arizona sometime in the second quarter, with RINs seen boosting the partnership’s profitability through this activity. Kinder Morgan said it generates excess RINs each month through its transmix facilities, which it sells into the market. l

For more information: This article was written by Brian Milne, who manages the refined fuel’s editorial content, spot price discovery activity and cash market analysis for Schneider Electric’s energy segment.

He is also the editor of OilSpot, a weekly newsletter for fuel marketers, buyers and sellers. Milne has 17 years experience in the energy industry as an analyst, journalist and editor. www.telventdtn.com, +1 952 851-7216

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biofuels regulations The European Commission seeks to create serious structure for second generation biofuels, as a new report finds double and quadruple counting to be ineffective

Who’s counting?

E

pure, the European renewable ethanol association, has looked at the double and quadruple counting proposals by the European Commission and deemed it an ‘ineffective’ way to propel advanced biofuels production.

The association has instead called for a dedicated sub-target for these fuels under the Renewable Energy Directive (RED).

The Double Counting, Half Measures: Study on the effectiveness of double counting as a support for advanced biofuels report is based on the study ‘Effectiveness of the Doubt Counting Mechanism’, commissioned by ePure and conducted by Meo Carbon Solutions.

According to the study, double and quadruple counting towards the target for 10% renewables in transport will not help reduce greenhouse gas emissions from transport by 2020.

Instead it believes only a sub target will create a stable framework for the deployment of the technology and investments necessary to meet the targets set in the RED and the Fuel Quality Directive (FQD).

Non-business model According to the report, the RED has implemented double counting of certain biofuels with the aim of diversifying the raw materials used to produce them.

The double counting mechanism intends to provide compensation for the higher production costs

associated with processing new feedstocks. The report also states that double counting is, to date, the only dedicated support mechanism established in the EU for cellulosic biofuels, with quadruple counting also proposed by the EC for some feedstocks.

The ultimate goal of this multiple counting proposal is to support the development of new technologies and new advanced biofuels.

The report makes it clear that ‘double counting has so far provided nearly exclusive benefit to biodiesel producers using used cooking oil and animal fats feedstock’ but that ‘the techniques used to convert these oil and fats into biodiesel do not require new or sophisticated technology’.

‘What we see is disappointing,’ says ePure secretary general Rob Vierhout. ‘Multiple counting is not bankable and cannot be included in a business model. It is useless for investors that want to move into the business.’

The report also outlines that double counting measures have been ineffective at broadening the feedstock base and enabling technology innovation. In addition, it points to market distortion impacts as it states the EC only provides a nonexhaustive list of wastes and residues, which is ‘insufficient to give guidance on how to implement the measure and on which feedstocks are eligible for doubling counting’.

‘As a consequence member states implemented the measure quite differently,’ the report continues. ‘Biofuels can count double in one

member state but not in another. Therefore, the international market becomes distorted with serious consequences in terms of availability of raw material and international trade.’

Vierhout adds that ‘the double counting can increase risks of fraud and used cooking oil tourism’.

Looking for inspiration The ePure report says double counting also does not create bankable value and is therefore ineffective at removing investor risk associated with first-oftheir-kind plants. Double counting also reduces the quantity of biofuels on the market thus causing less fossil fuel to be displaced and fewer greenhouse gas savings made.

Rather than the double counting measures, ePure has proposed that the incentives for advanced biofuels in the EU be modelled more closely to the Renewable Fuel Standard (RFS) and other US-

based incentive programmes.

It wants to see the encouragement in developing the likes of mandatory sub-targets for particular production pathways, tax incentives, feed-in tariff provisions, incentives for feedstock collection, investment support for first-of-kind plants and government loan guarantees.

‘Commercial plants are now being built to produce cellulosic ethanol outside of Europe thanks to more attractive policy frameworks,’ says Lars Hansen, regional president of Novozymes Europe, who provided funding for the study.

‘With the ongoing discussions of indirect land use change and the preparation of a 2030 framework for climate and energy policies, the EU has a unique opportunity to get its biofuels policy right and to give a clear signal by setting up an ambitious, but achievable, target for advanced biofuels up to 2030.’ l

Will it add up? The counting method does not mean the physical amount of biofuels will be available

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As the US RFA queries a cellulosic biofuels target for this year, Canada announces a new programme to boost its agricultural sector

Varying views on North American fuel industries

F

irst up, the US Renewable Fuels Association (RFA) has urged the Environmental Protection Agency (EPA) to scale back this year’s volume requirements for biofuel production, arguing the proposed standards are ‘unrealistic’.

The association advised EPA at the start of April to revise its cellulosic and advanced biofuel standards set out earlier this year which put the 2013 standard for cellulosic fuel at 14 million gallons, up from 8.65 million gallons in 2012.

The figure was primarily based on expectations that two producing companies, Ineos Bio and Kior, would be able to help meet those production goals. But the RFA argues against the unrealistic overall target and wants the EPA to coordinate deeper with the two companies, plus take in consideration the status of sugarcane imports too.

After accounting for expected production of biomass-based diesel, other domestic advanced biofuel and cellulosic biofuel, the EPA estimates 666 million gallons of imported sugarcane ethanol will be needed to meet the current 2013 advanced biofuel standard.

‘We do not believe the levels of sugarcane ethanol imports assumed by EPA are reasonable given current

biofuels international

market conditions,’ says RFA president Bob Dinneen.

‘If EPA has overstated the contribution of non-biodiesel domestic advanced biofuel production then the need for sugarcane ethanol imports would be closer to 716 million gallons.’

The RFA wants the EPA to note that anywhere between the 666-716 million gallon range would far surpass the amount of ethanol Brazil has exported to the US in any single year in the past: ‘Further, Brazil has not been a reliable supplier of ethanol to the US in the past, as imports have been highly variable from year to year.’

Alongside the concerns about the target not aligning with current production volumes and the sugarcane quandary, the two other key points of the RFA’s report are: 1) As there are legal and economical options available for surmounting the blend wall, the E10 saturation point should not be a factor in the EPA’s decision-making process for 2013 RVO levels.

2) The EPA should propose 2014 RFS standards as expeditiously as possible and ensure the 2014 RVOs are established no later than 30 November this year.

‘The RFS is a flexible programme that is a proven success by lowering this country’s dependence on foreign oil, creating local jobs and stimulating investment in the next generation of

biofuels,’ continues Dinneen.

‘To ensure it continues to be implemented effectively, we call on the EPA to exercise its discretion to adjust the 2013 advanced biofuel standard. Our comments request that EPA publish the 2014 proposed RFS standards as soon as possible so stakeholders can engage and ensure it is implemented as efficiently as possible next year.’

New Canadian framework wins applause Over in Canada, April saw the official launch of the Growing Forward 2 (GF2) policy framework for Canada’s agricultural and agri-food sector.

And the Canadian Renewable Fuels Association (CRFA) has lauded this launch as ‘good news’ for its industry and for the farmers who work closely with biofuels producers.

GF2 is a C$3 billion (€2.2 billion) investment by federal, provincial and territorial governments (FPT) and the foundation for government agricultural programmes and services over the next five years.

The framework will focus on innovation, competitiveness and market development to ensure Canadian producers and processors have the tools and resources they need to continue to

capitalise on emerging market opportunities.

‘Farmers across the country are clear winners with increased production and promotion of domestic renewable fuels,’ says CRFA president W. Scott Thurlow.

‘Our members are taking the platform created by ethanol and biodiesel technology and using it to develop fuels, plus value-added agricultural and chemical products, from a growing range of biomass.’

In addition, GF2 includes a suite of business risk management programmes to help farmers in managing risk due to severe market volatility and disaster situations.

Governments will also assist the industry in its efforts to research, develop and implement new agricultural risk management tools.

‘Programmes like GF2 will help build-out this innovation so that the economic and business risk management benefits of domestic renewable fuels production will accrue for our farmers today and well into the future,’ adds Thurlow.

GF2 includes $2 billion cost-shared on a 60/40 basis for programmes delivered by provinces and territories, and $1 billion for federally delivered strategic initiatives.

Under GF2, FPT cost-shared investments will increase by 50% and provincial and territorial governments will have greater flexibility to tailor programmes to local needs. l

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biofuels regulations While renewable energy in the UK has performed strongly, biofuels have dipped but a new European Commission report points to a healthy future for the liquid fuel

Renewable energy in UK up despite biofuels drop

N

ew government figures have revealed 2012 was a strong year for renewable energy generation in the UK. A report released at the end of March put the UK’s generated electricity from renewables last year at 11.3% overall, and 12.5% in the fourth quarter.

It is believed much of this growth is due to new generating projects coming online across all renewable sectors, with biomass input increasing by 17% largely, in part, to Tilbury power station’s conversion to biomass. Total UK renewable power capacity now stands at 15.5GW. ‘Renewables now generate more than 10% of our electricity on average,’ says Renewable Energy Association (REA) CEO Gaynor Hartnell. ‘The conversion of Tilbury also shows what a big difference biomass can make, especially at a time when the government is desperate to bring forward affordable, baseload, low carbon generation.’

However, there was a reduction in the consumption of liquid biofuels for transport, down to 2.6%, as it remains a small part of UK motor fuel. The REA believes certainty is urgently needed within policy framework to fulfil their potential for decarbonising transport.

‘These are trying times for producers of renewable

transport fuels. The removal of the fuel duty rebate for used cooking oil has significantly reduced biodiesel consumption, but the 5% cap on first generation biofuels proposed by the EU poses a much greater problem,’ Hartnell adds.

‘We are pleased to hear that UK ministers are

growth has increased since the introduction of indicative targets from 1.9% per annum (1995-2000) to 4.5% per year (2001-2010).

‘It would be a mistake for the EU to rely solely on a 2030 carbon target to drive the uptake of low-carbon energy however,’ warns Hartnell. ‘It does not bode

‘Biofuels and bioliquids are subject to strict EU sustainability criteria’ prepared to be flexible on the level of the cap. The REA, alongside representatives of other land-based industries, will continue to call for greater use of genuinely sustainable biofuels.’

EU biofuels policies assessment The European Commission (EC) has also recently published two reports, one being a ‘green paper’ on 2030 framework for climate and energy policies and another a progress report on renewable energy, which included a separate report on the social sustainability of EU biofuels policies.

The REA has come out as ‘strongly supportive’ to an extension of existing national renewables targets to 2030, as the green paper shows annual renewables

well that the EU Emissions Trading Scheme has failed to deliver long-term carbon signals. The mandatory targets for 2020 are accelerating the deployment of renewable energy across the EU and we need to maintain that momentum.’

Biofuels and bioliquids are subject to strict sustainability criteria in order to count towards the EU’s 2020 targets. Within the progress report the EC assessed the sustainability of EU biofuels, as part of a wider report expected shortly on the social sustainability of the increased demand of biofuels.

‘The Commission’s assessment has highlighted the sustainable nature of biofuels produced and used in the EU. This is in stark contrast to recent stories which have wrongly linked biofuels to high food prices

and poor GHG savings,’ REA’s head of renewable transport Clare Wenner says.

Wenner adds that the analysis showed that biofuels in fact only have had a minor effect on global commodity prices, and that biofuel demand is in fact more price sensitive than the food market, meaning that use of crops for biofuels actually declines as food prices increase.

‘Biofuels used in the EU consume only 3 million hectares of the 1.5 billion hectares of total arable land available worldwide,’ she continues. ‘This report also shows that over 80% of biofuels consumed in Europe is produced within the EU.’ The EC report also confirmed that biofuels actually encourage best agricultural practices through voluntary schemes, generating much needed jobs (220,000 in the EU and 1.4 million internationally), and have contributed to significant carbon savings estimated at 25.5 Mt CO2eq.

‘First generation biofuels have a significant role to play in contributing to GHG reductions in the transport sector beyond 2020, which is responsible for 25% of the UK’s emissions. Support for first generation biofuels in the short- to mediumterm will help to stimulate much needed investment in second generation biofuels,’ concludes Wenner. l

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James Barrett caught up with the CEO of a small Michigan biodiesel company to discuss its large future aspirations

Giving biodiesel the thumbs up

B

eing based in the US, a country that is a major player in the global export of ethanol products, Michiganbased Thumb Bioenergy’s (TBE) motto is ‘Local products creating local jobs producing local products’, solidifying an “every little helps” ethic to helping the world move towards cleaner, renewable energy.

‘The US alone consumes somewhere around 65 billion gallons of diesel fuel, with over half of that used for off road purposes. This compares to over 1 billion gallons of gasoline produced last year,’ says TBE CEO Leon Jackson, who adds that current biodiesel production would provide approximately 0.5% of total diesel use. ‘The ethanol industry will provide about 2.8% of the total fuel used in the gasoline market for the US.’ The gloves are off Jackson is not a fan of the large volumes of imported petrofuels, alongside the obvious environmental damage caused by burning them, as it adds to the US’s negative balance of payments. So TBE’s business plan is based on collecting used cooking oil from restaurants in and around an area known as the Thumb. That area covers the eastern side of the state and is so named because Michigan resembles a glove.

‘We convert the waste oil into biodiesel at our facility in Sundusky which is then used throughout the Thumb area for farming, heating and other applications requiring diesel fuel,’ explains Jackson. ‘We

biofuels international

Michigan: a g-lovely state, home to Thumb Bioenergy

presently collect used cooking oil from approximately 350 restaurants and food stores across the Thumb region.’

TBE made its first biodiesel back in the summer of 2008 but it soon found out that, although it was fairly easy to make the product, it was difficult to make biodiesel that met ASTM and EPA standards.

Jackson and his team spent the next two years experimenting and testing facilities to eventually meet and exceed those industry standards.

‘It took two years because it happened organically, we didn’t force anything,’ he explains.

‘The biodiesel produced in that time was used by us and some nearby farmers we knew, but our intention was always to grow the business to a commercial scale and we aren’t far off that goal now.’

Jackson believes his facility needs to be producing over 200,000 gallons of biodiesel to be able to compete with petrofuel providers and is moving quickly toward that goal.

An expansion plan was implemented that saw biodiesel production capacity double from approximately 6,000 to 12,000 gallons in 2010, then it

rose to 42,000 gallons in 2011 and again to 110,000 gallons last year. Investment into new tanks, capable of handling 1,000 gallons of liquid, has also been part of the forward progress.

‘Fortunately for us there are several market drivers that help provide a tail wind and enhance business opportunities for biodiesel,’ Jackson expands. ‘Things like energy independence, reducing greenhouse gases, reducing air pollution and health risks, enhancing engine performance and reducing engine wear are just some examples but, presently, the RFS2 programme is the key market driver.’

The feedstock for TBE’s operations currently comes from around 350 local restaurants and businesses around the Thumb region, but Jackson says it is not a case of simply heading out and harvesting it.

‘We face competition from 10 other companies for the used cooking oil around these parts, most of which deal in the animal feed sector,’ he elaborates. ‘Other commodities like yellow grease are not an option for us because of costs involved, so we pride ourselves on offering a good

deal to anyone who wishes to become a partner. We also give them containers to place the waste oil in for collection.’

Jackson says it is a pretty even split when it comes to profiling business partners – 30% like the fact their used cooking oil will be used in a renewable energy capacity, 30% simply want the best price for their waste product and the remaining 40% sit somewhere in between.

‘At this moment in time TBE offers between $1 and $1.25 a gallon to each and every supplier,’ Jackson adds. ‘We expect to produce over 175,000 gallons of biodiesel this year and the only thing stopping that will be not securing enough new suppliers to work with us.

I believe this will require about 150 additional restaurants and food stores joining in our vision over the next two years.’

Waste not, want not And, while using a waste product to such good effect, TBE makes sure nothing goes to waste via its production process.

‘We made it a priority in turning all feedstocks into either biodiesel or usable coproducts. Aside from used cooking oil for biodiesel, our inputs can include methanol and sodium methylate to create other outputs like crude glycerin and windscreen washer fluid,’ Jackson elaborates.

‘The crude glycerin is sold for processing into soaps, methanol and other products while the biodiesel and washer fluid are sold and used locally. The only waste water we generate is that used to wash our own hands.’ l

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biofuels profile James Barrett raised a glass and spoke to Merrick and Company’s VP Steve Wagner as he discovered the story behind its brewing ethanol success

Refreshing ethanol process

M

errick and Company is a global business that deals in multiple energy markets, plus sectors like life sciences and national security, but ethanol production is one of its key focuses and it is a beverage enjoyed by many all over the world that is providing the feedstock – beer.

Collaboration between Merrick and a Miller/Coors brewery based in Golden, Colorado has been yielding ethanol for 17 years and shows no sign of letting up.

‘Our facility, located right in the middle of the brewery’s site, produces 3 million gallons of ethanol a year which is a drop in the ocean compared to the 13 billion gallons made country-wide,’ says Merrick VP Steven Wagner.

The first of two on-site facilities became fully operational back in 1996 after Merrick agreed to purchase a brewing residual waste stream and upgrade it to fuel-grade ethanol.

‘The plan aligns itself with Colorado’s Front Range Clean Air programme,’ explains Wagner. ‘As we are a mile high, it is necessary to add oxygenate to petro to reduce carbon monoxide emissions.

Ethanol promotes more complete combustion in internal combustion engines as well as increasing octane levels, of which ethanol blends at 113 octane.’

A second facility came online in 2004 and doubled the ethanol end product to the current 3 million gallons.

Seamless: Merrick’s operations sit among the brewery facilities

The reason for the almost ten year gap between the two constructions is simple – as the brewery grew, so did its production of waste streams and it was simply the right time to expand operations.

Cause for concern?

Merrick has several local customers that purchase the ethanol but primarily it goes

to Sinclair Oil and Suncor Energy to be blended into petrol for transportation use.

‘Suncor distributes its product via Phillips 66 and Shell branded service stations in Colorado, under licence from Phillips and Shell Oil respectively,’ Wagner explains, but he goes on to say that the E10 blend wall in place across the US is an issue worth watching as there will come a

time where the subject could bring a ‘cause for concern’.

‘I fear it is a train wreck waiting to happen,’ he elaborates. ‘The renewable fuels standard in the US mandates ever increasing amounts of biofuels to be blended into the fuel pool.

The market has become so saturated with ethanol that a move to something like E15 would be a logical step forward but there is still a lot of opposition, not less from oil companies and the auto industry.’

He reveals that one big car manufacturer has even taken very public steps to show its non-support for a move to a higher ethanol blend.

‘Toyota has actually placed a cross through an E15 sign on its petrol cap, so that is a pretty plain stance,’ Wagner laments. ‘Other manufacturers like Chrysler, General Motors and Ford don’t seem to have an overt problem with an increase but obviously oil and refinery businesses would not welcome it either as it would cut their market share down by a further 5%.’

But with Wagner pointing to a target of 36 billion gallons of biofuels in the transportation sector by the year 2022, set by the Renewable Fuels Standard, it does seem the matter will have to come to a head sooner rather than later.

Import/export Merrick is also involved in helping others realise biofuels projects as its 17year stint in the renewable

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energy sector has given it the necessary experience.

The company has won two awards for its services to renewable biofuels projects over the past few years, in particular for services rendered in the engineering stakes.

With the current US government seemingly supportive of renewable energy projects, Wagner believes more market opportunities should become viable in the future.

However, when the subject of exporting comes up, he does not believe Merrick will be jumping onto that bandwagon any time soon.

‘We do have more capacity to produce additional ethanol than we are currently, so I’d never say never,’ he explains.

‘Nearby countries like Brazil and Argentina have a price advantage over US ethanol exports because of the recently imposed import tariff on ethanol into the EU27. This

tarriff is around $0.09 (€0.06) per gallon at the moment and applies only to US production.

Not many US producers can compete with that imposition.

‘Brazil may find it tough to keep up its export levels moving forward however. I believe it stands at 60 million gallons per month leaving its shores but, as internal demand keeps rising, the balance may shift and open up opportunities for others,’ Wagner adds.

Compared to the recordsetting year of 2011, the US ethanol industry exported significantly less ethanol in 2012. ‘While 2012 exports were lower than 2011’s record volumes, global demand for US ethanol remained relatively strong,’ Geoff Cooper, RFA’s VP of research and analysis, divulges. ‘Clearly, nations around the world are increasingly recognising the benefits of using a cleaner-burning, lower-cost alternative to petroleum.’

A total of 738.7 million gallons of US ethanol was exported in 2012, according to government data released recently. However, that is a 38% decrease from the record amount exported in 2011. Canada was the number one destination for US ethanol, bringing in 235.8 million gallons, while another 65.2 million gallons was exported to the UK and 59.5 million gallons to Brazil.

‘The Netherlands, UAE, Mexico and Peru were other top importers,’ Cooper adds, specifying that Mexico and Peru were new markets.

‘As we enter 2013, one of the ethanol industry’s top priorities will be to grow export demand and tap into new international markets.’

Extras One of the brewery’s residuals from its drying operation is yeast and condensate. ‘For

every pound of yeast pitched to the wort (the German term for what goes to the fermenter) you get three pounds back,’ explains Wagner. ‘We dry that yeast to produce the alcoholic condensate which we process into fuel grade ethanol.’

Other residuals are packaging losses, aged discards, and beer that does not pass the taste test.

Another use of dried yeast is for animal feed, particularly for cats: ‘The dried yeast goes into cat chow as yeast is 51% protein and is good for them.’

One other perk that the employees of Merrick get from working with the brewery, alongside this fruition business relationship, is a chance to taste the nonwaste liquids that make their way out from the process.

‘We do get to try fresh beer right out of the barrel on occasion and I’ve got to say it is not too bad at all!’ laughs Wagner. l

MARCH/APRIL 2013 Issue 2 • Volume 4

Cheap gas = less

biogas

The shale gas drilling boom is having an unfortunate side effect

Making money less of an object

The UK’s largest finance asset finance provider advises on how the industry’s biggest to overcome one of stumbling blocks

Regional focus: North America FC_Bioenergy_March/A

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biofuels biodiesel in the US Pre-processors, distillation, public or private equity, RIN futures, cold-soak, quality assurance – biodiesel producers face a barrage of variables everyday that affect revenue, sales and, most importantly, profits

Biodiesel’s big decisions

by Nicholas Zeman

‘M

oney isn’t brave’ is a statement that rings true and, particularly in the fuel and financial sectors, it can illustrate investors running away from turmoil. And even if nothing comes of the latest attacks on the US Renewable Fuel Standard, in the form of the RFS Reform Act, it could still scare investors away.

This is one of the reasons that Renewable Energy Group (REG), based in Iowa, released a report in April about the lasting impact of biodiesel and its benefits for food, fuel and financial markets.

‘There are not a lot of reports out there like this one,’ says Daniel Oh, president of REG. ‘The financial world is not deeply connected to agricultural processing, so we wanted to bring something out that could make investors more certain about the prospects of the biodiesel industry.’

REG’s report was released as Congress saw the introduction of the RFS Reform Act, the latest in a line of continuous, seemingly unrelenting, attacks on renewable fuels mandates from food manufacturing and oil producing industries. The Act would eliminate the biofuels mandate beginning in 2014 and rescind the requirements of blending up to 15% ethanol into the fuel supply. The proposal would reduce the total size of the RFS by 42% over the next nine years.

‘The way it looks is that the attacks will come but the EPA has been steadfast in its insistence that it

REG surpassed $1 billion in annual revenue for the first time in 2012

cannot, and will not, waive the RFS,’ says Raj Mosali, founder of Jatrodiesel, a biodiesel producer and technology provider.

‘What the biodiesel industry wants the world to know is that increased demand from biodiesel companies for waste fats has driven prices upward, creating an attractive alternative source of revenue for livestock and meat producers,’ the REG report adds. ‘In fact, analysis of the impact of biodiesel production on the value per head shows that cattle producers now earn up to an additional $16.79 (€12.90) when beef tallow is used in biodiesel production – more than twice as much as they earned in the past from these byproducts.’

Nevertheless, food manufacturers and livestock producers continue their aggressive campaign to defeat the RFS. ‘We are pretty much selfreliant but, in order to maintain that status, we cannot be asked to compete with federal

mandates like the RFS for the limited supply of feed grains,’ says National Cattleman and Beef Association’s Craig Uden.

‘In light of the worst drought to hit our country in over 50 years, and the ever-increasing renewable mandates, we are seeing many of our members making losses.’

‘As biodiesel production helps bolster farm profit margins, farmers and ranchers earn market-based incentives to boost their overall meat and

Daniel Oh, president Renewable Energy Group

grain production,’ Oh says in response. ‘When farmers make more money they produce more products, that is basic economics. When there is more meat or soyabean meal supply available, it relieves rising pressures on food prices. ‘‘Much of the vitriol is really directed at ethanol, but biodiesel gets lumped into that category by the general public. There’s no blend wall for diesel, so more equipment manufacturers are approving B20 or conducting tests to approve higher biodiesel blends. The diesel hybrids in Europe, for example, are being recognised as some of the most efficient vehicles in the world.’

REG surpassed $1 billion in annual revenue for the first time in its history last year, partly due to a successful IPO, so the reactions from public markets are of more a concern than ever for this biodiesel producer.

But it grew in every important category however, selling 188.4 million gallons of biodiesel last year (about 20% of the country’s 2012 output) and is poised to continue capturing the market’s upward trajectory.

But is the political environment compromising deals today, as tension surrounding the RFS in Washington soils the interchange between biodiesel marketers and their biggest customer – the obligated parties?

‘No, industries can have different strategies and goals but the obligated parties have put excellent people in their biofuels divisions, so they want to be compliant,’ Oh believes.

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Comeback Michael Laporte, CEO of Methes Energies in Toronto, agrees with Oh that the RFS makes the US a great place to deal in biodiesel. The company has been registered as an RFS certified producer and is moving biodiesel into the US from its plant in Ontario.

In 2012, Methes thought market conditions were good enough to go public and it navigated a successful IPO last November. ‘It’s a sign that capital markets are starting to open back up for viable biodiesel companies,’ Laporte says. ‘Investor interest in renewable energy projects and companies is becoming braver.’

Capitalising on that atmosphere is part of Methes’ long-term growth strategy.

‘Shares are a different currency which can be leveraged without depleting capital, so we think that is a big advantage,’ Laporte adds. The company uses the proceeds of the offering for the purchase or upgrade of equipment and rail track facilities at its Ontario facility, for example.

‘People are knocking on the door wanting to know how we did it, and not just biofuels companies,’ Laporte continues. ‘It is part of a much bigger plan, looking five to 10 years into the future. For one, it’s an advantage being a public company with many of the governments around the world, from the standpoint of being an “open book”. Then there is the increased ability to raise capital and tap into large pools of additional investors.’

As investors come back to renewable energy markets and support the growth of companies like REG and Methes, clusters of biodiesel plants that may have been shut for years are looking at starting back up.

‘The problem is that those plants do not often have the production capabilities necessary to compete in today’s market,’ says

biofuels international

Jatrodiesel’s Mosali. ‘Many, for instance, do not have a preprocessor so they have no multi-feedstock capabilities.

Some operators may not have retained a lot of their skills and knowledge, or maybe their permits have expired.’

Jatrodiesel has seen steady consulting and retrofitting work because of those reasons.

‘We’ve worked with four plants in the last 18 months,’ Mosali adds. ‘Requests have included the installation of distillation towers, or some need to be brought up to date on all the ASTM changes that have happened in the last three or four years.’

One major change is the requirement for biodiesel to pass the cold soak test under

pretreatment systems. The evolution of preprocessing technology in the biodiesel industry is the asset providing the direct benefit livestock producers obtain, as REG mentions, from new demand for animal fats such as poultry fat and beef tallow.

More corn oil is going into the market too and this produces a fuel that might have to be matched with the right buyer: ‘It is red in colour a lot of the time, so a lot of buyers don’t want it. We’ve been looking at dying the biodiesel just to avoid the problem,’ Laporte adds.

Two of the main pretreatment technologies in the market today are acid esterification, which uses sulphuric acid

Although soyabean oil remains the largest feedstock for biodiesel production, corn oil has become more popular American Society of Testing and Material guidelines, which determines the cold weather properties of biodiesel.

‘There are two ways to make cold soak,’ Mosali explains. ‘The first is to chill the biodiesel to a certain temperature and then reheat it. This causes the sterols to fall out and the fuel is then filtered to a purity that resists cold weather degradation. The other way is distillation which, although more expensive and causes a 2-3% yield loss, allows end product consistency every time.’

‘Cold soak was a speed bump, as its time it to resist degradation was basically cut in half,’ adds Laporte. ‘That is the biggest quality issue over the past year; it took some major adjustments and we helped some clients with it.’

Aside from purification, there are also several options when it comes to

and methanol to purify the feedstock, and glycerolysis, which is a high temperature process used in conjunction with enzymatic hydrolysis.

Acid esterifiction is the cheaper way, using two reactors and the infrastructure of an existing plant, plus the process can be automated.

‘You can go up to about 20% free fatty acid (FFA) with an esterification pretreatment system and 100% FFA with glycerolysis,’ Mosali explains.

‘But the reality is that 95% of all feedstocks on the market are less than 20% FFA. Glyerolysis also requires a decent boiler because the process uses more energy, and it needs glycerin as a catalyst.’

Waste byproducts were confined to generally low margin uses in the past, but REG says the investments in preprocessing have enabled biodiesel producers to add animal fats as a raw material.

Biodiesel producers were able to use approximately 1.29 billion pounds of animal fats in 2011 alone.

‘More companies are using tallow but the problem is that, for the most part, biodiesel produced from tallow cannot be used in cold weather because its cloud point is relatively high. So a lot of this biodiesel is being used in stationary applications like heating oil,’ says Dehran Duckworth, sales manager for Tristate Biodiesel. ‘Companies like Northstar Biofuels and others are however developing new methods and technologies for making higher quality biodiesel from tallow.’

Quality issues The latest national survey of 100% biodiesel samples by the US Department of Energy’s National Renewable Energy Laboratory (NREL) found that 95% of the samples from 2011-12 met ASTM International fuel quality specifications. These standards serve as industry guidelines and are designed to ensure quality at the pumps, along with reliable operation of the nation’s vehicles powered by biodiesel blends.

‘The survey showed a major improvement over results from previous years,’ senior NREL chemist Teresa Alleman says. ‘In our 2007 survey of B100 biodiesel, less than half of the samples met quality specifications. More stringent quality requirements, along with the voluntary BQ-9000, are among the reasons for this marked improvement.’

The fuel itself has made huge strides, but the biggest quality issue facing biodiesel producers at the moment is the quality of renewable identification numbers (RINs).

Fraud and mismanaged generation have led to a wild, volatile market for RINs. This chaotic environment is one condition causing price swings and the need for third party auditing and quality assurance.

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biofuels biodiesel in the US The comment period of the EPA’s proposed rules for a voluntary RIN integrity programme closed on 18 April.

The proposed rule creates a structured process for buyers of RINs to verify their validity.

‘Producers having a quality assurance programme in place will have an advantage in the marketplace by assuring their customers of their legitimacy,’ says Shashi Menon, a managing partner in engineering firm EcoEngineers.

‘But, critics of the programme believe it will be a cost burden, especially for small producers.’

RINs, like soyabeans and diesel fuel, are now a tradable commodity and the Chicago Board of Trade will launch a RIN futures contract in May. This side of the business is far from the scientific, mechanical aspects of maintaining a plant and producing fuels and chemicals, which is more

common in the industry than risk management, sales and marketing sophistication.

Mosali believes a lot of brokers and companies are now negotiating tolling agreements, which allows a facility to focus on processing without having to market fuel or procure feedstock, while a third party retains ownership of the materials being processed.

‘The biggest expense is feedstock so if you have a company that is willing to provide it all, and take all of the fuel, then it’s a good situation,’ he adds. ‘It’s more manageable to be responsible only for the maintenance of the plant and making spec quality fuel and so forth.’

But one side effect is that purchasing companies will make sure everything is working properly and spend time observing the

mechanics of a plant before moving in and buying it out.

‘This is happening a lot as big companies are buying plants up,’ Mosali continues. ‘The ones with good infrastructure are being bought, but they must be viewed from a healthy position from the off.’

This phenomenon could be the precursor to a heightened period of mergers and acquisitions, but how do small companies compete with the monolithic vertically integrated companies like REG? ‘We have different models, so we are not in the same game really,’ Laporte says.

‘We do have the same standards to meet, like ASTM and BQ 9000, but we don’t compete for end product. We are a technology player, with equipment and services for deployment to our clients.’

With all of these

developments, and the emergence of firms like Jatrodiesel and Methes that get plants back online making quality fuel, production is trending upward, even maybe expanding beyond the RFS requirements and might compete at a broader advanced requirement.

Although soyabean oil remains the largest feedstock for biodiesel production, corn oil has become more popular as more dry-mill ethanol producers extract corn oil and increase its availability as a biodiesel feedstock.

Producers and investors alike seem to be starting to ignore the attacks on the RFS as the technological power of the industry grows to produce fuel from a wider variety of sources, and money is being used to back the decisions being made by biodiesel in 2013. l

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Corn and RIN price issues still dominate US ethanol, but expanding its feedstock options and customer base would change all that

A diversified solution

C

by Nicholas Zeman orn will set records this year as it receives the most support since 1936 as it tops 97 million acres, according to a US Department of Agriculture crop report in April.

Ethanol producers hope that means an abundant supply in their own backyard but, for firms like Guardian Energy and Blue Flint Ethanol (BFE), planting season brings with it a new set of challenges, such as snow cover throughout most of Minnesota and North Dakota – states heavy in corn production where the companies reside respectively.

‘For the most part, planting hasn’t even started yet,’ says Jeff Zueger, BFE general manager. ‘We had 18 inches of snow in mid-April and it has hampered the start of the season, but there is still opportunity to get strong planting sessions in. Things will not get too tense until about mid-May because, if farmers are still waiting to plant at that point, things

biofuels international

could get very challenging.’

Weather conditions and planting reports heavily affect futures prices for both corn and ethanol. So, if planting in major portions of the US corn belt is delayed, traders are likely to start buying up corn contracts into the first or second week of May as prices shoot up.

So far, however, crush margins have strengthened since the beginning of 2013 and ethanol producers are busy trying to position themselves to take advantage of the improving environment. BFE, for instance, is optimistic that this year will be less heartbreaking than 2012’s buffet of drought ravaged corn crop, short petrol prices and RIN prices near zero.

‘The good news is North Dakota saw a doubling in corn production last year and we think we will be near 4.1 million acres this year,’ Zueger says. ‘Having a good crop in our own backyard is absolutely beneficial because North Dakota wasn’t as negatively affected by the

long drought as other parts of the country were last year.’

In a report on the domestic market in the US, Iowa State University and the University of Missouri’s joint Food and Agricultural Research Policy Institute (FARPI) asked the question: ‘Why are renewable identification numbers (RINs) so low?’

‘Once the blend wall was approached, in combination with an absence of E15 and E85 vehicles on the road, we expected RIN prices for ethanol would start to rise. But they didn’t and there might have been some speculative behaviour keeping them low,’ says Julian Binfield, analyst for FARPI. The blend wall Binfield refers to is that almost all petrol contains 10% ethanol and there is not a lot of room for corn ethanol’s continued growth under current federal regulations. But, surprisingly, refiners have had trouble meeting the current E10 mandate through ‘actual

gallons purchased’ because a stagnating petrol market means they are buying conventional ethanol RINs. BFE says speculators are buying up RINs in anticipation of a shortage next year, but the process is actually counter-productive.

‘It doesn’t make sense to buy a RIN when you can buy a gallon of ethanol for blending with petrol which helps drive the price down, plus you get a RIN along with the energy gallon,’ Zueger says. ‘There is an excess of RINs in 2013 but the price run-up could certainly have to do with speculation about what is going to happen in 2014. There is expected to be a shortage of RINs and an inability to get further gallons into the marketplace. But that is exactly what we want to see happen, more gallons.’

Refitting, recalibrating The ethanol industry is spending again as margins get more comfortable. It is investing

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biofuels ethanol in the US in itself as part of a longterm strategy to diversify and make total use of its assets in chemicals, fuels, real estate and agriculture because it knows what will happen if it does not.

The Energy Information Administration has stated that so-called ‘simple plants’, unable to recover corn oil or perform other value added operations, represent a ‘diminishing portion of the ethanol industry’ since several have temporarily shut down with ‘at least 20 idled by January’.

Ethanol plants with corn oil recovery units are able to earn more revenue, so they usually have higher profit margins than plants without, even if their production costs are slightly higher. Profit margins at plants capable of corn oil recovery in recent years have been $0.15-20 (€0.11-15) per gallon higher than at plants without that capability. Adding corn oil extraction can make a difference but plants are digging even deeper in the search for equipment and technologies that can further boost profits.

Cleveland-based Arisdyne Systems believes that yield enhancement, energy cost reductions and adding revenue streams are essential to survival.

‘Last year corn was in short supply and lots of projects at ethanol plants were derailed or cancelled,’ Fred Clarke, VP of Arisdyne, says.

‘Our business really started to sour but the EPA changed its expectation for cellulosic ethanol. The lowest hanging fruit was to combine starch and cellulosic components,’ Clarke continues. ‘We call this generation 1.5 and it helped make more starch available to achieve higher yield, not only in corn but corn stover as well.

The EPA did not recognise corn fibre as a cellulosic material in the past, now it does.’

Arisdyne recently received a patent for its apparatus and method for increasing alcohol yield from grain using hydrodynamic controlled flow cavitation. The patent

recognises its ‘ability to depolymerise the grain by exposing entrapped starches, thereby increasing the rate of liquefaction of the starch’.

Recovering waste streams has also remained a focus.

Large ethanol facilities in North Dakota have waste streams to

Waco, Texas in April. ‘There were different codes back then, but the 21st century is a safer, more efficient, age.

Fertiliser plants are very capital intensive, around $1.3 billion for a large system. We’ve got new technology and systems in place which we hope

‘Speculators are buying up RINs in anticipation of a shortage next year, but the process is actually counter-productive’ make methane gas and they are also looking to incorporate new equipment into their operations which can make them more profitable and protect from corn and petrol volatility.

‘North Dakota corn growers are progressive thinking when it comes to maintaining and upgrading sustainability; they don’t take anything for granted,’ says Justin Eisenach of Colorado-based Agrebon Systems, which provides ethanol plants with a system which can recover methane gas to make fertiliser.

‘It’s a bolt-on technology manufactured at a commercial site as ethanol plants use a lot of nitrogen in fermentation,’ Eisenach adds. ‘We provide the capital, they provide the land lease, access to backup utilities and other amenities – it’s a symbiotic relationship.’

Agrebon’s system was originally developed as a solution to lowering the carbon footprint for Pepsi’s Tropicana orange juice brand: ‘Little did we know at the beginning that, while lowering that footprint is nice in the food industry, it is required for fuel,’ he adds.

The Agrebon system is one way for aging equipment and manufacturing templates in the fertiliser industry to be upgraded, and the ethanol industry is helping it get off the ground.

‘That facility had been around since 1958,’ Eisenach explains when considering a fertiliser plant explosion in

will help ethanol producers diversify its product offerings.’

Winning support California-based Fulcrum Bioenergy has developed a business model and technology to make biofuels from municipal solid waste and has official support.

‘We applied for a Department of Energy loan guarantee, but that came to a halt,’ says Fulcrum president Rick Barraza. ‘But then there was an opportunity with a similar loan guarantee from the USDA, and we were selected for approval last September.

We expect to complete our equity financing and start construction of our first project in Nevada next year.’

Fulcrum has designed a catalyst that can make not only

ethanol but other fuels such as diesel and jet fuel, for example,’ Barraza explains. ‘So we can produce what we believe will be the most valuable fuel in the market place. In addition, we have contracts already in place throughout the country to acquire feedstock at zero cost to the company.’

Still, Fulcrum got the message that investors in the public market were skeptical and pulled an initial public offering last autumn: ‘The market for industrial companies that are new, innovative or first of its kind is like this – people get excited about the story and like the business model, but just weren’t comfortable with the risk. That was part of our reasoning for withdrawing the IPO, and there are some good options to explore in the private equity sector.’

As capital opens up and margins improve, projects continue at existing and future sites across the US. In California, Aemetis Ethanol installed new equipment this year to process grain sorghum, a fast growing crop on the US agricultural scene.

Part of this growth is because sorghum’s current status with the EPA which, in December, approved the use of grain sorghum feedstock along with biogas in a combined heat and power system to produce an advanced biofuel containing approximately 50% lower

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carbon content than petrol.

Aemetis shut down in January to retrofit the facility as it knew advanced biofuel generates ‘D5 RINs that have traded at a premium to traditional ethanol D6 RIN’s’.

Eric McAfee, Ametis CEO, says the company spent $5 million to enable ‘the plant to produce Advanced Biofuel in a flexible configuration that enables the use of multiple feedstocks and energy sources’.

More gallons produced by sorghum could also stop some ‘circular trade’ going on between the US and Brazil.

Brazil’s sugarcane fuel currently meets the Renewable Fuel Standard (RFS) requirements for advanced biofuels defined as renewable fuels made

fertiliser as diversification means less risk. But the industry should diversify its customer base as well as its product portfolio by seeking out those companies who can gain an advantage in their own industries by using advanced biofuels, distillers grains and other products.

This is important not only from a standpoint of the RFS, which forces oil companies to become biofuels customers, but numerous other global initiatives can be supported by ethanol like the Kyoto Protocol, United Nation’s Framework Convention on Climate Change Programme and other public and private sustainability concerns.

This quality will become more of an issue as ethanol

‘Ethanol plants are becoming more integrated biorefineries as diversification means less risk’ from non-food crops with low input requirements.

‘Brazil was sending a large percentage of its ethanol to the US and then importing corn-based ethanol back in because it was short on its own supply,’ says Binfield.

‘There are some plants that will be using sorghum as a feedstock and those will help meet the advance biofuels requirement, but for now most of it is being fulfilled by sugarcane ethanol from Brazil.’

To increase the availability of sorghum in the Californian market, Aemetis’ Chicagobased partner Chromatin, is providing growers with a hybrid sorghum seed that can be used as an effective double crop alternative behind wheat, or in rotation with cotton and vegetable crops.

Environmental management solution Ethanol plants are becoming more integrated biorefineries capable of producing chemicals, fuels, feed and

biofuels international

producers look to expand their portfolio of customers beyond any obligated party. The ethanol industry needs to convince corporate consultants that biofuels are good for business.

Sustainabililty, biodiversity, and carbon reduction are all buzz words in the corporate world, but they also represent a movement that is here to stay.

‘It’s going to be an unrelenting requirement to use biofuels under global environmental protection efforts,’ says Rebecca Ranich, regulatory affairs manager at Deloitte Consulting.

Emissions reduction schemes in the EU and the US are requiring companies to think about their natural resource usage in ways they never have before. ‘We advise them on how they consume different fuel products, reduce their carbon footprints and the strategic opportunities biofuels offer businesses,’ explains Ranich.

‘Our view has been that biofuels are an opportunity rather than a nuisance and all options should be evaluated competitively. l

Get Ready for the FEW

www.fuelethanolworkshop.com

June 10-13, 2013 America’s Center | St. Louis, MO

Where Producers Meet 866-746-8385 | service@bbiinternational.com |

#FEW13 | @ethanolmagazine

Producers representing 87% of all U.S. installed capacity attended last year.

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biofuels plant update

Plant update – ethanol in the US Aemetis and Cilion Location California Alternative fuel Ethanol Capacity 55 mgy Construction / expansion / Aemetis acquired Cilion, which acquisition included its production plant Completion date July 2012 Investment Third Eye Capital, Aemetis’ existing senior lender, provided a $15 million (€11.4 million) term loan and an $18 million working capital financing facility to assist in the purchase and to provide ongoing working capital

Ineos New Planet Bioenergy Location

Vero Beach, Indian River County, Florida Alternative fuel Cellulosic ethanol Capacity 8 mgy in addition to 6MW of renewable power Feedstock Renewable biomass including yard, vegetative and agricultural wastes Construction / expansion / Construction acquisition Completion date Construction finished in June 2012 and production began at the end of the year Investment $130 million (€99.5 million)

LS9 Location Alternative fuel Capacity Construction / expansion / acquisition Completion date Investment

Comment

Okeechobee, Florida Renewable products 75,000 gallons a year Retrofit June 2012, with large-scale production commencing later in the year FOF’s Clean Energy Investment Programme invested $4.5 million (€3.6 million) that helped fund the facility’s retrofit earlier in the year The plant helps LS9 improve its production process and generate large commercial volumes for testing. The samples can also be analysed by the company’s key partners and potential customers

Valero Energy Location Indiana, Nebraska and Ohio Alternative fuel Ethanol Capacity 110 mgy in total Feedstock Corn Construction / expansion / Resume operations acquisition Comment Valero idled three of its ethanol plants in June last year due to the US drought, which placed pressure on corn levels and prices. The company has since resumed production at its facilities in Ohio and Nebraska, aiming to bring back online its Indiana-based plant too

The Andersons Location Denison, Iowa Alternative fuel Ethanol Feedstock Grain Construction / expansion / The Andersons acquired the plant, acquisition now named Andersons Denison Ethanol, from Amaizing Energy Denison and Amaizing Energy Holdings Completion date May 2012

DuPont Location Iowa Alternative fuel Cellulosic ethanol Capacity 30 mgy Feedstock 1,300 tonnes of corn stover Construction / expansion / Construction acquisition Designer / builder Fagen and KBR Project start date November 2012 Completion date End of 2014 Investment $200 million (€153 million)

Patriot Bioenergy Location Whitley County, Kentucky Alternative fuel Ethanol Feedstock Beet Construction / expansion / Construction acquisition Project start date September 2012 (announced)

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Sundrop Fuels Location Louisiana Alternative fuel ‘Green gasoline’ Capacity 50 mgy Feedstock Forest waste and hydrogen from clean-burning natural gas Construction / expansion / Construction acquisition Designer / builder Sundrop is using ExxonMobil’s methanol-to-petrol technology Project start date End of 2012 (broke ground) Completion date End of 2014 Investment $450-500 million (€345 - 385 million)

Primus Green Energy Location New Jersey Capacity 33 litres of petrol per hour Construction / expansion / Construction acquisition Project start date July 2012 Completion date End of 2012 Investment $7 million (€5.3 million) Comment The facility will serve as a proving ground for the company’s first commercial plant, which it hopes to break ground on this year

Chemtex and USDA Valero Energy Location Upper Peninsula, Michigan Alternative fuel Cellulosic ethanol Feedstock Woody biomass Construction / expansion / Construction acquisition Designer / builder Mascoma developed the wood-toethanol process which combines woodchips with microorganisms Completion date Late 2013 Investment $232 million (€177 million). Valero is the majority owner after investing $132 million of this

Location Sampson County, North Carolina Alternative fuel Cellulosic ethanol Feedstock Energy crops Construction / expansion / Construction acquisition Project start date 2012 (announced) Completion date 2014 Investment The partnership with the USDA will see $99 million (€75.7 million) support the plant’s construction Comment Chemtex will work with Novozymes to produce the cellulosic ethanol

ZeaChem Purified Renewable Energy and Minnesota Energy Location Buffalo Lake, Minnesota Alternative fuel Ethanol Feedstock 25 mgy Construction / expansion / The Minnesota Energy plant has been acquisition renamed Purified Renewable Energy following an acquisition Project start date April 2012 Completion date September 2012

Choice Ethanol Holdings Location Atkinson, Nebraska Alternative fuel Ethanol Capacity 44 mgy Construction / expansion / Choice Ethanol Holdings acquired the acquisition idled NEDAK Ethanol plant Project start date Idled in June 2012 Completion date January 2013 Investment $22 million (€16.8 million)

Advanced Bioenergy and Flint Hills Resources Location Nebraska Alternative fuel Ethanol Capacity 115 mgy Construction / expansion / Flint Hills Resources acquired the acquisition plant from Advanced Bioenergy Project start date October 2012 (announced) Completion date End of 2012

biofuels international

Location Boardman, Oregon Alternative fuel Cellulosic ethanol Capacity 250,000 gallons per year Feedstock Biomass, including willow Construction / expansion / Construction acquisition Completion date October 2012

Global Partners Location Clatskanie, Oregon Alternative fuel Ethanol Capacity 110 mgy Construction / expansion / Global Partners has acquired 100% of acquisition the plant Project start date January 2013 (signed agreement) Completion date End of Q1 2013 Investment $95 million (€72.7 million)

Pennsylvania Grain Processing Location Clearfield, Pennsylvania Alternative fuel Ethanol Capacity 110 mgy Feedstock Corn Construction / expansion / The plant has resumed operations, acquisition having been idle for about one year.

The $270 million (€207 million) facility was acquired at auction earlier last year for $9.35 million Project start date June 2011 (idled) Completion date July 2012 (production began)

*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

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capitalists and oil companies holding an ever-increasing share.

Market conditions in 2012 accelerated the industry consolidation already well underway—plants with underlying stability were able to ride out unfavourable commodity prices, while owners who came into the year already experiencing difficulty were faced with considering selling their plants.

biofuels M&As

Minnesota-based industry analysts and reviews theoflay of theexperienced US However, things areChristianson a bit different today than Partners they were in the earlier round challenges ethanol producers inlooking 2008. Backto then, many just getting off the ground, still optimizing ethanol land and offers by tips to anyone buy orplants sellwere facilities

No longer a fledgling industry

processes, and heavily mired in start-up expense and debt. By reviewing financial factors such as earnings, it’s clear that many plants were much better poised in 2012 to weather a tough year, having experienced several years of steady profitability from 2009-2011. Overall average earnings remained positive in 2012 (albeit narrowly so), and even the bottom 25% of plants by earnings (in the laggard category shown in the chart) fared much better than the troubled plants of 2008.

N

o doubt about it, the US ethanol industry continues to consolidate. Although the origins of many plants lie in farmer-owned cooperative ventures, over time the landscape has changed.

Today, most plants are operated as LLCs or as part of larger corporate structures, with venture capitalists and oil companies holding an ever-increasing share.

Market conditions in 2012 accelerated the industry consolidation already well underway - plants with underlying stability were able to ride out unfavourable commodity prices, while owners who came into the year already experiencing difficulty were faced with considering selling their plants.

Position of strength Things are a bit different today than they were in the earlier round of challenges experienced by ethanol producers in 2008, however.

Back then many plants were just getting off the ground, still optimising processes and heavily mired in startup expense and debt. By reviewing financial factors, such as earnings, it is clear that many plants were better poised in 2012 to weather a tough year because of experiencing years of steady profitability from 2009-2011.

Overall average earnings remained positive in 2012 (albeit narrowly so), and even the bottom 25% of plants by earnings (in the laggard category shown in the chart)

EBITDA (U.S. Dollars Per Production Gallon for All U.S. Plants)

$0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 -$0.10 -$0.20 -$0.30 2008

2009

Average

Leaders

2010

2011

2012

Laggards

US dollars per production gallon across all US plants

This kind of industry maturity has changed the way plant acquisitions occur. Companies looking to purchase assets tend to the have an existing portfoliothe and are seeking opportunities build upon fared much better than a shutdown, ownership can do toto present their their current synergies; looking to divest of assets often aren’t in single-option troubled plants of companies 2008. team must themselves constantly evaluate plant in the best light to a situations and have to explore and review their potential options. buyer, including: This kindlike of bankruptcies, industry thetime feasibility of resuming maturity has changed the way plant acquisitions occur. Companies looking to purchase assets tend to have an existing portfolio and are seeking opportunities to build on their current synergies; companies looking to divest themselves of assets often aren’t in single-option situations, like bankruptcies, and have time to explore and review their options.

The recent possible-sale announcement by Denverbased BioFuel Energy typifies the current environment.

After a decision to temporarily shut down its southern Minnesota plant due to high corn prices, the company announced in late March that it was investigating selling the plant. That situation is a common one this year; many plants temporarily halted production in late 2012. As time goes by during

operations or selling.

Deal or no deal?

How can a plant’s owners ensure that they’ll get the best offer if they do decide to seek a buyer? The most important thing any owners can do is to keep in mind that there is always the potential for a sale opportunity to arise.

In the current atmosphere, it is a good idea to keep a potential future sale in mind when making any decisions related to the management of the business.

This attitude helps keep the executive and ownership team focused, not merely on profit, but on maintaining a competitive edge to ensure that the business is always an attractive asset.

With this attitude in mind, there are several specific things a potential seller

1) Be proactive about getting the business in order: This means ensuring all permits are up to date, maintenance logs and financial documents are current and plant policies, procedures and margin management plans are documented and clearly presented. Being prepared to tell the story of the business sets the right first impression and builds trust with a potential purchaser as they are provided with a complete and accurate picture.

2) Know your industry: It’s important for plant owners to educate themselves about economic conditions surrounding their business and to know what is happening in the local and national ethanol industry. This allows them to present facts in a realistic but optimistic light.

42 may/june 2013 biofuels international

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For instance, any assumptions made in business forecasts can be backed up with practical facts from other, similar businesses.

Knowing what is happening in the industry also allows plant owners to keep an eye open for possible improvements they might make to the plant that will make it appealing to a potential purchaser (but bear in mind that it is also important to keep debt in control – improvements don’t make sense if making them means over-leveraging).

3) Allow for time: Plenty of time should be allocated to investigate and allow buyer opportunities to develop during the process of exploring an ownership transfer; this will help maximise the value of the

business and find, not just any buyer, but the right buyer.

Head of organisation What if a company is looking to acquire ethanol production assets? What should they look for and be wary of?

Different organisations have different goals – some seek plants that align with their current technologies to ensure that they are familiar with operational aspects, while others may be looking to invest in a new technology.

Some buyers feel it is advantageous to add capacity in their own region; others may be diversifying geographically.

It is just as important for a potential buyer to understand what will add the most value to their portfolio, as it is for a potential seller to understand

their plant’s unique position in the marketplace. Setting clear objectives as a buyer saves time for both sides.

Again, well-organised data is a key indicator of a good opportunity, so think twice when dealing with a disorganised or incomplete presentation of business information. Be sure, too, that the board and management team seem aligned on the decision to sell as this will keep everyone involved on track with maintaining the value and operational condition of the plant throughout the sales process.

to help assess any given plant and decide what is best for its long-term future.

Many seasoned industry veterans are ready to help explore options, so there are ample opportunities for buyers as well as sellers in the marketplace to make financial choices that best fit their own situation. The best policy for all parties is to know their niche and to stay alert for opportunity. l

Explore the options The long and short of it is that ethanol production is no longer a fledgling industry. A great deal of data is available

For more information: Christianson and Associates is an accounting and consulting firm which manages an ethanol industry benchmarking programme in the US and Canada www.christiansoncpa.com

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Co g

T Feedstock o r r e fac ant r pl we ioelectricity Therm tion Po a n B l po tio w er

en

World Biomass Power Markets CONFERENCE AND EXHIBITION 15-17 May 2013

Okura Hotel, Amsterdam, The Netherlands

THE WORLD'S LEADING BIOMASS-TO-POWER EVENT Part of the:

WORLD BIOMASS POWER GLOBAL SERIES

Green Power’s World Biomass Power Markets will be the world’s largest conference and exhibition focused exclusively on biomass for thermal power and heat generation. Previously known as Biopower Generation and co-located with our World Biofuels event in Rotterdam, this year the event will stand alone.

The only global industry forum for the entire biopower supply chain: Utilities, IPPs, Project Developers, Pellet Producers, Chipping and Pelleting Equipment, Boiler Suppliers, EPCs and Engineers, Financiers, Investors, Politicians, Regulators and Freight & Logistics.

A top-level, large scale forum for the entire biomass-to-power sector to debate the issues that matter to your business: How Will Regulatory Change and Policy Uncertainty Affect the Biomass Power Sector?

Evaluating the Viability of a Project from the Point of View of Different Risks Along the Supply Chain Using Pellet Standardisation Criteria as a Tool to Influence Policy in Europe New Feedstocks and New Supply Chains How Impurities in Feedstock Affect Lifetime Quality of Plant Equipment How Can the Biomass Power Sector Co-Ordinate More Effectively to Better Promote the Emissions and Sustainability Credentials of the Industry?

ts lle Pe

www.worldbiomasspower.com biofuels international

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biofuels heat exchange Beta Renewables uses heat integration as one way of reducing emissions and keeping its commercial plant profitable

Warming to the challenge

S

econd generation ethanol processes are gradually moving from the pilot and demonstration stages to full-scale production plants.

Having solved initial issues like getting processes to work, ethanol manufacturers must now focus on optimising production economy to become competitive.

Energy cost is a large part of any ethanol plant’s budget, putting energy efficiency high on the agenda for all plant managers. Optimising the use of heat often has a big impact on profitability, so heat integration is a straightforward way to improve energy efficiency and can lead to big cuts in operating cost.

There are many ways to reuse energy in a second generation ethanol plant. One example is using low-grade steam, such as evaporated vapour, as a heating medium instead of exhaust steam.

Another is to use the energy in hot streams, for instance condensate or warm product, to preheat cold streams.

Trailblazing

chemical-free pretreatment and low costs. The Crescentino plant is the first full-scale test of the Proesa process, but BR and its partners have already started working on their next plants.

The entire project has had a strong focus on production economy. The goal has been to develop a complete and financially viable solution for production of ethanol and other bio-based chemicals from non-edible biomass such

Beta Renewables (BR) began production at its Crescentino plant in northern Italy in late 2012. It is the first full-scale second generation ethanol plant in the world and will initially produce 40,000 tonnes per year (tpy). The company will then gradually ramp up production to 60,000 tpy.

Development started at laboratory scale in 2007 before building a one tpd pilot plant, which has been operational since 2009. The result is a new lignocellulosic bioethanol process called Proesa that offers feedstock flexibility,

The heat exchanger is a key component in a heat integration system

Investments in heat integration have proven profitable and have short payback times. As an added bonus, CO2 emissions and climate impact are often reduced as well. Keeping CO2 emissions to a minimum is important for the credibility of the ethanol industry and can also have a monetary value if operating under a cap-and-trade system.

as energy crops, corn stover, rice husk, bagasse and straw.

To ensure good production economy, BR also invested in agronomic research and investigated how to improve crop yields, crop management, harvesting, handling and transport.

The company minimised investment and production costs by simplifying the process as much as possible.

One example is the chemicalfree pretreatment that saves

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chemicals and means lower grade materials can be used in the plant. Another is that the biomass can be used as collected, without prior drying.

Heat integration at Crescentino Minimising energy consumption has been an important part in keeping operating costs down in the Proesa process.

The entire Crescentino plant has been designed with energy efficiency as a guiding principle.

An example of this is the heat integration between the pretreatment and distillation stages. To reduce exhaust steam consumption, the engineers at BR designed a solution where vapour produced in the pretreatment stage is reused as heating medium in the mash column reboiler. This leads to energy savings and a cut in operating cost.

The set-up requires a reboiler on the mash column that can operate with a very small driving temperature difference, i.e. the temperature difference between the heating and boiling media.

A standard shell-and-tube heat exchanger would be impossible to use in this duty since it requires at least a 10°C temperature difference.

The engineers at BR contacted equipment manufacturer Alfa Laval for advice on how to realise the design. Having worked with numerous ethanol plants, Alfa Laval engineers helped pick a suitable heat exchanger for the task.

The solution was to use plate heat exchangers as reboilers as their higher thermal efficiency means they can operate with a driving temperature difference as small as 3°C. Most processing industries have some type of heat integration in their processes, but many still use shelland-tube heat exchangers

biofuels international

with low thermal efficiency.

The heat exchanger is a key component in a heat integration system and choosing the right type has a direct impact on bottom lines.

Modern plate heat exchangers offer many benefits over shell-and-tubes.

They allow companies to use low temperature streams for heating and can increase heat recovery by up to 50%.

More energy is put back to use; energy that would otherwise have gone to waste.

A knowledgeable equipment provider is important when building plants in developing industries, such as second generation ethanol. The provider must have a holistic view, the expertise to be able to read between the specification lines and a focus on getting the process to work.

with a counter-current flow (i.e. the hot fluid enters the heat exchanger at the end where the cold fluid exits).

This makes it possible to handle crossing-temperature programmes in a single heat exchanger (i.e. to heat the cold fluid to a temperature that is higher than the outlet temperature of the hot fluid).

This is especially important in heat recovery since the maximum amount of energy is recovered when the cold fluid is heated to a temperature close to that of the hot fluid.

The high efficiency means plate heat exchangers can exploit very small temperature differences and makes it possible to profit from heat recovery from sources that have previously been deemed worthless.

Turbulence and countercurrent flow

When designing the utility system for a new plant, or when upgrading an existing one, it is a good idea to investigate how heat integration can help keep investments in heating and cooling capacity to a minimum.

Switching from shell-andtube to plate heat exchangers can often be a good way to resolve bottlenecks related to cooling and heating in existing plants. With a little luck production can be increased with new heat exchangers

The superior thermal efficiency of a plate heat exchanger is the result of its highly turbulent flow. The small thickness of the plates also has a positive effect on heat transfer. The result is an overall heat transfer coefficient that is three to five times higher than for a shelland-tube heat exchanger.

An important feature of plate heat exchangers is their capability to operate

Design and maintenance

and existing utility systems.

A key feature of a plate heat exchanger is its highly turbulent flow. Apart from improving heat transfer, it also makes it less susceptible to fouling.

High turbulence means fouling deposits do not build up as fast as in a shell-andtube heat exchanger. The result is longer service intervals, more uptime and more recovered heat than for a shell-and-tube solution. Less fouling also leads to lower cleaning costs.

Summary Second generation ethanol processes have proven to be technically feasible in a number of pilot plants across the world. Through its Crescentino plant, BR has proved that it is possible to produce second generation ethanol on a commercial scale at a competitive cost.

Heat integration is an easy and straightforward way to increase energy efficiency and lower operating costs.

But it is important to choose the right heat exchangers for the different positions. To obtain the best results a close contact with an experienced supplier is recommended. l For more information: This article was written by Karin Öhgren Gredegård, biofuels market manager for Alfa Laval Tel: +46 46 36 77 74 karin. ohgrengredegard@alfalaval.com

All bases covered: Crescentino ensures all byproducts are produced as viably as ethanol

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biofuels DDGS Pannonia Ethanol’s Steve Moore believes disregarding DDGS simply as a by-product of ethanol production is a narrow minded game

Waste not, want not

O

ne debate within Europe regarding biofuels appears puzzling to their American counterparts. Issues that have been resolved long before, in other parts of the world, keep arising here in the ‘Old World’. Yet what is particularly troubling is not just the on-going debate but that a significant part of the industry story is either overlooked or unknown to many of the participants.

Dried Distillers Grains with Solubles (DDGS) is a high protein co-product of the dry mill ethanol production process. Ethanol production only removes the starch from the corn kernel so the remainder - protein, oils, and fibre - are collected and distributed as a nutritious, high quality animal feed.

A general rule of thumb from the US is that any plant’s success each year is based on the results of the DDGS. To treat it as a by-product, and not a co-product, is a massive mistake because despite its important role, DDGS become more critical in years where ethanol margins are tight.

Though the vast majority of an ethanol business

comes from large volumes of ethanol, Pannonia Ethanol is increasingly seeing itself as a provider of high quality feed ingredients that also produces ethanol. As much of the world’s population has an increasing desire for protein-rich diets, particularly in the developing world, the role of ingredients like DDGS will play an important role.

To not completely understand the value of DDGS and maximise its revenue is a massive mistake on the part of grain ethanol producers.

Practice what you preach The benefits of DDGS are not just limited to those who produce them as there are substantial social benefits that can be attributed to the production of this feed component. For example Pannonia’s plant, which is located in rural Hungary, faces challenges with employment like many rural areas. A peer reviewed economic impact assessment of its project, performed in July 2012, concluded that keeping all of its DDGS production would add an extra 100 indirect jobs into the country.

The company-branded DDGS is made from nongenetically modified (GM) maize produced in the European Union. It acts as a partial substitute for imported GM protein sources and, in addition, Pannonia uses no antibiotics in its production process. As many are aware antibiotics in the food supply, and the increasing resistance of viruses to them, is becoming as big a concern as GM organisms.

As more questions arise about food security from recent incidents in Europe, feed ingredients produced safely within the EU can contribute to increased European food security.

Concerns about greenhouse gases (GHGs) continue to be an issue but well produced DDGS can have lower GHG emissions than imported protein meals. While Renewable Energy Directive (RED) sustainability criteria do not formally apply outside of biofuels, this is not part of the regulatory environment.

In a normal year, Hungarian maize will produce the equivalent of 2.5 tonnes a hectare of pure protein. What this means is that less land is required in central Europe than in most jurisdictions.

Additionally, the land utilised is all low carbon stock.

What does the future hold?

Mountain of gold: DDGS will play an important role in the future of ethanol producers

DDGS clearly has a role to play in Europe as not only a high quality partial substitute for imported protein meals. While there are many research initiatives underway to extract additional

value Steve Moore, sales manager at Pannonia Ethanol, believes the following three broad trends can be expected: 1) Blends of various nontraditional corn co-products (i.e. hominy, corn gluten) will be combined with DDGS to add value 2) Branded corn coproducts that have unique feeding applications and value, plus are distinctly different than commodity co-products, may become available 3) Co-product ‘value enhancers’, which may consist of enzymes, probiotics or other additives, may be added to DDGS to increase nutritional value for specific feeding applications.

To ignore the significant contributions of DDGS while the role of biofuels in Europe is discussed makes for an imperfect discussion. The fact that some of the debate participants in Brussels were unaware that the industry produces a feed product is startling, even a bit scary.

The production of bioethanol and DDGS is a pragmatic business. No one will – or should – guarantee business success because it is doing the right thing. Bioethanol production is a low margin, commodity business so energy efficiency, production costs and customer trust are the keys to survival.

In such a difficult operating environment, to not exploit the total value of a high value product of the production process is not only risky, but could even be viewed as short-sighted and reckless. l For more information: www.pannoniaethanol.com +36 20 356 2586

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Mycotoxin testing protocols can protect ethanol co-products

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as of April 12, 2013

Courtesy of Neogen Corporation - Milling & Grain sales team Courtesy of Neogen Corporation

T

he huge increase in ethanol production over the past decade has provided producers an unprecedented opportunity to produce profitable co-products. These products, such as dried distillers grains with solubles (DDGS), are often a secondary source of business for ethanol producers, many of whom recognise its value as a costeffective animal feed product.

However, as a result of the ethanol production process, mycotoxins that may be present in raw corn can become concentrated during production, leading to coproducts that are not suitable for animal feed. Production of quality animal feed is important to a producer’s profitability and co-products must adhere to set limits on mycotoxin levels by following rigorous testing protocols to ensure their DDGS are safe.

Mycotoxin contamination in animal feed can have serious health and economic affects, from chronic health issues to loss of reproductive efficiency and even death. Ensuring potential DDGS buyers that an ethanol facility has a robust monitoring programme can greatly assist in marketing and selling ethanol co-products.

Although all major mycotoxins – aflatoxin, deoxynivalenol (DON), fumonisin, ochratoxin, zearalenone and T-2/ HT-2 toxins – have the potential to contaminate corn and therefore DDGS, most producers primarily

CORN HARVEST MYCOTOXIN MAP REPORT

Current map represents crop areas marked with colored symbols have confirmed levels as noted below.

CONFIRMED LEVELS OF AFLATOXIN IN NEW CROP CORN: Southern CA levels > 200 ppb; SC levels > 300 ppb; TX up to 1,000 ppb; OK up to 200 ppb; KY > 20 ppb; AL up to 20 ppb; KS up to 80 ppb; MO up to 230 ppb ; IL up to 150 ppb; NE > 150 ppb; NC > 100 ppb; TN >30 ppb; IA up to 1200 ppb; IN over 150 ppb; OH > 500 ppb CONFIRMED LEVELS OF FUMONISIN IN NEW CROP CORN: PA < 10 ppm; OH < 3 ppm; DE, MA, VA > 7 ppm; KY > 7 ppm; NC > 6 ppm CONFIRMED LEVELS OF DON IN NEW CROP CORN: MD up to 4.75 ppm; IA > 2 ppm CONFIRMED LEVELS OF ZEARALENONE IN NEW CROP CORN: IA up to 900 ppb

Corn harvest mycotoxin map report as of April 12, 2013 This report is brought to you by Neogen’s Milling & Grain sales team. Reports are compiled from

are concerned with whichandproliferates in wet,If you have questions, through fermentation various sources are subject to variability. pleasethe contact us at 800/234-5333 via email at foodsafety@neogen.com. aflatoxin and DON. coldorconditions such as process into distilled productseen information visit our company Aflatoxin is a carcinogenicFor furtherthose in Europe last website: www.neogen.com alcohol, do not degrade substance produced by the year. Neogen tracks reports during fermentation, and moulds Aspergillus flavus and of mycotoxin outbreaks and accumulate in the spent A. parasiticus, which thrives publishes weekly reports grains.1 Therefore, the mycotoxin concentration level in hot, dry weather, such with updated maps and in spent grains can be triple as the drought conditions information for producers. that of raw corn. Given these that have affected the elevated concentrations, US since last summer.

Mycotoxin thresholds ethanol producers need an Conversely, DON is effective and proactive testing produced by the mould Research has established protocol in order to capitalise Fusarium graminearum, that mycotoxins do not flow

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biofuels byproducts on their ethanol co-products.

For example, producers who plan to sell DDGS to dairy markets should know feed for dairy animals must contain less than 20 parts per billion (ppb) aflatoxin in the US. Taking the threefold concentration of mycotoxins into DDGS, aflatoxin concern levels for incoming corn would need to be as low as 5-6 ppb. Although setting a rejection limit at such low levels may be impractical, effectively monitoring and controlling mycotoxins in ethanol production will improve the quality and marketability of co-products.

Sampling for tests For mycotoxin testing, the importance of representative samples cannot be overstated. However, it can be difficult obtaining such a sample as mycotoxin contamination typically is not evenly dispersed throughout a load of grain, leading to pockets of contamination called ‘hotspots’.

The number of probes per container depends on the size and depth of the carrier (e.g. a hopper car versus a truck); however, in general, a representative sample should be obtained by probe from a number of different locations and depths. The typical automated probe seen at most ethanol plants obtains corn from multiple levels but from only one insertion location per compartment, typically in the middle.

To obtain a more representative sample, a probe should be used in at least three different sections of the same bin or grain compartment. Once that sample is collected, a one to two pound subsample can be used for the mycotoxin testing.

The full subsample should be ground so 75% passes through a 20 mesh screen and the appropriate assay size (usually 10g) weighed out for sample preparation

and extraction. The rest of the subsample should be labeled and kept for reference.

Spikes Spikes in mycotoxin levels most often occur for one of two reasons. First, mycotoxin contamination is not homogenous in the fields and, therefore, not homogenous in shipping containers.

Although farmers may have ideal crops in most of their fields, mycotoxin problems still may occur in areas of the field that have been stressed.

As a result, many deliveries from the same farm or elevator may be acceptable, but one may come in from the stressed area that had a higher level of contamination.

Secondly, just because the corn is out of the fields and stored does not mean it is in the clear. Mycotoxins can grow in storage, where the mould that produces the toxin often flourishes in ideal conditions. This issue highlights the importance of proper processing before storage, especially drying. If corn is not adequately dried down, even a low level of mycotoxin presence can rise sharply and spread through the bin or corn pile.

On-site screening for raw corn The most proactive method for monitoring incoming raw corn for mycotoxins is to test each delivery and wait for the results before clearing the shipment for acceptance.

However, given the high time, labour and cost associated with this model, it typically only is implemented during an outbreak of mycotoxin contamination has occurred in the grains’ source area.

Alternatively, this technique is used more often during periods of transition throughout the year, such as during a new crop harvest, and when stored corn is cleared out in late spring. Testing during

these times gives producers a glimpse at potential upcoming problems.

Some facilities prefer to screen random loads of raw material. Although it is a less effective method of mycotoxin control, random load tests let the suppliers know that a plant still is monitoring for mycotoxins and raw material quality.

In some cases, ethanol producers also may work closely with key suppliers to work out a pre-sample submitted in advance for testing. This approach requires trust between the parties and can expedite delivery. Random samples taken at delivery still should be tested at the quality assurance lab to ensure the efficacy of this method.

Qualitative tests, such as Neogen’s Reveal test for aflatoxin, can provide producers with a simple yes/no answer in as little as one to three minutes.

On-site quantitative testing Most producers prefer to collect a daily composite sample for full quantitative analysis by their quality assurance lab. This model is by far the most popular method for the majority of producers that utilise mycotoxin control programmes. These daily composites can tell the producer if a problem has occurred and can allow for trace backs to identify a farm or elevator that shipped contaminated corn. This method is most appropriate when there is no ongoing outbreak during harvest.

Additionally, this method is a cost-effective way to monitor for spikes in mycotoxin levels.

If using the quantitative approach, it is vital the quality assurance lab conducts random quantitative tests of suppliers. Testing for exact levels establishes a baseline of information that is important in marketing co-products such as DDGS.

Should a testing programme identify a concern level for corn from a supplier, delivery should be carefully monitored, and every load tested, until the ethanol producer is satisfied that the condition of the incoming raw corn has improved.

Weekly composites can be an effective method for producers who have not seen any presence of mycotoxins in their market area during a six to eight week period after harvest. When combined with a more aggressive approach at peak periods, daily composites tested in the quality assurance lab are extremely effective.

Quantitative tests, such as Neogen’s Veratox test, can provide fast and precise results. Veratox is an enzymelinked immunosorbent assay (ELISA) microwell test approved by the USDA-GIPSA. Third party testing For many years, DDGS and wet distillers grain with soluble analysis has been conducted by outside labs using AOAC reference methods (e.g., HPLC or GC-mass spectronomy).

Samples are prepared on-site, sent to the labs and results received back in two to five days on average. Although these tests are expensive, they have been the only alternative and, therefore, an acceptable cost of doing business to the marketing side of ethanol co-products.

Neogen works with ethanol producers to provide an in-house method of mycotoxin analysis. Its screening or quantitative test kits are currently being used by more than 100 ethanol facilities to test their incoming corn stock. l For more information: Pat Frasco is Neogen’s sales director – milling and grain division www.neogen.com +1 800 234-5333 Reference 1. Lillehoj, E.B., W.F. Maisch, and A. Lagoda. 1979 The fate of aflatoxin in naturally contaminated corn during ethanol fermentation.

Can. J. Microbiol. 25:911-914.

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Oil majors have plenty of money and technical expertise, and they need biofuels to blend with their petroleum products, so why have they stopped investing in biofuel R&D?

Strange bedfellows

by Phil Thane

W

ith a hundred years experience of large-scale chemical engineering, and no shortage of money, the major oil companies would appear to be best placed to invest and de-risk new biofuel production technologies. Some projects were sold off last year and the flow of optimistic press releases has almost dried up.

Can it be that, with unconventional oil and gas coming onstream and politicians having second thoughts about biofuels, oil companies are backing away?

Political support?

Biofuels, in a straight fight, cannot yet compete on price with fossil fuels. That might change one day as the costs

of extracting hard-to-reach fuel deposits escalate but, for now, biofuels need either a subsidy to reduce the price or a mandate to compel their use regardless of price.

In difficult economic times governments previously keen to reduce carbon emissions by increasing biofuel consumption are reconsidering; concerns over land use change and levels of full lifecycle CO2 savings are also having an impact.

For example, in the UK, the Renewable Transport Fuel Obligation set a target of 5% by 2010 (later extended to 2014) but there is no clear policy for what happens afterwards. The Renewable Transport Fuels Group said last year that a lack of biofuel inclusion targets beyond 2014 is causing uncertainty

for biofuel investors in the UK, with many looking to move R&D elsewhere.

That situation is just part of an upheaval in mandates at EU level. The EU has a 5.75% mandate for biofuels and was planning to increase that to 10% by 2020. In 2012 the commission proposed to reduce that to 5%, to introduce indirect land use change (ILUC) calculations and phase out the use of some arable crops for fuel. The proposals will hit current producers hard, but favour companies developing fuels from algae, waste and other non-food sources.

In the Asia Pacific region the picture is more mixed: New Zealand has not extended its biodiesel subsidy and an ethanol mandate in Queensland, Australia was shelved following public

opposition. But China plans a 10% mandate by 2020 which nine provinces have implemented and India has an ambitious target of 20% by 2017, but it is unlikely it will achieve it.

The US Environmental Protection Agency (EPA) is continuing to ramp up its biofuel mandate each year but as Ken Cohen, ExxonMobil’s (EM) VP of public and government affairs, put it in January 2012, the EPA is ‘mandating the impossible’.

Cohen’s complaint was that the mandate for 2012 required the industry to produce 8.65 million gallons of cellulosic biofuel even though there were no commercial refineries making it. This year the target was raised to 14 million gallons and it fell to the American Fuel and Uncertainty in Europe over biofuels made from food crops will hit current producers hard

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biofuels big oil Petrochemical Manufacturers president Charles Drevna to point out there was still no cellulosic ethanol available in commercial quantities.

biofuels they need to raise taxes to pay for the subsidy, but if they mandate biofuels without subsidies then oil companies have to raise

Fracking, the hydraulic fracturing of rocks process to release oil and gas is not new, but recent developments in drilling technology have made

Shell has a joint technology development programme with US company Virent to directly convert plant sugars and non-edible biomass into a range of high performance liquid transport fuels

It’s not just ethanol that is a problem in the US as last year 140 million biodiesel credits turned out to be fraudulent and Drevna adds it is unrealistic to assume the biodiesel industry will actually produce 1.28 billion gallons of physical biodiesel this year.

The US mandate rules 36 billion gallons of biofuels by 2022, with 21 billion gallons from sources other than corn.

Unrealistic mandates such as these are damaging as there is a fear that private capital will not be available to build new plants for advanced biofuels and that lack of capacity will eventually force the government to reduce the mandate. That uncertainty worries potential investors making it even less likely that projects will go ahead.

Democratic politicians are in a bind; if they subsidise

prices. If the mandated level is not reached then companies can be fined, which will increase the price of their fuel to pay the fines. Governments cannot simply rule it illegal to sell fuel without a mandated level of biofuel because that would lead to shortages. None of these options is likely to win them many votes, especially at a time when so many people are still suffering the economic fallout of 2007/8.

The natural response of a politician faced with a difficult decision is prevarication and that is what we are seeing now.

Meanwhile...

Biofuels are still a tiny proportion of an oil company’s turnover and they are all, always, prospecting for new sources of petroleum.

it much more viable. For the last few years the oil majors have been investing heavily in this and other unconventional sources of oil and gas.

EM announced a longterm investment of up to $600 million in algal biodiesel researcher Synthetic Genomics (SG) in 2009 but, despite SG continuing its work, the last press release about algal fuel was in July 2010. Then, in 2011, EM bought gas producer XTO Energy in a transaction worth $41 billion (€31.5 billion) which dwarfs not just its investment in biofuels, but that of the whole industry.

Second generation business model The oil companies are guarded about their investments and their plans, but what

is becoming clear is that, along with second generation fuels, we will get a second generation business model.

When ethanol and FAME were introduced into regular fuels the oil companies treated them like other additives they were used to buying from specialist manufacturers.

Ethanol conveniently replaced Methyl Tert-Butyl Ether (MTBE) as an anti-knock, octane raising additive in petrol and FAME enables low-sulphur blends to be made. It also increases the lubricating properties of diesel to reduce engine wear. At this stage oil companies had no need to invest in biofuels producers, but it soon became apparent that if governments continued to ramp up biofuel use then production levels would have to rise.

Oil companies often invested in biofuels (and other alternative energy technologies) through third parties, and this continues today. Energy Technology Ventures is a joint venture, involving ConocoPhillips and others, which invests in a range of next generation energy technologies, including Cool Planet Biofuels.

Companies also entered into long-term purchasing deals, securing their supply of FAME or ethanol and giving the biofuel producer a guaranteed income that could be used to secure funds for building or expanding plant. But, alongside this investment in existing biofuels companies and startups, there is a new model emerging – Big Oil doing it for themselves.

Blend walls Unless a country is prepared to go the way of Brazil and engineer a radical change in the whole fuel and transport system, then existing biofuels run into a problem.

They might be mixable with petroleum-based fuels but they are not a drop-in replacement. There have

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been arguments in Europe and the US recently about the wisdom of increasing blend ratios, as vehicle manufactures are unwilling to guarantee how their engines will perform once a fuel goes outside normal petrol and diesel specifications.

No doubt engine management systems can be tweaked and fuel systems modified to increase levels a little but that does not solve the issues around availability of feedstocks and sustainability of the whole fuel production process, and we will soon run into a real

or pyrolysis to produce an oil that can be refined.

Similar thermochemical techniques can also be used to produce diesel fuel.

By a combination of hydrolysis (adding hydrogen) and cracking to break down long chain molecules to shorter ones, it is possible to produce fuels that are totally compatible with existing petroleum-derived fuels, solving at least one of the ‘blend wall’ issues.

Thermochemical biofuel processes, using non-food biomass, offer a way out of some of the problems around

‘Oil companies are guarded about their investments, but what is becoming clear is that, along with second generation fuels, we will get a second generation business model’ ‘blend wall’ beyond which increasing the biofuel mandate is certainly not desirable and maybe not practical.

Thermochemistry to the rescue?

Broadly speaking there are two routes to making a gasoline substitute from biomass: biochemical and thermochemical.

The first, fermenting sugars to produce alcohols, is the most common at present. The thermochemical route is more varied, with many different technologies being trialled, but they tend to involve either gasification followed by a ‘gas-to-liquid’ process

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food-vs-fuel and sustainability.

But the crucial issue for the biofuels industry is that the experts in thermochemistry are the oil companies.

What are they up to?

Make no mistake, oil companies take biofuels seriously. EM has published a report setting out its longterm view of the oil and gas business to 2040. It estimates that, by 2040, demand for biofuels will be about five times current production.

Matthew Tipper, VP for Alternative Energies at Shell, also sees things much the same: ‘We believe that liquid fuels are going to be part

of the mix for a long time.

We can imagine that in the “light duty, light vehicle” area we will see increasing market penetration from things like e-mobility and hydrogen mobility, but certainly in the heavy duty sector with trucks, marine and aviation we’re going to need high energy density liquid fuels for decades.

‘Taking a long-term view, the world’s going to need advanced biofuel products and we’re going to continue to invest in their development,’ he adds. ‘But there is no doubt that in the industry at large the current recession has slowed things down, particularly for the smaller companies.’

Tipper went on to explain why the optimistic press releases of previous years’ progress have dried up recently.

‘To some extent, the expectations that were set between 2005-07 were overoptimistic. What we’re now seeing is a healthy dose of realism and a recognition that almost any new technology takes 20 to 30 years to become material,’ he says.

‘But there’s a lot of inertia in the system and a lot of capital is required to make that change. If you look back to nuclear, hydro, wind and solar power, all these technologies took years to make a difference.

I don’t think that advanced biofuels are an exception to that rule, unfortunately.

We’re in the game, but we realise it is long haul.’

Shell’s biofuels work is a stage they refer to as ‘select and focus’ after it began a large number of research projects with many different technology partners. Inevitably some failed, either technically or economically but now it has a smaller set to work on that look promising.

The worrying thing for conventional biofuel producers is that this kind of work, at least at Shell, is being done in-house.

Where does that leave us?

It seems probable that biofuels production will diverge into two different strands. On the one hand there will be a place for FAME and ethanol, at least as additives in roughly the ratios they are used now – though it is likely they will be based on non-food feedstocks and with stricter controls on land use.

Large-scale production of drop-in fuels made via thermochemical processes might become just another process carried out by the oil industry.

Somewhere in between the two are companies currently building, or scaling up to, second generation pilot plants like Dupont Danisco, Kior, Abengoa, M&G and Ineos.

They are likely to see their businesses challenged by Big Oil’s sheer scale, but they do have advantages of their own.

Oil refineries like their oil to arrive by pipeline or supertanker, but biomass is not like that. It is bulky, less energy dense than oil and varies greatly, so it is unlikely an oil refinery is going to deal with woodchips, algae or miscanthus, for example. This means there are opportunities for those that can process biomass close to where it originates, whether that is in a forest, a swamp, grassland, desert or municipal waste dump.

Some biofuels producers might diversify and we are already seeing companies such as Cobalt Technologies that set out to produce butanol for fuel use selling it as an industrial chemical.

Similarly, Blue Marble Energy aimed to harvest wild algae for a fermentation process to produce renewable fuels and some speciality chemicals, but has relaucnhed as Blue Marble Biomaterials, specialising in the speciality chemicals market.

Things change, but it is likely bio-based fuels will be with us for a while yet – whoever makes them. l

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biofuels corn oil Around 40% of ethanol plants were extracting corn oil in 2011 â&#x20AC;&#x201C; this has now risen to as high as 75%. Phil Thane looks at the bitter battles between rivals, the differences between the technologies and, importantly, the economics

Hitting the sweet spot Source: CPT

A

lmost all manufacturing processes produce wastes and manufacturers are always looking for ways to increase profits by packaging waste as a byproduct that can be sold. For as long as ethanol has been distilled from grain, distillers have sold the spent grain as animal feed. Distillers Dried Grains with Solubles (DDGS) consists of the solid residue together with the dried stillage, the watery liquid and suspended solids remaining after distillation. Where the material is destined for a local animal feed plant it is sometimes shipped as wet distillers grains. This reduces production costs, but is more expensive to transport and will spoil more quickly.

According to separation experts Valicor DDGS, a typical dry mill corn ethanol facility contains approximately 11-12% by weight of corn oil.

A 100 million gallon a year (mgy) ethanol facility typically has over 10 million gallons of corn oil contained within its DDGS product. Corn oil is valuable both as a feedstock for biodiesel production and for the chemical industry.

Most of that oil is released from the cornâ&#x20AC;&#x2122;s germ during the milling, cooking and fermentation and is found in the stillage. A small part of the total will be free and will float to the top of the stillage where it can be skimmed off. A larger part of the oil is emulsified into the watery stillage, aided by the various other chemicals present which act as emulsifying agents. Breaking that emulsion economically, is the key to making a profit from corn oil extraction.

3D drawings of what a full-scale fractionation system would look like at an ethanol plant

Separation technologies An oil-in-water emulsion (like a vinaigrette) will separate naturally in moments under the action of gravity alone.

Emulsifying agents can make emulsions so stable (like mayonnaise) that separation would take years. The simplest method of breaking an emulsion is to increase the difference between the specific gravities of the two

phases so they are pulled apart more easily. Heating helps because it thins the oil without changing the water very much. Adding salt or other water soluble chemicals to the emulsion increases the density of the water, but the effect is small.

Many different chemicals from simple acids to complex enzymes can be used to help break emulsions so that the time and force required

to extract the oil is reduced and the yield increased.

Acids and alkalis have both been used, but adding an alkali to a mixture of oil and water can create soap.

Non-polar chemicals and enzymes are favoured by some manufacturers. Any additive has to be removed, or if remains in the stillage and ends up in the DDGS it has to be certified as safe for livestock consumption.

Typical centrifuges used to extract solids from stillage create a force equal to 3,500 times gravity; forces like that can break oil-inwater emulsions too.

The possible variations of static settling tanks, centrifuges and chemicals are almost endless. In practice many producers begin oil extraction with a simple system and then add more sophisticated machinery or use additives to increase the extraction rate.

Process flow of a dry fractionation system integrated into an ethanol plant

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The EQP4 is a model of a small scale system provided by CPT to the National Corn to Ethanol Research Centre

An industry at war The individual components and steps in the oil extraction process are all well known, but by grouping them together in a specific manner, and in some cases using a patented emulsion breaking chemical, several companies and research groups have created systems that have been granted US patents.

However, uncertainty and arguments surrounding the patent situation is causing some producers to hold back on installing or improving their existing oil recovery system.

One centrifuge supplier has been so concerned about the issue he will not sell centrifuges to ethanol producers in case they are used in a way which attracts the attention of patent lawyers.

This is despite the fact that centrifuges have been used to separate cream from milk – essentially the same process – for a century or more, and a method of using centrifuges to extract corn oil from ethanol ‘slop’ (stillage) was patented in 1950 by National Distillers Products Corp.

Much of the current controversy centres around

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Greenshift which, under the name GS Cleantech, filed a patent for ‘Method of processing ethanol byproducts and related subsystems’ that describes using a centrifuge to extract oil from stillage. GS Cleantech has subsequently taken out many more similar patents which widen the scope, each making it slightly more likely that a company will breach one.

Processes Greenshift and others have gone way beyond the 1950s method of simply centrifuging the stillage prior to evaporation.

Greenshift has two different methods: method 1 which intercepts the syrup during evaporation and consists of pretreatment, emulsion breaking, centrifugation and solids settling prior to returning the defatted syrup back to evaporation; and method II in which the whole stillage passes through a series of additional centrifuges upstream of the normal centrifugation stage of the ethanol plant. This increases the oil concentration which in turn increases the

amount of oil extracted by the method I process.

Method I can extract up to about 3 gallons for every 100 gallons of ethanol produced.

Method II can add another 3.5 gallons of corn oil for every 100 gallons of ethanol produced. Greenshift’s patents refer to carrying its processing at a temperature of around 82°C with stillage having a pH of around 3.5. The first method II system using Alfa Laval centrifuges was installed at Advanced BioEnergy’s 110 million gallon per year ethanol plant in Fairmont, Nebraska during 2011.

Advanced BioEnergy sold this plant, which has a capacity of 115 million gallons, to Flint Hill Resources in December 2012. The company decided to sell, in part, because it believes the value of its plants might go down as the ethanol industry goes through an expected rough patch over the next 12 to 18 months. However, it continues to operate its two other ethanol plants.

ICM is another company very active in this field. The ICM Advanced Oil Separation System (AOS) uses a Tricanter to separate partly evaporated

stillage (syrup) into a watery phase, which includes solids, and a concentrated emulsion phase. Ethanol is used to break the emulsion, avoiding the need to introduce any other chemicals. When the emulsion separates the ethanol remains in the watery phase and can be removed by evaporation. By operating on the concentrated emulsion at a late stage in the evaporation process AOS is able to use smaller equipment, saving on capital costs.

ICM’s AOS system has also been awarded a patent and the company rejects Greenshift’s claim that it is infringing on its patent, and has stated that it will defend Cardinal Ethanol which uses ICM equipment against claims

by Greenshift. This stand is important – ICM has installed AOS in nine plants and has contracts for several more.

In June last year (2012) it announced plans to equip Pacific Ethanol’s plant in Burley, Idaho and hopes to fit three more for Pacific this year. In February 2013 it announced a deal with Abengoa Bioenergy for AOS to be deployed at the company’s Madison, Illinois and Mt. Vernon, Indiana facilities.

AOS avoids the need for any additional chemicals, but there is a cost involved in removing the added ethanol from the syrup. Valicor Separation Technology uses previously separated oil instead. An oil-in-water emulsion can be broken by flooding it with extra oil, a process familiar to any cook who has added too much oil too quickly to a mayonnaise. In the Corn Oil Separation System (COSS) the partially evaporated stillage is centrifuged and a ‘cut’ containing both free oil and emulsion is fed into a settling tank where the emulsion breaks due to the excess of oil.

Doug Corey, industry manager for ethanol at Valicor says that COSS extracts around 85% of the oil available

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biofuels corn oil chemicals will work in the vast majority of existing oil separation equipment. All that is needed is an injection point into the stillage stream just ahead of the centrifuge.

Some experimentation might be needed to determine the most advantageous position to inject the additive and the dosage required and to determine the level of evaporation that takes place before the syrup is routed through the oil separator.

Most plant operators are able to find a convenient point in their evaporation stages where the additive can be injected without major infrastructure changes. ICM systems, for example, typically intercept the syrup following evaporator 6 or 7 and divert the flow to a feed tank where it has a short residence time to separate. Nalco’s additive can be injected either directly into the tank or into the line ahead of the centrifuge.

Ashland is now working with companies using other feedstocks to produce ethanol to evaluate the opportunities for oil production from those.

Economics

the volume flow, so taking the syrup at a later stage means less volume, less additive and a smaller centrifuge. In some cases companies taking a very thick syrup have found that their centrifuge cannot produce oil at all without additives.

Picking the right dosage is as important as choosing the right additive, and equally plant-specific.

Experimentation to achieve the best ROI is essential.

A different approach Corn contains about 2lbs of oil per bushel, and a good

Yield increases with additive dosage, but that’s not the whole story...

Source: Nalco

Using additives is an extra cost of course, but the resulting increase in yield is immediate and easily quantifiable. In the worst cases companies are seeing a ‘one for two’ increase in profits; for every $1 (€0.77) spent on additives they earn at least $2 in increased oil production.

If the plant is particularly inefficient to begin with the increase in profit can be up to six times the additive cost.

For a typical 100mgy ethanol plant:

• Using mechanical separation a plant may achieve 0.4 to 0.5lb of oil per bushel of corn • Using an additive that will typically rise to 0.7 or 0.8lb/bushel • Each tenth of a pound (0.1lb) equates roughly to 1gpm (gallon per minute) • With additives the plant may recover approximately 8-9gpm • Total oil recovered will have a market value of approximately $9m per year • The additive will cost between $500,000 – 3m per year.

Dosage rates are based on

Source: Nalco

in the stillage, yielding oil about 98% pure. Where very high quality oil is required it may be transferred to another centrifuge for a final polish.

Many producers that have installed separation systems relying on purely mechanical methods have been disappointed with the yield.

Back in 2008 several producers approached speciality chemical company Ashland asking if it could provide a chemical means of increasing yield. McCord Pankonen, Americas regional sales manager at Ashland says that the company invented corn oil extraction additives. Since then a host of competitors have brought alternatives to market. One of the better known is Nalco’s GR8109+.

Ashland produces a range of three additives for corn oil separation: a general purpose one for the majority of plants, a high yield variant and a low cost option.

Nalco industry technical consultant Jason Van’t Hul explains that many of the plants it deals with are in permanent trial mode experimenting to find which additive suits its plant best.

Neither company will disclose what precisely is in their products but both say it is a surface acting chemical.

Many surfactants are used as emulsifying agents, but it is possible to use some to break emulsions. The trick is finding the right one, and one that is certifies ‘GRAS’ (Generally Recognised As Safe) in animal feed. All the surfactant additives used in this market are GRAS according to US CFR 582.

Additive companies do not supply any machinery – their

… the sweet spot for maximum profitability occurs at a relatively low dosage

Effects of animal feeds The oil increases the calorific value of the DDGS. When used as feed for pigs and chickens this is a good thing, but for other stock, especially dairy cows and laying hens, too much oil in the diet leads to problems with the

quality of the milk and eggs produced.

This limits the amount of DDGS that feed companies can blend into their products. The meal produced by a plant using fractionation is more like soy meal than DDGS, and highly valued for

feeding to all kinds of stock, even to fish. The price and profitability of DDGS is tied to the location and available transport, where there is demand for high oil content DDGS it may not make sense to invest in oil extraction.

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Equally importantly, the wheat germ can be processed to produce food-grade corn oil that sells for a lot more than the ‘distillers oil’ available from the back end.

Using fractionation a plant should be able to extract as much as 1.2 to 1.4lbs of food quality oil per bushel at the front end, and still be able to extract around 0.25lb of biodiesel feedstock using its existing back end technology.

Referring once again to a typical 100mgy ethanol plant adding a fractionation plant to the front end will cost in the region of $32 million, but the net income of the plant can be expected to jump by $17 million a year. The huge increase, due to selling high value edible oil and high protein meal, ensures that the extra equipment pays for itself in a couple of years.

Even better, the roller milling process is more energy

Source: Nalco

extraction system on the ‘back end’ of an ethanol plant might recover nearly half of that although many achieve far less. Fractionation is a very different approach that removes much of the oil at the front-end of the process before the corn is fermented.

Rather than use a hammermill to grind the whole kernel into course meal, a fractionation plant such as those installed by Cereal Process Technologies (CPT) uses roller mills to break up the kernels prior to screening them to three separate streams of material: bran, germ and endosperm. Only the last containing the starch is fermentable. Fractionation improves ethanol production and lowers costs; nonfermentable materials no longer take up plant capacity so space is available to make more ethanol – meaning better capital utilisation.

Emulsified oil before additive treatment

Oil separated following treatment with Nalco’s GR8109+ additive

efficient than hammer milling.

CPT has several systems operating commercially and

a system installed in the National Corn to Ethanol Research Centre. l

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biofuels bio-based chemicals In a capital-intensive industry such as industrial biotech, start-ups cannot only gain access to technology and know-how, but also secure significant investments through developing partnerships

Investing in renewable chemistry startups

T

he chemical industry today has perfected its processes, supply chains and distribution networks based on petroleum as its primary feedstock. The innovations are few and far between; they are based on incremental improvements and continue to require large capital expenditures to keep the economics affordable.

The geopolitics, volatility of petroleum prices, increased difficulty in accessing petroleum reserves, global demographics and pressure to increase margins have all forced the industry to look for ways to innovate outside of its traditional sandbox and to diversify its feedstock outside of the traditional petro-chemistry.

Parallel to these industry trends, the last decades have witnessed an enormous progress in the development of biotechnology and have rendered the ability to engineer different microorganisms almost limitless. Initially those technologies, which had been primarily focused on the development of therapeutic molecules, started to venture into areas such as enzyme engineering, chemicals production and energy, among others.

While imagination may be unlimited, the traditional industry continues to encounter questions and challenges around scale-up, economics and development of the value chain and further, downstream, the setup of appropriate business models and partnerships that lead

to success. Altogether this represents the dawn of a new industry where many details remain to be invented: the so called â&#x20AC;&#x2DC;renewable chemistry industryâ&#x20AC;&#x2122;.

In the meantime the agro-industry, which was traditionally restricted to the first transformation of agricultural products, started to recognise the opportunity to better valorise production through more complete use of all waste streams, shift away from supplying commodities towards higher added value products and therefore integrate more value down the value chain.

On the one side there is the emerging chemical industry which is working to, at least partially, reinvent itself in terms of feedstock, while on the other side is a competing agro-industry which sees the opportunity to keep more value

for itself. This gives, both to the industrial biotechnology industry and to those who master these technologies, a central role in the revolution to come: a sweet spot for venture capital investing.

Technology startup investing Investing in start-up companies is an art and science that requires disciplined approach and strong understanding of industry dynamics, technology evolution and motivations and abilities of people involved in building those young and fragile companies.

Industrial biotechnology start-ups are no different to any others. The key asset in any new company is people: qualified, experienced and driven individuals ready to change the world and bring

latest innovations to the market.

Occasionally, opportunities in renewable chemistry and industrial biotechnology open up completely new markets and investors need to be able to recognise those opportunities and foresee the changes they can bring. But start-ups in this sector, like all others, are also faced with challenges. Often the novelty of developed processes represents an opportunity, but equally a hurdle when trying to scale them up and find ways to produce them economically.

Unlike most other technology start-ups where risk diminishes with time and the development of the technology, the scale-up risk is high and at the same time costly. The ability to scale a process and understand the issues is often completely different from the skill set required for initial product development and innovation.

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While a large company may have departments for each of these challenges, a start-up needs to reinvent itself at each stage of the development – a tall order for a small organisation. In addition, the cost of scaling up is significant, requiring access to several tens of millions of euros that are not easily accessible in today’s capital markets.

Unlike the period two years ago when large expenditures were primarily financed by public markets in the US, today we see more scale-up financing through partnerships with large corporate players and further involvement of corporate venturing groups.

Developing partnerships appears to be an optimal way to progress, leveraging the skillsets of each partner to create a new company bringing novel technology and ideas: industrial partners scale-up expertise, financial strength and access to the market.

Regulations and government participation With regulatory incentives difficult to rely on, as witnessed in the solar sector, new companies must demonstrate an ability to provide new solutions demanded by the marketplace by offering new products, superior performance or lower production costs if they are to appear attractive to potential investors. However, governments do hold a number of other critical roles.

US-based companies, for example, have seen an early boom in financing driven by certain regulatory measures as well as access to considerable non-dilutive sources of financing (Department of Energy, US Department of Agriculture etc.). Consequently, they were able to allocate significant resources to their development and reach maturity more rapidly than some of their European counterparts.

While not always successful, and often criticised, this type of government involvement

biofuels international

through loans and guarantees facilitates maturation and buildup of expertise, while alleviating pressures that come with large capital raises.

Across the board Sofinnova Partners, a business that has been involved in investing in technology-based start-up companies for over 40 years and has invested in more than 500 new businesses over that period, is looking to finance start-ups across the board, from very early opportunities coming out of academia or government laboratories all the way to companies with developed products who are looking to scale-up their technology and reach commercialisation.

In order to serve the emerging ‘seed stage’ companies, Sofinnova has established a separate investment vehicle – Sofinnova Green Seed Fund – focused on early opportunities in industrial biotechnology, renewable chemistry and bioenergy in Europe. These start-ups typically look for initial investment of up to €1 million and Sofinnova finances them either alone or in partnership with other investors, keeping

capital reserves for follow-on investment. A recent example of such an investment is Finnish start-up MetGen, focused on developing tailored enzyme solutions with applications in biochemicals, biofuels and pulp and paper industries, where Sofinnova led an investment round of €2.2 million.

More mature companies with proven products looking to scale-up, commercialise and develop their product portfolios further are served by Sofinnova Capital VII, a €240 million life sciences fund that reserves a significant portion of its investments to disruptive projects in renewable chemistry.

Initial investments could range from €2.5-10 million, with reserves for follow-on investment as the company grows and continues to invest in expansion. Examples of such investments are the Netherlands-based Avantium and Bio-Amber, present in the US, Canada and France.

The way forward Renewable chemistry and industrial biotechnology is an emerging sector and its development is no different

than the development of other sectors such as biotech 20 years ago, solar or wind 10 years ago. Further success requires development of a critical mass of entrepreneurs and successful industrial integration of several startups that will lead by example.

As soon as this begins to happen, large companies will be much more comfortable acquiring technology-centric start-ups at early stages and leveraging their industrial and market competences as is the case in other industries supported by venture capital (pharmaceuticals, communication, software or internet).

The potential for European R&D communities to continue creating start-ups competitive on a global scale is great. Furthermore, the diversity and experience in European chemical, biotech, agriculture, oil and gas and processing sectors provides unparalleled access to talent and industrial expertise required by start-up companies. l For more information: This article was written by Denis Lucquin, managing partner and Josko Bobanovic, partner of Sofinnova Partners: www.sofinnova.fr

Partnering as a tool to access technology BioAmber was established in 2009 as a spin-off from DNP, a US biotech company. From the beginning the four founders, led by Jean François Huc, were focusing their development on renewable succinic acid and molecules and polymers derived from it. Since the very start, partnering and joint venturing was at the heart of BioAmber’s strategy.

The company’s first recombinant technology, a bacteria producing succinic acid, was licenced from the DoE while its second, recombinant yeast, has been licenced from Cargill which is currently fermenting it at a scale of 1 billion litres for lactic acid. This yeast was then further developed up to an exceptional yield of succinic acid through a partnership with Cargill. These results allowed BioAmber to partner with DuPont and in-license its technology to transform succinic acid to BDO.

On the scale-up side, BioAmber crossed the Atlantic and established a joint venture with ARD, the R&D subsidiary of French agro-industrial group Siclaé. This, in turn, led to the establishment of a JV aimed at scaling up BioAmber technologies within BioDemo, a demonstration plant owned by ARD with a fermentation capacity of 350,000 liters.

Japanese Mitsui, a global trading giant and one of the largest chemical players in the world, is BioAmber’s commercial partner as well as partner for the development of initial production capacity.

The development of succinic acid-based new phthalate free plasticisers led to a partnership with Lanxess in Germany.

Industrial biotech is an extremely capital-intensive industry. Partnering is not only a way to get access to the best technologies and know how, but one of the best ways to leverage large players’ financial means to develop this industry.

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David Berry, a partner with Flagship Ventures, reveals the winning formula that will make biofuel start-ups more attractive to investors

Financing entrepreneurial innovation

I

n every entrepreneurial sector, founders and managers are seeking to identify the magic formula of how to build, finance and ultimately exit their companies. Some of the more storied sectors, such as biotechnology and digital, have the significant benefit of not only a wealth of startups but also a bounty of success stories.

However biofuels, as both a young sector and a grouping of companies small in number, is lacking in such stories success stories, which leaves for a situation that is as simple as it appears: biofuel financing is a game of exceptions.

As the biofuel sector heated up over the last handful of years, entrepreneurs and investors attempted to create a rule-set around biofuel investment, extrapolating rules from other sectors to this one. For example, the first round or two of financings would focus on bench-scale work and proof of concept, subsequent support would cover pilot financings, and then financial support would drive towards demonstration scale. The extrapolation, however, was not complete.

Choosing the right path In other sectors, financing stages are aimed at accomplishing key steps that create value in the eyes of financiers and ultimately

Smaller, multiple deals are currently being completed rather than blockbuster ones

acquirers. This logic implies that the proof points and steps that are of more value to the ultimate acquirer should be perceived or treated with a higher valuation by financiers. The challenge that the biofuels space has faced, and continues to suffer from, is that the acquirers have been traditionally found around the struggling companies, seeking bargain basement prices. Else, they are focused on companies that have technologies proven at scale with products and real revenues to speak of.

Simply said, companies were being built and financed to a model that was incomplete and not connected to the financial ecosystem.

Of course, no entrepreneur wants to play for the failure scenario. This means that

companies need to figure out how to play to commercial revenue. Moreover, they need to achieve this real milestone on an amount of cash low enough that the price an acquirer or the public markets are willing to pay can offer both the entrepreneurs and the investors a reasonable return. There are but a handful of companies who have been able to navigate this path.

The fundamental challenge is that the amount of money needed to get to commercial revenue is typically much more than a traditional venture and similar financiers can provide. When one looks at the companies that are successful, or poised to be, three paths emerge to give companies sufficient cash: partnerships, government support and lottery tickets.

Partnerships: Not to be confused with investment from a strategic, partnerships offer companies some degree of validation as well as financing.

In biotechnology, partnerships done between large pharmaceutical companies and small, typically pre-clinical biotechnology companies can provide sufficient capital to fundamentally enable their platform and get them through some of the typically more costly hurdles in drug development. Some examples include Celgene’s partnership with Agios that included $120 million (€91.7 million) upfront or, more recently, Astra Zeneca’s partnership with Moderna, including $240 million upfront and an additional $180 million in potential near-term milestones.

With few exceptions, these deals have been largely absent from the biofuels arena. The challenge here is that, unlike in the pharmaceutical arena where the large incumbents view start-ups as an ecosystem that creates an outsourced innovation supply chain, the large fuel companies do not view the biofuel community in the same way and are taking a ‘wait-and-see’ approach.

While this has translated into fewer and smaller deals, successful companies ultimately will cobble together multiple deals at various parts of the value chain.

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That being said, the field is evolving and truly innovative companies such as Audi, who recently announced a partnership with Joule Unlimited, do see the disruptive potential of certain biofuels platforms and are making targeted bets on technologies with the potential to change the landscape. As more success emerges from the industry, the partnership route will likely become more favoured, but for those to whom it has blessed, this can prove to be a transformative approach to reach commercial potential for a company in need of financing to become commercial.

Government support: This has been both a blessing and a curse for biofuels companies. The government has, in the past, offered quite substantial sums to various biofuel companies focused both on technology development as well as on plant building. The USDA loan guarantee programmes have a similar transformative potential by allowing companies to derisk the capital associated with getting the first plant up and running, which significantly enhances the probability of longer term success.

These programmes, however, unfortunately favoured technologies in more common areas of technology development rather than the cutting edge of innovation. Ironically, this induces entrepreneurs to favour more traditional approaches rather than trying to identify and develop the sorts of innovations that can truly transform industries. Further, with austerity becoming a word of choice in congressional budget negotiations, one has to wonder how viable a path this route will be to cross the proverbial chasm going forward.

Lottery tickets: Finally, a handful of companies have

biofuels international

had the good fortune to try out-of-the box approaches that occasionally can prove transformative. Amyris’s approach to ethanol trading is one such example. Although, like lottery tickets, financial rewards from this approach cannot be dependent on; if one tries a series of low probability yet high magnitude (if successful) events, then one at least opens themselves up to the potential for transformation.

The path to success is irrelevant if one cannot get

the investors in a syndicate does not have enough dry power to invest, the dynamics around fundraising for the entrepreneur change massively for the worse.

The way to overcome this is to keep investment syndicates as strong and/ or small as possible while making sure that sufficient capital is available to provide for a reasonable duration of funding. The best way to drive syndicate formation or command more money from an investor is that

‘No entrepreneur wants to play for the failure scenario.

This means that companies need to figure out how to play to commercial revenue’ on it in the first place. Early financing in biofuels has proven more challenging of late. Poor performance by funds has caused many to stop actively investing either in biofuels specifically or altogether. This has led to fewer investments in general.

Raising capital How does one raise money in an ever-moredifficult environment?

The short answer is be differentiated. This is important for two reasons.

First, the investments that are being made tend to focus towards differentiated stories with strong (read: experienced— both entrepreneurially and industrially) management teams and blocking intellectual property positions.

Second, the difficulty that venture capital firms have raising new funds introduces a new financing risk surrounding the syndicate. When one of

unique ‘must have’ story.

Flagship Ventures focuses on funding and building such stories and in the past has funded technologies such as Mascoma at the earliest stages. It also invents technologies and build companies from scratch at its VentureLabs unit and, in the biofuels space, the vast majority of the company’s investments have stemmed from this process.

As Flagship Ventures explains: ‘As investing is easier than inventing, founding and building, it is essential that the companies that we launch out of VentureLabs are unique and differentiated.’

LS9 and Joule Unlimited both originated from the unit.

LS9 was founded based on an insight into making more valuable and more fungible into the fuel stream than ethanol, while Joule was founded as a means to produce biofuels at low cost without dependency on sugar.

More recently, VentureLabs

has founded and launched companies including Pronutria, which seeks to overcome the food-vs-fuel issue by improving land efficiency, and Midori Renewables, which has developed a new technology to substantially reduce the costs of cellulosics.

Since 2007, Flagship Ventures has provided the first round of financing to its biofuels companies without syndication. This has provided each of these companies with the breadth of capability to make substantial progress and develop breakthrough technologies in an unfettered way.

The biofuels sector has been afflicted by a progressively more difficult funding environment. While this is not unique to biofuels, the smallness of the sector compared to others makes seeing the paths how to escape more difficult. Not only do other sectors point to routes to obtain funding both at the beginning and throughout the lives of companies, but when one looks at the successes in the biofuels sector, they tend to recapitulate what has happened in other sectors.

Ultimately, what is proving to be most important is to focus on exceptions. The ways for entrepreneurs to get financing today cannot rest purely on what others have done, but must seek to move the needle on their own merits. The best way to do this is to make the company an exception in its own right, driven by its uniqueness, its technology, its defensibility, and its team. For the truly differentiated story, the financing environment remains robust. l

For more information: www.flagshipventures.com

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Activated carbons, in their various forms, can purify glycerine to a colourless, odourless standard

Glycerine purification with activated carbon

G

lycerine is a clear, odourless viscous liquid with a huge number of industrial applications including cosmetics, pharmaceuticals, foods and beverages, flexible foams, tobacco, antifreeze, paints and coatings.

Glycerine, or glycerol, is produced from natural glycerides present in fats and oils, or manufactured synthetically from propylene.

Natural glycerine is a byproduct from a number of different industrial processes, including fatty acid manufacturing, soap production and fatty acid ester production. In recent years there has been a significant increase in glycerine production resulting from the global growth in the biodiesel market. Glycerine is a key by-product in biodiesel production, which is formed from the transesterification of vegetable oils and animal fats.

Depending on the purity of the glycerine required for the intended application, various purification steps may be necessary. The purification of glycerine can be relatively complex depending on its starting purity and treatment objective. The traditional transesterification process leads to a mixture of glycerine in aqueous solution together with salts and other bodies.

Depending on the concentration and nature of the contaminants, the process can include a pre-treatment with powder activated carbon, a concentration and distillation and a final purification step

biofuels international

The decolourisation of glycerine (right to left) using increasing quantities of granular activated carbon

for both decolourisation and deodorisation on granular activated carbon.

Since many applications involve food/cosmetic/ pharmaceutical end uses, the removal of colour and odour is vital to ensure the glycerine product meets the required industry standards, including Food Chemical Codex and the various regional pharmacopeia protocols.

Activated carbon The recent use of solid catalysts to produce biodiesel has changed the nature of the glycerine generated as a by-product. Its exceptional purity simplifies its further treatment to an acceptable quality to suit a wide range of applications. A single activated carbon filtration step on a selected, unique, highpurity, high-activity carbon can help manufacturers to achieve a high standard of decolourisation and deodorisation.

Activated carbons can be used either in a granular form, in fixed-bed adsorbers/ filters, or dosed as a powder in a batch type process.

When purifying glycerine with activated carbon, both colour and odour are removed, leaving the glycerine waterwhite and odourless.

Granular activated carbon In a fixed-bed filtration system using granular activated carbon, odour is typically first to breakthrough, i.e. it is the first contaminant to appear in the liquid flowing from the adsorber. This is because the molecules responsible for colour contamination are generally better retained in the adsorption pores of the activated carbon.

Ideally, an activated carbon that has more capacity for odour, while retaining its capacity for colour removal should be selected. With a higher capacity for odour, the granular carbon filtration bed will last longer, reducing the specific use rate of activated carbon in kg per tonne of glycerine produced.

When a granular activated carbon is spent, when the adsorption capacity is exhausted or the treatment objective of the purification

process is reached, it can be recycled by thermal reactivation. This involves removing the spent carbon from the customerâ&#x20AC;&#x2122;s site and returning it to a reactivation facility capable of handling food-grade materials.

An example of an activated carbon optimised for use in glycerine purification is Chemviron Carbonâ&#x20AC;&#x2122;s CAL TR 12x40 grade, which has the ideal balance of odour and colour adsorption capacities. CAL TR 12x40 is a quality, low dust, agglomerated coal-based granular activated carbon.

Chemviron Carbon is the European operation of Calgon Carbon Corporation and has experience in this application of activated carbon for use in the glycerine industry.

Reactivation involves treating the spent carbon in a high temperature furnace, reaching temperatures of up to 950°C. In a carefully controlled process, the undesired organic impurities of carbon are thermally destroyed and the carbon is returned to an activity level suitable for it to be returned to the customer and reused in its operation.

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biofuels glycerine purification The recycling of spent granular carbons by thermal reactivation offers substantial ecological and economic advantages compared with the one-way use of virgin activated carbon. It meets the environmental need to minimise waste since the carbon is reused rather than disposed of.

Compared with the production of virgin carbon, reactivation has a far lower CO2 footprint and generally limits more the use of the world’s resources. If reactivation of the spent carbon turns out to be not appropriate or acceptable for cases where a customer’s glycerine specification is particularly tight, the spent activated carbon can be removed and replacement virgin activated carbon can be supplied.

As mentioned, both granular and powdered activated carbons can be used in the purification of glycerine, but only granular types can be reactivated or taken back.

Another operation advantage of using granular activated carbons is that they can be delivered and used in mobile carbon filters.

20m3 Cyclesorb MA20 units

Mobile filters

Mobile carbon filters are delivered to a customer’s site pre-filled with the selected grade of virgin or reactivated granular activated carbon.

Their operation is a simple ‘plug-and-play’ process and when the carbon is spent, it can be removed from the customer’s site by simply exchanging the mobile adsorber. This service

These units are mobile adsorption vessels that can be supplied on a service/ rental basis. They can be supplied on a short-term basis, for example during production trials or when maintenance of a customer’s own fixed-bed adsorber is required, or on a longer term contract as an alternative to costly investment in fixed-bed filters. The use of these mobile carbon filters allows, in certain cases and where appropriate, for the activated carbon to be pre-treated via pre-wetting and/or further de-dusting.

These two options can drastically reduce the amount of water used for start-up and conditioning of the granular activated carbon beds.

Chemviron Carbon’s Cyclesorb range of mobile adsorption units. The choice of unit is driven by the flow-rate of liquid to be treated and the quantity of activated carbon required to meet the treatment objective

avoids any on-site carbon handling operations, which offers additional process efficiency for customers in the glycerine industry.

Advantages In summary, activated carbons have a long history of use in the glycerine industry for the decolourisation

and deodorisation of the product. Both granular and powdered grades can be used, depending on process requirements and preferences, but the use of granular materials offers two key advantages: granular activated carbons can be reactivated at a suitable foodgrade reactivation facility or they can be supplied/used/ returned in mobile filters.

The use of mobile carbon filters for glycerine purification additionally offers the following benefits: • Cost effective – avoids investment in fixed-bed filters • No on-site maintenance • Simple installation, connection and operation – ‘plug and play’ concept • Suitable for temporary requirements – trials or plant maintenance • Combined transport vessel and adsorber – no onsite carbon handling • Ready for use, from stock. l For more information: This article was written by David Reay, European marketing manager, Chemviron Carbon: www.chemvironcarbon.com

62 may/june 2013 biofuels international

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How can European biodiesel producers meet EN 14214 standards during tough times?

Pure and simple

D

uring the last few years biodiesel production in Europe has increased but, due to a lack of profitability, many producers had to temporarily stop their production; some were even forced to shut down their plants completely.

The main reasons behind those situations include the increased price for high quality feedstock, like vegetable oils, and the higher requirement demands on the quality of all end products.

Thus the necessity of using lower-quality feedstock, such as used cooking oil or animal fat, has therefore played a part in these scenarios.

The purification process after transesterification of lowcost feedstock is one of the key factors to allowing end product to fulfil the required parameters of EN 14214 biodiesel standards. Alongside established parameters, like monoglyceride, phosphor and sulphur content checks, additional quality parameters like cold soak testing and filter blocking tendency are now being discussed with a view to becoming mandatory new parameters within biodiesel quality standards.

Additionally, these higher biodiesel quality standards are already requested in purchasing requirements within the mineral oil industry, meaning increased demands placed onto biodiesel production technology.

Traditional purification processes for high quality feedstock, like dry washing processes, acid water washing, ion-exchanger or resign, are not sufficient to tackle these new quality

biofuels international

Properties Condition Units EN 14214 2012

BDI distillation

FAME content

Vegetable oils

% (m/m)

≥96.50

>99.50

UCO, tallow

mg/kg

≥96.50

>98

Sulphur content

Vegetable oils

mg/kg

≤10

<2

UCO, tallow

mg/kg

≤10

<2/<7

Sulphated ash content

% (m/m)

≤o.o2

<0.002

Water content

mg/kg

≤500

<100

Total contamination

mg/kg

≤24

<4

Methanol content

% (m/m)

≤0.20

<0.001

Monoglyceride content Single stage distillation

% (m/m)

≤0.70

<0.1

Two stage distillation

% (m/m)

≤0.80

<0.01

Diglyceride content

% (m/m)

≤0.20

<0.01

Triglyceride content

% (m/m)

≤0.20

<0.01

Group l metals (Na+K)

Vegetable oils

mg/kg

≤5

<0.1

UCO, tallow

mg/kg

≤5

<0.5

Group ll metals (Ca+Mg)

Vegetable oils

mg/kg

≤5

<0.1

UCO, tallow

mg/kg

≤5

<0.5

Phosphorous content

Vegetable oils

mg/kg

≤4

<1

UCO, tallow

mg/kg

≤4

<2

EN 14214 biodiesel standard properties and reachable parameters via BDI technology

requirements. Therefore, to ensure profitability of biodiesel production, additional purification steps will have to be implemented to existing installations to combine feedstock flexibility with a consistent quality end-product.

According to current standards, but depending on feedstock source, different parameters are critical for biodiesel production.

By converting used cooking oil, for example, its methyl ester content (EN 14214: min 96.5%) is negatively influenced by a high polymer content found in the feedstock.

By using low quality animal fats, the sulphur limit of 10 in the European biodiesel standard (and 15 in the US version) still has

to be fulfilled. The sulphur content of this feedstock can exceed 100 ppm, depending on seasonal feedstock variations and the rendering process used, which can cause high impurity levels in the final product even after several washing steps.

Besides the impurities already mentioned the content of phosphor, monoglycerides and metals, which are difficult to access by conventional purification steps, can be removed by using a distillation unit for final purification. A ‘one size fits all’ distillation solution is the wrong way to faced future demands, however. A distillation or rectification concept has to be chosen, taking into account the feedstock being used, to find a balance

between purification efficiency, investment and operation costs.

During the last 15 years technology developer BDI has invested and built more than 10 distillation units that can handle different feedstock types. The main parameters and values of EN 14214 are shown and also the values that could be reached by using BDIs distillation technology, which aims for maximum yields based on a two stage solution operating at minimum temperatures. l

For more information: This article was written by Christine Riedl, technical sales director biodiesel at BDI www.bdi-bioenergy.com

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biofuels conference review ILUC and sustainable farming remained hot topics at this year’s eighth annual World Biofuels Markets

‘This could be Rotterdam or anywhere’

W

orld Biofuels Markets returned to Rotterdam, the Netherlands in March this year – the third consecutive year before it returns to Amsterdam in 2014.

The show was officially opened by vice mayor of Rotterdam, Alexandra van Huffelen, before keynote speakers Tony Juniper, environmentalist and former executive director of Friends of the Earth; Raffaello Garofalo, secretary general at the European Biodiesel Board (EBB); and Guido Ghisolfi, CEO at Beta Renewables, took to the floor.

Juniper began with the ageold food vs fuel debate and sustainable farming. Quoting a Foresight report on the future of food and farming, published in January 2011, he said: ‘The global food system will experience an unprecedented confluence of pressures over the next 40 years.’

According to the report, global population is on the rise, expected to reach over 9 billion by 2050. And, with increased numbers likely to be wealthier, demand for more high quality diets will grow. On the production side, the need to slash GHGs will be imperative as competition for land, water and energy intensifies.

The solution? Juniper pointed to sustainable agriculture that will ‘meet the needs of a rising population for food, fibre and energy while remaining resilient to external shocks such as oil

price volatility, resource scarcity and climate change impacts’.

Juniper said: ‘To be sustainable from an economic point of view, all this must be achieved via commercially viable businesses that are supported with policies and incentives that reflect the wider public interest.’

Following this sustainable farming debate was Garofalo’s address of indirect land use change (ILUC). He said the EBB believes in the implementation of consistent EU policies for biofuels to encourage investors to take risks and help develop more renewable technologies.

With this in mind, Garafalo attacked ILUC and ILUC factors, deeming them an inappropriate ‘basis for a fair and proportionate energy policy’, stating that ILUC is based on unverified econometrical models spotting only biofuels. ILUC spot analysis gives a false and illusionary global perspective on biofuels, denying their real wider geopolitical perspectives and implications.

Drawing attention to the 33-50% of food produced that goes to waste, Garafalo went on to quote an FAO report which stated: ‘One-third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tonnes per year. This inevitably also means that huge amounts of the resources consumed in the food production are used

in vain, and that the GHGs caused by production of food that gets lost or wasted are also emissions in vain.’

Additionally, with 80% of agricultural land unexploited in African countries such as Senegal, Nigeria, Ghana and Angola, and biofuels representing just 0.5-1% of the overall worldwide agriculture, Garafalo says the ‘lack of food’ is more a ‘bad distribution of resources’.

Beta Renewables’ Ghisolfi concluded this keynote session on a positive note by hailing second and third generation biofuels the ‘heroes’ of the renewable fuels story. He claimed his company’s new cellulosic ethanol plant in Crescentino, Italy, with a 50,000-tonneper-year ethanol capacity, has proved critics wrong.

‘The plant is in the course of debugging and optimisation and we expect continuous production at target capacity by the end of Q2,’ he said.

The debate continued into the second day when eight speakers aired their opinions on energy security and other issues crucial to the success of the biofuels industry.

Commenting on land and sustainable agriculture, Forum of the Future’s founder and director Jonathan Porritt said ‘the world urgently needs a huge thriving biofuels industry.

Most of us are largely in denial of the implications of climate change’.

In regards to the global availability of land, NATO general Wesley Clark positively stated that there is ‘a billion acres of unused cropland in the world’. This statement, however, drew criticism from Petri Vasara, director of Pöyry Global BioFutures, who advised against such assumptions because the ‘lack of land is the real battleground. The strongest land requirement is in Asia but more modest in Russia and the US. Land requirement for cattle grazing dominates in all regions bar North America’.

The session’s chair, author and television presenter Jonathan Dimbleby opted for a consensus among the floor on land use, to which the majority of all present agreed that it was an issue.

Putting aside their differences, the speakers did agree on one thing: that Europe needs to look to the US model to encourage growth in the biofuels industry.

As Clark highlighted: ‘There is a lot of political support for these endeavours which is lacking in Europe. The US should be seen as the model to strive towards.’

To this BP Biofuels’ CEO Philip New added that investor confidence in the industry, which is already fragile, is being further affected by uncertainty surrounding EU regulations. He said the biofuels sector should stop issuing out blame to other markets and regulations and instead focus on building a positive reputation that will aid future investment. l

64 may/june 2013 biofuels international

Biomass Asia Asia Conference 2013 Conference 2013

20 biofuels May 2013 heading 20 May 2013 Pre-Conference Seminar Pre-Conference Seminar 21&&22 22May May2013 2013 21 Green CMYK c76 m0 y100 k0 Pantone 362 c rgb r61 h164 b42

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International Conference, International Conference, Exhibition Exhibition

20-22 May 2013 2013 || Sunway SunwayPutra PutraHotel, Hotel,Kuala KualaLumpur, Lumpur,Malaysia Malaysia 20-22 May Pellets and Biomass Supply Chain Pellets and Biomass Supply Chain ● Growth and Potential for Pellet in Asia – An ● Growth and Potential for Pellet in Asia – An Analysis ofof Supply Supply and andDemand DemandbybyPoyry Poyry Analysis Singapore Singapore ● OutlookononBiomass BiomassPellet PelletMarket Market Processing ● Outlook – – Processing TechnologiesbybyThe TheEnergy EnergyResearch Research Centre Technologies Centre of the Netherlands of the Netherlands Systemsforfor Biomass ● Sustainability Systems Biomass ● Sustainability by DQS

by DQS The Traceability Traceabilityand andSustainability SustainabilityControl Controlof of Biomass Commercialisation&&Financing Financing ●●The Biomass Commercialisation Biofuels from Waste and Residual Biomass ● Private Equity Perspectives on Biomass and Biofuels from Waste and Residual Biomass ● Private Equity Perspectives on Biomass and Materials by TUV Nord Clean Energy by Mizuho Asia Partners Materials by TUV Nord Clean Energy by Mizuho Asia Partners ● EXIM Bank’s Perspectives in Financing ● EXIM Bank’s Perspectives in Financing Biomassfor forAgriculture Agriculture Internationalisation of Green Green Projects Projectsby byExportExport- Biomass Internationalisation of Value-AddingOpportunities Opportunitiesin in Agricultural Waste Import (EXIM) (EXIM) Bank Bank Malaysia Malaysia ●●Value-Adding Agricultural Waste Management by Malaysian Agricultural ● Eco-Loan as as aa Tool Tool to toSupport Support EnvironmentallyEnvironmentallyManagement by Malaysian Agricultural Researchand andDevelopment Development Institute (MARDI) Friendly Ventures Ventures by

by Sumitomo SumitomoMitsui MitsuiBanking Banking Research Institute (MARDI) Value-AddedProducts ProductsSuch SuchasasBiochar Biochar and Corporation ●●Value-Added and BioBio Corporation CNGfrom fromPalm PalmOilOilIndustry Industry Closed CNG byby Closed LoopSystems SystemsPte. Pte. Ltd. Regional Updates Updates on on Growth Growthof ofBiomass Biomass Loop Ltd. toto Stable Biochar - ConversionofofOrganic OrganicWaste Waste Stable Biochar ●● Conversion ● Korea’s Bioenergy Bioenergy Perspective Perspectiveby byEco EcoFrontier Frontier Competitiveness of ● Competitiveness of Malaysia’s Malaysia’s Renewable Renewable Solutions Utilisation and Greenhouse GasGas SolutionsforforWaste Waste Utilisation and Greenhouse Energy Sector Sector by

by Frost Frost &&Sullivan Sullivan Mitigation Putra Malaysia (UPM) MitigationbybyUniversiti Universiti Putra Malaysia (UPM) ● Biomass Availability Availability && Assessment Assessment inin Indonesia Indonesia Economy Driversfor forBio-Based Bio-Based Economy

by Indonesian Indonesian Centre Centre for for Estate Estate Crops Crops Drivers ● Bioeconomy Initiative in inMalaysia Research and Development (ICERCD) ● Bioeconomy Initiative MalaysiabybyRoland Roland and Development (ICERCD) Berger Strategy Consultants Berger Strategy Consultants ●●Tapping Solid Waste TappingRevenues Revenuesfrom fromBio-Based/Bio-Chemical Bio-Based/Bio-Chemical Solid Waste as as Feedstock Feedstock Products – Can Biomass ● Tapping Energy from Sewage and Sewage Products – Can Biomassin inAsia AsiaDelivers Deliversbyby ● Tapping Energy from Sewage and Sewage Novozymes Malaysia Sludge by Novozymes Malaysia Sludge

by Indah Indah Water Water Konsortium Konsortium (IWK) (IWK) ● Promoting Berhad ● Promoting Bioethanol/Bioenergy Bioethanol/Bioenergy Usage Usage in in Berhad ASEAN Region by Bioenergy Society ● Renewable Energy from Sanitary by ASEAN Region by Bioenergy Societyof of ● Renewable Energy from Sanitary by Singapore KUB-Berjaya Energy Singapore KUB-Berjaya Energy ●●Potential in in ● Municipal Solid Waste as Possible Feedstock in PotentialofofCellulosic CellulosicEthanol Ethanolfrom fromBiomass Biomass ● Municipal Solid Waste as Possible Feedstock in Malaysia by DuPont Cement Manufacturing by Lafarge Asia Malaysia by DuPont Cement Manufacturing by Lafarge Asia Building on the success of the inaugural EU-Asia Building on the success of the inaugural EU-Asia Biomass Best Practices & Business Partnering Biomass Best Practices & Business Partnering Conference held in 2012, with over 600 participants Conference held in 2012, with over 600 participants from 29 countries and more more than than 80 80 speakers, speakers,this this from 29 countries and dynamic event will unite industry professionals from dynamic event will unite industry professionals from all of biomass biomass value valuechain chain––bioenergy, bioenergy,biobioall sectors sectors of based products, agriculture, and high value based products, agriculture, and high value chemicals with special special focus focuson onAsia Asiaand andEurope.

Europe. chemicals –– with

biofuels international 8882 Fax: +603-8884 8838 or visit www.biomass-sp.net may/june 2013 65 Tel: +603-8884 Tel: +603-8884 8882 Fax: +603-8884 8838 or visit www.biomass-sp.net

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biofuels preview As the Fuel Ethanol Workshop (FEW) in St Louis, US, gradually gets closer to opening, Biofuels International offers a preview of some of the exhibitors taking part

Just a FEW tasters

ADI Systems levels of contingency plan offered. to manufacturing to renewable fuels.

ADI Systems is participating at the event The C&A team has attended in order to connect with companies Ashland Water Technologies FEW for over 10 years. investigating anaerobic digestion and Ashland Water Technologies is both wastewater treatment options. exhibiting at and sponsoring the event, ERI Solutions It will be promoting high-rate anaerobic promoting its product offering to the ERI Solutions is participating as an exhibitor technologies, particularly the ADI- External ethanol industry as well as showcasing four at FEW in order to network with ethanol Circulation Sludge technologies that it claims producers both current customers and Bed (ECSB), which could help improve the profit prospective. ERI hopes to further educate was developed by potential of ethanol plants. ethanol producers on the net effect to the HydroThane STP. The Ashland personnel will bottom line, and the need for risk reduction proprietary anaerobic also present three technical as it pertains to employee injury, liability, technology uses presentations that are tailored to property damage and non-compliance. granular biomass to industry professionals focused anaerobically treat on production efficiency, Essex Industries the wastewater and plant optimisation and Essex Industries will be has high biomass process control. exhibiting its Fire-Safe Valve retention features.

Assemblies, which are ADI provides Cereal Process designed to stop the flow of complete systems Technologies flammable or hazardous media for biogas handling Cereal Process during a fire or emergency and utilisation, Technologies (CPT) offers situation. These assemblies including biogas a patented corn grain have applications throughout ADI Systems will talk treatment treatment systems. processing technology ethanol manufacturing options Its technologies which it claims improves facilities, providing a means can be refined to meet any strict the processing margins for ethanol for automatic emergency processor demands and services plants. The process is currently shutdown in all areas, but are offered on a design/build basis being used to make fuel, food, more commonly found on both or technology-only package. feed, oil and industrial products. pump and fill side of denatured CPT’s patented corn dry milling ethanol and proof tanks. Ball system employs a process to provide valve sizing ranges from ¼” to the highest level of feedstock quality 4” and Butterfly valves range Essex fire fighting to the ethanol plant at the lowest in size from 2” through 12”. capital and operating costs. It also captures the highest level of available starch while ETS Labs keeping most of the non-fermentables out.

ETS Laboratories has worked in Constructed in modular form and fermentation analysis for over 30 years, capable of processing from 10 to providing its Scorpions Fermentation 800 bushels of corn per hour, CPT’s Contamination Detection System to Aggreko wants to unblock bottlenecks corn dry fractionation process can be find microbial contaminants throughout Aggreko sized to fit any ethanol biorefinery. the fermentation process.

Aggreko believes cooling system bottlenecks It believes early detection of are a common problem in ethanol Christianson and Associates fermentation contamination is a costproduction, with hot summer weather Christianson and Associates (C&A) is a or other process limitations impacting national CPA and consulting firm and productivity, profitability or product quality. has developed a reputation as a trusted It is in the business of helping ethanol technology and services partner to producers to improve their bottom line with the global biofuels industry, covering rental equipment such as cooling towers, subject matters like RIN consulting and pumps, chillers and heat exchangers. annual attestation compliance, ERP Aggreko is also equipped to help technology solutions, financial advisory recover from damage due to tornados, and biofuels benchmarking services. ice storms or fire. It employs full-time It also provides traditional accounting technicians and project managers which services such as auditing, tax services can respond immediately to these and estate planning to clients across a types of major events, with different variety of industries, from agribusiness ETS says early detection stops contamination

66 may/june 2013 biofuels international

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effective way to prevent yield loss in ethanol production facilities.

Fagen moved into Hungary last year

Fagen Fagen is a biofuels engineering, procurement and construction contractor which, it claims, has built more ethanol capacity than any other company, contributing over 6 billion gallons of fuel-grade ethanol to the US’ renewable fuel inventory annually.

The company broke ground on its first international ethanol project in Hungary, with production beginning in the spring of 2012. It is also a renewable power contractor including biomass, wind, solar and biogas.

Ferm Solutions Ferm Solutions is a service and technology provider to the fuel ethanol industry with core competencies in both fuel and portable ethanol production processes, and has both in-house and collaborative research projects with several major industrial and academic partners.

It is exhibiting at this year’s FEW to showcase its technical support and product lines to ethanol producers, while also supporting its scientists who will be presenting new products and future direction in technical sessions.

Governments and regulatory bodies worldwide are developing new specifications and standards for sustainable and renewable fuels. IA will use FEW as a platform to network and discuss global markets and regulations.

Kennedy and Company Just as the biofuels production and refining process is complicated, the industry’s accounting, tax and consulting needs are not easy tasks to get right and Kennedy and Company works regularly with biofuels plants on such issues.

It will be exhibiting its services covering things like start-up consulting, tax incentive consulting, human resources consulting, strategic planning and board retreats, cost segregation, profitdriven tax and audit services.

LAI Ethanol LAI is exhibiting and speaking at FEW this year as a company representative will be part of the panel discussing co-products on the Wednesday. It will also be showcasing products that offer solutions to corn and fibre refining, plus another invention that produces food grade products via a balance of any starch/sugar/cellulose used to produce fuel and animal feed with no loss of nutritional value or process waste.

Molemaster hopes to have a blast at FEW

Ferm will showcase research findings at FEW

Inspectorate America Inspectorate America (IA) is a multinational group providing independent inspection, sampling and testing services for the petroleum and fuels related industries.

Its global network of laboratories provides analytical testing to both internationally recognised standards and customer-specific methodologies.

biofuels international

Molemaster Services Molemaster Services is attending FEW to showcase its media blasting services.

Its equipment features interchangeable nozzles combined with a variety of media to provide flexibility for a range of cleaning environments that includes DDGs, scalper bins, grinding bins and silos.

It will also be showcasing a new dry ice blasting service and solutions for silo and bin cleaning projects.

Nagase American Nagase America is a subsidiary

of Japanese chemical trading company Nagase and Company.

With a 170-year history, Nagase America has been stepping into the fuel ethanol field for the last couple. Partnering with global suppliers and companies with technologies, it is aiming to become a solution provider in the field and is exhibiting at FEW to gather information on the current status of fuel ethanol markets, as well as spotting industry trends.

Nelson Engineering Nelson Engineering combines more than 80 years of renewable fuels and biotechnological engineering and practical field experience. It is also involved in process/project engineering, agricultural and biobased operations, regulatory support, construction and project management services for the bio-tech industry.

Neogen’s technology will be on show

Neogen Neogen has been partnering with the ethanol industry to help face the mycotoxin challenge through testing on all the major mycotoxins, including aflatoxin, DON, fumonisin, ochratoxin, T-2/HT-2 toxins and zearalenone.

Its AccuScan Pro reader provides a way to read, store and analyse results from Neogen’s line of lateral flow tests.

Neogen representatives will be on hand at FEW to discuss testing solutions and to answer questions on a topic which offers the ethanol industry unique challenges.

Pinnacle Engineering Pinnacle Engineering has been involved in providing services to energy clients since 1996 and it, with CEO Jim Holland in attendance, exhibits at FEW to show support to the ethanol industry and to stay educated on new developments and approaches.

‘Networking with other exhibitors provides our personnel with insight and knowledge we can use in assisting clients not only in the energy industry but also in the environmental, rail, emergency response, industrial and land development operations,’ says Holland. l

may/june 2013 67

biofuels events and advert index

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Upcoming biofuels events May

12-15

Bioenergy and Biorenewables: Integrating scientific and societal agendas

Amsterdam

15-17

World Biomass Power Markets

Amsterdam, the Netherlands

20-22

Biomass Asia Conference 2013

Kuala Lumpur, Malaysia

23-24

World Biofuels 2013

Seville, Spain

3-7

21st European Biomass Conference and Exhibition

Copenhagen, Denmark

10-11

Biofuels Conference 2013

Amsterdam, the Netherlands

10-13

International Fuel Ethanol Workshop and Expo

St. Louis, Missouri

12-13

European Biodiesel 2013

Lisbon, Portugal

16-19

10th Annual World Congress on Industrial Biotechnology

Montreal, Canada

19-20

Biochemicals & Bioplastics

Frankfurt, Germany

25-26

World Bio Market: Technology & Innovation

Copenhagen, Denmark

27-28

UNICA Ethanol Summit 2013

Sao Paulo, Brazil

JUNE

September 11-12

Biofuels International Conference 2013

Ramada Plaza, Antwerp, Belgium

25-26

Lignofuels 2013

London, UK

25-26

SMi’s 6th Annual Conference: Energy from Waste

TBC

30 - 3

Algae Biomass Summit

Orlando, Florida, US

December 10-11

Tank Storage Asia

Max Atria, Singapore Expo

3-5

EABA Expo & Conference

Florence, Italy

March 2014 4-6

World Biofuels Markets 2014

Amsterdam, the Netherlands

18-20

StocExpo 2014

Rotterdam, the Netherlands

Top BI Tweets Here is a selection of interesting things from our Twitterverse! (#biofuelsmag) ePURE ‫‏‬IEA global biofuels capacity must double in order to meet the challenge of reducing global temps by 2°C Vivergo Fuels We produce enough high protein animal feed to feed 18% of the UK dairy herd - that’s 340,000 cows a day!

Bioenergy Crops India’s PM vows to double renewable energy capacity in next four years to 55GW Algae.Tec ‫‏‬ Richard Branson tips all transport business profits into clean energy #biofuels Agriculture Brazil Ethanol strengthens against gasoline in April on below average production Alan Anderson Energy beet trial plots in North Dakota show success within dry conditions

advert index Alfa Laval

15

BDI – Bioenergy International AG

25

Brookfield 19 De Smet Engineers

FC

GEA Westfalia Separator GmbH

9

Iowa Economic Development Authority

7

Outotec 3 Vogelbusch Biocommodities GmbH

13

Wilks Enterprise, Inc

21

Biofuels International magazine (ISSN 1754-2170) is published six times a year in January, March, May, July, September, November by Horseshoe Media, Marshall House, 124 Middleton Road, Morden, Surrey, SM4 6RW. The 2013 annual subscription price is $370.

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January/February 2013 Issue 1 • volume 7

The 5% equation

international

How is Europe reacting to the EC’s latest transportation fuel proposals?

Double counting Nothing but a headache?

UPM Biofuels

www.biofuels-news.com

UPM Biofuels Regional focus: biofuels in southeast Asia and Australasia Regional focus: biofuels in Europe FC_Biofuels_November_2012.indd 1

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0 may/june 2013 biofuels international