OFI February 2015 issue by Oils & Fats International

February 2015 Vol 31 No 2 www.oilsandfatsinternational.com

FEEDSTOCKS A smoking hot biofuel From seed to sky

POLICY Industry in state of inertia

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Leading edge technologies for refining plants

Degumming • Acid Degumming (wet/dry) • Ultra-shear acid Degumming • Bio Degumming • Membrane Degumming

Neutralising

Short/long mix Neutralising • Multimix Neutralising • Miscella Neutralising • Silica Purification

Detoxification

Bleaching

• Combiclean Process • Active carbon Purification

• Sparbleach Bleaching • Unibleach with prefiltration • Silica Purification

Deodorising

Winterising

• Qualistock Deodorising • Multistock Deodorising • Sublimax Ice Condensing

• Wintrend Winterising • Combifrac Winterising

Science behind Technology

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T HE B USI NE SS MAG AZ IN E FOR TH E OILS AN D FATS IN D UST RY

PHOTO: RENE/FOTOLIA.COM

CONTENTS FEATURES VOL. 31 NO. 2 FEBRUARY 2015 EDITORIAL: Editor: Serena Lim Tel: +44(0)1737 855066; Fax: +44 (0)1737 855034 E-mail: serenalim@quartzltd.com Assistant Editor: Charlotte Niemiec Tel: +44 (0)1737 855157; Fax: +44 (0)1737 855034 E-mail: charlotteniemiec@quartzltd.com

AVIATION

PROCESSING & TECHNOLOGY

SALES: Sales Manager: Mark Winthrop-Wallace Tel: +44 (0)1737 855 114; Fax: +44 (0)1737 855034 E-mail: markww@quartzltd.com Sales Consultant: Anita Revis Tel: +44 (0)1737 855068; Fax: +44 (0)1737 855034 E-mail: anitarevis@quartzltd.com Chinese Sales Executive: Erik Heath Tel: +44 (0)1737 855108; Fax: +44 (0)1737 855034 E-mail: erikheath@quartzltd.com

Plant & technology round-up

OILSEEDS

From seed to sky

THE CARINATA OILSEED PRODUCES A NON-EDIBLE OIL THAT IS SUITABLE FOR THE MANUFACTURE OF AVIATION BIOFUEL P14

POLICY

PRODUCTION: Production Editor: Nikki Weller Tel: +44 (0) 1737 855088; Fax: +44 (0)1737 855034 E-mail: nikkiweller@quartzltd.com

A smoking hot biofuel

Industry in state of inertia

EUROPE

CORPORATE: Vice President: Steve Diprose Tel: +44 (0)1737 855164 E-mail: stevediprose@quartzltd.com

FEEDSTOCKS

Potential in pongamia

A waste or not a waste?

NEWS & EVENTS

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Cheap oil’s impact 2

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Germany gets greener

FEEDSTOCKS A member of FOSFA

News

BP to cut cellulosic biofuels business as energy costs fall

Comment

Diary of Events

Statistics

Oils & Fats International (USPS No: 020-747) is published eight times/year by Quartz Business Media Ltd and distributed in the USA by DSW, 75 Aberdeen Road, Emigsville PA 173180437. Periodicals postage paid at Emigsville, PA. POSTMASTER: Send address changes to Oils & Fats c/o PO Box 437, Emigsville, PA 17318-0437 Published by Quartz Business Media Ltd Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 E-mail: oilsandfats@quartzltd.com

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NEWS

COMMENT

Cheap oil’s impact

hat is the future of biofuels in the face of plunging petroleum prices, now hovering around US$50-60/barrel for Brent crude from the highs of US$100/barrel for much of the past decade? BP has just announced it is divesting its cellulosic biofuels business (see article, opposite), biofuel producers are having to slash prices to stay competitive and there is no economic incentive for oil refiners to blend biofuels above mandated levels. The percentage of ethanol blended in US gasoline dropped 7.8% to 789,000 barrels/day in the first week of January to reach 9%, and sunk to a three-year low of 8.9% the previous week, the US Energy Information Administration has reported. Ethanol prices for FOB Rotterdam fell to an all-time low of US$508/m3, down from a previous all-time low in July 2014, Platts reported on 14 January. In the big picture, biofuels are just a drop in the ocean of the global fuel market, making up just 1.4% of the world’s liquid fuel market in 2013, according to the International Energy Agency. In that year, the transport sector used 53% of the 90M barrels of oil consumed each day. But even that 1.4% share is likely to fall as crude oil prices stay low, according to analysts at Energy Intelligence. Low oil prices may also lead to policy-makers questioning mandated blend rates themselves. In November, the US Environmental Protection Agency delayed announcing its 2014 quota volume for blending, and proposed a biofuels blending mandate of 15.21bn gallons, down from 16.55bn gallons in the 2013 rule (see article, opposite page). So the big question is – where is the petroleum market heading?

Have petroleum prices bottomed out?

For much of the past decade, oil prices were high – around US$100/ barrel since 2010 – because of soaring oil consumption in countries like China and conflicts in oil-producing nations like Iraq and Iran, explains Brad Plumer at Vox.com. High prices spurred companies to start drilling for new, hard-toextract crude oil in the USA’s shale formations and Canada’s oil sands. The USA has added four million new barrels of crude oil/day to the global market since 2008, a significant boost to global crude oil production of about 75M barrels/day. With geopolitical disruptions easing and oil demand falling in Asia, Europe and the USA in mid-2014 due to weakening economies, world oil supply was on track to rise higher than demand. From a June peak of US$115/barrel, prices fell to some US$80/barrel in mid-November. OPEC – the world’s largest oil cartel – is not cutting production to prop up prices. Saudi Arabia – the world’s second-largest crude oil producer – does not want to give up market share, and is banking that it can pump oil cheaper than the shale extractors in the USA. So, have crude oil prices bottomed out or will they continue to stay low? Analysts have different opinions; some say we will see US$40/ barrel while others predict a rebound soon. There are commentators who say governments should now introduce much needed energy policy reforms, such as ending fossilfuel subsidies, as the current low prices will reduce the policies’ effect on consumers. Denmark’s Novozymes has said it will continue to invest in enzymes for advanced biofuels production because it believes in its long-term potential. Apart from energy security, one of the major drivers for renewable fuels has been the need to cut emissions to tackle climate change. That need has not gone away. It is just how long biofuel producers can tough out the current oil price slump. w

BP to cut cellulosic biofuels business as energy costs fall

nergy giant BP will divest its cellulosic biofuels business in the face of falling energy costs, the company announced in December last year, as reported by Biofuels Digest. The result would be more than “hundreds of jobs” lost across the whole of BP’s global operations. Assets were also to be sold in addition to more than US$40bn in assets sold as part of the payment for the 2010 Deepwater Horizon Oil Spill. The company said: “The current challenging external business environment is resulting in tough strategic choices having to be made by businesses across BP. In biofuels, the decision has been taken to cease further development of BP’s proprietary lignocellulosic (LC) technology. While we believe there is value in the LC technology, we have chosen to focus our biofuels investment on building the profitability and scale of our sugarcane biofuels business in Brazil.” It added: “This decision will

affect LC activities, including a demonstration plant in Jennings, Louisiana, the technology centre in San Diego, the Highlands feedstock farm in Florida, as well as some activities in Brazil and centrally. We will now explore options to sell these assets and facilities.” The company confirmed its decision would not affect its Vivergo bioethanol joint venture in the UK or its bio-butanol JV Butamax and Kingston Research Limited. The Butamax JV was progressing with its existing strategy to commercialise biobutanol. Additionally, BP said it would discontinue a sugar-to-renewable diesel programme that had been underway since 2008. “This has been a difficult decision”, the company said. “However, it is increasingly clear that there are fundamental cost challenges to develop[ing] a sugar-based biodiesel fuel that is able to compete with vegetable-oil derived biodiesels or sugar-based ethanol (in gasoline).”

Raízen plans eight ethanol plants

n December last year, Brazil’s Raízen and Canada-based Iogen Corp announced they had begun production of cellulosic ethanol on schedule at Raízen’s newly expanded Costa Pinto sugarcane mill in Piracicaba, São Paulo, Brazil, Biofuels Digest reports. If Costa Pinto operations are successful, Raízen plans to deploy Iogen’s technology in seven more Raízen sugarcane mills to double biofuel output in 10 years. “Continuous commercial production will commence with the upcoming 2015 harvest season,” said Pedro Mizutani, Raízen’s executive vice president. “We plan to be producing up to one billion litres of cellulosic biofuel from bagasse and cane straw by 2024,” Mazutani added. This would involve investment of some US$930M to increase biofuel output by 50%, according to the Financial Times. Raízen is Brazil’s biggest sugar and ethanol producer and a joint

venture between Royal Dutch Shell and Cosan. It broke ground on the US$100M biomass-to-ethanol expansion at Costa Pinto just over a year ago. The new facility will convert biomass, such as sugarcane and straw, into 40M litres/year of advanced, secondgeneration cellulosic biofuel. It is also the first large-scale commercial implementation of Iogen Energy’s cellulosic ethanol technology, which the company developed and has proven at its Ottawa demonstration facility. “We have 10 years of demonstration-scale operating experience and, by operating over six months with Brazilian bagasse, we were able to troubleshoot problems, collect information and adapt designs for reliable low-cost operation in Brazil,” said Iogen CEO Brian Foody. “Large-scale commercialisation in Brazil will open the door for global deployment of our technology,” he added.

2 OFI – FEBRUARY 2015, BIOFUELS ISSUE www.oilsandfatsinternational.com

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NEWS

US extends tax incentive but delays 2014 blend volume O n 3 December, the US House of Representatives voted to pass a shortterm tax extenders package to reinstate the biodiesel tax incentive retroactive from its expiry on 1 January 2014 to the end of 2014, Biodiesel Magazine reports. The National Biodiesel Board (NBB) was urging lawmakers to act quickly on a longer-term tax deal that would provide more certainty for growth and investment in the US biodiesel industry. “While we appreciate a one-year extension, we are urging Congress to continue pressing for a longer-term policy that can afford this industry the certainty needed to invest and grow”, said Anne Steckel, NBB’s vice president of federal affairs. “Biodiesel businesses across the country are poised to expand their operations, hire new workers and build new

infrastructure, but we need forward-looking policy.” In addition to the biodiesel tax credit, the package also included an extension of the second-generation biofuel production tax credit for algae and cellulosic biofuels. The Algae Biomass Organization also called on Congress and the White House to negotiate a long-term tax policy for renewable fuels. Adding to the uncertainty in the US market, the Environmental Protection Agency (EPA) announced in November that it would delay issuing a final renewable fuel standard (RFS) setting out blend volumes for 2014. Instead, it plans to issue a new rule this year to set standards for 2014 through 2016 in an attempt to bring its annual rulemaking back into compliance with statutory deadlines, after

several lengthy delays in recent years. The EPA decision was welcomed by renewable fuel producers, who had opposed the agency’s proposal to lower the statutory blending requirements for 2014 to 15.21bn gallons because it did not believe the fuel sector could absorb any additional ethanol. This was down from 16.55bn gallons in the 2013 rule. The EPA had been required by statute to finalise the rule by 30 November 2013. The petroleum industry and some environmental groups cited the postponement as further evidence the rule should be scrapped, with the American Fuel & Petrochemical Manufacturers announcing in November that it planned to sue the EPA over the delay in issuing the final 2014 rule.

Navy completes first successful ATJ supersonic flight

he US Navy, Naval Air Systems Command (NAVAIR) and Gevo, Inc – the world’s only commercial producer of renewable isobutanol – announced in December the first successful alcohol-to-jet (ATJ) supersonic flight at the Naval Air Warfare Center in Patuxent River, Maryland, USA, Biofuels Digest Reports. This was the first evaluation test programme to comprehensively test and evaluate the performance of a 50/50 ATJ blend in supersonic (above Mach 1) afterburner operations – a critical test to successfully clear the F/A-18 for ATJ operations through its entire flight envelope. The US Navy is exploring alternative fuels that can serve

as drop-in replacements to petroleum, as the availability of additional fuel sources can increase resiliency for operational commanders and help reduce US dependence on fossil fuels. The F/A-18 testing is a

significant milestone leading to a military specification (MIL-SPEC). The MIL-SPEC would allow for commercial supply of ATJ fuel to the Navy and Marines Corps. Gevo’s ATJ is produced at its demonstration biorefinery in Silsbee, Texas, using isobutanol produced at its Luverne, Minnesota, fermentation facility. The isobutanol is being produced in one of the facility’s four fermenters, while the other three fermenters are dedicated to ethanol production. Gevo’s isobutanol meets product specifications for direct drop-in applications, as well as for use as a feedstock for the Silsbee biorefinery to produce hydrocarbons such as ATJ, the company said.

IN BRIEF MALAYSIA: The biodiesel blend mandate jumped to seven percent from five percent last November, which is expected to increase national palm oil consumption to 575,000 tonnes/year. The biodiesel would be sold at a total of 366 petrol kiosks. The country was also exploring increasing the blend to 10%, but a timeline had not been set. FRANCE: The national oil body UFIP agreed in December to increase the biodiesel blending mandate from seven to eight percent, Biofuels Digest reports. However, it warned that this may void some car manufacture warranties by going above the EU-wide approved seven percent level.

EPA criticised for Argentine decision Boost from reintroduction of Cide

he US National Biodiesel Board (NBB) has criticised a decision by the Environmental Protection Agency (EPA) to allow Argentinian biodiesel producers to use a survey plan to certify that the soyabean oil feedstocks it uses are sustainable. “The EPA’s 27 January decision effectively leaves it to the foreign producer to pay an independent third party to survey their feedstock suppliers and is far less stringent than the current map and track requirement,” the NBB said. This involved foreign producers closely mapping and tracking each batch of feedstock used to produce imported renewable fuels.

“Many of the soyabeans processed into soyabean oil in Argentina come from Uruguay, Peru, Brazil and other countries,” the NBB said. “Given the complex international trade involved, the EPA will have little ability to verify the survey plans proposed by Argentinian producers.” The NBB estimates that up to 600M gallons of Argentinian biodiesel could enter the USA as a result of the change. t Members of Carbio, Argentina’s biofuels association, exported 1.6M tonnes of biodiesel in 2014, a year-on-year increase of 41%, a result of soyabean oil’s cheapness relative to energy blending demand, Platts reported.

osan SA, Brazil’s biggest producer of sugar and ethanol, said in November that two potential upsides in 2015 could brighten the outlook for the country’s ethanol sector, which has struggled with government policy in recent years, Reuters reports. Vasco Dias, president of Raízen – the company’s sugar, ethanol and bioenergy segment – said the possible reintroduction of a tax on gasoline, known as Cide, would allow ethanol to regain some of the market share of the light-vehicle fuels market that it had lost in recent years. Over the past few years, the government has sought to contain inflation by holding down the price of gasoline and removing the Cide tax, which hurt the competitiveness of ethanol. Sources consulted by Reuters said the government was currently considering the return of Cide on gasoline to boost tax revenue. Cide was 28 centavos/litre (US$0.42/gallon) before the government eliminated it. Additionally, Dias said the government could this year raise the ceiling of the blend range for ethanol in gasoline to 27.5% from the current ceiling of 25% and, in so doing, raise demand for the biofuel. The government is in the final stages of feasibility studies on the higher blend’s effects on fuel distribution, engines in older cars and the environment.

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NEWS

IN BRIEF THE PHILIPPINES: Under the Energy Plan 2012-2030, the Department of Energy plans to increase the biodiesel blend to five percent from the current two percent. A spokesman said it was hoped this could be achieved by the end of the year. FINLAND/USA: Finland’s Neste Oil Corp and Iowa-based Renewable Energy Group Inc announced on 19 December that they had settled their patent infringement lawsuits against each other regarding renewable diesel processes. REG inherited the lawsuits when it acquired Syntroleum Corp and the Dynamic Fuels renewable diesel plant in Geismar, Louisiana. CHINA: Experts estimate that China’s consumption of biodiesel during 2014-17 will go beyond 2.5M tonnes, following the implementation of a national B5 blend and expansion of biodiesel applications, Biofuels Digest reported in December. Biodiesel projects are ramping up in China; as of the end of May 2014, major biodiesel projects proposed and under construction boasted a combined capacity of over 2.7M tonnes/year. FINLAND: Finnair flew an A330 from Helsinki to New York in December, partially on used cooking oil-based jet fuel, to highlight the opening of the UN Climate Summit. The fuel was supplied by SkyNRG Nordic, a joint venture between SkyNRG and Statoil Aviation. The airline said it was hoping to set up a biofuel fuelling hub along with partners to help reduce the cost of aviation biofuels and strengthen the supply chain. CHINA: In December last year, Shell Hong Kong became the first oil major in the city to commercially launch a five percent biodiesel blend product targeting corporate customers seeking to meet their greenhouse gas emission targets. However, the company said it had no plans to launch the cleaner-burning fuel at its network of fuel stations, citing uncertain demand and limited storage capacity.

Boeing completes green diesel flight

n 2 December last year, Boeing completed the world’s first flight using ‘green diesel’, a sustainable biofuel that is widely available and used in ground transportation. The company powered its ecoDemonstrator 787 flight test aeroplane with a blend of 15% green diesel and 85% petroleum jet fuel in the left engine. The fuel is made from vegetable oils, waste cooking oil and waste animal fats. Boeing previously found that the fuel was chemically similar to hydroprocessed esters and fatty acids (HEFA) aviation biofuel, which was approved in 2011.

However, green diesel is chemically distinct and a different fuel product than biodiesel. With production costs of 800M gallons/year in the USA, Europe and Asia, green diesel could rapidly supply as much as one percent of global jet fuel demand, according to Finland-based Neste Oil, which supplied the Boeing diesel. With a wholesale cost of around US$3/gallon, inclusive of US government incentives, green diesel approached price parity with petroleum jet fuel. Additionally, on a lifecycle basis, sustainably produced green diesel reduced carbon emissions by 50-90%, compared to fossil fuel.

FGV will triple biodiesel capacity

alaysia’s Felda Global Ventures Holding Bhd (FGV) aims to be the world’s leader in biodiesel by tripling its production capacity to 350,000 tonnes/year by 2016, New Straits Times reported in December. The country’s largest biodiesel exporter will spend US$47.5M on expansion plans at its Kuantan biodiesel plant. The group president and CEO, Datuk Mohd Emir Mavani Abdullah, said this would increase FGV’s output of palm methyl ester (PME) to 350,000 tonnes by 2016 from its current 100,000 tonnes/year. The B30 blend comprises 30% PME and 70% diesel fuel.

REG acquires majority in Petrotec AG

enewable Energy Group Inc (REG) announced on 29 December that its wholly owned subsidiary – REG European Holdings BV – had completed the acquisition of IC Green Energy (ICG)’s majority equity ownership position in German biodiesel producer Petrotec AG. The subsidiary purchased ICG’s 69% equity ownership in Petrotec AG for US$20.9M, or US$1.235/share, paid in 2,070,538 newly-issued REG shares. The REG subsidiary also purchased ICG’s loan to Petrotec AG of approximately US$15.4M. REG European Holdings BV intended to make a cash tender offer for all other Petrotec shares at a price no less than the value per share received by ICG.

Norwegian airport to supply biofuels

vinor’s Oslo Gardermoan, Norway, will be the first airport in the world to supply biofuels on a regular basis, Biofuels International reported in November. Through an agreement with Avinor, Statoil Aviation will deliver 2.5M gallons of biofuel to tanks at Oslo Airport between March 2015 and March 2016. These 2.5M gallons will be used to produce a 50% biofuel

mix, which will fuel approximately 3,000 flights between Oslo and Bergen. The mix will initially consist of used cooking oil (UCO), but industry experts in Norway are considering producing forestbased biofuels on a large scale in coming years. Lufthansa, SAS and KLM have all agreed to support the move by purchasing biofuel and taking part in the new initiative.

Ethanol, sugarcane prices linked in India

he Indian Sugar Mills Association (ISMA) has welcomed the Indian government’s decision to link ethanol prices to sugarcane prices, saying that ethanol blending would save foreign exchange to the tune of Rs5,000 crore (US$800M), The Economic Times reported in December. The Cabinet Committee on Economic Affairs fixed Rs48.5-49.5/litre for procurement of ethanol for blending with petrol. “Linking the ethanol price to the sugarcane price will directly benefit farmers. [The] sugar industry is required to pass on 70% of the revenue from primary by-products and, therefore, this move will mean higher revenues for farmers also,” ISMA director general, Abinash Verma, said in a statement. The ISMA added that this decision would bring transparency and simplify the procedures to finalise ethanol contracts and supplies.

Amyris receives ANP approval for renewable jet fuel

n December, renewable products company Amyris Inc received approval for its renewable jet fuel from Brazil’s fuels regulator, ANP, clearing the way for the commercialisation in Brazil of the Amyris renewable jet fuel in blends of up to 10%. “The airline industry continues to experience strong growth and, while current low oil prices may provide a short-lived respite, the impact of carbon pollution is undeniable,” said John Melo, president and CEO of Amyris. “Amyris and its partners are contributing to reductions in greenhouse gas (GHG) emissions with our renewable fuel. We are pleased that leading airlines, such as Air France, Lufthansa and KLM are, or soon will be, flying with a blend of our renewable jet fuel.”

Tyton explores tobacco biofuel

yton BioEnergy Systems, a US biotechnology company, is modifying tobacco plants to produce a renewable biofuel crop, Global Business reported in December. With traditional tobacco, farmers take great care with the leaves and dry them in special curing barns at the end of the season. But, for biofuels, the plant is cut down in its prime when the sugar content is at its highest and processed fresh without curing. The firm uses the plant’s genetic code to boost its sugar and oil content. The sugar is used to make ethanol while the oil is extracted to make biodiesel. The company is working alongside local farmers to begin testing the GM crop.

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European Parliament passes Fuel Quality Directive

n 17 December, the European Parliament (EP) rejected a motion opposing the European Commission (EC)’s proposal to implement Article 7a of the Fuel Quality Directive (FQD) and its six percent greenhouse gas (GHG) reduction target for transport fuels. FuelsEurope welcomed the passing of the proposal. “After five years of review, the EC proposal, already supported by member states, now has the support of Parliament and the regulatory uncertainty on how fuel suppliers can comply with the six percent GHG reduction target is lifted,” FuelsEurope said. The target must be

Kior Inc files for bankruptcy in USA

iofuel producer Kior Inc has filed for bankruptcy protection in Delaware with a plan to sell its assets to affiliates of billionaire banker Vinod Khosla if no better offer emerged, Bloomberg reported in December. The company listed consolidated assets of US$58.3M and debt of US$261.3M as of 30 June in Chapter 11 documents filed on 9 November. It owes around US$77M to Alberta Investment Management Corp and around US$159M to senior lenders owned and controlled by Khosla, the co-founder of Sun Microsystems Inc. Kior opened the first US commercialscale cellulosic biofuel plant in 2012 in Columbus, Mississppi, converting wood waste and other non-food crops into gasoline and diesel. The plant has since been idled and decommissioned to minimise costs.

achieved within the next five years. The European renewable ethanol industry association, ePure, welcomed the fact that the FQD would finally move forward but had called on the EP to vote against the EC’s proposal. ePure said the EC proposal undermined Europe’s six percent decarbonisation objective because it set the fossil fuel baseline at 94.1gCO2/MJ, instead of 83.8gCO2/MJ. “This, in effect, lowers the EU’s decarbonisation ambitions as less effort will be required from fuel suppliers to achieve the objective,” ePure had said in an earlier press release. The proposal would allow fuel suppliers to

reach the six percent objective without the need for low carbon fuels in the proportion envisaged in the EU Climate and Energy package adopted in 2009, or through reduced upstream emissions, without a proper methodology to calculate and monitor these, ePure said. “Applying the six percent decarbonisation target to a baseline of 94.1gC02/MJ, would result in around seven million tonnes of extra CO2 emissions,” ePure said. “ePure now calls on the EC to ensure that the FQD is properly implemented, maintained and strengthened as part of the 2030 Energy and Climate policy framework.”

49 2014

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Pacific Ethanol and Aventine in merger

S-based Pacific Ethanol Inc and Aventine Renewable Energy Holdings Inc announced on 31 December that the two companies had agreed to merge, with Aventine to operate as a whollyowned subsidiary of Pacific Ethanol. “This transaction will more than double our annual ethanol production capacity and it will establish Pacific Ethanol as the fifth largest producer and marketer of ethanol in the USA,” said Pacific Ethanol CEO Neil Koehler. The combined company will have a total ethanol production of 515M gallons/year of ethanol and, with Pacific Ethanol’s marketing business, will sell over 800M gallons/year of the fuel. The deal is expected to be finalised in the second quarter of this year, subject to regulatory approvals and approval of the two companies’ shareholders.

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DIARY OF EVEN TS

25-26 February 2015 Energy from Waste VENUE: The Royal College of Surgeons of England, London, UK Tel: +44 1722 717024 E-mail: efw@markallengroup.com Website: www.efwlondon.eu/booking

2-4 March 2015 World Bio Markets VENUE: Hotel Okura, Amsterdam, the Netherlands Tel: +44 (0)207 099 0600 E-mail: info@greenpowerconferences.com Website: www.worldbiomarkets.com

11-12 March 2015 Advanced Bioeconomy Leadership Conference VENUE: Capital Hilton, Washington DC, USA CONTACT: Bill Lundberg, Conference Director/Managing Partner, Alliance Biofuels Conference, USA. Tel: +1 774 270 0358 E-mail: blundberg@me.com Website: www.advancedbiofuelssummit.com

15 April 2015 4th Annual EU Biofuels Seminar VENUE: Hotel President Wilson, Geneva, Switzerland CONTACT: Chris Willmets-Secker, Platts, UK Tel: +44 (0)20 7176 6227 E-mail: chris.willmets@platts.com Website: www.platts.com/events/emea/ eu-biofuels/index

4-6 May 2015 6th AEBIOM European Bioenergy Conference 2015 VENUE: Radisson Blu Royal Hotel, Brussels, Belgium CONTACT: Anamaria Olaru, Communications & Events Manager, European Biomass Association (AEBIOM), Belgium. Tel: +32 2 3184034; E-mail: olaru@aebiom.org Website: www.aebiom.org/conference

1-4 June 2015 International Fuel Ethanol Workshop & Expo VENUE: Minneapolis Convention Center, Minneapolis, Minnesota, USA CONTACT: BBI International, USA Tel: +1 866 746 8385 E-mail: service@bbiinternational.com Website: www.fuelethanolworkshop.com

New date for OFI India in 2016

FI India, to be held at the Hyderabad International Convention Centre, has a new date of 13-14 April 2016. The event will feature a two-day exhibition with leading providers of plant, equipment and technology to the oils and fats industry; a two-day business conference; and a two-day Smart Short Courses programme. Business conference: The business conference, ‘Fostering Market Growth and Facing Challenges in the Oils and Fats Industry’, features four modules covering global and regional issues impacting the oils and fats industry; drivers and challenges in the Indian and South Asian markets; geographic and feedstock issues impacting Indian imports; and new markets, applications and opportunities for oils and fats players. Smart Short Course: The ‘Critical issues in Crushing, Refining, Processing, Product Formulation and Packaging’ programme is for marketing, technical and plant personnel. It offers the opportunity for those who are experienced to meet experts in the field to discuss their current problems and enhance their product innovation or plant operation. Tour of CSIR-IICT: On Tuesday 12 April, the eve of OFI India, the Council of Scientific and Industrial Research – Indian Institute of

Chemical Technology (CSIR-IICT) is offering a tour of its facilities. The focus of the CSIR’s Centre for Lipid Research includes oil processing, biolubricants, surfactants, castor oil-based products, speciality oleochemicals, bioactive compounds, nutraceuticals and structured lipids and biodiesel. For sales and sponsorship, contact: Mark Winthrop-Wallace, Sales Manager Tel: +44 1737 855114 E-mail: markww@quartzltd.com Anita Revis, Sales Consultant Tel: +44 1737 855068 E-mail: anitarevis@quartzltd.com Erik Heath, Chinese Sales Executive Tel: +44 1737 855108 E-mail: erikheath@quartzltd.com For the business conference, contact: Serena Lim, Editor, OFI E-mail: serenalim@quartzltd.com For the Smart Short Course, contact: Ignace Debruyne, E-mail: info@ smartshortcourses.com or Sefa Koseoglu, E-mail: sefa.koseoglu@membraneworld.com

www.ofievents.com/india

3-5 June 2015

25-27 August 2015

11th International Conference on Renewable Resources & Biorefineries

International Congress and Expo on Biofuels & Bioenergy

VENUE: Park Inn Hotel, York, UK CONTACT: Els Vertriest, Medicongress, Belgium Tel: +32 9 218 85 81 E-mail: els@medicongress.com Website: www.rrbconference.com

7-10 June 2015 The 5th International Conference on Algal Biomass, Biofuels and Bioproducts VENUE: Paradise Point Resort & Spa, San Diego, USA CONTACT: Website: www.algalbbb.com

10-11 June 2015 Oleofuels 2015 VENUE: Frankfurt, Germany CONTACT: Cheryl Williams, ACI, UK Tel: +44 (0) 203 141 0623 E-mail: cwilliams@acieu.net Website: www.wplgroup.com/aci/conferences/ eu-eaf8.asp

For a full listing of oils and fats industry events, go to: www.ofimagazine.com

VENUE: Valencia, Spain CONTACT: OMICS Group Conferences, USA Tel: +1 888 843 8169 E-mail: biofuels.conference@omicsonline.us Website: www.biofuels-bioenergy. conferenceseries.com

26-28 October 2015 2015 National Advanced Biofuels Conference & Expo VENUE: CenturyLink Center Omaha, Nebraska, USA CONTACT: BBI International, USA Tel: +1 866 746 8385 E-mail: service@bbiinternational.com Website: www.advancedbiofuels.com

30-31 December 2015 ICBB 2015: XIII International Conference on Biofuels and Bioenergy VENUE: Holiday Inn, Paris Montparnasse, Paris, France. CONTACT: Website: www.waset.org/ conference/2015/12/paris/ICBB

6 OFI – FEBRUARY 2015, BIOFUELS ISSUE www.oilsandfatsinternational.com

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A smoking hot biofuel The race is on to find a suitable feedstock for aviation biofuel. Industry giants such as Boeing, South African Airways and SkyNRG have teamed up to investigate whether tobacco is a good contender. Charlotte Niemiec looks at global research into the crop’s potential to produce biofuel and its various other applications

uelling aeroplanes is an expensive business; the UK’s Wired magazine notes that, in 2012, the world’s airlines spent US$209bn on fuel – amounting to 33% of operating costs. Not just that, but using traditional fossil fuels such as kerosene to fuel the engines is damaging to the environment. The International Air Transport Association (IATA) estimates that using biofuels instead of fossil fuels could cut the industry’s overall carbon footprint by 80%. However, there’s a problem: if the industry were to switch to biofuels now, the costs would skyrocket. Biofuels derived from plants and agricultural wastes that are currently available are more expensive than traditional jet fuel. Nevertheless, it is hoped this will change if and when production is ramped up. The next problem is feedstock: for all industries trying to move from fossil fuels to biofuels, it is proving tricky to secure a sustainable, efficient, competitively-priced and inexhaustible feedstock. This is particularly trying for an industry such as aviation, where enormous amounts of fuel are required. But, according to Boeing, South African Airways (SAA) and SkyNRG, a potential – and somewhat surprising – feedstock exists: tobacco. These giants of the airline industry are experimenting with producing biofuel from ‘Solaris’ tobacco. Boeing announced in August last year that SkyNRG was expanding production of the plant in South Africa as an energy crop that farmers could grow instead of traditional tobacco. According to a Boeing press release: “Test farming of the plant, which is effectively nicotine-free, is underway in South Africa, with biofuel production expected from large and small farms in the next few years.” The plan, says Boeing, is to convert oil from the plant’s seeds into jet fuel. The company adds: “In coming years, Boeing expects emerging technologies to increase South Africa’s aviation biofuel production from the rest of the plant [and not just its seeds].” This particular type of tobacco was invented and patented by Italian company Sunchem Holding – an industrial research and development company operating in the sectors of genetic and recombinant DNA in plants for energy and human purposes – which owns the exclusive rights to Solaris, or ‘seed tobacco’. The company’s website explains that the plant has several advantages over other feedstocks: it is extremely robust and is able to grow in various climates and soils. An annual plant, it can be cultivated on marginal lands that cannot be used for food production and can be harvested in the same year of sowing, enabling farmers to plan the amount of land dedicated to Solaris each year. The seeds themselves contain around 40% oil and, after cold pressing, seeds can produce 33-34% of raw oil and 65% protein cake. A SkyNRG press release adds that, in addition to the production of vegetable oil, the plant can be used to generate valuable animal proteins and biomass for providing electricity to rural environments. The company is concentrating on demonstrating the sustainability of the plant by meeting the criteria of the Roundtable on Sustainable Biomaterials (RSB).

Setting a sustainable example According to SkyNRG, a Netherlands-based aviation fuels company focused on sustainable fuels, “aviation is one of the most dynamic, economically v

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AVIATION

v crucial and socially essential industries. At the same time, this industry is responsible for up to three percent of global man-made CO2 emissions. Unlike other forms of transport – such as cars that can switch to alternative energy sources like ethanol, hydrogen or electricity – aviation has fewer green alternatives to significantly reduce its carbon footprint.” SkyNRG’s mission is to play a pioneering role in creating a sustainable future for aviation. The Netherlands’ KLM airline was SkyNRG’s launching customer on 23 November 2009, when the airline operated the world’s first demonstration test flight with passengers on board using sustainable jet fuel. Boeing is the aviation industry’s leader in the development of sustainable biofuel, working with partners in Australia, Brazil, China, Europe, Japan, the Middle East, South Africa, the USA and other countries. The company says it is encouraged to invest in alternative fuels because, when produced sustainably, the use of aviation biofuels reduces carbon emissions by 50-80%, compared to using petroleum jet fuel. Since aviation biofuels were approved in 2011, over 1,500 passenger flights have been conducted. SAA has pledged to reduce its carbon emissions by 34% by 2020 and 42% by 2025 – and it wants to use home-grown biofuel by 2017. The airlines anticipate growing Solaris on a large scale, as well as on smallholder farms in the South African region. The companies are already working together with South African stakeholders to “position farmers with small plots of land to tap markets for biofuel feedstocks that provide socio-economic value to communities without harming food supplies, fresh water or land use.” The consortium wants to raise further funding in the near future to reach critical scale as soon as possible, it says.

Global research into tobacco

However, the Solaris tobacco type is not the only tobacco variety – and the Boeing, SAA and SkyNRG consortium is not the only team – producing fuel from tobacco. Researchers from Royal Holloway University of London, UK, were awarded a grant from the European Union (EU) in 2012 after identifying a tobacco tree that could produce biofuels. Scientists at the university’s School of Biological Sciences discovered that Nicotiana glauca produces compounds that can be used as a biodiesel, which could be used directly as fuel or cracked to produce petroleum compounds. Nicotiana glauca is a species of wild tobacco known as ‘tree tobacco’, native to South America but now widespread on other continents and a common roadside weed in the southwestern USA. Significantly, the plant grows well in warm and arid climates; it does not require fertile ground and can thrive in regions that receive just 200mm/ year of rainfall, with temperatures exceeding 40ºC. Initial studies showed the plant was able to grow in desert climate conditions, such as those found in the United Arab Emirates (UAE), North Africa and other arid or tropical regions of the world. “This is a crucial factor”, says Dr Paul Fraser from the university. “It means that growing this crop will not be in competition for land space with food crops. Indeed, many farmers have already raised concerns about giving their land over to biofuel crops. Our discovery could potentially solve this issue.”

AS GLOBAL SMOKING PREVALENCE FALLS, PRODUCING BIOFUELS DERIVED FROM TOBACCO PLANTS WOULD OFFER TOBACCO FARMERS MORE SECURITY IN THE FORM OF AN ADDITIONAL END USE FOR THEIR CROPS

Other research has been undertaken by scientists at the Lawrence Berkeley National Lab in California, USA, under a project funded by the Department of Energy (DoE)’s Advanced Research Projects Agency-Energy (ARPA-E), a US government agency tasked with promoting and funding research and development of advanced energy technologies. The scientists again selected tobacco because the plant is “grown in large tracts throughout the USA and in more than 100 countries.” Furthermore, tobacco “generates multiple harvests per year, its large leaves could store a lot of fuel and it is amenable to genetic engineering.” Tobacco has huge potential because it produces very high yields, the researchers say, estimating that “about 1,000 acres of tobacco could yield more than one million gallons of fuel”. Currently, they note, tobacco is one of the most ubiquitous plants in the American south. But, as sales of commercial tobacco products fall, demand for the crop is declining. If tobacco were to be redirected to biofuels, it could resuscitate an industry upon which many depend for their livelihoods. The Tobacco Atlas Organisation notes that, while smokers consumed nearly 5.9 trillion cigarettes in 2009, global smoking prevalence is flat or decreasing (although the total number of smokers worldwide continues to increase simply due to population growth). The organisation suggests that the pattern of nicotine consumption may shift in future, as people seek alternative nicotine delivery systems such as gum or electronic cigarettes. Cultivating tobacco for biofuels, therefore, makes solid commercial sense, especially as “tobacco grown for biofuel purposes can be planted at up to 16 times the density of tobacco planted for consumption, so fields already producing the plant could vastly increase production to meet potential future need.” The Berkeley scientists are working on creating tobacco plants that maximise the uptake of CO2 and sunlight, and the production of oils and fats. Furthermore, at Old Dominion University (ODU) in Virginia, USA, Sandeep Kumar, assistant professor of civil and environmental engineering, is conducting research into the areas of biofuel production from non-food-based biomass feedstock. He notes: “We’re trying to replace petroleum as much as possible, reduce greenhouse gases and

make fuels that can be produced locally.” As the state of Virginia is a huge tobacco producing region, research into alternative uses of the plant here makes sense. Tyton BioSciences, based near Danville, is one of several Virginia companies exploring new uses for tobacco as the smoking rate declines nationwide. The company notes that tobacco produces a plethora of valuable proteins and chemicals that can be used for a variety of purposes besides smoking products, including applications in the animal feed, pharmaceutical and biofuel industries. ODU and Tyton BioSciences have jointly filed two patent applications in the past year around a chemical-free process of turning the tobacco plant into biofuel. One patent involves removing the sugars from the tobacco biomass to create a fuel source; the second is to process tobacco seeds themselves to extract an oil product and other fuel products. Tyton BioSciences received a grant from the Virginia Tobacco Commission and awarded US$61,000 to Kumar’s team at ODU. The team is testing different tobacco plant varieties and developing novel processes to produce advanced biofuels and bio-products as efficiently as possible. Finally, Ruth Sanz-Barrio, an agricultural engineer of the NUP/UPNA-Public University of Navarre in Pamplona, Spain – and researcher at the Institute of Biotechnology – says her research shows that “the leaves of genetically modified tobacco plants were releasing 500% more fermentable sugars. With these sugars, which could later be turned into bioethanol, one could obtain up to 400 litres/tonne of bioethanol from fresh leaves ... which would mean an almost 10-fold increase in bioethanol yield with respect to the control tobacco plant that had not been modified.” She concludes that genetically-enhanced tobacco could be an alternative source of biomass in areas such as Extremadura and Andalusia in Spain, the traditional tobacco producers. “The estimated calculations of the starch production of these enhanced varieties would be equivalent to those of crops such as barley or wheat”, she says, adding: “As cereals are currently being used as the raw material to produce bioethanol, genetically-enhanced tobacco could be an alternative source of biomass and for obtaining clean energies.” w Charlotte Niemiec is OFI’s assistant editor

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Plant and technology round-up Oils & Fats International reports on some of the latest projects, plant and technology news and developments around the world

Algenol launches Indian algae project A

lgenol, USA and India’s Reliance Industries Ltd reported on 21 January that they had successfully launched Algenol’s first algae production platform in India. The demonstration module is located near the Reliance Industries’ Jamnagar petroleum refinery. “The project is designed to demonstrate how robust the Algenol system is in India and how the two companies will more broadly integrate Reliance’s refinery operations with Algenol’s platform in the future,” said Paul Woods, founder and CEO of Algenol. “The deployment of our technology in India is a critical milestone,” he added. Construction of the system was completed in November by Algenol and Reliance engineers and biologists. Test runs were completed and several successful batches of algae were grown. The Algenol fuel production process is designed to convert one tonne of CO2 into 144 gallons of fuel while recycling CO2 from industrial processes and converting 85% of the CO2 used into ethanol, gasoline, diesel and jet fuels, for about US$1.30/ gallon.

“The initial project start-up and smooth transition begins to prove the viability of our technology in varying environments across the globe and the ability of partners to operate our production systems without Algenol’s day-to-day involvement,” Woods said. Currently, day-to-day operations of the project are managed solely by Reliance Industries, after Algenol provided training and operational support. The Reliance group – which has been a strategic investor in Algenol’s technology since June 2011 – is India’s largest private sector enterprise with businesses in the energy and materials value chain and annual revenues in excess of US$66bn. India is the world’s third largest producer of CO2. Algenol said its fuel production process required saltwater rather than freshwater – a key advantage for India – which has incurred serious droughts in the past and faces significant demand for fresh water. The project is currently using saltwater from the Arabian Sea. Algenol was founded in 2006 and is headquartered in Fort Myers, Florida. It said it would announce its first commercial facility this year in the USA. v

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11 OFI – FEBRUARY 2015, BIOFUELS ISSUE www.oilsandfatsinternational.com

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IN BRIEF BRAZIL: Rio Grande do Norte’s first biodiesel plant opened in Guamaré in December, Biofuels Digest reports. The country’s oil and gas giant, Petrobras, invested more than BRL5M in the facility, which will use a wide range of feedstocks from oils produced by small farmers under the social seal programme to used cooking oil brought in from collection points that will be set up around the region.

World-first wood-to-biodiesel plant in Finland PHOTO: LAPPEENRANTA BIOREFINERY AUGUST 2014

USA: In California, Baker Commodities plans to build a 20M gallons/year biodiesel plant in Vernon, co-located with its rendering plant, using technology provided by Superior Process Technologies that claims to produce the fuel with less energy and higher yields at under US$2/gallon, Biofuels Digest reported late last year. HUNGARY: Pannonia Ethanol announced in December it would spend €30M on a project to expand its ethanol plant in Dunaföldvár, central Hungary. CEO Zoltán Reng said the current investment would double the plant’s capacity from 220M to 450M litres/year, as of this year. USA: In California, construction is underway at the pilot plant Mendota Advanced Bioenergy Beet Cooperative is building to produce ethanol from beets. The pilot plant was expected to be commissioned in December and run for nine months before scaling up to 15M gallons/year, Biofuels Digest reports. A commercial facility, aiming for commission during 2017 or early 2018, was also planned. ZIMBABWE: The government has given the green light for the construction of a US$500M ethanol plant at Nuanetsi Ranch in Mwenezi, Soyatech reported in January. It will be developed under the joint venture company, Zimbabwe Bio Energy, comprising a group of private investors and the Development Trust of Zimbabwe. UGANDA: Global process solutions company, Praj Industries, will build an ethanol plant in Uganda for Kakira Sugars, Moneycontrol Bureau announced in January. The plant will process sugarcane molasses from the Kakira Sugar Mill, part of the Madhvani Group, one of the largest private sector groups in East Africa. Praj recently commissioned Africa’s first Roundtable on Sustainable Biomaterials (RSB) certified 80,000m3 ethanol plant in Sierra Leone. HAWAII: Hawaiian Electric and Pacific Biodiesel Technologies signed a contract in November for the Maui-based biofuel company to supply a minimum of two million gallons/year – and up to three million gallons/year – of biodiesel processed from waste cooking oil and other local feedstocks, primarily for use at the Campbell Industrial Park generation facility.

he world’s first wood-based renewable diesel biorefinery has started commercial production in Lappeenranta, Finland (pictured). UPM’s Lappeenranta Biorefinery is based on a hydrotreatment process developed by UPM and will produce approximately 120M litres/year of renewable UPM BioVerno diesel. “Lappeenranta Biorefinery is the first significant investment in a new and innovative production facility in Finland during the ongoing transformation of the forest industry. It is also a focal part in the implementation of our company’s Biofore transformation strategy,” said Heikki Vappula,

Refineries in Finland receive state grants

n Finland, the Ministry of Employment and the Economy has granted Bioethanol Finland Oy €30M to support a planned bioethanol facility investment to be called ‘Kouvola Myllykoski’. Neste Oil Corporation was also granted just under €3.3M to support its ‘Naantali’ refinery. The Myllykoski plant will be built within an old factory in the area, utilising existing infrastructure such as power plants, sewage treatment plants and complete logistics connections. The refinery will use 72,000 tonnes/year of straw to produce 90M litres/year of bioethanol. The Naantali biorefinery will be built in Neste Oil’s existing Naantali refinery. It will process tall oil residue into biofuel with a total production of around 40,000 tonnes/year.

Brooke biomass venture

nvestor Brooke Renewables will provide up to US$1bn (€800,000) over a five-year period to build a facility in Sarawak, Malaysia that converts inedible crops to green fuel, Biofuels International reported in November last year. Brooke Renewables, a venture comprising Hock Lee Group, Brooke Asia and Biochemtex, will build a second-generation bioethanol and biochemical

executive vice president, UPM Biorefining. The finished product fulfils customer specifications and the company is set to move from start-up into regular production. The biodiesel is produced from crude tall oil, a residue of pulp production. A large portion of the raw material comes from UPM’s own pulp mills in Finland. UPM says its BioVerno renewable diesel reduces greenhouse gas (GHG) emissions by as much as 80% compared to traditional diesel and works with all diesel motors. UPM has a sales agreement with North European Oil Trade (NEOT), a wholesale organisation of oil and biofuel products. plant in Sarawak, the report said. The ‘Sarawak biomass hub’ will be the first commercial facility in Southeast Asia to produce second-generation biofuel from inedible crops. Beta Renewables, which operates a commercialscale 2G bioethanol plant in Italy, will provide processing technology to the Sarawak plant and Novozymes will supply enzymes.

Neste Jacobs to build tall oil rosin facility

echnology and engineering company Neste Jacobs and SunPine, which produces biochemicals and feedstocks for second-generation renewable fuels, signed an agreement in November for Neste Jacobs to perform engineering, procurement and construction management services to construct a tall oil rosin production facility in Pitea, Sweden, ProTech reports. The facility is expected to be operational in the second half of 2015 and will deliver rosin to the Lawter facility in Kallo, Belgium. SunPine will produce three different products: raw tall diesel, a feedstock used in the production of renewable diesel; rosin, a raw material used in the production of derivatives, including printing ink and adhesives; and tall oil pitch, an energy product used in the paper industry.

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REG facility producing RHD commercially

n 19 November last year, Renewable Energy Group (REG) celebrated the grand opening of its Geismar biorefinery, which is now producing renewable hydrocarbon diesel (RHD) in commercialscale quantities. REG acquired the 75M gallons/year nameplate capacity plant in June 2014. Beginning production on 17 October, as of November REG Geismar LLC had already produced more than 4.7M gallons of renewable fuel. REG-9000/RHD produced at the plant meets or exceeds ASTM D975 standards. The Geismar biorefinery, REG’s largest, is the company’s first plant to produce RHD using BioSynfining technology developed by REG Synthetic Fuels LLC in Tulsa, Oklahoma, USA. The process converts a wide range of feedstocks – such as animal fat, inedible corn oil, used cooking oil and vegetable oils – into renewable fuel. In addition to RHD, the Geismar facility produces renewable naphtha and liquefied petroleum gas.

Plants commissioned in Sarawak, Malaysia following B7 mandate

lantation group Sarawak Oil Palms Bhd (SOP)’s biodiesel plant, one of two plants completed in Sarawak state, is currently commissioning on a trial basis, The Star reported in December. Group CEO Eric Kiu said the RM60M (US$16.8M) plant, which is located next to SOP’s palm oil refinery in Bintulu, was expected to initially operate at around 50% of its installed capacity of 300 tonnes/day. He told the newspaper that production levels of the plant would be based on the biodiesel demand by the transportation sector in the state. The other biodiesel plant in Sarawak is owned by Senari Biofuels Sdn Bhd (formerly Global Bonanza Sdn Bhd), which is located in the Senari Industrial Complex in Muara Tebas. Sarawak, Sabah and Labuan are the last to implement blending under the government’s nationwide biodiesel programme. “Our biodiesel plant will mainly supply to the blending terminals in Bintulu, Miri and Tanjung Manis in Mukah Division. The biodiesel will be sent to these terminals by road,” Kiu explained. According to a Malaysian Palm Oil Board (MPOB) official, five terminals with in-line blending facilities – costing an average of RM10M (US$2.8M) each – are currently under construction in southern, central and northern Sarawak. These include two in Miri, one in Bintulu, one in Senari-Kuching and one in Tanjung Manis. With the exception of Senari, the other blending facilities were expected to be operational by January. The official said that the government had allocated RM350M (US$97.8M) to fund the development of 35 blending terminals across the country. The B7 blend for the transport sector was introduced in Peninsular Malaysia in December last year.

Great Lakes Biodiesel plant put into receivership

n Ontario, Canada, the C$50M Great Lakes Biodiesel (GLB) plant in Welland went into receivership in December last year and will be sold to the highest bidder, the Sarnia Observer reports. The GLB plant opened at the end of 2012 to convert canola and soyabean oil into biodiesel. Court documents seen by the newspaper confirmed that Toronto-based KPMG had been appointed as the receiver for GLB, along with associated companies Einer Canada and Bioversel Trading. Luxembourg-based investment company Heridge Sarl launched the court case because it said it was only repaid half of a C$20M loan used to get GLB’s plant off the ground, the report said. Heridge has now submitted a bid to purchase all assets of GLB, including the Welland plant, which is not in operation but still employs 16 people. The plant is being maintained so it can immediately go back into production when a new owner is in place. According to court documents, GLB used the loan to build the Welland production facility in 2012 and to secure a commitment from the federal government for C$65M through Natural Resources Canada’s C$1.5bn ecoEnergy fund, designed to kick-start the country’s biofuel industry. However, emails from Natural Resources Canada show that the department terminated the agreement in October 2013 because “GLB had failed to fully commission the biodiesel plant in accordance with the requisite timelines.”

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PHOTO: BEAWOLF/DREAMSTIME.COM

OILSEEDS

From seed to sky I

THE FIRST AEROPLANE TO FLY ON 100% BIOFUEL FLEW ON CARINATA IN 2012 AND WAS FOUND TO PERFORM AS WELL AS CONVENTIONAL FOSSIL FUELS WHILE EMITTING FEWER PARTICULATES

Carinata produces an excellent biofuel and its meal can be fed to cattle, but the crop shines best as a feedstock for aviation biofuel. Charlotte Niemiec looks at its success in the air and efforts to improve and scale up production

s carinata the ‘Holy Grail’ for aviation biofuel? Those involved with the crop believe so, as it meets all specifications for commercial jet use with no need to blend in any petroleumbased fuel and emits fewer particulates than conventional fuel. Brassica carinata, or Ethiopian mustard, is a crop similar to canola or rapeseed that produces a non-edible oil ideally suited for the manufacturing of biofuel. It has many advantages: it is tolerant to both heat and drought and resistant to many diseases, making it ideal for production in regions typically not wellsuited to growing major food crops. Additionally, it fits well within different crop rotations, enabling efficient and sustainable use of land resources. It is certified sustainable under the Roundtable of Sustainable Biomass (RSB). The crop’s residue can be ground into a meal for use in cattle markets, increasing its crop value. An article submitted to Biofuels Digest in May last year by Don Konantz, president and CEO of Calyx Bio-Ventures, an agricultural technology company focused on renewable fuels, notes that this “recaptures so much of the costs and assists in the economic viability of this burgeoning biofuel [because] when the meal’s full value is achieved, and at scale, the cost of producing biofuel with carinata is cost-competitive for energy customers”. Dr John McKinnon, Saskatchewan Beef Industry chair, University of Saskatchewan, Canada, places another tick in the carinata checklist: “Carinata meal is relatively low in fibre and an excellent source of crude protein that is readily degradable by rumen bacteria. As such, this meal can be used

effectively to meet the rumen degradable protein needs of growing cattle.” Carinata has a very low level of saturated fat – lower even than canola oil, an oil that provides one of the best biodiesel fuels. In conventional biodiesel, saturated fats are responsible for crystal formation that leads to clouding and filter plugging in cold temperatures, making carinata oil a preferred feedstock for biodiesel in colder climates. The oil contains over 40% erucic acid, a C22 monounsaturated fatty acid. Traditional aviation fuel is composed of C9 through C13 molecules and the longer carbon chain length of carinata oil allows for more efficient conversion into aviation fuel with reduced amounts of low-value secondary products such as liquefied petroleum gas (LPG) and naphtha when compared to other feedstocks used. Furthermore, carinata’s long-chain fatty acids are used in multiple industrial applications that include high performance lubricants, coatings and use as a feedstock to create chemical intermediates. Carinata oil is believed to be a sustainable source of these fatty acids for the emerging sustainable or ‘green’ chemistry industry.

Agrisoma leads the industry One company involved with the research into, and production of, carinata is Agrisoma, which sells seeds to farmers for the production of renewable oil. It is the world’s largest carinata breeding company and has amassed the largest collection of carinata genetic resources, introducing its commercialised carinata to the crop seeds market. The company v

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v explains that, as a close cousin of canola, carinata readily drops into existing agricultural practices and the oilseed value chain without the need for new equipment or changing practices. The complete value chain that takes carinata from seed to oil has been established using existing farm equipment and oilseed processing facilities. This could encourage farmers that might otherwise be reluctant to invest in new systems to grow carinata as a rotation crop; too many times have farmers switched from one crop to another on the promise of a ‘miracle’ crop (think jatropha or camelina), only to find that yields were not as expected, nor profits. This is not the case with carinata, says Agrisoma. The company’s programme includes a large Canadian nursery effort, where hundreds of advanced pre-commercial lines of carinata are tested for performance in the core production region and are assessed for yield, seed and oil quality, herbicide tolerance and disease resistance, as well as overall agronomic performance. On an annual basis, Agrisoma evaluates tens of thousands of new lines across the major target production zones to select varieties that are best suited for commercial sales. Its ‘Resonance carinata’ brand is currently being grown in Canada using sustainable farming practices. Agrisoma has collaborated with key research institutes to develop a comprehensive genetic map of carinata, identifying key traits that are instrumental in achieving yield and quality, it says. It uses these molecular markers to assemble new genetic combinations, making it a leader in the genetic research of carinata and using its advanced technology to improve oilseed yield and produce the best oil profiles for the biofuel industry. Its technologies include new genomics, proteomics and DNA-based tools that develop scientific understanding of carinata. The Canadian National Research Council (NRA) provides further access to advanced capabilities that include genome sequencing, bioinformatics and advanced analytical tools such as nuclear magnetic resonance (NMR) imaging and mass spectrometry.

Carinata makes aviation history As an aviation fuel, carinata soars. A report from the Coordinating Research Council (CRC) claims that the fuel ‘ReadiDiesel’, made from Resonance carinata, meets ASTM D975 specifications (the standard specifications for diesel fuel oils, biodiesel, biodiesel blends, diesel, fuel oil, petroleum and petroleum products) “without blending and has a molecular make-up that is almost indistinguishable from the ultra-low sulphur diesel tested ... and was the only fuel tested that had the same level of aromatics as petroleum-based diesel fuel”. The tests have proved positive in the airfield, too. On 29 October 2012, a Dassault Falcon 20 twin engine took off from Ottawa, Canada, and made a 90-minute round-trip flight to Montreal. The fuel that powered the jet was made from 100% carinata oilseed, making it the first aeroplane in history to fly on 100% biofuel. Until then, biofuel flights were restricted to a 50% blend with petroleum as the technology for a pure biofuel product was “largely unproven”, a South East Farm press report said. Even more positively, the carinata aviation fuel emitted fewer particulates than conventional jet fuel and the pilots said they did not detect any

PHOTO: WESTIMAL/DREAMSTIME.COM

OILSEEDS

LIKE RAPESEED, CARINATA PRODUCES SMALL YELLOW FLOWERS AND CAN BE GROWN ON MARGINAL LAND

difference in performance compared with flying with conventional fossil fuels. Agrisoma president Steven Fabijanski said of the flight: “To date, all powered flight has relied on fossil fuel. This flight changes everything; we have witnessed petroleumfree aviation.” Agrisoma further explains carinata’s benefits as a biofuel: “For biofuel manufacturers, Resonance carinata provides a lower-cost, uniform, long-chain monounsaturated fatty acid profile that enables additional efficiencies and returns from biofuel manufacturing processes. Resonance carinata oil has been used for advanced biofuel manufacturing as well as traditional biodiesel. [It] makes an excellent biodiesel and provides a very useful blend stock for improving the quality of biodiesel made from lower quality feedstocks.” In addition to its performance as a biofuel and aviation fuel, using carinata has further benefits. Carinata fuels need only a minimal amount of refining once the oilseeds are crushed and filtered, and farmers stand to benefit financially. David Wright, project director at the University of Florida’s North Florida Research and Education Centre in Quincy, said: “With the technology proven, we estimate a total income to be from US$550/acre to US$750/acre, generating an income of US$100M/year to US$375M/year for the state of Florida.” He adds: “This technology will not take land out of food production and has the benefit of creating jobs in Florida with a minimal impact on the environment.”

Government incentives needed Despite its potential, The Western Producer reported last year that, while there were plenty of

carinata research plots, there had been no grower contracts in Western Canada by July. The article explained that plans made earlier in the year to offer production contracts had been scrapped when the federal government took longer than expected to approve carinata meal for cattle feed and the US government hadn’t approved the oil as part of its biofuel blending mandate. Another problem was that the US Environmental Protection Agency (EPA) had not issued renewable identification numbers (RINs) for carinata. Ken Mudry of Paterson Grain – a buyer, importer and exporter of grain commodities in Canada – said these approvals from both the US and Canadian governments were needed to increase the value of the crop for growers and marketers. “We’re over one hurdle and we’re working toward the approval with the EPA in the USA to get approved for RIN credits,” he said, adding “We’re quite optimistic it will get approved before [this] spring.” While aviation fuel was the ultimate market for carinata oil, until production was scaled up, the oil was going into the biodiesel market, he said. “The challenge is to ensure that we scale up and that Agrisoma continues to look at enhancing the performance of the crop itself, enhancing yield [and] looking at the profile of the oil and meal.” Will carinata take off? If there is incentive to grow the crop, yes. Mudry asserts: “Producers in Western Canada have told us they would grow it if it was at parity to canola values, so that’s the thing we’re targeting. Before we go full-scale contracting, we have to ensure that we can deliver that value to producers.” Charlotte Niemiec is OFI’s assistant editor

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POLIC Y

Industry in state of inertia BP, Shell and Total are the giants of the petroleum industry, but where do they stand on biofuels? Despite differing concerns and diverging focuses, the companies are united in their belief that biofuels are a necessity, but that biofuel policies the world over have to change if they are to be produced at scale. Charlotte Niemiec looks at each company’s position

P’s alternative energy business is still very much alive, particularly its biofuels business, said Philip New, CEO of BP Alternative Energy at the Argus Biofuels Conference held in London on 20-22 October 2014, driving home the continued importance of biofuels in the transport sector. However BP, like the rest of the industry, is struggling with EU and global policies surrounding biofuels. New says that, after a period of growth, the European biofuels industry has become stagnant and parity is dead. The amount of new money going into Europe is vanishingly small; biodiesel has remained flat, while ethanol has slowly climbed, but any new projects coming online are “the last hurrah projects” sanctioned back in “the days of optimism” of the previous decade. There are one or two glimmers of hope, but even this is misleading, New says, stating that some of the more recent announcements are those of cellulosics. “How did the industry find itself in this position when, just five years ago, we were

so optimistic about biofuels?” New says it doesn’t help that the world has suffered a recession. “Additionally, we have biofuels competing with fossil fuels and gasoline demand has declined by 25%, as people are driving less.” Numerous promises were provided that underpinned the initial spurt of investor confidence, but have these promises been borne out by reality? The point, says New, is moot. When it comes to vested interests, oil refiners are not happy, and process and food manufacturers are even more unhappy as they are unable to control the supply of vegetable oils.

Over-promised and under-delivered The biofuels sector has done itself few favours – it has been out-thought and out-manoeuvred, overpromised and under-delivered, especially when it comes to new technologies. The amount of capital required to support an expansion in biofuels is hugely significant, but it is simply not there. The industry is in a state of inertia, New states. Biofuels are unable to get into the fossil fuel space in a number of ways: not only has the industry seen massive policy uncertainty, but it is now in a situation where it is difficult to contemplate material investment in the future growth of biofuels. Investors are under enormous pressure and, strategically speaking, everyone has had to cut back on long-term projects and strategies have been considerably more risk aware and cautious. Venture capitalists that contributed to the boom have moved on and, as far as banks are concerned, commercial loans are extremely hard to obtain while the policy environment is so insecure. These biofuel policies are enormously complex. Transport is a hugely interconnected world, but there are no real mechanisms to provide that interconnectivity, New says. Policies and programmes are set by different agencies in different places, with different goals and intentions – and they are done in a silent way that crashes together and either baffles people or, more likely, makes them run for the exit, believing it too risky and too dangerous. It is the same or a similar story in most parts of the world, but it is made more difficult in the EU because of the differing policies of member states.

“A nice little earner”

PHOTO: AFRICASTUDIO/DOLLARPHOTOCLUB

In the UK, one of the things that transport fuel is blessed with, and biofuels uniquely blessed with, is that drivers pay fuel duty. New says that people are still holding on to the myth that biofuels are subsidised – they are not. “The problem is that we tax biofuels the same way we have always levied fuel duty: on a volume basis. We tax the carbon that comes from ethanol at around four

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times the rate of fossil fuels. For this to become a compelling consumer proposition, this is a huge hurdle to overcome. Ethanol has historically been cheaper wholesale than fossil fuel, but it is made more expensive by virtue of the impact of duty. However, if the structure is to be contained, then biofuels would become ‘a nice little earner’ for the government.” Liquid fuels have fundamental advantages over other alternative energy options, says New. “We chose biofuels as the system or process that made the most sense and in which we should invest. At heart, that is because fossil liquid fuels are the most efficient way of delivering energy. They are the lowcost, most practical option and the best system to deliver something that has been fine-tuned over a hundred years. If we are looking to find alternatives, it seems to make sense to find something that has already been proven to work effectively. Ethanol and biodiesel, therefore, make sense.”

FIGURE 1: GLOBAL INVESTMENTS IN BIOFUELS BY REGION (US$BN)

Electric vehicles no silver bullet Nevertheless, there are other options. Electric, fuel cell cars have advantages in that they could improve local air quality, although the case for ethanol and biodiesel is quite robust in this area too. But it is important to remember that road transport decarbonisation will not be delivered by electric vehicles alone. New says one of the things that has such a negative effect on investment in biofuels is the notion that there is something better on the horizon, such as electric cars. However, relatively few people change

Source: Bloomberg New Energy Finance, 2014

their car each year and, during a recession, this happens even less. Most people are, therefore, unlikely to buy an electric car. Sufficient battery technology is not there, yet, and better recharging infrastructure is needed first. Additionally, how are we going to find the extra electricity, especially renewable electricity, to run these cars? New believes that, despite the generous subsidies and incentives in the EU, road transport will rely

on liquid fuels for the foreseeable future. He cites a statement from the International Energy Agency (IEA), which says that, at best, the world would have four percent of electric vehicle penetration in global car parks by 2030. If society is to meet its goals, it will have to rely on biofuels blended into liquid fuels for the time being. New says ethanol is the answer: it is a low-cost, sustainable biofuel that can continue to help make v

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v savings and it should have an ongoing role in the future. In 2014, ethanol was cheaper than petrol, and delivered better greenhouse gas (GHG) savings. Furthermore, the supply base for ethanol feedstocks is large, actually running at a surplus in the EU and the rest of the world. Therefore, the sustainability of the feedstock base is assured. Advanced gasoline internal combustion engine hybrids with advanced ethanol deliver the same or greater GHG savings as battery electric vehicles (BEVs), at significantly reduced cost and with lower technology risk. “We can do it today, now – the technology is there.”

PHOTO: JOEL_420/DOLLARPHOTOCLUB

POLIC Y

Food versus fuel misleading New says earlier fears of biofuels’ impact on food have not been borne out. “Does it undermine carbon saving claims if each field harvested creates an incentive to cut down trees in the Amazon?” In retrospect, New says, it is becoming clearer that people confused causation with coincidence; it was merely a coincidence of events around the commodities spike towards the end of the last decade, when everything was “up”. Since then, what has become clear is that many of the soft commodities are fundamentally delinked. For example, petroleum prices have come down recently, but it is clear that the soft commodity complex weakened significantly in advance of the petroleum complex. If petroleum and soft commodities are linked (the food versus fuel argument), then food should follow petroleum. “The fact that petroleum follows food suggests that what we are dealing with is more complex and multi-causal, and food versus fuel concerns are, at best, highly simplistic, if not fundamentally flawed. They are, irregardless, absolutely unprovable,” New says. The real tragedy is the impact all this has had on the potential for the EU to really take advantage of opportunities that biofuels and the biofuels industry have provided to create jobs and develop technology. Converting cellulosic feedstocks into advanced ethanol is considerably easier and cheaper than conversion to diesel.

THE INTERNATIONAL ENERGY AGENCY FORECASTS THAT ELECTRIC CARS WILL HAVE JUST 4% GLOBAL PENETRATION BY 2030

Practically all the investment by major companies in demonstrating this has occurred either in Brazil or the USA, and Europe is missing out on a huge opportunity.

A zombie biofuels industry Where, then, does all this lead? New says there is a continual worry that legislators are inclined to make “a hypothetical great the enemy of the good”. In other words, legislators were demonising biofuels

FIGURE 2: EU BIOFUEL CAPACITY (MILLION LITRES)

despite their huge potential to contribute to global energy. “We need simple goals and policies, or we will end up with neither and be stuck in a middle ground with a ‘zombie biofuels industry’ and a very slowly growing battery electric alternative development. “We need to decarbonise transport and improve air quality and the industry cannot hide from public pressure for this. Additionally, we need to synchronise vehicle and fuel policies, clear away structural barriers and roll out at least an E10 mandate. “After 2020, EU legislation is, if not silent, speaking with a muted voice. No one will invest in this quiet future; we need a clear set of signals around biofuels, continued support for sustainable biofuels, and for biofuels with high GHG performance that are cost-effective and scaleable.” New reiterates that consistent, transparent and enduring policy for advanced biofuels is required. If not, the consequence of current policy will be stagnation.

ILUC fudging EU biofuel policy

Source: Tallage, 2014

Also at the Argus Biofuels Conference, Marc Gillmann, Biofuels and Biomolecules Strategy manager of Total, expressed concern over the impact of indirect land use change (ILUC) policies when it came to EU biofuel policy. Unlike BP, Total focuses on the importance of biodiesel rather than ethanol to provide fuel for the future. Gillmann asks what exactly is meant by ILUC. It is not something that can be seen on the ground, but can only be seen through very complex tools. It is the estimation of additional emissions (under a large set of hypotheses) due to changes in agricultural patterns. It can be neither observed 22 OFI – FEBRUARY 2015, BIOFUELS ISSUE www.oilsandfatsinternational.com

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nor measured, only modelled. Although these models are being improved, it is a dynamic effect and impossible to truly tell, says Gillmann. In his view, ILUC factors are redundant with the cap on first-generation biofuels: it will have little or no effect on land conversion. However, it would shut down the European biodiesel industry if ILUC factors are included in the assessment of the sustainability of biofuels; it would distort the market by giving undue advantage to ethanol; and it would further deteriorate the competitiveness of the European refining industry. Contrary to other regions, he says, Europe needs biodiesel, not ethanol, to improve its energy security. Europe is short on diesel but long on gasoline, and traditional gasoline export markets are shrinking. Certain measures that could effectively limit the risk of ILUC, such as a cap on first-generation biofuels and direct measures to limit the risk of land conversion – such as bilateral cooperation and the extension of sustainability measures to all imported vegetable oils – do not make sense in Europe. It is a fact, says Gillmann, that Europe needs biodiesel. “Europe consumes more diesel than ethanol and, with the competitiveness of Europe’s refining industry, we need to promote the biofuel industry.” According to Gillmann, Total endorses the need to adjust the biofuels policy to limit the risk of negative consequences to the environment. The limitation of first-generation biofuels and the realistic promotion of advanced biofuels is a straightforward way to limit the risk of ILUC. “The use of ILUC factors in the assessment of the sustainability of biofuels would be detrimental not only to the European biodiesel industry, but also to the European refining industry and Europe’s energy security. “If ILUC factors are to remain in the directive, their use should be restricted to GHG statistical reporting by EU member states.” There is also good reason to make a new assessment of ILUC effects and, if they are made, Gillmann believes new estimates would be significantly lower.

It’s in Our Nature

A breakthrough year for 2G

Putting money where the mouth is Shell’s largest operating alternative energy business is Raízen, a joint venture with Cosan in Brazil. Raízen produces 2.2bn litres/year of ethanol and four million tonnes of sugar, and has installed capacity of 900MW of electric energy derived from sugarcane bagasse. At the time of the ABLC conference, Raízen was in the final stages of constructing a 10M gallons/year cellulosic ethanol plant. Nevertheless, Shell’s focus is on advanced biofuels. Two of the technology v pathways it is progressing in-house are Aqueous Phase Thermal Conversion 23 OFI – FEBRUARY 2015, BIOFUELS ISSUE

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Shell’s focus, on the other hand, is on advanced biofuels, which it expects to be producing at scale in the USA by the end of the decade, according to vice president of Shell Alternative Energies, Matthew Tipper, speaking at the Advanced Bioeconomy Leadership Conference (ABLC) in San Francisco, USA, held 10-12 November 2014. Tipper says Shell believes there is a strong future for advanced biofuels, which could make a substantial contribution to US fuels demand. He labelled 2014 a “breakthrough year” for advanced biofuels, with US$1.6bn of capital projects completed. Recent achievements include Emerald Biofuels’ intention to build an 82M gallons/year plant on the Gulf Coast using waste fats, Fulcrum’s award of US$105M from the United States Department of Agriculture (USDA) for its plant in Nevada using municipal solid waste (MSW) and Red Rock Biofuels’ grant to build its plant in Oregon using woody biomass. Much of this investment, says Tipper, is in cellulosic ethanol but, further down the line, there is huge potential for “fungible hydrocarbons”, or blended fuels, as well. Shell is convinced that advanced biofuels will remain a critical part of its transport fuels portfolio and its focus remains in fuels rather than in speciality products, Tipper says. Global trends such as population growth, urbanisation, climate change and advances in technology will drive huge changes in mobility, presenting challenges to Shell, as well as to the increasingly complex energy ecosystem in which the company operates. “A truly sustainable global system doesn’t just need to be lower carbon – it needs to deliver more energy to meet the needs of a growing and affluent world. This means change is required, including a switch from coal to cleaner-burning natural gas, a strong and stable carbon pricing system, the potential for carbon capture and storage (CCS), as well as the role of biofuels and liquid fuels,” Tipper says.

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v (APTC) and Reverse Acid Pre-Treatment (RAPT). APTC produces fungible drop-ins from cellulosic feedstock. Shell’s pilot plant at its Technology Centre in Houston is operating and providing valuable data, and Shell is now looking carefully at reactor scale-up. The RAPT process is a proprietary biomass deconstruction technology that Shell believes gives beneficial yield and operating performance. A pilot plant will be operational by the end of 2015 for the production of cellulosic ethanol. Additionally, CRI – a catalyst company and subsidiary of Shell – is the exclusive worldwide licensor of IH2 Technology, which was developed at the Gas Technology Institute in Des Plaines, Illinois. This technology directly converts biomass to cellulosic hydrocarbons such as gasoline, diesel or jet fuels via a two-stage thermochemical process, using tailored CRI catalysts. Tipper says Shell is currently considering how to move forward with development of this technology and early deployment. Alongside these technology developments, Shell is trialling advanced biofuels for road transport, aviation and marine engines. Working with renewable energy company Virent, Shell has developed a gasoline made from sugars that was registered by the Environmental Protection Agency (EPA) last year for blending in gasoline at up to 40%. It has also developed a jet product that can be blended at 15% which, as of last November, was going through the certification process. Shell has also partnered with Rolls Royce to continue development of this product, which will additionally make road diesel and marine diesel fuel. Shell believes these technologies can meet the needs of its investors, customers and society at large, Tipper says. But, for advanced biofuels to be viable to Shell, it must be able to manufacture them at a certain scale – and sustainably. It plans to do this with a scale-up of smaller plants with widespread feedstock availability. The “best bet” for Shell, says Tipper, is woody biomass and energy crops, and the company will likely begin manufacturing biofuels in the southeast of the USA, with plans to be operational by late this decade. In the USA, there is an established and sustainable forestry industry, robust transport infrastructure and national and state-level incentives. Shell is confident that this can be replicated in Europe; however, the choice of feedstock is crucial here, given the extremely high sustainability bar in Europe. Importantly, advanced biofuels could ultimately supply a significant part, perhaps all, of Europe’s transport fuel needs.

Policies require harmonisation Tipper says that, if one is to imagine a world where CO2 emissions from transport have been cut by more than 60% through the deployment of a range of energies across all forms of transport, the vision implies an energy future where industry, government and consumers work together to decarbonise road transport. Today, he says, governments have probably the most important role to play. The vision will only become reality with the right policy frameworks in place to spur continued research and development, with support for commercialisation and nothing to hinder this. Many governments have policies in place to 2020 – and discussions are beginning in Europe about policies to 2030. These policies need to address vehicle, RR-01-002

PHOTO: LZF/DOLLARPHOTOCLUB

POLIC Y

ETHANOL DERIVED FROM SUGARCANE IS A LOW-COST, SUSTAINABLE BIOFUEL AND PRODUCTION LEVELS ARE RUNNING AT A SURPLUS

“We need simple goals or policies, or we will end up with neither and be stuck in a middle ground with a ‘zombie biofuels industry’ and a very slowly growing electric alternative development” fuel, infrastructure and the consumer, as a whole. They must be pragmatic enough to be realised, but flexible enough to keep pace with technology development. Of all existing road transport policies, Tipper notes, the US Renewable Fuel Standard (RFS) – through its Renewable Identification Number (RIN) trading and cellulosic waiver credit mechanisms – provides the most explicit price support for cellulosic biofuels. The RFS is key to Shell’s advanced biofuel manufacturing ambitions. However, Shell says it continues to support a revision of the RFS out of necessity, but stands absolutely against repeal.

A coordinated effort In order to move beyond current ethanol blend levels, a coordinated effort among the biofuels industry, original equipment manufacturers (OEMs), infrastructure providers and consumers is required. Until then, the EPA’s proposed volumes for 2014 seem to Shell to be a sensible solution intended to keep the RFS stable. Furthermore, the RFS must receive support beyond 2022, albeit with the necessary amendments to ensure stability. Without the level of support implicit in the RFS, says Tipper, advanced biofuels in the USA will not happen. In the EU, the European Commission appears muddled, he adds, but Shell is hopeful that changes in governance will put an end to in-fighting and lead to greater realism. Shell also believes that carbon intensity fuel standards, such as the EU Fuel Quality Directive (FQD) or California’s Low Carbon Fuel Standard (LCFS), as currently constructed, provide neither the investment certainty nor price signal for new technology development. These shortcomings must be addressed in the setting of feasible compliance standards and the development of alternative compliance mechanisms that send stable price signals. Concluding, Tipper says that “getting advanced biofuels right” is both complex and difficult, demanding of both technology and policy. But Shell enjoys this challenge. “With pragmatic policy frameworks, advanced biofuels can – and will – have a real impact on cleaning up the transportation industry, as well as creating value and prosperity for companies and communities the world over.” w Charlotte Niemiec is OFI’s assistant editor. This feature is based on presentations given by Philip New, CEO of BP Alternative Energies and Marc Gillmann, manager of Biofuels and Biomolecules Strategy at Total at the Argus Biofuels Conference, held in London on 20-22 October 2014; and a presentation given by Matthew Tipper, vice president of Shell Alternative Energies, at the Advanced Bioeconomy Leadership Conference (ABLC) held in San Francisco, USA from 10-12 November 2014.

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EU ROPE

n 1 January this year, Germany’s new greenhouse gas (GHG) reduction obligation entered into force. The new legislation means that companies in the mineral oil industry will have to reduce their emissions by 3.5% in the years 2015 and 2016, calculated on the basis of the fuel quantities sold in the calendar year. For the period 2017 to 2019, this reduction requirement increases to four percent and reaches six percent by 2020. The new plan to slash CO2 emissions was announced on 3 December 2014. The package, which includes an energy efficiency programme that could trigger billions of euros in investment, is essential if Germany is to hit its goal of a 40% drop in emissions by 2020 from 1990 levels, Reuters reported in December. The broader European Union (EU) is aiming to cut emissions by the same amount by 2030. Currently, Germany is the only member state in the EU to have implemented such a scheme which, according to speakers at the ‘Fuels of the Future’ conference held in Berlin from 19-21 January 2015, will lead to a competition of GHG efficiency and optimisation measures that will affect all stages of the supply chain. As a result, biofuel producers are demanding consistent documentation and strict controlling of reports on GHG savings across the EU to ensure that only ‘real’ or significant reduction values are taken into account. The new legislation is the German government’s attempt to contribute to the vast GHG reduction targets set by the EU and reduce the country’s carbon footprint. EU policy requires a reduction of 60% GHG emissions by 2050, when compared to 1990. Despite a decrease in recent years, total EU emissions remain 20.5% above 1990 levels and need to fall by 67% by 2050 in order to meet targets.

Germany gets greener A greenhouse gas reduction obligation of 3.5% has entered into force in Germany, but a lack of EU-wide decisions on biofuels and other forms of renewable energy after 2020 is making permanent policy difficult to achieve. Charlotte Niemiec writes The package envisages savings of 25-30M tonnes of CO2 emissions via a national energy efficiency plan to modernise and insulate buildings. It also includes incentives for electric cars and stricter rules on fertilisers and wastes. The most contested step of the package, according to Reuters, is making coal plant operators reduce emissions by at least 22M tonnes, equivalent to shutting about eight plants. This makes up over a quarter of the 78M tonnes of reduction planned by 2020.

Germany’s biofuel landscape In a January 2012 report titled ‘Biofuels – At What Cost? Mandating Ethanol and Biodiesel Consumption in Germany’, prepared by Anna Rauch and Michael Thöne of the FiFo Institute for Public Economics at the University of Cologne, Germany, the authors explain that Germany is Europe’s leading biodiesel producer. In 2009, Germany accounted for 28% of the EU’s total biodiesel production, even though it used only around 51% of its installed domestic production capacity. In 2010, production of biodiesel was around 53% of installed capacity.

The country’s success in biodiesel production was due to the fact that, up until 2006, biofuels enjoyed major tax incentives in order to support their introduction in Germany. The consumption of biodiesel – in particular, in pure form (B100) – grew rapidly until 2007, encouraging German biodiesel companies to expand their production capacities. In 2007, however, the landscape changed as the trend shifted from the use of tax incentives towards regulatory measures such as mandatory blending requirements. While, in 2006, B100 accounted for 67% (1.95M tonnes) of biodiesel consumed in the domestic market, it accounted for just 11% (0.29M tonnes) in 2010. As a result, a large number of biodiesel producers stopped production. In March 2011, the German Association of Biodiesel Producers (VDB) reported that half of Germany’s 49 biodiesel plants had either stopped production, or their holding companies had been declared insolvent. Currently, there are no plans to build new biodiesel plants in Germany. Another sign of the downturn of the B100 market was that the number of fuelling stations selling B100 shrank from 1,900 to below 200.

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On the other hand, the ethanol industry in Germany is slowly growing, albeit at not nearly the dramatic pace seen with biodiesel. In 2009, ethanol accounted for 20% of the biofuels used in Germany’s transport sector, while biodiesel accounted for 77%. The bioethanol industry is relatively new in Germany; it has only been produced industrially since 2005. Since then, the quantities of ethanol have grown annually, except between 2006 and 2007, and 2009 and 2010, when production levels decreased slightly. In 2009, Germany was behind France as the second largest fuel ethanol producer in Europe and one of the top six ethanol-consuming European countries. The European fuel ethanol industry is relatively small in size when compared to the Brazilian or US ethanol industries or the European biodiesel industry. In 2003, Germany did not consume any ethanol. Between 2009 and 2010, ethanol consumption grew sharply to 1.16M tonnes. Over recent years, ethanol consumption in Germany has exceeded the amount of ethanol produced domestically and additional volumes have been imported. Pure vegetable oil for use in transport is another option in Germany, although not a very practical one. It can be used in an unmodified form as a fuel if a vehicle’s engine is adapted to accommodate its specific properties. Pure vegetable oil consumption in Germany amounted to 840,000 tonnes and 401,000 tonnes in 2007 and 2008, respectively. In 2009 and 2010, it shrank to around 100,000 tonnes and 65,000 tonnes, respectively. Thus, only three percent of the total biofuel consumed in 2009 was pure vegetable oil.

FIGURE 1: DEVELOPMENT OF BIOFUELS IN GERMANY

Source: BAFA, BMF, FNR (August 2013)

FIGURE 2: FUEL CONSUMPTION IN TRANSPORT SECTOR 2012, BIOFUEL SHARE: 5.7%

Challenges to continued success With a rising population, there are enormous challenges ahead to ensure enough sustainablyproduced fuel for the transport sector. Katherine Reiche, parliamentary secretary of the Federal Ministry of Transport and Digital Infrastructure, explained at the Fuels of the Future conference that freight transport and aviation were two key areas in which the industry expected to see an increase. By 2030, freight was expected to rise by 40% and aviation by 4.5%. Additionally, by 2030, there will be four billion vehicles on the road, compared to 1.2bn today. In a bid to reduce its GHG emissions, Germany is turning to alternative, ‘greener’ fuels including hydrogen, renewable energy and natural gas. The country is not just phasing out nuclear power – prompted by the Fukushima nuclear disaster in Japan in March 2011 – but it is aiming to replace fossil fuels with renewables. The government’s objective is to reduce consumption of fossil fuels by 10% by 2020 and 40% by 2050 and this will contribute hugely to reducing Germany’s carbon footprint. Biodiesel and bioethanol are expected to play a large role in this context, Reiche said, adding that biofuels can contribute in the short-term to climate protection, which is why the German government has paved the way with mandates and GHG quotas. From now on, emissions would be considered that were involved in the entire “cradle to grave process” of biofuels, she said, and these would be factored in. Nevertheless, despite its optimistic and ambitious attitude towards reducing GHG emissions and promoting sustainable fuels, Germany does not

Source: BAFA, erdgas mobil, DVFG, BMF, FNR (2013)

exist in a vacuum. The policies of the EU are of huge importance for biofuel producers that rely on subsidies and encouragement to invest, but a lack of certainty for the EU biofuels sector after 2020 makes permanent policies all but impossible to implement. Anselm Eisentraut of the International Energy Agency (IEA) said at the conference: “EU policy uncertainty leaves the biofuel sector in limbo – there is no clear guidance and this causes a lot of headache. Even with a seven percent cap on conventional biofuels, we still do not see enough room to grow the industry. What happens after 2020 remains a big question mark as, without a policy framework, it’ll be very difficult to keep plants operating and commit to new investments.”

A shift to advanced biofuels From 2020, the focus on biofuels is expected to shift to second- and third-generation biofuels, as there is a real concern that first-generation biofuels derived from food crops cause indirect land use change (ILUC). However, the technology to produce these advanced biofuels is not yet widely available. While Germany has been successful so far in reducing its GHG emissions, it has done so using first-generation

biofuels and the expected shift to advanced biofuels may well knock back progress. Helmut Lamp, chairman of the German BioEnergy Association, said: “An implementation of the present proposals would disadvantage the biodiesel and bioethanol established on the market while, beyond 2020, the focus is expected to shift towards technologies that are still not available and will require billions of new investments.” He further warned: “To limit or even reduce the sale of certified biofuels produced in Europe would be a declaration of bankruptcy for industrial policy and a fatal signal for other sectors of the bioeconomy.” He continued: “Beyond 2020, there has to be a competition in the biofuel sector open to all types of technologies, in which biodiesel and bioethanol are included in the EU’s biofuel strategy to contribute to climate protection and resource conservation. This makes it all the most incomprehensible that biofuels are not an explicit part of the GHG reduction policies in either Germany’s climate protection targets for 2020 or in the 2030 Framework for Climate and Energy Policies decided w by the European Council.” Charlotte Niemiec is OFI’s assistant editor

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SCIENTISTS HAVE FOUND A FUNGUS IN HORSE MANURE THAT HELPS SPEED UP THE CONVERSION OF PLANT MATTER TO SUGAR

hile the vast majority of biofuels are derived from agricultural sources such as rapeseed or soyabeans, over the past decade, some slightly more unorthodox ideas for biofuel feedstocks have crawled out of the woodwork. As weird as they sound, many work extremely well; some are more renewable than traditional biofuels, make better use of waste products and many make more commercial sense.

Smelly, rotten feedstocks One potential feedstock is a particularly smelly crop called field pennycress, nicknamed ‘stinkweed’. A weed of Eurasian origin that is now naturalised throughout North America, it is occasionally used in salads or sandwich spreads, as it has a distinctive taste. However, researchers have looked into its potential as a biofuel due to its high oil content. According to Advanced Biofuels USA, scientists extracted oil from wild stinkweed, pre-treated it with acid and used methanol to react with the oil to produce both biodiesel and glycerol. After some additional refining, the biodiesel met the US biodiesel fuel standard. Previously considered a problematic, malodorous weed, attitudes towards stinkweed are changing as its low cloud and pour point make it a promising biofuel. Furthermore, the plant can be grown in the winter and harvested in the spring, making solid commercial sense as a good rotation crop. Another plant-based idea is the use of the fungus Gliocladium rose (Glio), discovered to be responsible for rotting canvas during World War Two. According to Biofuels Digest, Glio produces diesel, synthesises ethanol and produces cellulase. It is significant because of its ability to convert

Freak feedstocks In a bid to secure renewable sources of energy, scientists are investigating ever stranger biofuel feedstocks. Fungus, human fat, rabbit corpses – these are just some of the ideas of recent years. Charlotte Niemiec looks at the viability and commercialisation of these unexpected feedstocks plant material directly into hydrocarbons that are identical to those found in petroleum. Biofuels Digest explains that the traditional method of producing biofuels involves using yeast and proceeds in two steps. First, enzymes are used to degrade plant material into sugar. Then, yeast converts the sugar into ethanol that is then mixed with other fuels or used directly in engines that can handle its corrosive properties. With Glio, however, the plant matter is converted directly to hydrocarbons in a single step and they can be used in a standard engine without the worry of conversion.

Re-purposing waste products If fat is fuel, Beverly Hills plastic surgeon Dr Craig Alan Bittner epitomised this in 2008. Bittner repurposed the fat he removed from his patients’ bodies and turned it into biofuel to power two Ford

SUVs. Human fat contains triglycerides in the same way as vegetable oil. Scientific American reported in 2008 that a 1996 report to the National Biodiesel Board (NBB) by University of Idaho researcher Jon Van Gerpen concluded that biodiesel fats produced from vegetable oils and animal fats were very similar, containing the same chemical compounds but in different amounts. “There does not appear to be any basis for making a distinction between the two fuels in terms of their impact on engine performance and emissions”, he wrote. Environmentally-friendly but deemed illegal in California to use human medical waste to power vehicles, it is nevertheless a process similar to using rendered animal fat. Others have turned to more conventional waste products of the human body as a source of biofuel. In 2009, Applied Clean Tech (ACT) and Qteros announced that ‘Recyllose’ – a recycled solid-based material produced from municipal

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wastewater could be turned into fuel from cars. In other words – the companies were turning human excrement into biofuel. It was surprisingly effective; the researchers found that one tonne of human excrement produced 120-130 gallons of ethanol. ACT president, Dr Refael Aharan, said a wastewater plant that handled 150M gallons/day of waste would have to produce 20-30M gallons/year of ethanol in order to make the process profitable. Horse manure may also provide the key to a better biofuel. In 2013, Western Farm Press reported that scientists had discovered candidate enzymes in fungi living in the faeces and intestinal tracts of horses. Michelle O’Malley, PhD, explained that the fungus “thrives on lignin-rich plants and converts these materials into sugars for the animal.” The scientists’ goal, the report said, is to take the genes that produce such enzymes from gut fungi and genetically engineer them into yeast.

Animal energy In October 2009, the UK’s BBC News reported that Stockholm, Sweden, had solved the problem of the thousands of rabbits destroying the capital’s parks in a rather unusual way. The rabbits were being culled by hunters employed by the city and the bodies were being used to fuel a heating plant in central Sweden. Tommy Tuvunger, one of the hunters, told Germany’s Spiegel website that 6,000 rabbits were culled in 2008 and a further 3,000 in 2009. “They are a very big problem”, he said. “Once culled, the rabbits are frozen and, when we have enough, a contractor comes and takes them away.” The frozen rabbits are taken to a heating plant in Kalskoga, which incinerates them to heat homes. Leo Virta, the managing director of Konvex – the plant’s suppliers – told the BBC that Konvex had developed a new way of processing animal waste with funding from the European Union (EU). He said that, with this new method, raw animal material was being crushed, ground and then pumped to a boiler where it was burned together with wood chips, peat or waste to produce renewable heat. “It is a good system as it solves the problem of dealing with animal waste and it provides heat,” he said. Nevertheless, some residents in Sweden were not too impressed with the city’s out-of-the-box thinking and many animal rights groups voiced concern. However, Virta insisted the system was efficient and noted: “One hundred thousand tonnes of raw material can generate enough heat for 11,000 homes a year.” The Stockholm facility also incinerates dead cats, cows, deer and horses.

Weirder and weirder There are even stranger ideas out there. The Biofuels Digest report says that two projects have found research and development (R&D) funding to look at opportunities for growing biofuels in space. It notes that a group at NASA’s Ames Research Centre is working to convert space-based plant residues from plants grown by astronauts to provide food and breathing air for long-period space travel into sources of fuel, chemicals and food. In March 2010, according to the article, jatropha seeds went into orbit on the space shuttle, where a research project looked at growth rates. In 2011, researchers at Tulane University in Louisiana, USA, discovered a new bacterial strain,

‘TU-130’, that turns newspapers into butanol. University of Idaho, explained in 2011 that his lab Doctoral student, Harshad Velankar, who worked had made biodiesel from a variety of feedstocks, with the team, said: “Cellulose is found in all green including oil from candlenut and croton from plants and is the most abundant organic material Africa, avocado from Mexico, karanja from India, on earth. Converting it into butanol is the dream hemp from Canada, algae from California, peanuts of many. In the United States alone, at least 323M from Georgia and coffee grounds from the lab’s tonnes of cellulosic materials that could be used to local Starbucks. But what had great potential was fat from black soldier fly larvae. produce butanol are thrown out each year.” Thompson explains: “The larvae feed on manure The team first identified TU-103 in animal droppings, cultivated it and developed a method for and transform it into fertiliser. As they grow, they using it to produce butanol. A news release from accumulate fat in their bodies. We received several the university noted that butanol was superior pounds of larvae. First, we had to dry them in an to ethanol as a biofuel because it can readily fuel oven and then we put them through our mechanical existing motor vehicles without any modifications press to extract the fat. It was a gooey, smelly to the engine. It can also be transported through process. It was difficult to separate the oil from the existing fuel pipelines, is less corrosive and contains rest of the larvae. Maybe hexane extraction would more energy than ethanol, theoretically resulting in have been a better option.” Nevertheless, he added, “We found that the fat was very high in free fatty improved mileage. David Mullin, associate professor of cell and acids – about 80%. The theory is that the larvae molecular biology at the university, said that TU- produce an enzyme in their bodies to break down w 103 is the only known butanol-producing clostridial the fat and use it for life support.” strain that can grow and produce butanol in the Charlotte Niemiec is OFI’s assistant editor presence of oxygen, which kills other butanolproducing bacteria. Having to produce butanol in an oxygen-free space CULLED RABBITS HAVE increases the costs of production. BEEN USED TO FUEL Liquids produced for human A HEATING PLANT IN consumption, such as wine or CENTRAL SWEDEN soda, are also candidates for biofuel. In the UK, the Daily Mail reported in July 2008 that the Prince of Wales was fuelling his Aston Martin D86 with ethanol made from waste wine not suitable for consumption. At Oklahoma State University, USA, scientists reported that waste from soda pop production could be used as a feedstock for ethanol production by adding nitrogen and yeast, Biofuels Digest reported. The presence of sodium benzoate, a common food preservative, was the major indicator in whether a particular brand of soda would ferment well or not. Soda waste is typically disposed of by adjusting the pH level and sending it to a local wastewater treatment plant, a method that can be costly because it can be done only in limited quantities, the report said. In November 2011, Green Machine Digest reported that biofuels were being developed from nappies, beer, coffee grounds and styrofoam. The plastics, resins, fibres and waste contained in a nappy were perfect fodder for biofuel, researchers in Canada discovered, while coffee grounds represented thousands of pounds of biological waste every year. Unlike nappies, however, coffee possesses a distinct trait that makes it ideal for biofuel production: coffee beans contain a significant amount of oil – 10-15% of a coffee bean is usable oil that can be processed into an alternative fuel. Styrofoam, while not a potential alternative fuel source itself, could be an excellent fuel additive, the report said, adding: “The largest hurdle facing Styrofoam fuel blends is the emissions they produce when burned. If the environmental hazard can be overcome, using Styrofoam as a fuel additive could solve the problem of what to do with a material that can’t be recycled and takes decades to biodegrade.” Finally, Joe Thompson, PHOTO: STEFAN ANDRONACHE/ biodiesel lab manager at the DOLLARPHOTOCLUB

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Potential in...

...pongamia Unsuitable for human consumption but with a high oil yield, is pongamia the next big biofuel on the block? Charlotte Niemiec assesses its worth and looks at the companies trialling it in the ﬁeld

ongamia: a crop that could produce six times more oil per acre than soyabeans or another ‘miracle’ crop along the jatropha line destined to disappoint farmers? Pongamia has indisputable advantages over other oilseed crops, but its relative obscurity in the biofuels arena means the crop has had limited testing in the field. Pongamia oil is derived from the seeds of the Millettia pinnata tree, a legume native to tropical and temperate Asia but now strewn across the globe. The plant produces pods, the seeds of which contain approximately 30% oil, but this oil is unsuitable for human consumption as it is toxic and will induce nausea and vomiting; its disagreeable taste and odour is due to bitter flavonoid constituents. Historically, the oil has been used as a lamp oil, in leather tanning, in soap making and as a lubricant. In the Asia region, it was used in traditional medicine for treating skin and liver disease, but it has recently gained a credible place in modern medicine: studies have shown some

potential for biocidal activity against V. cholerae and E.coli, as well as anti-inflammatory, antinociceptive (reduction in sensitivity to painful stimuli) and antipyretic (reduction in fever) properties. The plant has a natural defence system against pests – it seems to have no natural predators – spurring research that suggests the oil can be used as a natural insecticide. Nevertheless, it is as a biofuel that pongamia really comes into its own. Numerous companies are looking to exploit the seed’s high oil content and the ARC Center of Excellence for Integrative Legume Research explains that growing pongamia as a biofuel crop provides no direct competition with food crops as it is a non-edible source of fuel, and no direct competition with existing farmland as it can be grown on degraded and marginal land. Furthermore, the ARC notes, as a legume, it is able to fix its own nitrogen from the soil, minimising the need for added fertilisers and enriching the soil in which it is grown. Pongamia trees are noninvasive and highly resistant to both high and cold

temperatures, drought and saline soils. Pods are harvested using existing mechanical shaking equipment – such as that employed in the nut industry – and the oil can be extracted using existing crushing equipment with no modifications. After the oil is extracted, degummed and refined, it can then be shipped to biodiesel producers. Another end use of pongamia is in the animal feed industry. After the oil is crushed from the seed, the remaining seedcake could be used to feed livestock as the seeds have around a 27% protein content. Phase 1 livestock feed tests on the seedcake have been positive and Phase 2 testing is underway. Furthermore, because of its high nitrogen content, the seedcake could be used as a high nitrogen organic fertiliser; nitrogen is a very expensive crop input and farmers would certainly welcome cheaper fertilisers. USA, California-based TerViva Bioenergy is one company working with the crop. CEO Naveen Sikka tells Oils & Fats International that his company has developed special varieties of pongamia trees that produce between 30-40% oil. “We’re a crop technology company dedicated to pongamia. We see pongamia as ‘soyabeans 2.0’ – it has a very similar output profile to soyabeans in terms of the lipid and the protein. One of its advantages is that it yields anywhere from three to five times more per acre on output than soyabeans

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and it is done with a far better environmental profile – it uses less water, far less fertiliser and it is a perennial crop. However, it’s not a miracle crop. It’s not going to grow in the deserts of Morocco without any kind of supplemental water.” TerViva focuses on three main areas, Sikka explains – germplasm development, farming and the downstream markets. The company spends a lot of time trying to understand the plant, its biology and how it can be effectively propagated. “We think that pongamia can be soya-like in its output and palm-like in its yields, with a much better sustainability footprint. In a world where we’re looking at shortages of food and an increased use of land for optimisation of food production, we have a real opportunity to make pongamia into something very special.” The company has partnered with biodiesel producers such as the Renewable Energy Group (REG) to make renewable diesel and biofuel from pongamia oil, and it recently completed production of renewable diesel and Jet A using pongamia oil with Applied Research Associates (ARA). Sikka is enthusiastic about pongamia’s potential as a biofuel: “We’ve successfully made renewable diesel, biodiesel, Jet A – it’s a 100% viable biofuel. I think our competitive advantage is that pongamia can yield anywhere from 400 to 1,000 gallons/acre, with a price around the US$30-60/barrel range. Not a lot of crops can make that claim because they’re row crops or they’re cyclical crops; even jatropha doesn’t yield as much because it’s a shrub and has to be planted very densely. The drawback, of course, is that it is a tree crop, so it’s a long-term gain. It takes four to five years before the first yields can be drawn and it has a 25-year lifecycle, so there are not a lot of places in the world that will have this kind of patience.”

Finding the land Importantly, suitable land must be found upon which to grow the crop and, with agricultural land at a premium, growing crops purely for the purpose of producing biofuels has sparked controversy in recent years. However, TerViva has a compelling solution: it is repurposing diseased land in Florida, USA, that was home to acre upon acre of citrus groves. A September 2014 article by AgInvesting explains: “Few people outside the state of Florida realise that, according to some industry observers, the 150-yearold citrus industry could be on the brink of collapse in as little as two years. The cause is a pinhead-sized insect that transmits a bacterial infection called Huanglongbing (HLB) to citrus trees and slowly chokes off the flow of water and nutrients from the roots to the leaves. Not only have scientists been unable to come up with a viable cure, they haven’t even been able to culture it in the lab.” This has devastated the citrus industry in Florida. The report notes: “Citrus contributes US$9bn in revenue to the state and employs 76,000 people. Ten years ago, in its heyday, the state produced around 240M boxes of fruit. As of the most recent USDA report [September 2014], that number has declined to as low as 104M boxes. That rate of decline is not linear, it is accelerating. Estimates are that, as production declines to 80M boxes, most of the remaining processing plants will begin to shut down. After that, citrus in Florida could remain only as a niche crop.” TerViva says that, if there was a viable alternative crop to grow, there wouldn’t be over 125,000 acres of abandoned citrus land, and it is looking to capitalise on the devastation left in the region. AgInvesting states: “Arguably, the only agricultural industry with

deep enough demand to accommodate the tens of thousands of acres of these former citrus properties coming into production is the oilseed industry, where the worldwide demand for oil and protein is huge and growing. Currently, oilseed demand is being met primarily by soya and, to a lesser degree, by cottonseed, canola and other minor (by comparison) row crops like flaxseed and safflower.” TerViva is working with seven of the 10 largest agriculture growers in the state of Florida. It has around 150 acres in the ground across nine different sites. It is also growing pongamia in Hawaii on abandoned sugarcane lands. Sikka explains that Hawaii has lost around 80% of its sugarcane lands in the past two decades, land that is perfect for pongamia. The company received a US$1M grant from the US Department of Defense for its pongamia project in the state.

A new agricultural model Formerly known for its development of jatropha varieties, Bosques Energéticos in Mexico has also turned its attention to pongamia. Undeterred by the failure of jatropha to ‘make it big’ in the biofuel industry, CEO Kirk Haney observes that “it wasn’t jatropha that failed, it was the jatropha model that failed.” As a result, the company has refined its process and highlights a new, intriguing business model that requires the inter cropping of three different crops. One of the recognised drawbacks of planting pongamia is the amount of time it takes to reach maturity. Farmers wouldn’t expect to see significant returns on their investment for at least five to seven years. However, Bosques’ model maximises both v

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available land and time by initially planting castor, which sees a quick return on investment within years one to three, inter cropped with jatropha, providing returns in years three to seven, inter cropped again with pongamia, producing significant quantities of oil around the seven-year mark. Zafar Karim, chairman of Legendary Investments – a London-listed company that invested in Bosques in 2010 – explains why the model works: “If we look at year one and year two, we project 1,2001,300kg/ha from castor and that’s conservative. After year four, pongamia and jatropha kick in. We see jatropha starting at 500kg/ha and getting up to 5,500-6,000kg/ha of seed, with the higher 30% of oil content by year five. With pongamia, we see as much as 3,000kg/ha of seed in year four, 10,000kg/ha of seed by year seven and in the 17,000-18,000kg/ha range by year 10.” Encouragingly, biotechnology might help hasten the process, as Karim notes: “With pongamia, typically you get flowers in year four and seeds in year five. So far as we knew, no one had got flowers in two years, but we are doing that now with our 4G pongamia.” The company’s 4G jatropha programme succeeded in bringing yield times down from 18 months to under a year. Sikka also believes biotechnology could increase yields. He explains: “For our planting style and density, we’re talking about 50kg/tree of yield at 150 trees/acre to get 400 gallons of oil. We work with pongamia varieties that yield anywhere between 20-250kgs, so we know of trees that produce four to five times that 50kg level. If you try to calibrate it for size, for a plantation model,

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“We think that pongamia can be soya-like in its output and palmlike in its yields with a much better sustainability footprint” we do think pongamia’s capable of building into the 150kg/tree range, which could push yields to 400-1,200 gallons, just by picking the right varieties and learning how to cultivate them to the maximum yield and success. If you step into genetic modification, the sky’s the limit; you could modify the composition of fatty acids in the oil, you could modify the percentage of oil content in the seeds.

How much oil you get out of an acre is dependent on two things: how many seeds on the tree and the percentage of oil in the seed. Right now, we’re averaging around 40% oil in the seeds – although it generally averages around 30% – but, with genetic modification, you could maybe get it to 50%. Now you’re talking about a 25% increase in yield/acre, so there is a lot of potential.”

Growing in popularity While pongamia is still relatively unheard of, its popularity is growing. Organisations across the globe, such as The Pongamia Project in Australia, are championing its benefits as a biofuel crop. This project is looking to increase funding for research into pongamia, increase investment in plantations to help create a supply chain that will be operational within five years, to increase the attractiveness of the sector to both investors and companies, and to build general support for pongamia biodiesel. Sikka concludes: “If we can prove to the market, to the Procter & Gamble’s of the world, that we can deliver a large-scale supply of this oil, they will innovate on top of that platform. For example, we use soya oil and palm oil for a myriad of products, because there’s a lot of it. That’s our strategy – we’re taking it step by step. The first step is to get yields successfully demonstrated, to get the right germplasm, to get into a competitive position and then build relationships with downstream players and use it for chemicals, fuel, even food – and see how we can produce a very sustainable product.” w Charlotte Niemiec is OFI’s assistant editor

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Life cycle assessments (LCAs) are an important way to measure a product’s sustainability. With used cooking oils and animal fats being increasingly used as feedstocks for biofuels, LCAs need to clearly set out where to allocate the environmental impact of utilising them in biofuel production

iofuels are an essential measure to increase the use of energy from biomass in the transport sector. The use of waste and residues for biofuel production – such as used cooking oils and animal fats – has significant environmental advantages compared to food and feed grade biomass, avoiding the greenhouse gas emissions from the cultivation of energy crops and the conflicts related to indirect land-use change (ILUC). EU institutions have long recognised this fact and the EU Renewable Energy Directive (RED) rates this type of biodiesel as particularly worthy of support. Up to now, the actual saving on greenhouse gas (GHG) emissions achieved by biofuels was only relevant with regard to the legal minimum saving requirement. However, in view of the GHG quota set out in the EU Fuel Quality Directive, it is now no longer just a case of complying with minimum requirements – the actual achievable level is also becoming increasingly important. So when does something start or end as a ‘waste’? Life cycle assessments (LCAs) are an important way to measure the environmental impact of a product’s life from cradle to grave. LCAs attempt to address the waste question but there is still a lack of clarity on the issue. This is particularly true in cases where treating a specific waste or residue is necessary or even mandatory before further use. In this context, the pivotal question is: in LCAs, to what extent should environmental burdens from upstream or downstream processes be allocated to the main system or to the final product after secondary processing? This article attempts to answer the question with a focus on the collection and treatment of animal by-products.

Animal by-products Animal by-products (ABPs) arise mainly during: t The slaughter of animals for human consumption t The production of products of animal origin t The disposal of dead animals t Disease control measures Regardless of their source, without strict treatment ABPs pose a potential risk to public and animal health and the environment. Within the European Union (EU), regulations 1069/2009 and 142/2011 set out rules to control these risks by setting out safe disposal measures. Animal by-products and derived products fall under this regulation if they are excluded from, or

IN 2013, ALMOST 100% OF ANIMAL FATS AND 90% OF MEAT AND BONE MEAL IN THE EU WAS USED FOR ENERGY PURPOSES

A waste or not a waste?

not intended for, human consumption. According to the degree of risk involved, ABPs are classified into three categories, with Category 1 referring to the material with the highest risk and 3 to the lowest risk. There are different mandatory disposal and recovery options for each category (see Figure 1, following page). In 2013, a total of 17M tonnes of ABP raw materials were treated in the EU, six million tonnes of which fell under Category 1 and 2, according to the European Fat Processors and Renderers Association (EFPRA). The two main substances produced after the required sterilisation and drying process of Category 1 and 2 material were meat and bone meal (MBM) with a yield of some 22% weight/ weight (w/w), and animal fat with a yield of about 12% w/w. In 2013, almost 100% of animal fats and nearly 90% of the MBM derived from Category 1 and 2 were used for energy purposes. Figure 2 (following page) shows the use of fat (combustion of fat in thermal boilers, biodiesel) and MBM (combustion of MBM, fertiliser and fur feed) .

LCA reference The International Reference Life Cycle Data System (ILCD) Handbook was developed by the

Joint Research Council (JRC) for the European Commission and aims to provide a general guideline to ensure quality and consistency of life cycle data, methods and analyses. To establish boundaries between the initial (primary) life cycle and subsequent stages derived from end-of-life (waste) products, the JRC proposes the following approach: t The decisive indicator is the market value of the end-of-life product. t If the market value is positive (i.e. above zero), the product is considered a co-product of the preceding process or system. t If the market value is negative (i.e. below zero), the product is considered a waste material. Its processing is allocated to the producing system up to the point at which a product with a positive market value (secondary good) is produced. Thus, the pivotal question is: where should the boundary between environmental burdens from the primary pathway and the secondary good be drawn? The JRC says: “It is argued that all treatment processes that are necessary until the treated waste product is achieving a market value of zero are within the responsibility of the first system. This is because the waste or end-of-life product is v

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SOURCE: IFEU

FIGURE 1: CATEGORIES FOR ANIMAL BY-PRODUCTS IN EU

SOURCE: IFEU

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FIGURE 2: UTILISATION OF MBM AND ANIMAL FATS FROM CATEGORY 1 & 2, 2013

v generated by the first system, while a waste can per se not carry any burden of treatment. “Furthermore, is it considered inappropriate to attribute all preceding waste treatment processes to the eventually-produced secondary good. “An allocation of burdens to the secondary goods can plausibly therefore only be done at that process step where a valuable secondary good is produced.” When applied to the calculation of greenhouse gas (GHG) balances for biodiesel from animal fat, this suggests the approach illustrated in Figure 3 (following page) is appropriate. Two possible scenarios are considered: Case 1: The ABP is associated with a negative market value, as is the case for the more hazardous materials (Category 1 and 2). Case 2: The ABP is associated with a positive market value, as is sometimes the case for the less hazardous materials (Category 3). In the first scenario, the market value of the animal by-product is negative. That means only the resulting substances (cleaned animal fat or defatted MBM) after the rendering process are ready for use in other processes and then have a positive market value. The collection, the rendering process and the associated burdens are thus part of the first life cycle (animal husbandry, production of animal products like meat, milk, eggs, wool, etc.) and have to be allocated to them.

The disposal fees for the slaughterhouses and farmers for animal by-products of Category 1 and 2 vary a lot in the EU’s different member states. This mainly depends on the different national supporting schemes for the disposal of these materials. In some countries, the producer of animal by-products has to pay the whole cost for collection and treatment whereas, in other member states, the costs are partly borne by local authorities. Thus, it can be stated that within the EU, all producers of animal by-products of Category 1 and 2, i.e. slaughterhouses and farmers, have to pay a certain disposal fee for the safe elimination of these substances. In the case that the animal by-products have a positive market value, the balance boundary should be shifted so that the collection and the rendering process are allocated to the product. This is the case for ABP of Category 3, which has a positive market value at bigger slaughterhouses. The main reason for this is the higher market value of feed-grade processed animal proteins (PAP) and the feed-grade animal fat from Category 3 animal by-products.

Other standards Other standards also attempt to address the question of where to allocate the environmental impact of processing ABPs. The international standard for LCAs is ISO

14040/44, which is limited to the following wording: “Consideration should be given to the need for allocation procedures when dealing with systems involving multiple products and recycling systems. “Particularly for the recovery processes between the original and subsequent product system, the system boundary shall be identified and explained. “An open-loop allocation procedure applies to open-loop product systems where the material is recycled into other product systems and the material undergoes a change to its inherent properties.” The Technical Specification ISO/TS 14067 ‘Carbon Footprint of Products’ mostly reiterates the ISO standard but includes several additional explanations. One recommendation suggests: “One possible way of process subdivision is for the GHG emissions tied to final disposal/recycling to be split into a component EEoL charged to the product system under study and a component EPP charged to the product system that uses the recycled material. EPP are the GHG emissions tied to the pre-processing of the recycled material in order to fulfil the quality requirements of the substituted primary material.” The European Standard EN 16214 ‘Sustainably Produced Biomass for Energy Applications’ states that the total GHG emissions incurred in all upstream steps of the chain and up to the point where co-products are separated, are allocated between the biofuel/bioliquid or intermediate and the co-products. Wastes and residues do not share the burden of allocation i.e., none of the GHG emissions incurred up to the point at which they are produced are allocated to them. The “point of collection” is defined as “the point from which waste, agricultural crop residues or residues from processing can be directly used as raw material for biofuel or bioliquid production. “If an additional recovery process for a waste or residue is required before further use, the material is a waste or residue from processing until the recycling or recovery operation has been completed.”

Defining boundaries The ISO standard does not specify at which point to split the system boundary between a process system producing a residue and the second life cycle system recycling the residue. The EN standard defines the point of collection as the starting point of the second life cycle system. Based on this, the allocation for the second life cycle starts where the waste/residue could be directly used as raw material for biofuel or bioliquid production. In the case of biodiesel production from animal fat, this would be after the recycling or recovery operation, i.e. after the rendering process of ABP.

JEC Well-to-Tank Report The consortium of the JRC, European Council for Automotive R&D (EUCAR) and Concawe research group explicitly distinguishes between the system boundaries for biodiesel from used cooking oil (WOFA) and biodiesel from animal oil (TOFA) in its latest Well-to-Tank report. The report suggests that the only difference between the two materials is that TOFA is associated with the additional transport to the

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The JRC’s arguments have been adopted by Oehmichen und Majer in their study for Germany’s Union for the Promotion of Oil and Protein Plants (UFOP). “Whereas biodiesel from used cooking oils is associated with the upstream biodiesel production processes, collection and transport only, the process chain of biodiesel from animal oil includes expenditures for both oil transport to the production facility and rendering. “This process is integrated into the carcass rendering facility and is carried out exclusively for the purpose of oil production for subsequent use. Thus, it has to be included for LCA purposes.” However, it must be noted that the main purpose of the rendering process is not oil production but the thermal treatment of carcasses as a legal obligation to meet hygiene requirements. Moreover, as long as a process output is not associated with any positive market value, the intensity of its processing in a preceding step remains irrelevant.

Market value is key There is no debate that a clear boundary is required between one life cycle that concludes with a waste material fit for secondary processing and the subsequent life cycle that encompasses treatment and utilisation of the secondary good. The pivotal question is: to what extent should environmental burdens from upstream

FIGURE 4: COMPARISON OF ACTUAL AND DEFAULT VALUES ON GHG SAVINGS (EU RED) Greenhouse gas emission saving (%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cultivation

Sugar beet ethanol Default value of GHG emissions according to EU RED

SOURCE: IFEU

FIGURE 3: CALCULATION OF GHG BALANCES FOR BIODIESEL FROM ANIMAL FAT

Actual value

rendering facility. In fact, additional efforts for tallow production are also factored in. The report states: “Biodiesel can be produced from a number of waste materials, notably used cooking oils and tallow (one of the products of the rendering process which processes animal carcasses from slaughterhouses). “Used cooking oils need to be collected in any case, so they are deemed to be available at the processing plant with a zero energy and GHG footprint. They need to be cleaned and refined before the esterification step, which is similar but slightly different from the process used for virgin oils. “Animal carcasses are deemed to be waste and have therefore a zero footprint. They need to be collected and transported to the rendering plant, while the rendering process uses some energy. “As a result tallow comes with a small but significant energy and GHG cost.” The JEC consortium gives animal carcasses ‘waste material’ status, whereas animal oil is classified as a ‘waste material’ but also a product. The JEC classifies animal oil as a product due to the fact that it represents a material output from a production process, as opposed to a production residue. However, the following essential aspects are not considered: t The main purpose of rendering is the correct and safe disposal of animal carcasses. It is legally required and mandatory. This applies to hazardous Category 1 and 2 materials in particular. The goal is the conversion of carcasses into harmless and recyclable materials flows. Depending on the rendering procedure, the arising materials are animal oil and MBM. t The market value of ABP from hazardous sources is below zero, i.e. no positive market value.

SOURCE: IFEU

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52%

Processing

Wheat ethanol (natural gas as process fuel in conventional boiler)

Transport & distribution

34%

Rapeseed biodiesel 42%

Palm oil biodiesel (process not specified)

Total GHG saving

19%

Waste vegetable or animal oil biodiesel

83%

Waste vegetable or animal oil biodiesel

85%

Default greenhouse gas emissions (gCO2eq/MJ)

or downstream processes be allocated to the main system or the final product from secondary processing? The ILCD Handbook provides guidance in this context: the marketability of a material is decisive, i.e. a positive market value classifies a given material as a secondary good. But, under no circumstances, should environmental burdens from upstream life cycle processes be applied to materials without any market value. This, therefore, defines the starting point of the subsequent life cycle boundary. In the case of ABPs with a positive market value, as is sometimes the case for Category 3 ABPs, the burden of the transport to the rendering plant as well as the burden of the rendering process should be attributed to the second life cycle. The IFEU study therefore confirms the accuracy of the calculation methods used to measure the GHG saving within the EU’s Renewable Energy Directive. It also confirms the latest calculations carried out in the context of the International Sustainability and Carbon Certification (ISCC)

sustainability certification process, which reveals that producing biodiesel from animal fat achieves a remarkable actual value of 85% savings in GHG emissions compared to fossil diesel fuel (see Figure 4, above). In the case of ABPs with a negative market value, typical Category 1 and 2 APBs, all environmental burdens starting after the rendering process should be allocated to the second life cycle. In the likely event that the EU’s Renewable Energy Directive (RED) will distinguish between biodiesel from used cooking oils versus animal fat, the quality of the animal fat has to be clarified, for example, with: One default value for used cooking oil/animal fat from Categories 1 and 2 starting with the rendered fat or with the collection of used cooking oil. One default value for animal fat classified as Category 3 starting with the collection of ABP (as long as the market value of ABP is positive). w This article is based on a study written by Germany’s Institute for Energy and Environmental Research (IFEU) on behalf of the European Fat Processors and Renderers Association (EFPRA)

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STATISTIC S

BIODIESEL VS DIESEL PRICES (US$/TONNE)

STATISTICAL NEWS FROM MINTEC Biodiesel and diesel European Union (EU) biodiesel prices rose slightly at the start of 2014 due to rising prices of oils and oilseeds. However, prices began to fall throughout the second half of the year following the decline in petroleum prices. Petroleum prices fell in the second half of 2014, driven by increasing non-Organization of the Petroleum Exporting Countries (OPEC) supply, coupled with falling demand.

Unleaded petrol and ethanol

PETROL VS ETHANOL PRICES (US$/TONNE)

US unleaded petrol prices remained largely stable in the first half of 2014. However, prices fell thereafter, mainly due to lower petroleum prices. Ethanol prices rose significantly in the first half of 2014 as distillers in the USA faced logistical issues, affecting the deliveries of both maize and ethanol between regions. Both petrol and ethanol prices fell at the end of 2014 due to slowing demand growth and falling feedstock prices.

Ethanol and maize The price of ethanol in early 2014 rose as concerns persisted over the drought in Brazil, resulting in maize prices rising. Maize production in the USA is expected to reach 361.1M tonnes in 2014/15, up three percent compared to 2013/14. However, global production is expected to remain stable at 988M tonnes, as increased production in the USA has been offset by declines in Brazil and Argentina.

ETHANOL VS CORN PRICES (US$/TONNE)

PRICES OF SELECTED OILS (US$/TONNE) 2012

2013

Oct 14

Nov 14

Dec 14

Jan 15

Soyabean 1,230 1,052 828 820 797 797 Crude Palm 1,014 854 758 761 701 721 Palm Olein 997 803 697 702 652 657 Coconut 1,122 948 1,151 1,194 1,201 1,173 Rapeseed 1,240 1,080 832 830 805 785 Sunflower 1,256 1,108 863 890 874 855 Palm Kernel 1,119 904 937 984 969 1,029 Average price 1,140 964 INDEX 270 228

866 883 857 860 205 209 203 204

Mintec is the principal independent source of global information for commodities and raw materials. We specialise in helping supply chain professionals minimise risk. We provide services that range from detailed market reporting and consultancy projects to packages of sophisticated tools for analysing and interpreting market information. Mintec supports leading suppliers, processors, retailers, service providers and major end-users across a wide range of industrial and consumer goods sectors with statistical information and expert market analysis. Tel: +44 (0) 1628 851313; E-mail: sales@mintec.ltd.uk Website: www.mintecglobal.com

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