OFI November/December 2015 by Oils & Fats International

Nov/Dec 2015 t Vol 31 No 8 www.oilsandfatsinternational.com

OILSEEDS

Taking the fish out of fish oil

LOGISTICS

UCO: Garbage to gold

Cover Nov/Dec.indd 1

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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

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

PHOTO: WOLFELARRY/ VERA KUTTELVASEROVA / TATOMM: DOLLARPHOTOCLUB

CONTENTS VOL. 31 NO. 8 NOV/DEC 2015

FEATURES

EDITORIAL: Editor: Serena Lim Tel: +44(0)1737 855066 E-mail: serenalim@quartzltd.com

OILSEEDS

Editorial Assistant: Rose Hales Tel: +44(0)1737 855157 E-mail: rosehales@quartzltd.com SALES: Sales Manager: Mark Winthrop-Wallace Tel: +44 (0)1737 855 114 E-mail: markww@quartzltd.com

Taking the fish out of fish oil

TRANSPORT & LOGISTICS THE TRADITIONAL SOURCE OF LONG CHAIN OMEGA-3 FATTY ACIDS IS FISH OIL, BUT SUPPLY CAN NO LONGER MEET DEMAND. SCIENTISTS ARE WORKING ON NEW SOURCES, INCLUDING MODIFYING OILSEEDS SUCH AS CANOLA TO PRODUCE LONG-CHAIN OMEGA-3 OIL P20

Sales Consultant: Anita Revis Tel: +44 (0)1737 855068 E-mail: anitarevis@quartzltd.com Chinese Sales Executive: Erik Heath Tel: +44 (0)1737 855108 E-mail: erikheath@quartzltd.com

NEWS & EVENTS

PRODUCTION: Production Editor: Carol Baird E-mail: carolbaird@quartzltd.com

CORPORATE:

Managing Director: Steve Diprose Tel: +44 (0)1737 855164 E-mail: stevediprose@quartzltd.com SUBSCRIPTIONS: Tel: +44 (0)1737 855032; Fax: +44 (0)1737 855034 E-mail: subscriptions@quartzltd.com Address: Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, UK Annual Subscription: UK £145, Overseas £168. Two years: UK £261, Overseas £302. Single copy £36 © 2015 Quartz Business Media ISSN 0267-8853 Website: www.oilsandfatsinternational.com

Used cooking oil: garbage to gold

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 17318-0437. 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 Printed by Pensord Press, Gwent, Wales

Oils & Fats International

Biofuels News

Europe extends US biodiesel duties for another five years

INSPECTION, TESTING & CERTIFICATION

32 Inspection and testing round-up

News

Glencore may sell minority stake in agriculture business

Biotech News

EU Parliament rejects GMO draft law

FOOD SAFETY & CERTIFICATION

A member of FOSFA

@oilsandfatsint

Rebuilding trust

BIOFUELS

28 Positive outlook for Denmark

Comment

Transport & Logistics News

Cargill expands in Egypt to meet demand 12

Renewable Materials News

Inventure to build plant for Wilmar China Oleochemicals

35 Taiwan: keeping it clean

Diary of Events

USA

International Market Review

Statistics

Suppliers round-up

1 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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NEWS

COMMENT

Rebuilding trust A

s the fall-out from Volkswagen’s emissions’ rigging scandal rumbles on, there is one question that must linger in everyone’s mind – how can a company recover from such a blow to its reputation? The answer is relevant to all of us as trust in our brands is the basis for our relationships with our customers, suppliers and those we do business with. The scandal hit the headlines on 18 September when the US Environmental Protection Agency found that VW had installed ‘cheating’ software in diesel vehicles that understated the emissions of harmful nitrogen oxides (NOx) when tested. The software switched emissions controls on when tested in labs, but turned them off when the car was on the road so that they were pumping out up to 40 times the legal limit of NOx. VW has admitted that there are 11M vehicles with the cheating software, including Audi A3, VW Jetta, Beetle, Golf and Passat models. Only 482,000 vehicles are affected in the USA. VW plans to launch a recall of the affected vehicles in January and has set aside €6.5bn to cover this but the total bill is expected to be much higher because of potential fines and lawsuits. And in another twist, VW also revealed on 4 November that its own internal investigations showed that CO2 emissions and fuel consumption have been understated during standard tests, which could affect about 800,000 cars in Europe, most of them diesel but some petrol models as well. This could affect VW, Skoda, Audi and Seat cars. Apart from the financial hit from fines and falling share prices and sales, Volkswagen faces an enormous challenge in rebuilding its reputation. There are some good signs in the company’s initial response with its swift admission of guilt and the resignation of its chief executive. VW also carried an intrinsic brand strength before the crisis hit and some shoppers will be looking for a deal on VW cars.

Impact on biodiesel?

So will there be a fall-out for the biodiesel industry? There are some analysts who predict that the scandal will act as a catalyst to speed up the fall of diesel cars in Europe and halt it in the USA. More than half of all new cars sold in Europe run on diesel engines, which have been widely promoted because of their fuel efficiency and resulting lower CO2 emissions. Recently though, there have been rumblings of discontent over diesel, with the mayor of Paris calling for a ban on older diesel vehicles in the city by 2020 and a wider European debate on air quality and the harmful pollutants – such as nitrogen oxide and particulates – that diesel emits. If diesel use were to fall in Europe, it would have a knock-on effect on biodiesel as the vast majority of the biodiesel produced in the EU is blended. (Last year, the EU produced some 10.2M tonnes of biodiesel). But, the EU still has mandated blend quotas and there is a huge diesel fleet in Europe which is not going to disappear. And without diesel vehicles, Europe’s commitment to greenhouse gas reductions could not be fulfilled. For the moment, there is no immediate impact on the biodiesel market. However, the debate on the long-term future of VW and diesel will both carry on. In the meantime, the regulators in the USA and EU should really introduce some proper real-world testing of vehicle emissions. w

Glencore may sell minority stake in agriculture business

nglo–Swiss commodity trading and mining giant Glencore Plc is considering selling a minority stake in its agriculture business to help reduce its US$30bn of debt, Bloomberg reported in September. The company was in talks with about a dozen sovereign wealth funds and Asia-based trading houses. Bloomberg said the sale was part of a debt-cutting programme announced in early September which included selling US$2.5bn of new stock, asset sales, spending cuts and suspending dividend payments to help cut debt by about US$10.2bn. Glencore’s agriculture unit generated EBITA of US$1.21bn last year. On 19 August, it reported adjusted EBITA from agricultural products slumping by 46% in the first half of 2015 from a year earlier as bumper crops pressured prices. The report said new investment would provide the unit with the funding to grow further. Glencore became a major agriculture player when it bought Canadian grain trader Viterra Inc for US$4.6bn in 2012 but it still

lacks presence in the US market. Asian and Middle Eastern buyers have increasingly taken stakes in agricultural businesses recently. In August, Japan’s Mitsubishi Corp agreed to buy a fifth of commodity trader Olam International (see OFI News, September/October 2015). Last year, China’s largest food company Cofco Corp spent US$3.5bn acquiring controlling stakes in Noble Group Ltd’s grains trading arm and Dutch trader Nidera BV. In April, a Saudi state-owned subsidiary partnered with Bunge to buy a majority stake in the former Canadian Wheat Board (see Transport & Logistics News, OFI June 2015). Baar, Switzerland-based Glencore is one of the world’s leading producers and marketers of commodities including metals, minerals and grains. Its agricultural business focuses the processing, handling and marketing of wheat, corn, barley, rice, oilseeds, meals, edible oils and biodiesel. These are supported by storage, handling, processing and port facilities based around the world.

China’s Donlinks Grain and Oil to bid for Australian land giant

ne of China’s largest vegetable oil producers, Donlinks Grain and Oil Company, has entered the race for S Kidman & Co, Australia’s largest landholder, reports Financial Review. In a statement to the Shenzhen Stock Exchange, Guangzhou-based Donlinks said it would partner with British Virgin lslands-registered Genius Link Capital to make a second-round offer on 27 October. If successful, Donlinks would own 51% of S Kidman & Co. S. Kidman & Co is one of Australia’s largest beef producers with pastoral leases covering 101,000km2. The Financial Review said Donlinks, which imported soyabeans and produced vegetable oil and animal feed, had struggled over the past 18 months with falling prices and demand. Last year, it spent nearly US$773M buying a state-owned fertiliser business in a bid to diversify its operations. Earlier this year, it said its first-half loss had narrowed to 29.2M yuan (US$4.6M) from 340.7M yuan (US$53.7M) a year ago. Other interested Chinese bidders in S Kidman & Co included a consortium comprising state-backed developer Shanghai CRED and two private companies; financial services group Zendai; textile, property and logistics conglomerate Shanshan Group; and Shanghai Pengxin Group, a substantial owner of New Zealand farmland. The winning buyer is expected to be announced later this year.

2 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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NEWS

Indonesia combats haze from forest fires I ndonesia’s Golden Agri-Resources (GAR) announced at the end of September that it had stopped buying palm oil from a supplier ordered to cease operations for allegedly causing forest fires in the country. The government had launched investigations of more than 200 companies as it tried to control fires on Sumatra and Kalimantan islands amid complaints from Singapore and Malaysia about smoke or “haze” from the

New trade pact is announced

fires, Reuters said. The haze had pushed pollution levels to unhealthy levels in Singapore, Malaysia and northern Indonesia. Indonesia had ordered four companies to suspend operations, including unlisted palm oil company PT Langgam Inti Hibrindo, the supplier GAR said it had ceased purchases from. The Reuters report said Indonesia had been trying for two decades to end the seasonal fires caused by slash-and-burn

clearances on Sumatra and Kalimantan, where pulp and paper and palm oil companies hold large areas of forest concessions. President Joko Widodo has ordered thousands of security personnel backed by helicopters to help fight the fires, threatening to revoke land permits from any companies found responsible. GAR is the world’s secondlargest listed palm oil plantation and produced 2.95M tonnes of palm oil in 2014.

New palm oil body to be set up

n 5 October, 12 countries announced the largest tradeliberalising pact encompassing Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam. The aim of the Trans-Pacific Partnership (TPP) is to deepen trade by addressing issues such as government procurement, intellectual property protection and the conduct of state-owned enterprises. It is also meant to update trade agreements by dealing with post-Word Trade Organization (WTO) developments, including e-commerce and cloud computing, as well as addressing labour and environmental standards. Lawmakers in all TPP countries must approve the deal and the Financial Times said that not one of the 29 “chapters” in the fiendishly complex agreement had yet been closed, meaning that talks would drag on into next year.

ndonesia and Malaysia agreed in October to set up a new Council of Palm Oil Producing Countries to coordinate production, manage stocks and stabilise prices, reports the Jakarta Globe. “If we’re together, we’ll control 85% of the palm oil market,” Indonesia’s Coordinating Minister for Maritime Affairs Rizal Ramli said, adding that he would also invite Thailand to join the council. According to a Reuters report on 14 October, the new body would replace “no deforestation” pledges made by major palm companies in favour of a joint set of standards which would also consider the welfare of smallholders. “Indonesia and Malaysia have agreed to combine our two standards,” Rizal Ramli said in the report. “We are the biggest palm oil producer. Why (should) the consumers from the developed countries set the standard for us as they want?” Indonesia and Malaysia make up 85% of world palm oil output.

Sanhe to invest in new soya plants

anhe Hopefull Grain and Oil Group Ltd, one of China’s leading private agriculture companies, plans to invest two billion yuan (US$317M) in a vegetable oil refinery project in Jiangsu province and another US$317M in a soyabean processing plant in Liaoning province, reported the China Daily on 9 September. This would give it a total soyabean processing capacity of 9M tonnes/ year when the projects were completed, propelling it to one of the top three grain and oil companies in China, the report said. Sanhe Hopefull’s current soyabean processing capacity was 3M tonnes/year, with 550,000 tonnes/year of soya oil capacity, the China Daily said. It was the only private Chinese company in the industry to own a port in Brazil.

Legumex Walker’s processing plants put on sale

anada’s Legumex Walker has officially put its pulse and special crops processing plants located in Canada, the USA and China on the market, the Western Producer reported on 27 August. The move follows the group’s canola processing segment posting adjusted EBITDA of negative US$3.6M for the first half of 2015 and a lending group’s demand for repayment of a US$54.M loan. The company’s special crops business has three operating divisions:   t The sunflower, flax and bird food division contains primary and secondary processing plants in Winnipeg; Winkler, Manitoba; and St Jean Baptiste, Manitoba; and a plant in Mentor, Minnesota. Total processing capacity is 141,000 tonnes/year.  t The edible bean division includes primary processing plants in Morden, and Plum Coulee, Manitoba; St Hilaire, Minnesota; and Tianjin and Dalian in China.

Total processing capacity is 106,000 tonnes/year.  t The pea, lentil and canaryseed division has primary and secondary processing plants in Runciman, Brooksby, Saskatoon and Regina in Saskatchewan and a plant in St Jean Baptiste, Manitoba. Total processing capacity is 275,000 tonnes/year. An analyst quoted in the report said it could be difficult to sell the money-losing Pacific Coast Canola crush facility in Warden, Washington as it was a long way from where the commodity was grown in large quantities.  However, there was likely to be a long list of suitors for the special crops segment with prospective buyers including Canadian grain companies, Canadian pulse processors wishing to expand and foreign buyers looking for Canadian origination.

IN BRIEF NIGERIA: Russian company Amuragrotsentr will build a soyabean processing plant in the Belogorsk area in Amur Oblast, reports AllAboutFeed. Construction was due to begin in September. The plant would be able to process 240,000 tonnes/year of soyabean and produce 200,000 tonnes of soyabean products such as oil, meal and lecithin. Amuragrotsentr also plans construction of a second stage of the plant which will focus on the production of isolated soya protein. According to the company, the plant would meet a quarter of the total Russian demand for isolated soya protein, which can be used for compound feed production, or as an ingredient in meat products such as sausages. USA: Bunge North America announced on 5 October that it had purchased Whole Harvest Foods, LLC, a leading refiner and packager of expeller pressed commercial cooking oil. Whole Harvest Foods products – which include frying oils, pan sprays and liquid butter alternatives – are manufactured at Bunge’s vegetable oil refinery and packaging facility in Warsaw, North Carolina, and its packaging plant in Las Vegas, Nevada. The products are made from expeller pressed canola, cottonseed and soya oils. TURKEY: The European Bank for Reconstruction and Development (EBRD) says it is boosting Turkish agribusiness with a €45M loan to leading edible oil producer Reka Bitkisel Yaglar San ve Tic AS. The loan would help Reka refinance existing loans, buy new equipment and enable it to work with larger numbers of oilseed farmers, the bank said. Reka was formed in 2010 and currently had the largest integrated oilseed processing capacity in Turkey in the north-east Tekirda province, where most of the country’s sunflowerseed and rapeseed crops was grown. The EBRD said it had invested more than €6bn in Turkey – its leading recipient in 2014 – with new investments worth €1.4bn last year.

3 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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NEWS

IN BRIEF INDONESIA: PT Eagle High Plantation will build two new palm oil mills in West Kalimantan and Papua as part of plans to double its crude palm oil production within five years from its current 400,000 tonnes, the Jakarta Post reports. The company will spend US$15M on both mills, which can process 45 tonnes/hour each of fresh fruit bunches, adding to seven existing mills with a total capacity of 385 tonnes/hour. It will also spend US$6.8M on new plantations. It currently holds 425,000ha of landbanks in Kalimantan, Sumatra and Papua, 151,000ha of which have been planted. Mature plantations cover 97,000ha of the total planted area. CENTRAL AMERICA: Archer Daniels Midland Company (ADM) announced on 25 August that it is opening distribution and merchandising offices in El Salvador and Guatemala to offer a full supply chain solution for customers’ grain, meal and oil demand by taking advantage of its transportation network and distribution capability. “We intend to use existing infrastructure such as our port facilities in Mexico and Guatemala, and large grain export terminals in the US Gulf to increase destination marketing in these countries,” said ADM Latin America president and general manager Federico Gorbea. ADM currently has operations in the Dominican Republic, Mexico, Panama and Puerto Rico and an existing joint venture grain storage facility at a port in Guatemala as well as a port facility in Jamaica. UK: New Britain Oils (NBO) said in September that it had increased its bakery fats production capability by 30% at its Liverpool site to meet a substantial increase in demand for segregated, traceable palmbased products. Malaysia’s Sime Darby Plantation acquired Papua New Guinea-based New Britain Palm Oil for US$1.7bn in March, which included the Liverpool site. NBO said it had seen demand for its bakery fats increase by 50% year-on-year since opening its fully dedicated palm oil refinery just five years ago.

Kellogg’s boosting Africa presence K

ellogg Company announced a new joint venture with Tolaram Africa on 15 September to boost its presence in the growing African market. “As a region that is experiencing explosive growth, with a population of almost one billion people and an economy that is expected to more than double over the next 10 years, sub-saharan Africa provides tremendous opportunity for our company,” said chairman and CEO John Bryant. Highlights of the partnership include:

t The creation of a joint venture between Kellogg’s and Tolaram Africa to develop snacks and breakfast foods for the West African market. t The acquisition of 50% of Multipro, a leading sales and distribution company in Nigeria and Ghana. t The right to acquire a stake in Tolaram Africa Foods (which owns 49% of Dufil Prima) in the future. Dufil Prima manufactures and markets

leading food brands, including Indomie noodles, which are often eaten at breakfast, as well as Minimie snacks, Power oil and Power pasta. “Tolaram Africa has built a highly successful consumer products business and today, it is one of the largest food companies in Nigeria,” said Bryant. Multipro is headquartered in Lagos and provides access to some 1,000 exclusive distributors, and operates 19 warehouses across six locations. It is also establishing similar networks in other key African countries including Democratic Republic of Congo, Ivory Coast, Cameroon and Ethiopia. Kellogg’s has agreed to pay approximately US$450M for a 50% stake in Multipro and the option to purchase a stake in Tolaram Africa Foods. Total sales are expected to be some US$750M in 2015, with the final purchase price dependent on actual results for EBITDA in 2015.

China’s food safety law in effect Clariant expands

hina’s amended 2015 Food Safety Law became effective on 1 October and will mean stiffer civil and criminal punishments for those found to be in violation, reports Food Safety Magazine. Companies that violate the new legislation -- to be enforced by the China Food and Drug Administration – will be restricted in terms of future loans, taxation, bidding and land use while rewards will be increased for those who blow the whistle on food safety violations within China’s borders. There will also be more supervision of food sold online. China’s last version of its Food Safety Law was passed in 2009, in the wake of a baby milk scandal in which some 290,000 infants were fed milk contaminated with melamine, a toxic industrial compound. Other scandals included pickled vegetables containing industrialgrade salt and unsafe levels of pesticides; soya sauce made from human hair; alleged carcinogens used in frying oil and recycled outof-date food, the magazine said.

Soya under new traceability system

he Food and Drug Administration of Taiwan has added a further seven items to its list of commodities covered by its new food traceability system, Lipid Technology reported in August. Its first list included edible oils, dairy products, food additives, fish food and GM ingredients. The new additions include soyabeans, soyabean products and corn. The traceability system requires

traders to retain information on the product, its supplier and distribution details, as well as maintaining internal tracing records. The new system was introduced in the wake of a series of food scandals in late 2013 and early 2014, most of which involved adulterated cooking oil products (see ‘Taiwan: keeping it clean’, p35).

with new sites

lariant has announced capacity expansions including new operations at existing sites in Turkey and Mexico and construction of a new Indonesian site for its Tonsil bleaching earths. The new facilities would improve supply lead times and product availability for customers in these regions, Clariant said. “They include on-site teams of experts in product and application techniques, as well as analytical laboratories to support the development of bleaching earths that meet local oil refining requirements for colour improvement, odour removal and shelf life.” Customers in Turkey and the Middle East would benefit in particular from the newly developed Tonsil Supreme 158FF grade, which would be produced at the expanded Balikesir site using a specific clay from a local Turkish mine. “Across its regions, Clariant sources bentonite from its local mines to both secure clay access and ensure sustainable mining practices,” the company added.

FDA finalises rules to prevent foodborne diseases

n 10 September, the US Food and Drug Administration (FDA) finalised the first two of seven major rules aimed at preventing foodborne diseases, which leads to illness in an estimated 48M people in the USA, according to data from the US Centers for Disease Control and Prevention. The FDA Food Safety Modernization Act (FSMA) places greater emphasis on the prevention of foodborne illness, holding imported food to the same safety standard as domestically produced food, and

developing an integrated food safety system. The two preventive control rules require human and animal food facilities to develop and implement written food safety plans that indicate the possible problems that could affect the safety of their products and outline steps the facility would take to prevent or significantly minimise the likelihood of those problems occurring. The seven FSMA rules are due to be finalised next year.

4 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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BIOFUELS NEWS

IN BRIEF FRANCE: Avril, the EU’s largest biofuel producer, opened a 100,000 tonnes/year plant in Sète on France’s Mediterranean coast on 28 October in order to meet the demand from higher French biodiesel blending levels, Reuters reported. The new plant would allow Avril to raise biodiesel capacity to 1.7M tonnes. Although the biofuel blending level was paused in 2013, it was raised from 7% to 8% in late 2014. Avril chose southern France as a site because competition with Belgium, Germany and the Netherlands was high in the north, Reuters said. INDONESIA: All airlines operating in Indonesia must use aviation biofuel for ther aircraft from 2018 onwards, Global Indonesian Voices reported on 26 October. Minister of Transportation Ignasius Jonan said the government planned to produce the biofuel from palm oil or water hyacinth as both raw materials were abundant in the country. The report also said that an agreement was signed in Washington between the Indonesian and US governments to conduct a special joint study on palm oil-based aviation fuel. No start time or expected duration was given, however.

‘Slack’ demand for EU biodiesel

emand for biodiesel was ‘slack’ during September 2015, according to a recent update on the EU biodiesel market produced by Germany’s Union for the Promotion of Oil and Protein Plants (UFOP). Although spot material sold quickly, the smaller quantities that remained received little interest. On prices, UFOP noted that wholesale was weak, and the price differential between biodiesel and diesel increased again. Biodiesel consumption for blending in July reached 190,000 tonnes, just below June’s level – both were considerably lower than 2014 demand. Cumulative consumption of biodiesel in 2015 up to, and including July, amounted to 1.33M tonnes, a decrease of 2% from the amount consumed the previous year.

Europe extends US biodiesel duties for another five years

ollowing a year of investigating, the EU has announced it is extending duties on US biodiesel, according to a Biodiesel Magazine report in September. The new regulations were published in the EU Official Journal and extend anti-dumping and anti-subsidy duties on US biodiesel for another five years. The duties were first introduced in 2009 after complaints that B99, the USA’s subsidised biodiesel, was flooding the EU market, causing a detrimental effect on EU producers. Further complaints then arose that US suppliers were sidestepping the duties by shipping biodiesel to the EU via Canada. A further investigation led to the introduction of anti-circumvention measures in 2011. According to Biodiesel Magazine, the anti-dumping and anti-subsidy duties were due to expire in 2014, but an expiry review request was filed by the European Biodiesel Board (EBB), which sought a fiveyear extension. Reuters reported that the EU decided there was still a risk of harm if the duties were lifted, so extended them. The US biodiesel trade association, the National

Biodiesel Board (NBB), has responded by saying that the decision is unfair and protectionist. NBB vice president of federal affairs Anne Steckel told Biodiesel Magazine that the decision was clearly aimed at giving European biodiesel producers an edge over their competition and a lock on the European market. “We will continue evaluating our options for fighting these protectionist duties,” she said. According to Reuters, a US tax credit of US$1/ gallon of biodiesel produced was the issue causing harm to European producers. The NBB said the EU was ignoring the fact that the tax incentive had expired. However, the EBB’s secretary general disagreed, telling Biodiesel Magazine that “the US authorities have established a tradition of reinstating the tax credit in a retroactive manner”. US imports of biodiesel from the EU have increased in recent years, whereas EU imports of US biodiesel have dropped to virtually nothing since the introduction of the duties in 2009, the NBB said.

100% renewable biodiesel from entire castor plant C

hemical engineers from Iran’s Isfahan University of Technology, said in October that they have successfully produced biodiesel from castor oil using a biorefinery set-up, which negates the need for extra petrochemical methanol, according to a report in The Chemical Engineer. The researchers, Hamed Bateni and Keikhosro Karimi, found that bioethanol could be used as an alternative to methanol. Using the concept of a biorefinery, they produced multiple products from a single feedstock. The castor plant was selected as the feedstock as it can grow in poor conditions, The Chemical Engineer report said. Oil, seedcake, stems and leaves were extracted and retained from the plant. The researchers said, “This study showed that the castor plant can be comprehensively exploited using a biorefinery approach for biodiesel and ethanol production in which no extra alcohol out of the process was necessary for the biodiesel unit.”

Boeing and China jet fuel cooperation

ircraft manufacturer Boeing announced in September that it had made several agreements to expand collaborations with China. Boeing and the National Development Reform Commission of the People’s Republic of China (NDRC) have signed a Memorandum of Understanding (MOU) that will advance their longterm strategic cooperation. As part of the MOU, Boeing and the NDRC announced a new

aviation biofuel initiative to turn agricultural waste in China into renewable energy. Waste feedstocks such as corn cobs and wheat stalks would be used to produce fuel in a bid to reduce carbon emissions from aircraft. According to a study by the US Department of Energy, sustainably produced aviation biofuel reduces carbon emissions by 50-80% on a lifecycle basis, compared to conventional jet fuel.

Perstorp acquires biodiesel plant in Fredrikstad

wedish company Perstorp is acquiring a biodiesel plant in Fredrikstad, Norway with plans to move the assets to its existing facility in Stenungsund, Sweden by the end of this year, Biodiesel Magazine reported in September. Perstorp, which produces speciality chemicals as well as biodiesel from rapeseed oil, told Biodiesel Magazine that the company was looking to grow the biofuels side of the business. Vice president of biofuels Lars Lind said: “In order to grow with the market, we need to secure more production capacity and, with the Norweigian facility, we can combine Perstorp’s unique expertise with existing equipment. With the new facility, we can almost double our current production capacity.” According to Biodiesel Magazine, Perstorp distributes a branded biodiesel in low-level blends called RME-Perstorp BXN, a ready-to-use B100 called Verdis Polaris-Flora and a biomethanol-blend B100 called Verdis Polaris-Aura. The acquisition would allow growth for the Swedish market as well as supporting the growing market in Norway, the report said.

6 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

Biofuel News Nov/Dec.indd 1

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BIOFUELS NEWS

EC approval for Dutch Nidera reports rouge trader joint venture company D

Pertamina invests in aviation biofuel

ndonesia’s state-owned oil and gas company, Pertamina, will invest around US$480M to produce bio-aviation turbine fuel and build a refinery by 2017, according to an Antara News report in August. The report said Pertamina had a target to produce up to 26M litres/year of aviation biofuel. The fuel would be made from palm oil and should surpass the national target for the national aviation industry, which is currently set at about 3%. Although Indonesian airlines do not currently use biofuels, the industry is growing fast at an annual rate of 10%. The construction of the refinery would support the government’s efforts to reduce aviation emissions by up to 26% by 2020, Antara News said.

Vietnam’s renewable energy industry in crisis

49 2014

biodiesel joint venture company between Wilmar International Limited of Singapore and Fox Petrolifera Italiana SpA of Italy was officially approved by the European Commission (EC) in September, RTT News reported. The joint project would be based in the Netherlands and operate one of Fox Petrolifera’s existing plants in Italy producing biodiesel and its by-products. RTT News said both parent companies would also sell palm and seed oil, used in the production of biodiesel. The joint venture had to be approved by the EC under the EU Merger Regulation. It concluded that the acquisition did not raise competition concerns because the combined companies’ market position would remain highly limited and they would face continued pressure from other strong, multinational companies.

utch grain and oilseed trader Nidera BV reported that a “rouge” ethanol trader had racked up significant losses in biofuels trading through fraudulent activities. Nidera CEO Tom van der Laan said in a Bloomberg report that the company had since exited the biofuels business and closed all deals linked to the losses. The actions of the trader “probably lasted for a prolonged time” and the company only found out earlier this year. He did not give a figure for the losses but said Nidera would still post a profit for the company’s fiscal year, ending in September. None of the company’s other trading activities were involved, the Reuters report added. Chinese grain trader and food processor COFCO, which bought a 51% stake in Nidera last year, said it still had confidence in Nidera. “Nidera has dealt with the issue, which has not affected the company’s daily operation,” COFCO said in a e-mail to Reuters.

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ive ethanol manufacturing projects in Vietnam were facing the prospect of permanent closure in October after sales of the biofuel had failed to take off in the country, a Viet Nam News report said. The government kicked off a biofuel development programme in 2007 and hundreds of millions of US dollars were invested in the ethanol plants. Petro Viet Nam contributed US$300M to build three ethanol factories with capacity to produce 300M litres/ year between them, Viet Nam News said. Of the seven factories built, only two were producing ethanol, the article said, the other five had stopped operations temporarily. Viet Nam News attributed the lack of demand for renewable energy in Vietnam to the government’s failure to adequately promote the use of ethanol. The ethanol in Vietnam is produced from cassava, but the price of the feedstock was higher than the global price, Viet Nam News said, which in turn raised the price of ethanol and made it difficult to export. FM_Tonsil_128x185_en.indd 7 OFI – NOVEMBER/DECEMBER 2015 1 www.oilsandfatsinternational.com

Biofuel News Nov/Dec.indd 2

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05.12.14 16:41

05/11/2015 09:31

BIOTECH NEWS

EU Parliament rejects GMO draft law

draft EU law that would allow individual EU member states to either restrict or ban the sale and use of GMOs on their territory was rejected by the European Parliament on 28 October, according to a press release. In particular, members were concerned that the law might be unworkable and would lead to border checks being reintroduced. The proposal was rejected by 577 votes to 75, with 38 abstentions. Rapporteur Giovanni La Via – who recommended that the proposal be rejected

High cost of neonicotinoids ban in England

– said that the draft law could have negative consequences for agriculture in the EU, which relied heavily on GMO protein supplies. However, the European Commission (EC) said it would not withdraw the proposal, which would be discussed by EU ministers. Another EU law that allows member states to ban the cultivation of EU-approved GMOs in their territory was approved and entered into force in March (see OFI Biotech News, March/ April 2015). According to an AFP report, more than half

of EU countries – 15 out of 28 – requested to opt out of cultivating GMOs before the opt-out deadline of 3 October. Member states can choose to ban growing a GMO crop even if it has been approved by the EC. Austria, Bulgaria, Croatia, Cyprus, Germany, Greece, France, Hungary, Italy, Latvia, Lithuania, the Netherlands and Poland have requested to opt out. The UK requested a partial opt-out for Scotland, Wales and Northern Ireland. Belgium requested a ban for the region of Wallonia.

Australia and China form biosecurity partnership

he EU ban on neonicotinoid insecticides cost English farmers millions of pounds in 2015, according to a study published by Rural Business Research in August. In total £22M (€30M) was spent on alternative chemistry to confront flea beetle on winter oilseed rape crops. This breaks down to £7.8M (€10.6M) for the cost of chemicals used to control cabbage stem flea beetle (CSFB), £11.4 (€15.5M) for application of the chemicals, replanting costs of £0.7M (€1M) and a cost of £2.3M (€3.1M) for crop lost and not replanted. Farmers Weekly said that around 240,000 litres of insecticide was applied to winter oilseed rape crops in England, combating both actual and predicted outbreaks of flea beetles. An estimated 1.1M ha were sprayed. It was reported that 17% of growers suffered crop loses due to CSFB, with an estimated 16,000ha of crop area lost (about 3% of the total growing area). Growers used mainly cypermehrin and lambdacyhalothrin as neonicotinoid alternatives, Farmers Weekly said. The winter oilseed rape crop area in 2015 was estimated to be 8% lower than the 2014 area, at 577,000ha. The EU decided to ban three neonicotinoid insecticies in 2013 because of concerns they can harm honeybees.

he Australian Plant Biosecurity Cooperative Research Centre (CRC), Murdoch University and the Chinese Academy of State Administration of Grain will make up the foundation of a new partnership called the Australia-China Joint Centre for Postharvest Grain Biosecurity and Quality Research, which aims to prevent losses of stored grain, ABC Rural reported on 25 September. The centre would develop non-chemical controls for pest management and protect the countries against grains biosecurity risks. Plant Biosecruity CRC chief executive officer Michael Robinson told ABC Rural that China loses around 30% of its grain supply to pests each year, making it a serious issue. Robinson said that Australia’s interest was in protecting trade, whereas China needed to protect food security. The Federal Government’s Australia-China joint research fund would fund the research centre, alongside other research partners – both government and private.

Monsanto seeks transformation

ollowing Monsanto’s failed attempts to acquire rival Syngenta, the company says it plans to transform itself into a big data business, a Reuters report in September revealed. Monsanto met with 200 technology start-ups and identified five as possible targets for acquisition. Reuters said that Monsanto sought to provide

services, software and hardware tools that would use data to help farmers boost their crop yields. It already owns weatherforecasting firm Climate Corp, and yield boosting software Precision Planting. But Reuters said that farmers and agribusiness customers were reluctant as farm incomes were down by half compared to the 2013 high.

DuPont Pioneer’s Soya crush for yield campaign Straubing plant

ustralian canola growers are being challenged by DuPont Pioneer in a new campaign aimed at closing the yield gap between them and their oversees counterparts, Queensland Country Life reported in October. DuPont ran canola technology showcases in New South Wales and Western Australia as part of the campaign, which focused on yield advancement and the impact of new hybrid technology to close the yield gap.

rcher Daniels Midland Company (ADM) announced in October that it plans to add switch capacity at its rapeseed crushing facility in Straubing, Germany in order to begin processing soyabeans. Once the new capability is added the plant will be able to crush non-GM soyabeans sourced from the Danube region, allowing non-GM soya meal to be marketed to customers in Austria, Germany and Switzerland.

Lawsuit against Syngenta can advance to trial

federal district judge in Kansas City, USA ruled in September that a class action lawsuit filed against Syngenta by farmers, grain handlers and exporters over the company’s Viptera corn trait can advance to trial, Farm Journal reported. According to the report, farmers and grain handlers purported they were economically harmed and that Syngenta was “negligent in the timing, scope and manner” of commercialising the corn in the USA, as it knew that China had yet to approve the variety. Those affected and their attorneys believe that China’s rejection of the variety MIR162 led directly to an interruption in trade causing prices to drop and farmers to lose between US$13bn. Syngenta said that it did not consider China to be a key export market for the USA in 2010 and 2011, and other countries that fell into this category had given full regulatory approval.

BASF expands joint venture

ASF and Monsanto Canada expanded their joint product offering, Powerful Combinations, in Western Canada in October, according to a news release from BASF. The expansion offers soyabean and canola farmers solutions to maximise production during the 2016 growing season. The offer includes both herbicides and fungicides for the management of crop diseases and resistance issues.

8 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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TRANSPORT & LOGISTICS NEWS

Cargill expands in Egypt to meet demand C

argill announced at the start of September that it is constructing an additional 42,000 tonnes of storage capacity at its existing premises in the port of Dekheila in Alexandria as part of a US$100M investment to meet increasing demand in Egypt for soyabean meal and vegetable oil. It plans to double the capacity of its soyabean oil crush operation in Borg El Arab, which will add a 3,000 tonne production line to its existing facility, allowing the production of improved high protein meal, a fast growing product segment in the local market. Cargill said the extension at Dekheila – which discharged, stored and handled

THE NETHERLANDS: Fluvia Holding and the Dekker Group agreed in July that Fluvia would sell its 55% interest in FluDek BV to Dekker, making Dekker the sole owner of Maastank BV – the tank terminal for vegetable oils and oleochemicals in the Port of Rotterdam – and with a 27.3% interest in MaasRefinery. Dekker said the acquisition was one of the ways it planned to double its storage capacity to around 100,000m³ over the coming years. It would also expand the infrastructure for the storage, tran-shipment and treatment of high-grade special vegetable oils and oleochemicals.

lobal logistics provider Van den Bosch Transporten announced on 16 September that it is expanding its activities in Africa and the Middle East, with a new branch in Dubai; 500 new ISO tank containers; and a tank cleaning service in Tema, Ghana that will be launched early next year. The Dutch group specialises in the transport of liquid and dry bulk for the food and chemical industries, including oils and fats. “We are finding that more and more European companies are focusing on growth markets such as Africa and the Middle East,” said CEO Peter van den Bosch. “That has made the demand for deep sea bulk transport rise rapidly.” Business development manager Paul van de Vorle said the company was very active in the oils and fats market in Europe, acting as a bulk supply chain partner for major refiners such as IOI, Cargill, Olenex and Sime Darby in delivering vegetable fats. “We also supply considerable volumes of oils – mainly sunflower, olive and soya oils – from crushers in eastern and southern Europe towards filling lines for the private label industry and big FMCG

companies such as Unilever. “We have developed tank containers that enable our customers to optimise payload.” From a few hundred tank containers, the company now had well over 4,000 and recently invested again in 500 new 20ft ISO tank containers. Van den Bosch said the company was opening a new branch in Dubai in September because it saw possibilities in the Middle East, with Dubai lying at the crossroads of three continents. “The African continent also offers many opportunities in loading edible oils and fats,” van de Vorle said. “The decision to build a tank cleaning facility in Tema offers our customers the chance to load products like cocoa or shea butter in bulk from the origin. This optimises their supply chain because no manual handling is necessary to heat and unload the product at the unloading location.” Van den Bosch said volumes between Europe and Africa were growing because they were able to convince customers to ship liquids in ISO tanks instead of in small quantities, offering handling and heating advantages and savings in packaging costs.

Standic expands in oleochemicals SEA-Tank Terminal PHOTO: STANDIC

AUSTRALIA: Co-operative Bulk Handling Ltd (CBH), one of the country’s leading exporters of wheat, barley, canola and lupins, is planning to spend US$727M to reshape its Western Australian storage and handling network, Oilseed & Grain News reported. CBH figures showed that 110 of its sites received only 12% of grain harvested, while its maintenance costs had more than doubled in the past three years. CBH was planning to spend US$145M/year to 2020 to increase throughput capacity, replace storage infrastructure and complete upgrades.

operational by mid-2017. Work to increase the storage capacity at the port of Dekheila was also due to commence in November, with completion expected by the end of 2016. Cargill has been operating in Egypt since 1994 and has been involved in soyabean crush since 2004 through its majority share in the National Vegetable Oils Company (NVOC), producing crude soyabean oil for the Egyptian market and supplying soybean meal to the poultry and aqua feed industry. Cargill also has a majority share in the National Stevedoring Company in Dekheila port, which facilitates the discharge, storage and handling of imported grains into Egypt.

Van den Bosch grows in Africa, Middle East G

IN BRIEF

ARGENTINA: In September, Dutch oilseed and grain trader Nider opened its second berth at the Puerto General San Martin terminal with a shipment of 15,000 tonnes of soyabean oil. The new berth allows Nidera to export 800 tonnes/hour of vegetable oil and 1,200 tonnes/ hour of fertilisers.

imported grains and oilseeds – would enable it to optimise its supply chain, allowing for enhanced efficiency in the timely delivery of grains to its Egyptian customers and to its crush plant at Borg El Arab. “This investment fits with our strategy of growing our business in Africa and the Middle East,” said Johan Steyn, head of Cargill’s grain and oilseeds business in Middle East/Africa. “Expanding in Egypt will enable us to serve our customers in the local market with high quality products, crushed and produced locally.” Construction at the soyabean crush facility was due to start in November and the expanded facility was expected to be

ndependent liquids storage operator Standic BV announced on 9 October that it had completed storage and facility expansions for chemicals and oleochemicals at Dordrecht sea port in the Netherlands. Its new Tank Pit 7 (pictured) has 36,000m² of storage divided over 43 stainless steel tanks in different sizes. The tanks each have their own line, pump and loading arm, making cross contamination impossible. They also have capacity for iso-container parking and heating together with tank

features such as heating and mixing of chemicals on site. Standic commercial director Paul Voogt said: “The market for oleochemicals storage is increasing and we also see a growing demand from our customers.” Standic has also increased its jetty capacity at its storage and distribution centre in Dordrecht by 33%, resulting in shorter jetty occupation times. With 230,500m³ of storage capacity and 163 tanks, Standic provides storage for liquids including oleochemicals, biofuels and lubricants. Sited at Dordrecht sea port – between the harbour area of Rotterdam and Antwerp – Standic has direct access to the North Sea and provides a transit path by road, rail and inland waterway to the Ruhr Area.

offers new tanks

EA-Tank Terminal is extending its capacity at the port of Ghent, Belgium with six new stainless steel tanks with a total capacity of 9,600m³. All tanks are heatable, insulated and have segregated in and out lines. Each tank is connected with a separate line to the waterside as well as to a truck or train loading position. The tanks would be ready by January 2016. SEA operates 250,000m³ of storage capacity at Ghent, handling a variety of products including vegetable oils, animal fats, FAME, fishing oil, molasses, fertilisers and other nonhazardous products. The SEA terminal also has almost 1.5 km of quay length.

10 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

Transport News.indd 1

05/11/2015 09:43

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02/11/2015 09:58 14/10/15 16:53

R E N E WA B L E M AT E R I A L S N E W S

IN BRIEF GERMANY: Oleochemicals producer Peter Greven GmbH announced that it received Roundtable on Sustainable Palm Oil (RSPO) certification in July for its lubricant esters, the first producer in Europe to do so. The company said that in 2013, it was the first metal soap producer to receive the RSPO supply chain certification system (SCCS) certificate, allowing it to produce and distribute vegetable stearates and dispersions based on RSPO-certified fatty acid. The first product to be available in its LIGALUB lubricants line is LIGALUB 18 TMP MB, a polyol ester of an unsaturated fatty acid. USA: The United States Department of Agriculture (USDA) has granted six products from Emery Oleochemicals’s EMEROX range a certified bio-based product label, which verifies that these polyols contain renewable bio-based content that meets or exceeds levels set by the USDA. Emery’s polyols are currently manufactured out of the company’s newly commercialised US$50M polyols plant in Cincinnati, Ohio. AUSTRALIA/NEW ZEALAND: Henkel AG’s acquisition of Colgate-Palmolive’s laundry detergents and pre-wash brands in Australia and New Zealand is expected to be closed in third quarter 2015. The €220M acquisition was first announced in May and will make Henkel one of the largest players in detergents in the region. The purchase includes brands such as Cold Power, Dynamo and Fab, which generated sales of some €110M in 2014. FRANCE/USA: French biotech company Deinove announced in September that it had forged a partnership with US Tyton BioEnergy Systems to produce green chemical compounds. “The main goal of the partnership is to combine Tyton’s energy tobacco feedstock, process and production infrastructure with Deinove’s deinococcus bacteriabased fermentation solutions to produce green chemical compounds of high commercial value,” the companies said.

Inventure to build plant for Wilmar China Oleochemicals

nventure Renewables Inc, USA has announced construction of a commercial scale plant for Wilmar (China) Oleochemicals Co Ltd that will convert waste vegetable oil by-products into intermediate materials, which can be further processed into higher value food, feed and industrial products, including biodiesel. “We’re very excited to be working with Wilmar (China) Oleochemicals,” said Inventure Renewables president and CEO Mark Tegen. “The recent selection of Inventure’s mixed super critical fluid (MSCF) technology would not have been possible without the compelling case for improved operational efficiencies that our technology offers.” Inventure will supply basic engineering, detailed engineering, equipment design, fabrication, supervision of installation and start-up support. Wilmar is a leading Asian agribusiness group

spanning oil palm cultivation, oilseeds crushing, edible oils refining, sugar, speciality fats, oleochemicals and biodiesel manufacturing and grains processing. Its oleochemical and biofuel business currently comprise production sites in China, Malaysia and Indonesia, with plans to add sites in India and Europe in the near future. As one of the world’s largest oleochemical producers of basic oleochemials – accounting for around one-third of Asia’s fatty acid production – Wilmar’s product range includes basic oleochemicals such as fatty acids, fatty alcohols, methyl esters, glycerine and derivatives such as soap noodles, cosmetic esters, palm waxes, alkyl ketene dimers, acid chlorides, distilled monoglycerides, epichlorohydrin, primary and tertiary amines. Inventure Renewables develops process technology for the production of sugar from biomass.

Gevo sells renewable bio-isooctene

S renewable technology company Gevo Inc announced on 28 September that it had begun selling renewable isooctene worth over US$1M in orders this year to BCD Chemie, a subsidiary of chemical distributor Brenntag. The isooctene will be produced at Gevo’s biorefinery in Silsbee, Texas, derived from isobutanol produced at Gevo’s plant in Luverne, Minnesota. BCD Chemie is targeting applications in Europe with Gevo’s isooctene and may market other hydrocarbon products, including isooctane and jet fuel. Gevo currently has a partnership with Brenntag in Canada, which sells Gevo’s isobutanol as a solvent in Canada. Isooctene and isooctane can be used as high-octane fuel blend components in gasoline formulations, which minimise engine knock. Headquartered in Germany, Brenntag, is a global leader in industrial and speciality chemicals distribution, generating sales of US$13.3bn in 2014.

Amyris cosmetics MOU

S industrial bioscience company Amyris Inc announced on 11 September that it had signed a memorandum of understanding with leading Brazilian cosmetic company Contém 1G. Amyris owns the Biossance brand, which incorporates its Neossance squalane emollient derived from Brazilian sugarcane. It plans to introduce its Biossance skin moisturiser to Brazil around the end of this year, and an additional five Biossance products through 2016, with a hair care line by the end of 2016. With the agreement, Amyris gains access to Contém 1G’s manufacturing and cosmetic development facilities and its 190 retail sales outlets across Brazil. “We see an opportunity for sales to Contém 1G in the range of US$8-12M in the first year of the relationship, as well as a rapid expansion of the brand in a ‘direct to consumer’ sales model where consumers can try and buy our product immediately,” said Caroline Hadfield, senior vice president, personal care, at Amyris.

Brazil PHA plant

taly’s Bio-on Spa and US hedge fund Moore Capital signed a license agreement on 14 September to build a 10,000 tonnes/year polyhydroxyalkanoates (PHA) bioplastic plant in Brazil’s São Paulo state utilising sugarcane co-products. “It will be the most advanced biopolymers production site in South America,” the companies said in a press release. Moore Capital said it was investing €5.5M in acquiring the production license and another €80M in constructing the first facility. It has an option to build a second plant in Brazil.

BDO deal expands to Asia

hemical giant BASF and California-based Genomatica announced on 24 September that they had expanded the scope of their North American license agreement for the production of renewable 1,4-butanediol (BDO) by adding countries in Southeast Asia to the deal. The agreement allows BASF to build a facililty that will use Genomatica’s single-step fermentation process, with BASF securing rights to produce up to 75,000 tonnes/year of BDO at the plant. The companies went into partnership in 2013, with BASF announcing at the end of 2013 that it had produced its first commercial quantities of BDO. BDO and its derivatives are used to produce plastics, solvents, electronic chemicals and elastic fibres for the packaging, automotive and textile industries. BASF produces BDO at its sites in China, Germany, Japan, Malaysia and USA. It said it would increase its capacities for BDO to 650,000 tonnes/ year by the end of 2015 and for BDO-derived polytetrahydrofuran to 350,000 tonnes/year by the start of 2016.

12 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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05/11/2015 11:58

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04/11/2015 10:42

DIARY OF EVEN TS

20-21 NOVEMBER 2015 PORAM Annual Forum and Dinner

VENUE: One World Hotel, Selangor, Malaysia CONTACT: PORAM Secretariat, Malaysia Tel: +603 7492 0006 E-mail: poram@poram.org.my Website: www.poram.org.my

25-27 NOVEMBER 2015 11th Indonesian Palm Oil Conference and 2016 Price Outlook VENUE: Bali Nusa Dua Convention Centre, Indonesia CONTACT: IPOC Secretariat, Indonesia Tel: +6221-57943852 Fax: +6221-57943853 E-mail: info@gapkiconference.org Website: www.gapkiconference.org

3 DECEMBER 2015 FOSFA Oils and Fats Dinner VENUE: Tallow Chandlers Hall, London, UK CONTACT: Gemma Hale, FOSFA, UK Tel +44 20 72835511 E-mail: contact@fosfa.org Website: www.fosfa.org

3-5 DECEMBER 2015 7th biennial Journées Internationales d’Etude sur les Lipides (JIEL) conference

VENUE: Marrakech, Morocco CONTACT: Société Marocaine pour l’Etude des Lipides (SMEL) Tel: +212 0522 994982 E-mail: jiels2015@gmail.com

18-19 JANUARY 2016 Fuels of the Future 2016: 13th International Biofuel Conference VENUE: Berlin, Germany CONTACT: Bundesverband BioEnergie eV, German Bioenergy Association Tel: +49 228 8100 222 E-mail: info@bioenergie.de Website: www.fuels-of-the-future.com

OFI India 2016 13-14 April 2016 Hyderabad International Convention Centre For more information on the exhibition, business conference, Smart Short Course and CSIR-IICT tour, contact:

Sales & sponsorship

Mark Winthrop-Wallace, Sales Manager E-mail: markww@quartzltd.com Tel: +44 (0) 1737 855114 Anita Revis, Sales Consultant E-mail: anitarevis@quartzltd.com Tel: +44 (0) 1737 855068 Erik Heath, Chinese Sales Executive E-mail: erikheath@quartzltd.com Tel: +44 (0) 1737 855108 Nikunj Vishwakarma, India Sales Executive E-mail: nikunj@quartzltd.com Tel: +91 67351022; +93 73517070

Business conference

To present a paper, contact: Serena Lim E-mail: serenalim@quartzltd.com To register, go to: www.ofievents.com/india/register

Smart Short Course

To register, contact: Ignace Debruyne, E-mail: info@smartshortcourses.com or Sefa Koseoglu, E-mail: sefa.koseoglu@membraneworld.com

CSIR-IICT tour

To register, go to: www.ofievents.com/india/register

www.ofievents.com/india Event partners:

14-17 MARCH 2016 World Bio Markets 2016 VENUE: Movenpick Hotel City Centre & Passenger Terminal, Amsterdam, the Netherlands CONTACT: Green Power Conferences, UK. Tel:+44 (0)207 099 0600 E-mail: info@greenpowerconferences.com Website: www.worldbiomarkets.com

International Palm Oil Exhibition (INPALME) VENUE: Santika Dyandra Convention Centre North Sumatra Province, Indonesia Contact: Yanto Sutioso Tel: +62 853 19967833 E-mail: pibi@infopibi.com Website: www.palmoilexhibition.com

1-4 MAY 2016 107th AOCS Annual Meeting VENUE: Salt Lake City, Utah, USA CONTACT: AOCS Meetings Department, USA Tel: +1 217 6934821 E-mail: meetings@aocs.org Website: http://annualmeeting.aocs.org

29 MAY - 3 JUNE 2016 19th International Sunflower Conference VENUE: Balkan Congress Center, Edirne, Turkey CONTACT: International Sunflower Association Tel: +90 284 226 12 18 E-mail: info@isc2016.org Website: www.isc2016.org

1-4 JUNE 2016 16th European Fat Processors and Renderers Association (EFPRA) Congress VENUE: Costa Navarina Resort, Messinia Greece CONTACT: KAFSIS Bio-Industries SA Tel: +30 210 89 60 100 E-mail: info@kafsis.com Website: www.efpramessinia2016.com

18-21 SEPTEMEBER 2016 14th Eurofedlipid Congress VENUE: International Convention Center (ICC) Ghent, Belgium CONTACT: Eurofedlipid, Germany Tel: +49 69/79 17-533 E-mail: info@eurofedlipid.org Website: www.eurofedlipid.org/meetings/ ghent2016/

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

9-10 FEBRUARY 2016 Oilseed Congres Europe MENA 2016 VENUE: Barcelona, Spain CONTACT: Oilseed Congress Europe, High Quest Group, USA. Tel: +1 207 2449544 E-mail: OCEINFO@highquestgroup.com Website: www.oilseedcongress.com

20-22 APRIL 2016

Brisk business at oils + fats 2015 in Munich

rganisers of the three-day oils+fats trade fair on 15-17 September in Munich reported a total of 51 exhibitors from 17 countries attending their exhibition. Günter Simon, managing director of the HF Group and chairman of the advisory board of oils+fats summed it up: “Overall this was a very professional event. The atmosphere and the organisation were good, and the Bavarian evening was a big hit.” Another success was the integration of the 8th International Symposium on Deep Frying. “This gave an added boost to the profile

and attractiveness of oils+fats,” said Frank Amoneit, managing director of Euro Fed Lipid. Managing director Reinhard Pfeiffer of Messe München, the organiser, said: “oils+fats caters for a very interesting sector with lots of potential. The satisfaction expressed by the exhibitors is an incentive for us to further develop this small but high-quality trade fair and to attract further groups of visitors. In two years, oils+fats will be taking place in parallel with drinktec, the world’s leading trade fair for beverages and liquid food, and this will generate synergy benefits.”

14 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

Diary.indd 1

05/11/2015 09:35

Celite® Cynersorb A soap and phospholipid adsorbent with excellent filtration characteristics Designed by IMERYS to increase refining capacity, simplify the refining process and reduce reefing costs without compromising filtered oil quality. Filtration Flow Rate (m3/hr)

Oil & fat-based feedstocks used for the production of biodiesel often contain soaps/ phospholipids, glycerol and trace metals that need to be removed as part of the purification process. Typically this is done during a powder filtration stage with the addition of either a synthetic amorphous silica gel or a magnesium silicate.

IMERYS, the leading manufacturer of perlite and diatomite filter aids, with nearly a century of production experience & application knowledge,

Regular Silica Gel

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Celite® Cynersorb is a fully-functioning soap/ phospholipid adsorbent also able to remove trace metals, but unlike silica gel or magnesium silicate adsorbents, Celite® Cynersorb, has excellent filtration performance characteristics – under the microscope it looks almost identical to a diatomite filter aid. The result – a simplified filtration process with an adsorbent that reduces the need to add additional filter aid, or where filter aid is not being added allows for longer cycle lengths.

Industrial plant trials used cooking oil as a feedstock in biodiesel production. Celite® Cynersorb (Trial) was used as a direct 1:1 replacement for synthetic magnesium silicate (Control). Results confirmed that due to the superior filtration characteristics of Celite® Cynersorb all filter aid normally added to maintain filtration flow rate when using the magnesium silicate adsorbent could be eliminated with no impact on filtration capacity (flow rates were actually increased) or quality of the filtered oil with respect to soap concentration.

16.3

12 10 8

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Control

Trial

Trials showed that 90.8 kg of magnesium silicate and 50 kg of diatomite could be replaced using only 90.8 kg of Celite® Cynersorb (Trial regime) - reducing powder dosing by 35%. Flow rate increased by 60%

Powder Addition (kg) 100 90 80 Powder Addition (kg)

Whilst such products have excellent adsorption characteristics, they are very poor filter aids and can cause premature blockage of the filter. Therefore, to ensure adequate filtration throughput, it is often necessary to add a high permeability filter aid, typically a diatomite, to keep the filter bed “open”. Whilst this achieves the required increase in filtration capacity, it also adds process complexity and results in additional spent filter cake to be removed.

90.8

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I NTE RN ATION AL M ARKET REVIEW

‘Macro’ diversion for harvest markets Macro-economic and other ‘outside’ market trends have lengthened the list of bear factors at work on an arguably over-supplied global oilseed market during third quarter 2015. John Buckley writes

FIGURE 1: VEGETABLE OIL PRICES – MONTHLY AVERAGES

urrency volatility, weak energy markets, slowing Chinese economic growth threatening regional – maybe global – commodity demand have combined to outplay the often dominant weather factor as this year’s key Northern Hemisphere crops are ‘made.’ That oil values are not caving in has been largely down to this year’s disappointing rapeseed and flat sunflowerseed harvests as well as some longer term threats to rapeseed and palm oil supplies.

A continuous five-year downtrend Although recently edging off their summer 2015 lows, vegetable oil prices have been on a more or less continuous five-year downtrend since 2010 (see Figure 1, above). The supply factors behind this year’s slide have already been well-documented, led by massive soyabean harvests on top of record stockpiles of the leading oilseed; so record supplies of soya oil competing at unusually low premiums against record supplies of palm oil for the developing world’s cooking oil imports. The result has been a low base price for edible oils, upon which, even with the higher premiums being charged for rapeseed and sunflower oils, do not make the latter anything but cheap compared with levels seen in recent years. On the demand side, global consumption of fats and oils grew at almost half the previous season’s pace in 2014/15 (which ended 30 September). The main reasons include a slowdown in growth in Europe, to a lesser extent the USA and, according to the USDA, Indonesia (often overlooked as the world’s fifth largest vegetable oil consumer, whose off-take dropped almost 10%). Apart from the slowdown in biodiesel demand, food oil growth also seems to be faltering in several small/moderate consumer countries in response to the global economic recession and their declining currencies versus the US dollar, reducing their purchasing power.

Currencies impact markets Currencies have come to the fore as a market factor on the supply side too in the past few months and not just the constant rise in the value of the US dollar. In Brazil, the collapse of the Real – down 37% versus the US dollar for the year to date – has actually meant producers there getting more for their soyabean crops, even as world prices fell. One recent report suggested the return was now the equivalent of the record US$15/bushel that their US counterparts saw back in May 2014. US

producers, in contrast, have seen their crop value slide by almost 10% in the year and are worried about the strong US dollar losing them export sales. The collapse of the Real, along with weakening returns for corn, the main competing crop, is likely to push soyabean sowings in Brazil to a new record high this autumn and is already resulting in predictions of its first 100M tonne crop – possibly more. Views on the next crop in Argentina, whose currency is also weak, have been more varied. The USDA currently assumes a repeat of this year’s record yields is unlikely but some local analysts believe the crop there can still come near to the last one (60M-plus tonnes). The challenge for both the main Latin American producers may be acquiring adequate inputs amid their economic/credit difficulties and weak currencies raising their costs of imported agrochemicals. Brazil’s early plantings are also going in dry in some areas (unusual for a normally wetter El Niño cycle) – a factor that needs to be watched in the weeks ahead. Later-sown Argentina also has some weather issues – too much rain in some areas, too little in others but, at this stage, has plenty of time before optimum sowing windows close. If these disruptions continue, it might mean later harvests but both countries are hardly short of surplus stocks to spin their sales out for as long as necessary. The picture of ongoing surplus in the soyabean market has not been undermined much by the USDA, which estimated that yet more of this year’s acres went unplanted due to unfavourable weather last spring. With yield forecasts creeping up, the crop still looks on target for something around 105/106M tonnes which, amid expected lower exports and stabilising domestic crush (after two growth years), will more than double US seasonal ending stocks. Neither was more than brief support offered by the USDA revising last year’s US crop down by just over 1M tonnes to 106.9M – a move many in the trade had expected for some time.

China stock fall causes low demand ‘Macro’ factors have been overhanging the demand side of the equation, not least China’s uncertain economic outlook after its surprise devaluation hammered its own and overseas stock markets and sent commodity prices worldwide into a protracted

downward spiral. Sentiment has partially recovered over the last few weeks, despite a welter of reports that, not only is China’s GDP growth slowing significantly, but it has probably been over-rated for some years. (Maybe the latter proposition should soften the impact of the first one somewhat?). Although industrial commodities – metals and energy – and their producers have been hardest hit by the Chinese outlook and its possible braking impact on global economic recovery, a nervous reaction in the soya market was unsurprising, given that PRC accounts for about two-thirds of world exports of this oilseed and about 30% of global consumption. US soyabean exporters, already watching a large chunk of their traditional trade slip away to the cheap Latin American competition, have been particularly worried. However, so far, their fears seem to have been calmed somewhat by a spate of recent purchases by their top customer – plus the news in mid-October that Chinese imports from all sources were actually up by over 11% for the full 2014/15 season and by 13% for this calendar year to date. The USDA recently estimated them only 9% higher for 2014/15 and 2.6% up for 2015/16. It would not be that surprising to see the new season’s figure go higher than that projection, given that soyabeans are so much cheaper than a year ago (that difference eclipsing China’s small currency devaluation) and may well get cheaper still if normal weather allows the Latin American crops to hit targets. At this stage, soya oil is expected to contribute about 2.5M tonnes or 36% of the growth in this season’s global demand for fats and oils, compared with the 28% average of recent years. Weak currencies have also played a large part in the palm oil market, offering some respite to the two big Asian suppliers from the collapse in the US dollar value of their exports. Palm prices hit a six -and-a-half year low in August but recovered by about 20% in September to a 15-month high. Malaysia’s ringgit has been Asia’s weakest currency, shedding almost 20% of its value this year. Indonesia’s Rupiah has meanwhile hit a 17-year low, also shoring up producer returns. The ringgit’s fall has also helped make palm oil more attractive in dollar terms to Malaysian foreign buyers. Along with Indonesia applying a new export tax (and the seasonal lift in supply) it has helped lift Malaysian exports from an v

16 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

John Buckley Nov/Dec.indd 1

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CHARTS: JOHN BUCKLEY

I NT E RN ATION AL M ARKET REVIEW

bearing in mind that palm oil has contributed about 40% of the annual growth in world vegetable oil consumption in recent years and – amid lower rape and sunflower oil output – has been predicted to raise that to as much as two-thirds in 2015/16. Overall, supply of vegetable oils is reasonably well matched to demand this season, increasing by about 3%. Despite all the talk about prolonged global economic slowdown, that growth rate is actually slightly faster than last season’s according to the USDA’s data.

FIGURE 2: WORLD PALM OIL SUPPLY GROWTH

Sunflower and rapeseed suffering

FIGURE 3: WORLD SUNFLOWER OIL DEMAND

v average 1.1M tonnes in the Jan/Apr period to about 1.64M tonnes monthly during May/Sep. Yet that still has not been enough to Malaysian stocks building up, even though output, while rising seasonally over the summer months, has gained on the same period of 2014 by less than 1%. By end-September, the inventory had reached a new all-time high of almost 2.63M tonnes.

Palm oil projections The recent price revival for palm has been down to several factors. On the supply side has been mounting concern about dry weather associated with what is expected to be one of the strongest El Niños yet. The recent thinking is that this will hit Malaysian/Indonesian production at some stage later in 2016. Yields and production are also seen under threat from poor flowering and pollination caused by a persistent smoke haze from Indonesian forest burning. That most of this is guesswork is revealed by estimates of production loss that range from as little as 5% to as much as 30%. Both countries also plan to tear out some old plantations to replant with new higher yielding trees, a process that could take out about 800,000 tonnes of annual oil production for several years, until these start bearing fruit. Indonesian officials (who might be expected to put a bullish slant on this), warn next year’s production

could drop below 30M tonnes, possibly as low as 28M although, presumably increases in yield from earlier new and maturing plantations could offset that somewhat. It’s in stark contrast to the latest USDA forecast for the 2015/16 season that began in October: Indonesia up 2M to 35M tonnes and Malaysia up by 1.2M to 21M tonnes, with world output up by over 3.6M to 65M tonnes. The USDA’s projections for palm oil demand are more confident. Top consumer India is seen taking 750,000 tonnes more this season as it replaces shortfalls in domestic oilseed crops due to a sub-par monsoon. Indonesian demand is seen growing even faster, from 7.26M to 9.22M tonnes, as it jacks up biodiesel use. Russia is also expanding use as it looks for cheap replacements for products embargoed by western sanctions over Ukraine – and could become a 1M tonne market next year. Overall, world palm oil demand is expected to grow by 4.7M tonnes. Yet even that will, according to the USDA, still lag production, resulting in stocks rising yet again, from 8.7M to 9.3M tonnes (versus the average 7.5M tonnes of recent years). Clearly, if production does falter, stocks are more likely to head down, if from a higher than normal level. Some analysts see that as grounds for predicting much higher CPO prices at same stage in 2016 onward – perhaps US$600, even US$700/tonne versus the recent mid-US$500s. That could be quite influential on overall oil values,

However, within the overall picture of plenty, two key tighter sectors have developed – sunflower and rapeseed, both of which suffered from lower sowings and/or weather-reduced yields. EU rapeseed production peaked last year at 24.4M tonnes and has since fallen to 21M or less. In the past month various industry pundits have forecast 2016 sowings will be similar to this year’s. Given favourable weather and better yields, next year’s output could improve, although any gain may well be matched or outweighed by the lower stocks carried in from this year’s smaller crop. Among Europe’s key foreign suppliers, Ukraine has already warned its next crop – being planted this autumn – will be far smaller after drought reduced sown area. Australia’s rapeseed export supplies might be similar to last year’s but these are in demand from other countries too. Largest rapeseed supplier Canada’s crop has fallen for two years running from a record 18.6m tonnes in 2013/14 to just 14.3M tonnes this year. Exporting over half its crop around the world, Canada could respond to shortfalls by planting more next year. While its genetically modified canola may be of less direct use to Europe, it could still moderate world rapeseed prices/product costs. World sunflower oil supplies have also been curbed by a decline in sunflowerseed crops from a peak 42.8M tonnes two years ago to 40.5M tonnes this year. Among top producers, EU output is down from over 9M tonnes on 2013 to less than 8M tonnes this year. The CIS countries at least have managed some improvement; their output rising from 19.6M tonnes to about 20.9M tonnes, if still under 2014’s 22.7M tonnes. Europe reduced sowings for the 2015 crop while Russia’s rose by a modest 2%. European yields were also down again this year and about 10% under their 2014 level but Russia and Ukraine saw better yields, despite earlier concern about economic difficulties reducing their input use. Sunflower oil consumption has rocketed in the last decade or so, reaching a record 14.6M tonnes last season and expected to remain around that level in 2015/16 (see Figure 3, above). European demand, mainly in the food sector, has risen 11% in the last two years alone while India and others have been importing more in response to healthy image marketing and more competitive prices in recent years. Meeting that demand growth from a lagging crop has eaten into stocks of both sunflowerseed and oil carried from one season to the next. That tighter balance seems likely to keep prices of this commodity relatively firm – unless producers manage a bigger supply response next spring, when most of the next crop w will be sown. John Buckley is Oils & Fats International’s market correspondent

18 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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OILSEEDS

PHOTO: MORGANKA/DOLLARPHOTOCLUB.COM

Taking the fish out of fish oil L

Long-chain omega-3 fatty acids are essential for human health, but the traditional source – fish oil – is finite. Rose Hales looks at how scientists are steering away from fish to find alternative sources FIGURE 1: STRUCTURAL FORMULAS

Omega-3 fatty acids

Methyl end

Alpha-linolenic acid ALA – short chain 3

Elcosapentaenoic acid EPA – long chain 3

Docosahexaenoic acid DHA – long chain

Omega-6 fatty acids

Linoleic acid LA Arachidonic acid AA

SOURCE: EUROPEAN FOOD INFORMATION COUNCIL

ong-chain omega-3 (ω-3) fatty acids are a finite resource, currently procured only from marine fish and used to feed farmed fish as well as consumed as a health supplement by humans. Due to the oil’s scarcity and a growing demand that is fast superseding supply, scientists are researching the possibility of genetically modifying oilseed plants, which naturally only produce short-chain ω-3s, to produce long-chain ω-3s instead. To define ω-3 fatty acids in scientific terms, they are polyunsaturated fatty acids with a double bond at the third carbon atom from the end of the carbon chain, as shows in figure 1 (left). They are divided into long-chain and short chain ω-3 fatty acids; although they have the same essential make-up, they are produced from different sources and the health benefits differ greatly. Short chain ω-3s, such as alpha-linolenic acid (ALA) are found widely in oilseeds. They provide little additional health benefit to humans. In comparison, long-chain ω-3s such as docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA) are linked to heart health, in particular they are said to reduce the risk of death from coronary heart disease by reducing high cholesterol and high blood pressure. Long-chain ω-3s are also reportedly linked to brain development and function, according to the US National Institutes of Health, Office of Dietary Supplements, and help protect against stoke. Eating two portions of fish per week can reduce the risk of stroke by 50%. The

Alzheimer’s Drug Discovery Foundation reports on the effects of long-chain ω-3s on preventing dementia, and there is also research that suggests they are beneficial for eye health and diabetes. Our bodies do not produce ω-3 fatty acids; they can only be introduced into the body through diet. Although humans can, they are not very good at converting short-chain to long-chain ω-3s; so consuming ALA will not usually raise the levels of DHA in the body. Short-chain ω-3s are found primarily in plants, in particular oilseeds such as rapeseed, soyabean, flaxseed and hemp. The long-chain ω-3s are sourced from oily fish such as salmon, mackerel and tuna. Fish do not produce the fatty acids either but bioaccumulate it through the food chain. Marine fish consume it in the form of marine microalgae, but farmed fish feed must contain the essential fatty acids.

Two main uses Long-chain ω-3 fatty acids have two particular uses, as aquaculture feed and as a human health supplement. Because fish don’t produce the longchain ω-3s, farmed fish feed must contain them. According to a Guardian report, in 2011 around 80% of all the fish oil produced went to fish farms. Stocks of long-chain ω-3s are finite as long as fish are the only source. Demand is growing and over half of the fish consumed worldwide comes from aquaculture; in 2011 the Global Organisation

20 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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O I L SE E DS

for EPA/DHA (GOED) valued the total long chain ω-3 market at US$18.6bn. Insatiable demand and high market value has triggered a need to find an alternative source of the long-chain fatty acids.

Why not just farm the microalgae? The logical answer is to grow and farm the microalgae that produce the longchain ω-3s. A paper titled ‘Long-Chain Omega-3 Oils – An Update on Sustainable Sources’ written by Peter D. Nichols, James Petrie and Surinder Singh in May 2010 considers the success of such a prospect. It states that although farmed single-cell organisms such as heterotrophic dinoflagellates and thraustochytrids have found a place in the infant formula market as well as other niche areas, they are currently too expensive to produce on a scale suitable for aquaculture. In an updated article by the same authors published in Inform in November 2013, it is said that “to date…algal production systems have been limited by high capital costs and limited production,” the authors then add, “time will tell if sufficient improvements can lead to high and more economic levels of production.” Research suggests that no improvements have yet been made to progress the economic viability of large-scale algal production.

Creating long-chain from short-chain With large-scale algal production currently ruled out, scientists have taken an alternative route to find a new source of long-chain ω-3s. This is to genetically modify a living organism to cause it to yield long-chain fatty acids. This is considered to have the potential for success in the long-term. In particular, scientists are researching the possibility of either genetically modifying shortchain ω-3 producing oilseeds or beef-producing cows to create the long-chain fatty acids.

GM oilseeds According to the previously mentioned report published in Inform in November 2013, the “ability to produce industrially relevant levels of DHS in oilseed crops has been a long-standing target for the global lipid engineering community.” The first demonstrations were published in 2010, the article says, with three groups disclosing the production of low-levels of DHA in three plants – soyabean, a mustard plant and a laboratory model plant. However, subsequent efforts on these plants focused on EPA rather than DHA. The next significant breakthrough came in late 2012 from CSIRO, Australia’s national science agency, according to the Inform article. CSIRO formed a collaboration in 2011 with Nuseed and the Grains Research and Development Corporation (GRDC). This collaborative research alliance was formed with the aim of leading the international race to break the world’s reliance on fish stocks for its supply of long chain ω-3s. In the study, levels of DHA similar to that of fish oil (in excess of 12%) is described as having been produced in Arabidopsis seed – another mustard family plant. The high levels of DHA were achieved by genetically modifying the original seed using transgenics to artificially insert a gene sequence into the Arabidopsis plant. An optimal gene combination was achieved by CSIRO, it was reported, and additionally the profile of the fatty acids was remarkably ‘clean’ – with low levels of both ω-6 fatty acids and intermediate ω-3 fatty acids being produced. In 2013 similar levels of DHA were reported in the oilseed crop camelina (a cousin of rape). This species produced a high ratio of ω-3 to ω-6 and only small amounts of the less desirable intermediate fatty acids. Crucially, the GM camelina contained similar levels of DHA found in fish oil. Then, in late 2013, the CSIRO, Nuseed and GRDC alliance announced that a similar breakthrough had been achieved using canola. Nuseed took the genes from microalgae and transferred them into canola to produce an oilseed rich in DHA. “Target DHA oil levels” were achieved in late 2013, the collaboration said, adding: “we are on the right path to deliver a commercially viable alternative ω-3 source oil.” In addition the alliance said: “If we are successful, we estimate that one hectare of the DHA canola will deliver the equivalent amount of DHA oil that can be extracted from 10,000 fish.” The aim is for the seed to be commercially available by 2018.

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Field trials In Australia, where genetically modified organisms (GMOs) fall under strict guidelines but are grown and available, the prospect of GM ω-3 producing v 21 OFI – NOVEMBER/DECEMBER 2015

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OILSEEDS

GM beef

SCIENTISTS HAVE EXPERIMENTED WITH GENETICALLY MODIFIYING OILSEEDS SUCH AS CANOLA (PICTURED) AND ITS COUSIN CAMELINA TO PRODUCE LONG-CHAIN Ω-3 FATTY ACIDS PHOTO: LUKAS GOJDA/ DOLLARPHOTOCLUB

v oilseeds will be more favourably received. However, what about in countries in the EU, for example, where GMOs are viewed with more suspicion or are banned completely? In the EU France and Germany are the largest countries opposed to GM crops and both have outright bans; Austria, Hungary, Greece and Luxembourg have also banned the cultivation and sale. In the UK, England maintains the possibility but as of now does not grow any GM crops, mainly due to unsuitability; Scotland and Wales say they will opt out of GM crop cultivation completely. English company Rothamsted Research received approval in April 2014 from the Department for Environment, Food & Rural Affairs (DEFRA) to conduct a field-scale trial of genetically modified camelina, engineered to produce long-chain ω-3 fish oils in their seeds. The seeds produce both EPA and DHA. Previous trials have been conducted in glasshouses with positive results but this is the first of its kind conducted in a field. According to a Guardian newspaper report in July on the research results, three varieties have been grown with varying numbers of synthetic genes – four, five and seven. A report from Rothamsted Research suggests that the seven-gene version was used for the field trial. New data from scientists at Rothamsted Research following the field trial shows that a crop plant can be engineered to synthesise the long-chain fatty acids. Dr Olga Sayanova, the senior Rothamsted Researcher who developed the GM camelina plants, says: “We are delighted with the results of our first year field trial. Our results give hope that oilseed crops grown on land can contribute to improving the sustainability of the fish farming industry and the marine environment in the future.” The field-scale trial demonstrates that the traits and ability of the GM camelina to produce fish oils are stable, and that there are no negative effects on yield. According to a report issued by Rothamsted Research on the field-trial: “Monitoring of the plants grown in the field showed no obvious phenotypic differences in the growth, flowering or seed-set of the GM camelina plants when compared to the non-GM control plants.” In addition, Professor Johnathan Napier, leader of the GM camelina programme at

Rothamsted Research, says: “The ω-3 fish oil trait that we have developed is probably the most complex example of plant genetic engineering to be tested in the field. This is a globally-significant proof of concept and a landmark moment in the effort to develop truly sustainable sources of feed for fish farms.” Research by scientists at the facility is ongoing. A second-year trial is beginning in which two lines of GM camelina are being sewn, alongside the nonGM control plants. One is the same as the previous year’s line and the second is a plant genetically engineered to produce only EPA. The two lines will be analysed and compared. Although GMO trials are allowed in the UK when conducted for research, scientists must prove that there is no risk of safety or contamination. Rothamsted’s Hertfordshire field-trial site is surrounded by a high fence; this is mostly to keep protestors from destroying the trial, but also prevents small mammals from entering. A fine mesh net is used to prevent pollenating insects and birds from reaching the flowering plants. The risk of cross-pollination with other oilseed crops is extremely low. Although camelina is known to cross-pollinate with close members of the camelina family, Rothamstead Research says: “Pollen dispersal will be minimised through the placing of wild-type C. sativa on the external strip of the experimental plot – this will serve as a pollen-trap for pollen released from the GM C. sativa.” A 1.8m barrier of the nonGM camelina is planted, as well as a 6m separator strip for additional isolation. The field-trials being conducted by Rothamsted Research are due to last four years, starting in 2014 with the final trial been planted in 2017. It will not be until the end of the fourth year trial that final results will be published and subsequent steps taken. It is expected that if the trials are successful, the patent will be sold to North American and Canadian agribusinesses, Rothamsted Research says, and the resulting fish oils fed back into the aquaculture industry to sustain the supply of farmed fish high in long-chain ω-3 fatty acids.

Elsewhere in the world, genetic modification of organisms is following a strangely similar, yet completely different route. Instead of engineering plants to produce the long-chain ω-3s, scientists in China are looking instead at mammals, in particular beef cows. The idea is that if cattle can be genetically engineered to contain high levels of long chain ω-3s, they can be eaten as an alternative to fish without having to feed them high quantities of the ω-3s as is necessary in aquaculture. According to a report in Springer, commenting on a study in the journal’s Biotechnology Letters, a team of scientists from Northwest A&F University and the National Beef Cattle Improvement Centre, both in Yangling, Shaanzi, China, have successfully modified the genes of foetal cattle to produce long-chain ω-3s. The team is working with Luxi Yellow cattle, a Chinese breed with high beef yield. The report explains the modification process: “The fat1 gene, isolated from a nematode worm, codes for desaturase enzymes that are involved in the conversion of n-6 [ω-6] to n-3 [ω3] polyunsaturated fatty acids.” The report says that by introducing the fat1 gene to cattle, the levels of beneficial ω-3 oils increased by more than five times. Corresponding author Linsen Zan from the College of Animal Science and Technology at the Northwest A&F University says, “we have provided the first evidence that it is possible to create a new breed of cattle with higher nutritional value in terms of their fatty acid composition”. However, the research still has a long way to go. Of the 14 calves that were modified with the fat1 gene, 11 died in the first four months. The causes of death were mostly from either inflammation or a common cattle infection, haemorrhagic septicaemia, the report says, but further research is needed to establish the specific causes. Genetic modification can cause abnormalities and incomplete reprogramming of cells, or genes being ‘switched off’. If the trials ultimately prove successful and safe, the intention is for high long-chain ω-3 fatty acid beef to be consumed as an alternative source to fish.

Conclusion With the large-scale production of marine algae still not an economically viable source of long-chain ω-3 fatty acids, scientists are researching alternative sources to produce fish oil instead. Genetically modified beef has gone through initial trials, and although the results are favourable in terms of yield, a high death rate in the young cattle means that research and testing still has a long way to go. Genetically modifying oilseeds has clearly proved to be safer and more successful, current research has produced no adverse effects and seeds with a high yield of long-chain ω-3s have been created, including in field-based trials. The only obstacle to commercial availability comes from laws and regulations on GMOs. However, consumption of animal protein fed on GMOs is allowed even in GMstrict areas such as the EU, so farmed fish fed with genetically engineered fatty acids could be sold widely. w Rose Hales is OFI’s editorial assistant

22 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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T RAN SPOR T & LOGISTIC S

Garbage to gold LLECO

PHOTO: O UK-BASED OLLECO – A FOUNDER MEMBER OF EWABA – COLLECTS AND RECYCLES USED COOKING OIL, TURNING IT INTO ADVANCED BIODIESEL. OLLECO PROVIDES CATERERS WITH THESE ‘OILSAFE’ CONTAINERS TO STORE THE OIL SAFELY AND SECURELY BEFORE IT IS COLLECTED

Used cooking oil is no longer a discarded by-product in the EU but a commodity that is saved and transformed into renewable biodiesel. Rose Hales looks at how the oil is stored, collected and transported in Europe before it is made into fuel

he handling and transport of used cooking oil (UCO) in Europe is becoming an increasingly important issue as its use as a biofuel feedstock continues, with EU-wide guidelines governing their safe recovery and reuse. UCO is defined as an animal by-product (ABP) because meat or fish fried in the oil may have left particles or residue behind. To safeguard animal health and the food chain

and help prevent the spread of infectious diseases, the Animal By-Products Regulation EC 1774/2002 (ABPR) was amended in October 2004 to make it an offence to use UCO as an ingredient in animal feed. The regulation applies across the EU. After the regulation came into force, caterers were still producing UCO at the same rate, even though its primary use (other than being thrown away) was removed. Simultaneously around that time, the EU was giving thought to its fuel usage and beginning to consider implementing regulations around the use of fossil fuels and encouraging the use of renewable energy. The European Commission (EC)’s first proposals, Energy for a Changing World, were published in January 2007. This included An Energy Policy for Europe and Limiting Global Climate Change to Two Degrees Celsius – the Way Ahead for 2020 and Beyond. In these proposals the EC called for targets to reduce greenhouse gas (GHG) emissions and recommended improving energy efficiency by increasing the share of renewable energy by 20% by 2020. Although EU directives on renewable energy have been updated considerably since then, this was the first instance of the EC placing targets on renewable energy usage and kick-started the renewable energy industry in Europe. In the past few years first-generation biofuels began to be pushed to the side as sustainable, non-food fuels began to take their place – these second-generation fuels included using feedstocks such as UCO. This was the catalyst that led to UCO being regarded as a commodity rather than a waste. Instead of paying collectors to pick up and dispose of UCO, large scale biofuel manufacturers sprung up, as did enterprising collection businesses, which were more than happy to take the waste oil away to be converted into valuable fuel. Collectors now pick up the oil free of charge and some even pay for the oil.

Guidelines for handling Used cooking oil is classified in the EU as ‘nonhazardous waste’, the guidelines for storage and handling are less severe than for hazardous substances but there are still requirements. Although the ultimate destination of UCO changed, caterers are still required to store the oil correctly and ensure it is collected from their establishments safely and legally. The EU Waste Framework Directive (Directive 2008/98/EC) provides an outline for the collection, transport, recovery and disposal of waste and requires member states to take necessary measures to ensure waste is disposed of safely and without causing harm to

human health or the environment. It also obliges establishments carrying out waste management operations to have a permit or to be registered, and member states must draw up a waste management plan. Oils & Fats International spoke to Angel Alberdi, secretary general at the European Wasteto-Advanced Biofuels Association (EWABA), who says that generally there are no common rules across the EU on UCO – this is one of the reasons the association was set up in 2013, to promote harmonisation of rules concerning UCO across member states. Nevertheless, most member states have transposed provisions of the Waste Framework Directive (Directive 2008/98/EC). For example, in the UK the requirement placed on the caterer is know as the ‘Duty of Care’ – meaning that the caterer is required to make suitable arrangements for the oil’s storage (it must be safe and not stored hazardously) and the waste oil is disposed of correctly. It is the caterers’ duty of care to make sure the waste carrier is lawful and the oil is treated legally once it is removed from the catering establishment. Anyone who transports waste such as UCO in the UK must acquire a Waste Carriers Licence. This applies to producers disposing of their own waste and carriers dealing only with the collection and transportation of waste oil. A carrier applies for a Waste Carriers Licence online, which is issued by the Environment Agency. The licence certifies that waste carriers comply with environmental regulations, for example, the Environment Act 1990. The oil remains the responsibility of the caterer even after it has been collected. If the caterers suspect that the carrier is not legal, does not hold the required licence, or is disposing of the oil illegally, then they have a duty to report it. Carriers can be checked on the public register, and vehicles will usually carry a card issued with the licence, which also holds the licence number. When the waste oil is collected the carrier issues the caterer with a Waste Transfer Note. This proves that the oil has been disposed of legally through a licenced carrier. In the UK these notes are required to be kept for a minimum of two years and must be made available for inspection under Section 24 of the Environmental Protection Act 1990. Most member states implement a similar system in which Waste Transfer Notes are provided to certify compliance. Greenea – a UCO collecting company that originated in France but operates across the EU – supplies Waste Transfer Notes on the collection of oil. Under EU regulations (Regulation (EC) No 178/2002) waste oils and fats must be fully traceable at every stage; a Waste Transfer Note confirms traceability of the UCO. Alberdi explains that the European Commission backs 19 voluntary sustainability schemes, including the International Sustainability and Carbon Certification (ISCC), which tracks the whole value chain (see https://ec.europa.eu/ energy/en/topics/renewable-energy/biofuels/ voluntary-schemes for more information). The ISCC was recognised by the EC on July 2011 as one of the first certification schemes to demonstrate compliance with the EU Renewable Energy Directive’s (RED) requirements. Certification can be applied to meet legal requirements in the bioenergy markets as well as to demonstrate the sustainability and traceability of feedstock in the food, feed and chemical industries. v

24 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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The UK’s Environment Agency and Department for Environment, Food & Rural Affairs requirements for UCO storage containers: Design standards for containers Your container must be strong enough, and have enough structural integrity, to not burst or leak in ordinary use. Fixed tanks Must be manufactured to British Standard 5140, OFTEC standard OST T100 if the container is plastic and OFTEC standard OFS T200 or British Standard 799-5, if the container is metal. OFTEC is a trade association for the oil heating and cooking industry. Drums and intermediate bulk containers (IBCs) Containers should be marked with ‘UN’ for United Nations. Location of container The container should be positioned in a safe area where it is at minimal risk of being damaged by impact. For example, away from driveways and tanker turning circles. If this is not possible, the container must be reinforced so an impact will not cause damage and leaking. For example, barriers or bollards should be placed around the tank. Remote filling Moveable tanks filled remotely via a pipe must use a drip tray to catch any spilled oil, or a bund – an outer case holding the container. Fixed remotely filled tanks must be bunded. Capacity of secondary containment The secondary containment for a drum (which is generally a drip tray) must have a capacity equal to at least 25% of the capacity of the drum it’s providing containment for. For other containers like fixed tanks, mobile bowsers and IBCs the secondary containment must have capacity to hold 110% of the capacity of the container. Secondary containment that contains multiple fixed tanks, mobile bowsers or IBCs, must have a capacity that is equal to either 25% of the combined capacity of all the containers or 110% of the capacity of the largest container – whichever is greater. For more information and requirements relating to bunds, sight gauges, piping, delivery pipes, pumps, overfill prevention, checking for leaks and bowsers with permanently attached delivery pipes read the full Environment Agency requirements at www.gov.uk/storing-oil-at-a-home-orbusiness

Who are the carriers? In theory anyone can collect used cooking oil from caterers as long as they obtain a Waste Carriers License. Due to the financial benefits of creating biodiesel from UCO this has proved to be worthwhile even for small businesses. However, the market is dominated in terms of quantity by large companies who both supply cooking oil and collect used waste oil. This is more financially viable as waste oil can be collected during delivery of fresh oil. Companies can also offer rewards to customers including points to receive money off fresh oil, as well as the ease of such a system. Alberdi at the EWABA says that UCO collectors throughout Europe are mostly small operators working at the municipal and regional level. Although a handful of companies work across multiple countries, most restrict themselves to a single country, and a single region within that country. He also says that most carriers only collect the UCO and transfer it to a biofuel producer, with a small number of the largest companies collecting UCO and producing biofuel.

Industry associations EWABA is the main association supporting carriers of UCO across Europe, promoting the separate collection and free trade of UCO. Set up in 2013, the association works to make regulations and certification easier for collectors. EWABA represents carriers that collect from both caterers and household sources. Alberdi says that although the greatest amount is sourced from caterers and other business establishments, the industry is progressing and the potential of the domestic UCO sector is being discovered. Germany, Spain and the UK all produce large quantities of UCO and have efficient systems in place to collect and transport it, he says. There is a potential 4bn litres/year of UCO that could be collected and used in the EU, according to Alberdi. Currently some companies in the EU also

import UCO in order to produce biofuel. Mainly the feedstock is imported from the Middle East, North Africa and the USA. If the EU can collect a greater percentage of the UCO it produces, it will be able to produce a higher amount of biofuel and spend less importing the feedstock. OFI asked Alberdi if the EU is importing UCO from as far away as the USA to produce biofuel, and then double counting it, is this really providing a GHG saving or is this a false economy? He responds by saying that BioGrace calculations prove that emissions associated to transport are minimal and in consequence do not have a significant impact on the incredible savings of UCO methyl ester, which are 90% when compared to fossil fuels – by far the greenest biofuel. A report entitled ‘Wasted: Europe’s Untapped Resource’ was published in February 2014 and provides an assessment of advanced biofuels from wastes and residues, including an appraisal on the potential of UCO. The report was published following a project organised by the European Climate Foundation (ECF), and was put together with support from technology innovators and green NGOs. The ECF was established in 2008 and is a major philanthropic initiative that promotes climate and energy policies that reduce Europe’s greenhouse gas emissions. The report considers the biofuel potential of many waste products including used cooking oil. It says that there are concerns that there are insufficient quantities of waste and residues to make a meaningful contribution to fuelling transport, however, the analysis concludes that “if mobilised in a sustainable manner, [they] can make a sizable contribution to reducing European dependence on imported oil.” Currently 1.1M tonnes/year of UCO is being converted into low-carbon fuel, but there is the potential to expand this greatly. Although the report concedes that in some countries, such as Germany, using more UCO as biofuel could have displacement impacts, generally UCO is still an under-utilised resource. It says reliable data on the industry’s potential is

Blocked sewers: Why UCO can’t be poured down the drain

t is imperative to collect and manage UCO instead of pouring it down the drain. Although most caterers and households are used to seeing UCO in a liquid form, it doesn’t stay this way. The oil solidifies in the cold underground sewers, along with other solid items that mistakenly find themselves in sewer systems and together they form into huge masses known as ‘fatbergs’. Fatbergs collect and grow as they are added to, and eventually result in huge impassable masses weighing up to 15 tonnes, which block and break sewers. Often the fatbergs aren’t discovered until nearby residents complain of sinks that will not drain. The BBC reports that the largest fatberg discovered in the UK was in London in 2013, and it was said to weigh as much as a bus. Workers estimated it would take around six weeks to repair the sewer that had been damaged by the fatberg.

26 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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difficult to find, due to the nature of the industry (for example, there are countless UCO producers). Of the 1.1M tonnes of UCO being consumed as a feedstock in Europe, the Wasted report estimates that 700,000 tonnes come from within the EU, with substantial quantities imported to make up the shortfall. The report says that in 2012 over 250,000 tonnes of UCO was imported into the EU, the majority coming from the USA. In order to grow the supply of UCO, Europe will have to introduce home collection, the report says; the industry is already moving in this direction. EWABA’s secretary general, Angel Alberdi told OFI that the association is commissioning a follow-up study to the Wasted report, which assesses the potential of waste oil from households. The study should be available in the first half of 2016.

Transportation and storage In the UK, storage of used cooking oils is covered in the Environment Agency’s Pollution Prevention Guidelines. The environment agency says that although the regulations are mostly guidelines for good practice (rather than laws), carriers who cause pollution or allow it to happen may be committing a criminal offence. The guidelines state that oil storage containers must be ‘fit for purpose’. In short this means that they must be leak-proof, spill-proof and made of an appropriate material (a more detailed explanation of storing UCO pre-collection is outlined, left). Carriers collect used oil in the original cooking oil bottles, or provide plastic bins or containers – often this depends on the amount of used oil being generated and the size of the caterer. Maritime transportation is used in Europe to transport UCO between countries and to import it from outside the EU. Ships carrying UCO to and from ports in Europe are required to follow general shipping regulations. For example, UCO transportation is covered under MARPOL (International Convention for the Prevention of Pollution from Ships) rules, which prevents pollution of the marine environment by ships from operational or accidental causes. In addition, ships transporting UCO must abide by the EU MRV (monitoring, reporting and verifying) Regulation, which came into force on 1 July 2015. The regulation aims to reduce CO2 emissions by requiring ships weighing above 5,000 tonnes on voyages to, from and between EU ports to monitor their CO2 emissions, distance travelled and cargo carried. The data must be reported and a document of compliance must be carried at all times.

UCO into biofuel UCO in Europe is mainly converted into biodiesel, which is used to power diesel vehicles including public buses and taxis. Since 2007 in the UK, members of the public can make up to 2,500 litres of biodiesel/year without paying any tax. So some small carriers collect UCO locally and convert it into biofuel to power their own vehicles. This has, however, led to an illegal underground industry where small carriers collect and convert more than 2,500 litres of biofuel, a BBC article in 2013 reported. Some companies such as Olleco or Proper Oils collect UCO and convert it into biodiesel, paying

the duty and VAT, and sell it on at a fuel pump. Other companies sell the cooking oil they collect onto specialist biofuel manufacturers, such as UK Biofuels. On a larger scale, some multinational companies operating in the UK have devised their own system for dealing with UCO. For example, McDonald’s collects and processes its own cooking oil, and uses it to power its fleet of vehicles (see case study bottom right).

Issues and problems In Europe, used cooking oil is at its most valuable as a biodiesel feedstock. Thieves are the biggest threat to caterers, as used cooking oil is now a valuable commodity. Caterers are required by their Duty of Care to take sensible precautions to minimise the risk of theft. A BBC report in 2013 researched the scale of the theft problem in the UK and how much it costs the economy each year. It is estimated that the UK produces around 650M litres of cooking oil/ year, and Adam Baisley, commercial director of one of England’s largest waste oil collectors, Olleco, estimated that as much as 20% of this is stolen every year. The stolen oil is converted into biodiesel and sold on the black market. Producing biodiesel legally costs the producer about £1.24 (€1.72)/ litre, but producing it illegally from stolen oil costs only £0.20 (€0.28)/litre. Not only is there less raw material on the market for legal producers to purchase, but they are in competition with much more cheaply priced products. The BBC investigation found that 30M litres of illegal biodiesel is made from thieved cooking oil in the UK every year, and the industry costs the Treasury around £25M (€34.78M) a year.

also key, as research showed many members of the public were unaware of the importance of collecting and disposing of the oil correctly. Theft was also deemed to be the biggest problem faced by the domestic UCO industry across the UK. RecOil’s Guidelines for UCO collection, transport and promotion campaigns reports that “The risk of UCO theft is very common and reported in many of the case studies (80% of organisations declared that UCO theft risk is average or high, in particular 20% of the cases declared the system as not secure). Wherever possible, containers should be placed in closed areas, and always locked. Incidents and acts of vandalism are also reported frequently. In some cases, the oil was contaminated with mineral oil.” The complete findings can be downloaded from w the project’s website: www.recoilproject.eu. Rose Hales is OFI’s editorial assistant

McDonald’s – a case study

Tapping into domestic sources Although caterers produce the largest quantity of UCO per venue, domestic or household UCO is still somewhat of an untapped resource. In Europe there is an ongoing push to collect waste oil from households for the purpose of biodiesel production. RecOil was a EU initiative supported by the EC through the Intelligent Energy for Europe programme, which aimed to enhance the collection of household UCO and its transformation into sustainable biodiesel. The project started in May 2012 and was concluded in April 2015 having thoroughly researched and tested methods of collections and transformation in six European countries: Belgium, Denmark, Greece, Italy, Portugal and Spain. The project’s purpose is to be a resource for countries designing systems to collect household UCO by reporting on the varying success of different methods and locations of collections, as well as awareness campaigns. Overall, the greatest success generated was through collection points situated in easily accessible areas, with high numbers of passing traffic, for example in schools, supermarkets and car parks. There was a preference by citizens in test areas for collection points that required only for them to drop their container of oil inside, as opposed to directly disposing of the oil from the container into the collection point. Communication, advertising and engagement were

orldwide catering and food giant McDonald’s is one of, if not the biggest producer of used cooking oil in the world. McDonald’s UK recycles its own used cooking oil into biodiesel, using the final product to fuel 42% of its delivery fleet. McDonald’s converted its whole fleet of 155 trucks to run on the cooking oil based biodiesel. Beginning in 2007, almost all of the business’s 1,200 UK restaurants recycle and reuse their cooking oil. According to its website, in 2013 3.7M litres of UCO was collected and subsequently converted into 3.1M litres of biodiesel. This recycling resulted in a saving of more than 6,000 tonnes/year of CO2. The used cooking oil, cardboard and kitchen food waste is collected by the vehicles that have delivered food and packaging to the UK restaurants. Using the delivery trucks in this way saves an additional 5,000 trips per year, McDonald’s says. McDonald’s UK uses a mixture of high oleic UK rapeseed oil and sunflower oil from Spain to fry its food. The company keeps the used cooking oil apart from other supplies as other cooking oils collected can be contaminated.

27 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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BIOFU ELS

Positive outlook for Denmark I Denmark has committed to removing fossil fuels from its energy supply by 2050, and instead is focusing on biomass, as well as solar and wind energy. With several large companies working exclusively on advanced biofuels and a thriving industry, the outlook is positive. The International Energy Agency (IEA) Bioenergy Task 39 (Commercialisation of liquid biofuels) provides a roundup of the country’s plants and programmes. Claus Felby and Henning Jorgenson write

n 2012, the Danish parliament decided on a new climate act, which calls for an energy supply totally free of fossil fuels by 2050. This goal has brought forward long-term policies on both energy infrastructure and energy research. The backbone of the renewable energy supply will be wind, biomass and solar. In 2014, the share of renewable energy was 27% of which biomass accounted for approximately 66%. Currently biomass is used to replace coal, but as the wind energy sector is expanded, more biomass can be allocated to the transport sector. Electric vehicles will be part of the transport sector, but it is generally recognised that liquid fuels will be needed. There are no specific national policies or regulations on advanced biofuels, as a general EU policy on advanced biofuels is still in the making. The Danish energy sector recently implemented its own set of biomass sustainability criteria. The principles in the Danish rules are close to the UK legislation on a sustainable biomass supply. All gasoline and diesel sold at filling stations are blends of 5.75% ethanol or biodiesel. The major part of the ethanol is imported from Brazil, but for biodiesel it is difficult to get precise information about the sourcing. The EU target of 10% renewable energy in the transport sector by 2020 will only, to a limited degree, be covered by electric vehicles, and the amount of biofuel consumption is expected to increase. The national target for a fully renewable energy supply keeps biofuels on the research agenda, but there has been a shift towards biorefining, with

lignin processing and alternative protein supply gaining increased interest. The food versus fuel debate has caused a political preference for advanced biofuels, but further national action, for example a specific mandate for cellulosic ethanol or similar, is awaiting EU policy on advanced biofuels. The outlook for biofuels in Denmark is positive. The country has a large biotech industry and several companies dedicated to advanced biofuels. However, the development of a national advanced biofuels industry is delayed by the lack of a coordinated set of EU policies.

Demonstration and commercialisation There are no large-scale ethanol plants at present but a large straw-based facility will come online in 2018. Emmelev produces biodiesel on a large-scale using rapeseed oil while Daka Ecomotion uses waste feedstocks to produce advanced biodiesel: t Emmelev A/S – Emmelev Mølle is the only Danish producer of first generation biodiesel based on rapeseed oil. The annual production is around 100,000 tonnes of biodiesel, but there are plans for expanding the capacity. The major part of the production is shipped to Germany. Besides biodiesel, glycerine and feed cake are also produced at this plant. t Daka Ecomotion – This company produces a biodiesel product based on refined animal fat waste from slaughterhouses and agricultural byproducts. The process is much like plant-based v

28 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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29 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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BIOFUELS

FIGURE 1: LOCATION OF PILOT, DEMONSTRATION AND LARGE-SCALE BIOFUEL FACILITIES AALBORG UNIVERSITY & STEEPER ENERGY

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RENESCIENCE

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for handling of GM microorganisms in 2013. From 2011 to the end of 2014, the operational periods were used for testing different equipment, feedstocks, new enzymes or microorganisms. As there were no tests planned for 2015 and because there is yet no mandated market for second-generation ethanol in Denmark or the EU, it was decided to put the plant on standby in 2015. The technology development and business operations for Inbicon and REnescience are still running full scale at the laboratories and the pilot plants in Fredericia and in Copenhagen. A main focus point is the Maabjerg Energy Concept biorefinery, described in more detail later in this article (see box on next page). t BioGasol – This company has built a well equipped pilot-plant in Ballerup near Copenhagen. Its main technology are pre-

biodiesel production but uses a two-step process due to a higher content of fatty acids. As waste feedstocks are used, the fuel is classified as a second generation advanced fuel. In addition to biodiesel, glycerine and potassium sulphate are also produced. The majority of the production is sold outside Denmark. The plant’s total production capacity is 100M litres/year. In addition there are several demonstration and polit-scale facilities: t Inbicon – This DONG Energy spin-off company has been developing advanced, second-generation bioethanol technologies since 2004. Furthermore, it is using its enzyme process technology for processing of household organic waste by the REnescience process. Both technologies are part of DONG New Bio Solutions and integrated into the main company. Several full-scale projects are under development. Together, Inbicon and REnescience have three main sites: a pilot plant and laboratories in Fredericia, waste processing laboratories and a demonstration plant in Copenhagen, and a straw to ethanol demonstration plant in Kalundborg. The demonstration plant in Kalundborg, Denmark, has been running since 2009. For the first few years the plant was run in a continuous mode 24/7 in order to build operational experience. In 2011, the plant was switched to operation of one month campaigns, run four times per year. This was done to have time in between operation for rebuilding and improving the process. The plant was rebuilt from a SSF (simultaneous saccharification and fermentation) to a SHF (separate hydrolysis and fermentation) process setup in 2011 and

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treatment units named Carbofrac. These units are sold at both pilot-scale and larger scale, with capacities ranging from 100 kg/hour to 12 tonnes/hour. Some years ago there were plans for a demonstration scale plant using the Maxifuel concept; these plans have been put on hold and the company now focuses on process technology. t Novozymes – The world’s largest producer of industrial enzymes has its headquarters in Copenhagen. The majority of its research activities relate to second generation bioethanol and are performed at its US facilities (in Davis, CA and Franklinton, NC). A smaller group working on biofuels (both first and second generation) is located in Denmark. Novozymes has a partnership with Beta Renewables at a plant in Crescentino, Italy. Furthermore, it is also collaborating with energy company Raízen on a sugarcane bagasse to ethanol plant in Brazil. Novozymes is also actively involved in a number of research projects with Danish universities. t Terranol A/S – Develops and produces yeasts for pentose (C5) and hexose (C6) sugar fermentation for second generation bioethanol production. The company has sold several licences and collaborates with Abengoa, Novozymes and Inbicon, among others. t Biofuel Technology – A small company located in Hobro, which specialises in biomass logistics and pre-treatment technology. It has successfully built a supply technology based on compression of straw into brickets. Currently it has a good market with biogas plants where the compressed straw has several advantages, for example a higher water uptake and higher biogas yield. For straw-based ethanol, the company is currently developing a pretreatment system adapted to compressed straw. It is collaborating with partners in China on possible large-scale use of the technology for cellulosic ethanol production. t Steeper Energy – This Canadian-based company has opened a hydrothermal liquefaction pilot plant in collaboration with Aalborg University. Its bio-oil process is based on a thermal breakdown of biomass in water at or above 300°C and at near supercritical conditions. Currently it is looking into using this technology to produce diesel for the marine sector. Initial plans for a large-scale production unit have been made.

EMMELEV MØLLE IS THE ONLY DANISH PRODUCER OF FIRST GENERATION BIODIESEL BASED ON RAPESEED OIL

30 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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BIOFUELS

Biogas for transport The Danish biogas sector has since 2012 been favoured by a price premium for both electricity and transport. The biogas production is expected to increase from five petajoule (PJ) to 20 PJ over the next decade, compare to a total energy consumption of 761 PJ. Several new plants are under construction and will be connected to the national gas grid. Approximately US$5 is paid to the producer for every GJ of biogas sold for transport. However, very few biogas filling stations are currently available. There is some discussion on projects to convert buses to using biogas, but in the short to medium term, biogas is only expected to have limited use as a transport fuel.

Biofuel research in Denmark All universities have activities on-going within biofuels and biorefineries and a large part of the activities are organised in national projects. Some of the main projects are: Biomass for the 21st Century, a large project to convert hydrolysis lignin to a marine diesel fuel and C5 sugars to chemicals. BioValue is another large project looking at biorefining with a special focus on protein feed and chemicals from non-food biomasses. Many of the active projects have large and active participation from industry, which provides an applied focus with a preference for using current infrastructures, i.e. existing demonstration facilities and biomass logistic systems. In 2010, the Novo Nordisk Foundation awarded US$120M for the set-up of the Novo Nordisk Center for Biosustainability. This centre is a collaboration between the Technical University of Denmark (DTU), University of Copenhagen and the Chalmers University in Sweden. From 2016 it will be located on DTU’s main campus. The focus of the research is two-fold: to identify the most valuable and efficiently produced chemicals that can be made using microorganisms and to improve the production of microorganisms. Some of the research is devoted to biopharmaceuticals. Aarhus University (AU) is building pilot-scale facilities focused on both thermal processing and biorefining of grasses with a special emphasis on protein separation. The grass biorefinery pilot plant at Aarhus University, Foulum, fractionates green biomass like grasses and legumes into a solid fibre fraction and a liquid green juice fraction. The fibre fraction contains the fibre bound protein and will be used for ruminant feed. The soluble protein in the juice is precipitated and recovered into a protein concentrate for monogastric animal feed, expected to compete with soya protein feed. This pilot plant has a high degree of flexibility as reflected by its wide input capacity range of 100-1000kg biomass (dry matter basis)/hour. The AU biorefinery pilot plant is located near the AU full-scale biogas plant, allowing the possibility for anaerobic digestion and thus production of energy and fertiliser from the residue juice after protein separation. Furthermore, this pilot plant is also located near a twin screw extruder for biomass fractionation and a new hydrothermal conversion (HTC) pilot plant (60 litre wet/hour, maximum pressure of 300 bar, and maximum temperature of 450°C), designed for production of bio-oil and/or

chemicals such as binders, from lignin and other biomass residue streams. The former Risø Laboratories have been merged with the technical university (DTU) and thus no longer exist as a separate entity. All research activities have been moved from the Risø Campus to DTU in Lyngby.

Industry and university collaboration The BioRefining Alliance is a Danish organisation founded in 2011 by three leading Danish companies – DONG Energy, Novozymes and Haldor Topsøe – and the business organisation Danish Agriculture & Food Council. Today, it has 10 members including Danish universities, companies and organisations. The funding of the organisation comes from the members only, with the largest share paid by industry. The BioRefining Alliance works mainly on a political level to promote Denmark’s opportunity to create jobs, to export technologies and to

have industry-driven innovation within advanced biorefining in a bioeconomy, where the raw material is sustainable biomass and biowaste. Denmark has already invested a substantial amount of public and private funding in advanced bioeconomy research and development. A main element is the competencies in the whole value chain from agriculture and forestry to biological, thermal and chemical processes to bio-based products. The definition of advanced biorefining includes all types of processes (biological, chemical, thermal, mechanical), which create higher-value products (biofuels, biochemicals, feed, materials, etc) rather than converting biomass to heat and electricity. Recently, the Biorefining Alliance has advocated for specific advanced biofuel mandates in both Danish and European policy. w This feature is republished with permission from the IEA Bioenergy Task 39 May 2015 Newsletter. See www.task39.org for more information

Heat powered biogas and bioethanol at MEC biorefinery

aabjerg Energy Concept (MEC) is planned as an advanced, second generation biorefinery integrating an existing combined heat and power (CHP) power plant (pictured above) with a biogas plant and a planned bioethanol plant. The three plants are located close to each other in Maabjerg near the town of Holstebro, and are expected to be up and running in 2018. Recently, MEC was awarded €79M from the European NER 300 programme. The biorefinery will initially be able to convert straw, manure, waste and other by-products from agriculture and forestry into sugars (C5 and C6), lignin, ethanol, methane, heat and power. As technology develops, more products can be added to the portfolio. The essence of the ethanol process is a combination of physical and mechanical pre-treatment and enzymatic hydrolysis. This establishes a sugar platform, where sugars can be fermented into bioethanol or function as ‘building blocks’ for bio-chemicals, biopolymers and food ingredients for example. The lignin fraction will substitute for wood pellets in the CHP plant. Non-converted carbohydrates, acids

and degradation products are used as feed for the biogas plant. This boosts the methane yield from the manure almost 100% and is an important element of the MEC’s overall economics. The ethanol plant will receive 300,000 tonnes of straw from barley and wheat per year and will produce 79M litres of secondgeneration bioethanol. The logistics and the technology including the second-generation enzyme mixtures and yeasts have been developed and tested at the large-scale test facility Inbicon in Kalundborg, Denmark since 2009. The MEC advanced biorefinery will be established with built-in flexibility so that it can switch from straw to other feedstock such as green biomass and expand its bio-based product line on the basis of limited extra investments. According to calculations made by the consortium behind the biorefinery, MEC will create around 2,500 jobs in the two-year construction phase and around 1,000 jobs when in full operation. A large proportion of these are local jobs, which will increase local economic development.

31 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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Oils & Fats International reports on some of the latest news and developments surrounding inspection, testing and certification around the world

IN BRIEF PHILIPPINES: Leading inspection, testing and certification company Cotecna announced in April that it had integrated Philippine company Elite Inspection & Technical Services Inc (EITSI), which specialises in inspection of various agricommodities and petroleum products. In the field of oils and fats, Cotecna specialises in the inspection of vegetable oils, including transportation and storage, and verifying that products are certified to international (FOSFA and ISO) and national standards. HONG KONG: A new and quick system for testing edible oil for authenticity and the presence of illegal gutter oils has been set up by Hong Kong Polytechnic University, Cocommunity reported in August. The new method is simpler and quicker than the previous method, Cocommunity says, and uses matrix-assisted laser desorption/ionisayion mass spectrometry (Maldi-MS) to determine the authenticity of the oil in five minutes. The report says that the results can be obtained and a spectral database of labelled edible oils built. Different edible oils have individual Maldi-MS spectral patterns, so each spectrum can be compared to the authentic edible oil result. Researchers are working to complete the Maldi-MS library of edible oils. USA: Analytical instrumentation supplier Wilks, USA released a new portable ASTM biodiesel blend measurement method earlier this year. The company says the ASTM D7861 biodiesel blend method alleviates the challenges of previous portable biodieselblend measurements – high costs, delicate equipment and the necessity for a high level of technical knowledge. The new filter-based infrared analysers are rugged, compact and much better suited to the environment where biofuels are blended, Wilks says. It provides a fast and easy method for measuring biodiesel (FAME – fatty acid methyl esters) in diesel.

Campden BRI tests for oxidative stability

ampden BRI, provider of scientific, technical and advisory services to the food industry, is planning a new service to significantly reduce the time needed to test oxidative stability in fats and oils. The UK-based company says it invested in cutting-edge instrumentation from suppliers, and can now test food containing between 1% and 100% oil and fat in as little as a few hours, which historically could have taken months. By subjecting food samples to elevated temperatures and oxygen pressure, the system accelerates oxidation, providing fast, accurate and detailed information about its effects on food products, says Campden BRI.

RSPO develops new voluntary guidelines

PHOTO: CAMPDEN BRI

Inspection and testing round-up

New RSB standard for low indirect land use change biomass

he Roundtable on Sustainable Palm Oil (RSPO) has responded to concerns voiced by investors, manufacturers and campaign groups by announcing in July that it is working on a new set of voluntary sustainability guidelines, Lipid Technology reports. The new guidelines concern topics such as the preservation of peatlands and limiting deforestation and would be referred to as RSPO+. Secretary-general of the RSPO Datuk Darrel Webber says: “We will maintain our vision to make sustainable palm oil the norm.” Lipid Technology’s report says that at its third European Roundtable in Amsterdam in June, the RSPO adopted new regional objectives for market use of certified sustainable palm oil. It was reported that within the next five years, the RSPO aims to reach 100% usage in the EU, 50% in Malaysia and Indonesia, 30% in India and 10% in China.

he Roundtable on Sustainable Biomaterials (RSB) announced the approval of a new standard, the ‘Low ILUC Risk Biomass Criteria and Compliance Indicators’, at its general assembly meeting on 3 June. Approved by consensus, the standard will be an optional module for operations undergoing RSB certification. RSB-certified operators will be able to claim “low indirect land use change (ILUC) risk” on products, and therefore a minimal impact on food production or biodiversity. The standards include a set of criteria indicators that can be used to demonstrate a company’s operations do not cause indirect land use change. There are four approaches to indicate compliance: yield increase, unused or degraded land, use of waste or residues, and integrated sugarcane and cattle production.

Nidera certification for UCO biodiesel

utch agriculture and bioenergy producer, trader and marketer Nidera BV announced in September that it has earned the Roundtable on Sustainable Biomaterials (RSB) certification for producing and trading biofuels from used cooking oil. Covered under the certification is the company’s trading operations and its Biodiesel Aragon plant in Huesca, Spain where the biodiesel is produced.

32 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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New solid biofuel test standards developed

IOI certification for shea supply

he seventh formal international meeting of ISO Technical Committee 238 (TC23), Solid Biofuels, was held in York, England in July, according to a report of the meeting published by the American Society of Agricultural and Biological Engineers (ASABE). Attendees gave particular attention to a series of solid biofuel test standards and related topics. Seven of the current 12 published ISO standards on solid biofuels were completed in the past year, and there were another 26 at various stages of development when the committee met. Time was spent debating a classification standard for thermally treated solid biofuels, ISO 17225 part 8. The USA and Canada raised concerns on whether such a standard was immediately necessary, considering the relative immaturity of technology. Lab manager of Biomass Energy Lab Chris Wiberg said: “Technical standards are better choices in situations where the industry is still developing and the users of the information need guidance as compared to rigid requirements that are poorly understood.” As international trade in solid biofuels continues to expand, test methods will need to be developed in the future to maintain production quality, the meeting heard.

peciality fats producer IOI Loders Croklaan says it has become the first vegetable oils and fats company to obtain International Sustainability and Carbon Certification (ISCC) for its shea supply chain, following a two-year process with ISCC and

certification body SGS Germany. IOI has been using shea in applications for over 50 years. Shea is most commonly used in cosmetics and food manufacturing, it says. “We are supporting the construction of warehouses in Ghana to improve the earnings of women collecting shea from wild growing trees,” says Joost van Ginneken, supply chain manager, Africa, at IOI Loders Croklaan. “We are also one of the pioneers of the Global Shea Alliance.” Shea trees grow only in Africa, in a belt stretching from Sudan to Senegal. The trees only grow wild and only the shea that is not locally used is sold, IOI says. The shea fruits fall from the tree when ripe and are collected and dried by local women in small savannah villages. IOI says millions of people in West Africa, especially in rural areas, depend on shea for their livelihood. ISCC system manager Juliane Pohl says: “For this first certification of a shea supply chain, all existing requirements of the ISCC system have been implemented. For example, there is no land use change for shea. The traceability through the supply chain is ensured and social aspects have been discussed with NGOs.” v

Emissions standards explained

n the wake of the VW emissions scandal, public interest is especially high in Germany regarding legally binding limits for vehicle exhaust emissions, says the country’s Union for Promoting Oil and Protein Plants (UFOP). Biofuels need to fulfil these emission requirements, with each new emissions standard bringing along new scientific challenges for fuel system research. This central issue will be the focus of the forum, ‘Biodiesel Research – Development Prospects of Biodiesel’ during the 13th International Conference on Biofuels ‘Fuels of the Future 2016’, which will be held from 18-19 January, 2016 in Berlin. The forum will provide an overview of the legal exhaust emission requirements, especially surrounding the use of B100 and B30, as well as on the current optimisation options for biodiesel blends. As a co-organiser of the conference, UFOP says biodiesel has to demonstrate its efficiency under very different operating conditions. Quality monitoring for biodiesel is not only a necessary requirement along the supply chain, but also needed for the early fuel quality detection of biodiesel blends during vehicle operation. Sensor technology will also have to become part of fuel quality monitoring. More than 500 participants are expected to attend Fuels of the Future 2016. The conference will include lectures on current developments in the sector, economic and legal frameworks, primary materials and potential in international markets. The focus will be on: t Prospect on the established biofuels like biodiesel, bioethanol and HVO on the market until 2020 and beyond t Second and third generation fuels t Biomethane in the transport sector t Climate protection in the transport sector t Biofuels trade t Partner country: France

International Conference on Biofuels 18/19 January 2016 – Berlin

For further information, contact: German Bioenergy Association Markus Hartmann Tel: +49 228 8100 222 E-mail: hartmann@bioenergie.de www.fuels-of-the-future.com 33 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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ADM oilseed plants ISCC-Plus certified

rcher Daniels Midland (ADM) has had several of its European oilseed production facilities ISCC-PLUS certified in order to enhance the sustainability of its softseed supply chain, the International Sustainability and Carbon Certification (ISCC) body reported in August. ADM’s Sustainable Oilseeds Program is based on the ISCC-PLUS principles. Participating rapeseed and sunflowerseed growers in Poland, Slovakia, Hungary and the Czech Republic developed environmental management systems and implemented sustainable agriculture practices that addresse soil fertility, water protection, energy efficiency and biodiversity protection. Audits are carried out to ensure compliance.

SGS opens new labs in Malaysia, Russia

New programme to explore DNA O

n 10 August, industrial bioscience company Amyris Inc and Genome Compiler Corp, a synthetic biology platform company, announced a new open testing programme for pharma and biotech companies to access their DNA design and construction solutions. The companies are inviting interested parties to visit Genome Compiler’s website page where they can source information. “Through the integrated platform, researchers can leverage a comprehensive solution from design to delivery that represents an integrated DNA design and construction service,” the companies said. “The service allows for greater levels of automation, enabling faster progress, and will be less expensive and more sophisticated than other available offerings. Prospective customers will have access to Genome Compiler’s advanced software tools,

Wageningen develops bio-based standards

orldwide inspection, verification, testing and certification company SGS says it has opened a new agricultural testing laboratory in Malaysia and a new seed laboratory in Russia. The facility in Malaysia has received the approval of the Malaysian Palm Oil Board and will perform refined palm oil and crude palm oil testing in accordance to the Palm Oil Refiners Association of Malaysia’s specification, SGS says. The laboratory is located in Bintulu, Sarawak, which is a major player in the industry with almost one million hectares of planted palms that produce 1.5 tonnes/year of palm oil. As it is located within a 30km radius of four palm oil refineries and the port area of Tanjung Kidurong, SGS says this enables it to turn around quick results. The new laboratory in Russia opened in Voronezh in April for the purpose of studying the quality of various seeds including oil-yielding crops such as soyabean (pictured above). The lab focuses on verifying seed-sewing characteristics such as germination, purity or weight per 1,000 seeds. Such analysis enables informed decisions on sowing and planting and provides a fuller understanding on how a batch of seeds will perform, SGS says Analysis, therefore, has the ability to increase crop yields and production quality, it adds.

ageningen UR Food & Biobased Research was commissioned by the EU in February to perform pre-normative research into standards for bio-based products, particularly in regards to the demand for specific labelling and consumer information. Research was being undertaken into quality requirements based on laboratory tests into specific functional characteristics, for example strength, flexibility, permeability, recyclability and organic degradability. Communication with businesses, authorities and consumers on the characteristics and applications is another key goal of the project. The project is looking to develop guidelines for labelling products and the product information provided. Research is taking place in eight European Union member states into both acceptance and consumer demands, which should lead to European standards and policy regulations.

Codex agrees draft standard for fish oil

he Codex Committee on Fats and Oils met in Melaka, Malaysia in February for its 24th session. At the session, the Draft Standard for Fish Oil was discussed in detail and agreement was reached on a number of contentious issues, according to a Codex Alimentarius Commission (CAC) press release. The proposed draft standard was adopted at Step 5. In particular, the fatty acid profiles of salmon oil will differentiate between wild and farmed salmon, including the source of the raw material.

along with Amyris’s libraries of genetic parts, DNA construction and editing methods.” Amyris uses bioscience to convert plant sugars into hydrocarbon molecules and consumer products. It announced a collaboration agreement in March to integrate its automated lab services with Genome Compiler’s online design tools and e-commerce platform.

In addition, the category for ‘concentrated fish oils’ will remain in the proposed standard. Delegates from Latin America did not support the decision to adopt the standard. The session also discussed two criteria used to determine the purity and authenticity of olive oil, Olive Oil Times reports. Reports were put forward at the CAC and have been accepted by the International Olive Oil Council (IOC). At the Codex session, proposals were made to address the issue of olive oil campesterol values. Furthermore, the IOC approved changes to its standards at its 23rd extraordinary session in February. The standards affected were the CIO/T.15/NC No. 3 / Rev. 8 2015 – Trade Standards Applying to Olive Oils and Olive-Pomace Oils; and Decision no. Dec-11/s.ex.23-v/2015 on the Trade Standard Applying to Olive Oils and Olive-Pomace Oils. Testing methods have been modified.

Germany requires firms to reduce GHG

n January 2015, Germany introduced an obligation for companies to reduce their greenhouse gas (GHG) emissions, which means certification bodies face the challenge of certifying the CO2 reductions, the Union for the Promotion of Oil and Protein Plants (UFOP) says. UFOP says the Agency for Renewable Resources (FNR) has carried out research to investigate the need for qualifications in coordination with the biofuels sector, certification systems and certification offices. This information will be made available in a recommendation document. With the importance of renewable raw materials set to grow in the future, UFOP says it will ensure that an option is created for calculating GHG in the extraction of vegetable oil for rapeseed, soya and palm oil, regardless of final use. w

34 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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PHOTO: IMAGESBYKENNY/DOLLARPHOTOCLUB

F O OD SAFETY & C ER TIFIC ATION

STREET FOOD IS PARTICULARLY VULNERABLE TO BEING FRIED IN GUTTER OIL, ALTHOUGH ONE OF TAIWAN’S MOST WELL KNOWN SCADALS AFFECTED TRUSTED BRAND NAMES

Taiwan: T keeping it clean

After a series of food scandals in Taiwan, the island says it has cleaned up its oils and fats industry and introduced measures to eliminate gutter oil from its food supply chain including new certifications. Jens Kastner reports from Taipei he oils and fats industry in Taiwan, along with regulators, may be confident that a string of major food safety scandals that rocked the island from late 2013 until well into 2014 will not re-occur, but their reputation can ill afford a recurrence. The scandals, most of which involved adulterated cooking oil products, were triggered by revelations that Kaohsiung-based Chang Guann Co blended large quantities of cooking oil with gutter oil, grease and leather cleaner. However, at the centre of public attention stood major food producer and food retailer Ting Hsin International Group. Ting Hsin faced claims that cooking-lard-oil its subsidiaries Ting Hsin Oil and Fat Industrial Co Ltd and Cheng I Food Co Ltd imported from Vietnam, had not been meant for human consumption but for animal use. The tainted oil was then processed by over 1,000 companies, including numerous well-known Taiwanese food brands, such as Taiwan Sugar Corporation, Ve Wong Corp, Chi Mei Frozen Food Co Ltd and Gourmet Master Co Ltd. This sparked numerous recalls of products ranging from cakes to instant noodles.

As mainland China, Hong Kong, Japan, Malaysia and Singapore issued temporary import bans on Taiwanese oil products, the Ministry of Economic Affairs estimated that the scandals translated into losses for Taiwan’s food sector reaching NT$10.2bn (US$311.5M) domestically and NT$2.2bn (US$67M) in exports. Giving additional impetus to the Taiwan authorities scrambling for new policies to make the island’s oils and fats safe, the issue became political. The ruling party, the Kuomintang, lost support in 2014 local elections. Today, one-anda-half years later, regulators and the oils and fats industry agree that standards and controls have been tightened to reduce the risk of further oil tampering and misselling, at least regarding the larger players.

Good hygiene practice for everyone “The big companies’ products have all been made safe now by the government’s law amendments and better monitoring systems,” says Daniel Yang, secretary general of the Taiwan Vegetable Oil v

35 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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v Manufacturers Association, in an interview with Oils & Fats International. “It is the small, local factories that are not easy to control, but the government is also working to solve this problem, for example, by heightening the Taiwan Food and Drug Administration’s budget to enforce good hygiene practice on all food companies”, he adds. Yang explained that most of the edible oils refined in Taiwan are made of soyabeans imported in large quantities from Argentina, Brazil and the USA, which, to his mind, means the raw material inflow is easy to trace. Argentina, Brazil and the USA are the three largest producers of soyabeans in the world. “However, what remains difficult to trace is the sesame oils and peanut oils used in small quantities in Chinese cooking, as sesame is imported from mainland China or Vietnam, while the peanuts may come from small farms in the central region of Taiwan,” Yang says. Yang also insists that palm oil used for the manufacturing of instant noodles is imported from Malaysia and Indonesia and is “safe”, and so is the lard Taiwan imports from Spain.

Regulation and certification failings

Consequences for lawbreakers

RS/D

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From the authorities’ side, arguably the most prominent reaction to the scandal was the introduction of greatly increased penalties for offenders. Those who are found guilty of lacing food with banned substances or falsifying ingredients can now face seven years in prison, and if the violation results in death, they can even be jailed for life and face much higher fines, which have increased ten-fold. Fines for responsible executives are now between NT$80M (US$2.4M) and NT$200M (US$6.1M) in lethal cases, while companies are subject to a maximum fine of NT$2bn (US$61M). New rules also promise rewards for whistleblowers, which have been significantly increased to up to the equivalent of NT$2M (US$61,087), the money comes from the central government, while before local governments paid the rewards. The Ministry of Health and Welfare has also set up a hotline for reports on any kinds of potential food fraud. At Taiwan’s borders, importers must now declare whether oils and fats are edible for human consumption, as animal feed, or industrial-grade and provide relevant documentation from the competent authorities of the country of origin. And, at long last, the existing but widely neglected regulation that food-processing companies must employ a trained food safety expert who is licensed by the government, is now finally being enforced. This in turn has led to many food-processing companies setting up their own laboratories for raw material testing to facilitate the voluntarily reporting of food fraud by suppliers.

and additives – a Taiwan Office of Food Safety (OFS) has been established. The OFS reports directly to the government’s Premier and Dr Sun is one of its committee members. “I think the Office of Food Safety will enable us to successfully centralise coordination,” she says. “It helps in likely scenarios such as the Environmental Protection Administration finding signs of food safety law violations that only the Food and Drug Administration is competent to trace.” Looking ahead, Dr Sun is upbeat regarding Taiwan’s food safety prospects, and she sees the recent evolution of the TQF’s member pool as a very good sign. Before the scandal, Dr Sun explains, the association’s members were virtually all manufacturers, whereas now there are also retailers, raw materials suppliers, consumer protection agencies and hypermarkets, which facilitates fruitful exchange on an appropriate platform for the sake of food safety. She also says her association is setting up benchmarks toward aligning the Taiwan food industry with the Global Food Safety Initiative (GFSI) of the Consumer Goods Forum, a global industry network. “Recently we signed a letter of Intent with Safe Quality Food Institute (SQFI). We anticipate this move will improve TQF and bring us on par with international food safety standards,” Dr Sun says. The SQFI is a division of the USA-based Food Marketing Institute, which manages a family of internationally benchmarked food safety management standard programmes. Recognised by the GFSI, it links primary production certification to food manufacturing, distribution and agent/ w broker management certification. Jens Kastner is a freelance writer

O: PIC PHOT

As the gutter oil scandal unfolded in 2013/14, the authorities and food industry associations came under heavy fire for systematic flaws that facilitated food fraud in the first place. Specifically, there were serious shortcomings in inter-ministerial cooperation related to the food safety management system; how the Ministry of Economic Affairs dealt with factory registration; how the Ministry of Health and Welfare managed edible oil products; and how the island’s Environmental Protection Administration regulated waste cooking oil. Furthermore, all these government agencies failed to adequately crosscheck their records. The authorities were furthermore criticised for applying only minimum fines to food regulation offenders, if at all. Meanwhile, Taiwanese Good Manufacturing Practice (GMP) certification, which previously enjoyed good consumer awareness and appreciation locally, was on the receiving end of harsh public criticism as consumers came to understand the GMP certification system was voluntary, and arguably misleading. This was because although certification was issued on a processing-line and product-by-product basis to companies who were voluntarily audited by the certification body (the Taiwan Quality Food Association (TQF)), some companies also used the GMP tag fraudulently. The tag was displayed by several companies implicated in the scandal, as if all products in their portfolio had been certified – which was not the case – sometimes only one product had been tested. In response to this revelation, the TQF now requires that all products of the same category produced on the same premises be certified for GMP logos to be displayed. Moreover, TQF has replaced the GMP logo with a new version called ‘Taiwan Quality Food’ (left) to demonstrate that the regulator now imposes tighter controls on regulations and inspections.

“Before the scandal, we applied the four-m approach; the inspection of men, methods, material and machines,” says Dr Bonnie Sun Pan, the TQF chairwoman. “But now we are also enforcing traceability one step back and one step forward, so that the inspections cover the raw material supplier as well as the recipient of product,” she adds. That said, Dr Sun explains that the stricter approach has one significant downside, as it makes certification more expensive for private oils and fats producers and refiners. While TQF used to have more than 400 domestic processing lines certified and their products carrying a logo, “since the reform the number has been reduced to only 224 because of the higher inspection costs involved and because many of the food companies must modify their systems to pass,” Dr Sun says. She adds that while this number seems tiny compared to the 6,000 registered food manufacturing companies and estimated 200,000 small unregistered shops in Taiwan, many processing foodstuffs in their backrooms, the value of the TQF certified products make up more than 30% of the total food and drink market of Taiwan. Dr Sun moreover explains that approximately 60% of the total market is covered by the 6,000 companies enjoying a GMP registration, even if not all their products have been certified.

The future is clean In order to improve cross-ministerial cooperation as well as the establishment of a ‘food cloud’ – that promises to enhance tracking of food materials, ingredients

OILS SUCH AS SESAME AND PEANUT ARE MUCH MORE DIFFICULT TO TRACE AS THEY ARE OFTEN IMPORTED FROM MAINLAND CHINA OR VIETNAM, OR SMALL FARMS IN TAIWAN

36 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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USA

Cargill to expand Kansas soya plant C

argill announced in October that it plants to spend US$50M upgrading its Wichita, Kansas soyabean processing plant, according to a report in The Wichita Eagle. The company expected the renovation to be completed by 2017 and the new upgraded plant would allow Cargill to increase production by 30%, the report added. A US$10M expansion of an oil refinery plant adjacent to the Wichita plant was recently completed.

Suppliers round-up Oils & Fats International reports on some of the latest US news and developments from suppliers

Cargill completes $10M seed centre C argill completed its new seed innovation centre in Ft. Collins, Colorado in August, which will be the centre of the company’s specialist canola hybrid development, it said. The facility cost US$10M to build and it will be used by the company to select the next generation of VICTORY seed varieties. VICTORY seeds are canola hybrids that are crushed and refined to become Clear Valley high oleic canola oils in the USA and Canada. President of Cargill Specialty Seeds and Oils, Jenny Verner, said the facility was “the most strategic piece to the puzzle” as it would be responsible for selecting the seeds

that would produce crops harvested 10 years from now. Cargill’s seeds are developed to produce disease-resistant and high-yield crops, as well as improving the oil profile of high oleic canola. High oleic canola oil is popular as it has no trans fats and is low in saturated fat. Cargill started mapping all aspects of its North American canola supply chain this year through its Knowing Your Roots: from farm to table programme. In the 45,700 square foot facility is new offices, laboratories and warehouse spaces, and 48 employees will work at the site.

Hawaii biodiesel contract approved P acific Biodiesel Technologies announced in October that its contract with Hawaiian Electric to supply biodiesel for Oahu power generators has been approved. The two-year contract was due to go into effect in November and had a requirement for a minimum of 2M gallons/year but no more than 3M gallons/year. Pacific Biodiesel said the biofuel would be produced at its Big Island Biodiesel facility, which began operating in 2012. The facility’s modern technology would enable fast processing of used cooking oil from the state’s restaurants into a high quality end product. The Hawaii Utilities Commission, which approved the contract, said that by producing biodiesel locally there would be cost savings as well as a positive effect on the local economy. Pacific Biodiesel employs 70 people across Hawaii and anticipates that further jobs and opportunities would become available in the future for the agricultural sector due to an increased demand for local biodiesel it is hoped this contract will create. The renewable fuel will be used primarily at the 110-megawatt Campbell Industrial Park generation facility and the Honolulu International Airport Emergency Power Facility, but Pacific Biodiesel said it could also be used at other Oahu plants as needed.

REG purchases KiOR assets R

EG Synthetic Fuels LLC, a subsidiary of Renewable Energy Group (REG), has received permission from a Mississippi court to purchase equipment from the bankrupt KiOR Columbus facility (pictured), Biodiesel Magazine reported in October. The KiOR facility, which went bankrupt late last year, produced 15M gallons/year of cellulosic diesel and gasoline from woody biomass, in particular southern yellow pine. REG Synthetic Fuels paid US$1.5M, as well as additional expenses for preparation of the equipment, and acquired various pieces of equipment including a 12M gallon hydrotreating unit, distillation column and tankage. Brad Albin, vice president of manufacturing for REG, told Biodiesel Magazine that the company planned to relocate and utilise the equipment for future advanced biofuel projects.

39 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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STATISTIC S

SOYABEAN OIL PRICES (EU€/TONNE)

STATISTICAL NEWS FROM MINTEC Soyabean oil Soyabean oil prices in the EU fell in the first half of the year driven by forecasts for an increase in global production and ample supplies of alternative vegetable oils. Global production in 2015/16 is forecast to reach 50.7M tonnes, up 5% year-on-year. Consumption is forecast up by 5% year-on-year to 50M tonnes and ending stocks are forecast to fall by 2% year-on-year to 3.5M tonnes.

Rapeseed oil Prices in the EU rose due to tight supplies. Global rapeseed production is forecast to fall in 2015/16 in both the EU and Canada. As a result, global production of rapeseed oil is forecast at 26M tonnes, down 4% year-on-year. Consumption is forecast to exceed production at 26.8M tonnes, down 1% year-on-year. Consequently ending stocks are estimated to fall 24% year-on-year to 2.7M tonnes.

RAPESEED OIL PRICES (EU€/TONNE)

Sunflower and maize oil Prices for sunflower oil in the EU fell between June and September however; prices have since risen due to supply concerns. Global production of sunflower oil is forecast down 1% year-on-year to 15M tonnes. Maize oil prices rose due to concerns over dry weather in France. However, prices then fell driven by an increase in production forecasts.

SUNFLOWER (US$/T) AND CORN OIL PRICES (US$/T)

PRICES OF SELECTED OILS (US$/TONNE) 2013

2014

July 15

Aug 15

Sep 15

Oct 25

Soyabean 1,052 897 749 732 705 722 Crude Palm 854 825 644 555 554 638 Palm Olein 803 762 607 537 545 597 Coconut 948 1,276 1,082 1,028 1,043 1,127 Rapeseed 1,080 906 788 764 765 788 Sunflower 1,108 905 832 814 819 821 Palm Kernel 904 1,120 875 751 797 912 Average price 964 INDEX 228

956 226

797 189

740 175

747 177

801 190

Mintec works in partnership with sales, purchasing and supply chain professionals to deliver valuable insight into worldwide commodity and raw materials markets using innovative technology and a knowledgeable team of specialists. We provide independent insight and trusted data to help the world’s most prestigious brands to make informed commercial decisions. Tel: +44 (0) 1628 851313 E-mail: sales@mintec.ltd.uk Website: www.mintecglobal.com

40 OFI – NOVEMBER/DECEMBER 2015 www.oilsandfatsinternational.com

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ye ar s o f PARTNERSHIP/ TECHNOLOGY

TRUST/

INNOVATION/

CUSTOMIZATION/

Plants for Oilseeds, Edible Oils and Oleochemicals, made in Italy

ANDREOTTI IMPIANTI SHARING YOUR VALUES andreottiimpianti.com

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Flaking Mill OLFB. The best way to treat your oilseeds. The flaking mill opens a new dimension when processing soy, rapeseed, sunflower and corn, among others. More than 500 tons of throughput per day, about 25 % less space requirements and a high-performance motor increase efficiency. The flake thickness is constant at all times during operation and can be set while running. This ensures a consistently high product quality and optimizes extraction yield. In addition, large swinging doors ensure good accessibility and facilitate maintenance. This is how to get the best out of oilseeds. More at www.buhlergroup.com /olfb

Innovations for a better world.

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FUELS OF THE FUTURE 13th International Conference on Biofuels

18.–19. January 2016, Berlin 14 different sessions – more than 60 speakers 500 international delegates • Biofuels in transport sector until 2020 and beyond • Biodiesel, bioethanol, biomethane • Advanced Biofuels • Sustainability Certification • Biofuels trade • Climate protection in the transport sector More than 500 participants from around the world are again expected in January 2016, among them representatives from raw material production and logistics, biofuel producers, representatives from the oil industry, from vehicle technology and the automotive industry, from politics, auditors and environmental verifiers, from the certification systems along with scientists and researchers. ACCOMPANYING EXHIBITION In addition, the conference provides you with an opportunity to introduce your company or your institution to an international industry audience with an information booth in the entrance hall of the congress centre or to be represented as a sponsor. Furthermore, scientific institutions are given an opportunity to present scientific results in a separate poster exhibition free of charge — the organizers seek to provide a platform where representatives from science and the industries meet. The German BioEnergy Association will gladly provide further details.

www.fuels-of-the-future.com

Gold-Partner:

Organisers

Silver-Partner:

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