OFI November/December 2022

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Ongoing crisis

As the war in Ukraine drags on into its seventh month, the situation for its farmers and those in the agribusiness industry still remains critical, the Agro & Food Security Forum organised by Ukraine’s UkrAgro Consult heard in September.

Although 2.7M tonnes of grains and oilseeds have left the Black Sea ports of Chornomorsk, Odessa and Yuzhny/Pivdennyi as of 12 September through the UN-brokered export corridor agreed on 22 July, there are still huge challenges related to logistics.

“Russia has started a war on multiple levels, understanding that agriculture is the bloodline of Ukraine,” Cezary Maciborski, MK Merchants head of trade, said at the event in Warsaw. Ordinary farmers cannot plant crops because fields are mined, exports are blocked and large producers running efficient industrial units are “dying”, he said. “Ukraine can’t produce i-Phones. If you destroy agriculture, people will be dislocated and you are talking about a potential economic and social catastrophe with millions of refugees coming into Europe.”

Maciborski said the crisis can only be solved at a governmental level as individual businesses cannot invest based on small throughput capacities at the Ukraine-European border and the “ludicrous” idea of shipping grains through Poland’s Baltic Sea ports.

This view was echoed by Piotr Pawłowski, chairman of the Council of Stakeholders of the Port of Gdynia, who said that although Poland has the capacity to handle 8-9M tonnes/year of agricultural exports and imports, spare capacity only totals 1-1.5M tonnes/year as terminals already have long term-binding contracts with large agri businesses such as ADM, Bunge, Cargill and Louis Dreyfus.

“The biggest grain terminals are not interested in handling Ukrainian goods because they need just-in-time delivery to load vessels.”

That is virtually impossible due to the ongoing truck and rail problems with grain and oilseed deliveries at the land border including different-sized railway gauges; lack of storage facilities at borders; long waiting times for customs clearance and permits; veterinary/phytosanitary inspections not operating 24 hours/day; drivers unwilling to go to Ukraine because there are no facilities; and trucks having to queue for 10-15 days at the border even when they are empty on the way back, with protests at the border and drivers losing patience.

Before the war, 98% of Ukraine’s agricultural exports went via its sea ports and – after plummeting to 17% in March – exports via ports have risen to some 65% in August, the conference heard. Yet, chartering and insurance issues remain, along with prohibitively high freight rates for containers, barges and other forms of transport, as Ukraine competes against countries such as Romania and Turkey to ship its goods. Building storage facilities at border crossings so Ukraine can connect to regular rail lines has been proposed as a solution. But this surely won’t be enough, given the sheer volume of grains and oilseeds that Ukraine would normally produce – some 100M tonnes/year.

Meanwhile, domestic demand and prices are so low in Ukraine that farmers are unable to cover their production costs and finance their next crop, the greatest risk factor for grain production for 2023 and 2024, says UkrAgro Consult director general Sergii Feofilov.

The end of the 120-day export corridor deal is also looming on 19 November, with no one able to predict what Russian president Vladimir Putin will do next.

Serena Lim serenalim@quartzltd.com

OILS

UKRAINE: Crushing companies in the country are facing tight supply of sunflowerseeds due to farmers holding back sales of old crops and low new stocks, compounded by the harvesting campaign’s slow progress due to heavy rainfall, AgriCensus wrote on 22 September.

Market expectations of high sunflowerseed stocks did not materialise, with estimates of stocks as of 1 September at no more than 2.1M tonnes at plants and among farmers in Ukraine-controlled territory.

Meanwhile, crushing companies were trying to keep prices for old and new sunflowerseeds between US$327-373/tonne carriage paid to (CPT) plant including VAT, as they were limited by prices and the timing of the export corridor due to end in November.

Prices in the range of US$327-US$350/tonne CPT plant were typical for sunflowerseed with 46%48% oil content, and above US$350/tonne CPT plant with 50% oil content, the re port said. Export prices were significantly higher, ranging from US$515-550/tonne (delivered at place) in Roma nia, Bulgaria and Hungary.

The report said estimat ed sunflower exports for 2022/23 would not be lower than 1.6M tonnes and could reach 3M tonnes, mainly to Europe.

RUSSIA: Global agribusiness giant Bunge has agreed to sell its oilseed processing business in Russia to Karen Vanetsyan, the controlling shareholder of Exoil Group, Reuters reported on 19 September. The sale for an undisclosed amount includ ed Bunge's 540,000 tonnes/ year sunflower processing plant in Voronezh, which opened in 2008 and could produce more than 200M bottles of sunflower oil.

Probe finds evidence of Russian grain smuggling

example, investigators found that the bulk cargo ship Laodicea, docked in Lebanon last summer, was carrying grain stolen by Russia. The ves sel likely started its journey in the southern Ukrainian city of Melitopol, which Russia had seized at the start of the war on 24 February.

Melitopol Mayor Ivan Fedorov told AP that Russia was moving vast quantities of grain from the region by train and truck to ports in Russia and Crimea, a strategic Ukrainian peninsula that Russia has occupied since 2014.

The Laodicea reportedly claimed to be carry ing grain from the Russian port of Kavkaz when it arrived in Lebanon. The shipper was listed as Agro-Fregat and the buyer was Loyal Agro Co, a wholesale grocer headquartered in Turkey, according to AP's investigation.

An investigation by Associated Press (AP) and television series Frontline has found that Russia used a smuggling operation to steal Ukrainian grain worth at least US$530M and used the cash to fund its war efforts, World Grain report ed on 3 October.

Using satellite images and marine radio tran sponder data, AP tracked more than three dozen ships carrying grain from Russian-occupied areas of Ukraine to ports in Turkey, Syria, Lebanon and other locations.

The theft was being carried out by wealthy businessmen and state-owned companies in Russia and Syria, the investigation found. For

A spokesperson for Loyal Agro was quoted as saying that the ship’s cargo came from Russia. However, AP said the Laodicea could not have picked up its cargo in Kavkaz – listed on the bill of lading – as its hull, which reached 8m below water, would have run aground in the relatively shallow port.

Another company involved in smuggling grain was United Shipbuilding Corp, a Russian stateowned defence contractor sanctioned by the USA for providing weapons to the Russian war effort, AP said. The company, through its subsidi ary Crane Marine Contractor, bought three cargo ships in the weeks before Putin invaded Ukraine, with the vessels making at least 17 trips between Crimea and ports in Turkey and Syria, according to the news agency.

Russian groups warn of farming disruption

Trade associations in Russia are warning that the country’s planting campaign will be disrupted if farmers are called up for military service.

The warning followed Rus sian President Vladimir Putin’s confirmation at a meeting of regional leaders on 27 September that farm workers would be eligible for military service as part of the coun try’s partial mobilisation of reservists to fight in Ukraine, according to an AgriCensus report on the same day.

“Within the framework of partial mobilisation, agricultur al workers are also called up," Putin was quoted as saying.

Farming groups said the move could disrupt the final stages of the current harvest and new crop planting.

Agro-industrial unions had asked the government for a deferment from the partial mobilisation, AgriCensus quot ed from local media reports.

The Association of Nurs eries and Gardeners of the Stavropol Territory, for exam ple, had sent a letter to the Ministry of Agriculture saying that “mobilisation of workers employed in the industrial nursery and horticulture sec tors will lead to the disruption of the harvesting campaign”.

The Russian Grain Union

was also considering asking the government for a delay in calling up qualified workers, not only to allow field work but also for the processing industry, the report said.

At the time of the report, the Russian grain and oilseeds harvest was near completion with 88% of the crop harvest ed, but winter sowing had only just started with around 9M ha planted.

AgriCensus said this year’s Russian crop was forecast to reach a record level, with wheat expected to exceed 100M tonnes and the total grain harvest totalling around 150M tonnes.

Photo: Adobe Stock

AUSTRALIA: Global agri business giant Louis Dreyfus Company (LDC) announced its acquisition of leading Australian grain handling business Emerald Grain from Long River Farms on 26 September.

Emerald Grain operates a network of seven grain storage and reception sites across the Australian states of New South Wales and Victoria, with a combined storage capacity of 1M tonnes.

The company also has a grain export terminal at the Port of Melbourne.

LDC said it had been active for over a century in Australia, originating, processing and exporting grains, oilseeds and cotton. Emerald Grain exports a range of grains including barley, canola and wheat, to over 35 global markets.

USA: Glencore’s agricul ture division Viterra said on 3 October that it had completed its US$1.125bn acquisition of the grain and ingredients business of US firm Gavilon from Marubeni America Corporation.

Gavilon sources, stores and distributes grains, oilseeds and feed and food ingredients to US and global markets. With assets locat ed in key growing areas in the USA, Gavilon’s opera tions have access to major railways, rivers and ports.

The company has 105 grain storage facilities and a total grain storage capacity of 345.5M bushels, ac cording to Sosland Publish ing’s 2022 Grain & Milling Annual.

Glencore is a multination al commodity trading and mining company.

Viterra was formerly known as Glencore Agricul ture but rebranded in 2020. It is active in 37 countries and has a network of agri cultural storage, processing and transport operations.

Nestlé to stop sourcing palm oil from Astra Agro Lestari

Swiss food and drink giant Nestlé plans to stop sourcing palm oil from subsidiaries of leading Indonesian palm oil producer Astra Agro Lestari following environmental groups’ allegations of land and human rights abuses by the company, Reuters reported on 30 September.

Nestlé, the manufacturer of KitKat chocolate and Nespresso coffee, told Reuters that following a recent independent assessment, it had instruct ed its suppliers to ensure palm oil from three subsidiaries of AAL did not enter its supply chain.

Without specifying the claims against AAL other than to say it had been on its “grievance” list for several months, Nestlé said it expected it would not be using any palm oil from the compa ny by the end of the year.

AAL denied the accusations made against it.

“Astra Agro is very serious about implementing our sustainability policy. It is not true that Astra Agro or its subsidiaries carry out land grabbing,” AAL president director Pendidikan Santosa told Reuters

Nestlé was not a direct buyer of products pro duced by AAL but most probably bought from its customers, Santosa added.

The European Commission had proposed several laws aimed at preventing and, in the case of forced labour, banning the import and use of products linked to environmental and human rights abuses, Reuters wrote.

Environmental group Friends of the Earth said Nestlé’s move to stop sourcing from AAL was an important “first step” and called on other leading consumer companies to follow.

CSPO production rises by nearly 6%

make steady progress.

CSPO consumption using RSPO credits or physical supply chains (mass balance, segregated, identity preserved) totalled an estimated 8.53M tonnes last year, a significant 12.2% increase from 2020.

Among the key consumption regions and countries, Europe and North America continued to maintain the high CSPO uptake seen over recent years, the RSPO said.

Production of certified sustain able palm oil (CSPO) rose by almost 6% last year, according to the Roundtable on Sustain able Palm Oil (RSPO)’s latest Annual Communication of Progress (ACOP) report.

RSPO members with palm oil estate and mill operations reported total CSPO produc tion of 14.7M tonnes in 2021, representing 19% of total global production of crude palm oil (CPO). This was a 5.7% increase compared to the previous year, the RSPO said on 15 September.

CSPO sales by mills in creased by 13.5% compared to

2020 with an estimated total of 9M tonnes (RSPO credit volumes or physical supply), representing 61% of total CSPO production.

Total certified land area –excluding independent small holders – farmed by RSPO members reached 4.45M ha in 2021.

Among the five main grow ing countries and regions, Latin American growers continued to perform well, with 27% of the region’s total production as CSPO and a further potential 43% in line for certification, the RSPO said. Malaysia, Indo nesia and Africa continued to

Europe showed a strong rise in CSPO consumption at 3.49M tonnes, representing an overall uptake of 48.6%. North America had an uptake of 82.3% CSPO, up from 81% in 2020. Latin America reached a double-digit uptake of 13.9%, while China and India reached 8% and almost 3% respec tively.

Looking ahead towards 2030, the RSPO said one of the main challenges was the gap between CSPO produc tion and consumption through RSPO supply chain models or other certification schemes for members holding multiple certifications, leading to a portion of CSPO production downgraded to conventional palm oil when traded.

Photo: Adobe Stock

The RSPO says that production of certified sustainable palm oil has risen by 5.7% in 2021 compared with 2020

Indonesia to extend export waiver

The Indonesian government is planning to extend a palm oil export tax waiver until the end of the year, Reuters reported the country’s chief economic minister as saying.

Indonesia started removing taxes on exports of palm oil products from mid-July to help reduce excess stocks following a three-week export ban, which had been introduced in late April in a bid to stabilise local cooking oil prices, the 4 October report said. The tax waiver policy was scheduled to end after 31 October.

Indian palm oil imports rise18% in September

Palm oil imports in India rose by 18% compared to the previous month, AgriCensus reported from information published by the Solvent Extractors’ Association of India (SEA).

The world’s largest edible oil importer took in 1.17M tonnes of palm oil – consisting of refined bleached and deodorised (RBD) palm olein, crude palm oil (CPO) and crude palm kernel oil (CPKO) – in September, while soft oils imports totalled 421,625 tonnes, the 13 October report said. The increase in palm oil imports was due to a substantial price difference between palm oil and soyabean oil, with the former trading at more than US$400/tonne less in September.

Year-on-year RBD palm olein imports were higher, with Indian buyers favouring Indonesian exporters due to more competitive prices and lower duties, the report said.

In September, India imported 716,221 tonnes and 428,211 tonnes of palm oil from Indonesia and Malaysia respectively, reflecting the demand for cheaper Indonesian products, AgriCensus wrote. Soyabean oil imports in India increased slightly in September, rising 7% to 261,815 tonnes and sunflower oil imports rose 18% to 159,810 tonnes.

However, overall palm oil imports fell in the first 11 months of the current marketing year (beginning November 2021), with palm oil imports 8% lower than the same period the previous year at 7.03M tonnes.

“The plan is for an extension... until the end of the year,” Indonesia’s chief economic minister Airlangga Hartarto was quoted as telling reporters.

Indonesia collects export levies, on top of a separate export tax, to fund subsidies for its biodiesel and smallholder replanting programmes.

However, following a reduction in palm oil prices with the cost of palm oil-based biodiesel now lower than fossil diesel fuel, Indonesia currently needed less funds for the biodiesel programme, Hartarto said.

The government would continue to monitor the implementation of its Domestic Market Obligation (DMO) policy, which had been introduced in late May to ensure domestic cooking oil supply following the lifting of the palm oil export ban, he added.

Under the DMO policy, palm oil exporters are required to sell a portion of their products to the domestic market before they can receive a permit to export. Companies are currently allowed to export nine times the amount they have sold domestically.

NORTH AMERICA: Danish supplier of rendering and processing technology Haarslev is teaming up with US renewable fuel firm Grön Fuels to evaluate po tential rendering by-product and investment opportuni ties, PR Newswire reported on 4 October.

Grön Fuels would provide capital in exchange for product and Haarslev would provide rendering equip ment to a potential render ing facility, the report said. The alliance would include North American rendering projects within Haarslev’s development pipeline.

Grön Fuels operates a sustainable aviation fuel and renewable diesel plant at the Port of Greater Baton Rouge in Louisiana process ing feedstocks including fats, oils and greases.

CHINA: China is expected to produce 27.52M tonnes of vegetable oil in 2021/22, according to the monthly update to the country’s Agriculture Supply and Demand Estimates (Casde) reported by AgriCensus on 13 September. Imports are forecast at 5.93M tonnes, with rapeseed and soyabean oil imports estimated at 1M tonnes and 380,000 tonnes respectively. Casde said it expected consumption of edible vegetable oil to be stable at 36.34M tonnes for the marketing year, which runs from October to September for vegetable oil, corn and soyabeans.

Argentine farmers sell record volumes of soya

Farmers in Argentina sold a record volume of soyabeans – more than 13.7M tonnes – in Sep tember, following the government’s introduction of a special exchange rate for producers, accord ing to a report by the United States Department of Agriculture (USDA) on 11 October.

The special temporary exchange rate of 200 Argentine pesos/US$1 was introduced for soy abean exports from 5-30 September.

“This [rate] raised the peso-denominated price of soyabeans in the local market by 38% practi cally overnight,” the USDA Foreign Agricultural Service (FAS)’s Global Agricultural Information Network (GAIN) report said. As a result, export ers made almost 4M tonnes in export declara tion, with China the principal destination.

The USDA projected Argentine soyabean ex ports for 2021/22 at 5.5M tonnes. For 2022/23,

production was forecast at 49M tonnes.

Political considerations continued to affect farmers, the report said, and the recent boom in soyabeans combined with elections in 2023, meant that sales of all commodities were likely to slow down until August 2023, when farmers would see the results of primary elections.

“If the conservative opposition performs well, farmers are likely to hold onto as much grain and oilseeds as possible, hoping that a change of government in December 2023 could result in the end of currency controls and potentially lower export taxes,” the report said.

“In contrast, a stronger than expected perfor mance by the ruling coalition in August 2023 could mean that farmers would begin selling in earnest to avoid any new taxes imposed by a re-energised Peronist government.”

China to use less soya meal for food security

lies in feed grains”.

Soya meal reduction and substitution has been intro duced in recent years and the ministry said the proportion of soya meal in feed consumed by its aquaculture industry had dropped to 15.3% last year, a 2.5% fall compared to 2017. This had saved 11M tonnes of soya meal, equivalent to 14M tonnes of soyabeans.

The Chinese government has announced plans to reduce the amount of soyabean meal in feed products as part of a larger plan to boost food security, World Grain reported.

The plan was posted by

China’s Ministry of Agriculture and Rural Affairs following a meeting on 19 September.

The ministry said demand for feed grains continued to grow and "the most prominent contradiction in food security

The US Department of Ag riculture had forecast a record Chinese soya meal output of 75.2M tonnes for 2022-23, and a domestic soyabean crop of 18.4M tonnes, World Grain wrote. However, the country was still mostly dependant on soyabean imports for domes tic use, with a forecast 97M tonnes of imports in 2022-23.

FDA proposes new 'healthy' definition on packaging

The US Food and Drug Administration (FDA) is proposing to change the definition of 'healthy' on food packaging in a bid to improve diet and reduce chronic disease.

The proposed change would bring the ‘healthy’ claim in line with current nutri tional science, the updated Nutrition Facts label and the current Dietary Guidelines for Americans, the FDA said on 28 September.

Under the proposal, in order to be

labelled with the ‘healthy’ claim on food packaging, food products would need to:

• Contain a certain meaningful amount of food from at least one of the food groups or subgroups (such as fruit, vegetable and dairy) recommended by the Dietary Guidelines.

• Adhere to specific limits for certain nutrients, such as saturated fat, sodium and added sugars. The threshold for

the limits is based on a percentage of the Daily Value (DV) for the nutrient and varies depending on the food and food group. The limit for sodium is 10% of the DV/serving (230mg/serving). For example, a cereal would need to con tain 21.2g of whole grains and contain no more than 1g of saturated fat, 230mg of sodium and 2.5g of added sugars.

Photo: Adobe Stock

EUROPE: Global agribusi ness giant Bunge and Olle co, UK, are forming a 50/50 joint venture to create a full life-cycle oil collection business in Europe.

The joint venture would involve the collection of used cooking oil from food service and food manufac turing customers in Europe – excluding the UK and Ireland –for use as a feed stock in the production of renewable fuels, the firms said on 13 October.

Olleco is the renewables division of ABP Food Group and collects oil for con version into biofuels and food waste for conversion into renewable energy and fertiliser.

EU: EU oilseed produc tion is forecast to rise by 3% in 2022/23 based on increased planted areas of rapeseed, soyabeans and sunflower, according to a United States Department of Agriculture (USDA) on 12 October.

Soyabean planted area was forecast to rise by 11.1%, with rapeseed and sunflower areas set to be up by 9.7% and 10.3% respec tively. The rise in rapeseed planting was the first since a signficant decline in 2019, the USDA said.

“Attractive commodity prices, and to some extent uncertainty in the Black Sea market due to Russia’s invasion of Ukraine, are the major drivers for the increases in area."

Fate of Amazon hangs on Brazil presidential election

The Amazon’s future rests on the result of Brazil’s national election, according to experts quoted in a report by The Guardian on 3 October.

Following the close result of the first voting round on 2 October, left wing candidate Luiz Inácio Lula da Silva was due to face far-right incumbent Jair Bolsonaro in a second vote on 30 October. Both candidates fell short of the more than 50% of valid votes needed to prevent a second round.

Experts say the rampant destruction under President Bolsonaro could push the world’s big gest rainforest past an irreversible tipping point, according to an earlier report by The Guardian

In contrast, scientists estimated that a victory for the former president Lula, who oversaw a sharp decline in deforestation when in power, could lead to a 90% drop in the destruction of

forests, the report said.

Bolsonaro became president at the start of 2019 and had slashed environmental protections and promoted colonisation of the forest, The Guardian said, with research showing that CO2 emissions doubled in 2019 and 2020 compared with the average over the previous decade.

Almost 1M ha of rainforest has been burned in the past year, according to the latest data report ed by the newspaper.

If he wins, Lula has said he would reverse Bolsonaro’s legal changes, reform environmental agencies and drive illegal miners out of indig enous lands. Under the presidency of Lula and his Workers’ party successor, Dilma Rousseff, deforestation fell by 72% from 2004 to 2016, according to an earlier report by The Guardian on 30 September.

A third of olive oil from intensive farming

and published by Spanish tree nursery company Agromillora.

The study said that of the world's 11.6M ha of olive groves in 66 countries, 400,000ha were 'super high-density groves' on which about 1,600 olive trees/ha were planted. The groves were dependent on water availabili ty and mostly flat landscapes.

A new report has found that 'super high-density' groves account for more than a third of global olive oil production, with their proportion likely to grow, Olive Oil Times wrote on 10 October.

Although the groves make up just 3% of olive-growing hectares in the world, they ac count for 36% of global olive oil production, according to the study conducted by Juan Vilar Strategic Consultants

Agromillora said this farming method resulted in greater productivity and lower work force costs due to high mecha nisation, with quick delivery of the fruits to the mill, leading to less deterioration. Harvesting a hectare of super high-den sity olive trees required one or two hours, with harvesting costs reduced to US$0.029US$0.059, the company said.

Brazilian firms halt soya crushing due to low margins

Around 10 Brazilian soyabean crushing companies halted processing operations due to falling margins and weak demand, AgriCensus quoted local sources in a 29 September report.

As a result, the country’s crushing rate dropped by 15,000 tonnes/day, represent ing about 8% of the country’s capacity.

In an earlier report, AgriCensus wrote that eight soyabean crushing facilities had halt

ed operations on 12 September but, since then, two more plants had followed.

“Crushing margins are really bad again,” Victor Martins, senior risk manager at HedgePoint Global, told AgriCensus. “But some plants will continue to operate as they are better off crushing with negative margins than having the beans as stock."

Crushing plants usually carried out main tenance work around December/January,

ahead of the soyabean harvest in Brazil, but plants were going offline earlier than anticipated this year, the report said.

Soyabean processing capacity is estimat ed at 194,400 tonnes/day in Brazil, which is the second largest exporter of soyabeans oil globally, behind Argentina. Brazil is expected to export 2.13M tonnes of soy abean oil and 18.8M tonnes of soyabean meal in 2022/23, according to the USDA.

Photo: Adobe Stock

Stepan to buy surfactants producer PerformanX

US speciality chemicals company Stepan has agreed to acquire surfactants producer PerformanX Specialty Chemicals, the Inde pendent Commodity Intelligence Services (ICIS) reported on 12 September.

Stepan said the deal was expected to close in the third quarter of this year but did not disclose the financial details.

PerformanX was a strong strategic fit for the company’s surfactants business, Stepan CEO Scott Behrens was quoted as saying, which would allow it to diversify its alkoxyl

ation product lines.

The pending acquisition is the latest move by Stepan to increase its surfactants capacity and the company is building a new alkoxylation plant at its existing complex in Pasadena, Texas, according to the report.

Due to become operational in 2024, Stepan said the US$245M project would provide it with flexible alkoxylation capacity for both ethoxylation and propoxylation.

Stepan’s website said the company was active in the agriculture, coatings, house

hold and industrial cleaning, and personal care sectors.

PerformanX Specialty Chemicals offers a range of products and custom formula tions including ethoxylates, disinfectants, lubricant additives and a range of formulat ed speciality products, for sectors including cleaners and detergents, personal care, oil and gas, and paints and coatings.

Alkoxylates are a family of surfactants made by reacting fatty alcohols with eth ylene oxide (EO) or propylene oxide (PO).

BASF and RiKarbon to make bio-emollients

FINLAND: Renewable fuels producer Neste said on 19 September that it had launched a study into transitioning its Porvoo refinery into a renewable site and ending crude oil refining there in the mid-2030s.

The transition could include retrofitting existing units at a later stage, with a long-term production capaci ty of 2M-4M tonnes/year.

The Porvoo site currently produces both fossil and renewable products such as hydrotreated vegetable oil (HVO) and comprises four production lines and more than 40 production units.

Independently of the planned transition, Neste said it would continue sup plying fossil fuel products.

GERMANY: Chemical firm BASF announced on 29 Sep tember that it had launched a new catalyst to process renewable feedstocks.

The CircleStar catalyst achieved 99.5% selectivity for ethanol-to-ethylene con version, with an operating temperature more than 25°C lower than conventional processes, BASF said.

The catalyst’s star shape also increased the active geometrical surface area for the reaction, leading to improved mass transfer and a longer catalyst lifetime due to the lower operating tem perature and pressure-drop profile.

German chemical firm BASF has formed a partnership with US-based technology start-up RiKarbon to produce emol lients derived from bio-waste.

The partnership would involve BASF licensing and commercialising RiKarbon’s proprietary technology, the two companies said on 21 September.

BASF said it planned to bring the RiKarbon technology in-house and was planning a market launch of the initial solutions in 2024.

Founded in 2018, RiKar bon processes bio-waste into renewable chemicals and ingredients, such as base oils and emollients for renewable plastics, healthcare, and spe ciality applications, including cosmetics and hair and skin

care products.

RiKarbon said its emollients were comprised of 100% bio-based carbon, with 60% sourced from agricultural waste materials. The company

said its emollients could be used in personal care products as a bio-based alternative to linear silicones, petrochemi cal-derived hydrocarbons and esters.

Companies investing billions in bioplastics

Billions of dollars are being invested in bioplas tics with the sector set to expand with increased use of corn, sugar, vegetable oils and other materials, AP News wrote on 9 August.

Of the 9bn tonnes of fossil fuel plastic pro duced since the 1950s, only 9% was recycled, with the remainder buried in landfills, burned or polluting land and waterways, the report said.

Bioplastics currently represented 1% of global plastic production, but companies and investors were now seeing opportunities in the sector.

Investment in bioplastic manufacturing reached US$500M in the first three months of this year, according to data from i3 Connect, exceeding the previous high of US$350M in the last quarter of 2021.

Zion Market Research has estimated that the bioplastics market would surge from US$10.5bn in 2021 to around US$29bn in 2028.

US company Danimer Scientific, which makes a bioplastic called PHA or polyhydroxyalkanoate using microorganisms that ferment with canola oil, had recently expanded its plant in Win chester, Kentucky, the report said.

The other primary bioplastic was PLA, or poly lactic acid, widely produced by fermenting sugar from corn and sugarcane, AP News wrote.

NatureWorks, a joint venture between global agribusiness giant Cargill and Thailand’s PTT Glob al Chemical, was producing 150,000 tonnes/year of bioplastic pellets at its plant in Blair, Nebraska. It was also building a US$600M plant in Thailand to increase its production capacity by 50%.

PLA, unlike PHA, did not easily biodegrade in nature and NatureWorks had formed a partner ship with PHA manufacturer CJ Bio to produce a bioplastic that could more easily biodegrade, AP News added.

Photo: Adobe Stock

Emollients are products used to soften and lubricate skin

Venture to produce non-ionic surfactants

German chemical giant BASF is forming a joint venture with South Korean chemical company Hannong Chemicals to produce non-ionic surfactants in Asia Pacific.

BASF said on 6 October that it would own 51% of the BASF Hannong Chemicals Solutions joint venture while Hannong would hold the remaining stake.

Located in the Daejuk site at the Daesan Industrial Complex in Korea, the joint venture would combine BASF’s technology and product capabilities with Hannong’s production of non-ionic surfactant prod ucts. Expected to become operational in

Crop Energies buys Syclus to make ethylene

German ethanol producer Crop Energies has acquired a 50% stake in Dutch bio-chemicals start-up Syclus, the companies announced on 7 September.

The aim of the US$1.75M acquisi tion was to build an industrial-scale plant to produce renewable ethylene from ethanol.

Syclus said it planned to build and operate a production facility at the Chemelot industrial park in Geleen, the Netherlands.

While the plant was under devel opment, the company said it would study the technical and economic viability of producing renewable ethylene.

If the analysis was positive, basic engineering work would start late next year, with production at the 100,000 tonnes/year plant expect ed to begin in 2026. This would require an investment of US$82.8MUS$974.3M.

Applications for ethylene-based plastics and polymers include pack aging, building materials, automo tive applications, paints, adhesives, fibres, clothing and other everyday products.

To date, Crop Energies said it had mainly produced ethanol as a do mestic fuel substitute as well as for food and animal feed products, but the focus in the future would be on the de-fossilisation of other sectors.

In recent years, European demand for ethylene has been approximately 20M tonnes/year, the firms said.

the first half of next year, the joint venture would involve both companies maintaining their own sales and distribution networks.

Used in a wide range of industry sectors – including home care, personal care, industrial and institutional cleaning applications, as well as industrial formu lations – non-ionic surfactants are used in formulations for laundry detergents, surface cleaners and dishwasher deter gents, leather and textile treatment, metal surface cleaning and other applications.

Surfactants help lower the surface ten sion between a liquid and another liquid,

gas or solid. They are a key ingredient in cleaning products and have a water-lov ing head (hydrophilic) and water-hating (hydrophobic) tail. The hydrophobic tails are attracted to dirt while the hydrophilic heads help to wet things more uniformly. The hydrophilic head of each surfactant is electrically charged (negative, positive or neutral), and a surfactant is classified as anionic, non-ionic, cationic or amphoteric, depending on the charge.

Non-ionic surfactants have a neutral charge and are very good at emulsifying oils.

WORLD: Leading agribusi ness and one of the world’s largest ship charterers, Cargill, is aiming to boost its vessels’ use of biofuels to 50,000 tonnes by mid to the end of 2023, up from 12,000 tonnes since Janu ary, the firm’s marine fuels lead Olivier Josse said at the Singapore International Bunkering Conference and Exhibition (SIBCON) 2022.

“We are going to [blend] some fatty acid methyl ester (FAME) in the fourth quar ter in Singapore,” Reuters reported him saying.

The move to blend FAME was to try to understand the demand and appetite of customers for biofuels as a bunkering fuel, the 5 Octo ber report quoted Josse as saying.

SPAIN: Oil and gas compa ny Cepsa said on 6 October that it had successfully test ed its marine biofuel pro duced from used vegetable oils (with ISCC certificate of sustainable origin) and very low sulphur fuel (VLSFO).

The biofuel was loaded at Cepsa’s bioenergy plant in the San Roque Energy Park, Cádiz and used by a vessel in the company’s fleet.

“The results showed opti performance of maritime engines, leading to Cepsa being able to offer this bio fuel to its customers in the maritime sector,” it said.

Low Mississippi levels threaten soya exports

A sharp drop in Mississippi river water levels has forced barges to reduce loads by up to 40% and sent barge freight rates soaring just as the USA approaches the peak of its corn and soyabean export season, AgriCensus reported on 30 September.

Costs to transport grains and oilseeds down the Mississippi river have soared nearly 80% since the beginning of Sep tember and over 150% when compared to costs reported at the beginning of August, according to data from the US Department of Agriculture.

The issue had been brought to the fore with the largest US barge operator, Ingram Barge Co, declaring force majeure in a letter to customers, saying “near-historic” low water levels on the Mississippi River meant it could not fulfil deliveries, World Grain wrote on 6 October.

Bloomberg indicated a “log jam” of more than 100 vessels on the river.

World Grain said river water levels were typically at their lowest around this time of year but drought conditions in parts of the Midwest this year had dropped levels even lower, shrinking channels and reduc ing draft levels.

Around 60% of all US grain and oilseed exports moved

down the Mississippi River to ports in Louisiana on the Gulf of Mexico. Some Gulf exporters had pulled offers for corn and soyabean loadings at Louisiana ports in October and November as they were unsure if adequate grain supplies could reach ex port terminals, the report said.

Grain Service Corporation vice president Diana Klemme told AgriCensus that barge freight rates would remain high through the first half of Octo ber, which would be a drag on basis upriver rates and push Gulf basis levels higher.

Klemme added that “the difference between cash bids for September/first half of Oc tober and December are now

big enough that farmers and elevators will look to hold back as many bushels as they have room for – which in turn will only slow US export shipments further near term”.

If higher barge costs pushed FOB Gulf premiums higher, Brazil could overtake the USA in terms of spot price compet itiveness with more export de mand shifting to South America just a month after an incentiv ised exchange rate policy had bolstered Argentine soyabean shipments, AgriCensus wrote.

Brazil’s Agrural senior analyst Daniele Siqueira said that several million tonnes of soyabeans could shift from the USA to Brazil.

Around 15% of Ukraine’s storage damaged or destroyed

Around 15% of Ukrainian crop storage facilities have been destroyed, damaged or are now controlled by Russia, the Conflict Observatory reported on 15 September.

The US non-governmental organisa tion (NGO) said that around 14.57% of Ukraine’s estimated 58M tonnes of crop storage capacity (one in six facilities) had been impacted since Russia’s invasion of the country on 24 February.

“Intentional and indiscriminate target ing of crops storage infrastructure can constitute a war crime and a crime against humanity under international law,” said the

NGO, which was reporting on a Yale School of Public Health’s Humanitarian Research Lab assessment of crop storage facilities through commercial satellite imagery.

“This assessment determines that Russia and its aligned forces controlled approx imately 6.24M tonnes of Ukraine’s crop storage capacity as of July 2022 regardless of damage,” the Conflict Observatory said.

At least 3.07M tonnes of storage capac ity had been destroyed or visibly damaged since 24 February, constituting at least 5.36% of Ukraine’s pre-war crop storage capacity nationwide.

“The assessment also concludes that at least 60 of the 75 facilities (80%) identi fied as damage-affected are found at port facilities or within less than one kilometre of a railroad.”

The US Department of State called for further investigation, adding that the Kremlin’s invasion of Ukraine had led to the damage or outright destruction of many of Ukraine’s arterial roads, railways, ports, and food storage facilities that were essential to getting its agricultural goods to international markets, World Grain wrote on 19 September.

Photo: Adobe Stock

Around 60% of all US grain and oilseed exports are moved down the Mississippi River to ports in Louisiana for export

DRIVING

SPAIN: National oil and gas company Cepsa has started producing biofuels from used cooking oil (UCO) at its La Rábida Energy Park facility in Palos de la Fron tera, Huelva.

Cepsa said on 30 Sep tember that it aimed to produce 2.5M tonnes of biofuels by 2030 and the Huelva development was part of its 2030 Positive Motion strategy to promote the decarbonisation of air, road and sea transport.

USA: Renewable fuels com pany Aemetis has agreed 10 sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) supply deals worth US$7bn with 10 airlines.

Supply agreements had been made with Alaska Airlines, American Airlines, British Airways, Delta Air Lines, Finnair, Iberia, Japan Airlines, Jet Blue Airlines and Qantas, Aemetis said on 7 September. They would involve the delivery of SAF for between seven and 10 years. The SAF deals com prised blended fuel – 40% SAF and 60% petroleum jet fuel – scheduled to be delivered to San Francisco International and Los An geles International airports. The agreed HVO was expected to be delivered to Northern California truck fuelling locations.

USA: The Environmental Protection Agency (EPA) is expected to extend the period of annual biofuel blending mandates from one year to three years, Reuters quoted sources as saying on 2 September.

Switching to a multi-year target aimed to provide longer-term certainty to the refining and biofuels indus tries. The sector has been given annual mandates for more than a decade under the US Renewable Fuel Standard (RFS).

Shell Louisiana site may be re-purposed for HVO/SAF

Global oil giant Shell is close to reaching a final investment decision to re-purpose its Gulf Coast refinery in Louisiana, USA, to produce hydrotreated vegetable oil (HVO) and sus tainable aviation fuel (SAF), the Houston Chronicle reported on 29 September.

The US$1.48bn project’s first phase would include a low carbon fuels facility unit to produce HVO and SAF from plant oils, animal fats and used cooking oils, the report said.

Plans to repurpose the Convent site, northwest of New Orleans, were the first in a series of projects Shell was considering for its chemical facilities along the Gulf Coast to accelerate the transition from fossil fuels. The regional spending plan could reportedly cost as much as US$10bn.

Shell was also considering new projects at facilities in Deer Park, east of Houston; and Geismar and Norco in Louisiana, to help the company

reduce emissions and provide reduced-carbon products and chemicals, the report said.

Shell was prioritising projects in the region based on the most in demand low-carbon products, which now included biodiesel and SAF, said Emma Lewis, Shell’s senior vice pres ident of Gulf Coast chemicals and products.

Before its closure in Novem ber 2020, the Convent refinery processed around 240,000 barrels/day of crude oil.

Total secures feedstock for Grandpuits site

French oil giant TotalEnergies has entered an agreement with German rendering company SARIA to produce sustainable aviation fuel (SAF) at its Grandpuits refinery in Seine-etMarne, France.

The agreement would help TotalEnergies secure a feedstock supply – used cooking oils (UCO) and animal fats – to produce SAF and would increase the facility’s production capacity to 210,000 tonnes/year, 25% higher than forecast in the initial project announced in 2020, the company said on 26 September.

As part of the agreement, TotalEnergies said it would take 50% of SARIA’s production capac ity to supply animal fat esters to the refinery. SARIA would take an equivalent stake in Grand puit’s biofuels business, which TotalEnergies would continue to operate.

The deal is subject to regulatory approval.

China biodiesel production to rise by 32%

Biodiesel production in China is expected to increase by 32% this year compared to 2021 mainly due to a surge in export demand, Biodiesel magazine wrote on 20 September.

The country currently had 46 biodiesel plants, up from 44 last year and 42 in 2020, the magazine quoted from a US Department of Agriculture (USDA) Foreign Agricultural Service (FAS) Global Agricultur al Information Network (GAIN) report.

Nameplate capacity was expected to reach 4.7bn litres

this year, up from 2.8bn litres last year and 2.726bn litres in 2020, with capacity utilisation expected to drop to 51.7% this year, compared to 65.5% last year and 53.4% in 2020.

The USDA estimated that 2.381M tonnes of used cook ing oil (UCO) was expected to be used as feedstock for bio diesel production this year, up from 1.798M tonnes last year and 1.426M tonnes in 2020.

China was forecast to pro duce 2.43bn litres of biodiesel this year, up from 1.835bn litres last year and 1.455bn

litres in 2020, with consump tion expected to reach 600M litres this year, up from 564M litres last year and 522M litres in 2020, the USDA report said.

Biodiesel exports from China were forecast at 2.125bn litres this year, up from 1.835bn litres last year and 1.455bn litres in 2020, with most of the total volume destined for the European Union.

China is expected to import 295M litres of biodiesel this year, up from 204M litres last year and 102M litres in 2020, according to the USDA.

Photo: TotalEnergies

TotalEnergies is securing used cooking oil and animal fats feedstock for its Grandpuits refinery (above)

Non-GM protein from new ADM plant

Global agribusiness giant Ar chers Daniels Midland (ADM) announced the opening of an extrusion facility in Serbia to supply non-genetically modi fied (GM) textured soya protein on 19 September.

Opened less than a year

after ADM’s acquisition of European non-GM soya ingre dients provider SojaProtein, the company said the new facility would increase its extrusion capacity in the region and would extend its production of non-GM textured soya protein

to include origination and extrusion capabilities.

“Our new facility not only increases the supply of local ly-sourced, non-GM textured soya protein in Europe, it also matches the pace of the incredible expansion of the

meat alternatives category in the EMEA region,” ADM pres ident of global foods, Leticia Gonçalves, said.

The facility would produce non-GM soya proteins with 90% of the soya sourced grown locally.

US farmers urging action on Mexico's GM corn ban

US farmers are urging the government to challenge a looming Mexican ban on genetically modified (GM) corn, warning of billions of dollars of economic damage to both countries, Reuters reported on 26 September.

A 2020 decree by Mexico President An dres Manuel Lopez Obrador would phase out GM corn and the herbicide glyphosate by 2024.

Mexico imported around 17M tonnes/ year of US corn, Reuters wrote. Corn for human consumption – including white corn used in food products like tortillas –accounted for some 18%-20% of Mexico's total US corn imports.

Bayer wins fifth consecutive glyphosate cancer lawsuit

A US jury has found that German chemical giant Bayer’s Roundup weedkiller did not cause defendants’ cancer – the company’s fifth consecutive trial victory over such claims, No-Till Farmer reported several media outlets as saying.

Glyphosate is the active ingredient in Bayer brands such as Roundup and has been at the centre of mass litigation in the USA brought by plaintiffs claiming the weedkiller caused

IN BRIEF

their non-Hodgkins lymphoma. Bayer inherited the cancer lawsuits following its 2018 purchase of global agrichemical firm Monsanto for US$63bn.

The trial in St Louis was the first involving multiple de fendants, according to the 9 September report. The three plaintiffs claimed Bayer should have been responsible for warning them about cancer as a potential side effect, No-Till Farmer wrote.

USA: New research by the University of Illinois has shown that modifying the photosynthesis process in soyabeans can lead to a 25% increase in yield, The Guardian reported on 19 August.

Plants could bleach if they absorbed more energy than they could use for growth and used a mechanism called non-photo chemical quenching to get rid of excess energy. In bright sun light, quenching kicked in almost immediately but it could take up to half an hour for the process to switch off again. The research team modified three genes to allow the soyabean plant to be come more responsive to lower light conditions. The modified soyabean had an average improved yield of 25% over five trials.

Mexico's health regulator COFEPRIS had not authorised new strains of glypho sate-resistant GM corn seeds for import since 2018, Reuters said, and the National Corn Growers Association wanted the US Trade Representative to launch a dispute settlement proceeding under the US-Mex ico-Canada trade pact.

A March report by US consulting firm World Perspectives looking at white and yellow corn said Mexico's ban could cost the country US$4.4bn over 10 years for corn imports and push the price of tortillas up 42% by the second year. The USA could also see a US$16.5bn drop in economic output over 10 years, the report added.

Photo: Adobe Stock

Supporters of Mexico's GM corn ban fear biotech seeds contaminating native varieties

SAF taking o

e global use of sustainable aviation fuel (SAF) is rising but the sector still faces a series of challenges – notably higher production and feedstock costs compared to conventional jet fuels – before it takes o on a wider scale Gill Langham

The aviation industry currently accounts for approximately 2-3% of humaninduced carbon dioxide emissions and 12% of emissions from transportation, according to a report on the sector by the International Energy Agency (IEA Bioenergy).

In response, the sector has introduced measures to reduce emissions such as improving fuel efficiency by 1.5%/year (between 2009-2020), achieving carbon neutrality by 2020 and targeting a 50% reduction in emissions by 2050.

Meeting the aviation sector’s climate targets will require significant volumes of sustainable aviation fuel (SAF), the

IEA Bioenergy report says, but current production volumes are less than 150M litres/year, which is considerably less than 0.5% of total jet fuel demand.

Commenting on the sector, Louise Burke, vice president Global Aviation and SAF for Argus Media, says SAF and carbon offsets are considered the “main tools” for the aviation sector to use to meet its decarbonisation goals.

“We know that SAF is here to stay as the aviation industry is difficult to electrify and is unlikely to have other means of decarbonisation. As SAF is a drop-in fuel and can use current logistical transport means – the maximum SAF blend is currently 50% – this also provides ease of logistics in the market.”

Rising demand

Global SAF demand is forecast to range between 2bn-6bn litres/year by 2026, according to forecasts made by the IEA last year, when the total was 0.1bn litres/ year.

Recent investments will see production grow to more than 1bn litres/year over the next few years. However, the vast majority of these biojet fuels will come from hydrotreated esters and fatty acids (HEFA) feedstocks and technology, according to IEA Bioenergy’s

report ‘Progress in Commercialization of Biojet/Sustainable Aviation Fuels (SAF): Technologies, potential and challenges’.

Although other pathways are being developed, significant technological challenges still need to be resolved and the aviation sector remains largely dependent on liquid fuels – and will be for the foreseeable future – despite ongoing research on alternative technologies such as electric motors and the use of green hydrogen, according to the report.

“Unfortunately, these… low-carbonintensity alternative options are unlikely to be ready for commercial, large-scale and sector-wide deployment in the near term plus an additional hurdle is the long lifespan of aircraft,” the IEA Energy report says. “Biojet fuels represent the single greatest opportunity for airlines to achieve significant, long-term carbon reductions and they will be essential if the sector is to achieve a 50% emission reduction by 2050.”

Current pathways

At the time of the IEA Energy report, seven pathways and two co-processing pathways had been certified under international standards organisation ASTM. However, only the HEFA pathway – also known as hydrotreated

Photo: Adobe Stock

vegetable oil (HVO) biofuels – is currently contributing significant volumes, according to the report (see Table 1, right).

Biojet fuel produced using this process is known as HEFA-SPK (synthetic paraffinic kerosene) and this term is used within the ASTM D7566 standard.

More than 5bn litres/year of HEFA, as renewable diesel, are produced worldwide and significant expansion of multiple facilities is currently underway (see Figure 1, right).

The commercialisation of other pathways is ongoing but HEFA technology is expected to supply the bulk of bio-jet over the next five to 10 years until other technologies become fully commercialised, according to the report.

HEFA challenges

Although any type of lipid can be used to produce HEFA, generally referred to as fats, oils and greases (FOGs), there are price differences.

Apart from cost considerations, an equally important element is the “sustainability” and the overall carbon intensity of making the feedstock, according to the report, with the use of vegetable oil in the sector competing with food production demands. The source of oil will also impact a fuel life cycle assessment, which has a direct impact on the carbon intensity of the final fuel.

Opportunities for technical improvements to the fully commercial HEFA pathway are limited, according to the report, but there is “considerable scope” to reduce the cost and carbon intensity of the feedstocks – as demonstrated by the increasing use of used cooking oil (UCO).

However, although several waste feedstocks have been used to date, they are a finite resource, the report says.

“Consequently, existing and evolving oilseed crops will be needed to increase feedstock availability. However, there will be ongoing concerns about the sustainability and cost of feedstocks.”

Other technologies

Large-scale, pioneer facilities for a range of other technologies are under construction or planned and include gasification with Fischer-Tropsch, ethanolto-jet, isobutanol-to-jet and catalytic hydrothermolysis, the report says. In addition, multiple alternative technology pathways, currently in the ASTM approval pipeline, are expected to attain ASTM certification.

By 2030, multiple facilities are expected to produce substantial volumes of SAF annually, with about 8bn litres/year

forecast to be available by 2030, according to estimates by the International Civil Aviation Organization (ICAO), a specialised agency of the United Nations.

“It is hoped that multiple facilities using various technologies/processes will routinely produce bio-jet as, in the longer-term, significant expansion of HEFA volumes will likely be constrained by the availability of low cost, waste lipid/ oleochemical feedstocks,” the IEA Energy report says.

“In order to achieve the significant volumes needed to meet the sector’s targets, aggressive commercialisation and scale-up of all biojet fuel technologies will be required”.

Other challenges

As all biojet fuels used in commercial flights have to be certified to gain market access, the lengthy, arduous and expensive certification process represents a significant hurdle, according to the IEA Energy report.

“Currently, all alternative fuels can only be used in a blend with fossil jet fuel, [but] some biojet fuel technology providers are trying to produce fully synthetic biojet fuels that could potentially be used without any blending with conventional jet fuel”.

Higher production and feedstock costs for biojet fuels also remain a major obstacle for wider use, the report says.

“In 2022, SAF prices continue to price at least three times higher than those for conventional petroleum jet fuel,” Argus Media’s Burke says.

Argus assessed SAF at US$3,530.57/ tonne on 12 August compared to the conventional jet fuel price of US$1,114.50/tonne.

In addition, feedstock dynamics affect overall value of SAF values, Burke says, with European SAF pricing affected by underlying supply/demand fundamentals of HVO and UCO prices.

“For all of the biojet processes, the minimum selling price… is significantly u

higher than that of fossil-derived jet fuel. Thus, policy will play a very important role in trying to bridge this price gap,” the IEA Bioenergy report says.

Global developments

The increasing commercial use of biojet fuels is reflected in its expanding use at numerous airports worldwide by multiple airlines, according to the IEA Energy report.

At the time of the report, seven airports were regularly distributing biojet fuel blends and about 300,000 commercial flights had used these blends.

SAF providers have also been forming supply deals with individual airline companies.

For example, Finnish renewable fuels producer Neste – one of the leading players in the renewable fuels and SAF sectors – has entered supply agreements with major airlines, including IAG, Lufthansa Group (including SWISS), Delta Air Lines and Southwest Airlines, cargo carriers such as DHL and low-cost airlines such as easyJet.

The company, which expects to increase its SAF production to 1.5M tonnes/year (around 1.875bn litres) by the end of 2023, also expanded its partnership with ITOCHU earlier this year to increase the availability of SAF in Japan.

“It is likely that the increased availability of commercial volumes will see an increase in the establishment of regular downstream supply at multiple locations,” the IEA Energy report says.

In China, for example, the country’s largest oil refiner China Petroleum & Chemical Corporation (Sinopec) produced its first batch of SAF from UCO at its facility in the east of the country, Reuters reported on 28 June, paving the way for industrial-scale SAF production.

Other initiatives

Government initiatives look set to boost SAF production and usage, the report says.

In July, the European Union (EU) approved plans requiring suppliers to blend a minimum of 2% of SAF into their jet fuel from 2025, rising to 37% in 2040 and 85% by 2050.

Transport members of the European Parliament (MEPs) said the plan should include a gradual switch to alternatives to conventional fuel such as synthetic fuel and UCO.

The transport MEPs also proposed the creation of a Sustainable Aviation Fund from 2023 to 2050 to accelerate the decarbonisation of the aviation sector and support investment in SAFs, innovative

aircraft propulsion technologies, or research for new engines, the 27 June statement from the European Parliament said.

In the USA, the White House has vowed to lower aviation emissions by 20% by 2030, with a goal of boosting SAF production to 11.4bn litres/year (3bn gallons/year) by 2030, and to meet 100% of aviation fuel demand of about 132bn litres/year (35bn gallons/year) by 2050, according to a Reuters report on 10 August.

The US government’s landmark Inflation Reduction Act passed in August includes a dedicated tax credit for SAF, which is also expected to boost the sector.

The SAF tax credit of US$1.25/gallon, which could rise to US$1.75/gallon depending on the fuel’s greenhouse gas reduction level, will remain in place until 2024 and transition to Clean Fuel Production Credit (CFPC) payments from 2025.

“It will definitely incentivise renewable diesel producers to move over to SAF in North America as both new plants and the expansion of existing plants for renewable diesel will also produce SAF,” Argus Media’s Burke says.

Alternative feedstocks

As feedstock is generally a significant component of the cost of production (up to 80% of the cost of HEFA), the use of low-cost feedstocks will play a role in reducing SAF costs, according to the IEA Energy report.

Alternative technology pathways offer opportunities for producing SAF with low carbon intensity at a competitive price, the report says, by using low-cost, waste feedstocks such as municipal solid waste, sewage sludge, food processing waste, waste gases and forest and agricultural residues.

Other feedstocks, such as Brassica carinata, Camelina sativa, pennycress,

pongamia and jatropha, are also under development as more sustainable options that do not compete with food, the report says, but these options are only available in small quantities.

In Japan, the New Energy and Industrial Technology Development Organization (NEDO) has been working with engineering company IHI Corporation on the development of SAF using algae as a feedstock. NEDO also worked on a project to develop technology to make SAF using waste wood as a raw material in partnership with Mitsubishi Power, JERA, Toyo Engineering Corporation and the Japan Aerospace Exploration Agency (JAXA).

Both technologies, when combined with conventional fossil fuel (JET A-1), have been certified under ASTM D7566 and SAF produced by both pathways has been used to fuel flights from Tokyo International Airport.

The company said it now plans to continue SAF research and development with the aim of starting large-scale production.

Looking ahead

The aviation sector’s emission reduction target of 50% is likely to require more than 100bn litres/year of SAF by 2050, according to a ‘Reaching Zero with Renewables: Biojet Fuels’ report by the International Renewable Energy Agency (IRENA).

Although future SAF production volumes is expected to increase significantly – based on the expansion of existing facilities and investment in the specific infrastructure required to make HEFA-SPK derived biojet fuel – challenges remain, the IEA Energy report says.

“Although it is likely that ongoing improvements and optimisation of processes will continue to reduce costs and facilitate biojet fuel production and use, meeting the sector’s decarbonisation targets will be challenging.”

Accessing low-cost feedstocks will play a role in reducing SAF costs, the IEA Energy report concludes, but costs – and the future growth of the sector – will be closely linked to policies that incentivise their production and use.

“When we look at announced SAF capacity globally, we see growth from 1M tonnes/year to approximately 18M tonnes/year by 2028,” Argus Media’s Burke says.

“However, this will represent only 5% of global conventional jet fuel demand and clearly more incentives are required to move this number higher.” ● Gill Langham is the assistant editor of OFI

‘For all of the bio-jet processes, the minimum selling price is significantly higher than that of fossil-derived jet fuel’

Several EU countries have lowered or frozen their blending mandates as a result of rising food and fuel costs, while new incentives are promoting sustainable aviation fuel. Meanwhile, used cooking oil as a biofuel feedstock may be reaching its supply limit Gill Langham

A number of European Union (EU) countries have frozen or lowered biofuel blending mandates in response to rising food and fuel costs due to the conflict in Ukraine, the ACI Oleofuels 2022 conference held earlier this year in May heard.

“In the early days of the Ukraine crisis, disrupted supply had a significant impact on food and fuel prices and, as a result, several countries considered lowering, freezing or waiving biofuel blending mandates,” Cornelius Claeys, manager (biofuels) at Stratas Advisors, said.

The trend was likely to lead to a rise in emissions, but only in the short-term. In the longer term, the ongoing crisis was likely to accelerate the energy transition in Europe, Claeys said.

US approach

In the USA, Claeys said the initial response to rising prices had been to strengthen biofuel incentives by allowing year-round E15 use.

Europe’s approach to (temporarily) waive or freeze biofuel blending to reduce prices – could partially be explained by the European debate having focused more on food than on fuel prices, he said.

In addition, Claeys explained that relatively expensive biodiesel was mainly

Changing landscape

used in Europe, while in the USA, lower cost corn ethanol was the primary biofuel.

EU moves

The European Commission (EC) published a statement in March saying it supported member states finding ways to reduce the blending proportion of biofuels which could lead to a reduction of EU agricultural land used for production of biofuel feedstocks, to ease pressure on food and feed commodity markets. Although countries still needed to comply with the minimum obligations under the EU Renewable Energy Directive (RED) and Fuel Quality Directive (FQD), Claeys said this had opened the door for

a series of reductions in national blending mandates.

In Finland, for example, the 2022 and 2023 blending obligations were reduced by 7.5%, while Sweden froze 2023 obligations at this year’s levels.

“These Nordic countries can afford to reduce their blending mandates while still complying with EU directives, because they generally over-comply,” Claeys added.

The German government published a working paper on 17 May proposing to cap crop-based biofuels at 2.5% in 2023 and phase them down to 0% by 2030, a final decision on which was set to be taken in October. Meanwhile, penalties for non-compliance with blending obligations had been waived in Croatia.

“Despite these short-term bearish signs for (crop) biofuels, legislative incentives in the longer term appear to be strengthening as an indirect result of the Ukraine war,” Claeys said.

“This is exemplified by Finland; despite being the first country to reduce short-term blending obligations and by the largest margin, it simultaneously announced an increase in its 2030 blending obligation from 30% to 34%.”

Although uncertainty in the sector was likely to continue while the conflict in Ukraine remained unresolved, previous periods of recession combined with

2% (2025); 5% (2030); 20% (2035); 32% (2040); 38% (2045); 63% (2050). Waste-based biofuels and RFNBOs can contribute

0.7% (2030); 5% (2035); 8% (2040); 11% (2045); 28% (2050)

Phased in

Intra-EU

u

elevated fossil oil prices had generally accelerated rather than slowed down the shift towards alternatives, Claeys said.

“In the medium- to long-term however, a wide variety of European lawmakers share the view that climate objectives and energy independence should be accelerated by firm legislative action,” he added (see Table 1, previous page).

SAF developments

Since the conference, “game-changing” legislation had been announced in the sustainable aviation (SAF) sector, both in Europe and in the USA, Claeys said in August. (see Table 2, above).

“In Europe, the focus is on SAF mandates – the minimum quota which airlines or aviation fuel suppliers need to meet. Such mandates are now active in Norway, Sweden and France, with several other European countries having similar legislation in the pipeline. In parallel to this, the Refuel EU Aviation Regulation includes an EU-wide SAF mandate that will kick off in 2025 and increase exponentially through 2050,” he said.

North American legislators had taken

a different approach, Claeys said, opting to incentivise SAF uptake through production subsidies in the recently passed Inflation Reduction Act. The act – the largest climate spending package in US history – includes a new dedicated tax credit for SAF. The credit of US$1.25/ gallon, which could rise to US$1.75/gallon depending on the fuel’s greenhouse gas reduction level, would remain in place until 2024 and transition to Clean Fuel Production Credit payments from 2025.

Several additional production pathways had also recently received ASTM approval, he added.

Feedstock/UCO outlook

At the Oleofuels conference, Claeys also presented his view on the supply outlook for UCO and other waste feedstocks.

Nearly one-fifth of all European biofuels was now produced from used cooking oil (UCO), which had also witnessed the most absolute growth compared with any other biomass-based diesel feedstock in Europe and North America in the last few years, he said. Globally, 6.6M tonnes of UCO biofuels were consumed last year,

European Parliament draft

2% (2025); 5% (2030); 20% (2035); 32% (2040); 38% (2045); 63% (2050). Wastebased biofuels, RFNBOs, green electricity and low-carbon hydrogen can contribute 0.03% (2025); 0.7% (2030); 5% (2035); 8% (2040); 11% (2045); 28% (2050)

Phased in from 2023 over 10 years

Intra-EU included and free allowances phased out by 2025 x1.2 towards Annex 1XA obligation

Source: Stratas Advisors

representing 5% of the total biofuels market (see Figure 1, above).

However, UCO use in biofuels could be reaching its supply limit, Claeys said.

UCO supply in Europe, for example, was forecast to rise only marginally from 1.13M tonnes in 2021 to 1.26M tonnes by 2030 (see Figure 2, above).

China contributed almost a third (29%) of global UCO supply last year and its share of the market was expected to increase with an additional 500,000 tonnes by 2030, he said.

“Asia is expected to continue driving UCO supply, with an increase also expected in the Middle East and Africa.”

Animal fats faced similar constraints to UCO and were in competition with other end uses.

Meanwhile, global consumption of other biofuel waste feedstocks in 2021 included: 4.27M tonnes of animal fats; 1.36M tonnes of corn oil; 0.26M tonnes of agricultural waste; 0.21M tonnes of POME; 0.15M tonnes of tall oil and 0.13M tonnes of spent bleaching earth. ●

Gill Langham is the assistant editor of OFI

Figure 2: Global UCO collection outlook

Source: Stratas Advisors

Fats and oils are lipid materials that are generally soluble in organic solvents, but insoluble in water. While these lipids are chemically similar – in that both are composed of triglycerides – the common distinction is that fats are solid at room temperature and oils are liquid.

Fats and oils have various characteristics – such as melting behaviour, water content and free fatty acid levels – which determine their quality and behaviour. These characteristics can be measured with methods such as titration and UV/ VIS spectroscopy.

Melting behaviour

While pure substances have a sharp melting point, complex mixtures such as oils and fats – which consist of mixed triglycerides – gradually soften as the temperature rises and melt over a relatively large temperature interval. Therefore, better characterisation is achieved with the dropping point.

The dropping point of an edible fat or oil is the specific temperature at which a sample becomes sufficiently fluid to form a drop that falls from a standardised cup with an orifice, under defined test conditions. The sample preparation as well as the measuring method are described in the AOCS Cc 18-80 method. Table 1 (following page) indicates the dropping points of a selection of edible fats.

During dropping point determination, the first drop leaving the standardised cup

Characterising fats and oils

is detected using a video-based image analysis process. Simultaneous analysis of two samples yields the mean value and the standard deviation of the single results.

The entire measurement is recorded in colour, allowing the process to be followed live and subsequently reproduced as many times as desired.

The slip melting point (SMP) can be used to characterise fat and oil mixtures that do not have a sharp melting point.

USP <741>, ISO 6321 and AOCS Cc 3-25 are examples of methods using SMP as a quality control measure to identify and check the purity of substances in foods and drugs.

Palm oil, for example, is used in a wide variety of food products and its

constitutents are solid (stearin) and liquid (olein). The main components of stearin melt at higher temperatures than those of olein. By blending different amounts of stearin and olein, the SMP of palm oil can be used to differentiate between palm oil blends used in various food production processes to improve texture and taste or maintain quality and shelf life.

The SMP is the temperature at which a column of solid begins to rise in a capillary tube with both ends open due to a combination of buoyancy and the molten outside surface of the solidified fat.

To determine the SMP, an inner slip melting point capillary tube containing a column of fat (10mm in length) crystallised under controlled conditions is immersed in water, which is then heated at a specific

Fats and oils are essential components of our food and their effective characterisation is integral to ensuring quality. This guide outlines the recognised methods to assess fat and oil properties

u

Type of oil

Canola

Source: Mettler Toledo

Type

Castor

Cocoa

oil

oil

oil

Rapeseed (canola)

Table

oil production, when harvest is delayed, or fruits and seeds are stored before processing. FFAs can reduce the quality of an oil and are a quality indicator. The FFA content in an oil can be determined by non-aqueous titration.

In this method, 2-4g of sample are dissolved in an ethanol-ether solvent mixture and titrated with potassium hydroxide (0.02 M KOH in ethanol). The indication for non-aqueous applications is pH, and units are given as mg KOH per g sample.

Density

0.9500-0.9740

0.9450-0.9760

0.9190-0.9370

0.9190-0.9360

0.9210-0.9470

0.9210-0.9470

0.9100-0.9170

Temperature

Source: Mettler Toledo

rate. The temperature at which the column of fat is observed to start rising in the inner capillary tube is recorded as the SMP.

When measured manually via visualisation with the human eye, the SMP can often be difficult to detect due to the transparency of certain substances.

SMP instruments offer fully automated detection based on camera image analysis.

Moisture and water content

A low water content in fats and oils prevents their spoilage and water determination is therefore essential to ensure quality and safety. According to the Asia and Pacific Coconut Community (APCC), water content should not exceed 0.1–0.5%.

Moisture content can include both water and volatiles and halogen moisture analysers are a fast and accurate way to determine moisture content.

Karl Fischer or water-specific titration is an effective means to determine water content in fats and oils. The coulometric technique is preferred given the typical lower water content of fats and oils. However, sample dissolution may pose challenges and chloroform (or chloroformcontaining solvent mixtures), may be required for the complete dissolution of fats and oils in KF reagents.

An alternative that avoids such solvents is the warming of the KF titration cell prior to dissolution of the sample. This requires jacketed KF titration cells which can be connected to circulating thermostats.

Tips and hints:

• Sample handling is the most frequent

source of errors in KF titration and meticulous sample preparation and administration is a pre-requisite for reliable results. It is recommended, for example, to rinse the syringe with a small amount of sample before the sample is administered.

• Small deviations of slightly drifting balance readings can already be of significant influence. Thus, the balance reading must be perfectly stable when the weight is recorded.

• A balance with a resolution of 0.01mg is needed for precise results.

• 1-decanol or fat-specific solvents sold by specialty reagent manufacturers are recommended. Chloroform is an excellent solvent but its use is restricted due to its toxicity.

• The dissolution capacity of the solvent should be considered in order to ensure that that accuracy and reproducibility (RSD) are high.

• Hard fats are best titrated at elevated temperature. They dissolve quickly at 50°C in a methanol-chloroform solvent (1:1).

• Since edible oils typically contain less than 0.1% water, a larger sample size of up to 10g is required to bring the amount of water to the optimal range for volumetric KF titration. For coulometric titration, 1g is optimal.

Free fatty acids (FFAs)

Free fatty acids (FFAs) in oils and fats are prone to oxidation, leading to rancidity and degradation over time. They can form when bruised fruits or seeds are used for

Tips and hints:

• Since ethanol and ether solvents may contain titratable acids, a blank determination of the solvent mixture should be made and factored into the calculation of results.

• In the past, phenolphthalein was used to indicate the endpoint of the titration (when it turned pale pink). Now, however, a pH electrode is used and titration is carried out to the inflection point of the neutralisation curve.

The end of titration is automatically detected with an auto-titrator.

• After each titration, the electrode should be rinsed and cleaned with a solvent mixture to avoid crosscontaminating the next sample.

• To ensure hydration of the electrode’s glass membrane, the electrode is stored in water overnight, or when not in use. Before titration, the electrode should be rinsed with the solvent mixture.

Analytical methods

Titration is a classic analytical technique that allows the quantitative determination of a specific substance dissolved in a suitable solvent. The substance can be a pure compound or a component of a sample. However, several groups of samples or substances – typically, fats and oils or food samples containing fats and oils – require organic solvents to dissolve.

Titration has undergone a great deal of development,

manual operation of

burettes and colour indicators to automated instruments that perform a complete analysis, while electrodes or other sensors indicate the progress of the titration. Instead of manual calculations by chemists and technicians, modern auto-titrators automatically evaluate

prepare

documentation

Differential scanning calorimetry (DSC) is a thermal analysis technique and one of the most widely used tests in food processing. It can be used to quantify and determine:

Photo: Adobe Stock

• The liquid fraction in edible fats.

• The thermal (oxidation) stability of oils and fats.

• Polymorphic transitions in solid fats.

• Melting behaviour in fats.

• Crystallisation behaviour.

• The influence of hydrogenation on melting behaviour.

UV/VIS spectroscopy is used to distinguish different olive oil grades. Coldpressed extra virgin olive oil is the highest quality olive oil while olive oils that lack a precise quality declaration are usually blends of refined and virgin or extra virgin olive oils, and are of lower quality.

Lower quality olive oils contain conjugated dienes and trienes. These and other compounds are formed as a result of oxidative degradation processes in the oil. The conjugated carbon-carbon double bonds of the dienes and trienes absorb UV light in the 200-300nm wavelength range.

In contrast, substances with nonconjugated double bonds that are also present in extra virgin oil (such as unsaturated fatty acids) do not absorb light in this spectral range. This provides the basis for a simple method to check the quality of olive oil: low absorption in the 200-300nm spectral range points to high quality extra virgin oil, while high absorption indicates an olive oil of lower quality.

The International Olive Council has defined three criteria that must be fulfilled for an olive oil to be given the extra virgin

label when UV/VIS spectroscopy is used for quality control.

Quality indicators

Density: Oil refineries process oils and fats from different origins and before crude oils are unloaded and transferred to storage facilities, a fast quality check is needed to assess parameters such as free fatty acids (FFA) and colour.

Density and refractive indexes allow quick confirmation of the identity of the product in question. Density may also be used to identify mixture properties, as well as for the design of process piping and storage tanks.

Digital density meters and refractomers can measure the density or associated values of liquids in a short time (typically a minute) and require only a small quantity of sample (1ml). A built-in Peltier thermostat enables the adjustment of the sample to the appropriate measurement temperature.

In digital density meters, the density measurement is based on the electromagnetically-induced oscillation of a U-form tube made of glass. A magnet is fixed to the U-tube and a transmitter induces the oscillation. Table 2 (see page 26) lists density ranges for edible oils at a specified temperature.

In digital refractometers, a light passes through a prism and hits the sample, and is partly refracted and partly reflected. The reflected light is measured via an

optical sensor and the boundary between the dark and light areas corresponds to the critical angle required to calculate the refractive index.

Iodine value: Fats and oils are mixtures of triglycerides, which are made up of three fatty acids linked to glycerol by fatty acyl esters. Fatty acids are long chain hydrocarbons with carboxyl groups (COOH groups), and can be classified as saturated or unsaturated based on the number of double bonds present.

The iodine value (IV) can be used to determine the level of unsaturation in fatty acids, as their double/triple bonds will react with iodine. The higher the IV, the more unsaturated fatty acids are present, which are susceptible to oxidation and rancidification.

IV is defined as the weight of iodine absorbed by 100g of sample (fats, oils), and is an indication of the number of double bonds: the iodine in the Wijs reagent reacts with double bonds in the lipids. The reaction time is one hour and samples are kept in the dark.

Tips and hints:

• The addition of mercuric acetate solution increases the reaction rate of the iodine and can reduce the reaction time to five minutes.

• The excess of Wijs reagent should be 50-60% to ensure complete reaction of the sample with iodine. The sample size should therefore be adjusted depending on the expected iodine value (the degree of unsaturation). Only 40–50% of the iodine in the Wijs reagent should undergo reaction with the sample’s double bonds.

• It is recommended to carry out a blank determination more than once to obtain a reliable value. Use the average (mean value) in calculations.

Peroxide value: The peroxide value (PV) of an oil or fat is a primary indication of its deterioration by oxidation, which leads to unpleasant tastes and odours due to the formation of hydroperoxides. These hydroperoxides are measured quantitatively on the basis of their ability to liberate iodine from acidic solutions of potassium iodide.

The sample is dissolved in an acetic acid-chloroform solvent and a saturated solution of potassium iodide (KI) is added, initiating reaction of the peroxides to form iodine.

● This article is based on a guide written by Mettler Toledo, a global manufacturer and marketer of precision instruments for use in laboratory, industrial and food retailing applications

UV/VIS spectroscopy is used to distinguish different grades of olive oils

Delivering high oleic soya

High oleic soyabean oil (HOSO) offers significant health benefits as well as better performance in food service and manufacturing applications.

Among its health benefits are a higher monosaturated oleic acid (70-75%) content compared with standard soyabean oil (22-25%) at a level similar to olive oil, along with reduced saturated fats (see Table 1, below).

Its functionality is also comparable to partially hydrogenated oils and shortenings but without containing harmful trans fat. It offers a two to three times longer fry life in food service applications and a similar longer shelf life in packaged foods.

HOSO has a high Oxidative Stability Index (OSI) in the 25-30 hour range; a higher smoke point that is about 100C higher than commodity soya, HO

High oleic soyabean oil offers health benefits as well as greater functionality in frying and food manufacturing applications.

For this reason, the purchase, delivery and storage of the oilseed require a longer lead time and identity preservation handling Russ Sanders, David Tegeder

canola or HO sunflower oils; offers easier cleaning of cooking surfaces due to reduced polymer formation; and clean ingredient label opportunities by eliminating the need for synthetic antioxidants such as TBHQ and EDTA.

The excellent heat and oxidative stability of HOSO also has value in a variety of non-food industrial applications such as bio-based lubricants and industrial fluids.

For this reason, high oleic (HO)

soyabeans have substantially higher value compared to commodity soyabeans and identity preservation (IP) of the seed and oil in the supply chain is necessary.

Development and suppliers

HO traits in soyabeans have been developed through biotechnology (genetic modification) or conventional breeding.

No official fatty acid profile standard exists for HO soyabeans in the USA, which are generally defined as having 70% or greater oleic acid content. Seed trait developers are also placing growing emphasis on achieving a 75% oleic acid level and less than 3% linolenic content.

HOSOs can have similar oleic acid content but may differ greatly in linoleic and linolenic acids, which will affect oil stability as these fatty acids are more susceptible to oxidation. For this reason, oil customer specifications should consider the level of all three unsaturated fatty acids (oleic, linoleic, linolenic) compared to commodity soyabean oil.

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The USA is expected to plant more than 400,000ha of land to high oleic soyabeans in 2022/23

Photo: US Soybean Export Council (USSEC)

u

Table

soyabeans

SOYLEIC (HO soyabeans

SOYLEIC (HO soyabeans)

(HO soyabeans & oil)

(HO soyabeans & oil)

(HO soyabeans

SOYLEIC

(HO soyabeans)

soyabeans

(HO soyabeans)

The development of HO soyabeans in the USA began in the early 2000s with the goal of changing the seed’s fatty acid profile to improve heat and oxidative stability and eliminate the need for partial hydrogenation. Nearly 50% of US soyabean oil was partially hydrogenated to give greater functionality in frying and food manufacturing applications but there was increasing urgency to eliminate trans fatty acids arising from partial hydrogenation, due to growing evidence of their harmful effects on cardiovascular health.

The land planted with HO soyabeans in the USA has grown from over 600,000

acres (242,811ha) in 2021/21 and is projected to rise to nearly 1M acres (404,600ha) in 2022/23 and more than 1.4M acres (566,559ha) in 2023/24.

Current US HO soyabean trait technology developers include Bayer Crop Science, Corteva AgriScience and the Missouri Soybean Merchandising Council (see Table 2, above); while HO soyabean suppliers include ADM, Benson Hill, Bunge, Cargill, CHS and Perdue Agribusiness (see Table 3, above).

Purchasing HO soya and oil

The purchasing of HO soyabeans or oil involves several steps that are different

from placing orders for commodity soyabean or oil.

Important differences include finding a supplier; determining the specifications; requesting samples from a specific supplier; and negotiating the contract pricing, delivery time period and method, final fatty acid specifications, and analytical method for the official sample analysis.

For smaller, introductory volumes of HO soyabeans or oil, US processors and exporters may have supplies available.

For larger, ongoing supplies, longer range planning is needed. Unlike commodity soyabeans, HO soyabeans are produced in an IP system that requires coordination of seed production and placement with farmers, planting and harvesting, and coordination with processors and exporters on supply chain logistics. And because HO soyabeans are still in the early stage of export market introduction, there is limited uncommitted supply available for spot market demand.

These factors mean the optimal lead time in securing larger commercial supplies of HO soyabeans or oil can be 18-24 months. (see Figure 1, below left).

Identity preservation

Identity preservation (IP) is the process of implementing and documenting the specific steps in the supply chain to isolate and preserve the unique characteristics of a shipment. This prevents the loss of value through co-mingling during storage, handling and transport. There are two basic identity preservation systems used in commercial grain production.

Soft IP is a less complicated and costly level of IP. Quality testing is used to monitor adherence to contractual specifications. However, specification tolerances for farmers are much less stringent.

Hard IP is a more complex process used for non-GM products involving quality testing using strip tests, ELISA, or PCR assays for GMO presence. Grain production and handling protocols for farmers, grain handlers and processors require higher precision.

The HO soyabean IP system begins with the production of specially developed seed varieties by seed companies. Before seed products are sold to farmers, they must meet quality standards that assure HO commercial soyabeans will produce oil consistent with specification requirements.

The commercial production guidelines of the IP system are usually implemented through contracts between the farmer and the soyabean processor or exporter.

specify quality control

1:

oleic soyabean extended planning timeline (2023 crop

requirements that must be met by the farmer to assure that the value of HO soyabeans is maximised. All farming operations including planting, production, harvesting, storage and transport are managed to preserve the identity of the HO soyabeans.

All loads of HO soyabeans that the farmer sells to participating elevators, soyabean processors or exporters are tested to assure that quality standards are met, including the oleic and linolenic fatty acid content. Farmers are then paid a premium above commodity soyabean prices to cover the added costs of these IP requirements.

US processors and soyabean exporters who have production contracts with farmers are responsible for managing soyabean delivery schedules for crushing or exports. In cases where elevators are used to aggregate HO soyabean supplies, processors or exporters establish quality control standards that must be met to assure IP specifications are achieved. This may require equipment to test all inbound soyabeans for fatty acid composition and other quality factors.

Soyabean processors manage identity preservation of the soyabeans and oil throughout the crush process. This includes procedures for dedicated high oleic crush runs, isolation of HO oil in identity preserved tanks, and management of shipping logistics.

In a similar fashion, HO soyabean exporters maintain strict IP quality control procedures to prevent mixing with commodity soyabeans. This includes management and isolation of transport vessels to the point of customer delivery.

Non-GM HO soyabean seed products are developed using traditional plant breeding and are commercially grown in a hard IP system. In addition to the soft IP procedures used for biotech HO soyabeans, additional steps are taken to assure non-GMO classification for the soyabeans, oil and – in some cases – the meal. These steps include:

1. Verification of the seed variety’s nonGMO classification

2. Thorough cleaning of planting equipment to prevent co-mingling with GMO seed

3. Thorough cleaning of harvesting and grain handling equipment, storage facilities and transportation equipment

4. Testing of soyabeans using test strips, ELISA, or PCR assay technology to verify non-GMO classification

Pricing factors

Premiums required for HO soyabeans, meal and oil will be driven by overall

commodity soyabean prices and will need to be higher for farmers in years of high soyabean prices to provide them with extra incentives to produce an IP crop. The premium for HO soyabeans and oil is driven by:

• The cost to farmers of growing and delivering HO soyabeans under IP guidelines to minimise cross-mixing with commodity soyabeans.

• Possible higher transportation costs for farmers to deliver the HO soyabeans to IP elevators that may be a greater distance than their usual delivery location.

• Segregation costs for other supply

chain partners such as receiving elevators, processors and shippers.

• Fatty acid measurement technology at receiving locations and key processing steps to assure specifications are met.

• Supply/demand of competitive oilseeds and other fats and oils.

• Profit margin requirements for supply chain participants to manage a more complex IP system relative to commodity soya.

Except for the HO soyabean premium, HO soyabeans and oil can utilise the same Chicago Mercantile Exchange (CME) soyabean and oil futures and options

Transport method

Steel drum

Intermediate bulk container (IBC) tote - rigid

IBC corrugated tote – collapsible Flexitank for ISO TEU container

ISO tank container

Jumbo tank car (may be insulated with exterior coils)

Tank truck wagon Liquid barge Bulk liquid vessel

Approximate capacity/net weight*

420lb (191kg)

275 gal (1,041 litres)/2,100lb (953kg)

275 gal (1,041 litres)/2,100lb (953kg)

6,300 gal (24,000 litres)/48,000lb (22,000kg)

48,000lb (22,000kg)

25,500 gal (96,528 litres)/185,000lb (83,915kg)

28,000 gal (105,992 litres)/205,000lb (92,986kg) 48,000lb (21,772kg)

3,000,000lb (1,360,777kg), 1,361 tonne Varies by charter booking

• For HOSO – premium over the appropriate commodity soyabean oil basis

• For non-GM HO soyabeans and oil – additional costs for non-GM production and IP verification are in addition to the other pricing variables.

The HO soyabean premium for either whole soyabeans or oil can be contracted in advance to the actual shipment position by establishing a basis contract with the seller. The final flat price can then be established through the CME futures market up to start of the delivery period.

Documentation and inspection

There is no standard allowance for the specific level of mixing of commodity soyabeans or oil with HO soyabeans or oil. For this reason, it is important that purchase contracts contain specific fatty acid profile specifications of whole HO soyabeans for HO oil rather than a level of mixing specification.

This is critical since the increased value is determined by the improved fatty acid profile in comparison to commodity soyabeans. Buyers will want to receive the proper certification of analysis for the corresponding shipments.

In the case of whole HO soyabeans, the most rapid and reliable method to check the oleic and linolenic fatty acid content along with protein and oil content is by using near infrared (NIR) spectroscopy.

For HO soyabean oil, the most accurate determination of the oil’s fatty acid composition is by use of gas-liquid chromatography (GLC).

All documentation and inspection procedures used for GM HO soyabeans and oil should be used for non-GM HO soyabeans and oil. In addition, hard IP practices and testing methods used for commodity non-GM soyabean supply chains should also be applied. Specific non-GMO specifications, tolerances and compliance procedures may differ by supplier and should be documented as part of the purchasing negotiations.

Delivery options

Delivery options for either HO soyabeans or oil are similar to what international buyers often use for importing to their specific destinations. However, as the HO soyabean market is not nearly as advanced as that for commodity soya, the initial delivery modes might need to accommodate smaller quantities. A buyer may have limited on-site segregated storage or have smaller demand for the final refined HOSO and will therefore need to contract smaller quantities.

Figure

Bulk grain transport options

Figure

US soyabean logistics

Bulk vegetable oil transport methods

u

Buyers will need to discuss what logistical capabilities their supply chain can handle and which export destinations they can reach. Delivery transportation methods might include:

• 30kg bags (minimum one container)

• One tonne tote bags

• Twenty Foot Equivalent (TEU) containers

• Flexitanks in 20-foot containers (oil)

• ISO tanks (oil)

• Jumbo hopper or tank cars

• Barges

• Vessel holds

Segregation considerations for a given shipment need to be considered at each transfer point where there is a risk of co-mingling with either commodity soyabeans, oil, or other previously handled items. A buyer will want to follow basic Soft IP guidelines in order to minimise any co-mingling prior to final delivery.

For non-GMO HO soyabeans or oil, Hard IP guidelines should be followed to protect the non-GMO classification. IP procedures will include more detailed segregation practices and non-GMO testing. Bulk grain and vegetable oil transportation options, capacities and logistics flows are show in Figures 2 and 3 and Table (see page 32)

Storage

The most important consideration when storing HO soyabeans or oil is minimising co-mingling with their commodity counterparts, with the buyer and seller agreeing the tolerance for co-mingling.

For GM HO soyabeans and oil, specification tolerances can be managed through the Soft IP process. For non-GM HO soyabean and oil storage, maintaining specifications is best accomplished through the Hard IP process.

Fatty acid specification is important in determining oil functionality and value. For example, for every 1% mixing of commodity soyabeans (23% oleic content) with HO soyabeans (75% oleic content), the oleic content of the co-mingled oil would drop to 74.5%. At a 10% level of mixing, the oleic content of the comingled oil would drop to 70%. This change could have a significant negative impact on the HOSO’s performance.

Storage of HOSO is similar to commodity soyabean oil except that the HO oil may be stored longer before it begins to deteriorate in quality.

The cold temperature properties of HOSO will also differ and is similar to that of olive oil. Olive oil naturally solidifies once temperatures drop below 2-40C, slowly changing from a liquid oil at room temperature to a solid once the

temperature reaches –12 to –180C.

Congealing and solidification may occur with bulk HOSO transport, in storage tanks located in colder climates or when used in refrigerated conditions. While most HOSOs will meet a 5.5hr cold test – typical for bottled retail salad oils – exposure to near freezing or lower temperatures for greater time periods will result in viscosity increases and ultimately solidification.

Laboratory testing of HOSO has indicated increased viscosity onset at ~–10°C and solidification onset at –16 to -23°C. The volume of oil and other physical factors will affect the actual temperatures at which oil may change physical states.

The solidified state does not harm the oil, which will return to a liquid once the oil is warmed above freezing. If a buyer anticipates the exposure of HOSO to cold temperatures in bulk transport or storage, it is advisable to use insulated transport vessels and/or tanks that can also be gently heated along with heat traced insulated pipes. Bulk tanks with agitation in addition to steam coils will also help in keeping the oil circulating for uniform exposure to the heat source.

This article is based on a report prepared for the US Soybean Export Council by Russ Sanders of Sanders Advisors and David Tegeder of Tegeder Consulting

World oilseed output to rise

Global oilseed production in 2022/23 is expected to rise by 2M tonnes to 647M tonnes, according to the United States Department of Agriculture (USDA)’s Octo ber report on the sector.

The increase is due to larger Brazilian soyabean and EU rapeseed crops, more than offsetting smaller US soyabean and Canadian rapeseed production, the For eign Agricultural Service (FAS) report says.

Global crushing estimates are raised slightly due to higher Brazilian and Chinese soyabean and EU rapeseed processing, while total global oilseeds stocks would be up mainly due to higher soyabean stocks in Brazil.

The USDA said oilseed trade in 2022/23 would be marginally higher due to increased soyabean exports from Argentina and Brazil.

Global protein meal and oil production, and consumption, would also be higher, in line with changes to oilseed production and crushing.

For 2021/22, the USDA report fore casts higher global oilseed production at 605M tonnes due to increased soyabean

crops in Brazil, Uruguay and the USA.

“Oilseed trade is up fractionally due to higher Argentina and Uruguay soyabean exports. Global oilseed ending stocks are up on higher soyabean carryout in Argen tina, Brazil and the USA.”

The USDA said protein meal produc tion would rise in 2021/22, but global trade would remain almost flat as higher soyabean meal exports from Brazil and Paraguay, and more Indian rapeseed meal

exports, would offset lower Argentine soyabean meal exports.

Meal consumption would be up mar ginally in 2021/22, while global vegetable oil trade would fall, mainly due to lower Indonesia and Malaysia palm oil exports.

●

In Argentina, soyabean exports surged in September following the government’s introduction of a special exchange rate for producers.

According to the Buenos Aires Grain Exchange, farmers sold over 16M tonnes of soyabeans in September, or 37% of the total estimated 2021/22 Argentine soyabean crop.

For 2022/23, the USDA is increasing its forecasts for Argentine soya exports by 2.3M tonnes to 7M tonnes. If realised, the country would retain its position as the world’s third largest soyabean exporter after falling behind Canada, Paraguay and Uruguay in recent years.

Strong soyabean exports would reduce available supplies for crushing and product exports in Argentina. However, crushing is still expected to increase due to a larger 2022/23 crop, the USDA says.

STATISTICAL NEWS

Sunflowerseed and oil

Russia-Ukraine war has continued to support EU sunflowerseed and oil prices, with escalating tensions

raising concerns about the continuation of the grain corridor deal. Russia and Ukraine signed the grain corridor deal on 22 July to allow exports of grains, oilseeds and oils from Black Sea ports. Following sunflowerseed and oil shortages amid the war, the grain

deal led to increased global sunflower oil supply

helped put downward pressure on the vegetable oil complex. However, the risk of the deal being

could see prices return to levels seen before its implementation. This has already impacted

as buyers have increased buying activity to ensure they are well covered. The Mintec Benchmark Prices

for EU sunflower oil increased by 5.3% month-onmonth (m-o-m) to €1,376/tonne on 14 October.

the EU sunflower seed price rose by 9.4% m-o-m to €517/MT on 12 October. Additionally, a poor harvest in Ukraine (historically the world’s top sunflow erseed and oil producer) due to persistent rain, coupled with already reduced planting area amid the war, has supported prices.

Consequently, the global sunflower seed produc tion estimate for the 2022/23 marketing year (MY) is expected to decline by 8.9% year-on-year (y-o-y) to 52M tonnes. However, the global sunflower oil output estimate for the 2022/23 MY is forecast to rise by 1.1% y-o-y to 20M tonnes, with losses from Ukraine slight ly offset by gains from Argentina, the EU, Russia and Turkey.

Renewable diesel/biodiesel

On 14 September, the European Parliament voted to ban the use of both soyabean oil and palm oil as feedstocks for biodiesel production from 2023. While the initial phase-out date was set for 2030, lawmakers decided to bring forward the start date due to rising environmental concerns, as both crops have been linked to deforesta tion. This decision has had mixed reactions from various NGOs and industries because the current global food crisis has tightened supplies of alternative oils (sunflower and rapeseed), thus creating a bullish sentiment in the market.

Additionally, news that the Organization of the Petroleum Exporting Countries (OPEC) intends to cut crude oil production by two million barrels/day starting in November contributed to the sentiment, as this could mean increased reliance on vegetable oil feedstocks for biodiesel. Thus, the EU biodiesel price was up by 1.8% m-o-m to €2.2/litre on 12 October.

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