OILS & FATS INTERNATIONAL NOV/DEC 2023 ▪ VOL 39 NO 8
WWW.OFIMAGAZINE.COM
ALGAE OIL
Growing applications
USA
Renewable fuels drive market
CONTENTS
IN THIS ISSUE – NOV/DEC 2023 Biodiesel/Standards
FEATURES
26
NEWS & EVENTS
Ensuring quality International standards, particularly US and EU specifications, are used to ensure the quality of biodiesel around the world
Oilseeds/South Africa
Photo: Adobe Stock
OILS & FATS INTERNATIONAL
Photo: Adobe Stock
Plant & Technology
18
30
Global round-up of news OFI reports on some of the latest projects, technology and process news and developments around the world
Shipping & Transport
Surge in soyabeans
2
With South Africa expected to produce another record soyabean crop this year, the country has become a net exporter of the product
Photo: Adobe Stock
Renewable fuels drive market The oil value of US oilseeds is now driving the American oils and fats market due to rising demand from the domestic biodiesel and renewable diesel sectors
Export logistics
Photo: Adobe Stock
Ukraine/Russia News
USA
22
Comment
32
Freight review
There has been an uptick in activity in the freight rate with palm oil freight rates likely to remain unchanged, increased biodiesel flows out of South America and continued export challenges for Ukraine Algae oil
34
Growing applications Algae oil has applications as a plantbased and vegan source of omega-3 fatty acids, as well as in the food, pet food and cosmetics markets
4
Ukraine exports building up
News
6
Europe’s olive oil supply running out after drought
Biofuel News
10
EU formally adopts RED II and ReFuelEU regulations
Renewable News
12
Varo to build SAF facility in Rotterdam
Transport News
14
Mississippi grain shipments hit by falling water levels
Biotech News
16
NGOs accuse Bayer of hiding glyphosate data
Diary of Events
17
International events listing
Statistics
36
www.ofimagazine.com
World statistical data
OFI – NOVEMBER/DECEMBER 2023
1
EDITOR'S COMMENT
OILS & FATS INTERNATIONAL
VOL 39 NO 8 NOVEMBER/ DECEMBER 2023
EDITORIAL: Editor: Serena Lim serenalim@quartzltd.com +44 (0)1737 855066 Assistant Editor: Gill Langham gilllangham@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: Tony Crinion tonycrinion@quartzltd.com +44 (0)1737 855164 SUBSCRIPTIONS: Jack Homewood subscriptions@quartzltd.com +44 (0)1737 855028 Subscriptions, Quartz House, 20 Clarendon Road, Redhill, Surrey RH1 1QX, UK © 2023, 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, Merthyr Tydfil, Wales
Export logistics Russia’s full-scale invasion of Ukraine has now lasted for more than 17 months and, as with other long-running wars and humanitarian crises, sympathy appears to be running out as countries focus on their own domestic issues. At the start of October, Moldova became the latest European country to limit Ukrainian grain imports to protect local farmers when it announced import licensing for sunflowerseeds, wheat and corn, while allowing transit to third countries (see p4). Poland, Slovakia, Hungary and Bulgaria have also extended their import bans on Ukrainian grain in response to a decision by the EU not to extend its ban on sales into Ukraine’s five EU neighbours beyond 15 September. A three-way agreement between Poland, Ukraine and Lithuania is allowing Ukrainian grains exports – destined for Africa and the Middle East in particular – to be taken directly to the Lithuanian port of Klaipeda for product inspections, instead of being checked at the Poland-Ukraine border. However, rail and trucks only accounted for 23% of Ukrainian sunflower oil exports in the 2022/23 season, according to Riverside Tanker Chartering Ltd (see p33), and can only go so far against Russian attempts to stifle Ukraine’s export capabilities. Ukraine’s Danube ports of Reni and Izmail accounted for the bulk (43%) of Ukrainian sunflower oil exports in the 2022/23 season but have suffered from constant attacks. And despite Russia’s withdrawal from the Black Sea Grain Initiative in July – a year after it was set up to facilitate grain exports from Ukraine – the former corridor still accounted for 30% of sunflower oil exports in the 2022/23 season, illustrating how important the deep-water ports of Chernomorsk, Odessa and Pivdennyi are. The former corridor was open for most of the 2022/23 marketing year ending in August during which Ukraine managed to export 5.6M tonnes of sunflower oil (25% more than in the previous season), with Ukraine accounting for 89% of EU sunflower oil imports, Fastmarkets reported on 12 September (see p4). Exports of sunflowerseeds since the beginning of the new marketing year have amounted to 1.85M tonnes or 14% more than last year to date, with the bulk (1.7M tonnes) exported before the EU bans were introduced. What will happen in the new 2023/24 marketing year which began in September? The country’s three Black Sea ports are seeing increased activity after Ukrainian authorities announced a humanitarian export corridor in August safeguarding shipments to and from these ports. AgriCensus reports that some 800,000 tonnes of cargo were seen as loaded or expected to load as of 9 October. Since the first vessels to enter the ports arrived on 17 September, eight vessels had managed to leave the port carrying around 242,000 tonnes of grains and iron ore. Another 14 vessels had arrived or were expected to arrive into Ukrainian ports in the near future, with at least 560,000 tonnnes of cargo expected to be moved out of the country. It is still unclear what volumes will flow from the humanitarian corridor, which hugs the Black Sea western coastline near Romania and Bulgaria, not least because of the presence of Russian naval forces in the Black Sea. Export logistics still remain the key for Ukraine.
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UKRAINE/RUSSIA NEWS
Grain export levels from Ukraine’s deep sea ports have increased to levels comparable to the start of the Black Sea Grain Initiative (BSGI) with some 800,000 tonnes loaded or expected to load to date, according to analysis reported by AgriCensus on 9 October. Following the introduction of a humanitarian export corridor by Ukrainian authorities on 10 August – safeguarding shipments to and from the Black Sea ports of Pivdennyi, Odessa and Chornomorsk (POC) – activity had picked up after a slow start, the report said. Since the first vessels entered the ports on 17 September, eight vessels carrying around 242,000 tonnes of grain and iron ore were recorded as leaving at the time of the report. A further 14 vessels had arrived or were due to arrive, with at least 560,000 tonnes of cargo expected to be exported, AgriCensus wrote. The export rate was comparable to the first month following the introduction of the BSGI – brokered between
IN BRIEF Russian attacks on Ukraine’s ports and ships have destroyed nearly 300,000 tonnes of grain since July, Reuters reported on 13 October. Since Russia’s July withdrawal from the Black Sea Grain Initiative facilitating agricultural exports from Ukraine, its military forces had hit six civilian ships and 150 port and grain facilities during 17 attacks, destroying crops due for export, Ukraine’s Deputy Prime Minister Oleksandr Kubrakov was quoted as saying in a statement. The damage had reduced the country’s grain export potential by 40%.
Photo: Adobe Stock (Odessa, 9/8/21)
Ukraine exports building up
Ukraine and Russia by the United Nations and Turkey – on 22 July 2022. In the month after the BSGI’s introduction, a total of 1.55M tonnes of agricultural commodities had been shipped although the figure included around 1M tonnes of cargo that had already been loaded on vessels that had been stuck in ports since the Russian invasion on 24 February 2022, the report said. Navy spokesperson Dmytro Pletenchuk told an online media briefing on 4 October that Ukraine’s defence forces were doing everything to ensure the
safety of civilian ships in their territorial waters and that they were proceeding into the waters of Romania, Bulgaria and Turkey, all NATO countries. However, Ukrainian grain exports have declined by 24% to date in the 2023/24 July-June season as the country's major export routes were blocked, according to Ukrainian agriculture ministry data. Despite the logistical challenges facing Ukraine, the country’s total exports of oilseeds and their derivatives reported a year-on-year increase in the 2022/23 marketing year, according to a Fastmarkets
report on 12 September. From September 2022 to August 2023, Ukraine exported 5.6M tonnes of sunflower oil, 25% higher than in the previous season, according to Ukroliyaprom Association for Extraction and Processing of Fat and Oil Products data. The BSGI had been in operation for most of the marketing year, but exports by land were also prominent last season and accounted for about 23% of total exports, the report said. Exports had shifted to the Danube ports in recent months. According to the European Commission, Ukraine increased its share in total EU sunflower oil imports to 89% in the September 2022-August 2023 season, compared with 82% in the previous season. Turkey more than tripled its purchases of Ukrainian sunflower oil to 1.1M tonnes in 2022/23, increasing its share of Ukrainian sunflower imports to 19.2%, Ukroliyaprom data showed. China’s purchases rose by 80% to 636,800 tonnes, accounting for a 11.3% share.
EU countries maintain import bans Moldova, Poland and Lithuania have reached deals with Ukraine to allow transit of its grain while limiting imports to protect local farmers. Moldova would require import licensing for wheat, corn and sunflowerseed, Reuters reported on 5 October. And as part of a three-nation agreement, Ukrainian grain exports — destined for markets in Africa and the Middle East in particular — would be taken directly through Poland instead of first being checked at the Poland-Ukraine border, World Grain wrote on October. "Veterinary, sanitary and phytosanitary control will be transferred from the Ukrainian-Polish border to the port of Klaipeda (Lithuania) for all agricultural cargoes heading to this port. This will speed up transit through Poland,” Ukraine’s Ministry of Agrarian Policy and Food Mykola Solskyi was quoted as saying. Poland, Slovakia and Hungary announced
4 OFI – NOVEMBER/DECEMBER 2023
restrictions on imports from Ukraine on 15 September after the European Commission (EC) decided not to extend a ban on sales into Ukraine’s five EU neighbours, which also include Romania and Bulgaria, Reuters wrote in an earlier report on 19 September. In a bid to reach compromise, the Ukrainian government approved the introduction of export licences for corn, rapeseed, sunflowerseed and wheat to Ukraine’s five EU neighbours. The agriculture ministry would agree on the list and volume of products with importing countries, which would determine whether they were ready to accept these goods. Reuters also quoted Ukraine’s Foreign Minister Dmytro Kuleba as saying on 7 September that Ukraine and Croatia had agreed on the possibility of using Croatian ports on the Danube and the Adriatic Sea for the export of Ukrainian grain. www.ofimagazine.com
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Feeding, Fueling & Building a Better World
NEWS EU: 93.9% of EU soya imports are sourced from low-deforestation regions, according to EU feed manufacturers’ federation (FEFAC)'s risk assessments World Grain reported on 22 September. According to FEFAC, a significant part of soya used in the EU in 2021 came from regions with low deforestation risk, including the EU, Canada, Ukraine and the USA. These sources were considered “deforestation-free” although not officially certified as such. In addition, FEFAC said responsible soya and certified deforestation-free soya had continued to gain traction, with total industrial usage exceeding 14M tonnes in 2021. Since the publication of the first European Soy Monitor in 2018, the feed industry had demonstrated “remarkable progress in responsible soya usage”, FEFAC said. Provisional data for 2021 indicated that FEFAC members reported an increase of 21% in responsible soya usage compared to 2018. According to the European Soy Monitor 2021, 40% of soyabean meal equivalent of total EU soyabean consumption was sourced according to FEFAC’s Soy Sourcing Guidelines and 24% was certified as deforestation-free soya. These guidelines included good agricultural practices, environmental considerations, and social responsibility.
Europe's olive oil supply running out after drought Olive oil supplies in Europe have almost run out with more shortages expected after extreme weather hit harvests for a second year, The Guardian reported on 28 September. Europe – the world’s largest producer – has said it is having to import supplies from South America to keep up with demand. “Today it is almost physically impossible to buy olive oil. It is sold out,” Walter Zanre, chief executive of the UK arm of olive oil company Filippo Berio, was quoted as saying. According to the International Olive Council, global olive oil production is expected to fall to 2.4M tonnes, well below worldwide demand of about 3M tonnes, after drought and heatwaves hit production in leading producer Spain. Extreme weather in other important growing regions including Greece, Italy and Portugal as well as Turkey and Morocco had added to the crisis.
Zanre said his firm had been forced to import olive oil from Chile to cover the gap before the arrival of this year’s harvest beginning in October. Spain was expected to produce 750,000 tonnes – more than the 660,000 tonnes produced in last year’s poor harvest but well below recent volumes of around 1.3M tonnes, The Guardian said. Greece was expected to produce only 200,000 tonnes this year, a third less than last year due to extreme heat and problems with fruit fly infestations. Manolis Yiannoulis, head of the Greek interprofessional olive oil association, said consumers were seeing price rises of “more than 100%”. Shortage concerns had pushed up wholesale prices with, for example, the cost of extra virgin olive oil from Andalusia rising to US$8.89/kg in September, the highest ever recorded for Spain, The Guardian wrote.
Over 15M tonnes CSPO production in 2022
Photo: Adobe Stock
IN BRIEF
Production of certified sustainable palm oil (CSPO) exceeded 15M tonnes last year, representing 20% of global crude palm oil (CPO) production, according to new data reported by the Roundtable on Sustainable Palm Oil (RSPO) on 29 September. Key highlights included an
increase in global certified hectarage (+6.6%) and CSPO production (+4.8%) driven by gains in Indonesia, Latin America and Africa. At the time of the report, RSPO members’ share of global palm oil production totalled 42% of 77.6M tonnes, 20% of which was certified as CSPO.
Physical CSPO volumes traded, refined and processed by RSPO members increased by more than 11%, with RSPO members accounting for 78.3% of global palm oil traded. Accounting for physical CSPO and RSPO Credits, total downstream consumption increased by more than 7.4% in 2022. For RSPO members with retailer operations, total CSPO volumes exceeded 1.5M tonnes, with high levels of certified uptake in Europe and North America. With downstream consumption, RSPO members with Consumer Goods Manufacturers operations reported a more than 6.2% increase in total CSPO purchased, with total CSPO exceeding 7M tonnes.
Vegetable oil production to hit record levels with third year of rises Worldwide production of vegetable oil is forecast to reach record levels in the 2023/24 marketing year, the third consecutive year of production growth, according to latest estimates by the US Department of Agriculture (USDA) reported by Germa-
ny’s Union for the Promotion of Oil and Protein Plants (UFOP) on 28 September. World vegetable oil production would total 222.8M tonnes in 2023/24 to meet estimated demand of 217.5M tonnes. Palm oil production would rise to 79.5M tonnes,
6 OFI – NOVEMBER/DECEMBER 2023
accounting for 35.7% of total vegetable oil production, with Indonesia producing 47M tonnes and Malaysia 19M tonnes. Global soyabean oil was expected to increase to 61.6M tonnes; sunflower oil to 21.7M tonnes and rapeseed oil to 33M tonnes. www.ofimagazine.com
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NEWS
California first US state to ban BVO California has become the first US state to ban brominated vegetable oil (BVO) and three other chemicals in food, Food Safety News reported on 7 October. Governor Gavin Newsom signed the California Food Safety Act, the first law in the USA to ban four harmful chemicals – BVO along with potassium bromate, propylparaben and Red Dye No 3 – from confectionery, cereal, soda and other processed food sold and produced in the state, the report said. All four additives – which have been
linked to human health issues including hyperactivity, nervous system damage and an increased cancer risk – were already banned by European regulators, with the exception of Red Dye No 3 in candied cherries, Food Safety News wrote. “This bill will not ban any foods or products – it will require food companies to make minor modifications to their recipes and switch to safer alternative ingredients that they already use in Europe and in many other places around the globe,” Jesse Gabriel, chair of the state
Assembly Committee on Privacy and Consumer Protection, said. A vegetable oil that has bromine added to it, BVO is used in small amounts to keep citrus flavouring from floating to the top in some soft drinks. According to the US Food and Drug Administration, few drinks in the USA contained BVO as many soft drink makers had already reformulated their products. Coca-Cola, for example, announced it had stopped using BVO in its drinks in 2014, The Guardian wrote at the time.
China raises estimates for soya imports China has increased its estimates for its soyabean imports and edible oil production, according to the monthly update of the China Agriculture Supply and Demand Estimates (Casde) reported by AgriCensus on 12 September. Soyabean import estimates for the October 2022/September 2023 and 2023/24 marketing years were increased to 99.86M tonnes and 97.25M tonnes, respectively. The increase in 2023/24 was mainly due to high demand for protein raw materials from China’s livestock and poultry industry, Casde analysts said. Casde retained its estimates for soyabean production for 2022/23 and 2023/24 at 20.29M tonnes and 21.46M tonnes, respectively. Soyabean consumption estimates were raised for 2022/23 and 2023/24 to 115.07M tonnes and 116.92M tonnes, respectively. Projections for edible oil production were increased for 2022/23 and 2023/24 to 30.5M tonnes and 30.25M tonnes respectively, mainly due to the rise in estimated soyabean imports. Estimates for Chinese edible oil imports remained unchanged for 2022/23 and 2023/24 at 8.63M tonnes and 8.43M tonnes, respectively. Edible oil consumption projections also remained unchanged for at 36.32M tonnes and 36.61M tonnes, respectively. www.ofimagazine.com
OFI – NOVEMBER/DECEMBER 2023
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NEWS INDONESIA: The Attorney General’s Office (AGO) has launched a corruption investigation into the country’s BPDPKS palm oil fund agency, Reuters wrote on 30 September. To date, 15 people had been questioned, the AGO said on 19 September. Investigators were looking into alleged unlawful activities during 2015-2022 linked to the setting of Indonesia's monthly biodiesel price index, used to determine the subsidy paid to biodiesel producers. The BPDPKS is responsible for collecting levies on palm oil exports and distributing the proceeds to programmes such as biodiesel subsidies and palm oil replanting. EU: The European Parliament and European Council have updated the existing EU list of banned commercial practices, introducing new 'greenwashing' rules, a 19 September European Parliament statement said. Generic claims such as 'eco' and 'bio-degradable' would be banned without proof of relevant recognised environmental performance. Only sustainability labels based on approved certification schemes or established by public authorities would be allowed. The ban would also apply to claims based on emission offsetting schemes that a product had neutral, reduced or positive impact on the environment.
Canada to review $18bn Bunge-Viterra merger The Canadian government would be reviewing global agribusiness giant Bunge’s planned acquisition of Glencore-backed Viterra, including a public interest assessment to be completed by 2 June 2024, Reuters reported on 26 September. “Both companies hold ownership interests in port terminals throughout our country,” Minister of Transport Pablo Rodriguez said. “Healthy competition in the transportation sector is necessary to ensure fair pricing and access for users, especially for Canadian farmers. Given this transaction is of significant national interest in Canada’s transportation sector and the broader supply chain, it will be reviewed under the merg-
ers and acquisitions provisions of the Canada Transportation Act.” Announced by Bunge and Viterra in June, the US$18bn Bunge-Viterra merger would create one of the world's largest agribusinesses. Viterra, which has been owned by Switzerland-based commodity trading giant Glencore PLC since 2012, operates a network of agricultural storage, processing and transport assets in 37 countries. Bunge is a leading oilseed processor and supplier of oils and fats, operating approximately 300 facilities in more than 40 countries. On 5 October, Bunge shareholders voted in favour of the company’s acquisition of Viterra.
Bio-stimulant to boost sunflower yields
Photo: Adobe Stock
IN BRIEF
French agritech start-up Elicit Plant is set to launch a new phytosterol-based product in Europe developed to boost sunflower yields. Phytosterols are plant-derived lipids which activate the physiological defence mechanisms of plants in response to
environmental stress. “There are more than 200 different phytosterols in nature. Each one is stress- and species-specific," Elicit Plant CEO Jean-François Dechant said on 21 September. During times of water stress, phytosterols played a role in
regulating the opening of stomata, the pores which allowed gas exchanges between the plant and its environment. EliSun-a was designed to be sprayed on sunflowers, allowing phytosterols to enter the plant and stimulate root growth, the company said. This was essential to improve soil exploration by roots and increase their access to water, enabling them to tolerate drought. “EliSun-a integrates a new technology that generates yield gains even in a critical climate context. The product … will be available for order from throughout Europe from December 2023,” Ralph Beckers, strategic director of Elicit Plant, said in a blog on the company website on 3 October.
Argentina extends 'soya dollar' scheme to boost foreign reserves The Argentine government extended the country’s fourth ‘soya dollar’ scheme until 25 October in a bid to boost foreign exchange reserves and contain the peso to US$ dollar rate ahead of 22 October presidential elections, AgriCensus reported on 3 October. The CCL (contado con liquidacion) dollar
rate surged to a record 829 pesos/dollar on 2 October. Under the scheme, which had been due to end on 30 September, importers could only use the CCL dollar to liquidate 25% of the proceeds of soyabean exports, AgriCensus wrote. The remaining 75% could be exchanged at the official rate of 350 pesos/dollar.
8 OFI – NOVEMBER/DECEMBER 2023
According to BCR estimates, the dollar income from the fourth soya dollar scheme was US$1.7bn, which was below the government’s US$2.5bn target. The scheme’s extension could add another US$1bn to government reserves, according to Argentine newspaper La Nación. www.ofimagazine.com
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BIOFUEL NEWS WORLD: Global used cooking oil (UCO) supply is expected to increase from 14bn litres in 2022 to 18.9bn-37.8bn litres by 2030, according to a new report by US trade association Clean Fuels Alliance America. Meanwhile, US supply could increase from 3.2bn litres to 4.1bn litres by 2030, according to report authors LMC International and GlobalData. “Our industry envisions sustainably producing 22.7bn litres of clean fuels by 2030, and this report identifies crucial additional feedstocks,” Clean Fuels Alliance America CEO Donnell Rehagen said in the 13 September report. Most UCO supplies were transported from Asia to Europe, with potential to increase UCO collection in Asia, Europe and South America with the adoption of US-style collection practices, the report said. INDONESIA: The government’s introduction of a new B35 blend rate is expected to increase domestic biodiesel consumption by 25% to 13bn litres this year, the US Department of Agriculture (USDA) Foreign Agricultural Service (FAS) Indonesia: Biofuels Annual said on 29 September. The increase in consumption was also due to a growth in diesel demand. B35 reached nationwide coverage in August and the government was preparing to increase the blending rate beyond 35% with a series of road tests for trucks and cars using fuel with 40% fatty acid methyl ester (FAME) content, and fuel with 30% FAME plus 10% renewable diesel, the report said.
EU formally adopts RED II and ReFuelEU regulations Photo: Adobe Stock
IN BRIEF
The EU has formally adopted the new Renewables Energy Directive (RED II), raising the 2030 target for the share of renewable energy in the bloc’s overall energy consumption from 32% to 42.5%, S&P Global reported on 9 October. Member states now have 18 months to adopt the legislation, which sets sub-targets for transport and industry. In the transport sector, member states can choose between a binding target of a 14.5% reduction of greenhouse gases (GHG) from the use of renewables by 2030
or a binding share of 29% of renewables within final energy consumption in transport. At the time of the report, renewables’ share of the transport sector was around 10%, a share which had changed little for a decade, S&P Global wrote. Advanced biofuels (generally derived from non-food-based feedstocks) had a new binding target of a 5.5% share and, within this target, there was a 1% minimum requirement for renewable fuels of non-biological origin (RFNBOs) by 2030. On 9 October, the EU Coun-
cil also adopted the ReFuelEU regulation – part of the bloc’s plan to cut GHG emissions – in a bid to boost EU sustainable aviation fuel (SAF) supply and demand, Biodiesel magazine wrote on the same day. The rules are part of the Fit for 55 package – the EU’s plan to reduce GHG emissions by at least 55% by 2030 compared to a 1990 baseline and to reach net-zero by 2050. The regulation – which will take effect on 1 January 2024 – will require EU airports and fuel suppliers to ensure that at least 2% of aviation fuels are ‘green’ by 2025. The requirement will increase to 6% in 2030, 20% in 2035, 34% in 2040, 42% in 2045 and 70% in 2050. Under ReFuelEU, SAF includes certain biofuels made from agricultural or forestry residues, algae, bio-waste, used cooking oil or specific animal fats, but not SAF produced from feed and food feedstocks, including palm and soya materials.
Chinese export-orientated HVO plants rise The number of hydrotreated vegetable oil (HVO) plants in China has increased in the last two years, according to the 1 September US Department of Agriculture (USDA)’s Foreign Agricultural Service’s China: Biofuels Annual report. “The export of used cooking oil (UCO)-based biodiesel and HVO continued increasing momentum in the first half of 2023 as robust demand from the EU spurred biodiesel producers to increase production,” the USDA said. HVO plants in China had a combined production capacity of 3bn litres/year with an additional 1.2bn litres/year capacity planned. “Nearly all plants are export-orientated to take advantage of EU tax policies. HVO production capacity is estimated to have grown 1bn litres every year starting in 2021, and the same is expected in 2023 with an estimated 3bn litres this year,” the USDA. China’s biodiesel production was forecast at 1.9bn litres, 28% up on the previous year due to
10 OFI – NOVEMBER/DECEMBER 2023
increased exports and domestic consumption. “In the first half of 2023, China produced and exported higher volumes at very competitive prices,” the USDA said. China replaced Argentina as the primary export supplier of biodiesel to the EU in the fourth quarter of 2022, the report said. “Biodiesel and HVO exports are projected to continue surging in 2023, due to the EU and its double-counting provisions for UCO-based biofuels (both biodiesel and HVO) of the EU’s Renewable Energy Directive (RED II) and support by China’s 70% VAT rebate. Hainan and Fujian provinces top the export list,” the USDA said. Average biodiesel prices for exports continued to be strong at US$1,500 (RMB 10,500)/tonne in early 2023, up more than 30% compared to 2021, with even higher prices for HVO. From January-May 2023, China’s biodiesel exports increased 70% year-on-year, most shipped to the Netherlands and Belgium. www.ofimagazine.com
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RENEWABLE NEWS
Varo to build SAF facility in Rotterdam European energy company Varo Energy has announced plans to invest US$600M in building a sustainable aviation fuel (SAF) facility at the Gunvor Energy Rotterdam site in the Netherlands. The 100% Varo-owned facility would have a total feedstock capacity of 350,000 tonnes/year, with a SAF production capacity of 245,000 tonnes/year alongside a mixture of bio-naphtha and bio-propane, the company said on 7 September. Production
SOUTH KOREA: Italian multinational energy firm Eni has teamed up with South Korean chemical firm LG Chem for a potential biorefinery at LG Chem’s Daesan chemical complex in South Korea. Technical and feasibility assessments were being conducted with a final decision due to be made by next year the companies said on 14 September. If it went ahead, the biorefinery was expected to be completed by 2026. It would produce a range of products including sustainable aviation fuel, hydrotreated vegetable oil and bio-naphtha, processing around 400,000 tonnes/ year of bio-feedstocks using Eni’s Ecofining process, developed in collaboration with Honeywell UOP.
As well as being close to major markets the facility was also located alongside port infrastructure, wastewater treatment and existing road, rail and pipelines, enabling SAF production and distribution, Varo said. The company said the investment in the facility was part of its ONE VARO Transformation strategy, in which it aimed to produce more than 250,000 tonnes/year of biofuels by 2026 and more than 500,000 tonnes/year in the long-term.
Strong interest in sustainable materials
Photo: Adobe Stock
IN BRIEF
was expected to start by the fourth quarter of 2026. Varo said its new manufacturing facility would help meet growing SAF demand. According to the International Energy Agency (IEA), European jet fuel demand is set to grow by more than 20% over the next five years. “This new manufacturing facility alone will provide up to 7% of the EU’s 2030 SAF target,” VARO CEO Dev Sanyal said.
Global interest in sustainable materials continues to surge despite a slowdown in demand for surfactants this year, Happi reported on 1 September. Worldwide demand for surfactants in all industries is increasing by 4.9%/year and the market is expected to be worth a total of US$57.8bn by 2028, according to Dub-
lin-based ResearchandMarkets. Non-ionics are expected to be the fastest-growing surfactant type with the Asia-Pacific region the fastest-growing region again. New products that address sustainability and regulatory issues are driving demand in the personal care and home care sectors, according to
Tony Gough, technical director of Innospec and the chairman of the CESIO World Surfactant Congress held earlier this year, who was quoted in the 1 September Happi report. According to BASF representatives, surfactant demand has decreased compared to last year, mainly due to slower demand from the home care cleaning and personal care sectors. Although this had directly affected retail sales – with inflationary pressures and consumer cost cutting further exacerbating the situation – BASF said it was optimistic the market would recover and was making investments to meet demand. This included the expansion of alkyl polyglucosides (APGs) production capacity at its site in Cincinnati, the report said.
Surfactants could cause aerosol chemicals to last longer
A UK research study led by the University of Birmingham has found that hazardous chemicals commonly found in aerosols, such as those produced by cooking and cleaning, can be ‘protected’ in 3D structures formed by surfactants, causing them to last longer in the air. The study, published in Accounts of Chemical Research, examined how one surfactant component – oleic acid – formed complex structures at the nanoscale and how this affected the interaction of oleic acid with other chemicals in the air. Experiments were conducted on increasingly complex mixtures of surfactants to
establish the impact of a wide range of aerosol components, the university said on its website on 12 September. Studies were conducted to investigate self-organisation in particles levitating in the air as well as in thin films on solid surfaces and floating on water (representing the surface of aqueous droplets which are most commonly found in the atmosphere). These self-organised aerosols were then analysed, with complementary computer models to understand how surfactants could organise themselves in the atmosphere. “Aerosols are commonly created by everyday activities such as cooking and
12 OFI – NOVEMBER/DECEMBER 2023
cleaning, and with modern life seeing people spending on average 90% of their time indoors, there is an urgent need to understand how indoor aerosols are processed,” said Prof Christian Pfrang from Birmingham university, who led the work. “Oleic acid is known to self-organise into a range of 3D nanostructures, some of which are highly viscous and can delay the ageing and thus the breakdown of key chemical components in aerosols. “More research is needed to understand how these structures act both outdoors and indoors [and] what this means for the quality of the air we breathe.” www.ofimagazine.com
SOLUTIONS IN PROCESSING, TRADE & LOGISTICS 9-11 September 2024, Rotterdam www.ofimagazine.com/ofi-international-2024
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TRANSPORT NEWS USA: Finnish renewable fuels producer Neste has commissioned storage capacity for sustainable aviation fuel and renewable diesel at infrastructure and storage provider Vopak’s Los Angeles terminal in California. The move was a major step in further expanding the availability of Neste’s renewable fuels in the Southern California region, the company said on 27 September. INDONESIA: Pertamina International Shipping (PIS) – a subsidiary of Indonesian state-owned energy corporation Pertamina – has formed a partnership with PT Pelindo to develop the Jakarta Integrated Green Terminal (JIGT) in Kalibaru, North Jakarta. The terminal would store fuels such as liquified petroleum gas (LPG), gasoline and biodiesel, along with liquified natural gas (LNG), crude palm oil (CPO), used cooking oil (UCO) and petrochemical products, Pertamina said on 2 September. “JIGT is designed to anticipate increasing energy demands following national economic growth targets,” Pertamina president director Nicke Widyawati said. Located in an area developed by PT Pelabuhan Indonesia, JIGT would have deep sea facilities and was expected to have a storage capacity of up to 6.3M barrels over an area of 64ha, Pertamina said. The terminal was strategically positioned to serve as the gateway to the energy trading ecosystem through the Singapore-Indonesia corridor, which accounted for 30%-35% of global trade routes for oil and LNG. The terminal would be built and managed by PIS.
Mississippi grain shipments hit by falling water levels Total grain volumes barged on the Mississippi River are almost 30% below the five-year average due to low export sales and falling water levels, according to the US Department of Agriculture (USDA)’s 5 October Grain Transportation Report, reported by World Grain. Almost 60% of US grain exports are transported by barge on the Mississippi River system, which moves grain from the US Midwest to the Gulf region for export, with low water levels becoming a problem in June, leading to loading draft reductions of up to 32% and tow size reductions of 17% to 32%, on various sections of the river, the report said. The most severe restrictions were on the Lower Mississippi and Ohio rivers at Cairo, Illinois. Weekly grain volumes were down with the largest decline seen in corn volumes, which totalled 1.5M tonnes in third-quarter 2023 (45% lower than in 2022) and 9.1M tonnes in the year to date (32% lower than last year). Third-quarter 2023 barged soyabeans and wheat volumes heading to the Gulf also showed sizeable drops. At 1.8M tonnes, soyabean volumes were 31% down while wheat volumes, at 522,000 tonnes, were 15% lower than last year. Spot freight rates had started to increase, but below average export sales and demand for
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IN BRIEF
barges had kept rates from rising until August, the report said. The average third-quarter spot freight rate at St Louis, Missouri, was US$15.92/ tonne, 16% higher than last year and 9% lower than the five-year average. Looking ahead, the USDA said it expected barged grain shipments to pick up in the fourth quarter as corn and soyabean harvests progressed. “However, if low-water conditions in the Mississippi River system continue, lack of precipitation may lead to increased restrictions, which would further shrink an already tight barge supply,” the USDA said.
Russia and China to build new grain hub Russia and China have agreed to build a new grain hub on their border between Vladivostok in Russia’s far east and China’s northeastern province of Heilongjiang, the South China Morning Post (SCMP) reported on 12 September. The New Land Grain Corridor – a group of companies managing the development of grain production and infrastructure in Russia’s Ural Mountains, Siberia and the far east – would work with state-backed China Chengtong International Investment to create the US$159M Grain Terminal Nizhneleninskoye-Tongjiang. The agreement was made on 11 September during the Eastern Economic Forum in Vladivostock, along with other deals aimed at improving the logistics of transporting Russian grain to China, the SCMP wrote. Other agreements included a contract between the Trans-Baikal Grain Terminal and China’s Guangdong BestCon Intelligent Equipment firm to create a specialised land grain fleet in Russia, the report said. This could serve as an
14 OFI – NOVEMBER/DECEMBER 2023
alternative to sea routes. As part of the contract, 22,000 specialised grain containers would be made to transport up to 600,000 tonnes of grain, with a maximum storage capacity of up to 8M tonnes/year. In addition, Russia’s EPT Production and Export Company – part of the New Land Grain Corridor Group – finalised two contracts for the production and supply of grains, legumes and oilseeds with Chinese trading company Noble Home and Chinese transport and logistics firm Trans Eurasia (Tianjin) International Logistics. China-Russian trade value had increased by 32% compared to the previous year to US$155.1bn in the first eight months of this year, according to customs data. While most of that was from the traditional oil and natural gas sectors, imports of Russian agricultural products, such as soyabeans and rapeseed oil, had also rapidly increased, the SCMP report said. www.ofimagazine.com
SOLUTIONS IN PROCESSING, TRADE & LOGISTICS 9-11 September 2024, Rotterdam www.ofimagazine.com/ofi-international-2024
TRANSPORT NEWS Drought conditions in northern Brazil are causing logistical problems due to low water levels in key waterways in the Amazon basin, leading to grain and oilseed shipments being diverted to southern ports, AgriCensus reported on 11 October. Trading houses were reportedly shifting volumes from the Northern Arc – which comprises the land and water logistics network linking inland farms to ports in the north and northeast of the country – to the port of Santos, the report said. Volumes shifted to the south were primarily corn, according to sources. “Traders are shifting logistics from Miritituba [where an important Northern Arc river port is located] to Rondonopolis, which has a railway that goes directly to Santos,” Victor Martins, Latin America risk manager at Amius, told AgriCensus. According to sources, this was already having an impact on waiting times at the port of Santos, increasing to 13-16 days at the time of the report from 8-9 days the previous week. Delays could affect the pace of soyabean exports through Santos, potentially benefitting US exporters during the October-Feb-
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Drought in Brazil shifts cargoes to south
El Niño traditionally leads to drier conditions in northern and northeastern Brazil
ruary window, Martins said. Although disruptions to Northern Arc logistics were not severe at the time of the report, there were concerns that an ongoing drought could impact Brazilian exports. “The [dry] seasonality of rivers in the Amazon region between September and December is historical and well known,” Hidrovias do Brasil, which owns port terminals that handle the transport of soyabeans and corn through Amazon waterways, was
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quoted as saying in a note. Although drought conditions had been more intense this year, navigation operations in the waterways used for the transportation of agricultural products had not yet been severely impacted, the company added. The situation was more severe in the Amazon River, which was not a traditional route for agricultural products, the report said. At the end of September, the Brazilian Association of Cabotage Shipowners (Abac) said transport capacity through the Amazon River could drop by 50% by the end of October and, in the week of the report, port operations in Manaus were restricted due to low water levels. Based on historical patterns, rainfall should return to the north by November easing logistical headwinds in the region, the report said. However, this year’s forecast of an El Niño weather pattern, which traditionally leads to drier conditions in northern and northeastern Brazil, could further hamper the transport of grain and oilseeds through Amazonian rivers, AgriCensus wrote.
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OFI – NOVEMBER/DECEMBER 2023 15
BIOTECH NEWS GERMANY: Chemical giant Bayer has teamed up with gene-editing company Pairwise to develop short-stature corn to offer farmers more sustainable and resilient corn varieties. Building on an earlier partnership between the two firms for canola, corn, cotton, soyabeans and wheat, Bayer said on 29 August that the new five-year deal would focus on CRISPR applications for its Preceon Smart Corn System using Pairwise’s Fulcrum platform. “Pairwise’s editing tools allow for specific changes at virtually any location in the genome, which has the potential to make targeted … improvements in agriculture,” said Bob Reiter, head of R&D at Bayer’s Crop Science Division. With a targeted height of 30-40% less than traditional corn, short-stature corn offered a number of benefits including protection from crop loss due to increasingly severe weather events and extreme winds brought about by climate change, Bayer said. Short-stature also allowed for more precise application of inputs. The earlier five-year collaboration between the two companies – which concluded in June – resulted in 27 novel traits being transferred into Bayer’s testing programmes, the company said. Another outcome had been edited soya that reduced the severity of Asian soyabean rust.
NGOs accuse Bayer of hiding glyphosate data A group of NGOs has filed claims in an Austrian court alleging that German chemical giant Bayer withheld data showing health risks from exposure to its herbicide glyphosate, Phys Org wrote on 4 October. In September, the European Commission proposed renewing glyphosate’s authorisation for use in the EU for 10 years, sparking a backlash from environmental groups who have said there was scientific evidence that glyphosate may cause cancer, poison aquatic life and be fatal to key pollinators like bees, the report said. Those claims have been disputed by Bayer. Prosecutors in Vienna had opened an inquiry in 2019 after NGOs filed suits alleging the herbicide’s risks, the report said. As part of that inquiry, the Global 2000 association said it had given
prosecutors new documents which it claimed showed that Bayer had not submitted research results indicating risks to the nervous system, particularly for pregnant women and children. The association said it – along with Pesticide Action Network Group Europe (PAN Europe) – had submitted a statement of facts to the Vienna Public Prosecutor’s Office on 27 September. “In its re-authorisation request, Bayer wrongly excluded unfavourable data or presented results in a misleading way”, Helmut Burtscher-Schaden, a biochemist with independent Austrian environmental organisation Global 2000, told AFP. Since buying US agrochemicals company Monsanto for US$63bn in 2018, Bayer has faced a series of court challenges from defendants claiming that Roundup had cause their cancers.
New gene editing tool without CRISPR Researchers at Beijing's Chinese Academy of Sciences Institute of Genetics and Developmental Biology have developed a new gene-editing tool that does not use CRISPR/Cas9 technology, which is patented in the USA, the South China Morning Post reported on 9 September. CRISPR splits double-strand DNA to make edits to the base pairs that make up the strands, according to CRISPR Therapeutics. The DNA is cut and then repaired by a natural cell process. The CyDENT modular gene-editing system could perform single strand DNA editing without any cuts, the report said. It relied on a protein signal to transport an
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IN BRIEF
editor inside DNA, bypassing sector, as many proteins the need for a guide RNA encoded within the chloroand allowing access to hardplast – where photosynthesis to-reach cell genomes, said takes place – were related to Kevin Zhao, one of the study’s the efficiency of converting Calyxt says seedless hemp offered improved yields and quality authors and co-founder of sunlight to energy. This meant Suzhou-based Qi Biodesign. engineering crops for better Zhao said the system could energy conversion could probe used in the agribusiness duce higher yields.
Corteva and Bayer dominate US sales of corn, cotton, soya More than half of US retail sales of corn, cotton and soyabean seeds in 2018-2020 – the most up-to-date estimates available – were supplied by Corteva and Bayer, according to a report by the US Department of Agriculture (USDA)’s Economic Research Service (ERS) on 2 October. Four companies – Bayer, Corteva, Chem-
China’s Syngenta Group and BASF – currently controlled the bulk of crop seed and agricultural chemical sales, the report said. That market concentration could be traced back to the expansion of intellectual property rights to private companies for seed improvements in the 1970s and 1980s, which created an incentive to devel-
16 OFI – NOVEMBER/DECEMBER 2023
op new biotechnology seed traits and seed, the report said. As firms created genetically modified varieties of seed, mergers took place among companies that produced and sold pesticides, seed treatments, crop seeds and seed traits. As a result, the US crop seed sector had become more concentrated and integrated with agricultural chemicals. www.ofimagazine.com
SOLUTIONS IN PROCESSING, TRADE & LOGISTICS 9-11 September 2024, Rotterdam www.ofimagazine.com/ofi-international-2024
DIARY OF EVENTS 1-3 November 2023
5-9 December 2023
19th Indonesian Palm Oil Exhibition 2023 Bali International Convention Centre, Westiin Resort Nusa Dua, Bali, Indonesia www.gapkiconference.org
12-15 June 2024
Palm Oil Internet Seminar 2023 (POINTERS) (Virtual) https://mpoc.org.my/mmd-programmecalendar-2023/
EFPRA Congress 2024 Amsterdam, the Netherlands https://efpra.eu/events
7-9 November 2023
11 January 2024
International Palm Oil Congress & Exhibition (PIPOC) 2023 Kuala Lumpur Convention Centre, Malaysia http://pipoc.mpob.gov.my
Palm Oil Economic Review and Outlook Seminar R&O 2024 Pullman Kuala Lumpur City Centre, Malaysia https://mpob.gov.my/conferencescourses/palm-oil-economic-reviewoutlook-seminar-2024
9 November 2023 FOSFA Annual Dinner Geneva, Switzlerland www.fosfa.org/news/events/ fosfa-annual-dinner-2023 10 November 2023 PORAM Annual Forum https://poram.org.my/events-2023 10 November 2023
22-23 January 2024 Fuels of the Future - 21st International Conference on Renewable Mobility City Cube, Messe Berlin, Germany www.fuels-of-the-future.com/en 11-14 February 2024
Olsaaten Forum 2023 (in Germany only) Berlin, Germany www.ami-akademie.de/events/details/ oelsaaten-forum-2023
4th International Symposium on Microbial Lipids Graz, Austria https://eurofedlipid.org/4th-internationalsymposium-on-microbial-lipids
13-15 November 2023
17-18 April 2024
AAOCS Lipid Conference Australia Newcastle, NSW, Australia https://aaocs2023.wordpress.com
European Algae Industry Summit London, UK www.wplgroup.com/aci/wp-content/ uploads/sites/2/2023/08/EuropeanAlgae-Industry-Summit-Agenda.pdf
14 November 2023 Oleochemical Technology Course Louvain-la-Neuve, Belgium https://drive.google.com/ file/d/1MLbrrcmbVE_RjYhJIxY_ dubCY0ruRn8-/view 20-22 November 2023 Roundtable on Responsible Palm Oil (RSPO) Annual Roundtable Conference on Sustainable Palm Oil (RT2023) Hotel Mulia Senayan Jakarta, Indonesia https://rspo.org/event/save-the-datert2023-in-jakarta-20-22-november-2023 21-23 November 2023 Global Biodiesel Summit Qingdao, China https://webshow.ienmore. com/?activityId=1813&languageType=0
For a full events list, visit: www.ofimagazine.com Information subject to change www.ofimagazine.com
25-27 April 2024 Oils & Fats Expo Bangladesh 2024 International Convention City Bashundhara (ICCB, Kuril, Dhaka, Bangladesh www.oilfatbd.com/ 28 April-1 May 2024
8-10 July 2024 International Symposium on Lipid Oxidation and Fatty Acids Bologna, Itay https://eurofedlipid.org/5th-internationalsymposium-on-lipid-oxidation-andantioxidants 20-24 August 2024 21st International Sunflower Conference Bayannur, China http://www.esanrui.com/isc
9-11 September 2024 OFI International 2024 Rotterdam Ahoy Convention Centre, the Netherlands www.ofimagazine.com/ ofi-international-2024 22-26 October 2024 2024 North American Renderers Association Annual Convention Ritz Carlton Bacara, Santa Barbara, California, USA https://nara.org/about-us/events 22-23 October 2024 Oil and Fats International Congress (OFIC) 2024 (+ Online) Kuala Lumpur Convention Centre Malaysia https://mosta.org.my/events/ofic-2024 4-7 June 2025
2024 AOCS Annual Meeting & Expo + Sustainable Protein Forum Montreal, Québec, Canada www.aocs.org/attend-meeting
EFPRA Congress 2025 Radisson Blu Latvija Conference & Spa Hotel, Riga Latvia https://efpra.eu/events
7 May 2024
12-15 October 2025
Oleochemical Technical and Market Approach course Louvain-la-Neuve, Belgium https://drive.google.com/file/d/1xB7udyUtPmrG8dQJ2YozUWZEa6LkqOp/view
Euro Fed Lipid Congress and Expo Leipzig, Germany https://eurofedlipid.org/#mark-yourcalendar
12-13 June 2024
North American Renderers Association Annual Convention Ritz Carlton Amelia Island, Florida, USA https://nara.org/about-us/events/
Oleofuels 2024 Summit Italy www.wplgroup.com/aci/event/oleofuels/
21-26 October 2025
OFI – NOVEMBER/DECEMBER 2023
17
Surge in soyabeans One of the most advanced and diverse economies in Africa, South Africa also serves as an entry point to other countries in southern Africa, according to a report by the US International Trade Administration. The country’s strategic geographical location also offers an opportunity for bulk soyabean shipments to Southeast Asian countries, the South African Cereals and Oilseeds Trade Association (SACOTA) says. South Africa has a population of almost 60M people and enjoys macro-economic stability and a pro-business environment, according to the 6 May US report. It is the most advanced and productive economy in Africa with a gross domestic product (GDP) of US$386bn in 2019, equivalent to about one-third of total GDP for the sub-Saharan Africa region. However, unprecedented power shortages, high energy costs, inflation and rising interest rates are likely to delay significant investment in the processing sector, according to a 17 April United States Department of Agriculture (USDA) Foreign Agricultural Service (FAS) Oilseeds and Products Annual report on the country.
Record oilseed area/production Oilseed planted area and production in 18 OFI – NOVEMBER/DECEMBER 2023
With South Africa expected to produce a third consecutive record-breaking soyabean crop this year, the country – often viewed as a gateway to the African continent – has become a net exporter of the product Gill Langham South Africa are set to reach historic highs in the 2023/24 marketing year (MY), the USDA report says. Planted area and oilseed production are expected to reach 1.8M ha and 3.6M tonnes respectively, according to a South African Grain Information Service (SAGIS) Crop Estimates Committee (CEC) report on 27 September which estimated: • A soyabean planted crop of 2.755M tonnes from a planted area of 1.148Mha. • A sunflowerseed crop of 729,110 tonnes from a planted area of 555,700ha. • A canola crop of 230,950 tonnes from a planted area of 131,200 ha. “South Africa has experienced an upsurge in oilseed plantings over the past 20 years with a near nine-fold expansion in soyabean area,” the USDA report says. “We foresee that the positive trend in soyabean plantings will continue in the
2023/24 MY. “In the past, South Africa’s trade in oilseeds was generally limited, as the bulk of production was destined for local crushing and trade was directed to oils and meals. However, with the surge in the local production of oilseeds leading production to exceed crushing capacity, South Africa has become a net exporter of oilseeds.” Published on 29 September, the latest South African Supply and Demand Estimates by the National Agricultural Marketing Council (NAMC) projected total soyabean supply (including opening stocks, local commercial deliveries and imports) at 2.884M tonnes, with total demand (domestic and exports) at 2.450M tonnes. The NAMC estimates soyabean closing stock levels for 28 February 2024 at 434,147 tonnes. The same report estimated total sunflowerseed supply at 815,627 tonnes
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Photo: Adobe Stock
OILSEEDS/SOUTH AFRICA
OILSEEDS/SOUTH AFRICA with total demand (domestic plus exports) at 746,470 tonnes. Sunflowerseed closing stock levels for 28 February next year are estimated at 69,157 tonnes.
Soyabeans
The surge in soyabean planted area has been driven by farmers’ increasing use of soyabeans as a rotational crop with corn and growing local demand for soyabeans through extensive investments in oilseed processing plants, according to the USDA report. “South Africa is expecting to have a third consecutive record-breaking crop and increased soyabean production of 79% over the past five years to 2.76M tonnes,” Juan-Pierre Kotzé, research and project manager at SACOTA says. “This is while sunflower production has remained relatively constant over the years.” This year’s projected crop of 2.76M would be an increase of 525,000 tonnes – or 23.6% – following last year’s recordbreaking crop of 2.23M tonnes. With the increased production, local soyabean cake has almost completely replaced imported cake, according to SACOTA. However, in some coastal areas, such as in the Western Cape, exported product will be more difficult to replace with local product due to high transport costs from inland crushing plants to the region, SACOTA’s executive director André van der Vyver says. Sunflower planting was expected to increase in the 2023/24 marketing year and – assuming a three-year average yield and normal weather conditions – South Africa could produce a sunflowerseed crop of about 810,000 tonnes in the period, according to the USDA. According to the latest CEC estimates this figure would be a little lower at 729,100 tonnes. Historically, the bulk of soyabeans and sunflowerseeds produced in South Africa is crushed locally to produce edible oil for human consumption and protein meal for inclusion in animal feed. However, South Africa started to export soyabeans in the 2021/22 marketing year as local production of oilseeds exceeded processing capacity, the USDA says. “South Africa was traditionally a net importer of palm oil and soyabean and sunflower oil and cake. It has, however, increased its soyabean production significantly in recent years to become a net exporter of soyabeans over the past three years,” SACOTA’s Kotzé says. “Imports of soyabean cake have www.ofimagazine.com
therefore significantly declined,” he adds. South Africa’s soyabean exports reached a record level of 282,342 tonnes in the 2021/22 marketing year, with Malaysia (121,628 tonnes), Mozambique (61,720 tonnes) and Thailand (52,440 tonnes) the major markets. At the end of 2022, South Africa also completed export protocols to China, opening the market for exports to the world’s largest soyabean market, the USDA report says. With local crushing close to reaching capacity and domestic demand stagnating, South Africa’s exports of oilseeds could reach in excess of 550,000 tonnes in
2023/24, according to SACOTA. If production continues to grow as expected, South Africa will be increasingly dependent on finding profitable export markets, the organisation says.
Record rapeseed crop
South Africa is on track for record high rapeseed production in the 2023/24 MY– which runs from 1 October to 30 September the following year – driven by record rapeseed plantings and favourable weather conditions, according to another USDA report on the sector. Rapeseed production in the South Africa has seen a seven-fold increase since u
OFI – NOVEMBER/DECEMBER 2023
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OILSEEDS/SOUTH AFRICA “However, the use of rail transportation in South Africa has decreased to less than 10% of the total transport of grains for exports. This is largely due to cable theft and a lack of operational locomotives.”
Figure 1: Local soyabean demand and deliveries from 2016/17 to 2023/24 (projected)
u its introduction in the late 1990s and is set for a record crop of 220,000 tonnes in the 2023/24 MY – a 5% increase compared to the previous year, the South Africa: Surging Rapeseed Production report, published on 11 August, says. “Constant yield growth from new cultivars combined with firm crush[ing] demand because of escalating vegetable oil prices supported the expansion in rapeseed production,” the USDA says. South Africa’s Western Cape province – a winter rainfall region – accounts for the majority of the country’s rapeseed production, with a small quantity produced in the Eastern Cape province. Most of the rapeseed is produced under rain-fed conditions. Rapeseed has also proven efficient in a rotation system with other winter crops such as barley and wheat. The area planted with rapeseed in 2023/24 increased by 4% compared to the previous year to reach a record of 128,100ha. Despite the increase in rapeseed planted area and production, the crop still contributes to only a small percentage of South Africa’s total oilseed production, according to the 11 August USDA report. In the 2022/23 marketing year, rapeseed accounted for 6% of total oilseed production, while soyabeans and sunflowerseeds accounted for 73% and 20%, respectively. Following a 70% surge in production but with limited local processing capacity, South Africa started exporting rapeseed for the first time in the 2020/21 marketing season when 30,000 tonnes were shipped to Germany. Rapeseed exports continued in the 2021/22 and 2022/23 marketing years when 32,000 tonnes and 39,000 tonnes were shipped to Germany and Belgium, respectively. The USDA expects rapeseed exports to continue in the 2023/24 marketing year 20 OFI – NOVEMBER/DECEMBER 2023
with shipments of the crop forecast to reach a record level of 50,000 tonnes.
Rapeseed consumption
Rapeseed is mainly grown in South Africa to produce oil for human consumption. As well as its use as a cooking oil, rapeseed meal – a by-product from the extraction process – is used in livestock feed as a source of protein. When crushed, rapeseed yields 40%44% of oil and 53%-60% rapeseed meal. South Africa’s rapeseed processing capacity is estimated at 175,000 tonnes/ year. South Africa’s sole buyer and processor of rapeseed is SOILL, according to the USDA report. “The growth in rapeseed production in South Africa will necessitate future investments in expanding processing facilities and could also contribute towards additional replacement of presently imported vegetable oil,” the USDA says.
Logistical challenges
Despite increasing production of soyabeans, South Africa’s lack of an efficient transport network could hamper the long-term export potential of the grain and oilseed industries, according to SACOTA. “South Africa’s major issue in the agricultural environment is maintaining a productive logistical value chain,” SACOTA’s Kotzé, says. “Power outages have decreased productivity throughout the value chain and increased costs for all role players.” Short-term solutions include diesel generators but these could be costly, he adds. “The majority of infrastructure for loading and offloading bulk grains and oilseeds was built to make use of rail transportation,” Kotzé explains.
Source: SACOTA/SAGIS
Major players
The growth in the exportable surplus of soyabeans has opened up significant opportunities for multinational traders, according to SACOTA’s 15 August newsletter. “Currently, the key international traders of whole soyabeans are ETG and LDC but others are also entering this space,” Kotzé says. “On the local side, there are approximately a dozen traders and a similar number of crushing plants.” In the 2022/23 season, SACOTA says ETG took the lead in opening four new markets in Southeast Asia, including Bangladesh, Malaysia, Thailand and Vietnam. During the last season, 253,375 tonnes of soyabeans were exported through nine vessels. “These positive trends indicate potential for another big export season for soyabeans, with major destinations once again being Malaysia and Vietnam,” SACOTA says.
Deep sea exports
An increase in interest among SACOTA trading members to enter the soyabean export market resulted in a further 220,000 tonnes of deep-sea exports between April and August 2023. “It is expected that South Africa will see more deep-sea exports through the season, as an estimated 355,000 tonnes could still be exported, which will mean that South Africa will have exports exceeding 600,000 tonnes, including cross-border exports,” the association says. “This would be an increase of 98% in soyabean exports since the previous season and … a new record in terms of soyabean exports.” South Africa’s soyabean industry is well-positioned to seize the opportunity to export to China, which recently opened its market to South African soyabeans, according to SACOTA. “The arrival of the first two South African maize vessels at a Chinese port earlier this season is a milestone that also signals the potential for soyabean exports to China,” the association says. However, if the current trend of increasing soyabean surplus continues, South Africa will urgently need to increase the capacity for deep-sea exports, SACOTA adds. www.ofimagazine.com
OILSEEDS/SOUTH AFRICA Looking ahead
The South African soyabean industry has seen an average growth of 18% in production, while local demand has only increased by an average of 8% for the past 10 years (see Figure 1, opposite). According to SACOTA’s van der Vyver, this trend will continue in coming years although not at the same rate, leaving South Africa with a growing exportable surplus. “The market expects South Africa to export approximately 600,000 tonnes of soyabeans in 2023/24, an increase of 322,000 tonnes compared to the previous season,” van der Vyver says. However, the lack of an efficient transport system could hamper the longterm potential of the grain and oilseed industries, according to SACOTA. At the time of SACOTA’s Oilseeds Focus report published in June 2022, South Africa exported approximately 55,000 tonnes/month of maize via, on average, seven Supermax vessels at its three Durban bulk grain export/import terminals. “Any future soyabean exports are likely to compete with maize exports,” the report says. “Even if more vessels could be loaded
by increasing capacity at Agriport, supply and unloading of products will be a major challenge.” However, with maize exports expected to decrease, SACOTA expects new opportunities to open up for exporting soyabeans, as one of the limiting factors for soyabean exports was the availability of export slots at Durban harbour. Traders would be able to change their initial maize slot bookings to soyabeans, the organisation says.
East London port
Although East London port used to export bulk grains in the past, it had not seen any bulk grain/oilseed shipments for more than 10 years ago until last year when SACOTA worked with TPT East London to export maize. As Durban Harbour was booked to capacity, diverting exports though East London port could hold part of the solution for the future, SACOTA says. TPT East London welcomed its first soyabean vessel on 29 August. The St Columba loaded approximately 33,000 tonnes of soyabeans. The exporter was Ameropa, a multinational trader and a SACOTA member, with its South African offices
based in Umhlanga. “This shows that East London port could, once again, establish itself as an alternative to Durban Harbour for exporting bulk grains,” SACOTA says. East London port also secured two more slots for soyabean vessels to be dispatched before the end of December, with three more slots available for exports between December and April 2024. “While East London faces its share of challenges with equipment that has been neglected over the years and load shedding, they have managed to increase their average daily loading capacity from approximately 3,200 tonnes last year to a potential 5,100 tonnes,” SACOTA says. “These accomplishments serve as a clear testament to the port’s capabilities and commitment to once again becoming a key player in South Africa’s grain export market. “East London provides a strategic and competitive alternative for grain and oilseeds exports, especially during periods when other ports face logistical bottlenecks or prioritise other commodities.” ● Gill Langham is the assistant editor of OFI
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USA
The oil value of US oilseeds is now driving the American oils and fats market due to rising demand from the domestic biodiesel and renewable diesel sectors Heba Hashem
An increasing push for decarbonisation in North America is opening more opportunities for the production and sale of soyabean, canola oil and other vegetable oils. Rising demand from the domestic energy sector is increasingly leading the US oilseeds, oils and fats industry to re-value their products as feedstock for renewable fuels and biodiesel. A sign of increased demand is rising imports. According to the United States Department of Agriculture (USDA), US imports of vegetable oils surged to US$10.9bn in 2022, up from US$8bn the previous year. Much of the increased demand has come from expanded production of biodiesel and renewable diesel, the USDA said. In the US soyabean industry, 63% of the total value of soyabean crush products has historically come from soyabean meal and the remaining 33% from soyabean oil. Over the last few years, that rough split in value has shifted as the industry tries to extract more oil out of the crush, Mac Marshall, vice president of market intelligence at United Soybean Board, tells Oils & Fats International (OFI). “A few times in the last few years, we’ve seen that oil share value creep over 50% and right now it’s about 43%. So, there’s been a significant increase in the relative value of oil and its contribution to the value of crushers. “Oil is now driving more of the [soyabean] market than it has in the past, and it’s driving it in such a way that over the last couple of years, we’ve seen crush margins reach historical highs.” 22 OFI – NOVEMBER/DECEMBER 2023
Expanding crush capacity
These factors, overlaid with aggressive future demand for soyabean oil from the energy market, has led to crushers coming together with traditional energy players to invest in expanding soyabean crushing capacity throughout the USA. “If you look at all the announcements that have come out from various companies through the end of 2026, we could be looking at over a 30% increase in capacity expansion for crush in the United States,” notes Marshall. “It’s exciting to be in this time where soyabean oil has the chance to play a greater role in decarbonising the economy but also enabling less carbon-intensive transport, including getting food to people globally.” The latest wave of investments includes Minnesota-based Epitome Energy’s US$400M soyabean crushing plant in North Dakota. Scheduled to start operations in 2025, the plant will be able to process up to 42M bushels/year of soyabeans into crude soyabean oil, meal and hulls. Illinois-based ADM is also building a new soyabean crushing plant and refinery in North Dakota to meet growing demand from the company’s food, feed, industrial and biofuel customers, including producers of renewable diesel. The US$350M complex will have the capacity to process 150,000 bushels/day of soyabeans.
Exportable surplus
Scott Gerlt, chief economist of the American Soybean Association (ASA), believes that renewable diesel is the
Photo: Adobe Stock
Renewable fuels drive market biggest driver of US demand for soyabean oil: “The rise of renewable diesel is driving more value into soyabean oil, so we’re seeing more processing plants for soyabeans to produce the oil and meal. This is very important for the soyabean industry because food use of oil has remained fairly flat for a while. Renewable diesel is now helping take up some of that flat demand.” During 2021/22, nearly 40%, or 4.7M tonnes (10.4bn pounds) of soyabean oil produced in the USA is estimated to have gone towards production of biodiesel and renewable diesel, compared with almost zero two decades ago, USDA data shows. The trend is expected to continue, with US production capacity for renewable diesel set to nearly triple by the end of 2023 from the current 77,000 barrels/ day, according to the US Energy Information Administration. From a trade standpoint, prior to 2021, the US was exporting over a 1M tonnes of soyabean oil, according to Marshall. However, over the last two years, US soyabean oil exports have tailed off significantly. In 2021/2022, US soyabean oil export volumes stood at 804,272 tonnes, 22.7% lower than the five-year average, although whole soyabean and soyabean meal export volumes have been rising. This is because what was previously available exportable surplus is now demanded domestically, particularly in the energy space. “If we think about all the applications for soya, we’ve got a robust and diversified demand base in the USA. That surge from the energy side is certainly exciting, but it u www.ofimagazine.com
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USA 80% of the Missouri-based company’s oil products going into food channels, CEO Gregory Heckman said during the company’s second quarter 2023 earnings release and conference call in August. However, Bunge will continue to supply its customers as value chains switch around with the growth in fuel demand, the company’s chief financial officer John Neppl said. Earlier this year, Bunge announced it was acquiring Fuji Oil New Orleans LLC’s newly constructed, portbased refinery in Louisiana, a facility with multi-oil refining capabilities. “Historically, oil has been the lagger in North America, and meal has been the driver for a long time,” said Heckman. “We’re now seeing oil carry a higher share, and that’s here to stay.”
u also means we’re exporting less soyabean oil,” says Marshall. “In the years to come, as we have more crush, we’re going to be crushing more whole soyabeans than what would have been exported in the past.” Canola oil imports are seeing similar dynamics at play, with the US importing record volumes in 2022/2023 at 1M tonnes (2.34bn pounds), according to the USDA. The growth in imports has been partly driven by the US Environmental Protection Agency’s (EPA) ruling in December 2022 which qualified canola/ rapeseed oil as a feedstock for renewable diesel under the USA Renewable Fuel Standard (RFS). Given the resulting stronger domestic demand for canola oil, the USDA expects competition for canola oil to intensify. At the same time, US canola oil exports may find a growing market in Canada, according to the USDA’s 2022 Biofuels Annual report on Canada. The report said that Canada’s Clean Fuel Regulations, which came into effect in July 2023, are likely to increase demand for imported US feedstocks, in particular vegetable oil feedstocks such as canola and soyabean oils. Besides the EPA’s RFS programme, the Low Carbon Fuel Standard (LCFS) operating in the Pacific coast states of California, Oregon and Washington is also driving strong demand for soyabean and other vegetable oils. Several other US states, such as Illinois, Vermont, and New York, are considering introducing a similar standard. “The industry has been scaling up in the end-user space as far as renewable diesel plants getting built on the West Coast and Gulf Coast, and the crush capacity expansion. The levels of capital investment for those two parts of the value chain certainly speaks to large volumes in the years to come,” says Marshall. However, while the market is developing, there is also uncertainty in some of that growth because policies could change along the way. “Many crushing plants are getting built, with offtake agreements from renewable diesel manufacturers, says Gerlt. ”But there are challenges on that front. A lot of the biofuel segment is driven by policy and efforts to decarbonise, and there’s uncertainty with that policy.” For instance, the International Council on Clean Transportation recommended in 2022 that the California Air Resources Board set a cap on the volume of lipid feedstocks used for bio-based diesel fuel 24 OFI – NOVEMBER/DECEMBER 2023
Photo: Adobe Stock
Policies driving demand
Consolidated footprint
US production capacity for renewable diesel is set to triple by the end of this year from the current 77,000 barrels/day
eligible under the state’s LCFS programme. The council claims that increased consumption of lipid-based biofuels raises food prices, prompts sustainability concerns, and could undermine the efficacy of the LCFS. Gerlt notes that the proposed changes could negatively affect the soyabean oil being supplied to the US market. Although ASA research shows that soyabean production to produce biofuels has a negligible impact on the food price index, changing agreements and policies could undercut investment and force large financial losses when billions of dollars are being injected into new crushing facilities and renewable diesel plants.
Shifting market dynamics
While biofuels and other industrial processes have increased the demand for vegetable oils in the USA, the country’s imports of such oils were mostly used for food in 2022. According to USDA data, 70% of canola, 85% of palm and 100% of olive oil – the top three vegetable oil imports in 2022 – were consumed as food that year. Leading global oilseed processor Bunge is seeing a similar trend, with over
Meanwhile, Bunge’s proposed merger with Viterra – which would see the US company buy a 70% stake in the Netherlands-based global handler of grains, oilseeds, pulses and cotton – is expected to dramatically consolidate global grain trade, creating a dominant exporter in Brazil and a market-leading soyabean crusher in Argentina. The combined company would control nearly 24% of Brazil’s corn exports and roughly 21% of its soyabean exports, a Reuters analysis stated, citing data from shipping agent Cargonave Group. Moreover, Bunge and Viterra each have 12% of Argentina’s oilseeds processing capacity. If the US$1.3bn restructuring deal to rescue Argentine soya crusher Vicentin together with a local cooperative goes through, that would take their market share to 40%, a report by Bloomberg says. “Just looking at asset locations, this certainly gives [the merger] a more consolidated footprint across major points across the Americas. Given the companies’ high concentration of assets in Argentina, it’ll be interesting to see how that unfolds,” notes Marshall. For now, renewable diesel and biodiesel present the biggest opportunities for the US oilseeds, oils and fats market. The ongoing ramp-up in the country’s production capacity of renewable diesel is expected to create more stable demand for soyabean and canola oils, and other oils and fats feedstocks. This, in turn, will enable US producers to sell to the domestic market rather than relying on overseas buyers, but it also means fiercer competition among US crushers and biofuel producers to supply the burgeoning renewable diesel industry. ● Heba Hashem writes for International News Services Ltd, UK www.ofimagazine.com
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OFI – NOVEMBER/DECEMBER 2023
25
BIODIESEL/STANDARDS
Ensuring quality International standards, particularly US and EU specifications, are used to ensure the quality of biodiesel around the world Biodiesel must meet certain specifications and quality standards in order to meet regulatory standards, and poor-quality biodiesel can cause short- and long-term engine and equipment problems. Various parameters and tests are used to determine the quality of biodiesel and are specified in international standards.
Standards
The first US ASTM (formerly the American Society for Testing and Materials) biodiesel standard (ASTM D6751) was adopted in 2002 while, in Europe, the EN 14214 biodiesel standard was finalised in October 2003, Hannu Jääskeläinen writes in DieselNet. The US and EU standards have international significance and are usually the starting point for biodiesel specifications in other countries. Approaches to US and EU standards for biodiesel differ, according to Jääskeläinen. In the USA, ASTM D6751 establishes specifications for a biodiesel blend stock for middle distillate fuels. Two automotive standards for biodiesel/ diesel fuel blends have been published by ASTM. The ASTM Standard Specification for Diesel Oil (ASTM D975) was modified in 2008 to allow up to 5% biodiesel to be blended into fuel, and ASTM D7467 is a specification for biodiesel blends from B6 to B20. In Europe, EN 14214 has been developed for unblended fatty acid methyl ester (FAME) diesel fuel for diesel engines, as well as for certain higher level biodiesel blends, while low level blends are covered by EN 590, the European diesel fuel specification. In contrast to ASTM D6751, 100% biodiesel (B100) that meets the EN 14214 standard can be used unblended in a diesel engine (if the engine has been adapted to operate on B100) or blended with diesel fuel to produce a
26 OFI – NOVEMBER/DECEMBER 2023
Photo: Adobe Stock
blend in accordance with EN 590 or other applicable standards, Jääskeläinen writes. The US ASTM D6751 defines biodiesel as mono-alkyl esters of long chain fatty acids derived from vegetable oils and animal fats. The type of alcohol used is not specified. The European biodiesel specification EN 14214 is more restrictive and applies only to mono-alkyl esters made with methanol. Germany’s Association Quality Management Biodiesel (AGQM) has also published a guidance for a higher quality FAME to be used as B100 in heavy duty vehicles (https://www.agqm-biodiesel.com/ en/downloads/b100-guideline).
Parameters and tests
FAME (ester) content FAME (fatty acid methyl ester) is the generic chemical term for biodiesel derived from renewable sources and is produced by reacting fats and oils or fatty acids with methanol, according to a brochure published in January by AGQM. FAME content - frequently called ester content - is a measure for the purity of the biodiesel. The ester content is determined as a total of the FAMEs of C6-C24 and indicated in percent by mass: % (m/m). It is determined by gas chromatography in accordance with EN 14103. The European biodiesel standard EN 14214 requires a minimum content of methyl esters of 96.5 % (m/m). Fatty acid profile The fatty acid profile indicates the distribution of fatty acids in oils and fats and provides information on the feedstock used, according to AGQM. It is used to determine the ester content and linolenic acid methyl ester content, as well as to
calculate the iodine value. The abbreviated designation of the fatty acids comprises the number of carbon atoms and the number of double bonds (for example, C18:2 is a carbonic acid with 18 carbon atoms and two double bonds). The distribution of the various FAMEs is indicated in percent by mass % (m/m). The limit value for linolenic acid is a maximum 12% (m/m). For polyunsaturated (PUFA) FAME, the limit value is a maximum 1% (m/m), an important parameter as tri- and polyunsaturated fatty acids are extremely prone to oxidative attacks. Sulphur content Sulphur compounds can be absorbed by plants during growth, while animal fats can contain sulphur in the form of protein compounds, says AGQM. FAME produced from vegetable feedstocks usually contains between 2-7 mg/kg of sulphur. Animal fats with up to 30 mg/kg must be refined in order to remove the sulphur. The sulphur content of all diesel fuels has been limited to 10 mg/kg in Europe since 2003 to reduce sulphur oxide emissions from road traffic and to protect sensitive exhaust gas aftertreatment systems against poisoning. Water content Almost all biodiesel processes use a water wash as the final refining step for the removal of free glycerol, soaps and other impurities. In contrast to hydrocarbonbased fuels, FAME can bind relatively large amounts of water due to its polar properties and the product must be dried before final completion. FAME can also absorb water if air humidity is high and correct u storage conditions must therefore be www.ofimagazine.com
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BIODIESEL/STANDARDS
US and EU biodiesel specfications
u implemented to prevent this. Under normal conditions, the saturation concentration of FAME is 0.15% (m/m). At Property US – ASTM D6751- EU – EN 590: 2004 EU – EN 14214: 2019 low temperatures, especially in mixtures Specs (Test) Specs (Test) 12 Specs (Test) with non-polar fuels, free water can 930C (D93) Flash point, mininum 1010C (EN ISO 2719) 550C (EN 22719) precipitate. This free water phase can also Water & sediment mix 0.05% vol (D2709) cause corrosion and accelerate microbial Water, max 500mg/kg 200mg/kg growth. Biodiesel water content is limited (EN ISO 12937) (EN ISO 12937) to 0.05% (m/m) in EN 14214. AGQM 24mg/kg (EN 12662) 24mg/kg (EN12662) Total contamination, max requirements are significantly stricter with 65%: 2500C min Distillation temperature 90%, 3600C max a maximum 0.032% (m/m) for traders and 85%: 3500C max (D1160) (% volume recovered) 0.027% (m/m) for producers. (EN ISO 3405) 1.9-6.0mm2/s (D445)
Density Ester content Ash, max Sulphated ash, max Sulphur, max (by mass)
Copper strip corrosion, max Cetane number, min Cetane index, min PAH, max
0.02% mass (D874) Two grades: S15 15 ppm S500 0.05% (D5453) No 3 (D130) 47 (D613)
Cloud point
Report (D2500)
Cold filter plugging point (CFPP) Carbon residue on 10% distillation residue, max Acid number, max
0.05% wt5 (D4530)
Oxidation stability
2.0-4.5mm2/s (EN ISO 3104) 820-845kg/m3 (EN ISO 3675/12185) 5% vol max FAME (EN 14078) 0.01% wt (EN ISO 6245)
0.02% mass (ISO 3987)
25g/m3 maximum (EN ISO 12205)
0.5mg/KOH/g (EN 14104) 8 hrs min (EN 14112) 120g lod/100g (EN 14111, 16300)
Linolenic acid methyl ester, max Polyunsaturated methyl esters, max Alcohol control
12.0% wt (EN 14103)
Total glycerine, max Phosphorous, max
1.0% wt (EN 15779) 0.2% wt methanol max EN14110) or 1300C flash point min (D93) 1-B*: MG 0.4% wt (D6584)
0.20% wt methanol max (EN 14110) MG 0.70% wt DG 0.20% wt TG 0.20 % wt (EN 14105) 5.0mg/kg (EN 14108, 14109, 14538) 5.0mg/kg (EN 14538)
5mg/kg (EN14538) 5mg/kg (EN14538) 0.02% wt (D6584)
0.02% wt (EN 14105, 14106)
0.24% wt (D6584)
0.25% wt (EN 14105)
0.001% wt (D4951)
4.0mg/kg (EN 14107 prEN 16294) 460µm (ISO 12156-1)
Lubricity Cold soak filtration time (CSFT), max
Oxidation stability The oxidative stability of biodiesel fuel is a major factor in determining allowable storage time. FAMEs are prone to oxidation due to their chemical structure. Double bonds of unsaturated fatty acids react with oxygen forming peroxides, while consecutive reactions can cause the chains to break, leading to the formation of shortchain carbonic acids and polymeric structures. Natural antioxidants such as tocopherols can slow down the oxidation process while synthetic stabilisers such as BHT can also be used. Oxidation stability is a measure of resistance to oxidative processes. Under the Rancimat test method, an air stream is passed through the biodiesel sample at high temperature. Volatile oxidation products form after any antioxidants are used up. These volatile compounds increase the conductivity in the measuring cell. The time until determination of oxidation products is called induction time or oxidation stability.
0.3% wt (EN ISO 10370)
Iodine value, max
Monoglycerides, diglycerices & triglycerides, max Group I metals (Na + K, max) Group II metals (Ca + Mg, max) Free glycerine, max
Total contamination Total contamination is a measure for the content of filterable solid particles in diesel or biodiesel. It is determined gravimetrically by filtration and weighing of the filter. A high content of insoluble particles can lead to filter blockages, wear to the injection system, and valve leakage. Because of the relatively poor precision of the method, AGQM has specified a stricter limit of 20 mg/kg compared with 24 mg/kg under EN 14214.
10.0mg/kg Two grades: (EN ISO 20846, 50mg/kg 20884, 13032) 10mg/kg (EN ISO 14596, 8754, 24269) Class 1 (EN ISO 2160) Class 1 (EN ISO 2160) 51.0 (EN ISO 1565) 51.0 (EN ISO 5165) 46.0 (EN ISO 4264) 11% wt (IP 391, EN 12916) Location & season Location & season dependent (EN23015) dependent (EN 23015) Location & season Location & season dependent (EN 116) dependent (EN 116)
0.5mg KOH/g (D664) 3hrs minimum (EN14112)
3.5-5.0mm2/s (EN ISO 3104) 860-900kg/m3 (EN ISO 3675/12185) 96.5% min (EN 14103)
2-B*: 360s (200s if fuel temperature ≤ –120C) 1-B*: 200s (D7501)
ASTM D6751 has two grades of biodiesel: grade 2-B (identical to biodiesel defined by earlier versions of the standard) and grade 1-B with tighter controls on monoglycerides and cold soak filterability
28 OFI – NOVEMBER/DECEMBER 2023
Source: DieselNet
Kinematic viscosity
Acid value The acid value measures acid content and, therefore, the potential corrosive properties of biodiesel. During processing, the reaction of free fatty acids (FFAs) from the feedstock with the catalyst causes alkali metal soaps to form in a secondary reaction of transesterification. These soaps are removed from the product almost completely by separation. The low remaining soap residues are split by www.ofimagazine.com
BIODIESEL/STANDARDS washing with inorganic acids, and the resultant FFAs remain as a fat-soluble component in the biodiesel. FFAs are very weak acids and hence only slightly corrosive. Nevertheless, an effect on metallic components cannot be ruled out. The 0.5mg KOH/g acid value limit under ASTM D6751 and EN 14214, corresponding to a fatty acid content of around 0.25%, ensures that biodiesel does not induce corrosion. The acid value of FAME can rise during storage, if esters are split or short-chain carbonic acids are formed as a result of oxidations processes. Iodine value The iodine number (IV) measures the content of unsaturated fatty acids and is regarded as an additional stability parameter. IV varies with the type of feedstock used. It is measured by titration or calculation from the fatty acid profile which is determined by gas chromatography (GC) according to EN 14103. The result is indicated in g iodine/100 g biodiesel. As unsaturated fatty acids are more sensitive to oxidation, biodiesel with a high iodine value is less stable compared with more saturated FAME. Based on experience with rapeseed oil methyl ester, the maximum is specified at 120g iodine/100 g in EN 14214. Mono-, di- and triglycerides, free glycerol, total glycerol The transesterification of vegetable oils with methanol, as with all chemical reactions, is an equilibrium reaction in which there is no tendency for the quantities of reactants and products to change. Besides the main product FAME, the end product also contains the intermediate phases of reaction (monoand diglycerides) as well as non-converted vegetable oil (triglycerides). As conversion of the monoglycerides to fatty acid methyl esters is the slowest partial reaction, there are more monoglycerides, compared with diglycerides and triglycerides. A high content of monoglycerides can lead to coking and deposits in the injection system. Owing to their high melting points, monoglycerides are also suspected of being one of the main causes of precipitation and hence poor cold properties and filter blockages. The limit value for monoglycerides in EN 14214 is 0.7% (m/m). High boiling points and incomplete combustion of di- and triglycerides can lead to coke formation in injection system
and in the cylinder. The maximum content of di- and triglycerides is consequently limited to 0.2% (m/m) each. Free glycerol is released from oils and fats during the transesterification. As glycerol is insoluble in FAME but is easily soluble in water, it can be removed almost completely by decanting and subsequent water washing. The content of free glycerol is limited to 0.02% (m/m) and the total glycerol content is limited to 0.25% (m/m) under EN 14105. Saturated monoglycerides Saturated monoglycerides (SMG) are suspected of leading to filter blocking and poor cold weather behaviour, particularly in diesel/FAME blends. However, the SMG content of biodiesel cannot be determined directly with the GC test method (EN 14105). As an alternative, it has been calculated by using the monoglyceride content and the cloud point (EN 14214 Annex C). This method has been relatively inaccurate due to the precision of the methods and error propagation. In the meantime, there is a GCFID method (EN 17057) for direct determination of SMG. Currently, no limit is set for saturated monoglycerides. AGQM recommends a maximum content of 1,200 mg/kg in its guidelines for FAME as a blend component for diesel fuel. Na/K content (alkali metals) Sodium and potassium hydroxides or methylates are used as a catalyst for biodiesel production. Residues are usually present as soaps which are not fully removed in the wash. Soaps can lead to filter blockages and adhesions of injection pumps and nozzles. Another important aspect is ash formation: in particular, sodium accumulates on the surface of particle filters and oxidation catalysts, thereby reducing the efficiency and service life of the systems. Suitable process conditions allow the alkali metal content to be reduced to concentrations below the determination limit of the specified test method. Ca/Mg content (alkaline earth metals) Alkaline earth metals enter the biodiesel when using tap water for the water wash. Calcium and magnesium soaps are formed by reaction with FFAs. Soaps of alkaline earth metals are more voluminous than alkali metal soaps and can lead to filter blockage and adhesion of injection pumps. The entry of alkaline earth metals into FAME can be prevented by using soft water (condensate, demineralised water).
Phosphorus content Phosphorous can be found in vegetable oils as well as animal fats as phospholipids. It is a typical catalyst poison which can irreversibly affect the function of exhaust gas after-treatment systems. Even low phosphorous content can lead to longterm effects in continuous operation. The phosphorous content is reduced by degumming in vegetable oil production, distillation having to be carried out during the production of biodiesel from animal fats. If phosphoric acid is used in the process to remove the catalyst, phosphorous can also originate from there. However, phosphoric acid can usually be removed from the biodiesel very effectively with water. At present the precision of the method does not allow for any additional tightening of the limit. Cloud point The cloud point is the temperature at which temperature-induced precipitation (‘clouds’) sets in when a clear liquid product is cooled down under stipulated test conditions. Since November 2012, the cloud point has been part of the requirements for biodiesel as a blend component in Germany. There are also national requirements with respect to the cloud point depending on the climatic conditions. In Germany, a distinction is made between the limit values for summer, intermediate and winter quality. Cold filter plugging point (CFPP) The CFPP is a measurement of filterability at low temperatures. A sample is cooled in 1°C steps and sucked through a filter. If the sample can no longer be filtered within 60 seconds, the CFPP is reached. There are national requirements relating to the CFPP depending on climatic conditions. In Germany, a distinction is made between the limit values for summer, intermediate and winter quality. Inadequate cold flow properties of fuel can lead to blocked filters and engine problems or even failure of the injection pump. The cold flow properties of biodiesel depend on the distribution of FAMEs and hence on the feedstock used. The freezing points of saturated FAMEs are significantly higher than unsaturated compounds, which remain liquid at temperatures far below 0°C. The cold properties of biodiesel can be improved by adding flow improvers. ● The information on biodiesel parameters is derived from a brochure published this year by Germany’s Association Quality Management Biodiesel (AGQM), which excludes any liability in connection with the use of the information.
www.ofimagazine.com OFI – NOVEMBER/DECEMBER 2023 29
PLANT & TECHNOLOGY
Global round-up of news Oils & Fats International reports on some of the latest projects, technology and process news and developments around the world
Galp and Mitsui team up for SAF/HVO Portugal project Portugal-based energy company Galp and Japanbased Mitsui & Co have announced plans to form a joint venture to produce renewable diesel and sustainable aviation fuel (SAF) at Galp’s refinery in Sines, Portugal. The biorefinery unit would have the capacity to produce 270,000 tonnes/year of renewable diesel and SAF from waste residue feedstocks, such as used cooking oil (UCO) and animal fats, according to a Biodiesel Magazine report
on 25 September. Mitsui said the project would involve the construction of facilities within the Sines Refinery – operated by Lisbon-based Galp since 1978 – which would have the capability of being switched between renewable diesel and SAF production modes. Once established – following clearance from necessary authorities – the planned joint venture would be 75% owned by Galp with the remaining 25% held
by Mitsui, the latter said on 25 September. Initial renewable diesel production was expected to begin near the end of 2025, with commercial operations due to begin in 2026. In addition to its investment in the production business, Mitsui said it would take responsibility for the overall biofuels value chain, including the procurement of feedstocks, primarily from Asia, and product sales, while Galp would operate the biorefinery.
Orlen to build rapeseed plant for biofuels Biofuels producer Orlen Południe is set to build a rapeseed processing plant in Kętrzyn in the Polish province of Olsztyn. The plant was expected to process 500,000 tonnes/year of rapeseed sourced mainly from Polish agricultural producers, producing 200,000 tonnes of oil for the manufacture of low-carbon biofuels, the company said on 21 September. Orlen Południe, which is part of the Orlen Group, said the oil produced in Kętrzyn would meet the specifications required for use in its production facilities, which includes a biodiesel plant in Trzebinia. “We have a … strategy to advance our biofuel production capabilities. To further this vision, we are actively investing in our refineries in Trzebinia, Jedlicze, Płock and Gdańsk. The [Kętrzyn] facility is expected to
utilise a substantial portion, approximately one-seventh, of the total domestic output of the crop,” Orlen CEO and president of the management board Daniel Obajtek said. Estimated to cost around US$195M (PLN 850M), construction of the facility was expected to begin in the first half of next year, with completion due by mid-2026. In addition to the pressing plant, the complex would comprise processing nodes, including facilities for raw material reception and product dispatch, raw material and product storage, pressing and extraction, process steam production and wastewater treatment, the company said. The contractor for the project would be a consortium of Polimex Mostostal and Polish engineering company AB Industry. In 2022, Poland’s rapeseed crop yielded
a total of 3.6M tonnes. On 4 October, Orlen also announced the launch of a used cooking oil (UCO)/ fatty acid methyl ester (FAME) unit in Trzebinia. The new unit would produce 30,000 tonnes/year of second-generation fatty acid methyl esters (FAME) and 7,000 tonnes/year of technical-grade glycerine. It was part of the group’s biofuels strategy to replace fossil fuels with fuels made from waste materials. “By 2030, the use of bio-additives in the Orlen Group will increase to approximately 3M tonnes/year and will be an important business area,” Obajtek said. Construction of the new PLN 127.5M (US$29.95M) facility started in November 2021 with AB Industry as the general contractor.
First phase of LDC Chinese joint venture complete Global agribusiness giant Louis Dreyfus Company (LDC)’s joint venture in China with Donlink Holding Group (Donlink) and Guangdong HAID Group (HAID) has completed the first phase of its new food industrial park in Guangzhou. 30 OFI – NOVEMBER/DECEMBER 2023
The 180,000m² industrial park in Nansha would be operated by Fuling Food Technology, a joint venture set up by the three companies in 2020, LDC said on 27 September. Located at the centre of the
Guangdong-Hong Kong-Macao Greater Bay Area, the facility comprises a feed protein mill with 1.8M tonnes/year of soyabean processing capacity, a 360,000 tonnes/year vegetable oil refining mill and u a high-end cooking oil production line www.ofimagazine.com
PLANT & TECHNOLOGY with a 240,000 tonnes/year of bottling capacity. The site also includes a packaged cooking oil warehouse, a lecithin production line, soyabean oil tanks and a soyabean meal warehouse. The facility would focus on developing and producing plant-based food products and ingredients, LDC said. “Against the backdrop of China’s Greater Bay Area development, Donlink is pleased to work with partners to transform the traditional grains and oils processing business,” Donlink Group board member Guanghao Lai said. Donlink comprises three major business lines: Donlink Grains and Oils; Donlink Machinery and Donlink Investment. HAID Group has five business segments: feed; seedlings; animal protection; animal breeding and food.
MRL to include camelina as feedstock US renewable fuel company Montana Renewables (MRL) has expanded feedstock used at its Great Falls production facility in Montana to include camelina, PR Newswire reported on 13 September. A subsidiary of Calumet, MRL produces renewable diesel and sustainable aviation fuel (SAF) from a combination of different waste or renewable feedstocks including vegetable oils, animal fats, grease and algae. “We are pleased to add … US-produced camelina oil to our existing feedstocks, which already include canola oil, corn oil
Photo: Rothamsted Research
u
and tallow,” MRL CEO Bruce Fleming said. “While our ARA pre-treater technology provides the ability to run feedstock from anywhere in the world, camelina is indigenous to Montana.” According to its website, MRL currently produces approximately 113.5M litres/ (30M gallons)/year of SAF with plans to increase that amount over the next few years.
IN BRIEF INDONESIA: Danish process technology specialist Topsoe will supply its HydroFlex technology to produce renewable fuels at PT Kilang Pertamina Internasional (PT KPI)’s Cilacap Refinery Complex in Central Java.
Once operational, the refinery would produce 6,000 barrels/day of sustainable aviation fuel and renewable diesel, Topsoe said on 18 September. PT KPI is the refining and petrochemical
sub-holding company of Indonesian state-owned oil and gas corporation PT Pertamina. Cilacap is an integrated sites, where there is also a petrochemical complex.
Aemetis completes Indian plant expansion early US renewable fuels company Aemetis has completed the expansion of its Kakinada biodiesel plant in India a year ahead of schedule resulting in an increase in production capacity to 60M gallons (227M litres)/year. The expansion would help meet increasing demand for biodiesel by the governmentowned Oil Marketing Companies, Aemetis said on 6 September, adding that it aimed to increase production at the plant from 50M gallons (189M litres)/year to 100M gallons (378M litres)/year by 2025 in its five-year plan. In addition, Aemetis said it expected capital projects to increase production capacity at the plant to 80M gallons/ (302M litres)/year to be completed ahead of schedule in the first half of next year. “When production capacity reaches 100M gallons/year, the www.ofimagazine.com
India business will be able to generate more than US$500M/ year of revenues,” said Aemetis president Sanjeev Gupta. Located near the eastern India port of Kakinada in Andhra Pradesh, the Universal Biofuels plant is the largest biodiesel production facility in India, according Aemetis. The increased biodiesel production supported the Indian government’s goal of a 5% biodiesel blend equal to approximately 1.25bn gallons (4.7bn litres)/year as set out in the country’s 2022 National Biofuels Policy, Aemetis said. Headquartered in Cupertino, California, Aemetis is a renewable natural gas, renewable fuel and biochemicals company. It owns and operates facilities with more than 110M gallons (416M litres)/ year of production capacity in the USA and India.
Selective adsorbents based on powdered clays. Designed for the pretreatment of biofuel feedstocks. • Enhanced performance on the removal of metal traces and contaminants. • Specially designed to provide the greatest filtration rates. • Avoid clogging issues and excessive pressure increases. • Reduction of feedstock retention.
Tolsa, S.A.
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OFI – NOVEMBER/DECEMBER 2023 31
SHIPPING & TRANSPORT
Freight review There has been an uptick in activity in the freight market with palm oil freight rates likely to remain unchanged, increased biodiesel flows out of South America and continued export challenges for Ukraine Riverside Tanker Chartering The freight market is starting to observe an uptick in activity heading into the last quarter of 2023. While the chemical markets mid-year were very slow and the clean petroleum (CPP) markets have been oscillating up and down even more frequently than usual, energy demand remains robust heading into the Northern Hemisphere’s winter months.
Palm oil price review
Palm oil prices declined in September to a three-month low. On 21 September, palm olein was quoted at US$823/tonne FOB and crude palm oil (CPO) reached a low of US$902/tonne. A decline in short-term demand from India in particular, high stock levels in consuming countries and seasonally high production were to blame for the decline in palm oil’s value. Prices are expected to decline further over the next one to two months as September stocks are expected to rise
Photo: Adobe Stock
Palm oil freight
by around 2.4M tonnes (up 13%) and production is due to rise by around 1.85M tonnes (up 6%). However, CPO prices are expected to climb by at least US$100/tonne over the next four to six months, according to one market expert, driven by a combination of factors. These include developments related to India’s crop production, Black Sea exports and weather conditions in South America, which could negatively affect the production of competing vegetable oils and, in turn, increase demand for palm oil. The threat of El Niño and related lower rainfall may also hamper production of palm oil, which has been broadly moving sideways of late, making current prices of US$860/tonne seem undervalued. Concerns about Malaysia’s ageing palm oil plantations continue and some 664,999ha of oil palm trees are said to be above the 25-year range and are in dire need of replacing.
The tropical freight markets are still trading in a fairly narrow range because the number of open vessels to open cargoes has been surprisingly well balanced. Sulphuric acid flows from Asia to Chile have started to pick up and this is already starting to pull some stainless steel vessels out of the region. The longer haul bio and palm oil markets have been quite steady and time-charter trips are currently paying in the middle-high US$30,000/day range. Valuing where the tropical oil markets will trend next remains both an art and a science but it is likely that most markets should remain more or less unchanged until first quarter 2024, which is a shipment period that tends to be volatile in the East. Severe congestion in some of the Malaccan Straits ports has been causing concern, more specifically in Belawan located on the Indonesian northeast coast of Sumatra, where 7-10 days berthing delays have become the new norm. This port is, and has always been, the achilles heel of the region.
Figure 1: IMO 2/IMO 3 freight rates from Malacca Straits to Rotterdam 32 OFI – NOVEMBER/DECEMBER 2023
Source: Riverside Tanker Chartering Ltd
Molasses
The molasses markets has shown very healthy activity in September, with double the amount of business concluded compared to the previous month. This amounted to a global fixture volume of over 400,000 tonnes with 22 vessels fixed. A quarter of this worldwide business was molasses exported from India to varying destinations east and west. Molasses feature in the positioning of vessels in vegetable oil trades as they are an acceptable previous cargo under www.ofimagazine.com
SHIPPING & TRANSPORT FOSFA and NIOP terms and are carried in similar vessels to vegetable oil.
Black Sea
The 2022/23 season is now complete for sunflower oil in the Black Sea and it has been a challenging season, and will remain so, as the Russia-Ukraine war keeps raging. Ukraine is doing everything in its power to increase its export levels through a one-sided Black Sea humanitarian corridor and new routes via water, rail and roads to reach ports in Europe. During the 2022/23 season, it stands out that the lion’s share (43.1%) of Ukrainian sunflower oil exports went via Danube river ports. Even though exports via Chornomorsk, Odessa and Pivdennyi ports under the Black Sea Grain Initiative halted after Russia withdrew from the agreement on 17 July, the former corridor still sits in second place (close to 30%) as a share of total exports. Rail and trucks combined are not even getting close to that level (23.3%). Russia is doing everything it can to keep Ukrainian exports to a minimum, from constant barrages on the Danube ports of Izmail and Reni (as well as other port areas) to mining Chornomorsk, Odessa, according to latest British intelligence reports. These factors have increased the rates that are being charged by vessels loading from Reni and Izmail and have scared off owners from calling on the three reopened Black Sea ports. As per the typical historical trend, the total volume from the region declined www.ofimagazine.com
Figure 2: Freight rates loading at Argentina and Brazil (US$/tonne)
Figure 3: Freight rates Black Sea (JCC)/India (US$/tonne) slightly and export from the European Black Sea ports was once again the biggest total exporter of sunflower oil out of the region. Rates remained more or less stable at slightly higher levels, which makes sense as there is still a lot of insecurity in the region. It will be interesting to see what will
Source: Riverside Tanker Chartering Ltd
Table 1: Representative palm oil freight rates
Source: Riverside Tanker Chartering Ltd
Soft oil freight has continued its trend of previous months, with soyabean oil volumes out of Argentina continuing to decline but remaining fairly stable out of Brazil. Up River [Paraná] water levels in Argentina remain at healthy levels and are predicted to remain stable until the end of the year. The biggest receiver of products from South America is still India, the world’s largest vegetable oils importer. The only noteworthy change in the last few months is that biodiesel flow (both of feedstock as well as the finished product) seems to be increasing, adding some more ‘exotic’ destinations to South American trading patterns. Soft oil rates experienced a spike, which was directly related to a surge on the clean petroleum products (CPP) markets. Once the CPP markets – known to be volatile – came off again, so did the vegetable oil rates.
Source: Riverside Tanker Chartering Ltd
Soft oil freight
happen in October when new crop is expected to hit the market as the fourth quarter is historically usually a more bullish one. ● This article is based on extracts from Riverside Tanker Chartering Ltd’s October 2023 Palm Oil, Soft Oil and Molasses Market Report OFI – NOVEMBER/DECEMBER 2023
33
Photo: Adobe Stock
ALGAE OIL
Growing applications Algae oil has applications as a plant-based and vegan source of omega-3 fatty acids – as well as in the food, pet food and cosmetics markets Jens Kastner Algae have come to inhabit nearly every ecosystem on the planet, including some of the most inhospitable, with each species evolving specific biochemistries and metabolic profiles to thrive in different habitats over time. As a result, algae species naturally produce a wide range of biomolecules with potential commercial value, including those with known uses and those with new applications. One such application is omega-3 fatty acids. India-based market researcher DataM Intelligence published a report in July finding that the global algae omega-3 market reached US$1.2bn in value in 2022 and is expected to be worth US$1.7bn by 2030 because of rising demand for sustainable and plant-based omega-3 fatty acid sources. Omega-3 fatty acids have been linked to many health benefits. For instance, longchain omega-3 fatty acid DHA is seen as essential for brain health, cognitive function, and foetal development during pregnancy. Meanwhile long-chain omega-3 fatty acid EPA, which DataM Intelligence sees as holding 40-45% of the global algae omega-3 market, is known for its anti-inflammatory properties and its 34 OFI – NOVEMBER/DECEMBER 2023
role in supporting cardiovascular health. UK-based market research company Euromonitor International has also stressed that algae oil can be linked to numerous health advantages. “The health benefits, together with the fact that algae oil offers a sustainable and plant-based source of omega-3s, are the key characteristics of this oil type,” Maria Mascaraque, global industry manager, Euromonitor International, told Oils & Fats International (OFI). One recent indicator for the momentum behind the advent of algae oil as a promising industrial input is in the operations of Norway-based GC Rieber, which has for more than 120 years been processing and purifying fish oils. In February 2023, it launched VivoMega Algae Oils, a high-concentration vegan omega-3 from microalgae. While the algae strains come from the ocean, the algae is cultivated on land before undergoing a fermentation process in standard steel tanks that is comparable to beer-brewing, processing the algae into oil.
Processing algae
VivoMega Algae Oils’ SuperLight proprietary processing technology is designed and developed exclusively for algae oils. Through a specifically designed circular reflux system, the oil has exceptionally low exposure to heat, is protected from oxidation and includes every relevant fatty acid. GC Rieber claims that it also leads the market regarding its product’s oxidation levels, allowing it to maintain
its freshness for three years with optimal taste, smell and colour. GC Rieber says its VivoMega Algae Oils have no fish smell – a competitive advantage over fishbased products. They also align with EU ‘Green Deal’ initiatives and legislation on sustainability and circularity. “The methods we have developed are very efficient and while they are still more expensive than extraction from fish oil, the gap is closing as our production scale increases, to currently around 2,0003,000 tonnes/year,” says Ståle Søfting, sales and marketing director at GC Rieber VivoMega. Speaking to OFI, he adds that “demand growth is driven by factors ranging from concerns on over-fishing of oceans to an urgent need for additional omega-3 sources to satisfy demand, especially in markets where omega-3 consumption has traditionally been precariously low, such as in the USA, which needs protective health measures against chronic diseases”. GC Rieber ships its VivoMega Algae Oils to soft-shell contract manufacturers that supply the brands with filled capsules or liquids. “There only is a limited number of soft-shell contract manufacturers offering vegan capsules, as opposed to bovinebased capsules,” Søfting says. “The strong advantage of the former is that it opens both the vegan market and the halal market to omega-3 algae oils.” Explaining the current supply chain, Søfting named Netherlands-based Veramaris and Netherlands-based Corbion as the main players in terms of cultivation and fermentation. In June, Veramaris www.ofimagazine.com
ALGAE OIL released its first sustainable development report pointing out that fish oil supplies face uncertainty due to reduced forage fisheries quotas and the risk of a powerful anticipated El Niño ocean current systems, expected this year. In April, Corbion announced that it was looking to expand its algae footprint into pet food, saying it had to tailor the formulation and delivery system of its omega-3 ingredient to address the demands of pet food makers. This is a large and growing market – according to Euromonitor International, global pet food sales are increasing steadily in value, reaching US$123bn in sales in 2022, a 3.3% increase from 2021; it is expected to generate US$146bn in sales by 2026. Meanwhile, Provectus Algae, an Australia-based biotechnology company specialising in the optimisation of microalgae species, has expanded its initial focus on using its platform for animal health and nutrition applications to include cosmetic, food and beverage ingredients. Christopher Fisher, scientific affairs manager at Provectus Algae, told OFI that as a diverse class of organisms, algae offer significant potential for the biotechnology and biomanufacturing sectors. While algae’s industrial potential stems from many attributes, their impressive metabolic diversity and photosynthetic capabilities make them especially attractive, he says. “As with most biomanufacturing efforts, the widespread adoption of algae-based goods revolves around manufacturing at scale,” he says, adding that new research and technological advances have made algae biomanufacturing more efficient and accessible to the broader life science industry in recent years. As a result, algae biotechnology companies, including Provectus Algae, “are now working to scale up their operations and build industrial-scale manufacturing capabilities”, says Fisher. “As more of these sites come online, I anticipate you’ll see many algae-based bioproducts and ingredients hit the market.” Fisher says this is impressive given that, historically, many algae species have been difficult to grow, even at small scale, for research purposes. For this reason, only a small number of algae species have been applied industrially. “Alhough this is due to several factors, a good deal of the challenge stems from an inability to decipher each species’ unique relationship with light, a relationship that is complex and specific to each species,” explains Fisher. “Our Precision Photosynthesis technology allows us to rapidly determine ideal light recipes www.ofimagazine.com
‘As with most biomanufacturing efforts, the widespread adoption of algae-based goods revolves around manufacturing at scale’ for virtually any photosynthetic algae, allowing us to build a microalgae library and multi-omics database for biodiscovery efforts in under-utilised and underexplored species,” he adds. This, however, leaves one key problem – the need to expand awareness and broader market acceptance of algae biotechnology. According to him, since many biomanufacturing businesses have less knowledge of algae biotech than some other natural feedstocks, they can be more hesitant to manufacture an algaebased product or ingredient, especially when more familiar options are available. However: “As success stories mount and more people benefit from the advantages of algae biomanufacturing, I anticipate more people will want to get involved,” he adds. Meanwhile, promising blue skies research continues. In 2020, researchers at Germany’s University of Bonn proved the validity of previous reports that prokaryotic algae single-cell organisms also known as cyanobacteria or bluegreen algae – can produce oil from water and carbon dioxide with the help of light. The finding is unexpected: it was previously thought that this ability was reserved for plants and eukaryotic algae. The scientists had been working for many years on an enzyme that catalyses a step in plant oil synthesis. Unlike oil plants, such as rapeseed, cyanobacteria do not need arable land to grow – a container with culture medium containing minerals and sufficient light and heat is enough. While cyanobacteria thus far have produced only low amounts of oil, initial “highly promising results have already been obtained with cyanobacteria cultures accumulating much higher oil contents,” explains the project’s lead-biologist Prof Dr Peter Dörmann from the Institute for
Molecular Physiology and Biotechnology of Plants (IMBIO) at Bonn University. Speaking to OFI, he adds: “While this result means it is still too expensive to compete with mineral oils, it is relatively easy to manipulate the DNA of these cyanobacteria, making it promising for applications where oils do not compete directly with mineral oils, such as cosmetics, food supplements and a colourant that makes salmon meat red.” Dörmann says algal oils cannot compete with bulk chemicals unless governments target an economy that is completely CO2-emission-free, imposing penalties on greenhouse gas-related products. Even then, algae-based biofuels can only be produced in countries with warm climates: “You need light and steady temperatures of around 250C, meaning you’d need a lot of energy to grow them in places like Germany on scales big enough to feasibly produce biofuels,” says Dörmann. Indeed, the Guardian newspaper ran a story in February finding that while big oil firms have touted their investments in algae biofuels as the future of low-carbon transportation, they have all dropped out of this field. The article singled out ExxonMobil as the latest example, pulling out after 12 years of investing US$350M in algae biofuels. It cited multiple researchers agreeing that a real effort to commercialise biofuels – algal or otherwise – requires several billion dollars and a long-term dedication to overcoming fundamental biological limitations of wild organisms. Provectus Algae’s Fisher acknowledges that growing algae depends on a lot of energy, but that also holds true for most biomanufacturing efforts and even some synthetic chemical manufacturing. According to him, biomanufacturing always needs to work in a highly controlled environment, involving bioreactors, warm media for temperatures optimal for cellular growth and enzymatic activity, processing fluids, cleanroom spaces for contamination control and more. “However, it is worth noting that chemical manufacturing can also require high energy inputs, and LEDs continue to become more energy efficient, which further reduces the energy demands of algae cultivation compared to heterotrophic systems. “In addition, there is an opportunity to apply both natural and synthetic biology approaches to minimise photon waste, which can further reduce the amount of energy required by photobioreactors to reach maximum productivity,” he adds. ● Jens Kastner writes for International News Services, UK OFI – NOVEMBER/DECEMBER 2023
35
STATISTICS STATISTICAL NEWS
Mintec
Sunflowerseed and oil
Global sunflowerseed supply and demand (million tonnes)
International demand for sunflower oil has recently returned, trading at U$$819/tonne in Turkish ports, driven by competitive pricing compared to palm and rapeseed oils. India’s potential increased demand may exert upward price pressure in October due to low pipeline levels and upcoming festivals. Despite the recent increase in sunflower oil prices, market players anticipate continued downward pressure due to robust sunflowerseed harvests in Ukraine and Russia, potentially leading to oversupply. Uncertainties around Ukrainian port security have also contributed to market uncertainty. Market concerns extend to exports and the potential that Ukraine may struggle to offload supplies, which could increase prices due to lack of available supply or lead to decreases as sellers offer lower prices to attract sales.
Sunflower oil prices – fob NW Europe, Mintec benchmark price (€/tonne)
Mintec
Biodiesel/Renewable diesel
Global biodiesel and hydrotreated vegetable oil (HVO) production are projected to rise by 8.8% year-on-year (y-o-y) to 56.7M tonnes in the 2023 calendar year. The increase is due to a rise in palm oil as a feedstock for biodiesel in Indonesia, with the country raising its biodiesel blending mandate from 30% to 35% (B35) in February, with plans to increase to B40 in the near future. Despite the de facto ban on palm oil usage for biodiesel in some EU27 member states, including France and Germany, market sources have reported a recovery in its usage. In the Americas, following the Environmental Protection Agency’s approval for rapeseed oil as a feedstock for biodiesel, consumption and demand have reportedly risen. Market sources have stated that production and imports of biodiesel in the USA are likely to be curbed in the near to medium term as larger-than-expected volumes were produced, exceeding mandates in previous months.
Mintec
Palm oil
Global sunflower oil supply and demand (million tonnes)
Prices of selected oils (US$/tonne) Apr 23
May 23
Jun 23
July 23
Aug 23
Sept 23
Soyabean
1,024.0
937.8
1,023.3
1,124.5
1,113.3
1,090.4
Crude palm
978.9
929.1
914.8
1,009.3
984.8
955.3
Palm olein
881.5
846.0
826.5
909.3
885.2
860.1
Coconut
1,081.4
1,042.6
1,024.2
1,063.4
1,112.9
1,065.3
Rapeseed
1,004.7
883.0
957.8
1,072.3
1,020.9
987.6
Sunflower
1,050.8
932.5
923.9
1,058.4
979.6
898.3
Palm kernel
1,019.4
987.5
931.8
990.4
1,012.8
958.9
Average
1,006.0
937.0
943.0
1,032.0
1,016.0
974.0
Index
238.0
222.0
223.0
245.0
241.0
231.0
36 OFI – NOVEMBER/DECEMBER 2023
The Malaysian Palm Oil Board’s September data was released on 10 October with lower than expected stocks, production and export figures, according to Lipidos Santiaga’s 10 October Market Flash. Stocks stood at 2.31M tonnes, up 9.6% against August but lower than initial expectations of a 12-14% increase. Production was 1.83M tonnes, up 4.3% againist August but lower than initial expectations of a 6% increase. Exports were 1.19M tonnes, up 2.1% against August, contrary to market estimates of a 8% increase and almost 16% down against the September 2022 level. The biggest surprise came in a sharp increase in local disappearance (up 80% against August), with one possible reason being a rise in cooking oil purchases following the Malaysian government’s discontinuation of the subsidy for cooking oil.
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