OFI November/December 2019 by Quartz Business Media

OILS & FATS INTERNATIONAL

NOV/DEC 2019 â&#x2013;ª VOL 35 NO 8

OILSEEDS Sequencing the peanut

BIODIESEL EU industry update

USA

Focus on olive oil WWW.OFIMAGAZINE.COM Cover nov.indd 1

14/10/2019 12:57:38

www.desmetballestra.com

Science behind Technolog y

CONTENTS

OILS & FATS INTERNATIONAL

IN THIS ISSUE – NOV/DEC 2019

FEATURES

Oilseeds

NEWS & EVENTS

Transport & Logistics

Saudi Arabia: leader in the Gulf With the largest population and economy in the GCC region, Saudi Arabia’s limited production of vegetable oils means it is dependent on imports to meet increasing domestic demand

Sequencing the peanut Scientists have created the clearest picture yet of the peanut genome, paving the way for new varieties with improved traits such as pest and drought resistance

Biodiesel

Testing & Standards

Global round-up of news OFI reports on some of the latest news and developments involving instrumentation, testing and standards

Comment

3 News

EU industry update

As the world’s largest biodiesel producer, the EU is set to supply more hydrotreated vegetable oil but less conventional biodiesel due to strong competition from cheaper Argentine and Indonesian imports

Trump delays tariff hikes in ‘phase one’ deal with China

Biofuel News

10 21

Big Oil vs Biofuels

Eni launches renewable diesel refinery

Renewable News

ADM and LG Chem agree to develop bio-acrylic acid

Transport News

14 USA

Cargill and Maersk Tankers create medium range pool

Biotech News

Focus on olive oil The USA is a small player in the international olive oil market but has some of the most stringent certification standards

Germany to ban glyphosate weedkiller

Diary of Events

International events listing

Statistics

www.ofimagazine.com

Contents Nov.Dec.indd 1

Statistical data from Mintec

OFI – NOVEMBER/DECEMBER 2019

16/10/2019 08:29:20

TONSIL®

Partnering with you to refine a better future. Since 1906 we have been mining bentonite clays near the small Bavarian town of Gammelsdorf, and converting these into valuable products. In our Purification business, our Tonsil® range of adsorbents became an instant game changer for purifying edible oils and fats, and today Clariant remains a leader in edible oil purification. By partnering with you, our customers, we were able to develop an outstanding range of oil purification products perfectly tailored to the needs of today and the evolving needs of tomorrow. Sustainably mined, our 100% natural products are developed to ensure the highest levels of performance to the oil purification industry, in an environmentally responsible way. TONSIL® – A SUSTAINABLE TRADITION OF PURE INNOVATION CONTINUES. WWW.CLARIANT.COM / TONSIL

EDITOR'S COMMENT

OILS & FATS INTERNATIONAL

VOL 35 NO 8 NOV/DEC 2019

EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gabriel Day gabrielday@quartzltd.com +44 (0)1737 855157 SALES: Sales Manager: Mark Winthrop-Wallace markww@quartzltd.com +44 (0)1737 855114 Sales Consultant: Anita Revis anitarevis@quartzltd.com +44 (0)1737 855068 PRODUCTION: Production Editor: Carol Baird carolbaird@quartzltd.com CORPORATE: Managing Director: Steve Diprose stevediprose@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Elizabeth Barford subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2019, Quartz Business Media ISSN 0267-8853 WWW.OFIMAGAZINE.COM

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

Big Oil vs Biofuels It has been a cruel summer for farmers and biofuel producers in the USA, reeling from lost demand due to the country’s ongoing trade war with China and the record number of blending exemptions granted to oil refineries. Since US President Donald Trump took office in January 2017, the Environmental Protection Agency (EPA) has more than quadrupled the number of waivers it has granted to refiners, exempting 85 small producers from blending 4bn gallons (18bn litres) of renewable fuel into the nation’s fuel supply. “These 85 [small refinery exemptions – SREs], combined with the trade war and weather-related disasters, have taken a terrible economic toll on rural America,” says American Coalition for Ethanol (ACE) CEO Brian Jennings. According to the Des Moines Register the waivers “killed demand for 1.4bn bushels of corn used to make ethanol, and wiped out demand for 825M bushels of soyabeans that go into biodiesel”. SREs are aimed at small US refineries producing less than 75,000 barrels/day that can prove they are in financial strife. However, some of these small refineries are owned by large petrochemical companies like Exxon Mobil and Chevron Corp. On 9 August, the EPA granted 31 SREs for 2018, infuriating farmers and biofuel producers. Trump then waded into negotiations in September, promising a “giant package” to try and appease farmers/biofuel producers and the petroleum industry – both key constituencies ahead of next year’s presidential elections. A relief package was announced on 4 October by the EPA, which said the plan was to ensure that “more than 15bn gallons (68bn litres) of conventional ethanol are blended into the nation’s fuel supply beginning in 2020”. The package drew fire from oil companies, with the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers saying that they “are deeply concerned about the administration’s decision to, once again, play politics with our fuel system by increasing an already onerous biofuel mandate, placing greater strain on US manufacturers and threatening higher costs for consumers”. When the EPA revealed the actual details of the relief package on 15 October, it also drew fire from the biofuels industry, which labelled it a betrayal (see news story, p10). The package only addresses future SREs and will not reallocate the lost volumes of renewable fuel that have been exempted under past waivers. The National Biodiesel Board (NBB) has said that the key issue is ensuring waived volumes from SREs are reallocated to non-exempt refiners so that target volumes are kept. However, “the EPA is proposing a brand new method for making the estimate – one that was never previously discussed and significantly undercutting past exemptions”, says NBB vice president of federal affairs, Kurt Kovarik. With Big Oil vs Biofuels lined up on opposite sides of the fence, the latest deal is not the promise farming and biofuel players were expecting.

@oilsandfatsint

Oils & Fats International

Serena Lim – serenalim@quartzltd.com www.ofimagazine.com

Comment.indd 1

OFI – NOVEMBER/DECEMBER 2019

16/10/2019 12:08:59

NEWS IN BRIEF WORLD: Swiss commodity trading firm Glencore Agriculture has joined the so-called ABCD group of agribusiness – Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus Company (LDC) in an initiative to modernise global agricultural commodity trading. The initiative was established last October, with China’s COFCO International joining in December. ADM said that the project would initially look at new technologies, including blockchain and artificial intelligence, to automate grain and oilseed post-trade processes. The new platform's launch was projected in the second half of 2020, subject to regulatory approval.

Trump delays tariff hikes in 'phase one' deal with China US President Donald Trump announced a “very substantial phase one deal” on 11 October to solve the country’s long-running trade dispute with China. As part of the deal, China would scale up its purchases of US farm goods over two years to an annual total of US$40-$50bn, and agree to certain intellectual property measures and concessions related to financial services and currency, Bloomberg reported. In exchange, the USA agreed to delay a 5% tariff hike that was due to take effect on 15 October which would have increased duties to 30% on US$250bn worth of Chinese goods. China in recent weeks had already discussed buying more US products such as soyabeans, pork and wheat, Bloomberg said. The deal was announced after a two-day meeting in Washington between US and Chinese officials, the first senior-level discussions since a previous agreement fell apart in May.

Importantly, Trump said the deal was the first phase of a broader agreement which the president indicated that he could sign at an upcoming November summit in Chile, Bloomberg reported. However, a further 15% tariff on almost all US$160bn worth of remaining Chinese imports, including laptops, smartphones and clothing, is still set to be imposed on 15 December unless the agreement is finalised. The two countries have been locked in a trade dispute since last June, imposing billions of dollars worth of tariffs on each other’s goods, with the USA accusing China of discriminatory policies relating to technology and intellectual property. The US soyabean industry has been particularly hit by the trade war, with the American Soybean Association warning in May that farmers could not withstand another year in which their most important foreign market continued to slip away and soyabean prices were 20-25% below pre-tariff levels.

Photo: International Business Times

Rainforest destruction and haze blamed on Indonesian fires Fires burning in Indonesia since July had destroyed over 800,000ha of rainforest, largely as a result of illegal slashand-burn operations designed to clear land for agriculture – predominantly oil palm plantations, the Independent reported on 23 September. The newspaper said the burning had covered the islands in thick toxic smoke, turning the sky red, with the blazes exacerbated by the dry season since June. Air pollution had reached hazardous levels in neighbour-

ing Singapore and in Malaysia, where schools were forced to close due to the smoke.

Police had arrested 185 people since the fires started, the Independent wrote. Envi-

ronmental laws in Indonesia forbid the setting of fires to clear land. Indonesia’s Forestry Ministry claimed on 11 September that the smoke in Malaysia came from the country’s own forest fires, shown by satellite images. There were 1,423 potential fires registered on the Malaysian peninsula on 7 September, an increase from 1,038 on the previous day and also a spike in numbers in the state of Sarawak, the Straits Times reported.

Cargill reduces nearly 1,200 tonnes of plastic in packaging Cargill has reduced the amount of plastic it uses for its vegetable oil bottles and containers by nearly 1,200 tonnes/year, the agribusiness giant announced on 2 October. In North America, Cargill said it had eliminated 421 tonnes of plastic usage due to investments in new bottling line technology; retrofitting existing equipment and improving processes at its crush and refinery facilities. It now used 100% recyclable polyethylene terephthalate (PET) at its three new bottling lines. It was also using smart technology to create bottles on-site from 4 OFI – NOVEMBER/DECEMBER 2019

General News.indd 2

small, core plastic components, cutting the transport of standard-sized plastic bottles. In Europe, Cargill said it had reduced plastic usage by 360 tonnes/year. It was also working with a German consumer goods customer to incorporate 30% recycled PET in its one litre vegetable oil bottles. “That project, and similar ones launching with additional customers, are designed to help customers prepare for the EU’s goal of plastic bottles having at least 25% recycled content by 2025 and 30% by 2030,” Cargill said.

In Asia Pacific, Cargill said its Indian edible oil brands – Gemini, Sweekar, and NatureFresh – cut around 25% of the plastic used for select packages, eliminating 255 tonnes of plastic usage in 2018. It had also worked with Dow Chemical to reformulate its plastic material, making 90% of its plastic packaging recyclable. The goal was to use 100% recyclable packaging for Gemini, Sweekar and NatureFresh by the end of 2020. In South America, Cargill’s Brazilian soyabean oil Liza had cut 161 tonnes/year of plastic used in its 900ml bottles. www.ofimagazine.com

16/10/2019 10:06:17

Opportunity exists in unlikely places.

SEIZE IT.

Unlock opportunities with a full process solution from Crown. Transform food and non-food materials into high margin, saleable goods with Crown’s technical expertise and state-of-the-art Global Innovation Center. As the global oilseed industry leader, Crown’s proven engineering, equipment and aftermarket support is now available to solid-liquid processors. Using Crown’s full product lifecycle process, big and small processing plants can capture untapped revenue with new specialty market products. Choose Crown to design, pilot test, and implement a custom solution that gives your operation an innovative new advantage. Discover new products hiding in plain sight. Build your path to profit with Crown.

Contact Crown today 1-651-638-5474 or visit our website at www.crowniron.com

NEWS

French court upholds palm biofuels ban France’s constitutional court has upheld a law excluding palm oil from the country’s biofuel scheme, a decision which French oil and gas giant Total says puts its recently launched La Mède biorefinery at risk. Total had appealed against the regulation, which removes palm oil from a list of permitted biofuels from January 2020 and eliminates related tax advantages. The court said on 11 October that the new law was in line with the public interest of environmental protection, “considering the strong growth of palm oil production and the major amount of land used for its production worldwide, and given the deforestation and drying out of peat bogs”. Total CEO Patrick Pouyanne had warned

IN BRIEF

Thai authorities have approved the use of cannabidiol (CBD) and hemp in herbal products, as well as hemp in food and cosmetics. The government also removed cannabis and

hemp extracts with a tetrahydrocannabinol (THC) content of less than 0.2% from the list of banned narcotic substances, Cosmetics Design reported on 4 September. CBD and THC are the two most common compounds found in cannabis. Hemp (a member of the cannabis family) contains a very low concentration of THC, the cannabinoid compound that contains psychoactive properties. “The intention is to allow extracts to be used in medicine, cosmetics and food, and support hemp as a cash crop,” the Bangkok Post quoted Thai Food and Drug Administration secretary general, Tares Krassanairawiwong, as saying. Only hemp extracts that contained a ratio of CBD to THC not exceeding 0.01%-0.2% by weight could be used in herbal products and drugs. Hemp seed oil, seeds, stems, fibres and dried bark could also be used in traditional medicine, foods and cosmetics. In August, the country distributed its first batch of medical cannabis oil to hospitals after medical marijuana was made legal last year.

Malaysia may ban anti-palm oil labels from shelves Malaysia is considering a law to remove products with anti-palm oil labels from market shelves as it looks to take action against any unfair treatment of its second largest commodity export, the Malaysian Reserve reported on 4 September. Primary Industries Minister Teresa Kok said a proposal to ban products with anti-palm oil labels was being prepared by the Ministry of Domestic Trade and Consumer Affairs.

6 OFI – NOVEMBER/DECEMBER 2019

General News.indd 3

than 50% of the total volume of raw materials needed) and at least 50,000 tonnes of French rapeseed as feedstocks. A spokesman said Total had taken note of the court’s decision and reiterated Pouyanne’s previous comments that the company would not be able to meet commitments such as buying rapeseed oil from French farmers for the refinery. The French law specifies that palm oil cannot be considered a biofuel unless producers can guarantee it has been produced under conditions that prevent indirect increase of greenhouse gas emissions. Tax exemptions for palm biofuels would also end on 1 January 2020 under the government’s 2019 budget, Reuters said.

Thailand approves use of CBD oil and hemp

PERU: The Peruvian Palm Oil Producers’ Association (JUNPALMA) has committed to end deforestation from palm oil by 2021, Cosmetic Design reported on 12 September. The agreement was made in collaboration with USbased National Wildlife Federation, local governments, farmers and conservation organisation, Sociedad Peruana de Ecodesarollo. It would make Peru the second country in Latin America to sign up to such a deal, following Colombia in 2017. Peru was currently the 17th largest global producer of palm oil with 193M tonnes/year of output. ARGENTINA: The world's largest soyabean exporter has agreed to export soyabean meal to China for the first time, World Grain reported on 11 September. The president of the Argentine Oil Industry Chamber, Gustavo Idigoras, said the deal still required a two-step process of plant authorisations and registrations, which could take several months. The US Department of Agriculture has projected Argentina's soyabean meal exports at more than 30M tonnes for 2019/20.

in September that the decision could mean losses of up to €80M (US$88M) at La Mède, forcing it to rethink its plans, Reuters reported. The company had invested €300M (US$332M) in converting its La Mède site from a crude oil refinery into a 500,000 tonnes/year renewable diesel or hydrotreated vegetable oil (HVO) plant, with the first batches of fuel coming on stream in July. Total had said the plant would be using 60-70% sustainable vegetable oils (rapeseed, sunflower and palm oils) and 30-40% animal fat, used cooking oil and residues from waste. It had pledged to use no more than 300,000 tonnes/year of palm oil (less

“We are looking into putting this matter under one of the ministry’s regulations,” the Malaysian Reserve quoted Kok as saying. The country’s biggest supermarket, Mydin, had already pledged to ban such products from its shelves, Cosmetic Design wrote on 11 September. Kok urged other supermarket chains in Malaysia to do the same. In Indonesia, goods with "palm oil free" labels were removed from over a dozen

supermarkets in Jakarta after the Trade Ministry conducted inspections, Reuters reported on 22 August. The country's Drug and Food Control Agency said it would not approve the distribution of products with “palm oil free” labels, saying the oil was “safe” and the labels reduced its competitiveness. Indonesia and Malaysia are the world's largest palm oil producers, accounting for some 85% of global production. www.ofimagazine.com

16/10/2019 10:06:28

NEWS IN BRIEF BRAZIL: Agribusiness giant Bunge has agreed to buy 30% of Brazilian agricultural firm Agrofel Grãos e Insumos, based in Rio Grande do Sul state. Agrofel receives and stores soyabeans, corn, wheat and grains, as well as selling seeds, fertilisers and pesticides to farmers. Bunge said on 12 September that the investment aligned with its strategy to focus on its core businesses, thus strengthening its grain origination position in Brazil. Agrofel sourced more than 1M tonnes of grain annually, including soyabeans, corn and wheat, from some 15,000 farmers, Bunge said. The firm is supported by 38 units, including warehouses and shops, with a combined static capacity of almost 450,000 tonnes. The acquisition is subject to approval by the Brazilian Antitrust Authority (CADE). SWEDEN/UK: Swedish oils and fats producer AAK has acquired 80% of Soya International, a UK-based company that focuses on sourcing, processing and distributing non-GMO, semi-speciality and speciality lecithins. Lecithin is a natural emulsifier and a by-product from processing vegetable oils. “It is a key ingredient for many customers within our core segments, especially chocolate and confectionery fats and bakery, as well as dairy, special nutrition and personal care,” AAK president Johan Westman said on 11 September. “By expanding our portfolio with this ingredient, we will be able to create even better solutions with our customers globally.” Soya International operates a third-party processing facility in the Netherlands. It made approximately SEK150M (US$15.4M) in revenues last year, AAK said. The firm would trade under the new name, AAK Soya International.

USA to impose 25% tariffs on some Spanish olive oils The USA has won approval from the World Trade Organization (WTO) to impose tariffs on US$7.5bn worth of EU goods, including some Spanish olive oils. US imports of Spanish virgin and non-virgin olive oil in all of its fractions in containers of less than 18kg would be subject to 25% tariffs, due to take effect on 18 October, Olive Oil Times reported. Olive oils from France, Greece, Italy and Portugal would be unaffected. The tariffs were the result of a 15-year-long trade dispute over EU subsidies to Dutch European aerospace corporation firm Airbus, which the WTO ruled were improper and could hurt rival American manufacturer Boeing. The US Trade Representative Office (USTR) initially wanted to impose 100% tariffs on

Fish oil found to have no effect on diabetes

Researchers have concluded that omega-3 fatty acids in fish oil have little or no effect on the risk of developing Type 2 diabetes. The findings are the result of a systematic review, commissioned by the World Health Organization (WHO) and conducted by the UK University of East Anglia (UEA).

The review looked at the results of 83 studies published from the 1960s to 2018 involving 121,070 participants with and without diabetes, all with at least six-month duration. “Despite over 58,000 participants being randomised into long-term trials, and 4% of them developing diabetes, those who were randomised to consume more long-chain omega-3 fats (fish oils) had the same risk of diabetes diagnosis as the control group who did not take more fish oil,” the UEA stated on 21 August. The university said there was a consistent lack of effect of fish oils on the factors related to diabetes risk. However, lead author Dr Lee Hooper, from UEA’s Norwich Medical School noted that fish oil supplements could help reduce high levels of triglycerides, a type of blood fat that contributed to heart disease.

Sime Darby in sustainable palm oil partnership Malaysia’s Sime Darby Plantation Berhad (SDP) announced a sustainable palm oil partnership with global NGO Conservation International on 4 October. “While important strides have been made by responsible producers in the palm oil sector, challenges such as deforestation and social conflict continue,” Sime Darby said. The first phase of the collaboration would be an independent review by Conservation International of SDP’s opera-

8 OFI – NOVEMBER/DECEMBER 2019

General News.indd 4

US$15bn worth of goods but the WTO ruled that the USA could only impose countermeasures on half this amount. Joseph Profaci, the executive director of the North American Olive Oil Association, said while the 25% tariff on packaged Spanish olive oil would still have an adverse impact on importers and consumers, the USTR decision not to impose the full 100% tariff was a good sign. “I am optimistic that the USTR decision is a good faith indication of its desire to negotiate a settlement with the EU.” In addition, the USTR decision not to impose tariffs on any olive oils imported from France, Greece, Italy or Portugal, nor on bulk olive oils imported from Spain, was welcome news. See 'USA - Focus on olive oil', p33

tions and palm oil supply chain. Based on the assessment, Conservation International and SDP would identify opportunities to strengthen the company’s sustainability practices. SDP said the partnership followed its recently launched online open access tool, Crosscheck, which allowed anyone to trace its palm oil supply chain down to the mill level. The company said it was the world’s largest oil palm plantation company by planted

area and the world’s largest producer of certified sustainable palm oil (CSPO), with a CSPO production capacity of over 2.46M tonnes. “Our upstream operations consist of oil palm cultivation, harvesting and milling spread across Malaysia, Indonesia, Papua New Guinea, the Solomon Islands and Liberia.” SDP has an oil palm planted area of more than 600,000ha and accounts for around 4% of global crude palm oil output. www.ofimagazine.com

16/10/2019 10:06:33

www.dsengineers.com HEXANE FREE OIL & FEED PROCESSING TECHNOLOGIES

• • • • • •

FARMET - YOUR PARTNER IN THE FIELD OF OILSEEDS & OIL PROCESSING; FEED EXTRUSION WITH THE FOCUS ON SOYBEAN UNIQUE COMBINATION OF EXTRUDERS AND SCREW PRESSES MECHANICAL OIL EXTRACTION WITH MULTIPLE STAGE PRESSING EFFICIENT SOYBEAN PROCESSING WITH RECUPERATION SYSTEM THING GLOBALLY, ACT LOCALLY GMO FREE PROCESSING ORGANIC PROCESSING

Serving the Vegetable Oil Industry www.farmet.eu From Basic Engineering to Full Turnkey Project www.tolsa.com

MINCLEAR®

Single Point Responsibility through EPC or EPCM+® with guaranteed:

High Absorptive Bleaching Earths based on Natural and Activated Clays.

✔ Process Performances

Excellent for the treatment of Vegetable Oils & Biofuel Feedstocks

✔ Time Schedule

• Chlorophylls removal. • Low oil retentions. • Excellent filtration rates. • Phosphorus and metal traces removal. • Reduction of the precursors of 3-MCPD and GE. • Effective stability of oils.

✔ Budget

Engineers & Contractors TOLSA, S.A. Parque ParqueEmpresarial Empresarial Las LasMercedes Mercedes C/ Campezo, C/ Campezo, 1, 1, Ed. Ed.4,4,Pl. Pl. 2ª 2ª 28022 Madrid 28022 -Madrid Spain Tel.:Tel.: +34+34 913 913 220 220100 100 industrial@tolsa.com info@tolsa.com

Belgium Phone: +32 (0)10 43 43 00 info@dsengineers.com

Reliability through Experience

BIOFUEL NEWS

Eni launches renewable diesel refinery Italian oil and gas multinational Eni Spa has launched its 750,000 tonnes/year Gela biorefinery. The hydrotreated vegetable oil (HVO) plant was launched in August, the firm’s second conversion of a pretrochemical plant into a biorefinery, Eni said on 25 September. Eni’s Venice biorefinery began operations in 2014 and the two plants would bring the firm’s combined HVO production to some 1M tonnes, Eni said earlier in June at the ACI Oleofuels conference. The company said in addition to the

IN BRIEF USA: US engineering conglomerate Honeywell UOP said on 30 September that Diamond Green Diesel will expand its production of renewable diesel using its Ecoﬁning process by nearly 150% to 675M gallons (3.07M kilolitres)/year. “With the planned US$1.1bn expansion, the Norco, Louisiana-based facility will become one of the world’s largest renewable diesel plants.” The expansion – expected to be completed in late 2021 – would add a second, parallel plant adjacent to the existing facility. Diamond Green Diesel, a joint venture of Valero Energy Corp and Darling Ingredients, was currently the largest US commercial advanced biofuel facility, producing 275M gallons (1.3M kl)/year of renewable diesel, Honeywell said. Darling Ingredients is a leading rendering company with processing operations in over 200 sites worldwide. “Combining Darling’s ability to provide feedstocks in the form of tallow from recycled animal by-product and used cooking oil collected from restaurants, and Valero’s experience as the world’s largest independent petroleum reﬁner, helps us to meet growing renewable energy demands,” Diamond Green Diesel said.

drogen to deoxygenate a feedstock, with a second stage isomerisation step, to produce renewable diesel, as well as naptha, jet fuel and LPG. Eni said the Gela site was also home to a pilot waste-to-fuel plant which had been transforming organic waste into bio-oil, biomethane and water since last December. The ACI conference heard that 80% of the Gela plant’s feedstock comprised palm oil and 20% waste feedstocks, such as used cooking oil, but that the company was working towards using less palm oil.

UCO double-counting under Dutch scrutiny

The Netherlands is considering ending the double-counting of used cooking oil (UCO) to reach EU targets for renewable energy blending in the transport sector as a criminal investigation into a Dutch biodiesel ﬁrm continues, EURACTIV reported on 12 September. The probe into Biodiesel Kampen

– which was declared bankrupt on 27 August – is investigating whether biodiesel sold by the firm was wrongly certified as sustainable. According to a Dutch News report in May, government inspectors suspected that 59% of the biodiesel sold by the firm was wrongly certified in 2015. That year, Biodiesel Kampen accounted for almost a third of Dutch biodiesel, 70% of which was made from UCO. In early September, the Dutch government held a session on the UCO issue. “In parallel with the ongoing criminal investigation, the government is conducting a full analysis to identify weak points in the application of the Renewable Energy Directive [RED],” a Dutch spokesperson said. “Whether the solution includes ending UCO double-counting will, therefore, be decided at a later stage.” UCO is double-counted under the RED, meaning if its consumption is 2%, it would count as 4% towards the EU’s current 10% renewable energy target for the transport sector.

EPA biofuel relief package draws fire from industry The US Environmental Protection Agency (EPA) announced a biofuel relief package plan on 4 October which it said would “ensure that more than 15bn gallons (68bn litres) of conventional ethanol are blended into the nation’s fuel supply beginning in 2020”. However, the biofuels industry has criticised the way the EPA is proposing to calculate future small reﬁnery exemptions (SREs), when the EPA released details of its package on 15 October. SREs exempt small US reﬁneries (producing less than 75,000 barrels/day) from having to blend biofuels if they can

10 OFI – NOVEMBER/DECEMBER 2019

Biofuel news.indd 2

US$320M it had spent on the Gela plant, it planned to invest US$80M in further preliminary activities and pre-treating biomass, which would be finished in third quarter 2020 and supply the biorefinery with second-generation raw material from waste, raw vegetable oil and advanced materials. “To create the Gela biorefinery plant, the two existing desulphurising units were modified and a steam reforming unit was built to produce hydrogen,” Eni said. Eni’s renewable diesel technology, licensed from Honeywell UOP, uses hy-

prove they are in financial strife. Since US President Donald Trump took office in January 2017, the EPA has more than quadrupled the number of SREs it has granted, exempting 85 small producers from blending 4bn gallons (18bn litres) of renewable fuel from 2016-2018. American Coalition for Ethanol CEO Brian Jennings said that in a 3 October phone call, Trump officials had indicated that the EPA would take the three-year average of SRE volumes for 2016-2018 (about 1.34bn gallons or 6.09bn litres), and reallocate the volume to the 2020 renewable volume obliga-

tion (RVO). However, the EPA’s 15 October announcement instead proposed to calculate the average based on partial SREs that the Department of Energy had previously advised but the EPA had rejected. Jennings said the average of those “imaginary” partial SREs was only about 770M gallons (3,500M litres). “The ongoing insanity over the EPA’s mismanagement of the Renewable Fuel Standard would be bizzarely humourous if not for the fact that it, along with the US-China trade war and weather-related disasters, has taken a terrible economic toll on growers and biofuel producers across rural America.” www.ofimagazine.com

16/10/2019 12:19:24

WORLD LEADER IN 2ND GENERATION BIODIESEL PRODUCTION PLANTS. We apply the most innovative green technologies to manufacture 100% Biodiesel plants running low grade quality materials such as UCO, esterified oil and animal fats.

The TradiTiOn Of deSigning The fUTUre from design to construction and commissioning, we take care of our customers. Experts in Edible Oil Extraction and Refining, Oleochemicals, Biodiesel Production, Lube Oil Re-refining.

TeChnOilOgy Srl - Via D. Federici, 12/14 - 04012 Cisterna di Latina (LT), Italy - Tel. +39 06 9696181 - info@technoilogy.it - www.technoilogy.it

20+ years of know-how focused on Multi-Feedstock BioDiesel technology Optimization and modernization of existing plants Creation of added value from waste fats, oils and greases

BioDiesel Multi-Feedstock technology from the market leader

RetroFit Tailor made solutions for your individual needs

PreTreatment Know-how in all types of feedstock for the Renewable Diesel industry

bioCRACK Advanced biofuels from lignocellulosic biomass www.ofimagazine.com

www.bdi-bioenergy.com OFI â&#x20AC;&#x201C; NOVEMBER/DECEMBER 2019

RENEWABLE NEWS IN BRIEF THAILAND: Thailand is promoting palm oil-based biolubricants as part of its 2018-27 bioeconomy scheme to promote Thai farm products, the Bangkok Post reported on 5 August Nattapol Rangsitpol, director general of the Office of Industrial Economies, said Asia Pacific was the largest oleochemical market, with the region’s biolubricant market projected to reach US$4bn by 2026 from US$2.8bn this year. Nattapol said the aim was for Thailand to become the biochemical hub of Southeast Asia by 2027. ARGENTINA: Biopolymer producer Braskem and agroindustrial firm Ledesma SAAI have created a line of sustainable notebooks made from sugarcane, Braskem announced on 14 August. The notebook paper was made from sugarcane bagasse and its covers from Braskem’s green polyethylene, a plastic resin that used sugarcane as its raw material and could be recycled in the same way as fossil-based polyethylene (naphtha).

ADM and LG Chem agree to develop bio-acrylic acid Global agribusiness giant Archer Daniels Midland (ADM) and South Korea-based LG Chem have agreed to jointly develop bio-based acrylic acid, a key element needed to produce superabsorbent polymers used in nappies and other hygiene products. “The acrylic acid project is another effort from ADM to create new sustainable materials from renewable resources and demonstrates our strong commitment to support customer demand through innovation,” said Todd Werpy, senior vice-president and chief technology officer at ADM, on 25 September. Acrylic acid was currently produced almost exclusively from petrochemicals, ADM said. Under the deal, ADM and LG Chem would jointly work towards economically-viable commercial production of a 100% bio-based acrylic acid

using ingredients from ADM corn processing. “To support production, LG Chem plans to review the construction of a bio-SAP production plant in North America, and to explore additional bioplastic business opportunities,” ADM said. LG Chem is one of the world’s leading producers of acrylic acid and is South Korea’s largest diversified chemicals company. ADM said sustainable innovation was not new to the company, having opened the world’s first production facility for bio-based furan dicarboxylic methyl ester (FDME) in Decatur, Illinois with DuPont in April 2018. FDME is a molecule derived from fructose that can be used to create a variety of bio-based chemicals and materials, including plastics. The Decatur plant also uses ingredients from ADM corn processing.

Supply contract for crude lignin oil/ethanol plant UK biomass refinery developer Sainc Energy Ltd (Sainc) has agreed a definitive supply contract for 180,000 tonnes/ year of local olive tree prunings for its planned biorefinery at Villaralto, Spain. The biorefinery in Cordoba province, Andalusia, would produce second-generation ethanol alongside crude lignin oil (CLO), Dutch start-up firm Vertoro said on 30 September.

Vertoro would be buying the CLO and had also developed the facility’s technology, which mixes solid lignin and solvent (methanol or another polar solvent) to produce char and CLO, a feedstock for chemicals, materials and fuels. “For the ethanol off-take, Sainc is currently in discussions with BP, Shell and Total.” The facility was expected to enter production by third

quarter 2022, Vertoro said. Sainc said the Villaralto biorefinery was its first in an expected series. “We have three other sites under development in Spain and are exploring two large sites in the USA. Our biorefineries will convert residues from forestry operations into renewable transportation fuels and platform products for downstream chemicals.”

Clariant launches plant-oil based silicones ahead of EU ban Ahead of the EU’s ban of D4 and D5 silicones in wash-off personal care products from January 2020, German speciality chemicals firm Clariant recently launched a plant oilbased silicone range. “While [petroleum-based] silicones are used in a wide variety of skin and hair care products to meet consumer demands such as ease of spreadability, deep conditioning and imparting shine, there is growing awareness of the risks some of them may pose to the environment, with potential for a total ban on their use in some regions,” the company said in June.

From 31 January 2020, personal care products must not contain more than 0.1% of octamethylcyclotetrasiloxane (D4) and decamethylcyclopentasiloxane (D5) silicones in the

12 OFI – NOVEMBER/DECEMBER 2019

Renewable news.indd 2

EU. The 0.1% level effectively bans their use as a much higher level is needed in wash-off products. D4 has been identified as persistent, bioaccumulative

and toxic (PBT) and a very persistent, very bioaccumulative (vPvB) substance. D5 has been identified as a vPvB substance, according to ChemSafetyPro. Clariant said it had developed its Plantasens Flash 80 and 100 range in collaboration with US speciality and intermediate chemicals firm Elevance Renewable Sciences, which produced novel chemicals from plant oils using metathesis catalyst technology. The range, which utilised oils such as olive, lavender and jojoba, could be used as an ingredient in shampoos, hair conditioners, facial cleansers, deodorants and moisturisers. www.ofimagazine.com

14/10/2019 13:02:25

MORE THAN ENERGY

Efficient high temperature energy solutions with steam and thermal oil. Services by GekaKonus: Engineering | Design | Consulting Commissioning | After Sales Service

GekaKonus GmbH · Siemensstraße 10 · D-76344 Eggenstein-Leopoldshafen Tel.: +49 (0) 721 / 9 43 74 -0 · Fax: +49 (0) 7 21/ 9 43 74 - 44 · info@gekakonus.net · www.gekakonus.net

Pure-Flo B80

BANK ON B80 USE LESS. SAVE MORE. Pure-Flo® B80 is the most active natural product for bleaching palm oil. Its high level of activity means dosage can be reduced without compromising performance. Our Pure-Flo® B80 customers report as much as a 30% reduction in bleaching earth usage and a beneficial reduction in 3-MCPD ester formation. To start significantly lowering palm oil operating costs, visit BankonB80.com

www.ofimagazine.com

OFI – NOVEMBER/DECEMBER 2019

TRANSPORT NEWS IN BRIEF UKRAINE: Grain and oilseed handler Nibulon’s newly-built Ternivska transshipment facility in Vilniansk district handled 95,000 tonnes of crops since it opened in July, the company reported on 2 September. With a receiving capacity of 300,000 tonnes/year, the terminal loads grain and oilseeds onto water transport for delivery to Nibulon’s sea terminal in Mykolaiv city or directly to outer roads. Nibulon buys and handles crops such as rapeseed. TAIWAN: Central Union Oil Corp (CUOC) recently completed an expansion of its soyabean extraction plant, including four new storage silos with a combined capacity of 25,024m3, expanding CUOC’s total silo capacity to 72,000m3, World Grain reported on 9 September. CUOU produces soyabean oil, meal and lecithin at its 3,000 tonnes/day extraction plant and 600 tonnes/day refining plant located at Taichung Harbour. It is connected via belt conveyor to Far Eastern Silo Corporation, at Taichung Harbour’s Pier 1 and 3 export terminals. CANADA: Parrish & Heimbecker has acquired 10 Louis Dreyfus elevators to expand its offerings in western Canada, World Grain reported on 6 September. The firm trades and handles crops such as soyabeans, corn, canola and wheat. MALAYSIA: The Lahad Datu palm oil industrial cluster port showed it was capable of handling hazardous materials when it imported 1,500 tonnes of methanol from Indonesia on 25 August for a biodiesel plant owned by Genting Group, New Straits Times reported. Genting said shipping in methanol was more cost effective than trucking it in from Sandakan.

Cargill and Maersk Tankers create medium range pool Global agribusiness giant Cargill’s fleet of medium range (MR) tankers entered the Maersk Tankers MR pool on 1 October, creating a new joint pool that Cargill says will significantly increase the scope of their MR spot tanker business. The new joint pool was announced on 16 September and is managed by Denmark’s Maersk Tankers, which operates 44 vessels for 10 partners. Cargill added its fleet of up to 20 vessels, increasing the total number of vessels to more than 60, “making the new pool one of the market leaders in the MR segment”, the firm said. The joint pool does not include derivatives or MR tankers for period employment, which will be handled independently by both companies.

New silo for organic crops in Potzneusiedl

Austria’s Saatbau Erntegut has invested in a new reception and storage facility for organic crops, including oilseeds, in Potzneusiedl, Dry Bulk magazine said on 4 September.

Saatbau said the steady rise in organic agriculture in Austria had led to its decision to build the new 15,000 tonnes silo installation. “In addition to the main

crops of cereals and maize, we can also take soyabeans (pictured left), protein crops, sorghum and other alternative organic crops,” the company said earlier in April. Saatbau said the organic farming planted area in the four districts around the new silo had grown by 13,100ha to 55,851ha in the past year. Saatbau Erntegut is a branch of Austrian grain operator Saatbau Linz, which is involved in contract farming and also supplies seeds such as rapeseed, soyabean, sunflower and cereals to farmers.

COFCO to build biodiesel pipeline in Brazil China’s COFCO International is planning to build a 1-2km pipeline to transport its biodiesel to Brazil’s Rondonópolis rail terminal area, Reuters reports. The pipeline was expected to be operational in 2020, the 24 September report said. COFCO is the overseas agriculture business platform for COFCO Corporation, China’s largest food and agriculture company. It sources and produces, stores and handles, processes, trades and transports grains, oilseeds and sugar around the world. The firm said

14 OFI – NOVEMBER/DECEMBER 2019

Transport news Nov.Dec.indd 2

Cargill said the new partnership combined its experience in trading with the digital expertise of Maersk Tankers, which used algorithmic trading to position vessels to improve customer service and optimise earnings for partners. The new joint pool would also harness the two companies’ combined expertise in fuel optimisation, reducing bunker consumption and CO2 emissions. Cargill said both companies planned to attract additional vessels from other shipowners and further increase the pool’s capacity over time. The company charters over 650 dry bulk and tanker vessels every year. Maersk Tankers is a leading player in the product tanker industry, operating one of the world’s largest fleets of vessels.

it had 30M tonnes of port capacity, 24M tonnes of processing capacity and 2.2M tonnes of inland storage, with 60% of its global assets in the world’s number one exporting region of South America. Reuters said COFCO had boosted its biodiesel production in Mato Grosso state by 42% to 306M litres/year, and currently moved its biodiesel by truck or rail. Earlier in August, COFCO chairman Johnny Chi said the company was looking at investments such as new warehouses

and improving transportation systems in Brazil as the business environment was likely to improve after the approval of economic reforms. China was Brazil’s largest trading partner, according to a Reuters report on 5 August. COFCO was a major soyabean trader in the country, and a large producer of sugar and ethanol. It sharply increased the amount of soyabeans it sourced in Brazil to almost 11M tonnes last year, nearly 20% more than in 2017, largely because of China’s trade dispute with the USA. www.ofimagazine.com

16/10/2019 09:55:06

An ISO 9001:2015/14001/18001 Company Tel : +91-91-3692 1232/39, 022-27696339/6322/6325.

www.ofimagazine.com

OFI â&#x20AC;&#x201C; NOVEMBER/DECEMBER 2019

BIOTECH NEWS

Germany to ban glyphosate weedkiller Germany is planning to ban the use of glyphosate weedkiller by 2023 to protect insects crucial for ecosystems and the pollination of food crops, AFP reports. Ministers said on 4 September that the chemical – the subject of multi-million dollar cancer lawsuits in the USA – was to be banned by 2023. Glyphosate is the active ingredient in many weedkillers and is the most widely used herbicide in the world. It is used on farm crops, including oilseeds, and is often sold under the brand name Roundup, produced by US agrochemical and biotech company, Monsanto, which German chemical firm Bayer acquired in June 2018 for US$63bn. In Germany, the first stage of glyphosate’s phase-out next year was the banning of its use in city parks and private gardens,

IN BRIEF USA: Plant genetics start-up firm Inari raised US$89M to advance its research towards the USA and international markets, Xconomy reported on 6 August The firm was targeting corn, soyabean wheat and tomatoes as its initial crops and was aiming to launch several products in time for the 2021 growing season. CEO Ponsi Trivisvavet said the firm applied gene-editing techniques such as CRISPR to develop its seeds, some of which had already been planted on some US farm fields. In May, Inari had a limited launch of a corn product through two independent seed companies.

AFP said. Its use would also be restricted or banned in more species-rich areas such as grasslands and orchard meadows, and along many river and lake shores. Farm groups and the chemical industry had lobbied for the continued use of glyphosate, with Bayer saying the chemical could be used safely and was “an important tool for ensuring both the sustainability and productivity of agriculture”. Austria became the first EU member to ban all glyphosate use in July, with restrictions also in force in the Czech Republic, Italy and the Netherlands. France was phasing it out by 2023, AFP wrote. On 12 December 2017, the European Commission (EC) renewed approval of glyphosate for five years – rather than the standard 15 years – subject to each Plant Protection Product being authorised by

national authorities. “Member states are responsible for the authorisation, use and/or ban of glyphosate-based products on their territories,” the EC had said following its decision. Since the current approval would expire on 15 December 2022 and the renewal process had to start three years before expiry, companies had to submit a renewal application by 15 December 2019 if they wished, followed by a full dossier by 15 June 2020, the EC said. An Assessment Group on Glyphosate (AAG) comprising France, Hungary, the Netherlands and Sweden would then start a comprehensive scientific evaluation, which would be passed over to the European Food Safety Authority. A public consultation on the AGG’s assessment would also take place, the EC said.

BASF to launch 30 new products by 2028 BASF will increase its R&D budget and launch 30 new products, including eight active ingredients, as well as seeds in hybrid wheat, soyabean (pictured), canola and cotton and vegetables. The German chemicals company announced on 27 September that it would be increasing its R&D budget to approximately €900M (US$988M) in 2019 to support its innovation pipeline. “By 2028, BASF will launch over 30 new products with peak sales potential of more than €6bn (US$6.59bn).” BASF completed its €7.6bn (US$8.4bn) acquisition of several Bayer businesses and assets in August 2018, as part of its German rival’s divestments to complete its

acquisition of US agrochemicals firm Monsanto. The assets BASF bought included Bayer’s seeds businesses including

traits, research and breeding capabilities; a range of seed treatment products; certain glyphosate-based herbicides in Europe and Bayer’s digital farming platform. “Following the integration of these businesses, we can now serve farmers with a connected portfolio – from seeds, traits and crop protection to digital solutions,” BASF said. The firm said its activities were focused on four major customer segments and their crop systems – soya, corn and cotton in the Americas; wheat, canola and sunflowers in North America and Europe; rice in Asia; and fruit and vegetables globally. “In total, these crops represent approximately 70% of the global market.”

Last scheduled US Roundup cancer trial this year postponed The last scheduled US trial this year relating to Bayer’s Roundup weedkiller has been postponed at the request of both parties, indicating that settlement talks may be progressing, Reuters reports. The German chemical firm faces more than 18,000 lawsuits in the USA claiming its glyphosate-based herbicide causes non-Hodgkin’s lymphoma. It has already been ordered to pay millions of dollars in damages after losing three trials but has

16 OFI – NOVEMBER/DECEMBER 2019

Biotech news.indd 2

appealed against the verdicts. Reuters wrote on 6 October that the delay to the scheduled trial in St Louis, following two other postponements in August, would give Bayer breathing room to pursue settlement talks. Bayer has lost more than US$30bn or a third of its market value since it acquired US agrochemicals firm Monsanto – Roundup’s original manufacturer – last year. Settling all the Roundup cases could cost

about US$9bn, according to Bloomberg Intelligence analyst Mustaq Rahaman, with other estimates ranging from US$2.5$20bn, the news agency wrote. Bayer/Monsanto supplies farmers with crop protection products and biotech seeds such as canola, corn and soyabeans. ▪ An Australian farmer has launched a lawsuit against Bayer after being diagnosed with Hodgkin’s lymphona, Reuters reported on 10 October.

www.ofimagazine.com

16/10/2019 08:33:28

DIARY OF EVENTS 3-6 November 2019

19-21 November 2019

9-12 February 2020

13-15 May 2020

17th Annual Roundtable Meeting on Sustainable Palm Oil (RT17) Marriott Marquis Bangkok Queen’s Park, Thailand www.rt.rspo.org

International Palm Oil Congress & Exhibition (PIPOC) 2019 Kuala Lumpur, Malaysia pipoc.mpob.gov.my

World Congress on Oils & Fats 2020/ISF Lectureship Series International Convention Centre, Sydney, Australia wcofsydney2020.com

6-7 November 2019

18-19 November 2019

12-13 February 2020

ICIS World Surfactants Conference Hyatt Regency New Jersey, USA www.icisevents. com/ehome/index. php?eventid=200191757&

10th Annual Conference on Bioenergy and Biofuels Abu Dhabi, UAE biofuels-bioenergy. conferenceseries.com/ middleeast/

Future of Surfactants Summit Berlin, Germany www.wplgroup.com/aci/ event/surfactants-summit/

World Oilseed Congress 2019 Lviv, Ukraine worldoilseed.org 7 November 2019 China International Oils & Oilseeds Conference (CIOC) Guangzhou, China www.dce.com.cn/ CIOCEN/464520/464521/ index.html 7-8 November 2019 DGF Jahrestagung 2019 Radisson Blu Hamburg, Germany veranstaltungen.gdch. de/tms/frontend/index. cfm?l=8876&sp_id=1 8 November 2019 Advanced Technologies in Oilseed Processing, Edible Oil Refining and Oil Modification Zhujiang (Pearl River) Hotel Guangzhou, China www.smartshortcourses.com/ oilprocess22/program.html 9-10 November 2019 2nd AOCS China Section Conference Zhujiang (Pearl River) Hotel Guangzhou, China www.aocs.org/networkand-connect/membership/ sections#china-section 14-15 November 2019 9th ICIS Asian Surfactants Conference Pan Pacific Singapore www.icisevents. com/ehome/index. php?eventid=200190653&

For a full events list, visit: www.ofimagazine.com www.ofimagazine.com

Diary.indd 1

22-23 November 2019 PORAM Annual Events 2019 (Forum, Golf & Dinner) Dorsett Grand Subang Hotel Kuala Lumpar, Malaysia poram.org.my/p 5 December 2019 10th Fats & Oils Istanbul/ Feeds & Grains Istanbul Istanbul, Turkey www.agripro.com.tr 9-10 December 2019 Processing of Cannabis/Hemp Plants and Refining of CBD Oil: Market, Regulations and Applications Las Vegas, Nevada, USA www.smartshortcourses.com/ CBDoil1/program.html 20-21 January 2020 Fuels of the Future 2020 CityCube Berlin, Germany www.fuels-of-the-future.com 20-23 January 2020 National Biodiesel Conference & Expo Tampa Convention Center Florida, USA www.biodieselconference.org 30-31 January 2020 International Rendering Symposium, part of the International Production & Processing Expo Georgia World Congress Center, Atlanta, USA ippe20.mapyourshow. com/8_0/sessions/sessiondetails.cfm?scheduleid=29

3-6 June 2020 EPPRA 2020 Congress Villamoura, Portugal efpra.eu/congress-2020-tobe-help-in-portugal/

26-27 February 2020 Lignofuels 2020 Helsinki, Finland www.wplgroup.com/aci/ event/lignocellulosic-fuelconference-europe-2019/

15-17 June 2020 International Fuel Ethanol Workshop & Expo Minneapolis Convention Center, Minnesota, USA fuelethanolworkshop. com/ema/DisplayPage. aspx?pageId=Home

3-5 March 2020 Canadian Crops Convention Hyatt Regency Vancouver, Canada www.canadiancrops.ca

20-23 September 2020

8-10 March 2020 10th International Symposium on Deep-Frying Hagen, Germany www.dgfett.de/index.php 23-25 March 2020

18th Euro Fed Lipid Congress Leipzig, Germany www.eurofedlipid.org/ meetings/leipzig2020/index. php 17-19 November 2020

World Bio Markets Passenger Terminal Amsterdam, the Netherlands www.worldbiomarkets.com

Fabric and Home Care World Conference Shanghai, China www.aocs.org/attendmeetings/industry-events

25 April 2020

14-16 September 2021

Fundamentals of Edible Oil Processing Short Course Montreal Expos Quebec, Canada www.smartshortcourses.com

oils+fats Munich 2021 Messe Munich Germany messe-muenchen.de/de/ technisches/veranstaltungen/ oils-fats-2021.php

26-29 April 2020 2020 AOCS Annual Meeting Montreal Expos Quebec, Canada www.annualmeeting.aocs.org 28-29 April 2020 5th European Symposium ‘Dietary Fat and Health’ Frankfurt, Germany veranstaltungen.gdch. de/tms/frontend/index. cfm?l=9072&sp_id=2

19-22 September 2021 19th Euro Fed Lipid Congress Poznań Congress Center Poznań, Poland www.eurofedlipid.org/index. html 24-27 September 2023 16th International Rapeseed Congress Sydney, Australia www.irc2023sydney.com OFI – NOVEMBER/DECEMBER 2019

16/10/2019 09:53:45

TRANSPORT & LOGISTICS

With a population of 34M, Saudi Arabia is the leading consumer of edible oils in the GCC region

With a population of some 34M people, Saudi Arabia has the largest economy among the Gulf Cooperation Council (GCC) countries. It is also the leading consumer of edible oils, ahead of the other GCC nations of Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE). Due to the country’s lack of agricultural capacity, almost all of its edible oil is imported in the form of oilseeds and unrefined oil, with crushing and refining largely done in the kingdom. Only limited domestic olive oil production is carried out in the Al-Jawf region of the country. After a decade of strong economic activity from 2004–2014, during which vegetable oil consumption recorded a steady increase, the industry has registered modest growth in the last three years as the country experienced slower economic development during 2015– 2017, following the decline in world petroleum prices. In the current and upcoming year, vegetable oil consumption is expected to rise only moderately, although the country’s economy has started to pick up some momentum. According to a quarterly Reuters poll of 22 economists conducted during the first quarter of 2019, gross domestic product (GDP) in Saudi Arabia is expected to grow 2.1% in 2019 and 2.2% in 2020. Saudi Arabia’s population growth rate is among the highest in the GCC region and 18 OFI – NOVEMBER/DECEMBER 2019

Saudi arabia.indd 2

Saudi Arabia: leader in the Gulf Saudi Arabia has the largest population and economy in the GCC region. With limited oilseeds cultivation and production of vegetable oils, it is dependent on imports to meet ever increasing domestic demand Sunder Singh is projected to reach 40M by 2025. With its young population, where 70% of Saudis are under 30 years old, Saudi Arabia will continue to be a growth market for edible oils as young consumers with high disposable incomes have a positive impact on edible oil consumption, directly and indirectly.

Palm oil widely consumed

Palm oil demand in Saudi Arabia totalled 900,000 tonnes in 2018. The vegetable oil is one of the most widely consumed in the country because of its relatively low price and its use among large Asian communities. Malaysia and Indonesia – the world’s biggest producers of palm oil – are also the largest exporters of palm oil to the country.

Saudi Arabia imported 570,870 tonnes or US$301.4M worth of Malaysian palm oil and palm-based products in 2018. The kingdom’s import of Malaysian palm oil started to grow in 2017, with JanuaryDecember 2016 imports of 177,161 tonnes jumping to 376,551 tonnes in the same period in 2017. This was due to the country’s biggest importer, Savola Group, deciding to buy directly from Malaysia instead of sourcing its palm oil requirements through traders in the UAE. However, during the first three months of 2019, Saudi Arabian imports of Malaysian palm oil fell by 63.28 % (from 90,247 tonnes in January-March 2018 to 33,134 tonnes in January-March 2019) due to an increase in soyabean oil imports. Indonesia currently exports 370,000 www.ofimagazine.com

16/10/2019 08:45:19

TRANSPORT & LOGISTICS tonnes/year of palm oil to Saudi Arabia, according to Indonesian Palm Oil Producers’ Association chairman Joko Supriyono. “Indonesia still has a good opportunity to increase palm oil exports to Saudi Arabia as it currently supplies only 30% of Saudi’s palm oil demand,” Supriyono says. “We have the potential to increase exports to meet up to half of (Saudi Arabia’s) total needs, owing to several advantages, including our long-standing close relations with the country.” Apart from palm oil, Ukraine and Russia are major exporters of sunflower oil to Saudi Arabia. Imports from Ukraine in September 2017-August 2018 registered a sharp decline of nearly 32%. In 20172018, sunflower oil imports from Ukraine stood at 61,600 tonnes against 90,500 tonnes in the same period in 2016-2017.

Impacting factors

A few key factors are likely to have a profound impact on the edible oil industry in Saudi Arabia in the current and coming years. A major factor is the exodus of expatriate labour, which has pushed down overall aggregate demand and will impact edible oil consumption in coming years.

www.ofimagazine.com

Saudi arabia.indd 3

Official numbers point to 1M expat workers having left the kingdom in the 18 months to December 2018. An expat levy – introduced on 1 July 2017 to improve the representation of Saudi nationals in the private sector – has driven the decline in the expat population. Foreign nationals have to pay a monthly fee for each dependent (spouses, children, parents or staff) they sponsor. The fee was SAR100 (US$27) in 2017 and has risen to SAR300 (US$80) this year, and will increase to SAR400 (US$107) in 2020. In 2018, the levy was also extended to employees. Companies employing more foreign nationals than Saudis had to pay SAR400 (US$107)/month per foreign worker. If they employed more Saudi nationals, they had to pay SAR300 (US$80)/month per foreign worker. This fee was increased in 2019, and for 2000, the monthly fee will be SAR800 (US$213) per foreign employee if the firm employs more foreign nationals than Saudis, or SAR700 (US$187)/month if more Saudi nationals are employed. Continued Saudisation policies aimed at replacing foreign workers with Saudi nationals are likely to ensure that the exodus of expats continues. With nearly half of the Saudi population under the age

of 25 and a Saudi unemployment rate of more than 12%, jobs for local Saudis are a priority. The first phase of Saudisation in 12 retails sectors – including automotive, apparel, kitchenware, electronics and furniture stores – came into effect in September 2018, aimed at ensuring that 70% of sales jobs are filled by Saudis. Another factor that has boosted overall edible oil demand is the growing number of modern retail outlets, which has helped the wider distribution and availability of both edible oils and packaged foods, Increased urbanisation in Saudi Arabia has resulted in more modern retail channels, mainly hypermarkets and supermarkets. The combined number of hypermarkets and supermarkets outlets increased more than two-fold from 600 in 2008 to about 1,350 in 2018.

Major players Savola Group The largest edible oil processor in Saudi Arabia and the GCC region is the Savola Group, which was established in 1979 in Jeddah as a public joint stock company with the aim of manufacturing and marketing edible oil and vegetable ghee in u the country.

OFI – NOVEMBER/DECEMBER 2019

16/10/2019 08:45:19

TRANSPORT & LOGISTICS n Suez Ca

to statistics from the Saudi Arabian Ports Authority (Mawani). The authority has yet to release edible oil import data for 2018.



BAHRAIN



an -M

-el

b Ba b

Saudi Arabia has the largest economy and population among the other GCC countries of Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates

It began operations with SAR40M (US$10M) of capital and 200 employees, importing and refining vegetable oils under the original name of Saudi Vegetable Oils & Ghee Company. Savola achieved total sales volumes of some 1.7M tonnes of edible oils in 2018. Afia International Company, one of the main Savola Group firms, is the market leader in edible oils in the consumer goods sector of Saudi Arabia. It sells palm olein, palm stearin, corn, sunflower, soya and high oleic sunflower oils. Currently, the company has a more than 50% share of the Saudi Arabian edible oil market. The company also has a 20% market share in the GCC region, 42% in Jordan, 18% in Turkey, 85% of bottled edible oil in Sudan, 27% in Algeria and 14% in Morocco, and leading positions in Egypt and Iran as well. The company cited in its 2018 annual report that: “In Saudi Arabia, the grocery retail market remains challenging. FMCG sales in the kingdom fell by around 5% in 2018, while the implementation of value added tax (VAT), unprecedented shopper price sensitivity, rising energy and utility prices, and falling expatriate customers have acted as major barriers to the edible oil sector.” Arab Malaysian Vegetable Oil Products Arab Malaysian Vegetable Oil Products Co Ltd is a Malaysian investment firm which has been operating in Saudi Arabia 20 OFI – NOVEMBER/DECEMBER 2019

Saudi arabia.indd 4

since 2007. The company has established a group of factories in Yanbu’s light industrial zone. The company’s activities include refining, manufacturing and packaging vegetable oils and fats. It has set up storage tanks, a refinery and a fractionation plant in Yanbu (King Fahad) Industrial Port.

Major importing ports

Saudi Arabia has a total of nine major commercial sea ports – Dhiba (Diba or Dibba) Port, Gizan Port, Jeddah Islamic Port, Jubail Commercial Port, King Abdul Aziz Port Dammam, King Fahad Industrial Port Jubail, King Fahad Industrial Port Yanbu (Yanbu Industrial Port), Ras Al Khair Port and Yanbu Commercial Port. In recent years, the kingdom has embarked on a drive to grow its network of ports. One of the main targets under the Vision 2030 national development strategy is to substantially upgrade port facilities. This includes upgrading ports to better handle the increasing number of ultra-large container vessels (ULCVs) travelling along global shipping lanes. Jeddah Islamic Port accounted for nearly 74% of all edible oil imports in the country in the year 2017. Yanbu Commercial Port followed with a 15% share. Yanbu Industrial Port accounted for nearly 7.5% of all edible oil imports, while King Abdul Aziz Port Dammam accounted for the remaining 3.5% of all edible oil imports, according

Jeddah Islamic Port The largest edible oil import port in Saudi Arabia, Jeddah Islamic Port has an excellent location in the middle of the international shipping route between the east and west. The port lies on the Red Sea coast and remains the kingdom’s principal port, serving the holy cities of Mecca and Medina. It is the largest port in the Arab world. The port serves commercial centres through which more than 50% of the kingdom’s imports by sea are handled. Yanbu Commercial Port Yanbu Commercial Port is the nearest major Saudi seaport to Europe and North America and is the focal point of the most rapidly growing area on the Red Sea. Traditionally, it has served as the nearest gateway for seaborne pilgrims bound for the holy city of Medina. Port expansion in 1979 increased capacity to nine berths with modern facilities and equipment. It can handle in excess of 3M tonnes/year of cargo. Yanbu Industrial Port Yanbu Industrial Port (also known as King Fahad Industrial Port) lies on the shores of the Red Sea in central-western Saudi Arabia. about 300km north-northwest of Jeddah Islamic Port. It is located in the centre of shipping routes between Europe and the USA through the Suez Canal, as well as the Far East through Bab-elMandeb strait. Developed to serve the nearby industrial complex, Yanbu Port includes a variety of different terminals – for general cargo, containers, bulk cargo and petrochemicals – as well as storage areas for hazardous cargo, general cargo, container storage and covered warehousing. King Abdul Aziz Port Dammam King Abdul Aziz Port Dammam is the main gateway through which cargo from around the world enters the eastern and central provinces of Saudi Arabia. It is strategically placed to service the requirements of the petroleum industry, the continuous development of Riyadh, the capital, and the major cities in the eastern and central provinces. There is a dedicated railway line to Riyadh Dry Port and a highway system connecting Dammam Port with the rest of the kingdom and adjacent Gulf states.  Sunder Singh is a freelance journalist www.ofimagazine.com

16/10/2019 08:45:21

BIODIESEL

EU industry update The EU is the world’s largest producer of biodiesel, which is also the most important biofuel in the region. The bloc produced 14.4bn litres of biodiesel in 2018 and 2.8bn litres of hydrotreated vegetable oil (HVO) (see Table 1, p22). However, while HVO production is set to increase with new plants coming into operation, conventional biodiesel (fatty acid methyl ester or FAME) faces strong competition from domestic HVO and from cheap FAME imports from Argentina (mostly soyabean oil methyl ester or SME) and Indonesia (palm oil methyl ester or PME).

throughout the EU are being run well below full capacity or are shut down. Faced with pressure from large stocks and continuing high imports, EU FAME production this year is forecast to fall by 4% to 14.17bn litres.

FAME production and capacity

HVO production

The structure of the EU biodiesel sector is very diverse. Plant sizes range from an annual capacity of 2.3M litres owned by a group of farmers to 680M litres owned by a large multinational company. FAME production facilities exist in every member state with the exception of Finland, Luxembourg and Malta. Production capacity increased by 4% in 2018 due to an expansion in Italy. For 2019, a further marginal rise of 0.2% is forecast. However, numerous plants www.ofimagazine.com

EU.indd 2

The EU is world’s largest producer of biodiesel. However, while it is set to supply more hydrotreated vegetable oil (HVO) as new plants come into operation, its production of conventional biodiesel is forecast to fall as it faces strong competition from cheaper Argentine and Indonesian imports

Renewable diesel or HVO can be fully substituted for petroleum fuels, such as kerosene or diesel. They can be produced from a wide range of feedstocks such as vegetable oils, animal fats and used cooking oil (UCO), as well as oils produced as by-products of various industrial processes such as tall oil (a residue of the wood pulp and paper industry), technical corn oil (oil taken from distillers dried grains, the co-product of grain ethanol production), palm oil effluent,

and palm fatty acid distillate (PFAD). EU HVO production for 2018 is estimated at 2.8bn litres and is expected to increase slightly to 3bn litres in 2019. With new plants in France and Italy, production is forecast to surge in 2020 and 2021 to 3.5bn and 4.5bn litres respectively. EU HVO production capacity in 2019 is expected to increase 47% compared with 2018 to reach 5M litres, in the following six countries: Finland: Neste Oil operates one plant with two lines of about 215M litres each which began operations in 2007 and 2009. In 2010, Neste Oil opened up a renewable diesel plant in Singapore with an annual capacity of 910M litres and a similar scale plant in Rotterdam in 2011. The current u OFI – NOVEMBER/DECEMBER 2019

16/10/2019 08:48:15

BIODIESEL 2014

2015

2016

2017

2018

2019F

520

565

590

585

640

930

14,097

14,449

14,384

15,375

14,442

14,170

2,311

2,473

2,600

2,743

2,797

3,030

Imports

631

540

629

1,097

3,366

3,400

Exports

181

245

408

397

664

420

Consumption

14,502

14,719

14,610

16,020

16,854

17,380

Ending stocks

565

590

585

640

930

700

220

201

196

188

22,634

21,928

21,445

20,289

21,181

21,230

Beginning stocks Production (HVO production)

specifically for Venice, Eni is converting its Gela refinery in Sicily into a renewable diesel production facility to produce 770M litres/year. The conversion started in April 2016 and the facility is likely to be operational by the end of this year. Portugal: Since 2017, oil and gas firm GALP has been producing HVO at its 40M litres capacity plant in Sines. Spain: Two oil and gas companies – CEPSA and REPSOL – have been producing HVO since 2011 and 2013 respectively. In 2018, Spanish HVO production increased to 482M litres from 465M litres in 2017.

Production capacity – biodiesel Number of biorefineries Nameplate capacity Capacity use (%)

Production capacity – renewable diesel (HVO) Number of biorefineries Nameplate capacity Capacity use (%)

2,831

3,395

5,000

Rapeseed oil

6,200

6,400

6,060

6,300

5,200

5,000

UCO

1,890

2,400

2,620

2,770

2,860

2,750

Palm oil

2,240

2,340

2,315

2,650

2,570

2,640

Soyabean oil

840

540

610

930

1,000

1,100

Animal fats

920

1,030

795

800

Sunflower oil

310

210

250

180

185

190

Other, pine/tall oils, fatty acids

370

560

615

635

680

700

Source: GAIN, USDA

Feedstock use for biodiesel and renewable diesel/HVO (‘000 tonnes)

Table 1: EU biodiesel/renewable diesel production, supply and demand (M litres) u annual capacity of the Rotterdam plant is a maximum of 1,280M litres. In 2018, 83% of the feedstock used by the three Neste plants consisted of waste fats and oils (76% in 2017). The waste and residues consist of UCO, PFAD, animal fats and technical corn oil. In 2015, forest product company UPM opened a HVO plant in Lappeenranta with a capacity of about 115M litres/year using tall oil as its feedstock. The company is studying the possibility of opening another plant in Kotka with an expected capacity of about 550M litres. The targeted feedstocks are mainly forest byproducts, such as sawdust and branches. France: In July, French oil giant Total started up production at its La Mède biorefinery, which can produce 500,000 tonnes of HVO. Its feedstock comprises 60-75% vegetable oils (rapeseed, sunflower and palm oils), and 25-40% animal fat, UCO and residues from waste or the pulp and paper industry. As part 22 OFI – NOVEMBER/DECEMBER 2019

EU.indd 3

of an agreement with the government in May 2018, Total has pledged to process no more than 300,000 tonnes/year of of palm oil and at least 50,000 tonnes of French-grown rapeseed. Total and five partners are also part of the BioTFuel project, which aims to produce 230M litres/year of advanced biodiesel and SAF fuel from 1M tonnes of biomass by 2020. The demonstration scale plant is located at Total’s former Flanders refinery in Dunkirk. Italy: A HVO plant was opened by oil and gas group Eni in Venice in 2014. Since then, the plant has been able to supply approximately 325M litres/ year. Production is forecast to increase to 540M litres in 2021 as a result of upgrades. The feedstock, currently palm oil, will include an increasing proportion of used oils, animal fats and by-products from palm oil production. Following the model adopted

Sweden: Finnish company, St1, plans to produce HVO in Gothenburg, starting from 2021 with a planned plant capacity of about 125M litres. In Gothenburg, Swedish petroleum corporation Preem produces about 160M litres of HVO using mainly tall oil as a feedstock. The company recently increased its production capacity to 220M litres and is reportedly planning to further expand to 1.3bn litres in 2023. Preem is currently investigating the use and sourcing of other raw materials in order to expand production. It also plans to produce up to 300M litres/year of sustainable aviation fuel (SAF) in 2022. St1 and forest product company SCA are also planning to build a HVO plant with a capacity of about 250M litres, which is expected to be operational by 2021. One of the raw materials which will be used is biocrude oil made from tall oil. Swedish forest-based renewable fuel producer SunPine is planning to increase its biocrude tall oil production from about 100M litres to 150M litres in 2020. Wood products firm Setra is planning to produce about 30M litres of pyrolysis oil from sawdust. The construction of the plant is scheduled to begin in 2019. The crude bio-oils of SunPine and Setra will be further refined to renewable diesel.

Feedstocks and co-products

Rapeseed oil is still the dominant biodiesel feedstock in the EU, accounting for 39% of total production in 2018. However, its share in the feedstock mix has declined since its peak in 2008, when it accounted for 72%. This is partly due to the higher use of UCO and palm oil in Europe. In addition, EU rapeseed oil-based FAME (RME) has a hard time competing with cheap imported SME and PME. The use of rapeseed oil is expected to decline from 6.3M tonnes in 2017 and 5.2M tonnes in 2018 to 5M tonnes u in 2019. This is due to continued

www.ofimagazine.com

16/10/2019 08:48:15

UNITED ENGINEERING (E) CORPORATION, INDIA E: sales@uec-india.com www.uec-india.com

Engineered for Productivity HIGH CAPACITY OIL PRESSES

Clean and efficient vacuum systems for refining and deodorising

COLD PRESSING TECHNOLOGY

ICE Ice condensation

DEWATERING PRESSES

ACL Alkaline Closed Loop Kuala Lumpur 19.-21.11.2019 hall 4 stand 152-153

19th - 21st November 2019 Kuala Lumpur Convention Centre Malaysia

www.koerting.de +49 511 2129-253 Â· st@koerting.de

BIODIESEL u competition from lower cost feedstocks and biodiesel. In addition, the ban on three neonicotinoid insecticides (clothianidin, imidacloprid and thiametoxam) is expected to take a toll on EU rapeseed production. The majority of rapeseed oil is of domestic origin. UCO was the second most important EU biodiesel feedstock in 2018, comprising 22% of total feedstock or 2.86M tonnes. For 2019, UCO use is forecast to decrease by 4% because of lower FAME production. In 2018, the largest EU producers of UCO-methyl ester (UCOME) were Austria, Germany, the Netherlands, Portugal and the UK, together accounting for 90% of use for this feedstock. Palm oil came in third place in terms of feedstock use in 2018 (19% or 2.57M tonnes) and is imported. Its use fell 3% compared to the previous year, mainly because of the availability of cheap PME from Indonesia. Palm oil was mainly used in France, Italy, the Netherlands and Spain. For 2019, palm oil use is forecast to rebound due to increased HVO production. Around 1M tonnes of soyabean oil was used as feedstock in 2018, a large share crushed from imported soyabeans. The vast majority of soyabean oil is used in Spain, followed by the Netherlands and Germany. The increased use of animal fat, which totalled 800,000 tonnes in 2018, is due to new plants or capacity increases of existing plants. In 2018, the Netherlands was by far the largest user of animal fat for biodiesel production, followed by Finland and France. Sunflower oil only comprised 1% of the EU’s total biodiesel feedstock and is mainly used in Greece and Bulgaria, together accounting for 73% of EU sunflower oil-based biodiesel production.

Trade

In 2018, the dominant suppliers of biodiesel to the EU were Argentina and Indonesia, which accounted for 42% and 27% of EU biodiesel imports respectively. EU imports of biodiesel in 2018 surged three-fold to a record 3.37bn litres (20% of consumption) due to the removal of anti-dumping duties on biodiesel from Argentina (in September 2017) and Indonesia (in March 2018). EU imports from Indonesia totalled 892M litres last year and are expected to increase further as low crude palm oil (CPO) feedstock prices keep Indonesian PME highly price competitive. On 23 July, the EU issued preliminary 24 OFI – NOVEMBER/DECEMBER 2019

EU.indd 4

‘Faced with pressure from large stocks and continuing high imports, EU FAME production this year is forecast to fall by 4% to 14.17bn litres’ anti-subsidy duties on Indonesian biodiesel ranging from 8-18%, effective from September. The measures are provisional, pending the conclusion of an anti-subsidy investigation launched in December 2018. Definitive duties, usually applied for five years at the end of an investigation, would need to be set by 4 January 2020. EU biodiesel imports from Argentina amounted to 1.9bn litres last year. The EU proposed anti-subsidy duties of 25-33.4% on Argentine biodiesel in February but then reached an agreement with eight of the country’s biodiesel producers to allow up to 1.2M tonnes/year of tarifffree Argentine biodiesel imports at a set minimum price. After Indonesia and Argentina, Malaysia and China account for most of the EU’s remaining biodiesel imports, expected to remain largely unchanged at 300M-500M litres each. For 2019, EU biodiesel/HVO imports are forecast to further increase but only slightly (1%) to 3.4bn litres. EU biodiesel exports to destinations outside the bloc only amount to around 1% of production.

Consumption

Consumption of FAME and HVO is driven almost exclusively by member state mandates and, to a lesser extent, tax incentives. Only when biodiesel is cheaper than fossil diesel will consumption exceed mandated volumes.

While biodiesel use has continued to expand since 2017, the rate of expansion has fallen due to the use of feedstocks that can be double-counted towards mandates, thus reducing the physical volumes used to meet them. EU consumption totalled 16.85bn litres in 2018, with France, Germany, Italy, Spain and Sweden accounting for 63% of the total. This year, EU consumption is expected to increase 3% to 17.38bn litres as a result of mandate increases in Croatia, Finland, Hungary, Ireland, Italy, the Netherlands, Poland, Slovakia and the UK, and a rebound in the Czech Republic.

Blending

In 2019, total biofuels blending with fossil fuels (on an energy basis and with double-counting of advanced biofuels) is forecast to reach 7.3%. This is a minor increase compared to the blending of 7.1% achieved in 2018. Excluding double-counting, total biofuel blending in 2019 is forecast to reach only 5.7%, with 4% for bioethanol and 6.4% for biodiesel and HVO. Blending of food-based biofuels is estimated at 4.6%, still well below the 7% cap set by the indirect land use change (ILUC) Directive and the Renewable Energy Directive II (RED II) for 2021-2030 (see box, following page). Blending of advanced, non-food and waste-based biofuels is estimated at 1.2% in 2019. The majority of these advanced biofuels (about 1%) is produced from waste fats and oils (Part B feedstocks under RED II). Only a small percentage (0.2%), is produced from agricultural and forestry by-products such as pine oil and cellulosic feedstocks (Part A feedstocks under RED II). The RED II target for advanced biofuels produced from Part A feedstocks is 0.2% in 2022, which equals the current consumption level. However, the target is set to increase to 3.5% in 2030, which requires a quantity of about 10,000ttoe (thousand metric tonnes of oil equivalent). This would almost equal the current production of conventional biofuels and requires about 100 advanced biofuel plants with capacity of 200M litres/year each. This requires investments in domestic biorefineries and possible external sourcing of eligible feedstocks, or sourcing of such advanced biofuels from outside the EU.  This article is based on the United States Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report, ‘EU Biofuels Annual 2019’, published on 15 July 2019 www.ofimagazine.com

16/10/2019 08:48:23

BIODIESEL

EU biofuel policies explained The current EU policy for renewable energy is set out in its EU Energy and Climate Change Package (CCP) which runs from 2010-2020. The CCP includes a 20% binding target for renewable energy in the overall energy mix of the EU. The Renewable Energy Directive (RED) is part of the CCP and entered into force on 25 June 2009 and expires on 31 December 2020. It requires a 10% renewable energy blending target for the transport sector. Concerned that several CCP measures were having adverse environmental impacts and that not all member states were contributing to the EU 20% renewable energy target, the European Commission (EC) adopted the Indirect Land Use Change (ILUC) Directive in 2015, which amended both the RED and the Fuel Quality Directive (FQD). The amendment caps the use of food-based biofuels that can be used to meet the 10% transport target at 7%. It also requires advanced biofuels to comprise a minimum share of 0.5% of the transport sector’s energy use by 2020. To further incentivise advanced biofuel use, the amendment allows member states to double-count the contribution of advanced biofuels towards the binding targets To qualify for RED and FQD targets, biofuels consumed in the EU must comply with RED sustainability criteria such as the minimum level of greenhouse gas (GHG) savings and appropriate land use. Biofuels from older operations must achieve GHG savings of a least 50% in comparison with fossils fuels (60% for plants that have come online after 1 January 2017). Biofuels must not be made from raw materials obtained from land with high biodiversity value, such as primary forests, or with a high carbon stocks, such as wetlands, peatlands or continuously forested areas. Part A

Part B

•

• • • • • • • • • • • • • •

Algae if cultivated on land in ponds or photobioreactors Biomass fraction of mixed municipal waste Biowaste from private households subject to separate collection Biomass fraction of industrial waste not fit for use in the food or feed chain Straw Animal manure and sewage sludge Palm oil mill effluent and empty palm fruit bunches Crude glycerine Grape marcs and wine lees Nut shells Husks Cobs cleaned of kernels of corn Biomass fraction of wastes and residues from forestry and forest-based industries Other non-food cellulosic material Other ligno-cellulosic material except saw logs and veneer logs

Table 2: Advanced biofuel sources in RED II

www.ofimagazine.com

EU.indd 5

•

Used cooking oil Some categories of animal fats

The FQD mirrors some of the RED’s content, such as sustainability criteria. It places limits on the palm oil and soyabean oil content of biodiesel. A key requirement is that all fuel suppliers must meet a 6% reduction in GHG emissions by 2020. However, this will not be extended beyond 2020 as the EU addresses the decarbonsiation of transport fuels after 2020 in the revised RED (RED II).

RED II

In 2016, the European Commission (EC) proposed a successor to the RED to cover the 2021-2030 period. RED II was finalised two years later and will enter into force on 1 January 2021. The RED II sets a new overall renewable energy target of 32% by 2030 and a 14% target for the transport sector, with a clause for a possible upwards revision by 2023. Within the 14% transport sector target, food-based biofuels are capped at 1% higher than each member state’s 2020 conusmption level, with a maximum limit of 7% for each member state. If the cap on first generation biofuels in a member state is less than 7%, the country may reduce the 14% transport target by the same amount (for example, a country with a food and feed crop cap of 6% can set the transport target at 13%). Member states can also set a lower limit for conventional biofuels than prescribed in RED II. For advanced biofuels, the RED II sets two different targets for two groups of feedstocks (see Table 2, below left). Part A feedstocks (including palm oil mill effluent, tall oil, bagasse and forest residues) must be supplied at a minimum of 0.2% of transport energy in 2022, 1% in 2025 and increasing to at least 3.5% by 2030. Part B feedstocks (UCO and some categories of animal fats) will be capped at 1.7% in 2030. Advanced biofuels will be double-counted towards both the 3.5% target and towards the 14% transport target. The EC can add to the list of feedstocks but cannot remove any. RED II also includes specific criteria for high-risk ILUC biofuels.

High-risk ILUC feedstocks

One of the more heated debates surrounding RED II concerns the use of biofuels produced from areas that have undergone recent deforestation or the conversion of grasslands to croplands. In May 2019, the EU published the Delegated Regulation 2019/807 (delegated act), which determines what high-risk ILUC feedstocks are. They are defined as feedstocks for which the share of expansion of the production into land with high carbon stock is higher than 10% since 2008, with an annual expansion of more than 1%. Only palm oil falls under this definition. The delegated act allows producers to certify their feedstock as low-risk ILUC. In this case, the feedstock will need to comply with the RED II’s general sustainability criteria as well as be produced through “additional measures”, such as on unused or abandoned land or by smallholders (less than 2ha). This has been described as a loophole by European farmers and biodiesel producers. The use of high-risk ILUC biofuels will be capped at the 2019 level until 2023 and then phased out by 2030.  USDA Global Agricultural Information Network (GAIN) report, ‘EU Biofuels Annual 2019’ OFI – NOVEMBER/DECEMBER 2019

16/10/2019 08:48:23

OILSEEDS

Sequencing the peanut Peanuts are a vital source of nutrients, particularly in underdeveloped countries such as those in Sub Saharan Africa. This year, scientists have produced the clearest picture yet of the peanut genome, paving the way for new varieties with improved traits such as pest and drought resistance Gabriel Day With a high calorie, protein and carbohydrate content, peanuts (or groundnuts) provide a vital source of nutrients for populations in under-developed countries such as those in Sub Saharan Africa (SSA) – where the oilseed is widely grown. Peanut oil is also very popular in a variety of global cuisines and has a low level of saturated fat. China, India, various SSA countries and the USA are the world’s biggest producers of peanuts. And in recent years, scientists have been looking at ways to optimise the oilseed, with an international collaboration reporting in May that they had produced the clearest picture yet of the peanut’s complex genome sequence, paving the way for the development of peanuts with improved pest resistance and 26 OFI – NOVEMBER/DECEMBER 2019

peanuts.indd 1

drought tolerance. Peanuts are a rich source of oil (44% to 55%), protein (20% to 50%) and carbohydrates (10% to 20%). They are also an important nutritional source of niacin, folate, calcium, phosphorus, magnesium, zinc, iron, riboflavin, thiamine and vitamin E. According to Chinese firm ABC Machinery, peanut oil contains more than 80% unsaturated fatty acids (including around 41.2% oleic acid and 37.6% linoleic acid). It also contains around 10% palmitic acid and some stearic, arachidic, behenic and lignoceric fatty acids. In addition, the oil contains beneficial substances such as sterol, wheat germ phenol, phospholipids, vitamin E and choline.

Global production

According to the United States Department of Agriculture (USDA), the cultivated peanut has a total global production area of around 23.8M ha. SSA has a cultivation area of 10.71M ha, producing some 10.33M tonnes/year of peanuts. Domestic food consumption totals 7.43M tonnes/year and feed consumption 1.24M tonnes/year. In SSA, domestic production accounts for 96.2% of total output, according to a 2016 USDA Foreign Agricultural Service (FAS) report. However, in terms of individual countries, China takes the number one spot, annually producing around 17.5M tonnes, followed by India at 5.2M tonnes, Nigeria at 3.5M tonnes and the USA at 2.4M tonnes, according to the USDA 2019 estimates for peanut production. China also leads the world in peanut oil output by a large margin, with 2.9M tonnes/year of production. This is followed by India (1.1M tonnes), Myanmar (270,000 tonnes) and Nigeria (265,000 tonnes). However, the 2019 estimates show that Argentina is the world’s top exporter of peanuts and peanut oil (exporting www.ofimagazine.com

19/11/2019 16:58:16

FEATURE 800,000 tonnes/year and 92,000 tonnes/year respectively) despite only being the world’s seventh largest producer of both (1.2M tonnes of peanuts and 106,000 tonnes of peanut oil annually). China is the world’s second highest exporter of peanuts at 700,000 tonnes/ year, and India is third with 675,000 tonnes/year. The USA follows with 578,000 tonnes/year. Regarding world peanut oil exports, Senegal ranks second after Argentina with 65,000 tonnes/year and Brazil follows with 51,000 tonnes/year, according to the USDA estimates. Nigeria, the third largest peanut producer and fourth largest peanut oil producer, only exports 3,000 tonnes/ year of peanut oil. In terms of imports, the EU is the world’s largest peanut importer, at 980,000 tonnes/year, followed by Indonesia at 475,000 tonnes and China at 375,000 tonnes annually, according to the USDA 2019 estimate. The world’s number one peanut oil importer is China, taking 150,000 tonnes/year. The EU follows with 70,000 tonnes and the USA comes third with 32,000 tonnes. Peanut oil prices have remained steady in recent years. According to Oil World, in August 2019, peanut oil was priced at US$1,457/tonne, a small decline compared to the same time last year (US$1,477/tonne). Peanut prices however, saw a slight increase. In August 2019, the Oil World price was US$1,252/tonne, compared with US$1,405/tonne in August 2018. Regardless of where the peanuts originate from, there is a demand for them to be more drought and pest resistant.

OILSEEDS Thanks to the sequencing, the time required to develop new peanut varieties has been cut considerably, from typically six years to as low as two years, Wilson said. Using the peanut genome, researchers will be able to identify genes in strains known to have some resistance to fungal infection and develop new crosses that enhance disease resistance. Greater availability of high-quality peanuts will help ensure food security in nations that suffer from chronic hunger, such as Nigeria where over half of the population lives below the poverty line,

according to the charity Action Against Hunger. “The peanut crop is important in the USA, but it is very important for developing nations as well,” said Scott Jackson, chair of the IPGI. “In many areas, it is a primary calorie source for families and a cash crop for farmers.” “Improving peanut varieties to be more drought, insect and disease resistant can help farmers in developed nations produce more peanuts with fewer pesticides and other chemicals and help farmers in developing nations feed their families and build more secure livelihoods,” u

Gene sequencing

In April 2014, the peanut’s genome was successfully sequenced by the International Peanut Genome Initiative (IPGI), set up by the University of Georgia (UGA). The IPGI brings together scientists from Brazil, China, India, Israel and the USA to define peanut genome sequences, characterise the genetic and phenotypic variation in cultivated and wild peanuts and develop genomic tools for peanut breeding. Retired USDA national programme leader for oilseed research, Richard Wilson, describes genome sequences as “extremely high quality roadmaps to ensure gene locations on each peanut chromosome”. 2 OFI – MONTH 2018 www.ofimagazine.com

peanuts.indd 2

OFI – NOVEMBER/DECEMBER www.ofimagazine.com 2019 27

19/11/2019 16:58:18

OILSEEDS u said plant geneticist Rajeev Varshney of

the International Crops Research Institute for Semi-Arid Tropics in India (ICRISAT), who serves on the IPGI. In May, the USDA’s Agriculture Research Service (ARS) reported on latest advances in the IPGI project. “The story of the cultivated peanut begins several thousand years ago in South America, where the genomes of two wild ancestors, a. duranensis and a. ipaensis – merged in a rare genetic event,” the ARS said. “The result, in modern-day peanuts, is a complex genomic blend that’s nearly as big as the human genome, which is about three billion DNA base pairs.” Initially, scientists sequenced the genomes of the two wild ancestors separately, using the DNA taken from them rather than the cultivated peanut. “This made it easier to identify structural features of the genomes and

genes residing in them,” the ARS said. Identifying the structural elements aids future gene marker development – the determination of links between a gene’s presence and a physical characteristic of the plant. Using advanced DNA sequencing, the researchers sequenced the two merged genomes in a single commercially grown peanut, namely “Tifrunner”, filling in knowledge gaps that previous efforts had missed. “This latest advance, reported in the May issue of Nature Genetics, has already generated interesting leads, including a. duranensis’ geographical origin, the Rio Seco region in the northern Argentina.” The scientists concluded that ancient farmers migrating to Argentina from Bolivia exposed a. duranensis plants to another species they had brought with them – a. ipaensis, the other considered parent of the peanut plant.

Peanut oil extraction and processing The production of peanut oil involves various stages including cleaning, shelling, grading, crushing, rolling, steaming or cooking, pressing, filtering and refining, according to ABC Machinery. Cleaning: The peanuts are first cleaned to remove immature, damaged or mouldy kernels which can affect the oil’s quality. Shelling: A shelling process increases oil yield, improves the quality of the oil and reduces equipment wear. Grading: Some production plants separate small nuts from larger ones for different treatments. Crushing: This is carried out to remove the red skin on the nut kernel, which is then disposed of using a wind separator. At the same time, large sized kernels are crushed into a smaller size so the moisture of crushed peanuts can be better controlled. Rolling: The peanuts are rolled between two rollers to form the embryo slice, in which the shape of the peanut is changed and the oil path is shortened, which benefits oil extraction. Steaming and cooking: This adjusts the moisture of the peanut embryo slices, improving the oil extraction rate and ensuring the final peanut oil has a strong aroma. Pressing: The embryo slices are pressed for oil extraction. There are two methods of pressing: hot and cold pressing. • Hot pressing is where the peanuts are steamed and pressed, usually at a temperature above 120°C with a high rate of oil output. Due to the high production temperature, the peanut protein is usually denatured and loses nutrients. • Cold pressing is carried out at a temperature under 60°C, which is beneficial in preserving nutrients. Filtering: The crude peanut oil may include some organic impurities that can be filtered out. Refining: The crude peanut oil still may contain oil-soluble and non-oil-soluble impurities which can be removed by refining. 28 OFI – NOVEMBER/DECEMBER 2019

peanuts.indd 3

Scientists recreated the merger by crossing the two species and analysing the result in seven generations of offspring plants. It revealed a pattern of DNA swapping and eliminations taking place in the offspring plants which likely explains the diverse seed size, shape, colour and other traits seen in peanuts today. “The DNA swapping is unusual in that it occurs between the two ‘subgenomes’ of the two contributing wild species – something that is possible due to their high similarity,” the ARS said. The two ancestors had been collected in nature decades ago. A. duranensis is widespread in nature today, but a. ipaensis has only been collected from one location and may now be extinct in the wild. “Long-sighted efforts toward germplasm collection and conservation of these species provided the IPGI with the materials to understand the peanut genome better.” The latest work was led by UGA researcher David Bertioli, as a continuation of the IPGI. “Scientists undertook this large project to better understand the molecular and cellular mechanisms that underpin the peanut plant’s growth and development, as well as the expression of desirable traits, like high seed yield, improved oil quality and resistance to costly diseases and pests such as root knot nematodes,” the ARS said. Without gene sequencing, breeding desired varieties can take significantly longer. In India, two high oleic groundnut varieties are set for commercial production after eight years of collaborative work. The varieties, called Ginar 4 and Ginar 5, were developed by the Indian Council of Agricultural Research (ICAR) and ICRISAT. They have an 80% oleic acid content, higher than the 45% to 50% in standard groundnuts. "Oleic acid is a monounsaturated fatty acid with health benefits including reducing low density lipoprotein (LDL) or 'bad' cholesterol and maintaining high density lipoprotein (HDL) or 'good' cholesterol", ICRISAT said in May. "Studies have shown that high oleic groundnut oil and products are less prone to oxidation, hence giving extended shelf life." ICRISAT said the commercialisation of high oleic groundnut varieties in India would meet consumer and food industry demands for improved health benefits and a longer shelf life in products. • Gabriel Day is OFI’s assistant editor www.ofimagazine.com

19/11/2019 16:58:18

TESTING & STANDARDS

Global round-up of news Oils & Fats International reports on some of the latest news and developments involving instrumentation, testing and standards around the world

IDF issues guidance on milk fat purity The International Dairy Federation (IDF) released guidance on how to determine milk fat purity on 26 August. “Milk fat is an important component of milk and most dairy products,” the IDF says. “In addition to having a nutritional impact, it also provides numerous benefits to food products including flavour enhancement and desirable mouthfeel. “However, the high price of milk fat means that it is susceptible to replacement by other animal fats or vegetable oils.” The IDF’s ‘Guidance on the practical application of IDF/ISO standard on the determination of milk fat purity’ provides advice on the recently revised ISO17678/IDF 202 Milk and Milk Products: Determination of Milk Fat Purity by Gas Chromatography method. “The dairy sector is often required to prove the authenticity of its product against potential adulteration,” the IDF says. “By providing this additional background information and guidance, we aim to assist those who desire to set up the method and those who need a general understanding to interpret the results the method produces,” says the guidance’s lead author, Dr Alastair MacGibbon. “The guidance aims to provide background information for those carrying out the testing to enable the method to be more easily incorporated into the laboratory,” the IDF says. “In addition, guidance on the interpretation of results is provided.” The IDF says it hopes that greater knowledge of the testing and its advantages could lead to the replacement of some of the older test methods used in some regional regulations, increasing harmonisation. www.ofimagazine.com

Testing.indd 2

New standards to curb xylella fastidiosa spread The United Nations (UN) body responsible for preventing the spread of plant diseases adopted new standards to curb the spread of xylella fastidiosa, the bacterium which has devastated olive groves in Italy. The new standards – which also cover five other pest-borne diseases – were approved during the Commission on Phytosanitary Measures (CPM)’s annual meeting in April. They include universal guidance on the use of fumigation; implementing diagnostic protocols for correctly identifying invasive plant pathogens and reacting accordingly; setting ground rules for international trade in agricultural goods; developing new technologies to more effectively screen plants and plant products for diseases; and reducing the risk of transporting plant pests via sea containers. CPM is the governing body of the International Plant Protection Convention (IPPC) – the only international body charged with setting and implementing phytosanitary standards recognised by governments around the world, the UN Food and Agriculture Organization (FAO) says in a press release. “With increased trade and travel, the risks of plant pests spreading into new

areas across borders is now higher than ever before,” says Bukar Tijani, the assistant director general of the FAO’s agriculture and consumer protection department. The FAO, which runs the CPM, estimates that 20-40% of the world’s crops are lost to pests every year, with plant diseases costing the global economy around US$220bn annually, and invasive insects around US$70bn. Xylella fastidiosa attacks olive, citrus and plum trees and had spread rapidly from the Americas to Europe and Asia since 2015, the FAO says. “In Italy, the bacteria has led to the decline of 180,000ha of olive groves and constitutes a threat to Italy’s, and all Mediterranean economies.” Xylella fastidiosa had also infected olive trees in Spain’s Balearic Islands and France, according to Olive Oil Times. The bacterium attacks a plant’s water-transporting xylem vessels, blocking water movement and causing symptoms that resemble water stress. “Once xylella fastidiosa infiltrates a plant, it is there to stay - it starves the plant of water until the plant dies or becomes too weak to grow fruit,” the FAO says. u OFI – NOVEMBER/DECEMBER 2019

16/10/2019 10:04:11

TESTING & STANDARDS u

Confusion over cannabis and hemp Manufacturers and suppliers of cannabis and products derived from the plant need to understand both their products’ technical characteristics and legal status in their target markets, says Swiss inspection and testing firm SGS in an April report. “Most countries recognise cannabis sativa – containing delta-9-tetrahydrocannabiol (THC) – as drugs,” SGS says. “However, confusion surrounds varieties of cannabis sativa (known as hemp) and products containing hemp and its non-psychoactive derivative, cannabidiol (CBD).” SGS says cannabis, hemp and marijuana all belong to the cannabis plant family, which has two primary classifications – indica and sativa. Hemp is a variety of cannabis sativa L. Marijuana can be considered a member of either sativa or indica. SGS says hemp is low in THC but high in CBD, with its legality varying across the world. “Some ingredients taken from hemp are recognised as safe, others could possibly be considered novel foods or supplements, and some products are considered drugs. “The EU classes hemp and its derivatives (seeds, oils, flour and defatted seeds) as food and food ingredients. However, this rule does not apply in every member state.” In the USA, the signing of the Agricultural Improvement Act in December 2018 allows the legal selling of hemp and its derivatives if they contain less than 0.3% of THC on a dry weight basis. “The US Food and Drug Administration (FDA) recognises hemp seed, hemp seed protein powder and hemp seed oil as Generally Recognized As Safe (GRAS),” SGS says. “However, this change does not override state laws.” Australia and New Zealand have allowed the sale of hemp with no or very low levels of THC since November 2017. Canada has allowed hemp products with less than 0.3% THC since 1998. Since 1 January 2010, the Yunnan Department of Agricultural in China has allowed the cultivation of

hemp with less than 0.3% THC, with China now providing about 50% of the world’s industrial hemp products. In Japan, hemp cultivation is illegal but the sale of products is legal. SGS says CBD can be classified as a food, supplement and/or drug, depending on the country. The European Foods Safety Agency is considering a novel food application for CBD in food supplements with a daily intake of up to 130mg. In the USA, CBD – whether derived from hemp or not – is considered a drug, and it is illegal to sell CBD across state lines. “It is therefore not legal as a supplement or food ingredient,” SGS says. However, eight states have approved its use without a doctor’s recommendation. Other states require the recommendation of an authorised medical professional, thereby creating a quasi-drug status. Certain states also allow the sale of edible cannabis products. “For example, Washington state considers the product matrix and production chain. This means testing requirements can involve potency, moisture and water activity, foreign matter screening, entero-

bacteria, pathogenic E coli and salmonella, mycotoxins, heavy metal screening and residual solvent screening,” SGS says. “There is, however, no consistency between state requirements, with some authorities demanding specific test requirements and others remaining vague.” Canada made CBD legal for recreational and medical use in October 2018 but the rule does not override provincial laws. The country is still considering regulations for edible and topical products. The main criteria would be the level and limit of THC, such as 10mg THC per package, SGS says. “For edible solid products, all food or cosmetic safety requirements will apply. However, the addition of certain ingredients – vitamins, minerals, caffeine and alcohol – are prohibited. In addition, it will be illegal to sell to minors and packaging must be plain with specific labelling requirements.” Switzerland allows the sale of CBD and other cannabis products with less than 1% THC. A number of countries, including Argentina, Australia and Chile, recognises CBD as a drug. The Netherlands considers cannabis to be a soft drug, which can be sold in coffee shops, SGS says. “People are restricted to a maximum of 5g of soft drugs per day and it is illegal to sell to under-18s and non-residents. Stock in the coffee shop cannot exceed 500g and they cannot also sell hard drugs or alcohol.” Asian countries that are moving towards legalisation include China, Japan, Malaysia, South Korea, Sri Lanka and Thailand, SGS says. “Some analysts believe medicinal cannabis could be legalised in Thailand by the end of the year. Sri Lanka is beginning to cultivate cannabis for medicinal export and is considering legalising ayurvedic use. In China and Japan, cannabis remains illegal but both have approved limited cultivation and officially sanctioned research into the plant’s potential benefits.”

Unaprol proposes tighter extra virgin olive oil regulation Italian olive oil consortium Unaprol proposed lowering the acidity threshold value for extra virgin olive oil from 0.8% to 0.5% earlier in the year, Olive Oil Times reported. “This initiative stems from the need to ensure quality and effectively combat fraud and scamming, which are more likely to occur in relation to ‘borderline’ products,” Unaprol president David Granieri says. “The panel test works very

30 OFI – NOVEMBER/DECEMBER 2019

Testing.indd 3

well but the classification of olive oil can be improved.” According to current International Olive Council (IOC) standards, extra virgin olive oil must have a free acidity, expressed as oleic acid, of less than or equal to 0.8g per 100g, or 0.8%, Olive Oil Times says. “The request for a new classification of olive oils can be looked into as part

of the procedures provided for in the International Agreement on Olive Oil and Table Olives,” says IOC executive director Abdellatif Ghedira. “The IOC standard is a tool that is constantly evolving to meet the needs of the market and demands for transparency. A proposal must be officially presented so that the executive secretariat can take the steps necessary to study the issue at hand.”

www.ofimagazine.com

16/10/2019 10:04:19

We understand how you strive for constant product quality and optimized costs.

CONSISTENT +â&#x20AC;&#x2030;CONFIDENT You are poised to meet your safety and quality requirements while optimizing resources and securing process repeatability.

Improve your processes with our comprehensive portfolio of measuring instruments:

Micropilot FMR62: Compact radar level reduces maintenance eďŹ&#x20AC;orts and increases safety standards.

Do you want to learn more? www.endress.com/food-beverage

Deltapilot FMB50: Compact pressure sensor for hydrostatic level measurement is condensate-resistant and accurate.

iTHERM TM411: Modular thermometer provides outstanding measurement performance with best-in-class hygienic design.

USED COOKING OIL

USA

Focus on olive oil Although it makes up a very small contribution to global olive oil production, the USA has its own olive oil grade regulations and some of the toughest certification standards. According to the country’s largest producer, California Olive Ranch, 97% of olive oil consumed in the USA is imported. Domestic olive oil is mostly produced in California; the state grows more than 95% of the USA’s olives. The remaining is produced in Arizona, Florida, Georgia, Hawaii, Oregon and Texas. According to the California Olive Oil Council (COOC), olives were introduced into California in the 18th century, when Spanish missionaries planted olive trees at each of the 21 missions they established between the cities of San Diego and Sonoma. By the mid-19th century, the state had a thriving olive oil industry. The four oldest varieties in the state are the Mission olive, Manzanillo, Sevillano and Ascolano. However, since the 1980s, California has been cultivating close to 70 different varieties, with Arbequina being the most widely grown in the state. Many small producers in California make “Tuscan blends” which refers to the most common varieties originating from Tuscany, Italy – these being Frantoio, Leccino, Moraiolo, Olivastra and Pendolino, according to California Olive Ranch. However, poor weather conditions last year and recent tariffs on EU olive oil imports could hit future US olive oil supply and prices. www.ofimagazine.com

olive oil usa.indd 2

Despite being a small player in the international olive oil market, the USA has some of the most stringent certification standards, with the country dependent on imports to meet 97% of its consumption. Recent US tariffs against the EU could also hit US olive oil supply and prices Gabriel Day Regulations

The regulation of olive oil in the USA is different to most producing countries. The USA is not a member of the International Olive Council (IOC) – which officially governs 95% of international olive oil production. However, in 2010, the US Department of Agriculture (USDA) adopted the Olive Oil and Olive Pomace Oil Grades and Standards, which closely follows the IOC’s standards. The USDA’s and IOC’s grades for olive oil are: • Extra virgin has an “excellent” rating for odour and flavour and has a free fatty acid (FFA) content of no more than 0.8g per 100g (0.8%). • Virgin has a “good” rating for odour and flavour and an FFA content of no more than 2g per 100g (2%). • Refined olive oil has an “acceptable” rating for odour and flavour and an FFA content of no more than 0.3g per 100g (0.3%) • Olive oil (mixture of virgin and refined) has a “good” rating for odour and flavour and an FFA content of no more 1g per 100g (1%). The grades are voluntary and certification

is available from the USDA for a fee. In addition, the California Department of Food and Agriculture (CDFA) applies stricter standards set to handlers producing 22,730 litres or more of olive oil made from olives grown in California. • Extra virgin must have a FFA content of no more than 0.5g per 100g (0.5%). • Virgin olive oil must have a FFA content of no more than 1g per 100g (1%). • Crude olive oil has a FFA content of more that 1g per 100g (1%). With regards to labelling, California’s olive oil industry has also introduced new stricter standards. On 30 September, the Olive Oil Commission of California (OOCC) announced that producers in the state with an output of more 22,730 litres/year will now need to provide “technical evidence” in order to support their self-selected best by date, add storage recommendations and adhere to stricter requirements when using phrases like “Made in California or “California Olive Oil”. As of this harvest season, producers must use 100% California-grown olives in u OFI – NOVEMBER/DECEMBER 2019

16/10/2019 08:58:51

USA six annual exams to maintain its calibration with international standards and is recognised as an accredited panel by the American Oil Chemists’ Society. Once the oil meets both criteria, it can then display the COOC Seal on its label. No chemicals or extreme heat may be used during the extraction process. The COOC also says that if olives are damaged (through poor handling, mould or frost) or they are not milled within 24 hours of being harvested, the oil will not be extra virgin. Milling at a high temperature (over 30°C) can also negatively impact flavour and quality.

All producers Sensory

Median of defects Median of fruity

Free acidity (FFA) (%m/m)

>0 ≤0.5

Peroxide value (PV) (meq O2/kg oil) UV absorbency (UV)

≤15 K232

≤2.4

K270

≤0.22

Delta K

≤0.01

Moisture and volatiles (MOI) (%m/m)

≤0.2

Insoluble impurities (INS) (%m/m)

≤0.1

DAGs (%)

≥35

PPP (%)

≤17

Figure 1: COOC chemical standards and requirements for certification u their oils in order to use labels that state it was produced in California, Olive Oil Times reported. Labels that mention a specific region in the state must have 85% of the olives used in the oil grown in that region. If a specific estate is mentioned, then 100% of their olives used must be grown on it and the producer of the oil must own or control the estate. The OOCC said it added these rules to better inform customers how long an extra virgin olive oil maintains its quality standards when stored properly.

California is top US producer

California dominates the US olive oil industry, producing more than 95% of olives grown in the country, according to California Ripe Olives. The COOC says that as of January 2019, there were over 16,592ha of olive trees planted for extra virgin olive oil production in the state. It is estimated that an extra 6,070ha will be planted in California by 2020. The USA’s largest olive oil producer, California Olive Ranch, has olive farms throughout northern California, ranging from Red Bluff down to Bakersfield. The three main varieties of olives grown at these ranches are Arbequina, Arbosana and Koroneiki. California Olive Ranch also sources from, and works with, olive farmers in Argentina, Chile and Portugal. The brand announced in August 2018 that it had planted 890ha in just that year alone, bringing its total hectarage in California to 1,294ha since 2016. CEO Gregg Kelley said the expansion was the single largest olive tree planting project in California and the USA. “These new plantings come at a crucial 34 OFI – NOVEMBER/DECEMBER 2019

olive oil usa.indd 3

Source: COOC

Producers>22,730.45 litres

time for the industry as a whole,” he said. “As years progress, we are seeing an upward trend in consumer demand. By increasing our production level, we are more easily able to meet that need.” All of California Olive Ranch’s extra virgin olive oil is certified by the COOC, which is said to have one of the toughest olive oil certification processes worldwide.

COOC certification

The COOC represents 90% of all olive oil production in California and has had a taste panel since 1998, which certifies approximately 400 oils per year. To gain COOC certification, the oil must comply with both a chemical analysis and a sensory evaluation. COOC members must undertake this process following every harvest. The COOC’s Seal Certification Program also guarantees traceability. Through participation, the oil is verified to be from the most recent harvest and produced only from olives grown in California. Members who produce a label saying their oil is extra virgin must comply with the COOC Standards & Requirements annually under the programme. Chemistry testing by one of the COOC’s approved laboratories is required as a first screen to determine if an oil is extra virgin. The COOC says the levels required for the chemistry testing are among the strictest worldwide (see figure 1, above). After this, the oil must then undergo a sensory analysis, which is administrated by the COOC’s taste panel. The COOC says that its taste panel has been through intensive training. It meets at least twice each month to screen oils for certification and for continual training. Moreover, the panel participates in

USA consumption and trade

Provisional figures from the IOC say the USA consumed 315,000 tonnes of olive oil in 2017/18. In that period, the country exported 8,500 tonnes but imported 310,500 tonnes. IOC’s provisional figures for 2018/19 put USA olive oil consumption at a slight increase of 315,500 tonnes and imports at 310,000 tonnes, with exports at a much higher 12,000 tonnes. The USA accounts for around 36% of world olive oil imports, followed by the EU at 15%, according to the IOC. Other high importing countries are Brazil at 8%, Japan at 7% and Canada at 5%. In the October 2018-January 2019 period, the USA saw an increase of only 8% in olive oil imports against the same period in the previous year. More recently, the IOC reported that in May 2019, the USA imported 28,350 tonnes of olive oil, a small increase compared to May 2018 (28,242 tonnes). US olive oil and olive pomace oil imports increased in the 2017/18 crop year by 1.7%, reaching 322,199 tonnes, representing a 7.8% increase compared to the 2012/13 crop year (298,827 tonnes). US imports of virgin olive oil, saw a rise of 32.8% in 2017/18, compared with 2005/06, when 60% of imports were in this category.

Tariffs against Spanish olive oil

Although the EU is the USA’s chief source of olive oil, this supply is at risk from US tariffs aimed at a list of EU goods, including olive oil. On 2 October, the USA won approval from the World Trade Organization (WTO) to impose tariffs on US$7.5bn worth of EU products, including some Spanish olive oils. The tariffs were the result of a 15-year trade dispute over EU subsidies to European aerospace corporation Airbus, which the WTO ruled were improper. The tariffs can be increased at any time and the products affected can be changed. www.ofimagazine.com

16/10/2019 08:58:51

USA They will apply to US imports of Spanish virgin and non-virgin olive oil in all of its fractions in containers of less than 18kg. Olive oil from France, Greece, Italy and Portugal are unaffected. Although the US Trade Representative Office (USTR) had the authority to apply 100% tariffs, it limited the duties to 25% on agricultural products. Joseph Profaci, the executive director of the North American Olive Oil Association (NAOOA), said that while the 25% tariff on packaged Spanish olive oil would still have an adverse impact on importers and consumers, the USTR decision not to impose the full 100% tariff was a good sign for the industry. “I am optimistic that the USTR decision is a good faith indication of its desire to negotiate a settlement with the EU and we will be doing what we can to facilitate such a settlement to get all olive oil off the list.” In addition, the USTR’s decision not to impose tariffs on any olive oils imported from France, Greece, Italy or Portugal, nor on bulk olive oils imported from Spain, was welcome news, he said. In August, US lawmakers had urged the USTR not to impose tariffs on European olive oil, warning that it could lead to an

www.ofimagazine.com 34

olive oil usa.indd 4

olive oil shortage and higher prices in the USA, Reuters reported. They said a halt of EU olive oil imports would lead to a shortfall equal to 30% of current consumer demand, or 100,000 tonnes of olive oil. US domestic production satisfies 5% of the country’s consumption, said Profaci. According to the Observatory of Economic Complexity (OEC), in 2017 the USA imported 86% of its olive oil from Europe. Olive Oil Times reported that Spanish olive oil exports to the USA increased 40% in the first half of 2019. Since January, Spanish producers had exported about US$296M of olive oil to the USA, a US$32M increase compared with the same period last year. The increase was attributed to the prospect of the impending US tariffs, which had caused buyers to stock up on Spanish olive oil, coupled with low prices in Spain.

Poor harvest

US olive oil production was hit by poor weather in 2018, with output cut by more than half in that year. The San Francisco Chronicle reported that unusual weather in the first three months of the year had caused olive harvests to decline by 25%.

Farmers told Olive Oil Times: “We are speculating a very warm period in February woke the trees up and a freeze in March shut them down”. Olive trees generally bloom in May, with small cream-coloured flowers blossoming and continue to grow and start to ripen throughout the summer, according to California Ripe Olives. The blooms were damaged by the early spring frost, rendering the trees barren for the rest of the harvest season. COOC members produced 18M litres of extra virgin olive oil in 2017, whereas in 2018, production ended up being 7.2M-8.1M litres, according to Olive Oil Times. However, COOC executive director, Patricia Darragh said she did not know of olive oil prices increasing, pointing out that extra virgin olive oil has a two-year shelf life. This meant that production from 2017 could help carry some farmers through the following winter and spring. Olive Oil Times reported that California producers expected a return to normal yields in the 2019 season. Darragh estimates that production will return to about 18M litres in 2019.  Gabriel Day is OFI’s assistant editor

OFI – NOVEMBER/DECEMBER 2019

16/10/2019 08:58:52

STATISTICS STATISTICAL NEWS EU sunﬂowerseed production

The EU sowed 4.4M ha of sunflowers in 2019, a 5.5% rise from 2018, according to the European Commission. The largest sunflower areas are in Romania (1.3M ha), Bulgaria (0.8M ha) and Spain (0.7M ha). Most regions did not receive sufficient rain during the growing season. The EU yield forecast is an average of 2.29 tonnes/ha, 0.13 tonnes/ha below the previous year’s yield. The total EU harvest for 2019 is estimated at 9.95M tonnes, down 0.2% from 2018. EU sunflowerseed production

Graph: UFOP

Global soyabean production and stocks

The US Department of Agriculture (USDA) has forecast global soyabean production for 2019/20 at 341.4M tonnes. Ending stocks are estimated at 99.2M tonnes, an 11.8% drop from the previous year’s record. However, it will still be the second largest tonnage ever. The harvest estimate for the USA was slightly lowered by 1.3% to 98.87M tonnes, 20% short of the previous year’s record and the poorest harvest in six years. This was due to heavy rain and ﬂooding delaying plantings in spring.

Palm oil

World soyabean production and stocks (million tonnes)

Graph: UFOP

Chinese palm oil imports by product type, Jan-Aug 2019

Graph: MPOB

Prices of selected oils (US$/tonne) Apr 19

May 19

Jun 19

Soyabean

711.2

703.8

714.0

Crude palm

564.7

534.5

514.6

Palm olein

554.1

522.5

Coconut

688.1

Rapeseed

Mintec Aug 19

Sep 19

722.2

745.5

746.8

531.8

564.6

578.2

515.0

526.1

548.3

541.4

660.0

664.0

688.8

735.4

741.0

800.0

809.9

827.5

828.2

863.3

881.7

Sunﬂower

710.5

717.0

735.1

738.7

762.9

751.2

Palm kernel

647.1

621.0

566.9

580.2

650.0

637.3

Average

668.0

653.0

647.0

659.0

696.0

697.0

Index

158.0

155.0

153.0

156.0

165.0

36 OFI – NOVEMBER/DECEMBER 2019

Stats NOV.DEC.indd 1

Jul 19

Malaysia’s palm oil exports to China/Hong Kong increased by 129,585 tonnes or 12.3% to 1.41M tonnes for the January-August 2019 period, compared with the same time in 2018. One of the main reasons for the rise was China’s decreased crushing of soyabeans in the ﬁrst half of 2019, brought about by African swine fever (ASF), which reduced China’s need for soyabean meal for feed, driving up prices of local soyabean oil. As a result, demand for other oils – particularly palm – increased. China’s overall import of palm oil during January-July 2019 totalled 3.87M tonnes, an increase of more than 1M tonnes or 38.54% compared with the same 2018 period. RBD palm olein (RBD PL), RBD palm stearin (RBD PS) and crude palm stearin (CPS) were the major types of Malaysian palm oil exported to China. There was a 13.7% decrease in Chinese CPS imports by 21,661 tonnes to 136,125 tonnes. Meanwhile, RBD PS imports rose by 59.6% or 103,594 tonnes to 277,311 tonnes. Mintec provides independent insight and data to help companies make informed commercial decisions. Tel: +44 (0)1628 851313. E-mail: sales@mintecglobal.com Web: www.mintecglobal.com The Union for the Promotion of Oil and Protein Plants represents the interests of companies and associations involved in the production, processing and marketing of oil and protein plants in Germany The Malaysian Palm Oil Board is a government agency responsible for the promotion and development of the palm oil industry in Malaysia.

www.ofimagazine.com

24/10/2019 10:30:02

A smart choice for the future. The new BĂźhler Cracking Mill OLCC and its Smart Human Machine Interface provide extensive automation and monitoring possibilities. Full local and remote access to all key machine functions allow for a tailored integration into your specific process and automation landscape â&#x20AC;&#x201C; for future-proof peace of mind. Discover all your possibilities: www.buhlergroup.com/olcc oilseeds@buhlergroup.com

Innovations for a better world.